2022
ANNUAL
REPORT
Sabina Applecross. Another award winning development.
1
2
Contents
3
Chairman’s
Report
5
Managing
Director’s
Report
09
Key Financial
Metrics
13
Finbar
Milestones
15
Our
Finbar
17
Environmental
Social Governance
21
Completed
Projects
19
Finbar
Amenities
20
Finbar
Awards
26
Projects Under
Construction
31
Future
Projects
37
Investment
Properties
40
Financial
Report
Finbar. Setting the bar
sky high since ’95.
Retrace your steps 27 years into the past to a time when a growing,
sprawling city was aching for innovation. This is where the Finbar
story began, small and humble, inspired by an ambitious vision to
transform how Perth lives. Fast forward 75 landmark developments
and over 6,655 apartments later, Finbar has evolved into WA’s largest
apartment developer, trusted and celebrated for redefining the
skyline of one of the most liveable cities in the world.
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 3
Chairman’s
Report
Message from
The Chairman
JOHN CHAN
Finbar has delivered a net profit after tax of
$10.98 million for the 12 months to 30 June 2022,
which represents an increase of 24 per cent over
the previous financial year.
Dear Shareholder,
I am pleased to present Finbar Group’s Annual Report
for 2022.
Finbar has delivered a net profit after tax of $10.98 million
for the 12 months to 30 June 2022, which represents an
increase of 24 per cent over the previous financial year.
It is the 26th consecutive profit reported by your Company,
a record that gives your Board and management great
satisfaction as we navigate the cyclical market conditions.
The Company ended the financial year with $33.2
million in cash. In the current environment, I believe
cash management is the most important area on which
management must remain focused.
Our efforts in this area mean that, coupled with the cash
commitments from our joint venture partners at our joint
venture projects, the Company is adequately capitalised
to fulfill all working capital commitments and contingency
provisions for all projects currently under construction.
For shareholders, Finbar was able to announce a final
dividend of $0.02 per share fully franked, taking the full
year dividend to $0.04 per share.
$65.7 million were of completed stock, and 326 sales to
the value of $227.8 million related to off-the-plan sales
for projects both currently under construction or due to
commence in the current financial year.
Last year I said that the market for apartment developers
had become more difficult, with developers having to
commence projects without the previously-expected levels
of pre-sales.
Combined with the rapid increases we have experienced
in construction and labour costs, this has caused a
sharp decrease in the supply of new apartments into the
domestic market.
Research from the Property Council of
Australia found that more than a third of
Perth’s approved pipeline of apartment
developments – and a further $2.2
billion of apartment projects yet to
achieve development approval – are on
hold and may not proceed.
Finbar recorded its strongest sales period since 2015
with 443 lots sold to the value of $293.5 million. Of the
443 sales contracts secured, 117 lots with a value of
The reasons for this are many, but the escalation
in costs of construction, materials and labour are
contributing factors.
4
“
The Company ended the financial year with $33.2
million in cash. In the current environment, I believe
cash management is the most important area on which
management must remain focused.
”
Finbar has a competitive advantage in this market,
because of its cash management and balance sheet
strength and its ability and preference to enter joint
ventures with similarly minded and financially strong
partners. This has enabled it to continue to commence
major projects, albeit with a lower gearing of bank finance
than you would expect in a more normalised market.
Our strong focus on cash flow means we continue to
be selective in site selection and in choosing potential
joint venture partners for future projects. Our current
pipeline of projects is sufficient for the next five
years and we are in a position where we do not feel
under pressure to enter agreements or to acquire
development sites.
It means we will be delivering Finbar apartment
projects that we have already commenced into a market
that is forecast to be under-supplied this financial year
and next.
I said last year, and it remains my strong belief, that a
lower number of apartments available for sale in the
market in coming years will lead to price appreciation.
The broader Western Australian economy remains
strong with record high employment, increased
immigration and the early signs of wages growth.
With the cost of materials and labour continuing
to rise, the prices for apartments must increase to
compensate. I believe we are already seeing evidence
of this in Western Australia, even with the recent
increases in interest rates.
Finbar is not immune to the strong increases in
development costs for its projects, although with our
dedicated exclusive builder Hanssen, we have worked
to mitigate these where we can through the forward
purchases of bulk materials and scheduling of major
projects. Although we have experienced increased
costs and slower construction progress, it has been at
significantly lower rates than industry peers.
As a result, I expect Finbar to benefit from a lift in sales
prices for its apartments as it completes its projects
this financial year and into the 2024 financial year.
6,655 apartments since 1994
which equates to providing a
home for more than 20,000
Western Australian residents.
Finbar applies very strict criteria and metrics to
potential acquisitions since it first commenced
operations and this has served the company well.
Finbar has developed more than 6,655 apartments
since 1994 which equates to providing a home for
more than 20,000 Western Australian residents. I am
pleased that our reputation for quality, for delivery and
for customer service, which we have built up over many
years, has helped us continue to perform and deliver
projects in the current challenging environment.
I want to take the opportunity to thank our builder,
Hanssen, our joint venture partners and our banking
partners for their ongoing support.
John Chan
Chairman
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 5
Managing
Director’s
Report
Message from
The Managing Director
DARREN PATEMAN
Approximately $657 million in completed project
value should be delivered to the market in the 2024
financial year as Finbar completes Civic Heart,
Aurora, and The Point.
Finbar has this year delivered a net profit after tax
of $10.98 million which is a pleasing result given the
challenging business environment and a 12-month period
where the company has been focused on the construction
and delivery of some very significant scale projects.
Despite having a relative lack of completed product
available, Finbar achieved its strongest sales period since
2015 with 443 lots sold with a value of $293.5 million. Sales
were boosted by the completion and settlement of 89 sold
lots to the value of $41.5 million at the Company’s wholly
owned Dianella Apartments project in the first half of the
financial year along with the sell down of all remaining
residential lots across all other completed projects.
Of the 443 sales contracts secured, 117 lots to the value
of $65.7 million relate to the sale of completed stock, and
326 sales to the value of $227.8 million relate to off-the-
plan sales for projects both under construction – AT238
in Perth, Civic Heart in South Perth, Aurora in Applecross
and The Point in Rivervale – and at Garden Towers in East
Perth which is due to commence early in the second half
of the current financial year.
The Company has just 32 lots remaining for sale at Dianella,
with no other completed residential stock available.
Finbar has achieved healthy sales of off-the-plan
apartments at two of its most recent projects – The Point
and Garden Towers having sold apartments to the value of
$66.9 million at The Point, with apartments with a finished
value of approximately $34.0 million remaining. The Point
is scheduled for completion in the 2024 financial year.
At Garden Towers, which was released to the market
towards the end of the 2022 financial year, Finbar had
achieved $52.7 million in pre-sales at the record date,
with approximately $196.5 million remaining for sale and
works expected to commence in the second half of the
Financial Year.
Finbar has projects valued at more than $750 million
currently under construction and scheduled for delivery
over coming years.
Like the rest of the industry, Finbar has had to deal
with increasing costs of materials, issues with labour
availability and other supply chain constraints.
The Company has worked closely with its primary
contractor to mitigate these cost increases, however
Finbar projects have also seen the increased costs and
slower construction progress that is common in the
sector, albeit at lower rates than industry peers.
Finbar is comfortable that any cost increases across
its projects are within previously provided feasibility
contingencies. It also expects to protect margins as these
projects are completed from the continued lifting of sales
prices as it delivers new product into a market that will
have limited supply and healthy demand.
6
As at June 30 2022, Finbar held $33.2 million in
cash and is adequately capitalised to meet all of its
working capital commitments, including contingency
provisions, for all of its projects currently under
construction, as well as pay a fully franked final
dividend of $0.02 to shareholders.
In the current financial year Finbar will complete the
AT238 apartment tower on the eastern edge of the
Perth CBD with settlements likely to occur in the
second half of the financial year.
Current elevated construction costs in Western
Australia, and in particular regional Western Australia,
means the risk of any viable new apartments being
developed in Karratha is minimal and as Finbar
continues to own a large portion of the most attractive
and well positioned rental apartments in the city that
is unlikely to be replicated in the foreseeable future.
Finbar’s focus in the current financial year is the
successful completion and delivery of AT238 and
progressing the construction of Civic Heart, Aurora
and The Point.
As at June 30, Finbar had sold
apartments valued at $35 million
at AT238, with approximately $62
million remaining for sale. Along with
the remaining apartments yet to be
sold at Dianella, these will be the
Civic Heart
only completed apartments available
for sale this financial year.
Based on current timing of projects, the Company
anticipates revenue for the 2023 financial year will be
second half weighted with the completion of AT238
and the revenues for pre-sold units anticipated to be
received in February 2023.
Approximately $657 million in completed project value
should be delivered to the market in the 2024 financial
year as Finbar completes Civic Heart, Aurora, and The
Point. Whilst these projects are still at early stages of
construction progress we currently expect them to be
completed in the 2024 financial year.
A contributor to Finbar’s 2022 financial year profit
was an increase in valuation in the Company’s
Karratha apartments of $5.1 million (after provision
for taxation).
Finbar developed the Pelago apartments in 2012
and has held about 100 apartments as an ongoing
investment since then, generating a strong rental
income stream for the company. The 2022 financial
year saw rental revenue for the apartments increase
by 6 per cent.
At Civic Heart, all sub-basement and most podium
works have been successfully completed with the first
(and smaller) tower now becoming a feature of the
South Perth skyline and the larger tower to soon be
visible from the streetscape. The current estimate for
completion of this major project is in the second half
of FY 2024.
Basement structural work is well underway at Aurora
and The Point, with both of these projects also
expected to be completed in FY 2024.
In closing, I want to echo the sentiments of our
Chairman John Chan, in thanking our major project
finance partners Commonwealth Bank and Westpac
Banking Corporation, who continue to provide strong
support to Finbar.
I also want to thank senior management and staff
across the group who have all contributed to the
results Finbar has reported despite the challenging
and difficult operating conditions being experienced by
businesses closely linked to the construction sector.
Thank you for your ongoing support and interest in
Finbar Group.
Pelago continues to be an attractive wholly owned
asset for Finbar where it is seeing strong increases in
rental rates and high long-term occupancy.
Darren Pateman
Managing Director
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 7
2022 Finbar Group Limited Annu al Report
8
We’ve built our name on the back of an
enviable track record delivering high-quality
apartment developments in Perth’s best
locations, reliably and consistently. The
result speaks for itself - hundreds of new
apartments recognised with prestigious
awards, securing financial strength and
stability for the company, healthy dividends
for investors, and better lifestyles for
contented residents.
$0.04
per share fully franked
dividend for the full year.
2021
Winner
Property Council WA
Best Residential Development
(5 storeys or more) award for
Sabina Applecross.
Finbar has this year delivered a
net profit after tax of
$10.98m
24% increase on the previous
financial year.
443 apartments sold
during the year with a total value of
$293.5m
$753.9m
of apartments under construction.
Final Dividend FY22:
$5.44m
27 years
on the ASX
Over 70%
of buyers say the reputation of the
developer is critical when choosing
an apartment. Our reputation is
everything to us.
100% delivery on
6,655 apartments over
75 landmark developments.
Delivering on our commitment to
develop better lifestyles.
1.2
sales per day in FY22.
84%
of our customers rated
buying ‘off the plan’ easy.
89% of customers would
recommend Finbar to a friend.
Word of mouth is our strongest asset.
Consistently achieving
8-star
NatHERS rating
2022 Finbar Group Limited Annual Report
9
Key Financial
Metrics
SOURCE OF EARNINGS
TOTAL EARNINGS
RENTAL INCOME
89%
9%
2%
64%
33%
3%
Development
Income
Rental Income
Other
Pelago
Fairlanes
Other
DEVELOPMENT INCOME
FULLY FRANKED
DIVIDEND PER YEAR (CENTS)
1 0
NET PROFIT AFTER TAX
EARNINGS PER SHARE
$MILLION
$13.8
$11.4
$11.0
$8.9
$7.1
$8.1
$5.1
$
$0.06
$0.04
$0.04
$0.02
$0.04
$0.03
$0.02
2016 2017 2018 2019 2020 2021 2022
2016 2017 2018 2019 2020 2021 2022
Finbar’s Net Profit After Tax
increased by $2.1 MILLION
Finbar’s EPS increased by 23% to $0.04
Dianella
Sabina
43%
24%
One Kennedy
17%
Riverena
7%
Reva
4%
Vue Tower
4%
Palmyra East
1%
$293.5m
FY22 Sales
$10.98m
after tax profit
$18.7m
average sales of off-the-plan
apartments per month
$5.5m
average sales of completed
apartments per month
R
A
E
Y
L
A
I
C
N
A
N
F
I
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
$0.00
$0.00
$0.01
$0.03
$0.03
$0.03
$0.01
$0.01
$0.01
$0.02
$0.03
$0.04
Interim Dividend
Final Dividend
$0.06
$0.06
$0.07
$0.075
$0.085
$0.085
ENTERPRISE VALUE
$MILLION
PRESALES BOOK VALUE
$447.6
$MILLION
$358.8
$258.4 $252.7 $262.7
$239.1
$250.2
$237.0
$223.9
$260.9
$194.1
$189.6
$117.9
$53.6
2016
2017
2018
2019
2020
2021
2022
2016
2017
2018
2019
2020
2021
2022
Finbar’s Enterprise Value decreased by 5.26%
to $237.0 MILLION.
The increase in Presales for FY2022 to $358.8 MILLION was
due to sales achieved at Civic Heart, AT238, Aurora, The Point
and Garden Towers.
PROJECT PIPELINE VALUE
TOTAL DEVELOPED UNITS
$0.095
$0.10
$0.10
$BILLION
$2.2
$2.0
$1.8
$1.5
$1.4
$1.3
$1.2
UNITS
5984
6402
6527
6655
5675
5293
4923
$0.07
$0.06
$0.06
$0.06
$0.03
$0.04
$0.04
24%
increase in profit
$0.04
Dividend per share FY 22
Finbar has rewarded shareholders with a fully franked
dividend for the past 25 years, the last 17 by way of an interim
and a final. The dividend paid for the full year ended 30 June
2022 is $0.04 per share fully franked.
2016
2017
2018
2019
2020
2021
2022
2016
2017
2018
2019
2020
2021
2022
Finbar maintains a robust Project Pipeline of $1.5 BILLION to
ensure that the company can capitalise on changing market
conditions and bring new product to the market as quickly and
efficiently as possible to maximise shareholder returns.
Total Developed Units reached 6,655 by the end of FY2022
with the addition of 128 units from the completion of
Dianella. Finbar continues to position itself as the largest
residential apartment developer in Western Australia.
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
11
Key Financial
Metrics continued
TOTAL SALES AND
VALUE SINCE 1996
FINANCIAL YEAR
Number Of Sales
Total Value
Number Of Sales
Average Sales Per Day
AVERAGE SALES
PER DAY SINCE 1996
FINANCIAL YEAR
AVERAGE SALES
VALUE SINCE 1996
FINANCIAL YEAR
Number Of Sales
Average Sales
1 2
FOREIGN BUYER SALES
120
100
80
60
40
20
0
25
28
43
46
44
112
52
47
74
59
20
26
36
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022
FY2022 - SALES ACROSS AGE GROUP
8%
18-24
21%
25-34
10%
35-39
20%
40-49
19%
50-59
12%
60+
FY2022 - LOCATION OF BUYER FROM
THE DEVELOPMENTS
13%
9%
16%
19%
9%
5%
8%
5%
5%
2.5km or less 2.6-5km
6-10km
11-20km 21-30km 31-40km Regional WA Interstate Overseas
25%
20%
15%
10%
5%
0%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
115178100230245309591305211138321184338547403430266235406264200467$0 $4 $6 $17 $17 $37 $86 $95 $329 $133 $198 $134 $334 $304 $214 $284 0100200300400500600700050100150200250300350400199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020214432022Millions$293 245054$94 $45 $277 $143 $158 $167 $140 $148 $110 $195 117854501002302453095913052111383211843385474034302662354062642004670.00.10.50.60.71.60.60.51.51.11.20.71.10.71.300.20.40.60.811.21.41.61.8199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020214431.2$-$100$200$300$400$500$600$70020220.90.10.10.315240.80.80.90.60.50.4Thousands115241785450100230245309591305211138321184338547403430266235406264200467$330 $299 $232 $255 $319 $333 $365 $372 $389 $462 $519 $629 $678 $617 $730 $577 $611 $686 $706 $626 $598 $526 $559 $549 $608 $- $100 $200 $300 $400 $500 $600 $700 $80019961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018201920202021443$663 01002003004005006007002022Thousands$557 2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 13
Finbar
Milestones
27 years on the ASX
In our 27th year on the ASX, our
shareholders benefit from a strong sales
and settlement cashflow environment.
1000
apartments
milestone
Lists on ASX as
Property Development
Company operating out
of a 2 bedroom Como
apartment
Commenced 1st
Development Seville
on the Point, South Perth
$1m
net profit
milestone
Completed
Westralian, first
luxury project
on Terrace Road,
East Perth
$10m
net profit
milestone
$20m
net profit
milestone
Secured first
Pilbara project,
Pelago West,
Karratha
1 4
Completed WA’s tallest
residential apartment
development to date,
Concerto
Completed over $3b
worth of developments
since 1995
5,000
apartment
milestone
Concerto awarded
winner UDIA High
Density Development
Record launch at
Aurelia, with $66m of
sales in the 1st month
Completed Finbar’s
largest development to
date, Subi Strand
Spring View Towers
awarded winner
UDIA High Density
Development
Pelago West awarded
Judge’s and UDIA High
Density Development
2013
2015
2017
Completed three
projects; Palmyra
East, Vue Tower and
Reva consisting 414
residential apartments
and 23 commercial lots
Commenced
construction at
AT238 and
Civic Heart
1995
1997
1998
2001
2005
2006
2008
2009
2010
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Completed 1st
Development Seville on
the Point, South Perth
Maiden net profit
$0.7m
Relocated to first
corporate office,
Preston Street
South Perth (4 staff)
$100m market
capitalisation
Inclusion in All
Ordinaries Index
2000
apartments
milestone
Completed
company’s first
Pilbara project
Fairlanes awarded
winner UDIA High
Density Development
Relocated to
Fairlanes building,
East Perth (13 staff)
3,000
apartment
milestone
2012
Launched WA’s tallest
residential building,
Concerto
St. Mark’s awarded
winner UDIA High
Density Development
and Urban Renewal
$36.5m
after tax profit
2014
Four projects;
Norwood, Arbor North,
Unison on Tenth and
Linq consisting of 492
apartments and 10
ancillary commercial
tenancies worth
$249.3m completed
25th Year
on the ASX
Completed three
projects; Sabina,
Riverena and One
Kennedy consisting of
415 apartments worth
$223.5m completed
Completed two projects;
Aurelia and Aire West
Perth consisting of 296
apartments, 64 serviced
apartments and 22
commercial lots
Commenced
construction on four
projects, Vue Tower,
Reva, Palmyra East and
Sabina consisting of
582 apartments and 26
commerecial lots
6000
apartments
milestone
Completed Dianella
Apartments
Commenced
construction on two
projects; The Point
and Aurora
Sabina awarded
Property Council
WA Best Residential
Development
(5 storeys or more)
and UDIA Judges
Commendation in
the High Density
Development
Category
27 years ago, with three staff operating out of
a makeshift office and a vision to build better
lifestyles, Finbar listed on the ASX. Today, we
are WA’s leading and most trusted residential
apartment developer.
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 15
Our Finbar
Finbar is at the forefront of Western Australia’s lifestyle
property market, pushing the boundaries to deliver some of
Perth’s best medium to high density residential apartments
and commercial properties.
1 6
JOHN CHAN
Executive Chairman
27 years
DARREN PATEMAN
Managing Director
27 years
RONALD CHAN
Executive Director
18 years
KEE KONG LOH
Non-Executive Director
LEE VERIOS
Non-Executive Director
TERENCE PEH
Non-Executive Director
OUR PEOPLE
- A team of 18 staff in Finbar’s head office
- A team of 7 staff in Finbar to Rent
- A team of 3 staff in Finbar Sales
- Includes a management team with strong leadership skills and an excellent track record
- Are led by experienced and long serving management focusing on decisions that benefit the
company for the long term
OUR BUSINESS
- Retains a strong brand and a highly regarded reputation in WA
- Operates on a low cost base providing attractive profit margins and shareholder returns
- Maintains exemplary relationships with suppliers and stakeholders
- Manages a pipeline of projects to ensure economies of scale and future growth
OUR COMMITMENT
- Our commitment to our customers, shareholders, state and local government and the
environment has seen Finbar remain WA’s largest and most trusted apartment developer
OUR PROJECTS
- Represent some of Perth’s most prestigious and well-appointed lifestyle apartments
- Remain committed to creating progressive and innovative designs which represent value for money
- Offer a successful fusion of residential, office and public space
OUR INVESTMENT PROPERTIES
- Include the Fairlanes and Pelago buildings leased to reputable and proven businesses and individuals
- Provide consistent annual revenues from investments
- Ensure these additional revenue streams contribute to and smooth annual earnings
OUR FUTURE
- Our vision is to remain WA’s leading medium to high density apartment developer
- Continue to focus development efforts in and around inner city Perth
- Sustain and enhance the quality of inner city living for current and future generations
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
17
1 8
At Finbar, we’re committed to being a powerful and positive social force
by continuously searching for innovative new ways to enhance the way
Perth residents live - and it all starts by protecting and enhancing the
natural environments we build in. With the UN estimating that cities
produce 75% of our GHG emissions in transport and buildings, Finbar
has a responsibility to take action for the benefit of us all.
BUILD SUSTAINABLY.
LIVE SUSTAINABLY.
We are proudly a market leader in the design and development of
apartment projects with features and materials that help us protect
biodiversity, reduce future energy and water requirements, and minimise
our carbon footprint. By adopting a carbon neutral approach in selected
new developments, Finbar apartments are not only built sustainably –
they’re lived in sustainably too.
Our impact is vast, from reducing the destruction of native and
agricultural land associated with greenfield development, to decreasing
our dependence on cars, cutting the volume of waste during the
construction process, and finding new ways to lower embodied and
operational carbon, estimated to account for 40% of total emissions.
Finbar’s use of over 1 million sqm of Bubbledeck throughout the years equates to:
206,100m3
Site concrete saved
55,600t
Tonnes of CO2 saved
18,350t
Foundation load
27,800
Number of cars off the
road for one year
2,783,000
Trees equivalent to
growing for one year
32,900
Ready Mix truck trips saved
BUILT FOR MAXIMUM IMPACT
Our mission to achieve significant reductions in carbon emissions
doesn’t stop at design. We’re always searching for new ways
to adopt contemporary construction techniques that make a
meaningful impact to our carbon footprint.
We’re proud to be the first developer in Australia to adopt
BubbleDeck concrete. By capitalising on the lightweight strength
of recycled plastic balls, this innovative material has allowed
us to dramatically decrease the concrete and steel required to
structurally support each apartment floor. It may seem small, but
changes to the way we build such as this can have profound positive
flow on effects. We’ve reduced our concrete use by around a third,
dramatically decreasing the number of mixer truck visits required
for each project. This will protect our environment, for future
generations to come.
As a result of using BubbleDeck
concrete alone, Finbar has unlocked
incredible environmental benefits:
QUIETER ROADS
27,800 cars taken
off our roads for one year.
PRESERVED NATIVE
BUSHLAND
More than
2,495,625m2*
of native bush saved on
our urban fringes.
INNOVATIVE DESIGN
At Finbar, we’re continuously pushing the limits of design to deliver
future-focussed apartments with the highest energy efficiency on the
market. We keep up to date with cutting-edge design that embraces
innovative material selection, from taking advantage of the superior
thermal properties of concrete to the latest advances in glazing. The
result is exceptional residences that offer year-round comfort, with less
reliance on energy-draining heating and cooling. The proof is in the
NatHERS ratings, with Finbar developments surging past the minimum
6 stars to routinely achieve an 8-star average.
CLEANER AIR TO BREATHE
More than
55,600 tonnes
of CO2
saved from entering our
atmosphere.
*Number of apartment lots developed by the average
site area of new greenfield land sub divisions.
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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2 0
MODERN AMENITIES
Finbar developments are designed for tomorrow. We
predict how residents want to live, sleep, travel, eat,
exercise, work and unwind. From guest studios, parcel
lockers, virtual golf driving ranges, putting greens
and bike-share, to glamping experiences, zoom room
pods, kids play areas, pet play and wash zones, we’re
continuously enhancing and evolving our amenities over
the years, customised to each development, to treat
residents to the most unique living experiences.
Private glamping nook
Dog play area
LIFE.
EXCITEMENT.
ENERGY.
Finbar apartments are more than places to live - they
make places come alive. We design our developments
in the broader context of the locale, spilling out
and activating streetscapes with food, music and
experiences that draw in residents and visitors from
near and far. Perth is now one of the most liveable
cities in the world – and Finbar is proud to play a part in
evolving the city into its next iteration.
WINNING RESPECT
At Finbar, we work incredibly hard to earn the trust
of the WA community, our industry peers, and
stakeholders. We’ve set the bar sky high, challenging
ourselves to constantly innovate, evolve, and reinvent
to help redefine the skyline in Perth.
With every successful project, we build belief.
Finbar’s reputation continues to grow on the back of
endorsement by respected industry voices, from the
Urban Development Institute of Australia recognising
our exceptional projects, to City of Perth paying
tribute to Finbar’s nearly two-decade contribution
to the Perth CBD. And we’re not finished yet. As we
evolve our portfolio into the future, our ambition
remains stronger than ever – to remain WA’s largest
and most trusted apartment developer.
AWARDS &
ACHIEVEMENTS
Winning awards isn’t why we build. It simply reflects
our commitment to building better lifestyles with
respect and appreciation for all the hard work and
dedication of the entire Finbar team. We’re proud to
be recognised with a suite of awards over the years.
Putting green
A r ti s t im p r e s s i o n s
AWARDS
2021
Property Council WA.
Best Residential Development (5 storeys or more)
award for Sabina Applecross.
2021
UDIA Judges Commendation in the High Density
Development category for Sabina Applecross.
2017
UDIA High Density Development award for
Concerto Apartments.
2015
UDIA High Density Development award for
Spring View Towers.
2014
UDIA High Density Development and Urban Renewal
awards for St Marks Apartments.
2013
Lord Mayor Lisa-M. Scaffidi of the City of Perth
presented Finbar’s Executive Chairman with a
plaque from the City of Perth in recognition of Adagio
Apartments and Finbar’s contribution to the City for
almost two decades. This acknowledgement is a
result of the very strong relationship that Finbar has
developed with the City of Perth over the years with
approximately 90% of the Company’s developments
being located in the inner city of Perth.
2013
UDIA High Density Development award for Pelago West.
Finbar also received the UDIA Judges Award in 2013
for Pelago West, acknowledging the achievement
of delivering Karratha’s first mixed use high-rise
apartment development as part of the Pilbara Cities
State Government initiative.
2012
UDIA High Density Development award for Fairlanes.
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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2 2
Completed
Projects
DIANELLA APARTMENTS
36 Chester Avenue, Dianella
Project Company
36 Chester Avenue Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 100%
Construction Commenced Aug-20
Construction Completed
Sep-21
Total Lots
128
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
$62.6m
$49.6m
104 (81%)
24 (19%)
A
L
L
E
N
A
D
I
Dianella Apartments is conveniently located to the
amenity of Dianella Plaza and nearby high frequency
public transport. Combined with resort facilities, the
128 residential apartments within a low-rise built form
offers housing diversity within a local market devoid of
housing choice. Construction has been completed and
settlements have begun with the balance of unsold stock
expected to meet the strong owner-occupier demand
currently being experienced.
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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2 4
Palmyra
APARTMENTS EAST
Lot 1001-1003 Rowe
Avenue Pty Ltd
Equity Accounted Investee
RIVERENA
5 Rowe Avenue, Rivervale
Project Company
Entity Type
Finbar’s Ultimate Interest 50%
Marketing Commenced
Feb-19
Construction Completed Nov-20
Total Lots
125
Total Project Sales Value
$52.4m
Value of Sales to Date
$52.4m
Lots Sold
Lots Unsold
125 (100%)
0
ONE KENNEDY
1 Kennedy Street, Maylands
Project Company
241 Railway Parade
Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Marketing Commenced
Oct-18
Construction Completed May-20
Total Lots
123
Total Project Sales Value
$53.5m
Value of Sales to Date
$53.5m
Lots Sold
Lots Unsold
123 (100%)
0
Y
D
E
N
N
E
K
E
N
O
SABINA APPLECROSS
908 Canning Highway, Applecross
PALMYRA APARTMENTS EAST
49 McGregor Road, Palmyra
Project Company
Finbar Applecross Pty Ltd
Project Company
43 McGregor Road Pty Ltd
Entity Type
Fully Owned Subsidiary
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Marketing Commenced
Feb-18
Construction Completed
Feb-20
Total Lots
167
Total Project Sales Value
$117.6m
Value of Sales to Date
$117.6m
Lots Sold
Lots Unsold
167 (100%)
0
Finbar’s Ultimate Interest 50%
Marketing Commenced
Jan-18
Construction Completed
Sept-19
Total Lots
128
Total Project Sales Value
$50m
Value of Sales to Date
$50m
Lots Sold
Lots Unsold
128 (100%)
0
I
A
N
B
A
S
A
R
Y
M
L
A
P
A
N
E
R
E
V
I
R
Riverena is the second stage of the Arbor development
in the Springs precinct, which comprises 125 one, two,
and three-bedroom residential apartments. Situated in
an ideal location close to the Swan River, Perth CBD,
Optus Stadium, and various dining and entertainment
options to enhance residents’ lifestyles.
One Kennedy comprises 120 one, two, and three
bedroom residential three storey walk-up apartments
and three commercial lots. One Kennedy capitalises on
its proximity to public transport, located only 200 metres
from Maylands railway station, and connecting directly
to the Central Business District 4.5 kilometres away.
Located only metres from the Swan River and approximately 700
metres to the Canning Bridge Train Station. Sabina is the first
stage of a three stage development and consists of 164 residential
apartments and three ground floor commercial tenancies within
a podium and 30 storey tower built form. In 2021 Sabina received
a Judges’ Commendation in the UDIA Awards for Excellence. This
year Sabina was awarded UDIA Judges Commendation in the
High Density Development Category and Property Council WA
Best Residential Development.
Situated on the doorstep of the historic port city of
Fremantle in the established suburb of Palmyra,
Palmyra Apartments Estate East is the first stage of a
transformative three-storey residential development.
Achieving a strong response from first home buyers
and downsizers, the project successfully responded to
the growing owner-occupier demand for well-located,
affordable and good amenity product.
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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2 6
VUE TOWER
63 Adelaide Terrace, East Perth
REVA
5 Harper Terrace, South Perth
Project Company
63 Adelaide Terrace Pty Ltd
Project Company
5-7 Harper Terrace Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Marketing Commenced
Feb-15
Construction Completed
June-19
Total Lots
250
Approximate Total Project
Sales Value
$143.6m
Value of Sales to Date
$142.1m
Lots Sold
Lots Unsold
249 (99.6%)
1 (0.4%)
R
E
W
O
T
E
U
V
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 100%
Marketing Commenced
Jul-17
Construction Completed
Feb-19
Total Lots
59
Approximate Total Project
Sales Value
$47m
Value of Sales to Date
$42.5m
Lots Sold
Lots Unsold
53 (90%)
6 (10%)
A
V
E
R
Vue Tower is located just 150 metres from Langley
Park and 300 metres from the Perth foreshore. The
apartments enjoy expansive views of the City, the
Swan River, Heirisson Island, Optus Stadium and the
Burswood Peninsula. The project consists of a 34 level
building and podium, and comprises 245 residential
apartments with ground floor commercial lots and
office units on levels one and two.
Adjacent to Finbar’s highly successful Aurelia project in
South Perth, Reva is situated fronting Harper Terrace
and comprises of 41 luxury one, two, and three bedroom
apartments with rooftop amenities, as well as 18
commercial lots that were developed within the Harper
Terrace structure.
Projects Under
Construction
A r ti s t im p r e s s i o n
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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2 8
CIVIC HEART
1 Mends Street, South Perth
Project Company
1 Mends Street Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 52.5%
Construction Commenced FY21
Estimated Completion
Total Lots
FY24
335
Approximate Total Project
Sales Value
$413.5m
Value of Sales to Date
$173.3m
Lots Sold
Lots Unsold
187 (56%)
148 (44%)
T
R
A
E
H
C
I
V
I
C
This iconic site bounded by Mends Street, Labouchere
Road and Mill Point Road offers luxurious apartments,
world-class resort facilities, and a thriving ground floor
commercial precinct anchored by the heritage South
Perth Police Station and Post Office. Located in close
proximity to the Swan River, Perth Zoo, and the Mends
Street retail high street, Civic Heart is a transformational
development that has achieved strong sales in a highly
competitive localised market.
AT238
238 Adelaide Terrace, Perth
Project Company
240 Adelaide Terrace
Pty Ltd
Entity Type
Equity Accounted Investee
Finbar’s Ultimate Interest 50%
Construction Commenced FY21
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
FY23
121
$97.0m
$40.5m
58 (48%)
63 (52%)
8
3
2
T
A
AT238 comprises 119 residential apartments and two
ground floor commercial lots in a 32 storey tower and
represents Finbar’s tenth development along Adelaide
Terrace. Embracing spacious semi-enclosed balconies,
AT238 is positioned as an unique apartment product
with a striking glazed façade and rooftop amenities that
take full advantage of the expansive views.
A r ti s t im p r e s s i o n s
A r ti s t im p r e s s i o n s
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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3 0
S P R I N G S R E S I D E N C E S
AURORA APPLECROSS
3 Kintail Road, Applecross
Project Company
Finbar Applecross Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Construction
Commencement
Estimated Completion
Total Lots
FY22
FY24
121
Approximate Total Project
Sales Value
$142.1m
Value of Sales to Date
$40.0m
Lots Sold
Lots Unsold
49 (40%)
72 (60%)
A
R
O
R
U
A
The second stage of three in the Canning bridge
precinct, Aurora combines luxurious apartment finishes
& world-class facilities within an affluent Applecross
address. Featuring a central shared lane and public
amenity piazza.
THE POINT
31 Rowe Avenue, Rivervale
Project Company
31 Rowe Avenue Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 65%
Construction
Commencement
Estimated Completion
Total Lots
FY22
FY24
176
Approximate Total Project
Sales Value
$101.0m
Value of Sales to Date
$66.7m
Lots Sold
Lots Unsold
122 (69%)
54 (31%)
I
T
N
O
P
E
H
T
The Point comprises 167 one, two, and three bedroom
apartments and nine commercial lots on the ground
floor and will be situated at the main entrance to the
Springs precinct, opposite the Aloft Hotel.
A r ti s t im p r e s s i o n s
A r ti s t im p r e s s i o n s
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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3 2
Future
Projects
GARDEN TOWERS
Corner of Hay St & DeVlamingh Ave, East Perth
Project Company
Garden Towers East Perth
Pty Ltd
Entity Type
Equity Accounted Investee
Finbar’s Ultimate Interest 50%
Construction
Commencement
Estimated Completion
Total Lots
FY23
TBC
344
Approximate Total Project
Sales Value
$249.1m
Value of Sales to Date
$69.6m
Lots Sold
Lots Unsold
98 (28%)
246 (72%)
Positioned opposite Queens Gardens in East Perth,
Garden Towers will be comprised of 331 one, two, and
three bedroom apartments plus 13 commercial units.
A r ti s t im p r e s s i o n
A r ti s t im p r e s s i o n s
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
33
3 4
Palmyra
APARTMENTS WEST
BEL-AIR
239 Great Eastern Highway, Belmont
Project Company
239 Great Eastern Highway
Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 100%
Estimated Completion
Total Lots
TBC
194
Approximate Total Project
Sales Value
$92m
The 239 Great Eastern Highway project has an approved
DA for 194 one, and two bedroom apartments and
154sqm of ground floor commercial.
ROMEO
912 Canning Highway, Applecross
PALMYRA APARTMENTS WEST
45 McGregor Road, Palmyra
Project Company
Finbar Applecross Pty Ltd
Project Company
43 McGregor Road Pty Ltd
Entity Type
Fully Owned Subsidiary
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
TBC
155
Approximate Total Project
Sales Value
$121m
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
TBC
130
Approximate Total Project
Sales Value
$52m
A
R
Y
M
L
A
P
Located only metres from the Swan River and
approximately 600 metres to the Canning Bridge Train
Station, this 2,620sqm site fronting Canning Highway
received DA approval in April 2017 as the third of three
stages comprising 151 residential apartments and three
ground floor commercial tenancies within a podium and
26 storey tower built form.
The Palmyra second stage has received an amended
DA to incorporate market feedback from stage one.
Comprising 130 residential apartments, the introduction
of lifts and re-alignment of apartment typologies within
a low-rise structure, this development is designed to
respond to first home buyer and downsizer drivers within
the strong owner-occupier purchaser demographic, and
is anticipated to have an end value of $52 million.
A r ti s t im p r e s s i o n s
A r ti s t im p r e s s i o n s
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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3 6
LOT 1000
32 Riversdale Road, Rivervale
2 HOMELEA COURT
Cnr Rowe Avenue & Homelea Court, Rivervale
LOT 888
2 Hawksburn Road, Rivervale
FORMER ABC STUDIOS
187 Adelaide Terrace, East Perth
Project Company
32 Riversdale Road Pty Ltd
Project Company
Entity Type
Fully Owned Subsidiary
2 Homelea Court Springs
Pty Ltd
Project Company
Rowe Avenue Pty Ltd
Project Company
Finbar Sub 104 Pty Ltd
Entity Type
Equity Accounted Investee
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
TBC
143
Approximate Total Project
Sales Value
$88m
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 100%
Estimated Completion
Total Lots
TBC
135
Approximate Total Project
Sales Value
$83m
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
TBC
TBC
TBC
Finbar’s Ultimate Interest 100%
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
TBC
TBC
TBC
Lot 1000 comprises 4,069 square metres of absolute
waterfront land with expansive views of the Swan River,
Stadium Precinct, and Perth CBD. Public advertising
has commenced on final, amended DA plans of 19
storey tower with 143 units. Estimated determination of
the DA is late 2022.
2 Homelea Court comprises 3,770 square meters
of land located on the corner of Rowe Avenue and
Homelea Court, opposite Finbar’s Spring View Towers
is proposed to be developed into a project consisting of
approximately 135 apartments within a 18 level building.
The proposed apartment project has an estimated end
value of approximately $83 million.
The current approved DA comprises a six level office
building with 6,250sqm NLA.
The former ABC Radio Studios heritage building with
a GFA of 3,711sqm over three levels. Finbar acquired
the final stage from the JV partner to better leverage
potential future development outcomes.
A r ti s t im p r e s s i o n
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
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3 8
PELAGO
Sharpe Avenue, Karratha
Total Lots
Residential Lots
Commercial Lots
120
98
22
FY23 Forecast Rent
$5.81m
Lots Leased
112 (93%)
Residential Lots Leased
96 (97%)
Commercial Lots Leased
16 (73%)
FAIRLANES
181 Adelaide Terrace, East Perth
Total Sqm
Office Sqm
Retail Sqm
7,577
7,107
470
FY23 Forecast Rent
$1.96m
Sqm Leased
7361 (93%)
AURELIA
1 Harper Terrace, South Perth
Total Sqm
929
Estimated sales value
$6.5m
Estimated income value
$366,000 p.a.
Investment
Property
2022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 39
2022 Fi nb ar Group L i mited An nu a l Re po rt
4 0
FINBAR GROUP LIMITED
Financial
Report
CONTENTS
PAGE
Directors’ Report
(including Corporate Governance Statement)
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Lead Auditor’s Independence Declaration
ASX Additional Information
41
57
58
59
60
61
95
96
101
102
2022 Finbar Group Limited Annual Report DIRECTORS’ REPORT
For the Year Ended 30 June 2022
The Directors present their report together with the consolidated financial report of the Group, comprising Finbar Group Limited
(‘the Company’), its subsidiaries and the Group’s interest in equity accounted investees for the financial year ended 30 June 2022
and the independent auditor’s report thereon.
DIRECTORS’ REPORT (Continued)
For the Year Ended 30 June 2022
1. Directors
The Directors of the Company at any time during or since the end of the financial year are:
CONTENTS OF DIRECTORS’ REPORT
1 Directors
2 Company Secretary
3 Directors’ Meetings
4 Corporate Governance Statement
4.1 Board of Directors
4.2 Remuneration Committee
4.3 Remuneration Report - Audited
4.3.1 Principles of Remuneration - Audited
4.3.2 Directors’ and Executive Officers’ Remuneration - Audited
4.3.3 Analysis of Bonuses included in Remuneration Report - Audited
4.3.4 Directors’ and Executives Interests
4.3.5 Equity Instruments - Audited
4.4 Audit Committee
4.5 Risk Management
4.6 Ethical Standards
4.7 Communication with Shareholders
4.8 Diversity
5 Principal Activities
6 Operating and Financial Review
7 Dividends
8 Events Subsequent to Reporting Date
9 Likely Developments
10 Directors’ Interests
11 Indemnification and Insurance of Officers and Auditors
12 Non-audit Services
13 Lead Auditor’s Independence Declaration
PAGE
42
43
43
43
44
44
45
45
47
48
48
49
49
49
50
51
51
52
52
54
55
55
55
56
56
56
Executive Director and Chairman
John CHAN - BSc, MBA, MAICD
Director since 27 April 1995
Chairman since 15 July 2010
John Chan is Executive Director and Chairman of Finbar, and a Director of its Subsidiaries and equity accounted investees.
John was appointed director in 1995 and was instrumental in re-listing Finbar on the ASX as a property development company.
Prior to joining Finbar, John headed several property and manufacturing companies both in Australia and overseas.
John holds a Bachelor of Science from Monash University in Melbourne and a Master of Business Administration from the University
of Queensland. John is a Member of the Australian Institute of Company Directors, is a Trustee for the Western Australian Chinese
Chamber of Commerce, and is a former Senate Member of Murdoch University.
Managing Director
Darren John PATEMAN - EMBA, GradDipACG, ACSA, AGIA, MAICD
Director since 6 November 2008
Managing Director since 15 July 2010
Darren Pateman is the Managing Director of Finbar and a Director of Finbar’s Subsidiaries and equity accounted investees.
Darren commenced with Finbar prior to its relisting on the ASX as a property development company in 1995 and in this time has played
a primary role in developing Finbar’s systems, strategy and culture.
Darren has held several positions in his 27 years with the company which has given Darren an intimate knowledge of the key aspects
of Finbar’s business. Darren was formerly Company Secretary from 1996 to 2010, Chief Executive Officer from 2008 to 2010, and was
appointed Managing Director on 15 July 2010.
Darren is a Chartered Secretary and holds an Executive Master of Business Administration from the University of Western Australia
and a Graduate Diploma in Applied Corporate Governance (GradDipACG). Darren is an Associate of the Institute of Chartered
Secretaries and Administrators and a Member of the Australian Institute of Company Directors.
Executive Director and Chief Operations Officer
Ronald CHAN
Director since 24 February 2017
Ronald Chan is the Chief Operations Officer of Finbar and a Director of Finbar’s Subsidiaries and equity accounted investees.
Ronald joined the Board as an Executive Director on 24 February 2017. Ronald brings 18 years of experience in Finbar’s Company
operations where he has worked in several roles in the organisation including marketing, contract administration, and in 2013 was
appointed Chief Operations Officer. In this role Ronald has gained an intimate understanding of the Company’s relationships and
systems and managed the Company’s transition to digital and online marketing strategies.
Non-executive Director
Kee Kong LOH - B Acc, CPA
Director since 28 April 1993
Kee Kong Loh joined the Board in April 1993 and has substantial experience in the governance of companies in property development,
marine transportation, and electronics manufacturing sectors. He has a degree in accountancy from the University of Singapore and is
a member of the Institute of Certified Public Accountants of Singapore.
Non-executive Director
Terence Siong Woon PEH - B.Comm, M.Comm
Director since 24 April 2018
Terence Peh joined the Board on 24 April 2018. Terence is Chief Executive Officer and Executive Director of Chuan Hup Holdings
Limited, an investment company listed on the Singapore Stock Exchange, and Finbar’s largest corporate shareholder.
Terence has over 23 years of experience in property development investment and project management in Asia Pacific, and
management experience in finance in the marine and electronics manufacturing services industries.
Terence obtained his Bachelor of Commerce in Marketing from Curtin University and a Master of Commerce in Finance from the
University of New South Wales.
41
4 2
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
DIRECTORS’ REPORT (Continued)
For the Year Ended 30 June 2022
1. Directors (continued)
Non-executive (Independent) Director
Lee VERIOS - LLB, MAICD
Director since 6 December 2011
DIRECTORS’ REPORT (Continued)
For the Year Ended 30 June 2022
4. Corporate Governance Statement (continued)
4.1 Board of Directors
Role of the Board
Lee Verios joined the Board in December 2011. He is a well credentialed commercial lawyer having practised in Western Australia for
over 40 years.
Until his retirement from practising law in 2012, Lee was partner in the international law firm of Norton Rose and the leader of their
Commercial Property division in Perth. Throughout his legal career, Lee has held senior management roles in each of the firms of
which he has been a member.
The Board Charter sets out the Board’s role, powers and duties, and establishes the functions reserved for the Board and those which
are delegated to the management. The Board’s primary role is the protection and enhancement of long-term shareholder value. To
fulfil this role, the Board is responsible for the overall corporate governance of the Group.
The Board has delegated responsibility for the operation and administration of the Group to the Executive Chairman, the Managing
Director and Senior Executives.
In addition to his legal practice, Lee is an experienced company director, having held positions in a variety of public and private
enterprises.
Composition of Board
Lee is a member of the Australian Institute of Company Directors, the Law Society of WA and was previously Chairman of the
Australian Indonesian Business Council (WA Branch).
2. Company Secretary
The Company Secretary of the Company at any time during or since the end of the financial year is:
Edward Guy BANK - B Bus, ASCPA
Company Secretary since 2 December 2016
Edward Bank is the Company Secretary of Finbar, and of Finbar’s Subsidiaries and equity accounted investees. Ed is a Certified
Practicing Accountant with 28 years experience in private practice including 8 years as the Company’s external accountant. Ed joined
the Company in 2005 in the capacity of Chief Financial Officer.
Ed continues to hold the position of Chief Financial Officer.
3. Directors’ Meetings
The number of Directors’ meetings attended by each of the Directors of the Company, whilst being a Director, during the financial
year are:
Director
Board
Meetings
Held
Board
Meetings
Attended
Resolutions
Without
Meetings
Audit
Committee
Meetings
Held
Audit
Committee
Meetings
Attended
Remuneration
Committee
Meetings Held
Remuneration
Committee
Meetings
Attended
John CHAN
Darren John PATEMAN
Ronald CHAN
Kee Kong LOH
Lee VERIOS
Terence Siong Woon PEH
4
4
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3
N/A
N/A
N/A
2
2
2
N/A
N/A
N/A
2
2
2
2
N/A
N/A
2
2
2
2
N/A
N/A
2
2
2
4. Corporate Governance Statement
The Board (‘Board’) of Finbar Group Limited (‘Finbar’ or ‘the Company’), its subsidiaries and equity accounted investees (collectively
the Group) is committed to maintaining a high standard of corporate governance in the conduct of the organisation’s business in
order to create and deliver value to shareholders. In this regard, Finbar has established a corporate governance framework, including
corporate governance policies and charters to assist in this commitment. A copy of these policies and charters are available from the
governance page of Finbar’s website, www.finbar.com.au and are referenced throughout this document where relevant.
The framework is reviewed and revised in response to changes to law, developments in corporate governance best practice and
changes to the Finbar business environment.
As a listed entity, Finbar is required to comply with Australian laws including the Corporations Act 2001 (Cth) and the Australian
Securities Exchange Listing Rules, and to report against the ASX Corporate Governance Council’s Principles and Recommendations.
The Board recognises the importance of ensuring that Directors are free from interests and relationships that could, or could
reasonably be perceived to materially interfere with the Director’s ability to exercise independent judgement and act in the Group’s best
interests.
Accordingly, the Board has adopted guidelines, set out in the Board Charter, which are used to determine the independence of the
Directors.
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Group.
Where the Board believes that a significant conflict exists for a Director on a Board matter, the Director concerned will be restricted
from receiving materials, discussing or voting on the matter.
Details of each of the non-executive Directors (Independent) are set out in the Directors Report (page 43).
4.2 Remuneration Committee
The Remuneration Committee Charter sets out the Remuneration Committee’s role, powers and duties, and establishes the functions
delegated to the Committee by the Board. The Remuneration Committee reviews and makes recommendations to the Board on
remuneration packages and policies applicable to the Executive Officers and Directors themselves of the Company and of other Group
Executives. It is also responsible for share option schemes, incentive performance packages, superannuation entitlements, retirement
and termination entitlements, fringe benefits policies and professional indemnity and liability insurance policies.
The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages and policies applicable
to the Executive Officers and Directors themselves of the Company and of other Group Executives. It is also responsible for share
option schemes, incentive performance packages, superannuation entitlements, retirement and termination entitlements, fringe
benefits policies and professional indemnity and liability insurance policies.
The following directors serve on the Remuneration Committee and the members of the Remuneration Committee are:
• Terence Siong Woon PEH (Chairman) - Non-executive Director*
• Kee Kong LOH - Non-executive Director*
• Lee VERIOS - Non-executive Independent Director
• John CHAN - Executive Director and Chairman
*Kee Kong Loh was the Chairman of the Remuneration Committee until 28 February 2022 and was replaced by Terrence Siong Woon
Peh from 1 March 2022.
The Remuneration Committee Charter sets out the process for the periodical evaluation of the performance of the Executive Chairman
and Managing Director. These evaluations have been conducted during the period.
The Remuneration Committee Charters sets out the process for the periodical evaluation of the performance of the Senior Executives.
The Remuneration Committee in consultation with the Executive Chairman and Managing Director are responsible for the periodical
evaluation of the performance of the Senior Executives. These evaluations have been conducted during the period.
Finbar has a written agreement, either in the form of an employment contract or letter of employment, with each Executive Director
and Senior Executive which sets out the terms of their appointment.
A copy of the Remuneration Committee Charter is available on Finbar’s website www.finbar.com.au.
43
4 4
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited
4.3.1 Principles of Remuneration
Remuneration of Directors and Executives is referred to as remuneration as defined in AASB 124 Related Party Disclosures and
Section 300A of the Corporations Act 2001.
Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Group,
including Directors of the Company and other Executives. Key management personnel comprise the Directors of the Company and
Executives for the Company and the Group including the Section 300A Executives.
Remuneration levels for key management personnel and the secretary of the Company, and key management personnel and
secretaries of the Group, are competitively set to attract and retain appropriately qualified and experienced Directors and Executives.
The Remuneration Committee periodically obtains independent advice on the appropriateness of remuneration packages of both the
Company and the Group given trends in comparative companies both locally and internationally and the objectives of the Company’s
remuneration strategy.
The remuneration structures explained below are designed to attract suitably qualified candidates, reward the achievement of
strategic objectives and achieve the broader outcome of creation of value for shareholders. The remuneration structures take into
account:
• the capability and experience of the key management personnel;
• the key management personnel’s ability to control the Group’s performance;
• the key management personnel’s contribution to revenue and future earnings potential;
• project outcomes;
• the key management personnel’s length of service; and
• the Group’s performance including:
- the Group’s earnings;
- the growth in share price and delivering constant returns on shareholder wealth; and
- the amount of incentives within each key management person’s remuneration.
Remuneration packages include a mix of fixed and variable remuneration, short-term performance-based incentives and can include
long-term performance-based incentives.
Fixed Remuneration
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.1 Principles of Remuneration (continued)
Long-term Incentive
Incentive shares or options issued under the Employee Incentive Plan 2013 or Director Share Plan 2014 are made in accordance with
thresholds set in the plans approved by shareholders at the relevant Annual General Meeting, subject to the Board’s discretion.
Short-term and Long-term Incentive Structure
The Remuneration Committee considers that the above performance-linked remuneration structure is generating the desired
outcome. The evidence of this is in respect to the long term historical profit and dividend growth of the Company, coupled with the long
term retention of key management personnel resulting in the retention of Company intellectual property.
Consequences of Performance on Shareholders Wealth
In considering the Group’s performance and benefits for shareholder wealth, the Remuneration Committee has regard to the following
indices in respect of the current financial year and the previous four financial years:
Total comprehensive income
$10,975,000
$8,863,000
$7,068,000
$11,372,000
$13,760,000
2022
2021
2020
2019
2018
Profit before tax
Dividends paid
Change in share price
Return on capital employed
Return on total equity
$15,048,000
$12,043,000
$10,488,000
$15,947,000
$18,786,000
$10,884,000
$8,163,000
$13,606,000
$16,302,000
$13,874,000
-$0.17
5.06%
4.52%
$0.15
3.82%
3.65%
-$0.14
4.47%
2.92%
-$0.10
5.58%
4.58%
$0.14
6.24%
5.46%
Profit before tax is considered as one of the financial targets in setting the STI.
Dividends, changes in share price, and return of capital are included in the total shareholder return (TSR) calculation which is one of
the performance criteria assessed for the LTI. The other performance criteria assessed for the LTI is growth in earnings per share,
which takes into account the Group’s net profit.
The overall level of key management personnel’s remuneration takes into account the performance of the Group over a number of
years.
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any fringe benefit tax
charges related to employee benefits including motor vehicles), as well as employer contributions to superannuation funds.
Directors
Total base remuneration for all Directors, last voted upon by shareholders at the November 2013 AGM, is not to exceed $360,000 per
annum. Directors’ base fees are presently $213,811 per annum.
Remuneration levels are reviewed annually through a process that considers individual, segment and overall performance of the
Group. In addition, where appropriate, external consultants provide analysis and advice to ensure the Directors’ and Senior Executives’
remuneration is competitive in the market place. A Senior Executive’s remuneration is also reviewed on promotion.
Performance Linked Remuneration
Performance linked remuneration includes short-term incentives (STI) and can include long-term incentives (LTI), which are designed
to reward key management personnel for meeting or exceeding their financial and personal objectives. The short-term incentive is
an ‘at risk’ bonus provided in the form of cash, whilst the long-term incentive is provided as shares or options over ordinary shares of
the Company under the rules of the Employee Incentive Plan 2013 and Director Share Plan 2014. As at 30 June 2022, there were no
options on issue.
Short-term Incentive
The Remuneration Committee has elected to set the primary financial performance objective of ‘profit before tax’ as the key measure
for the calculation of the short term incentives of key management personnel. The non-financial objectives vary with position and
responsibility and include measures such as those outlined above. The STI for the current period was wholly based on a percentage
of ‘profit before tax’. Contractual amounts are accrued in the current year and discretionary amounts are accounted for in the year of
payment. The contractual amount is set at 3.3% of ‘profit before tax’ for 2022 financial year.
At the end of the financial year the Remuneration Committee assess the actual performance of the Group, the relevant segment and
the individual key management personnel contribution to the Group. The performance evaluation in respect of the year ended 30 June
2022 has taken place in accordance with this process.
45
4 6
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
For the year ended
30 June 2022
Executive Directors
Mr John Chan, Executive
Chairman
Mr Darren John Pateman,
Managing Director
Mr Ronald Chan, Chief
Operating Officer
Non-executive Directors
Mr Kee Kong Loh
Mr Terence Siong Woon Peh
Mr Lee Verios
Executives
For the year ended
30 June 2021
Executive Directors
Mr John Chan, Executive
Chairman
Mr Darren John Pateman,
Managing Director
Mr Ronald Chan, Chief
Operating Officer
Non-executive Directors
Mr Kee Kong Loh
Mr Terence Siong Woon Peh
Mr Lee Verios
Executives
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.2 Directors’ and Executive Officers’ Remuneration
Details of the nature and amount of each major element of remuneration of each Director of the Company and of the named Group
Executives who received the highest remuneration are:
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.2 Directors’ and Executive Officers’ Remuneration (continued)
Notes in relation to the Table of Directors’ and Executive Officers’ Remuneration - Audited
(A) Short-term Incentive Cash Bonus:
Short-Term
Post - Employment
Directors
Fees and
Committee
Fees
$
STI Cash
Bonus
(A)
$
Non
Monetary
Benefits
$
Salary
$
Total
$
Superannuation
$
Other
Long
Term
$
Total
$
-
587,356
190,706
-
778,062
27,981
13,176
819,219
The short-term incentive bonus is for performance during the respective financial years using the criteria set out on Page 45.
Details of the Group’s policy in relation to the remuneration that is performance related is discussed on Page 45.
On 25th August 2016, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive Shares
under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $207,500 which was repaid in August
2021. The related benefit is disclosed in table 4.3.2 on page 47.
On 13th September 2017, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive
Shares under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $202,500 which is repayable by
13th September 2022. The related benefit is disclosed in table 4.3.2 on page 47.
-
738,362
190,706
23,620
952,688
24,021
25,117
1,001,826
4.3.3 Analysis of Bonuses included in Remuneration
-
411,593
95,353
-
506,946
24,021
16,125
547,092
Details of the vesting profile of the short term incentive bonuses awarded as remuneration to each Director of the Company and each
of the named Group Executives are detailed below.
78,603
74,937
74,790
-
-
-
-
-
-
-
-
-
78,603
74,937
74,790
-
-
7,479
-
-
-
78,603
74,937
82,269
Mr Edward Guy Bank, CFO
-
320,901
95,353
-
416,254
24,021
12,148
452,423
228,330
2,058,212
572,118
23,620 2,882,280
107,523
66,566
3,056,369
Short-Term
Post - Employment
Directors
Fees and
Committee
Fees
$
STI Cash
Bonus
(A)
$
Non
Monetary
Benefits
$
Salary
$
Total
$
Superannuation
$
Other
Long
Term
$
Total
$
Executive Directors
Mr John Chan
Mr Darren John Pateman
Mr Ronald Chan
Executives
Mr Edward Guy Bank
Short Term Incentive Bonus
Included in
Remuneration
$
% vested in year
190,706
190,706
95,353
95,353
572,118
100%
100%
100%
100%
100%
Amounts included in remuneration for the financial year represent the amount of entitlements in the financial year based on
achievement of personal goals and satisfaction of performance criteria, as per Short Term Incentives (page 47). No discretionary bonus
was paid to the Executives in the 2022 financial year (2021: NIL). Any discretionary amounts of executive bonuses relating to 2022
financial year are yet to be determined, and therefore may impact future financial years.
-
527,692
132,272
-
659,964
25,000
8,869
693,833
4.3.4 Directors’ and Executives Interests
-
663,948
132,272
47,134
843,354
21,614 11,032
876,000
Movement in Shares
-
368,298
66,136
-
434,434
21,614
6,069
462,117
The movement during the reporting period in the number of ordinary shares in Finbar Group Limited held, directly, indirectly or
beneficially, by each key management person, including their related parties, is as follows:
71,710
61,535
65,490
-
-
-
-
-
-
-
-
-
71,710
61,535
65,490
-
-
6,220
-
-
-
71,710
61,535
71,710
Directors
Mr John Chan*
Mr Darren John Pateman
Mr Ronald Chan**
Mr Kee Kong Loh
Mr Edward Guy Bank, CFO
-
290,381
66,136
-
356,517
21,694
4,707
382,918
198,735
1,850,319
396,816
47,134 2,493,004
96,142 30,677
2,619,823
Mr Terence Siong Woon Peh***
Mr Lee Verios
Executives
Mr Edward Guy Bank
47
Held at
1 July 2021
Purchases
Sales
Held at
30 June 2022
27,318,265
1,250,000
3,632,493
-
17,091,098
1,803,035
2,000,904
-
55,837,175
4,594,668
72,393
300,000
-
-
-
-
-
-
-
-
-
28,568,265
3,632,493
18,894,133
2,000,904
60,431,843
72,393
300,000
4 8
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.4 Directors’ and Executives Interests (continued)
Directors
Mr John Chan*
Mr Darren John Pateman
Mr Ronald Chan**
Mr Kee Kong Loh
Mr Terence Siong Woon Peh***
Mr Lee Verios
Executives
Mr Edward Guy Bank
Held at
1 July 2020
Purchases
Sales
Held at
30 June 2021
27,031,551
3,609,493
286,714
23,000
15,481,061
1,610,037
2,000,904
55,837,175
72,393
300,000
-
-
-
-
-
-
-
-
-
-
-
27,318,265
3,632,493
17,091,098
2,000,904
55,837,175
72,393
300,000
4. Corporate Governance Statement (continued)
4.5 Risk Management (continued)
Risk Management and Compliance Control
Comprehensive practices have been established to ensure:
• capital expenditure with respect to land acquisitions or development agreements obtain prior Board approval;
• financial exposures are controlled, including use of derivatives. Further details of the Group’s policies relating to interest rates
management and credit risk are included in Notes 5 and 24 in the Notes to the Consolidated Financial Statements;
• management systems are monitored and reviewed to achieve high standards of performance and compliance with regulations;
• business transactions are properly authorised and executed;
• the quality and integrity of personnel (see below);
• financial reporting accuracy and compliance with the financial reporting regulatory framework (see below); and
• environmental regulation compliance (see below).
Quality and Integrity of Personnel
Training and development and appropriate remuneration and incentives with regular performance reviews create an environment of
cooperation and constructive dialogue with employees and senior management.
* John Chan has interests in Forward International Pty Ltd, APEX Investments Pty Ltd and Blair Park Pty Ltd which holds shares in
Finbar Group Limited.
Financial Reporting
** Ronald Chan has interests in Forward International Pty Ltd and Blair Park Pty Ltd which hold shares in Finbar Group Limited.
*** Terence Peh is a Director and shareholder of Chuan Hup Holdings Limited which holds shares in Finbar Group Limited.
No options for shares were granted to key management personnel as remuneration during the reporting period.
4.3.5 Equity Instruments
All options refer to options over ordinary shares of Finbar Group Limited issued under the Employee Incentive Plan 2013 or Director
Share Plan 2014. As at 30 June 2022, there were no options on issue.
4.4 Audit Committee
The Managing Director and the Chief Financial Officer have provided assurance, in writing to the Board that the Group’s financial
reports are founded on a sound system of risk management and internal compliance and control which implements the policies
adopted by the Board.
There is a comprehensive accounting system. Monthly actual results are reported against budgets approved by the Directors and
revised forecasts for the year are prepared regularly. Procedures are in place to ensure price sensitive information is reported to the
Australian Securities Exchange (ASX) in accordance with Continuous Disclosure Requirements.
A review is undertaken at each half year end of all related party transactions.
Environmental Regulation
The Audit Committee Charter sets out the Audit Committee’s role, powers and duties, and establishes the functions delegated to the
Audit Committee by the Board. The Audit Committee advises on the establishment and maintenance of a framework of internal control
and appropriate ethical standards for the management of the Group.
The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation.
Compliance with the requirements of environmental regulations and with specific requirements of site environmental licences was
substantially achieved across all operations with no instances of non-compliance in relation to licence requirements noted.
A copy of the Audit Committee Charter is available on Finbar’s website www.finbar.com.au.
The Board is not aware of any significant breaches of environmental regulations during the period covered by this report.
The following directors serve on the Audit Committee:
• Lee VERIOS (Chairman) - Non-executive Independent Director
• Kee Kong LOH - Non-executive Director
• Terence Siong Woon PEH - Non-executive Director
4.5 Risk Management
Oversight of the Risk Management Procedures
The Board has elected not to establish a separate Risk Committee to oversee risk management and instead the overall responsibility
of risk management resides with the Board in its entirety. In this regard, risk management considerations form part of the Board’s
discussions at scheduled meetings.
The Board oversees the establishment, implementation, and annual review of the Group’s risk management procedures. Management
has established and implemented informal risk management procedures for assessing, monitoring and managing all risks including
operational, financial reporting and compliance risks for the Group. The Managing Director and Chief Financial Officer provide
assurance, in writing to the Board, that the financial risk management and associated compliance and controls have been assessed
and found to be operating effectively.
4.6 Ethical Standards
All Directors, Managers and Employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the
reputation and performance of the Group.
Conflict of Interest
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Group.
Where the Board believes that a significant conflict exists for a Director on a Board matter, the Director concerned does not receive the
relevant Board papers and is not present at the meeting whilst the item is considered. Details of Director related entity transactions
with the Company and the Group are set out in Note 28 in the Notes to the Consolidated Financial Statements.
Code of Conduct
All Directors, Managers and Employees are expected to maintain high ethical standards including the following:
• aligning the behaviour of the Board and Management with the code of conduct by maintaining appropriate core Group values and
objectives;
• fulfilling responsibilities to shareholders by delivering shareholder value;
• usefulness of financial information by maintaining appropriate accounting policies, practices and disclosure;
• fulfilling responsibilities to clients, customers and consumers by maintaining high standards of product quality, service standards,
commitments to fair value, and safety of goods produced;
• employment practices such as occupational health and safety, employment opportunity, training and education support,
community activities, sponsorships and donations;
49
5 0
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
4. Corporate Governance Statement (continued)
4.6 Ethical Standards (continued)
Code of Conduct (continued)
• responsibilities to the individual, such as privacy, use of privileged or confidential information, and conflict resolution;
• managing actual or potential conflicts of interest;
5. Principal Activities
The principal activities of the Group during the course of the financial year continued to be property development and investment.
The Group’s focus is the development of medium to high-density residential buildings and commercial developments in Western
Australia by way of direct ownership, ownership through fully owned Subsidiaries or by equity accounted investees (through companies
registered specifically to conduct the development).
• corporate opportunities such as preventing Directors and key executives from taking advantage of property, information or position
The Group holds rental property through 175 Adelaide Terrace Pty Ltd, Finbar Karratha Pty Ltd and Finbar Commercial Pty Ltd.
for personal gain;
• confidentiality of corporate information;
• fair dealing;
• protection and proper use of the Group’s assets;
• compliance with laws; and
There were no significant changes in the nature of the activities of the Group during the financial year.
6. Operating and Financial Review
Operating Results
• reporting unlawful or of unethical behaviour including protection of those who report violations in good faith.
Total comprehensive income attributable to Owners of the Group
2022
2021
$10,975,000
$8,863,000
Trading in General Company Securities by Directors and Employees
The key elements of the Trading in Company Securities by Directors and Employees policy are:
• identification of those restricted from trading - Directors and Senior Executives may acquire shares in the Company, but are
prohibited from dealing in Company
• shares or exercising options:
- within two trading days after either the release of the Company’s half-year and annual results to the Australian Securities
Exchange (‘ASX’), the Annual General Meeting or any major announcement;
- whilst in possession of price sensitive information not yet released to the market;
• raising the awareness of legal prohibitions including transactions with colleagues and external advisers;
• raising awareness that the Company prohibits those restricted from trading in Company shares as described above from entering
into transactions such as margin loans that could trigger a trade during a prohibited period; and
• requiring details to be provided of the trading activities of the Directors of the Company.
4.7 Communication with Shareholders
The Board is committed to ensuring that the Company complies with its continuous disclosure obligations and to facilitate this, has
approved a Continuous Disclosure Policy that applies to all Group personnel, including the Directors and Senior Executives. The Board
seeks to promote investor confidence by seeking to ensure that trading in the Company’s shares take place in an informed market.
Finbar provides information about itself, its activities and operations, and its governance via its website www.finbar.com.au.
A copy of the Group’s Market Disclosure Policy is available on Finbar’s website www.finbar.com.au.
4.8 Diversity
The Board has considered the recommendation to formulate strict measurable targets for the purposes of the assessment of gender
diversity within the organisation. Given the small size and relatively stable nature of its workforce it has formed the view that at this
time it would not be appropriate or practical to establish a written policy regarding gender diversity. The Board will review this position
at least annually. However, generally, when selecting new employees or advancing existing employees, no consideration is given to
gender, age or ethnicity, but instead selections are based upon individual achievements, skill and expertise.
Gender representation
Board
Key Management Personnel
Senior Management
Group
2022
2021
Female
-
-
50%
56%
Male
100%
100%
50%
44%
Female
-
-
50%
55%
Male
100%
100%
50%
45%
Total comprehensive income attributable
to Owners of the Group
Basic EPS
Diluted EPS
Dividends paid
Dividends paid per share
Market price per share
Change in share price
Return on capital employed attributable
to Owners of the Group
Return on total equity attributable to
Owners of the Group
2022
2021
2020
2019
2018
$10,975,000
$8,863,000
$7,068,000
$11,372,000
$13,760,000
$0.04
$0.04
$0.03
$0.03
$0.02
$0.02
$0.04
$0.04
$0.06
$0.06
$10,884,000
$8,163,000
$13,606,000
$16,302,000
$13,874,000
$0.04
$0.68
-$0.17
5.06%
4.52%
$0.03
$0.85
$0.15
3.82%
3.65%
$0.05
$0.70
-$0.14
4.47%
$0.06
$0.84
-$0.10
5.58%
2.92%
4.58%
$0.06
$0.94
$0.14
6.24%
5.46%
Dividends for 2022 were fully franked and it is expected that dividends in future years will continue to be fully franked.
Key transactions that contributed to the consolidated net profit of the Company for the 2022 financial year were the completion of
Dianella Apartments, sales and settlements of completed stock held at 30 June 2021 as well as the ongoing rental of the Company’s
commercial properties. See below for further information on the Company’s project completions.
Review of Operations
Finbar Group Limited’s (‘Finbar’ or ‘the Company’) core business lies in the development of medium to high density residential
apartments and commercial property within the state of Western Australia. Finbar carries out its development projects in its own right
or through incorporated special purpose entities and equity accounted investees, of which the Company either directly or indirectly
holds interests in project profitability ranging between 50% and 100%.
The Company operates predominantly within the Perth CBD and surrounding areas.
Finbar’s business model involves the acquisition of suitable development land either directly or by way of an incorporated Special
Purpose Vehicle or by development agreements with Land Owners. Equity partners are sought to allow the Company to leverage into
larger development projects to take advantage of the benefits of economies of scale, and to help spread project risk.
Finbar outsources its design and construction activities to external parties.
The administration of the companies along with the operating, investment, and acquisitions decisions are made by Finbar’s Board and
Management. The Company employs 28 staff in its corporate offices in East Perth, Western Australia and 1 member of staff in its office
in the Pilbara.
This outsourcing model ensures that the Company is and remains scalable, efficient and agile in a market where acquisition and
project timing is critical in maintaining a competitive advantage, helping to protect margins and enhancing the returns Finbar can
generate for its shareholders.
There have been no significant changes in the Company’s operating model that occurred during the relevant reporting period and the
Company continued to develop and invest in built-form projects within Western Australia throughout the year as its core business.
51
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DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report 6. Operating and Financial Review (continued)
Review of Operations (continued)
6. Operating and Financial Review (continued)
Future Projects
Factors that may affect the Company’s profit are generally restricted to items that would be considered to reside outside of the control
of the Board and Management and are, in general, movements in interest rates, government rebates and incentives, changes in
taxation and superannuation laws, supply chain costs, banking lending policies and their regulatory changes, global economic factors,
resources sector activity, and employment rates.
The outbreak of COVID-19 globally and in Australia in 2020 remains as a significant risk event. The full impact on the Australian
economy, travel restrictions and period of recovery is yet to be known. While the measures implemented by the Federal and State
Governments were effective in reducing the impact of the virus, there may be ongoing outbreaks of COVID-19 which will require further
government response.
The Company’s Management has remained diligent in ensuring it maintains a strong balance sheet to protect and improve the
Company’s market position through this crisis. The construction commencement of Aurora in Applecross and The Point in Rivervale
as well as the completion of the project at Dianella positions the Company to benefit from the opportunities that may arise from
decreased competition and general industry stress. The ability to source new viable development opportunities is central to Finbar’s
ongoing success and the Board and Management has demonstrated a long track record of this ability.
The Board and Management control the Company’s key risks through the implementation of control measures which include; land
acquisitions generally secured without the use of debt funding, development funding which is carried out utilising senior bank funding
from major Australian banks, and the Company’s small and agile structure which can rapidly adapt to changes in market conditions.
There were no significant changes in the composition of overall assets and liabilities, with movements in assets from non-current to
current and movements in liabilities from non-current to current as projects reach completion. The Company continued to focus on
the generation of sales and rental revenue through property development and investment.
The Board and Management do not currently have the view that there is a requirement to reposition the Company’s overall business
model. The Board and Management continuously monitor market fluctuations and conditions and implement appropriate strategies to
benefit from and insulate the Company against changing market conditions.
Completed Projects
Dianella Apartments - 36 Chester Avenue, Dianella: 89 units have settled during the period. 27 units remain for sale in the 128 unit
development.
Reva - 5 Harper Terrace, South Perth: 4 units have settled in the reporting period. 6 commercial units remain for sale in the 59 unit
development.
Vue Tower - 63 Adelaide Terrace, East Perth: 6 units have settled in the reporting period. 1 commercial unit remains for sale in the
development of the 250 unit development.
Sabina Applecross - 908 Canning Highway, Applecross: 36 units have settled in the reporting period. The 167 unit development is now
fully sold and settled.
One Kennedy - 241 Railway Parade, Maylands: 36 units have settled in the reporting period. The 123 unit development is now fully sold
and settled.
Palmyra East Apartments - 43 McGregor Road, Palmyra: 3 units have settled in the reporting period. The 128 unit development is now
fully sold and settled.
Riverena - Lot 1001-1003 Rowe Avenue, Rivervale: 34 units have settled in the reporting period. The 125 unit development is now fully
sold and settled.
Aire West Perth - 647-659 Murray Street, West Perth: The 244 unit development is now fully sold.
Currently Under Construction
Civic Heart - 1 Mends Street, South Perth: Construction works continues to progress, with completion expected during financial year
ending 30 June 2024. To date 165 residential sales and 22 commercial sales have been achieved in the development of 309 residential
and 26 commercial units.
AT238 - 240 Adelaide Terrace, Perth: Construction works continues to progress, with completion expected during financial year ending
30 June 2023. To date 54 residential sales and 1 commercial sale have been achieved in the development of 119 residential and 2
commercial units.
Aurora Applecross - 3 Kintail Road, Applecross (Stage 2): Construction works commenced in November 2021, with completion
expected during financial year ending 30 June 2024. To date 47 residential sales have been achieved in the development of 118
residential and 3 commercial units.
Garden Towers East Perth - 101 Hay Street, East Perth - Marketing of the Garden Towers project continues to progress, with
construction expected to commence in the financial year ending 30 June 2023. To date 91 residential sales and 5 commercial sales
have been achieved in the development of 331 residential and 13 commercial units.
912 Canning Highway, Applecross (Stage 3): Development Approval has been received for 151 residential and 3 commercial units.
Palmyra West Apartments - 43 McGregor Road, Palmyra (Stage 2): Development Approval has been received for 130 residential units.
239 Great Eastern Highway, Belmont: Development Approval has been received for a development of 194 residential and 2 commercial
units.
Lot 1000 - 32 Riversdale Road, Rivervale: Development Approval lodged for a 19 storey tower with 143 units. Determination is expected
in December 2022.
Springs Commercial - 2 Hawksburn Road, Rivervale: The company has not secured a lease to date which would underpin the viability
of the development of a commercial building on this land. The company will continue to seek a leasing pre-commitment.
2 Homelea Court, Rivervale: Development options are currently being explored.
187 Adelaide Terrace, East Perth: Development options are currently being explored.
Investment Property
Fairlanes - 175 Adelaide Terrace, East Perth: The Fairlanes property has been valued during the reporting period. The valuation
resulted in no changes to the value of the property. The company continues to benefit from the investment income generated from the
leased property. The property is currently 97% leased. The company continues to actively market the remaining tenancies for rental.
Pelago Commercial - 23 & 26 Sharpe Avenue, Karratha: The Pelago commercial property has been revalued during the reporting
period. The valuation resulted in a $1,350,000 increase in value of the property. The company continues to benefit from the investment
income generated from the leased property. The property is currently 71% leased. The company continues to actively market the
remaining tenancies for rental.
Pelago Residential - 23 & 26 Sharpe Avenue, Karratha: The Pelago residential property has been revalued during the reporting period.
The valuation resulted in a $5,761,998 increase to the value of the property. The company continues to benefit from the investment
income generated from the leased property. The property is currently 98% leased. The company continues to actively market
tenancies for rental as they become available.
Vue Tower Commercial - 63 Adelaide Terrace, East Perth: Lot 4 at Vue Tower - Finbar Commercial Pty Ltd continues to be leased to a
non-profit organisation at $1 per annum until 13 June 2029.
Aurelia Commercial - 96 Mill Point Road, South Perth: Lots 132-138 at Aurelia were revalued during the period. The valuation resulted
in $150,000 decrease to the value of the property. The company is actively marketing the tenancies for rental.
Significant Changes in State of Affairs
Other than set out in this report, in the opinion of the Directors there were no significant changes in the state of affairs of the Group
that occurred during the financial year under review.
7. Dividends
Dividends paid or declared by the Company to members since the end of the previous financial year were:
Dividends Paid During the Year 2022
Final 2021 ordinary
Interim 2022 ordinary
Total Dividends Paid
Cents
per Share
Total Amount
$’000
Franked /
Unfranked
Date of Payment
2.00
2.00
5,442
5,442
10,884
Franked
10 September 2021
Franked
18 March 2022
Franked dividends declared or paid during the year were franked at the rate of 30%.
Proposed Dividend
After the balance date the following dividend has been proposed by the Directors. The dividend has not been provided for and there are
no income tax consequences.
The Point - 31 Rowe Avenue, Rivervale: Construction works commenced in March 2022, with completion expected during financial year
ending 30 June 2024. To date 121 residential sales and 1 commercial sale have been achieved in the development of 167 residential
and 9 commercial units.
Final 2022 ordinary
Total Dividend Proposed
2.00
5,442
5,442
Franked
9 September 2022
53
5 4
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
7. Dividends (continued)
Proposed Dividend (continued)
The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2022 and
will be recognised in subsequent financial reports.
Dealt with in the financial report as - Dividends
Dividend Reinvestment Plan
Note
19
$’000
10,884
In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP in the
2022 financial year until further notice. As such the DRP will not be active for the above mentioned dividend.
8. Events Subsequent to Reporting Date
With the ongoing COVID-19 pandemic, increasing inflation rates and cash rates, there is continuing economic uncertainties which may
influence the Australian economy and property market, and consequently impact property valuations.
Other than mentioned, there has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.
9. Likely Developments
11. Indemnification and Insurance of Officers and Auditors
Indemnification
The Company has agreed to indemnify the current Directors of the Company, its Subsidiaries and Equity Accounted Investees, against
all liabilities to another person (other than the Company or related body corporate) that may arise from their position as Directors of
the Company, its Subsidiaries and Equity Accounted Investees, except where the liability arises out of the conduct involving a lack of
good faith.
Insurance Premiums
During the financial year the Company has paid insurance premiums of $71,000 (2021: $55,000) in respect of Directors and Officers
liability and legal expenses insurance contracts for Directors and Officers, including Executive Officers of the Company. The insurance
premiums relate to:
• Costs and expenses incurred by the relevant Officers in defending proceedings, whether civil or criminal and whatever their
outcome; and
• Other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper use
of information or position to gain a personal advantage.
12. Non-audit Services
During the year KPMG, the Group’s auditor, has performed certain other services in addition to their statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and is satisfied that the provision of those
non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
The Group will continue to pursue its policy of increasing the profitability and market share of its major business sectors during the
next financial year.
• all non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed to
ensure they do not impact the integrity and objectivity of the auditor; and
The Group will continue planned development projects on existing land and will continue to assess new development opportunities for
the acquisition of land for future development.
Further information about likely developments in the operations of the Group and the expected results of these operations in future
years have not been included in this report as the disclosure of such information would, in the opinion of the Directors, be likely to
result in unreasonable prejudice to the Group.
• the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non-audit services provided
during the year are set out below:
10. Directors’ Interests
The relevant interest of each Director in the shares and options over such instruments by the companies within the Group, as notified
by the Directors to the Australian Stock Exchange Limited in accordance with S205G(1) of the Corporations Act 2001, as at the date of
this report is as follows:
Audit Services:
Auditors of the Company
Director
Mr John Chan
Mr Darren John Pateman
Mr Ronald Chan
Mr Kee Kong Loh
Mr Terence Siong Woon Peh
Mr Lee Verios
Ordinary Shares
28,568,265
3,632,493
18,894,133
2,000,904
60,431,843
72,393
Consolidated
2022
$
2021
$
146,970
146,970
20,700
20,700
124,138
124,138
16,560
16,560
Audit and review of financial statements - KPMG
Services Other Than Statutory Audit:
Taxation advice and tax compliance services - KPMG
13. Lead Auditor’s Independence Declaration
The Lead Auditor’s Independence Declaration is set out on Page 101 and forms part of the Directors’ Report for the financial year
ended 30 June 2022.
Signed in accordance with a resolution of the Board of Directors:
Darren Pateman
Managing Director
Dated at Perth this Twenty-third day of August 2022.
55
5 6
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2022DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20222022 Finbar Group Limited Annual Report2022 Finbar Group Limited Annual Report
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Year Ended 30 June 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2022
Balance as at 1 July 2020
Total comprehensive income for the year
Profit
Other comprehensive income
Transactions with owners, recognised directly in equity
Note
Share
Capital
$’000
Retained
Earnings
$’000
Asset
Revaluation
Reserve
$’000
Total
Equity
$’000
194,484
47,013
444
241,941
-
-
8,847
-
-
16
8,847
16
Dividends to shareholders
19
-
(8,163)
-
(8,163)
Balance as at 30 June 2021
194,484
47,697
460
242,641
Balance as at 1 July 2021
Total comprehensive income for the year
Profit
Other comprehensive income
Transactions with owners, recognised directly in equity
194,484
47,697
460
242,641
10,906
-
-
-
69
10,906
69
Dividends to shareholders
19
-
(10,884)
-
(10,884)
Balance as at 30 June 2022
194,484
47,719
529
242,732
Amounts are stated net of tax
Revenue
Cost of sales
Gross Profit
Other income
Administrative expenses
Advertising expenses
Revaluation increase of investment property
Revaluation increase of property, plant and equipment
Rental expenses
Gain on disposal of investment properties
Results from Operating Activities
Finance income
Finance costs
Net Finance Income
Share of (loss)/profit of Equity Accounted Investees (net of income tax)
Profit before Income Tax
Income tax expense
Profit for the year
Other comprehensive income
Items which will not be reclassified to profit or loss:
Revaluation increase of property, plant and equipment
Tax on items that will not be reclassified to profit or loss
Other comprehensive income for the year, net of income tax
Total comprehensive income for the year
Earnings per Share:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Note
Consolidated
2022
$’000
2021
$’000
7
8
10
10
14
11
11
20
20
90,291
101,965
(70,049)
(81,664)
20,242
20,301
1,146
(8,280)
(544)
6,864
283
1,429
(7,796)
(1,054)
1,534
196
(4,960)
(4,439)
374
129
15,125
10,300
595
(513)
82
(159)
15,048
(4,142)
10,906
858
(52)
806
937
12,043
(3,196)
8,847
98
(29)
69
23
(7)
16
10,975
8,863
4.01
4.01
3.25
3.25
The Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the Notes to the
Financial Statements set out on Pages 61-94.
The Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements set out on
Pages 61-94.
57
5 8
2022 Finbar Group Limited Annual Report CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2022
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Investments in Equity Accounted Investees
Other assets
Total Current Assets
Non-Current Assets
Trade and other receivables
Inventories
Investment property
Prepayments
Investments in Equity Accounted Investees
Property, plant and equipment
Deferred tax assets
Other assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Loans and borrowings
Current tax payable
Employee benefits
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Loans and borrowings
Deferred tax liabilities
Employee benefits
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Share capital
Retained earnings
Reserves
Total Equity
Cash Flows from Operating Activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash (used in)/generated from Operating Activities
Interest paid
Income tax paid
Net Cash (used in)/generated from Operating Activities
Cash Flows from Investing Activities
Proceeds from sales of investment properties
Interest received
Dividends received from Equity Accounted Investees
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Acquisition of investment property
Acquisition of other investments
Repayment of loans to related party
Loans to Equity Accounted Investees
Proceeds from loans to Equity Accounted Investees
Net Cash (used in)/provided by Investing Activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net Cash provided by/(used in) Financing Activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and Cash Equivalents at 30 June
Note
Consolidated
2022
$’000
2021
$’000
278,333
169,139
(283,611)
(150,909)
(5,278)
(1,833)
(2,598)
(9,709)
1,785
470
635
(98)
14
(331)
(3)
(2,943)
(23,130)
9,887
(13,714)
18,230
(71)
(2,492)
15,667
725
1,762
676
(70)
-
-
-
-
(7,985)
12,595
7,703
38,659
40,193
(23,749)
(10,884)
4,026
(19,397)
52,599
33,202
(33,392)
(8,163)
(1,362)
22,008
30,591
52,599
18b
13
13
21
21
19
18a
Note
18a
17
16
14
17
16
12
14
13
15
23
21
15
22
23
21
15
22
19
19
Consolidated
2022
$’000
2021
$’000
33,202
20,037
19,338
590
49
52,599
8,085
57,736
139
65
73,216
118,624
30,799
123,048
102,189
738
990
9,932
5,366
123
26,024
82,105
97,925
434
2,235
9,218
6,719
154
273,185
224,814
346,401
343,438
10,876
23,340
1,936
792
22,240
2,228
1,454
567
36,944
26,489
166
61,857
4,696
6
37
69,254
4,957
60
66,725
74,308
103,669
100,797
242,732
242,641
194,484
194,484
47,719
47,697
529
460
242,732
242,641
The Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements set out on
Pages 61-94.
The Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements set out on
Pages 61-94.
59
6 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2022
Index to Notes to the Financial Statements
Note
Page
Note
Page
1. Reporting Entity
2. Basis of Preparation
3. Significant Accounting Policies
4. Determination of Fair Values
5. Financial Risk Management
6. Operating Segments
7. Revenue
8. Other Income
9. Personnel Expenses
10. Finance Income and Finance Costs
11. Income Tax Expense
12. Investment Property
13. Property, Plant and Equipment
63
63
64
70
71
73
75
75
75
75
76
77
78
17. Trade and Other Receivables
18. Cash and Cash Equivalents
19. Capital and Reserves
20. Earnings per Share
21. Loans and Borrowings
22. Employee Benefits
23. Trade and Other Payables
24. Financial Instruments
25. Operating Leases
26. Capital and Other Commitments
27. Contingencies
28. Related Parties
29. Group Entities
14. Investments in Equity Accounted Investees
81
30. Subsequent Events
15. Tax Assets and Liabilities
16. Inventories
83
83
31. Auditor’s Remuneration
32. Parent Entity Disclosures
83
84
85
86
87
88
88
88
91
91
92
92
93
93
94
94
Index to Significant Accounting Policies (Note 3)
Note
(a) Basis of Consolidation
(b) Financial Instruments
(c) Property, Plant and Equipment
(d) Investment Property
(e) Inventories
(f) Impairment
(g) Employee Benefits
(h) Provisions
(i) Revenue
(j) Finance Income and Finance Costs
(k) Income Tax
(l) Goods and Services Tax
(m) Earnings per Share
(n) Segment Reporting
(o) New Standards and Interpretations
Page
64
65
65
66
67
67
68
68
68
69
69
69
70
70
70
61
6 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 1. Reporting Entity
Finbar Group Limited (‘the Company’) is a public company domiciled in Australia. The address of the Company’s registered
office is Level 6, 181 Adelaide Terrace, East Perth, WA 6004. The consolidated financial statements of the Group as at and for
the year ended 30 June 2022 comprise the Company, its Subsidiaries (together referred to as ‘the Group’ and individually as
‘Group entities’) and the Group’s interest in equity accounted investees. The Group is a for-profit entity and is primarily involved
in residential property development and property investment (see Note 6).
2. Basis of Preparation
(a) Statement of Compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. These consolidated financial statements of the Group comply with International Financial Reporting Standards (IFRSs)
and interpretations adopted by the International Accounting Standards Board (IASB).
The consolidated financial statements were approved by the Board of Directors on 23rd August 2022.
2. Basis of Preparation (continued)
(d) Use of Estimates and Judgements (continued)
(ii) Measurement of fair values (continued)
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that
is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
occurred.
(e) Changes in Accounting Policies
(b) Basis of Measurement
The Group’s accounting policies are consistent with those disclosed in the financial statements for the year ended 30 June 2021.
The consolidated financial statements have been prepared on the historical cost basis except for the following:
• financial instruments recognised through profit or loss are measured at fair value;
• investment property is measured at fair value; and
• property under Property, Plant and Equipment is measured at fair value.
The methods used to measure fair values are discussed further in Note 4.
(c) Functional and Presentation Currency
These consolidated financial statements are presented in Australian dollars which is the functional currency for the Group.
In accordance with ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191, amounts in the
consolidated financial statements and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise
stated.
(d) Use of Estimates and Judgements
The preparation of consolidated financial statements in conformity with AASBs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in any future periods affected.
(i) Assumptions and estimation uncertainties
Information about assumptions made in measuring fair values and estimation uncertainties that have a significant risk of
resulting in a material adjustment within the year ending 30 June 2022 are included in the following notes:
• Note 12 - Valuation of investment property;
• Note 13 - Property, plant & equipment; and
• Note 24 - Valuation of financial instruments.
(ii) Measurement of fair values
3. Significant Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements, and have been applied consistently by Group entities.
(a) Basis of Consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to or has rights to variable returns
from its investment with the entity and has the ability to affect those returns through its power over the entity. The financial statements
of Subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control
ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the
Group.
(ii) Equity Accounted Investees
Equity accounted investees are those entities over whose activities the Group has joint control, established by contractual agreement
and requiring unanimous consent for strategic and operating decisions. Investments in equity accounted investees are accounted
for using the equity method (Equity Accounted Investees) and are initially recognised at cost. The consolidated financial statements
include the Group’s share of the income and expenses and equity movements of Equity Accounted Investees, after adjustments to align
the accounting policies with those of the Group, from the date that the joint control commences until the date the joint control ceases.
When the Group’s share of losses exceeds its interest in an Equity Accounted Investee, the carrying amount of that interest is reduced
to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments
on behalf of the Equity Accounted Investee. Investments in equity accounted investees are carried at the lower of the equity accounted
amount and the recoverable amount. Investments in equity accounted investees are treated as current assets where it is expected that
the investment will be realised within a twelve month time frame.
(iii) Joint Operations
A joint operation is carried on by each venturer using its own assets in pursuit of the joint operations. The consolidated financial
statements include the assets that the Group controls and the liabilities that it incurs in the course of pursuing the joint operation, and
the expenses that the Group incurs and its share of the income that it earns from the joint operation.
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-
financial assets and liabilities.
(iv) Transactions Eliminated on Consolidation
The Group has an established control framework with respect to the measurement of fair values. This includes the CFO who
has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values.
Valuations are reported to the Audit Committee at each reporting date.
Intra-group balances and transactions, and any unrealised gains and losses or income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with Equity
Accounted Investees are eliminated against the investment to the extent of the Group’s interest in the Equity Accounted Investee.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Gains and losses are recognised as the contributed assets are consumed or sold by the Equity Accounted Investee or, if not consumed
or sold by the Equity Accounted Investee, when the Group’s interest in such entities is disposed.
63
6 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 3. Significant Accounting Policies (continued)
(b) Financial Instruments
(i) Non-derivative Financial Instruments
Non-derivative financial assets
Trade and other receivables and debt securities issued are initially recognised when they are originated. All other financial assets
(including assets designated at fair value through profit or loss – FVTPL) are initially recognised when the Group becomes a party to
the contractual provisions of the instrument.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers
the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of
the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset. Any interest in transferred financial assets that is created or retained by
the Group is recognised as a separate asset or liability.
Accounting for finance income and expense is discussed in Note 3(j).
Non-derivative financial liabilities
3. Significant Accounting Policies (continued)
(c) Property, Plant and Equipment (continued)
(i) Recognition and Measurement (continued)
Losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the
carrying amount of property, plant & equipment and are recognised net within “Administrative expenses” in profit or loss.
When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings.
In respect to borrowing costs relating to qualifying assets, the Group capitalises costs directly attributable to the acquisition,
construction or production of a qualifying asset as part of the cost of the asset.
(ii) Reclassification to Investment Property
Property that is being constructed for future use as investment property is accounted for as inventory until construction or
development is complete, at which time it is remeasured to fair value and reclassified as investment property. Any gain or loss arising
on remeasurement is recognised in profit or loss.
When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and
reclassified as investment property. Any loss is recognised in the revaluation reserve to the extent that an amount is included in
revaluation reserve for that property, with any remaining loss recognised immediately in profit or loss. Any gain arising on revaluation
is recognised in profit or loss to the extent the gain reverses a previous impairment loss on the property, with any remaining gain
recognised in a revaluation reserve in equity.
(iii) Subsequent Costs
Trade and other payables, commercial bills and subordinated liabilities are initially recognised when they are originated at fair value
plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised
cost using the effective interest rate method. All other financial liabilities (including liabilities designated at fair value through profit or
loss) are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable
that the future economic benefits embodied within the part will flow to the Group and its cost can be reliably measured. The carrying
amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in
profit or loss as incurred.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
(iv) Revaluation Model for Property
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the
Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
(ii) Share Capital
Ordinary shares
After recognition as an asset, the Group has elected to carry an item of property whose fair value can be reliably measured shall be
carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated impairment losses.
Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would
be determined using fair value at the end of the reporting period.
If an item of property is revalued, the entire class of property to which that asset belongs shall be revalued. Any gain or loss arising on
remeasurement is recognised in other comprehensive income and asset revaluation reserve. Refer Note 4.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effects.
(v) Depreciation and Amortisation
Repurchase of share capital
When share capital recognised in equity is repurchased, the amount of the consideration paid, which includes directly attributable
costs, net of any tax effects, is recognised as a deduction from equity.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
(c) Property, Plant and Equipment
(i) Recognition and Measurement
Depreciation and amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an
item of property, plant and equipment. Assets are depreciated or amortised from the date of acquisition. Land is not depreciated.
The estimated useful lives in the current and comparative periods are as follows:
• Office property
40 years
• Office furniture and equipment, fixtures and fittings
5 - 25 years
• Plant and equipment
1 - 10 years
Depreciation and amortisation rates and methods are reviewed at each reporting date. When changes are made, adjustments are
reflected prospectively in the current and future periods only.
Items of plant and equipment are measured at cost or deemed cost less accumulated depreciation and impairment losses.
(d) Investment Property
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets include the
cost of materials, direct labour, any other costs directly attributable to bringing the asset to a working order for its intended use, the
costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs (see
below).
Items classified as property are measured at fair value. Refer Note 3(c)(iv).
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
Gains on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the
carrying amount of property, plant & equipment and are recognised net within “Other income” in profit or loss.
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary
course of business, used in the production or supply of goods and services or for administrative purposes. Investment property is
measured at fair value (see Note 4) with any change therein recognised in profit or loss.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The self-constructed investment
property transferred from inventory are recognised at fair value.
When the use of a property changes such that it is reclassified as property, plant or equipment, its fair value at the date of
reclassification becomes its cost for subsequent accounting.
65
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022
3. Significant Accounting Policies (continued)
(e) Inventories
Inventories and work in progress, including land held for resale, are stated at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.
Cost includes the cost of acquisition, development costs, holding costs and directly attributable interest on borrowed funds where the
development is a qualifying asset. Capitalisation of borrowing costs is ceased during extended periods in which active development is
interrupted. When a development is completed and ceases to be a qualifying asset, borrowing costs and other costs are expensed as
incurred.
Current and Non-current Inventory Assets
3. Significant Accounting Policies (continued)
(g) Employee Benefits
(i) Superannuation Contributions
Obligations for contributions to superannuation funds are recognised as an expense in profit or loss.
(ii) Long-term Employee Benefits
The Group’s obligation in respect of long-term service benefits is the amount of future benefit that employees have earned in return for
their service in the current and prior periods plus related on costs; that benefit is discounted to determine its present value, and the
fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit-rated or corporate bonds
that have maturity dates approximating the terms of the Group’s obligations. The calculation is performed using the projected unit
credit method. Any actuarial gains or losses are recognised in profit or loss in the period in which they arise.
Inventory is classified as current when it satisfies any of the following criteria:
(iii) Termination Benefits
• it is expected to be realised in, or is intended for sale or consumption in, the entity’s normal operating cycle;
• it is held primarily for the purpose of being traded; or
• it is expected to be realised within twelve months of the reporting date.
All other inventory is treated as non-current.
(f) Impairment
(i) Financial Assets
Under the expected credit losses (ECL) model in accordance with AASB 9 Financial Instruments, the Group calculates the allowance
for credit losses by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed
future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance is the sum of these
probability-weighted outcomes.
At each reporting period, the Group assess whether the credit risk on a financial instrument has increased significantly since initial
recognition, by analysing reasonable and supportable information that is available without undue cost or effort about past events,
current conditions and forecasts of future economic conditions.
Except for purchased and originated credit-impaired financial assets, trade receivables, AASB 15 contract assets and lease
receivables, at each reporting date:
• the Group measures the loss allowance for a financial instrument at an amount equal to the ‘lifetime expected credit losses’ if the
credit risk on that financial instrument has increased significantly since initial recognition; and
• if the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measure the loss
allowance for that financial instrument at an amount equal to ‘12 month expected credit loss’.
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of
withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination
benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are
recognised as an expense if the Group has made an offer encouraging voluntary redundancy, it is probable that the offer will be
accepted, and the number of acceptances can be reliably estimated.
(iv) Short-term Employee Benefits
Short term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can
be recognised reliably.
(v) Share-based Payment Transactions
At the grant date, fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in
equity, over the period in which the employees become unconditionally entitled to the options. The amount recognised is adjusted to
reflect the actual number of share options that vest, except for those that fail to vest due to market conditions not being met.
(h) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be reliably
estimated, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability.
The allowance and any changes in the expected credit loss are recognised as impairment gain and losses in profit or loss.
(i) Revenue
(ii) Non-financial Assets
The carrying amounts of the Group’s non-financial assets other than investment property, inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the
asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash flow from
continuing use that are largely independent of the cash flows of other assets or groups of assets (the “cash generating unit”).
Under AASB 15 Revenue from Contracts with Customers, Revenue is measured based on the consideration specified in a contract
with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control
over a product or service to a customer.
(i) Property Sales
Revenue from property sales include:
• Sale of residential and commercial property;
• Development costs fees which represent the fees charged to recoup project development costs from the Land Owners; and
• Profit Share fees which represent percentage profit sharing revenue based on net project profit.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in profit or loss.
Revenue is recognised when control of the assets is transferred and the amount of revenue is measured based on the contracted
amount. The timing of transfer of control vary depending on the individual terms of the contract of sale.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
For projects with an external landowner when the Group is engaged as a property developer of the land, the Group is deemed to be
acting as the principal in the transaction and as such, property sales revenue and cost of sale are grossed up by the land cost base.
The cost of sales allocated to individual units is based on the estimated overall selling price for the project and is updated at each
reporting date.
67
6 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 3. Significant Accounting Policies (continued)
(i) Revenue (continued)
(ii) Supervision Fees
Supervision fees represents the management fees charged to the Equity Accounted Investees. Revenue is recognised in profit or
loss in proportion to the stage of project completion which is by reference to an assessment of the costs incurred and the costs to be
incurred. Revenue is measured based on the contracted amount and constrained to the amount that is highly probable.
(iii) Management Fee
Management fees represents the management fee charged to the shareholders of Equity Accounted Investees. Revenue is recognised
in profit or loss at project completion and is measured based on the contracted amount and constrained to the amount that is highly
probable.
(iv) Rental Income
Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease in accordance
with AASB 16 Leases. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the
lease.
(j) Finance Income and Finance Costs
Finance income comprises interest income on funds invested, interest on loans to Equity Accounted Investees, dividend income,
changes in the fair value of financial assets at fair value through profit or loss, and gains on hedging instruments that are recognised
in profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is
recognised in profit or loss on the date that the Group’s right to receive payment is established, which in the case of quoted securities
is the ex-dividend date.
Finance costs comprise interest expense on borrowings, changes in fair value of financial assets at fair value through profit or loss,
impairment losses recognised on financial assets, and losses on hedging instruments that are recognised in profit or loss. Borrowing
costs that are not directly attributable to the acquisition or production of a qualifying asset are recognised in profit or loss using the
effective interest method.
(k) Income Tax
Income tax expense comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except to the extent
that it relates to items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and equity accounted investees to the
extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable
temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they
relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional income tax expenses that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend is recognised. The Group does not distribute non-cash assets as dividends to its shareholders.
(l) Goods and Services Tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost
of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO
is included as a current asset or liability in the balance sheet.
3. Significant Accounting Policies (continued)
(l) Goods and Services Tax (continued)
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and
financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(m) Earnings per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options
granted to employees.
(n) Segment Reporting
Determination and Presentation of Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating
segment’s operating results are regularly reviewed by the Chief Operating Decision Maker (CODM) to make decisions about resources
to be allocated to the segment and assess its performance, and for which discrete information is available.
Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Group’s headquarters), head office
expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible
assets other than goodwill.
(o) New Standards and Interpretations
A number of new standards are effective for annual periods beginning after 1 July 2022 and earlier application is permitted; however,
the Group has not early adopted the new or amended standards in preparing these consolidated financial statements.
The potential impact of the new standards, amendments to standards and interpretations has been considered and they are not
expected to have a significant impact on the financial statement.
4. Determination of Fair Values
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-
financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following
methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes
specific to that asset or liability.
(a) Investment Property and Property carried at fair value
An external, independent valuation company, having appropriately recognised professional qualifications and recent experience in the
location and category of the property being valued, values the Group’s investment property portfolio and property no less than once
every three years. The fair values are based on market values, being the estimated amount for which a property could be exchanged on
the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the
parties had each acted knowledgeably and willingly.
In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash
flows expected to be received from renting out the property. A yield that reflects the specific risks inherent in the net cash flows is then
applied to the net annual cash flows to arrive at the property valuation.
Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or
likely to be in occupation after letting vacant accommodation, the allocation of maintenance and insurance responsibilities between
the Group and the lessee, and the remaining economic life of the property. When rent reviews or lease renewals are pending with
anticipated reversionary increases, it is assumed that all notices and where appropriate counter-notices, have been served validly and
within the appropriate time.
Properties that have not been independently valued as at the balance sheet date are carried at fair value by way of directors valuation.
69
7 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 4. Determination of Fair Values (continued)
(b) Trade and Other Receivables
5. Financial Risk Management (continued)
Trade and Other Receivables (continued)
The fair value of trade and receivables, excluding construction work in progress, is estimated as the present value of future cash flows,
discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes.
The Board of Directors has established a credit policy which undertakes an analysis of each sale. Purchase limits are established on
customers, with these purchase limits being reviewed on each property development.
(c) Share-based Payment Transactions
The fair value of employee stock options is measured using the Black-Scholes (or similar) option-pricing model. Measurement inputs
include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic
volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments
(based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based
on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in
determining fair value.
(d) Financial Guarantees
For financial guarantee contracts liabilities, the fair value at initial recognition is determined using a probability weighted discounted
cash flow approach. This method takes into account the probability of default by the guaranteed party over the term of the contract,
the loss given default (being the proportion of the exposure that is not expected to be recovered in the event of default) and exposure at
default (being the maximum loss at the time of default).
5. Financial Risk Management
Overview
The Group has exposure to the following risks from their use of financial instruments:
• credit risk
• liquidity risk
• market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for
measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout these
consolidated financial statements.
Risk Management Framework
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board is
responsible for developing and monitoring risk management policies.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers and investment securities.
Trade and Other Receivables
The nature of the Group’s business means that most sales contracts occur on a pre-sales basis, before significant expenditure has
been incurred on the development. All pre-sale contracts require a deposit at the point of entering into the contract, these funds
being held in trust independently of the Group. Generally, pre-sale contracts are executed on an unconditional basis. Possession of
a development property does not generally pass until such time as the financial settlement of the property has been completed, and
title to a development property does not pass until the financial settlement of the property has been completed. Where possession of
the development property is granted prior to settlement, title to the property remains with the Group until financial settlement of the
property has been completed.
The demographics of the Group’s customer base has little or no influence on credit risk. Approximately 11.82% (2021: 4.80%) of the
Group’s revenue is attributable to multiple sales transactions with single customers.
The Group’s trade and other receivables relate mainly to the Group’s loans to Equity Accounted Investees (within which the Group
holds no more than a 50% interest) and Goods and Services Tax refunds due from the Australian Taxation Office. The loans to Equity
Accounted Investees are repaid from proceeds on settlement and bear interest at BBSY plus agreed margin.
The Group has not established an allowance for impairment, as no losses are expected to be incurred in respect of trade and other
receivables. The trade and other receivables are mainly from related parties or being eligible for set-off against amounts owed to the
borrower.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group uses project by project costing to cost its products and services, which assists it in monitoring cash flow requirements
and optimising its cash return on investments. Typically the Group ensures that it has sufficient cash on demand to meet expected
operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of
extreme circumstances that cannot reasonably be predicted, such as natural disasters.
Market Risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group’s income or
the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, whilst optimising the return.
Interest Rate Risk
The Group continuously reviews its exposure to changes in interest rates and where it is considered prudent will enter into borrowings
on a fixed rate basis.
Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. The Board of Directors monitors the return on capital, which the Group defines as total comprehensive
income attributable to the group divided by total shareholders’ equity, excluding non-controlling interests. The Board of Directors also
monitors the level of dividends to shareholders.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position. The Group’s target is to achieve a return on assets of between 6.00% and
8.00%; for the year ended 30 June 2022 the return was 4.52% (2021: 3.51%). In comparison the weighted average interest expense on
interest-bearing borrowings (excluding liabilities with imputed interest) was 0.47% (2021: 0.43%).
The Group’s debt-to-capital ratio at the end of the financial year was as follows:
Interest-bearing debt
Market Capitalisation as at 30 June
Total Capital
Debt-to-capital ratio at 30 June
Note
21
2022
$’000
2021
$’000
40,041
62,135
185,044
231,305
225,085
293,440
18%
21%
From time to time the Company purchases its own shares on the market; the timing of these purchases depends on market prices and
availability of unallocated company cash resources where not required for core business activity. Shares purchased are cancelled from
issued capital on purchase. The intention of the Board of Directors in undertaking such purchases is to enhance the capital return to
the shareholders of the Company. Buy decisions are made on a specific transaction basis by the Board of Directors.
In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP in the
2022 financial year until further notice. As such the DRP will not be active for the above mentioned dividend.
71
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 6. Operating Segments
6. Operating Segments (continued)
The Group operates predominantly in the property development sector and has identified 4 reportable segments, as described below,
which are the Group’s three strategic business units, as well as the Corporate office. The strategic business units offer different
products, and are managed separately because they require different technology, marketing strategies and have different types of
customers. For each of the strategic business units, the Chief Operating Decision Maker (CODM) reviews internal management reports
on a regular basis. The following describes the operations in each of the Group’s reportable segments:
• Residential apartment development in Western Australia;
• Commercial office/retail development in Western Australia;
• Rental of property in Western Australia; and
• Corporate costs includes supervision fees, management fees and net assets attributable to the corporate office.
Information about Reportable Segments
For the Year ended 30 June 2022
Residential
Apartment
Development
$’000
Commercial
Office/Retail
Development
$’000
Rental of
Property
$’000
Corporate
$’000
Total
$’000
External Revenues - Company and Subsidiaries
External Revenues - Equity Accounted Investees
External Revenues - Total
76,661
6,550
83,211
4,842
8,464
1,470
-
-
-
4,842
8,464
1,470
91,437
6,550
97,987
Reportable Segment Profit before Income Tax - Company
and Subsidiaries
Reportable Segment Profit before Income Tax - Equity
Accounted Investees
8,467
(609)
2,993
5,032
15,883
(161)
(35)
-
(31)
(227)
Reportable Segment Profit before Income Tax - Total
8,306
(644)
2,993
5,001
15,656
Reportable Segment Assets - Company and Subsidiaries
136,221
16,706
103,883
27,594
284,404
Reportable Segment Assets - Equity Accounted Investees
Reportable Segment Liabilities - Company and Subsidiaries
Reportable Segment Liabilities - Equity Accounted
Investees*
Capital Expenditure
33,767
52,029
25,872
2,989
3,315
852
-
-
-
-
40,376
1,316
-
-
2
98
36,756
97,036
26,726
98
For the Year ended 30 June 2021
External Revenues - Company and Subsidiaries
External Revenues - Equity Accounted Investees
External Revenues - Total
Reportable Segment Profit before Income Tax - Company
and Subsidiaries
Reportable Segment Profit before Income Tax - Equity
Accounted Investees
90,961
17,618
108,579
2,328
7,871
2,234
103,394
-
-
-
17,618
2,328
7,871
2,234
121,012
8,205
(436)
2,967
5,501
16,237
Reconciliation of Reportable Segment Revenues, Profit or Loss, Assets and Liabilities
Revenues
Total revenue for development reportable segments
Total revenue for rental segments
Total revenue for other reportable segments
Consolidated Revenue
Total revenue for development reportable segments - Equity Accounted Investees
Total revenue for rental segments - Equity Accounted Investees
Total Reportable Segments Revenue
Profit or Loss
Total profit or loss for reportable segments
Finance income - Company and Subsidiaries
Finance costs - Company and Subsidiaries
Unallocated amounts:
Administrative expenses
Revaluation of investment property
Revaluation of property, plant and equipment
Gain on disposal of investment properties
Income tax applicable to share of profit of Equity Accounted Investees
Consolidated Profit before Income Tax
Assets
Total assets for reportable segments
Cash and cash equivalents
Investments in Equity Accounted Investees
Other assets**
Consolidated Total Assets
Liabilities
Total liabilities for reportable segments
2022
$’000
2021
$’000
81,503
93,289
8,464
1,470
7,871
2,234
91,437
103,394
6,550
17,618
-
-
97,987
121,012
15,656
17,575
595
(513)
858
(52)
(8,280)
(7,796)
6,864
1,534
283
374
69
196
129
(401)
15,048
12,043
284,404
273,171
33,202
1,580
27,215
52,599
2,374
15,294
346,401
343,438
97,036
6,633
94,386
6,411
103,669
100,797
1,366
-
-
(28)
1,338
Other liabilities
Consolidated Total Liabilities
Reportable Segment Profit before Income Tax - Total
9,571
(436)
2,967
5,473
17,575
Reportable Segment Assets - Company and Subsidiaries
132,813
16,473
98,868
25,017
273,171
Geographical information
** Includes receivables due to Finbar Group Limited from Equity Accounted Investees.
Reportable Segment Assets - Equity Accounted Investees
Reportable Segment Liabilities - Company and Subsidiaries
Reportable Segment Liabilities - Equity Accounted
Investees*
Capital Expenditure
* Excludes Liabilities payable to Finbar Group.
22,673
49,449
18,523
2,044
241
53
-
-
-
-
43,355
1,341
-
-
1
27
24,717
94,386
18,577
27
The Group’s share of revenues from equity accounted investees are reported in this table as they are managed by Finbar and reported to
the CODM. Revenues from equity accounted investees are not reported in the statement of profit or loss and other comprehensive income.
The Group operates predominantly in the one geographical segment of Western Australia.
73
7 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022
7. Revenue
Property development sales
Rental income
Supervision fees
Total Revenue
8. Other Income
Administration fees
Management fees
Other
Total Other Income
9. Personnel Expenses
Wages and salaries
Superannuation contributions
Increase in liability for annual leave
Increase in liability for long service leave
Directors and committee fees
Non Executive Directors - superannuation contributions
Total Personnel Expenses
Personnel expenses are included in administrative expenses on the Consolidated Statement
of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2022.
10. Finance Income and Finance Costs
Recognised in Profit or Loss
Interest income on loans to Equity Accounted Investees
Interest income on loans
Interest income on bank deposits
Interest income on property settlements
Total Finance Income
Interest expense
Bank charges
Total Finance Costs
Net Finance Income
2022
$’000
2021
$’000
81,503
93,289
8,464
324
7,871
805
90,291
101,965
X
X
61
818
267
52
850
527
1,146
1,429
X
X
5,232
369
66
106
228
7
4,781
322
36
57
199
6
11. Income Tax Expense
Recognised in Income Statement
Current Tax Expense
Current year
Income tax recognised directly to equity
Reversal of previously recognised tax assets
Non-recoverable amounts
Deferred Tax Expense Movement
Origination and reversal of temporary differences
Income Tax Expense excluding share of Income Tax on Equity Accounted Investees
Income tax relating to components of other comprehensive income
2022
$’000
2021
$’000
3,471
2,962
58
(424)
2
58
(140)
2
3,107
2,882
1,035
1,035
4,142
29
314
314
3,196
7
Total Income Tax Expense excluding share of Income Tax on Equity Accounted Investees
4,171
3,203
Numerical Reconciliation between Tax Expense and Pre-tax Net Profit
Profit for the year
Total income tax expense
Profit before Income Tax
Income tax using the domestic rate of 30% (2021: 30%)
6,008
5,401
Movement in income tax expense due to:
Non-deductible expenses
Non-recoverable amounts
Reversal off of previously recognised tax assets
Tax effect of share of equity accounted investees loss/(profit)
X
X
Total Income Tax Expense
Made up of:
142
318
32
103
595
503
10
513
82
532
291
15
20
858
45
7
52
806
Income Tax Expense excluding share of Income Tax on Equity Accounted Investees
Income tax relating to components of other comprehensive income
Income Tax Recognised Directly in Equity
Decrease in income tax expense due to:
Tax incentives not recognised in income statement
Total Income Tax Recognised Directly in Equity
10,906
4,142
8,847
3,196
15,048
12,043
4,515
3,613
1
2
(424)
48
2
2
(140)
(281)
4,142
3,196
4,142
3,196
29
7
4,171
3,203
(58)
(58)
(58)
(58)
75
7 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 12. Investment Property
12a. Reconciliation of Carrying Amount
Balance at 1 July
Sale of Investment Property
Acquisition of Investment Property
Transferred to Property, Plant and Equipment
Change in fair value
Balance at 30 June
2022
$’000
2021
$’000
97,925
97,331
(2,176)
(940)
331
(755)
6,864
-
-
1,534
102,189
97,925
Investment property comprises commercial properties at five developments and residential properties at two developments which are
leased to third parties (see Note 25).
The increase in the revaluation was as a result of an extension of the weighted average lease term from prior year, offset by COVID-19
impacts.
12b. Measurement of fair values
(i) Fair Value Hierarchy
The fair value of investment property was determined by external, independent property valuers, having appropriate recognised
professional qualifications and recent experience in the location and category of the property being valued or by director’s valuation.
In accordance with the Company’s policy, independent valuations were undertaken in December 2021 on existing properties, Pelago in
Karratha and Fairlanes in East Perth and in June 2022 for Aurelia in South Perth. At June reporting period the Directors confirm that
there is no change to the valuations undertaken in December 2021.
The fair value assessment of the Company as at the reporting date includes the best estimate of the impacts of COVID-19 pandemic
using information available at the time of preparation of the financial statements and appropriate forward looking assumptions.
The fair value measurement for investment property of $102,189,000 has been categorised as a Level 3 fair value based on the inputs
to the valuation technique used (see Note 2(d)).
(ii) Level 3 Fair Value
Note 12a shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.
(iii) Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment property, as well as the significant
unobservable inputs used.
Valuation Technique
Significant unobservable inputs
Inter-relationship between key
unobservable inputs and fair value
measurement
Expected market rental growth
0.00% - 4.50%;
The estimated fair value would
increase (decrease) if:
Weighted average 2.74%;
Void periods (average 8.2 months after
the end of each lease);
Expected market rental growth were
higher (lower);
Void periods were shorter (longer);
Occupancy rate 89%;
Occupancy rate were higher (lower);
Discounted cash flows: The valuation model
considers the present value of net cash
flows able to be generated from the property
taking into account expected rental growth
rate, void periods, occupancy rate, lease
incentive costs, such as rent-free periods
and other costs not paid by tenants. The
expected net cash flows are discounted
using risk-adjusted discount rates. Among
other factors, the discount rate estimation
considers the quality of a building and its
location (prime vs secondary), tenant credit
quality and lease terms.
77
12. Investment Property (continued)
12b. Measurement of fair values (continued)
(iii) Valuation technique and significant unobservable inputs (continued)
Valuation Technique
Significant unobservable inputs
Inter-relationship between key
unobservable inputs and fair value
measurement
Capitalisation of income valuation: The
capitalisation of income valuation method
capitalises the current rent received, at
a rate analysed from the most recent
transactions of comparable property
investments. The capitalisation rate used
varies across properties. Valuations reflect,
where appropriate, lease term remaining,
the relationship of current rent to the market
rent, location and prevailing investment
market conditions.
Adopted capitalisation rate
7.00% - 10.00%;
The estimated fair value would
increase (decrease) if:
Gross rent per annum
$450 - $668 per sqm;
Adopted capitalisation rate were
higher (lower);
Occupancy rate 71% - 98%; and
Rent free period 30 months
Gross rent per annum were higher
(lower);
Occupancy rate were higher (lower);
or
Lease term remaining were longer
(shorter).
13. Property, Plant and Equipment
Cost or Valuation
Balance at 1 July 2020
Additions
Change in fair value
Disposals
Balance at 30 June 2021
Balance at 1 July 2021
Additions
Transferred from investment property
Change in fair value
Reclassification
Disposals
Balance at 30 June 2022
Depreciation
Balance at 1 July 2020
Disposals
Revaluation
Office
Furniture and
Equipment
$’000
Property
$’000
Plant and
Equipment
$’000
Fixtures
and Fittings
$’000
Total
$’000
7,241
-
47
-
903
70
-
-
7,683
91
15,918
-
-
-
-
-
-
70
47
-
7,288
973
7,683
91
16,035
7,683
91
16,035
7,288
-
755
180
-
-
8,223
-
-
(172)
172
-
973
98
-
-
-
(314)
757
-
-
-
(4,047)
(147)
3,489
705
5,741
-
-
61
766
-
-
231
5,972
-
-
-
-
-
98
755
180
(4,047)
(461)
91
12,560
76
-
-
3
79
6,522
-
(172)
467
6,817
7 8
Risk-adjusted discounted rates
(weighted average 7.00%).
Rent-free periods were shorter
(longer); or
Depreciation and amortisation charge for the year
Balance at 30 June 2021
Risk-adjusted discount rate were
lower (higher).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022
13. Property, Plant and Equipment (continued)
Depreciation
Balance at 1 July 2021
Reclassification
Disposals
Revaluation
Depreciation and amortisation charge for the year
Balance at 30 June 2022
Carrying Amounts
At 1 July 2020
At 30 June 2021
At 1 July 2021
At 30 June 2022
Office
Furniture and
Equipment
$’000
Property
$’000
Plant and
Equipment
$’000
Fixtures
and Fittings
$’000
Total
$’000
-
-
-
(201)
201
-
7,241
7,288
7,288
8,223
766
-
(292)
-
97
571
198
207
207
186
5,972
(4,047)
(132)
-
182
1,975
1,942
1,711
1,711
1,514
79
-
-
-
3
82
15
12
12
9
6,817
(4,047)
(424)
(201)
483
2,628
9,396
9,218
9,218
9,932
For each revalued class the carrying amount that would have been recognised had the assets been carried on historical cost basis are
as follows:
Revalued assets at cost
Cost
Less accumulated depreciation
Net book value at 30 June 2022
Measurement of fair values
(i) Fair Value Hierarchy
Property
$’000
7,626
(1,776)
5,850
The fair value of property was determined by external, independent property valuers, having appropriate recognised professional
qualifications and recent experience in the location and category of the property being valued or by director’s valuation.
In accordance with the Company’s policy, independent valuations were undertaken in December 2021 on existing properties, Pelago
in Karratha and Fairlanes in East Perth. At June reporting period the Directors confirm that there is no change to the valuations
undertaken in December 2021.
The fair value assessment of the Company as at the reporting date includes the best estimate of the impacts of COVID-19 pandemic
using information available at the time of preparation of the financial statements and appropriate forward looking assumptions.
The fair value measurement for property of $8,223,000 has been categorised as a Level 3 fair value based on the inputs to the valuation
technique used (see Note 2(d)).
13. Property, Plant and Equipment (continued)
Measurement of fair values (continued)
(ii) Level 3 Fair Value
The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.
Balance at 1 July
Acquisitions and reclassifications from investment property and inventory
Revaluation increase included in ‘profit or loss’
Revaluation increase included in ‘other comprehensive income
Depreciation
Balance at 30 June
2022
$’000
2021
$’000
7,288
7,241
755
283
98
(201)
8,223
-
196
23
(172)
7,288
(iii) Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment property, as well as the significant
unobservable inputs used.
Valuation Technique
Significant unobservable inputs
Inter-relationship between key
unobservable inputs and fair value
measurement
Discounted cash flows: The valuation
model considers the present value of net
cash flows able to be generated from the
property taking into account expected rental
growth rate, void periods, occupancy rate,
lease incentive costs, such as rent-free
periods and other costs not paid by tenants.
The expected net cash flows are discounted
using risk-adjusted discount rates. Among
other factors, the discount rate estimation
considers the quality of a building and its
location (prime vs secondary), tenant credit
quality and lease terms.
Capitalisation of income valuation: The
capitalisation of income valuation method
capitalises the current rent received, at
a rate analysed from the most recent
transactions of comparable property
investments. The capitalisation rate used
varies across properties. Valuations
reflect, where appropriate, lease term
remaining, the relationship of current rent
to the market rent, location and prevailing
investment market conditions.
Expected market rental growth
0.00% - 4.50%;
The estimated fair value would
increase (decrease) if:
Weighted average 2.74%;
Void periods (average 8.2 months after
the end of each lease);
Expected market rental growth were
higher (lower);
Void periods were shorter (longer);
Occupancy rate 89%;
Occupancy rate were higher (lower);
Risk-adjusted discounted rates
(weighted average 7.00%).
Rent-free periods were shorter
(longer); or
Risk-adjusted discount rate were
lower (higher).
Adopted capitalisation rate
7.00% - 10.00%;
The estimated fair value would
increase (decrease) if:
Gross rent per annum $450 - $668 per
sqm;
Adopted capitalisation rate were
higher (lower);
Occupancy rate 71% - 98%; and
Rent free period 30 months
Gross rent per annum were higher
(lower);
Occupancy rate were higher (lower);
or
Lease term remaining were longer
(shorter).
79
8 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022
14. Investments in Equity Accounted Investees
14. Investments in Equity Accounted Investees (continued)
Equity Accounted Investees
The Group accounts for investments in Equity Accounted Investees using the equity method.
The Group has the following investments in Equity Accounted Investees (all stated at 100% of the values):
Equity Accounted Investees Assets
2022
Garden Towers East Perth Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Equity Accounted Investees Liabilities
2022
Garden Towers East Perth Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Equity Accounted Investees Assets
2021
Garden Towers East Perth Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
81
Ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Current
Assets
$’000
Non-
current
Assets
$’000
Total
Assets
$’000
1,209
34,431
20,131
18,166
21,340
52,597
63
-
-
1,619
1
37,323
-
1
2
-
4,245
42,545
63
1
2
1,619
4,246
79,868
Current
Liabilities
$’000
Non-
current
Liabilities
$’000
Total
Liabilities
$’000
767
35,484
21,509
17,745
22,276
53,229
4
-
-
499
5
-
2
6
-
688
4
2
6
499
693
36,759
39,950
76,709
Current
Assets
$’000
Non-
current
Assets
$’000
Total
Assets
$’000
350
563
155
-
-
5,515
1
17,495
17,099
-
-
1
6,426
4,169
6,584
45,190
17,845
17,662
155
-
1
11,941
4,170
51,774
Equity Accounted Investees Liabilities
2021
Garden Towers East Perth Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Profit/(Loss) Before Income Tax Recognised from Equity
Accounted Investees
2022
Ownership
Garden Towers East Perth Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Profit/(Loss) Before Income Tax Recognised from Equity
Accounted Investees
2021
Ownership
Garden Towers East Perth Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001-1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
* Finbar Sub 107 Pty Ltd was renamed Garden Towers East Perth Pty Ltd during the year ended 30 June 2022.
Current
Liabilities
$’000
Non-
current
Liabilities
$’000
Total
Liabilities
$’000
12
2,294
(5)
-
-
355
-
17,836
15,790
17,848
18,084
-
2
5
(5)
2
5
10,127
10,482
611
611
2,656
44,371
47,027
Revenues
$’000
Expenses
$’000
Profit/
(Loss)
before
income tax
$’000
1,337
(1,332)
5
2
-
-
302
(15)
1
13,094
11,920
-
9
13,101
13,554
Revenues
$’000
Expenses
$’000
-
-
681
-
3
602
652
1
34,568
31,307
-
7
35,249
32,572
(300)
15
(1)
1,174
(9)
(453)
Profit/
(Loss)
before
income tax
$’000
(3)
(602)
29
(1)
3,261
(7)
2,677
8 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 15. Tax Assets and Liabilities
The current tax liability for the Group of $1,936,000 (2021: $1,454,000) represents the amount of income taxes payable in respect of
current and prior periods.
18. Cash and Cash Equivalents
18a. Cash and Cash Equivalents
Bank balances
Cash and Cash Equivalents in the Statement of Cash Flows
2022
$’000
2021
$’000
33,202
33,202
52,599
52,599
Recognised Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are attributable to the following:
Inventories
Interest bearing loans and borrowings
Revaluation of property
Other items
Tax value of carry-forward losses recognised
Tax assets/(liabilities)
Set off of tax
Net Tax
16. Inventories
Current
Work in progress
Completed stock
Total Current Inventories
Non-Current
Work in progress
Completed stock
Total Non-Current Inventories
Assets
Liabilities
2022
$’000
2021
$’000
2022
$’000
2021
$’000
(1,112)
(1,131)
(7,334)
(7,644)
38
21
3,181
4,966
7,094
31
1,654
2,008
6,217
8,779
-
-
(2,139)
(2,184)
3,049
2,811
-
-
(6,424)
(7,017)
(1,728)
(2,060)
1,728
2,060
5,366
6,719
(4,696)
(4,957)
2022
$’000
2021
$’000
-
19,338
19,338
24,000
33,736
57,736
122,277
771
123,048
78,246
3,859
82,105
17. Trade and Other Receivables
X
X
Current
Trade receivables
Other receivables
Amounts receivable from equity accounted investees
Total Current Trade and Other Receivables
Non-Current
Trade receivables
Other receivables
Amounts receivable from equity accounted investees
Total Non-Current Trade and Other Receivables
6,716
622
12,699
20,037
8,556
13,094
9,149
30,799
7,458
627
-
8,085
7,105
10,344
8,575
26,024
Amounts receivable from equity accounted investees bear interest at BBSY plus agreed margin.
The Group’s exposure to credit risk and impairment losses to trade and other receivables are disclosed at Note 24.
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed at Note 24.
18b. Reconciliation of Cash Flows from Operating Activities
Note
2022
$’000
2021
$’000
Cash Flows from Operating Activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Loss on Disposal of Assets
Revaluation of investment property
Revaluation of property, plant & equipment
Gain on sale of investment property
Net financing income
Share of net (loss)/profit of equity accounted investees
Income tax expense
Operating Profit before Changes in Working Capital and Provisions
Change in trade and other receivables
Change in inventories
Change in prepayments
Change in provision for employee benefits
Change in trade and other payables
Cash (used in)/generated from Operating Activities
Interest paid
Income taxes paid
Net Cash (used in)/generated from Operating Activities
13
11
16
22
10,906
8,847
483
23
467
3
(6,864)
(1,534)
(283)
(374)
(92)
159
4,142
8,100
560
(2,545)
(304)
171
(11,260)
(5,278)
(1,833)
(2,598)
(9,709)
(196)
(129)
(729)
(937)
3,196
8,988
(1,433)
14,760
(434)
93
(3,744)
18,230
(71)
(2,492)
15,667
The increases and decreases in trade and other receivables as well as trade and other payables reflect only those changes that relate
to operating activities. The remaining increases and decreases relate to investing activities.
83
8 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 19. Capital and Reserves
Share Capital
On issue at 1 July
On Issue at 30 June - Fully Paid
Company
Ordinary Shares
2022
2021
272,123,142
272,123,142
272,123,142
272,123,142
The Company does not have authorised capital or par value in respect of its issued shares.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
Dividends
Dividends recognised in the current year by the Group are:
Dividends Paid During the Year 2022
Final 2021 ordinary
Interim 2022 ordinary
Total Amount
Dividends Paid During the Year 2021
Final 2020 ordinary
Interim 2021 ordinary
Total Amount
Cents per
Share
Total
Amount
$’000
Franked /
Unfranked
Date of Payment
2.00
2.00
1.00
2.00
5,442
5,442
10,884
2,721
5,442
8,163
Franked
Franked
10 September 2021
18 March 2022
Franked
Franked
21 September 2020
19 March 2021
Franked dividends declared or paid during the year were franked at the rate of 30%.
After 30 June 2022 the following dividend has been proposed by the Directors. The dividend has not been provided. The declaration and
subsequent payment of dividends has no income tax consequences.
19. Capital and Reserves (continued)
Dividend Franking Account
Company
2022
$’000
2021
$’000
30% franking credits available to shareholders of Finbar Group Limited for subsequent financial years
11,652
10,481
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
(a) franking credits that will arise from the payment of current tax liabilities;
(b) franking debits that will arise from the payment of dividends recognised as a liability at the year-end;
(c) franking credits that will arise from the receipt of dividends recognised as receivables at the year-end; and
(d) franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The impact
on the dividend franking account of dividends proposed after the balance sheet date but not recognised as a liability is to reduce it by
$2,332,000 (2021: $2,332,000).
Nature and purpose of reserve
Asset revaluation reserve
The revaluation reserve relates to the revaluation of non investment property carried at fair value.
20. Earnings per Share
Basic Earnings per Share
The calculation of basic earnings per share at 30 June 2022 was based on the profit attributable to ordinary shareholders of
$10,906,000 (2021: $8,847,000) and a weighted average number of ordinary shares on issue during the year ended 30 June 2022 of
272,123,142 (2021: 272,123,142), calculated as follows:
Profit Attributable to Ordinary Shareholders
Weighted Average Number of Ordinary Shares
Issued ordinary shares at 1 July
Weighted Average Number of Ordinary Shares at 30 June
2022
$’000
2021
$’000
10,906
8,847
Ordinary Shares
2022
2021
272,123,142
272,123,142
272,123,142
272,123,142
Proposed Dividend
Dividend proposed by the Group are:
Final 2022 ordinary
Total Amount
Cents per
Share
2.00
Total
Amount
$’000
5,442
5,442
Franked /
Unfranked
Date of Payment
Basic Earnings per Share (cents per share)
4.01
3.25
Franked
9 September 2022
Diluted Earnings per Share
The calculation of diluted earnings per share at 30 June 2022 was based on the profit attributable to ordinary shareholders of
$10,906,000 (2021: $8,847,000) and a weighted average number of ordinary shares on issue during the year ended 30 June 2022 of
272,123,142 (2021: 272,123,142), calculated as follows:
The financial effect of this dividend has not been brought to account in the financial statements for the financial year ended 30 June
2022 and will be recognised in subsequent financial reports.
Dividend Reinvestment Plan
The Company has a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend
entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash.
In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP in the
2022 financial year until further notice. As such the DRP will not be active for the above mentioned dividend.
Profit Attributable to Ordinary Shareholders (Diluted)
Weighted Average Number of Ordinary Shares (Diluted)
Weighted average number of ordinary shares at 30 June
2022
$’000
2021
$’000
10,906
8,847
Ordinary Shares
2022
2021
272,123,142
272,123,142
Diluted Earnings per Share (cents per share)
4.01
3.25
85
8 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 21. Loans and Borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For more
information about the Group’s exposure to interest rate risk see Note 24.
Current
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)
Total Current Loans and Borrowings
Non-Current
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)
Total Non-Current Loans and Borrowings
Terms and debt repayment schedule
Terms and conditions of outstanding loans are as follows:
Current
Commercial bills (Secured)
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)
Total Current Loans and Borrowings
Non-Current
Commercial bills (Secured)
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)*
Investor loans to subsidiaries (Unsecured)
Investor loans to subsidiaries (Unsecured)*
Investor loans to subsidiaries (Unsecured)*
Total Non-Current Loans and Borrowings
2022
$’000
2021
$’000
23,340
-
23,340
1,500
728
2,228
16,701
45,156
61,857
41,340
27,914
69,254
Nominal Interest Rate
2022
2021
Financial
Year of
Maturity
Carrying
Amount
$’000
Carrying
Amount
$’000
BBSY+2.00%
BBSY+2.00%
BBSY+1.50%
BBSY+2.00%
BBSY+2.00%
3.00%
2022
2023
2022
2024
2023
2024
2023
2024
2024
1,500
21,840
-
1,500
-
728
23,340
2,228
16,701
-
33,434
-
10,000
1,722
61,857
19,500
21,840
9,347
18,567
-
-
69,254
* These are loans from land owners which are non interest bearing.
Financing Arrangements
Commercial bills
22. Employee Benefits
Current
Liability for annual leave
Liability for long-service leave
Total Current Employee Benefits
Non-Current
Liability for long-service leave
Total Non-Current Employee Benefits
23. Trade and Other Payables
Current
Trade and other payables
Other payables and accrued expenses
Total Current Trade and Other Payables
Non-Current
Other payables and accrued expenses
Total Non-Current Trade and Other Payables
2022
$’000
2021
$’000
153
639
792
6
6
87
480
567
60
60
X
X
10,185
21,262
691
978
10,876
22,240
166
166
37
37
At 30 June 2022, consolidated trade and other payables include retentions of $204,000 (2021: $217,000) relating to construction
contracts in progress.
The Group’s exposure to liquidity risk related to trade and other payables is disclosed at Note 24.
24. Financial Instruments
Credit Risk
Exposure to Credit Risk
The carrying amount of the Group’s financial assets represent the maximum credit
exposure. The Group’s maximum exposure to credit risk at the reporting date was:
Trade and other receivables - current
Trade and other receivables - non-current
Cash and cash equivalents
Commercial bills (refer Note 24) are denominated in Australian dollars.
The commercial bill loans of the Subsidiaries are secured by registered first mortgages over the investment property land and
buildings of the Controlled entity as well as a registered mortgage debenture over the Controlled entity’s assets and undertakings.
The Group’s maximum exposure to credit risk for trade and other receivables at the
reporting date by receivable category was:
Investor Loans
Investor Loans are repayable upon the completion of the project.
87
Equity Accounted Investees
GST refunds due and other trade debtors
Other receivables
Working capital advances and bonds
Note
17
17
18a
Carrying Amount
2022
$’000
2021
$’000
20,037
30,799
33,202
84,038
21,847
11,508
13,716
3,765
50,836
8,085
26,024
52,599
86,708
8,575
9,922
10,971
4,641
34,109
8 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 24. Financial Instruments (continued)
Credit Risk (continued)
Impairment Losses
24. Financial Instruments (continued)
Interest Rate Risk (continued)
Cash Flow Sensitivity Analysis for Variable Rate Instruments
None of the Group’s trade or other receivables are past due and based on historic default rates and security held the Group believes
that no impairment allowance is necessary in respect of trade or other receivables.
A change of 100 basis points in interest rates would have (decreased)/increased the Group’s equity and profit or loss by the amounts
shown below. This analysis assumes that all variables remain constant. The analysis is on the same basis for 2022.
Liquidity Risk
The following are the contractual maturities of non-derivative financial liabilities, including estimated interest payments and excluding
the impact of netting agreements:
Fair Values
Fair Values Versus Carrying Amounts
Non-derivative Financial Liabilities
Commercial bills*
Investor Loans*
Trade and other payables
Non-derivative Financial Liabilities
Commercial bills*
Investor Loans*
Trade and other payables
Note
21
21
23
Note
21
21
23
30 June 2022
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
1 Year or
Less
$’000
1-3 Years
$’000
40,041
45,156
11,042
96,239
41,880
45,156
11,042
98,078
24,704
-
10,876
35,580
17,176
45,156
166
62,498
30 June 2021
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
1 Year or
Less
$’000
1-3 Years
$’000
42,840
28,642
22,277
93,759
44,037
28,813
22,277
95,127
2,081
899
22,240
25,220
41,956
27,914
37
69,907
* Refer to Note 21 Loan and Borrowings for details on loan maturity.
Interest Rate Risk
Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial assets and liabilities was:
Variable Rate Instruments
Financial Assets
Financial Liabilities
Carrying Amount
2022
$’000
2021
$’000
57,202
61,175
(40,041)
(43,568)
17,161
17,607
30 June 2022
Variable rate instruments
30 June 2021
Variable rate instruments
Profit or Loss
Equity
100bp
Increase
$’000
100bp
Decrease
$’000
100bp
Increase
$’000
100bp
Decrease
$’000
(460)
-
(460)
-
100bp
Increase
$’000
100bp
Decrease
$’000
100bp
Increase
$’000
100bp
Decrease
$’000
(914)
-
(914)
-
The fair values of financial assets and liabilities, as detailed below, approximates to the carrying amounts shown on the balance sheet:
Trade and other receivables
Cash and cash equivalents
Secured bank loans
Investor loans
Trade and other payables
Fair Values
2022
$’000
2021
$’000
50,836
33,202
34,109
52,599
(40,041)
(45,156)
(11,042)
(42,840)
(28,642)
(22,277)
Note
17
18a
21
21
23
The methods and assumptions used to estimate the fair value of financial instruments are as follows:
Unsecured shareholder loans
Due to the short term nature of these financial rights and obligations, their carrying values approximate to their fair values.
Long term loans are secured and interest bearing at bank business interest rates.
Cash and short term deposits
The carrying amount is fair value due to the liquid nature of these assets.
Bank loans
The carrying amount is a reasonable approximation of fair value.
89
9 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 Note
2022
$’000
2021
$’000
27. Contingencies
2022
$’000
2021
$’000
25. Operating Leases
Leases as Lessor
The Group leases out its investment properties held under operating leases.
Rental income received from investment property
Other rental property income received
8,235
229
8,464
7,724
147
7,871
7
Future minimum lease receipts
At 30 June, the future minimum lease receipts under non-cancellable leases are receivable as follows:
Less than one year
Between one and five years
More than 5 years
5,325
3,835
107
9,267
4,349
3,622
188
8,159
26. Capital and Other Commitments
X
X
Commitments and Contingent Liabilities
Property Development
Contracted but not provided for and payable:
Within one year
Later than one year
Total Property Development Commitments
Property Development - Equity Accounted Investees
Contracted but not provided for and payable:
Within one year
Later than one year
Total Property Development Commitments - Equity Accounted Investees
Group’s Share of Property Development - Equity Accounted Investees
Within one year
Later than one year
Total Share of Property Development Commitments - Equity Accounted Investees
Group’s Property Development Commitments including Equity Accounted Investees
Contracted but not provided for and payable:
Within one year
Later than one year
Total Property Development Commitments including Equity Accounted Investees
225,462
2,133
97,610
66,264
227,595
163,874
13,891
33,772
-
57
13,891
33,829
6,946
16,886
-
29
6,946
16,915
232,408
114,496
2,133
66,293
234,541
180,789
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not
probable that a future sacrifice of economic benefits will be required or the amount is not capable of
reliable measurement.
Guarantees
The Company has guaranteed the bank facilities of certain controlled entities
20,385
23,184
28. Related Parties
X
X
The key management personnel compensation included in ‘personnel expenses’ is as follows:
Short term employee benefits
Other long term benefits
Post employment benefits
Employee benefits
2,882
2,493
67
108
31
96
3,057
2,620
Individual Directors and Executives Compensation Disclosures
Information regarding individual directors and executives compensation are provided in the Remuneration Report section of the
Directors’ report on pages 45 to 49.
On 25th August 2016, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive Shares
under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $207,500 which was repaid in August
2021. The related benefit is disclosed in table 4.3.2 on page 47.
On 13th September 2017, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive
Shares under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $202,500 which is repayable by
13th September 2022. The related benefit is disclosed in table 4.3.2 on page 47.
Other Related Party Transactions
Equity Accounted Investees
Loans are made by the Group to equity accounted investees for property development undertakings. Loans outstanding between the
Group and joint ventures are interest bearing and are repayable at the completion of the equity accounted investees development
project.
As at 30 June the balance of these loans were as follows:
Garden Towers East Perth Pty Ltd
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
2022
$’000
2021
$’000
1,990
19,720
334
3,360
-
1
3
-
134
21,848
-
1
2
4,775
103
8,575
In the financial statements of the Group, investments in equity accounted investees are carried at the lower of the equity accounted
amount and the recoverable amount.
Ventrade Australia Pty Ltd and Ventrade Maylands Pty Ltd are related parties of Chuan Hup Holdings Limited who owns 20.53% of
Finbar Group. The Company entered into a joint venture arrangement with Ventrade Australia Pty Ltd, under Garden Towers East Perth
Pty Ltd, during the financial year ended 30 June 2021. The project end value is estimated at $200 million.
Included within the trade and other payables balance is $1,115,000 (2021: $3,793,000) owing to Ventrade Maylands Pty Ltd. Included
within the trade and other receivables balance is nil (2021: $207,000 payable) receivable from Ventrade Australia Pty Ltd. The payables
and receivables are in relation to development projects, are at arms length, non-interest bearing and at call.
91
9 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022 Country of
Incorporation
Shareholding/ Unit
Holding
$
Ownership Interest
2022
2021
29. Group Entities
Parent Company
Finbar Group Limited
Subsidiaries
1 Mends Street Pty Ltd
2 Homelea Court Springs Pty Ltd
31 Rowe Avenue Pty Ltd
32 Riversdale Road Pty Ltd
36 Chester Avenue Pty Ltd
43 McGregor Road Pty Ltd
5-7 Harper Terrace Pty Ltd
63 Adelaide Terrace Pty Ltd
88 Terrace Road Pty Ltd
96 Mill Point Road Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
172 Railway Parade West Leederville Pty Ltd (Deregistered)
Australia
175 Adelaide Terrace Pty Ltd
239 Great Eastern Highway Pty Ltd
241 Railway Parade Pty Ltd
269 James Street Pty Ltd (Deregistered)
Finbar Applecross Pty Ltd
Finbar Commercial Pty Ltd
Finbar Finance Pty Ltd
Finbar Fund Pty Ltd
Finbar Karratha Pty Ltd
Finbar Port Hedland Pty Ltd
Finbar Project Management Pty Ltd
Finbar To Rent Pty Ltd
Finbar Sales Pty Ltd
Finbar Sub 104 Pty Ltd
Finbar Executive Rentals Pty Ltd
Lot 1 to 10 Whatley Crescent Pty Ltd
30. Subsequent Events
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
1
1
1
1
2
1
1
1
1
1
-
1
1
1
-
1
1
1
1
1
1
2
1
1
1
1
1
27
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
31. Auditors’ Remuneration
Audit Services:
Auditors of the Group
Audit and review of financial statements - KPMG
Audit and review of trust accounts - Other Auditors
Services other than Statutory Audit:
Taxation advice and tax compliance services - KPMG
32. Parent Entity Disclosures
As at, and throughout the financial year ending 30 June 2022 the parent company of the Group was
Finbar Group Limited.
Result of the Parent Entity
Profit for the year
Total Comprehensive Income for the year
Financial Position of the Parent Entity
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Total Equity of the Parent Entity comprising of:
Share capital
Retained earnings
Total Equity
Parent Entity Contingencies
2022
$
2021
$
146,970
124,138
4,382
4,977
151,352
129,115
20,700
20,700
16,560
16,560
2022
$’000
2021
$’000
9,158
9,158
11,285
11,285
32,194
43,094
214,029
215,702
1,186
1,222
1,107
1,168
194,484
194,484
18,323
20,050
212,807
214,534
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice
of economic benefits will be required or the amount is capable of reliable measurement.
With the ongoing COVID-19 pandemic, increasing inflation rates and cash rates, there is continuing economic uncertainties which may
influence the Australian economy and property market, and consequently impact property valuations.
Other than mentioned, there has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.
93
9 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2022
1. In the opinion of the Directors of Finbar Group Limited (‘the Company’):
a) The Consolidated Financial Statements and notes that are contained in Pages 57 to 94 and the Remuneration report in the
Directors’ report, set out on Pages 45 to 49, are in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the year ended on
that date; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing Director
and the Chief Financial Officer for the financial year ended 30 June 2022.
3. The Directors draw attention to Note 2(a) to the consolidated financial statements, which contains a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the Board of Directors:
Darren Pateman
Managing Director
Dated at Perth this Twenty-third day of August 2022.
Independent Auditor’s Report
To the shareholders of Finbar Group Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Finbar
Group Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with the
Corporations Act 2001, including:
• giving a true and fair view of the Group’s
financial position as at 30 June 2022 and of
its financial performance for the year ended
on that date; and
The Financial Report comprises:
• Consolidated statement of financial position
as at 30 June 2022.
• Consolidated statement of profit or loss and
other comprehensive income, Consolidated
statement of changes in equity, and
Consolidated statement of cash flows for the
year then ended.
• Notes including a summary of significant
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
accounting policies.
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
Key Audit Matters
The Key Audit Matters we identified are:
• Valuation of Investment Properties; and
• Carrying Value of Inventory.
Key Audit Matters are those matters that, in our
professional judgement, were of most
significance in our audit of the Financial Report of
the current period.
These matters were addressed in the context of
our audit of the Financial Report as a whole, and
in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
95
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
9 6
DIRECTORS’ DECLARATION
Valuation of Investment Properties ($102.2 million)
Refer to Note 12 to the Financial Report
Valuation of Investment Properties ($102.2 million)
• We assessed the Group’s COVID-19 leasing
Refer to Note 12 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The key audit matter
Valuation of investment properties is a key
audit matter due to the:
• Significance of the balance to the financial
statements (30% of total assets);
•
•
Judgement required by the Group in
assessing the capitalisation rates applied to
the projected income of individual properties
in the income valuation model. A small
percentage movement in the capitalisation
rate would result in a significant financial
impact to the investment property balance
and the income statement;
Timing of the valuations performed by the
Group’s external valuer. It is the Group’s
policy when the external valuation was not
performed at year end for the directors to
assess and confirm the valuation to be
adopted in the financial report. We involved
KPMG Real Estate Specialists to inform our
evaluation of the external and internal
valuations for specific properties; and
• Consideration of the economic impacts of
COVID-19 on valuations including leasing and
rental relief assumptions.
Working with our KPMG Real Estate specialists
our procedures included:
• We assessed the Group’s policies for the
valuation of investment properties against
the requirements of the accounting standards
and our understanding of the business.
• We obtained an understanding of the Group’s
process regarding the valuation of
investment property, including specific
considerations of the impact of COVID-19.
• We assessed the scope, objectivity, and
competence of the Group’s external valuer.
• We assessed the property valuation
methodology adopted by the Group, key
assumptions and market commentary in the
valuations for specific properties against
accepted industry practices, using the nature
of the properties, and requirements of the
accounting standards.
• We compared the valuations prepared using
the capitalisation of income valuation
technique to the alternate discounted
cashflow method valuation where prepared
by the Group’s external valuers in December
2021.
• We compared the Group’s external
valuations in December 2021 and the
director’s internal valuations in June 2022, to
recent sales evidence and other published
reports of industry commentators.
• We challenged the capitalisation rates applied
by the Group, based on our knowledge of the
property portfolio and other published reports
of industry commentators.
• We also tested, on a sample basis, the
following key inputs to the valuations to
existing lease contracts and published CPI
statistics by the Australian Bureau of
Statistics:
Valuation of investment properties is a key
audit matter due to the:
• Significance of the balance to the financial
statements (30% of total assets);
The key audit matter
•
Judgement required by the Group in
assessing the capitalisation rates applied to
Carrying Value of Inventory ($142.4 million)
the projected income of individual properties
in the income valuation model. A small
Refer to Notes 3(e) and 16 to the Financial Report
percentage movement in the capitalisation
rate would result in a significant financial
impact to the investment property balance
and the income statement;
Valuation of inventory, being both completed
units and work in progress, is a key audit matter
•
Timing of the valuations performed by the
due to the:
Group’s external valuer. It is the Group’s
• Significance of the balance to the financial
policy when the external valuation was not
statements (41% of total assets);
performed at year end for the directors to
assess and confirm the valuation to be
• Significant judgement and our effort applied
adopted in the financial report. We involved
to assessing forecast selling prices and costs
KPMG Real Estate Specialists to inform our
of completion and selling expenses for work
evaluation of the external and internal
in progress. These factors impact the
valuations for specific properties; and
assessment of net realisable value as the
• Consideration of the economic impacts of
Group’s policy, in accordance with
accounting standards, is inventory must be
COVID-19 on valuations including leasing and
carried at the lower of cost and net realizable
rental relief assumptions.
value; and
• Work in progress comprises developments
currently under construction and future
projects, which are long term in nature
where forecast costs could be negatively
impacted by issues encountered during
planning or construction. In addition, forecast
selling prices can fluctuate significantly
based on property market conditions. This
includes consideration of economic impacts
of COVID-19 on forecast selling prices and
increases in supplier costs.
These factors increase the level of forecasting
judgement and audit complexity when assessing
forecast selling prices and costs of completion
and selling expenses for inventory.
o Gross rent;
o Occupancy rate;
o
o
CPI.
Lease term remaining; and
and rental relief assumptions with
consideration of the industry sector of the
Group’s tenants and the current economic
How the matter was addressed in our audit
environment.
• We assessed the disclosures in the financial
Working with our KPMG Real Estate specialists
report, using our understanding obtained
our procedures included:
from our testing, against accounting
• We assessed the Group’s policies for the
standards requirements.
valuation of investment properties against
the requirements of the accounting standards
and our understanding of the business.
• We obtained an understanding of the Group’s
process regarding the valuation of
investment property, including specific
How the matter was addressed in our audit
considerations of the impact of COVID-19.
• We assessed the scope, objectivity, and
Our procedures included:
competence of the Group’s external valuer.
• We compared the Group’s external
• We assessed the Group’s policies for the
• We assessed the property valuation
valuation of inventory against the
methodology adopted by the Group, key
requirements of the accounting standards
assumptions and market commentary in the
and our understanding of the business.
valuations for specific properties against
• We challenged the Group’s assumptions of
accepted industry practices, using the nature
forecast costs of completion and selling
of the properties, and requirements of the
expenses by selecting a sample of significant
accounting standards.
developments under construction and future
• We compared the valuations prepared using
projects to understand project design
the capitalisation of income valuation
complexity, sub-contractor reliance, other
technique to the alternate discounted
project risks and project funding which could
cashflow method valuation where prepared
negatively impact costs of completion and
by the Group’s external valuers in December
selling expenses including consideration of
2021.
supplier costs increases. This was done
through enquiry of senior management, and
comparison to documentation such as
valuations in December 2021 and the
budgets, funding agreements, supplier
director’s internal valuations in June 2022, to
contracts and internal reports.
recent sales evidence and other published
reports of industry commentators.
• We compared a sample of actual selling
prices of inventory during the current year to
• We challenged the capitalisation rates applied
the previous year forecast selling prices. We
by the Group, based on our knowledge of the
also compared actual construction costs
property portfolio and other published reports
during the current year to the previous year
of industry commentators.
forecast construction costs to inform our
• We also tested, on a sample basis, the
evaluation of current forecast selling prices
following key inputs to the valuations to
and costs of completion (including selling
existing lease contracts and published CPI
expenses) respectively. We have considered
statistics by the Australian Bureau of
the impact of COVID-19 on the forecast
Statistics:
selling prices of inventory based on the
current economic environment and resulting
o Gross rent;
property market conditions.
o Occupancy rate;
o
o
Lease term remaining; and
CPI.
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• We performed sample testing of sales of
inventory during the year and subsequent to
year end to executed settlement statements
to assess sales margins achieved during the
year and post year end. This informed our
evaluation of the carrying value of inventory
at balance date against the Group’s policy for
recording inventory at the lower of cost and
net realisable value.
• We compared forecast selling prices to total
costs incurred to date and forecast costs of
completion (including selling expenses) for
significant projects. We did this to assess the
carrying value of inventory against the
Group’s policy for recording at the lower of
cost and forecast net realisable value.
• We assessed the disclosures in the financial
report, using our understanding obtained
from our testing, against accounting
standards requirements.
Other Information
Other Information is financial and non-financial information in Finbar Group Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Report. The Key Financial Metrics, Chairman’s Report, Managing Directors’ Report, Finbar Overview,
Key Achievements, Development Overview and Finbar’s Investment Properties are expected to be
made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001.
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
• assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Finbar Group Limited for the year ended 30 June
2022, complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for
the preparation and presentation of the
Remuneration Report in accordance with Section
300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report
included in paragraph 4.3 of the Directors’ report
for the year ended 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
KPMG
Derek Meates
Partner
Perth
23 August 2022
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Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Finbar Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Finbar Group Limited
for the financial year ended 30 June 2022 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Derek Meates
Partner
Perth
23 August 2022
ASX ADDITIONAL INFORMATION
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below.
Shareholdings (as at 30 June 2022)
Substantial Shareholders
The number of shares held by substantial shareholders and their associates are set out below:
Shareholder Name
Chuan Hup Holdings Limited
Thorney Holdings Proprietary Limited
Forward International Pty Ltd
Wilson Asset Management Group
Ordinary shares
Refer to Note 19 in the Notes to the Financial Statements.
Distribution of Equity Security Holders
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-over
Number
%
55,871,363
28,688,116
28,568,265
23,615,000
20.53
10.54
10.50
8.68
Number of
Holders
Ordinary
Shares
401
482
310
772
147
106,096
1,412,324
2,416,031
24,481,453
243,707,238
2,112
272,123,142
The number of shareholders holding less than a marketable parcel of ordinary shares is 337.
Stock Exchange
The Company is listed on the Australian Securities Exchange. The Home exchange is Perth.
ASX Code: FRI
Other Information
Finbar Group Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
101
1 02
Twenty largest shareholders of ordinary shares as disclosed in the share register:
Offices and Officers
Chuan Hup Holdings Limited
UBS Nominees Pty Ltd
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Ltd (DRP)
Rubi Holdings Pty Ltd (John Rubino S/F A/C)
Blair Park Pty Ltd
J P Morgan Nominees Australia Pty Limited
3RD Wave Investors Pty Ltd
Forward International Pty Ltd
Mr James Chan
Hanssen Pty Ltd
Mrs Siew Eng Mah
Forward International Pty Ltd
Chan Family Super (WA) Pty Ltd (Chan Family S/F A/C)
Apex Investments Pty Ltd
Milton Corporation Limited
Mr Ah-Hwa Lim
Ms Yi Xian Chan
Denshir Pty Ltd
Mr Wan Soon Chan
TOP 20
Number of
Ordinary
Shares Held
53,837,175
27,865,536
27,467,507
%
19.78
10.24
10.09
9,063,016
7,912,358
7,685,726
7,193,944
6,650,000
6,472,922
6,328,032
5,000,000
4,820,000
4,492,901
4,277,072
3,645,446
3,163,226
3,155,770
2,892,126
2,739,322
2,435,137
3.33
2.91
2.82
2.64
2.44
2.38
2.33
1.84
1.77
1.65
1.57
1.34
1.16
1.16
1.06
1.01
0.89
197,097,216
72.43
Directors
Mr John Chan (Executive Chairman)
Mr Darren John Pateman (Managing Director)
Mr Ronald Chan (Chief Operations Officer)
Mr Kee Kong Loh
Mr Lee Verios
Mr Terence Siong Woon Peh
Company Secretary
Mr Edward Guy Bank (Chief Financial Officer)
Principal Registered Office
Finbar Group Limited
Level 6
181 Adelaide Terrace
EAST PERTH WA 6004
PO Box 3380
EAST PERTH WA 6892
Telephone: +61 8 6211 3300
Facsimile: +61 8 9221 8833
Email: info@finbar.com.au
Website: www.finbar.com.au
ABN 97 009 113 473
ACN 009 113 473
Share Registry
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
PERTH WA 6000
Telephone: +61 8 9323 2000
Auditors
KPMG
235 St Georges Terrace
PERTH WA 6000
103
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ASX ADDITIONAL INFORMATION (Continued)ASX ADDITIONAL INFORMATION (Continued) finbar.com.au