D E V E L O P I N G B E T T E R L I F E S T Y L E S S I N C E 1 9 9 5
A N N U A L R E P O R T
1
Contents
3
Chairman’s
Report
5
Managing
Director’s
Report
9
Key Financial
Metrics
14
Project
History
15
Finbar
Milestones
2023 Finbar Group Limited Annual Report 2
17
Our Finbar
19
Modern
Amenities
21
ESG at Finbar
22
Completed
Projects
26
Projects Under
Construction
30
New to Market
32
Future Projects
37
Investment
Properties
40
Financial Report
Finbar and Perth -
rising together.
For 28 years, the Finbar story has grown with the people
of Perth. With every new address, every new apartment,
every new innovation, we’re rewriting the narrative on
what it means to call this beautiful city home – and our
best is yet to come.
2023 Finbar Group Limited Annual Report 3
Chairman’s
Report
“
Finbar was holding $18.2 million in cash which
combined with the cash commitments from
joint venture partners for our joint venture
projects, means we are adequately capitalised
to fulfil all working capital commitments and
contingency provisions for all the projects we
currently have under construction.
JOHN CHAN
”
Dear Shareholder,
It is my privilege to present Finbar
Group’s Annual Report for the 2023
financial year.
Finbar has reported a net profit after tax
of $2.78 million for the 12 months to June
30 2023, compared with $10.98 million the
previous year.
Revenue of $34 million was well down
on the previous year, as Finbar focused
on the completion of the AT238 project
in Perth’s CBD and the continuing
construction activities at Civic Heart in
South Perth, Aurora in Applecross and
The Point in Rivervale.
Finbar has successfully sold the
limited remaining stock at the Dianella
Apartments development, which was
completed in the 2022 financial year, and
settled $46.8 million in sales at the AT238
complex during the 2023 financial year.
Sales at AT238 have been steady in the
early stages of this financial year and
Finbar has adjusted prices at the project
to mitigate the impact of higher than
forecast construction costs.
Finbar also recorded a $3 million
impairment on its Fairlanes commercial
property brought about by pressure
on commercial property capitalisation.
However, Finbar’s Pelago development
continues to hold value, receiving a $1.68
million increase in valuation.
At June 30, Finbar was holding $18.2
million in cash which combined with the
cash commitments from joint venture
partners for our joint venture projects,
means we are adequately capitalised to
fulfil all working capital commitments
and contingency provisions for all
the projects we currently have under
construction. We also do not hold any
balance sheet debt relating to our
development/pipeline land.
Finbar has good working relationships
with its joint venture partners and I wish
to thank them for their support and for
the trust they have given Finbar.
The Board has made the decision
to suspend dividend payments to
shareholders to help protect the balance
sheet strength that has enabled Finbar
to continue to fund construction and
development during this difficult cycle.
The Board is investigating the best
options for returning capital to our
patient shareholders upon completion
and settlement of the current major
apartment projects.
In almost 30 years as
a listed development
company, Finbar has
experienced a range
of different trading
conditions, but I think
none have ever been
as challenging as the
years following the
COVID pandemic.
Rapidly rising costs of construction
materials, coupled with a tight labour
market and disrupted supply chains has
meant project costs have soared.
2023 Finbar Group Limited Annual Report 4
Finbar is in a position where it will be able to deliver
new stock to the market later this financial year and into
the 2025 financial year.
Civic Heart
Despite record low vacancy rates in the
rental market, growing immigration
and a chronic lack of new supply of
apartments, prices of new apartments
have not risen commensurately.
numerous construction firms have
failed, Hanssen has consistently
worked with Finbar to facilitate the
delivery of quality accommodation to
Western Australia.
Finbar has taken the
decision to continue
to develop projects
through the current
cycle, despite the
challenges faced
with increasing
construction costs,
operating costs, and
continued monetary
policy tightening.
For many years, Finbar has exclusively
partnered with construction company
Hanssen to build its apartment
developments. At a time when
This symbiotic relationship has served
both companies well and has enabled
Finbar to continue to develop major
apartment towers at a time when many
of its competitors have been unable,
or unwilling, to commit to commencing
construction of their own projects.
I would like to thank Gerry Hanssen
for his continued support and for his
ongoing relationship with Finbar.
As a result, Finbar is in a position where
it will be able to deliver new stock to the
market later this financial year and into
the 2025 financial year. With interest
rates stabilising and a shortage of new
residential stock, and with increasing
population, low unemployment and
a strong local economy, I feel that
residential prices in Perth and Western
Australia must increase.
Finally, I would like to inform
shareholders that Non-Executive
Director, Lee Verios, has advised me
of his intention to retire later this year
and as such will be retiring as Director
of the Company at the close of the
Company’s annual general meeting in
October. I am personally grateful for
Lee’s contribution to the Board since
his appointment in 2011 and extend
thanks on behalf of all shareholders
for this, and wish him the very best in
his retirement.
In closing, I would like to take the
opportunity to acknowledge our
Executive team and Finbar staff for
their hard work and efforts during the
year. I would also like to give thanks
to all of our shareholders for their
ongoing support.
John Chan
Chairman
2023 Finbar Group Limited Annual Report 5
Managing
Director’s
Report
“
Finbar has sales of $226 million at
Civic Heart and – based on current
pricing – approximately $202
million remaining for the market.
”
DARREN PATEMAN
Finbar has reported a net profit after
tax for the 2023 financial year of $2.78
million as residential development
companies continue to face challenging
trading conditions.
The Company had limited completed
residential lots available for sale during
the year with the Dianella Apartments
project being sold out and revenue
for the sold apartments in the AT238
development occurring in the second half
of the financial year.
The 50/50 joint venture with Ventrade
Australia was completed in April and
provided a timely boost to Finbar’s
completed stock available for sale, with
the remainder of settlements expected in
the current financial year.
The profit was also impacted by a
decrease in the holding value of its
Fairlanes commercial investment
by $3 million due to pressure on
commercial property capitalisation
rates caused by the higher cost of funds
in the commercial sector. Finbar’s
other investment property, the Pelago
apartment complex in Karratha, continues
to perform well. It is 98% per cent
occupied and generated rental income in
FY2023 of $6.0 million.
Karratha is at the epicentre of WA’s
mineral resources and energy sectors,
and the Pelago apartments are
considered to be the town’s highest
quality accommodation, with little or no
likelihood of being replicated in the near
future given the current construction
cost environment and the challenges of
building in regional towns.
Finbar has approximately $680 million in
project value under construction, which
we expect to complete and deliver to
the market later this financial year and
in the first half of FY2025. We remain
well capitalised to meet our funding
commitments for all projects currently
under construction.
The company continues to face
challenging trading conditions, primarily
due to construction cost impacts in
the building sector which are finally
stabilising but not expected to reduce
significantly. Additionally, the current
environment of a rapid upward movement
in interest rates have dampened sales
activity as anticipated, although there are
indications that interest rates are at, or
very near, their expected highs based on
recent encouraging inflation numbers.
I want to acknowledge and thank
Finbar’s joint venture partners for their
contributions, Commonwealth Bank for
its support of the Civic Heart Project
and Westpac for its support at The Point
and Aurora projects. It is only with the
support and confidence of our investment
and funding partners that we have been
in a position to commence and progress
major projects at a time when many other
developers in Perth and across Australia
have delayed and cancelled their
proposed developments.
Our company will be conducting a capital
management review on the completion
of Civic Heart and Aurora with a view
to returning profits to our valued and
patient shareholders through the most
appropriate means.
It is also important to note that we
continue to work closely with building
firm Hanssen to ensure ongoing viability
of construction at our future projects.
2023 Finbar Group Limited Annual Report 6
Our company will be conducting a capital management review
on the completion of Civic Heart and Aurora with a view to
returning profits to our valued and patient shareholders
through the most appropriate means.
Aurora
In the current economic and business
environment of increased material
costs, a tight labour market, and
with some lingering supply chain
constraints, the practice of fixed price
construction agreements has all but
disappeared and developers will need
to work closely with a reduced pool
of builders to share risk and ensure
the ongoing viability of projects
through these unusual construction
environment times.
Finbar has worked with Hanssen to
mitigate the risks of rising construction
costs where possible, but also to ensure
that these major projects are able to
proceed, and be completed in a timely
manner and acceptable rates of return.
Construction at our biggest and most
complex development Civic Heart,
in South Perth, remains on track for
structural completion by Christmas with
practical completion and settlements
on track to occur in the second half of
this financial year. Finbar has sales of
$226 million at Civic Heart and – based
on current pricing – approximately $202
million remaining for the market.
Aurora in Applecross,
is also due to be
completed in the
second half of FY2024.
Sales of $55 million
have been completed
with a further $91
million in value
remaining for sale.
Although apartment prices have not
risen significantly in Western Australia
in recent years, we are confident that
these two completed projects will be
well received by the market, with the
chronic shortage of accommodation
in Perth, combined with population
growth and interest rate stability
expected to drive demand and,
inevitably, sustainable increases in
prices for new apartments.
Additionally, we are encouraged by the
current recognition and focus from
all tiers of government on the issues
of affordability and supply of housing
and apartments. The WA Government
in particular has looked to streamline
development approval processes and
has offered stamp duty relief to buyers
who have pre-purchased apartments off
the plan ahead of construction.
We are looking forward to a more
typical 12-18 months for Finbar as we
focus on the most important completion
of new apartment stock being delivered
later in the second half and into the
following financial year.
I will close by thanking my management
team and staff for their continued hard
work and support.
Darren Pateman
Managing Director
2023 Finbar Group Limited Annual Report 7
$679.3m
of apartments under construction.
204 apartments sold
during the year with a total value of
$176m
Finbar has this year delivered a
net profit after tax of
$2.78m
Finbar has been a shining light in the Perth property scene for decades. Reliable. Steadfast. Dependable. We’re proud to have led the way, staying the course when we could have rushed, pushing boundaries when we could have played it safe. Through it all, our commitment has never wavered, and never will – high quality residences, built in Perth’s best locations. Over 6,000 new apartments says it all, an enviable track record that will continue to drive our financial strength and stability as we reward investors for their confidence in us.2023 Finbar Group Limited Annual Report 8
100% delivery on
6,776 apartments over
76 landmark developments.
Over 70%
of buyers say the reputation of the developer
is critical when choosing an apartment.
Our reputation is everything to us.
84%
of our customers rated
buying ‘off the plan’ easy.
Consistently achieving
8-star
NatHERS rating
89% of customers would
recommend Finbar to a friend.
Word of mouth is our strongest asset.
28 years
on the ASX
2023 Finbar Group Limited Annual Report 9
Key Financial
Metrics
SOURCE OF EARNINGS
TOTAL
EARNINGS
Development income 77%
Rental Income 16%
Other 7%
$176m
FY23 Sales
DEVELOPMENT
INCOME
AT238 49%
Dianella Apartments 42%
Reva 5%
Vue Tower 2%
One Kennedy 2%
$2.78m
after tax profit
$12.2m
average sales of off-the-plan
apartments per month
RENTAL
INCOME
Pelago 67%
Fairlaines 29%
Other 4%
$2.72m
average sales of completed
apartments per month
2023 Finbar Group Limited Annual Report Key Financial
Metrics (continued)
10
NET PROFIT AFTER TAX
$MILLION
$13.8
$11.4
$11.0
$8.9
$7.1
$8.1
$5.1
$2.8
2016 2017 2018 2019 2020 2021 2022 2023
FULLY FRANKED DIVIDEND
CENTS
Interim Dividend Final Dividend
0.07
0.06
0.06
0.06
0.04
0.04
0.03
2016
2017
2018
2019
2020
2021
2022
2023
0.00
PROJECT PIPELINE VALUE
$2.2
$2.0
$1.8
$BILLION
$1.3
$1.4
$1.2
$1.5
$1.4
2016
2017
2018
2019
2020
2021
2022
2023
Finbar maintains a robust Project Pipeline of $1.4 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.
2023 Finbar Group Limited Annual Report 11
Key Financial
Metrics (continued)
EARNINGS PER SHARE
$ PER SHARE
$0.06
$0.04
$0.02
$0.04
$0.04
$0.03
$0.02
$0.01
2016 2017 2018 2019 2020 2021 2022 2023
PRESALES BOOK VALUE
$MILLION
$453.8
$349.0
$250.7 $257.5
$194.5
$175.2
$122.6
$45.6
2016
2017
2018
2019
2020
2021
2022
2023
Sales achieved at Civic Heart, Aurora, The Point and Garden Towers has
increased FY2023 presales to $453.8 MILLION.
TOTAL DEVELOPED UNITS
UNITS
6402
6527
6655
6776
5984
5675
5293
4923
2016
2017
2018
2019
2020
2021
2022
2023
Total Developed Units reached 6,776 by the end of FY2023 with
the addition of 121 units from the completion of AT238. Finbar
continues to position itself as the largest residential apartment
developer in Western Australia.
2023 Finbar Group Limited Annual Report Key Financial
Metrics (continued)
TOTAL SALES
AND VALUE
12
Number Of Sales
Total Value
Number Of Sales
Average Sales Per Day
AVERAGE SALES
PER DAY
AVERAGE SALES
VALUE
Number Of Sales
Average Sales
115178100230245309591305211138321184338547403430266235406264200464$0 $4 $6 $17 $17 $37 $86 $95 $329 $133 $198 $134 $334 $304 $214 $282 01002003004005006007000501001502002503003504001996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202143220222023MillionsUnits$284 245054$94 $45 $277 $143 $158 $167 $140 $148 $110 $176 $195 204117854501002302453095913052111383211843385474034302662354062642004640.00.10.50.60.71.60.60.51.51.11.20.71.10.71.300.20.40.60.811.21.41.61.8199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020214321.2$-$100$200$300$400$500$600$700202220420230.90.10.10.315240.80.80.90.60.50.4ThousandsSales0.5115241785450100230245309591305211138321184338547403430266235406264200464 $- $100 $200 $300 $400 $500 $600 $700 $80019961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018201920202021432010020030040050060070020222042023ThousandsUnits$330 $299 $232 $255 $319 $333 $365 $372 $389 $462 $519 $629 $678 $617 $730 $577 $611 $686 $706 $626 $598 $526 $559 $549 $607 $658 $863 $557 2023 Finbar Group Limited Annual Report 13
Key Financial
Metrics (continued)
s
e
l
a
S
120
100
80
60
40
20
0
25
28
FOREIGN BUYER SALES
112
43
46
44
52
47
74
62
39
34
20
25
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Following a rapid decline in FY20, after introduction of the foreign buyer surcharge tax
by the state government, some foreign buyers are returning to the market.
FY23 - SALES ACROSS AGE GROUP
10%
20%
14%
10%
23%
23%
18-24
25-34
35-39
40-49
50-59
60+
FY23 - LOCATION OF BUYER FROM
THE DEVELOPMENTS
19%
18%
5%
9%
7%
14%
16%
6%
6%
2.5km or less
2.6-5km
6-10km
11-20km
21-30km
31-40km
Regional WA
Interstate
Overseas
2023 Finbar Group Limited Annual Report
Project
History
2023
121 AT238 Perth
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
128
125
DIANELLA APARTMENTS Dianella
RIVERENA Rivervale
123
167
ONE KENNEDY Maylands
SABINA Applecross
128
59
250
PALMYRA APARTMENTS EAST Palmyra
REVA SOUTH PERTH South Perth
VUE TOWER East Perth
244
138
AIRE WEST PERTH West Perth
AURELIA South Perth
227
143
116
169
154
63
47
264
188
8
98
194
CONCERTO East Perth
MOTIVE West Leederville
LINQ Northbridge
UNISON ON TENTH Maylands
ARBOR NORTH Rivervale
NORWOOD PERTH Perth
TOCCATA East Perth
SUBI STRAND Subiaco
SPRING VIEW TOWERS Rivervale
52 MILL POINT RD South Perth
ECCO APARTMENTS Perth
AU APARTMENTS East Perth
188
131
115
43
PELAGO EAST Pegs Creek (Karratha)
ST MARKS Highgate
ADAGIO East Perth
KNIGHTSGATE Currambine
111
114
128
31
LIME Victoria Park
PELAGO WEST Pegs Creek (Karratha)
FAIRLANES PERTH East Perth
18 ON PLAIN East Perth
2011
202 X2 APARTMENTS East Perth
2010
75
85
THE EDGE Victoria Park
THE SAINT East Perth
2009
34
50
62
197
71
71
VERVE Perth
HORIZON CENTRAL Maylands
HORIZON SIXTH Maylands
ROYALE Perth
REFLECTIONS EAST East Perth
REFLECTIONS WEST East Perth
14
28 YEARS
76 LANDMARK DEVELOPMENTS
6,776 UNITS COMPLETED
2009
21
16
114
CIRCLE EAST Northbridge
CIRCLE WEST Northbridge
CODE Perth
113
111
123
81
49
80
76
60
104
54
43
98
64
14
94
51
25
45
30
47
54
47
11
25
68
76
1
1
12
2008
2007
2005
2004
2003
2001
2000
1999
CERESA Rivervale
INFINITY East Perth
ALTAIR East Perth
DOMUS Perth
DEL MAR Mandurah
SOHO East Perth
AVENA Rivervale
SOL APARTMENTS West Perth
ONE28 East Perth
ARUM Rivervale
SAMPHIRE Rivervale
WESTRALIAN East Perth
COSMOPOLITAN East Perth
RIVERSTONE South Perth
MARKETRISE West Perth
175 HAY East Perth
BLUE 2 South Perth
KINGSTON West Perth
ST THOMAS SQUARE Subiaco
MONTEREY BAY Port Mandurah
BLUEWATER South Perth
CHELSEA GARDENS West Perth
85 MILL POINT ROAD South Perth
THE 10TH TEE The Vines
THE RISE East Perth
WELLINGTON PLACE East Perth
ALBANY HIGHWAY MEDICAL CENTRE Victoria Park
CORFIELD STREET MEDICAL CENTRE Gosnells
MATILDA BAY APARTMENTS Crawley
1998
78 PADDINGTON PLACE West Perth
1997
1996
5
15
167 MELVILLE PARADE South Perth
SEVILLE ON THE POINT South Perth
3
5
THE LINKS South Perth
19 RENWICK STREET South Perth
2023 Finbar Group Limited Annual Report 15
Finbar
Milestones
28 years on the ASX
Our reputation is everything to us. Since we listed Finbar on the ASX 28 years
ago, we have built our name on the back of an uninterrupted run of successful
developments, from our first project, Seville on the Point, to Westralian,
Pelago, Fairlanes, Subi Strand, Concerto and our award-winning Sabina
Applecross. With Garden Towers and our landmark Civic Heart project on
the way, Finbar continues to prove why it is WA’s leading and most trusted
residential apartment developer.
1990s
2010s
1995
1997
Lists on ASX as Property
Development Company
operating out of a 2
bedroom Como apartment
Commenced 1st
Development Seville on the
Point, South Perth
Completed 1st
Development Seville on
the Point, South Perth
Maiden net profit
$0.7m
1998
$1m
net profit
milestone
2010
2012
2013
Secured first Pilbara
project, Pelago West,
Karratha
$20m
net profit
milestone
2020s
2020
25th Year on the ASX
3000
apartments
milestone
Pelago West awarded
Judge’s and UDIA High
Density Development
Completed company’s first
Pilbara project
Relocated to Fairlanes building,
East Perth (13 staff)
Fairlanes awarded winner UDIA
High Density Development
2013
$30m
net profit
milestone
2012
2021
Launched internal sales division –
Finbar Sales
Sabina awarded Property Council WA
Best Residential Development and
UDIA Judges Commendation in the
High Density Development Category
2021
FINALIST
2022
Work continues to progress
on the construction of
four projects, a collective
total of 753 units - AT238,
Aurora, Civic Heart, and
The Point. The total value of
sales resulting from these
combined projects exceeds
$780 million
2023 Finbar Group Limited Annual Report 16
2000s
2001
Relocated to first
corporate office,
Preston Street
South Perth
(4 staff)
2005
2006
2008
2009
Completed
Westralian, first
luxury project on
Terrace Road,
East Perth
$100m market
capitalization
1000
apartments
milestone
$10m
net profit
milestone
Inclusion in All
Ordinaries Index
2000
apartments
milestone
2014
2015
2017
2019
St. Mark’s awarded
winner UDIA High
Density Development
and Urban Renewal
2014
4000
apartments
milestone
Record launch at Aurelia,
with $66m of sales in the
1st month
Completed WA’s tallest
residential apartment
development to date, Concerto
Launched Property
management division –
Finbar to Rent
6000
apartments
milestone
Completed Finbar’s largest
development to date, Subi
Strand
Launched the Finbar Loyalty
Club. An exclusive rewards
program for all Finbar
buyers, past & present
Spring View Towers
awarded winner UDIA High
Density Development
Concerto awarded winner UDIA
High Density Development
2017
Completed over $3b worth of
developments since 1995
5000
apartments
milestone
2015
2023 Finbar Group Limited Annual Report
17
Our Finbar
JOHN CHAN
Executive Chairman
28 years
DARREN PATEMAN
Managing Director
28 years
RONALD CHAN
Executive Director
19 years
We’ve come a long way since the dream started as 3 people working out of a
makeshift office in Como. Now a 29-strong team led by experienced and long
serving management, we’re in prime position to push the boundaries at the
forefront of Western Australia’s lifestyle property market.
OUR PEOPLE
- A team of 19 staff in Finbar’s head office
- A team of 7 staff in Finbar to Rent
- A team of 3 staff in Finbar Sales
- Led by an experienced and long serving management team, with strong leadership skills and an
excellent track record
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
2023 Finbar Group Limited Annual Report
18
ELDON WAN
Non-Executive Director
LEE VERIOS
Non-Executive Director
TERENCE PEH
Non-Executive Director
Finbar continues to elevate the quality of inner city living in Perth, delivering
prestigious, well-appointed lifestyle apartments that artfully fuse office and
public spaces in progressive and innovative designs.
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 revenue 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
2023 Finbar Group Limited Annual Report
19
Modern
Amenities
INSPIRED BY MODERN
LIFESTYLES
At Finbar, we’re forever evolving to treat residents to the most
thoughtful amenities in sync with how they like to live. From
working out to working from home, accomodating guests to
treating pets like family, each development is customised to the
needs of its residents to ensure we continue to offer the most
relevant and responsive inner-city lifestyles.
PLAYTIME IN THE CITY
No longer the exclusive domain of couples and
professionals, inner city apartments are growing in
demand from young families seeking low-care minimalist
living close to entertainment precincts. Civic Heart
and Garden Towers raise the energy with exciting kids’
playrooms and outdoor playgrounds, while AT238’s
gaming zone complete with an arcade machine and PS5
mean it’s on for young and old.
IMMERSIVE
EXPERIENCES
Finbar developments understand resident needs to a tee.
Garden Towers’ state-of-the-art virtual golf driving range
offers an immersive experience where players can finetune
their swing in the comfort of their own home, while putting
greens at Civic Heart and Aurora offer the chance to work on
your short game at anytime.
WORKS FOR YOU
Working from home has become the new normal in a post-
pandemic world. As thought leaders in this space, Finbar is
innovating ahead of the trend with dedicated ‘WFH’ spaces in
Civic Heart, Aurora, AT238 and Garden Towers, from business
centres, to meeting rooms and zoom pods that make staying
connected seamless.
2023 Finbar Group Limited Annual Report 20
STAY A LITTLE LONGER
Our residents said they wanted the flexibility of having family and friends visit, without having to send them away
to stay at a hotel – and we listened. Following the overwhelming success at Sabina Applecross, Civic Heart and
Aurora have incorporated Finbar’s guest apartment concept, allowing residents to book a suite to accommodate
their loved ones while visiting.
BEST FRIENDS
WELCOME
Dog ownership in Australia is increasing
— and so is inner-city apartment living.
Finbar brings the two worlds together
thoughtfully and naturally, with pet wash
facilities and pet play areas at Civic Heart,
Garden Towers and AT238 inviting residents
to embrace all the physical and emotional
benefits that come from sharing an active
city life with your four-legged friend.
2023 Finbar Group Limited Annual Report 21
ESG at Finbar
As WA’s largest and most trusted
apartment developer, Finbar is committed
to operating in a manner that shows the
highest levels of environmental, social
and governance standards.
From its very early days, Finbar’s success has been guided by an
ethos to have positive environmental and social impacts and to be
ethical and transparent in its approach to meeting and exceeding
all regulations that govern how it operates.
The company’s ethos is to develop better lifestyles for people and
this guides the approach to ESG. Finbar strives to be a leader in
WA, to be a trusted and respected joint venture partner, employer
and neighbour to its stakeholders across the community.
E n v i r o n m e n t
S o c i a l
G o v e r n a n c e
– Using innovative, contemporary, and
light-weight construction techniques
to reduce carbon emissions
– Optimising design and material
selection to reduce energy usage
after handover
– Aiming to achieve high energy
efficiency and thermal comfort
ratings for each project
– Reducing waste through compaction
and building management of diverse
waste streams
– Reducing land clearing through
offering affordable and diverse infill
housing options
– Promoting adoption of EV through
providing backbone infrastructure
to catalyse the future installation of
chargers
– Providing affordable & diverse housing
options across the Perth metro area
– Corporate Governance Statement
– Materiality assessment and
identification of key ESG issues
– Long serving and experienced
management and leadership team
– Ethical conduct and responsible
business practices
– Risk management and long term
strategic direction
– Nurturing employee growth &
enhancing skills through training and
professional development.
– Data security and privacy
– Providing a wide range of amenities in
each project with a focus on health and
wellness
– Supporting local community
organisations
– Importance of employee diversity
& wellbeing
– Ensuring all our contractors and
suppliers comply with the modern
slavery initiatives and requirements.
– Providing positive policy outcomes
through membership and committee
input into the Property Council
of Australia (WA) & the Urban
Development Institute of Australia (WA)
– Broadening the rate base of local
governments, supporting the delivery
of services they provide to the local
community
2023 Finbar Group Limited Annual Report 22
COMPLETED PROJECTS
AT238
P E R T H
DIANELLA
APARTMENTS
D I A N E L L A
REVA
S O U T H P E R T H
2023 Finbar Group Limited Annual Report 23
AT238
238 Adelaide Terrace, Perth
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.
Project Company
240 Adelaide Terrace Pty Ltd
Entity Type
Equity Accounted Investee
Finbar’s Ultimate Interest
50%
Construction Commenced Mar 21
Construction Completed
Apr 23
Total Lots
121
Approximate Total Project
Sales Value
$100.9m
Value of Sales to Date
$57.1m
Lots Sold
Lots Unsold
77 (64%)
44 (36%)
2023 Finbar Group Limited Annual Report 24
DIANELLA APARTMENTS
36 Chester Avenue & 61 Waverley Street, Dianella
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.
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
$62.5m
Value of Sales to Date
$62.5m
Lots Sold
128 (100%)
Lots Unsold
0 (0%)
2023 Finbar Group Limited Annual Report 25
REVA
5 Harper Terrace, South Perth
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.
Project Company
5-7 Harper Terrace Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest
100%
Construction Commenced
Nov 17
Construction Completed
Feb 19
Total Lots
59
Approximate Total Project
Sales Value
$46.7m
Value of Sales to Date
$43.8m
Lots Sold
Lots Unsold
55 (93%)
4 (7%)
2023 Finbar Group Limited Annual Report 26
PROJECTS
UNDER CONSTRUCTION
CIVIC HEART
S O U T H P E R T H
AURORA
A P P L E C R O S S
THE POINT
R I V E R V A L E
2023 Finbar Group Limited Annual Report 27
CIVIC HEART
99 Mill Point Road & 3 Mends Street, South Perth
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.
Project Company
1 Mends Street Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 52.5%
Construction Commenced FY21
Estimated Completion
2H FY24
Total Lots
335
Approximate Total Project
Sales Value
$427.8m
Value of Sales to Date
$226.3m
Lots Sold
Lots Unsold
221 (66%)
114 (34%)
CONSTRUCTION PROGRESS
Comp le tion ETA
2H FY 24
JULY
2023
MARCH
2023
DECEMBER
2022
MAY
2022
JULY
2022
Constr uction Com me nced
Janua ry 202 1
2023 Finbar Group Limited Annual Report 28
CONSTRUCTION PROGRESS
Comp le tion ETA
2H FY 24
JULY
2023
MAY
2023
OCTOBER
2022
JUNE
2022
Constr uct ion Comm ence d
Decem ber 2 021
AURORA APPLECROSS
3 Kintail Road, Applecross
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.
Project Company
Finbar Applecross Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Construction Commenced FY22
Estimated Completion
2H FY24
Total Lots
121
Approximate Total Project
Sales Value
$146m
Value of Sales to Date
$55m
Lots Sold
Lots Unsold
60 (50%)
61 (50%)
2023 Finbar Group Limited Annual Report 29
S P R I N G S R E S I D E N C E S
CONSTRUCTION PROGRESS
Comp le tion ETA
1H FY 25
JULY
2023
MARCH
2023
DECEMBER
2022
SEPTEMBER
2022
Constr uct ion Comm ence d
M arch 202 2
THE POINT
31 Rowe Avenue, Rivervale
The Point comprises 167 one, two, and three bedroom
apartments and 9 commercial lots on the ground floor and
will be situated at the main entrance to the Springs precinct,
opposite the Aloft Hotel.
Project Company
31 Rowe Avenue Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 65%
Construction Commenced FY22
Estimated Completion
1H FY25
Total Lots
176
Approximate Total Project
Sales Value
$105.5m
Value of Sales to Date
$74.8m
Lots Sold
Lots Unsold
136 (77%)
40 (23%)
2023 Finbar Group Limited Annual Report 30
NEW TO MARKET
GARDEN
TOWERS
E A S T P E R T H
2023 Finbar Group Limited Annual Report 31
GARDEN TOWERS
110 Plain Street & 8 DeVlamingh Ave, East Perth
Positioned opposite Queens Gardens in East Perth,
Garden Towers will be comprised of 331 one, two, and
three bedroom apartments plus 13 commercial units.
Project Company
Garden Towers East Perth
Pty Ltd
Entity Type
Equity Accounted Investee
Finbar’s Ultimate Interest
50%
Construction
Commencement
Estimated Completion
Total Lots
FY24
TBC
344
Approximate Total Project
Sales Value
$256.5m
Value of Sales to Date
$96m
Lots Sold
Lots Unsold
138 (40%)
206 (60%)
2023 Finbar Group Limited Annual Report
32
FUTURE PROJECTS
BEL-AIR
B E L M O N T
ROMEO
A P P L E C R O S S
LOT 1000
R I V E R V A L E
PALMYRA
APARTMENTS WEST
P A L M Y R A
2 HOMELEA
COURT
R I V E R V A L E
LOT 888
R I V E R V A L E
FORMER ABC
STUDIOS
E A S T P E R T H
2023 Finbar Group Limited Annual Report 33
BEL-AIR
239 Great Eastern Highway, Belmont
The 239 Great Eastern Highway project has an approved
DA for 196 one, and two bedroom apartments and 154sqm
of ground floor commercial.
Project Company
239 Great Eastern
Highway Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest
100%
Construction Commencement TBC
Total Lots
Approximate Total Project
Sales Value
196
$92m
2023 Finbar Group Limited Annual Report
34
ROMEO
912 Canning Highway, Applecross
PALMYRA APARTMENTS WEST
45 McGregor Road, Palmyra
Located only metres from the Swan River and
approximately 600 metres to the Canning Bridge Train
Station, this 2,620sqm site fronting Canning Highway has
DA approval as the third of three stages for 151 residential
apartments and three ground floor commercial tenancies
within a podium and 26 storey tower built form.
Project Company
Finbar Applecross Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest
50%
Construction Commencement TBC
Total Lots
155
Approximate Total Project
Sales Value
$121m
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
Y
M
L
A
P
Project Company
43 McGregor Road Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest
50%
Construction Commencement TBC
Total Lots
Approximate Total Project
Sales Value
130
$52m
2023 Finbar Group Limited Annual Report 35
LOT 1000
32 Riversdale Road, Rivervale
2 HOMELEA COURT
Cnr Rowe Avenue & Homelea Court, Rivervale
Lot 1000 comprises 4,069 square metres of absolute
waterfront land with expansive views of the Swan River,
Stadium Precinct, and Perth CBD. DA has been approved
for a 19 storey tower with 143 units.
Project Company
32 Riversdale Road Pty Ltd
Entity Type
Fully Owned Subsidiary
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 an 18 level building. The proposed
apartment project has an estimated end value of
approximately $83 million.
Finbar’s Ultimate Interest
50%
Project Company
2 Homelea Court Springs
Pty Ltd
Construction Commencement TBC
Total Lots
Approximate Total Project
Sales Value
143
$88m
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest
100%
Construction Commencement TBC
Total Lots
Approximate Total Project
Sales Value
135
$83m
2023 Finbar Group Limited Annual Report
36
LOT 888
2 Hawksburn Road, Rivervale
FORMER ABC STUDIOS
187 Adelaide Terrace, East Perth
The current approved DA comprises a six level office
building with 6,250sqm NLA and 236 carbays.
The former ABC Radio Studios heritage building with a GFA
of 3,711sqm over three levels.
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%
Finbar’s Ultimate Interest
100%
Construction Commencement TBC
Construction Commencement TBC
Total Lots
Approximate Total Project
Sales Value
TBC
TBC
Total Lots
Approximate Total Project
Sales Value
TBC
TBC
2023 Finbar Group Limited Annual Report 37
INVESTMENT PROPERTIES
FAIRLANES
E A S T P E R T H
PELAGO
K A R R A T H A
AURELIA
S O U T H P E R T H
2023 Finbar Group Limited Annual Report PELAGO
Sharpe Avenue, Karratha
Total Lots
Residential Lots
Commercial Lots
117
99
18
FY24 Forecast Rent
$7.46m
Lots Leased
110 (94%)
Residential Lots Leased
97 (98%)
Commercial Lots Leased
13 (72%)
38
FAIRLANES
181 Adelaide Terrace, East Perth
Total SQM
Office SQM
Retail SQM
7,584
7,114
470
FY24 Forecast Rent
$1.02m
SQM Leased
4260 (56%)
AURELIA
1 Harper Terrace, South Perth
Total SQM
638
Estimated sales value
$4.5m
Estimated income value
$271,000 p.a.
2023 Finbar Group Limited Annual Report 39
2023 Finbar Group Limited Annual Report 2023 Fi nbar Group Limited Annual Re port
40
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
56
57
58
59
60
92
93
98
99
DIRECTORS’ REPORT
For the Year Ended 30 June 2023
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 2023
and the independent auditor’s report thereon.
CONTENTS OF DIRECTORS’ REPORT
PAGE
42
43
43
43
44
44
44
44
46
47
48
48
48
49
49
50
50
51
51
53
53
53
54
54
54
55
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 - Audited
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
12 Non-audit Services
13 Lead Auditor’s Independence Declaration
41
2023 Finbar Group Limited Annual Report
1. Directors
The Directors of the Company at any time during or since the end of the financial year are:
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 its 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 28 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 19 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 to 31 January 2023
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. Loh retired as a director of Finbar on 31 January 2023.
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 24 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.
Non-executive Director
Eldon WAN - B Acc, FCA Singapore
Director since 31 January 2023
Eldon Wan joined the Board on 31 January 2023. Eldon is the Chief Operating Officer of Chuan Hup Holdings Limited, an investment company
listed on the Singapore Stock Exchange, and Finbar’s largest corporate shareholder.
Eldon has over 25 years of experience in the finance and accounting sectors. He has accumulated industry experience in mergers and acquisitions,
financial and management reporting, budgeting, taxation, treasury as well as corporate governance and risk management matters.
42
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
1. Directors (continued)
Non-executive (Independent) Director
Lee VERIOS - LLB, MAICD
Director since 6 December 2011
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.
In addition to his legal practice, Lee is an experienced company director, having held positions in a variety of public and private enterprises.
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).
Lee Verios has notified his intention to retire as a Director of the Company to take effect at the conclusion of the Company’s 2023 Annual
General Meeting.
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 29 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
John CHAN
Darren John PATEMAN
Ronald CHAN
Kee Kong LOH*
Lee VERIOS
Terence Siong Woon PEH
Eldon WAN*
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
4
4
4
2
4
4
2
4
4
4
2
4
4
2
5
5
5
3
5
5
1
N/A
N/A
N/A
1
2
2
N/A
N/A
N/A
1
2
2
2
N/A
N/A
1
2
2
N/A
N/A
N/A
2
N/A
N/A
1
2
2
N/A
* Kee Kong Loh retired on 31 January 2023. Eldon Wan was appointed on 31 January 2023.
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.
43
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
4. Corporate Governance Statement (continued)
4.1 Board of Directors
Role of the Board
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.
Composition of Board
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:
• Terence Siong Woon PEH (Chairman) - Non-executive Director
• John CHAN - Executive Director
• Kee Kong LOH - Non-executive Director (Retired on 31 January 2023)
• Lee VERIOS - Non-executive Independent Director
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 Charter 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.
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.
44
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report 4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.1 Principles of Remuneration (continued)
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;
• the key management personnel’s length of service;
• project outcomes; 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
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.
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 the Director Share Plan 2014. As at 30 June 2023, 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 the 2023 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’s contribution to the Group. The performance evaluation in respect of the year ended 30 June 2023 has
taken place in accordance with this process.
Long-term Incentive
Incentive shares or options issued under the Employee Incentive Plan 2013 or the 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.
45
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report 4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.1 Principles of Remuneration (continued)
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
Profit before tax
Dividends paid
Change in share price
Return on capital employed
Return on total equity
2023
2022
2021
2020
2019
$2,782,000
$3,948,000
$10,975,000
$8,863,000
$7,068,000
$11,372,000
$15,048,000
$12,043,000
$10,488,000
$15,947,000
$5,442,000
$10,884,000
$8,163,000
$13,606,000
$16,302,000
-$0.02
1.84%
1.16%
-$0.17
5.06%
4.52%
$0.15
3.82%
3.65%
-$0.14
4.47%
2.92%
-$0.10
5.58%
4.58%
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.
Directors
The base Directors fees for Non-executive Directors, last voted upon by the shareholders at the November 2013 AGM, is not to exceed $360,000
per annum. Non-executive Directors base fees (excluding Committee Fees) are presently $207,039 per annum.
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:
Short-Term
Post - Employment
Directors Fees
and Committee
Fees
$
Salary
$
STI Cash
Bonus (A)
$
Non
Monetary
Benefits
$
Total
$
Superannuation
$
Other
Long
Term
$
Total
$
-
550,124
44,795
-
594,919
27,500
(3,535)
618,884
-
726,846
44,795
7,852
779,493
25,292
12,441
817,226
-
404,330
22,398
-
426,728
25,292
6,707
458,727
41,574
82,270
74,452
29,696
-
-
-
-
-
-
-
-
-
-
-
-
41,574
82,270
74,452
29,696
-
-
7,818
-
-
-
-
-
41,574
82,270
82,270
29,696
For the year ended
30 June 2023
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
Mr Eldon Wan*
Executives
Mr Edward Guy Bank, CFO
-
315,141
22,398
-
337,539
25,292
5,199
368,030
227,992
1,996,441
134,386
7,852
2,366,671
111,194
20,812
2,498,677
* Kee Kong Loh retired on 31 January 2023. Eldon Wan was appointed on 31 January 2023.
46
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.2 Directors’ and Executive Officers’ Remuneration (continued)
Short-Term
Post - Employment
Directors Fees
and Committee
Fees
$
Salary
$
STI Cash
Bonus (A)
$
Non
Monetary
Benefits
$
Total
$
Superannuation
$
Other
Long
Term
$
Total
$
-
587,356
190,706
-
778,062
27,981
13,176
819,219
-
738,362
190,706
23,620
952,688
24,021
25,117
1,001,826
-
411,593
95,353
-
506,946
24,021
16,125
547,092
78,603
74,937
74,790
-
-
-
-
-
-
-
-
-
78,603
74,937
74,790
-
-
7,479
-
-
-
78,603
74,937
82,269
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
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
Notes in relation to the Table of Directors’ and Executive Officers’ Remuneration - Audited
(A) Short-term Incentive Cash Bonus:
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 non-monetary 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 was repaid in September 2022.
The related non-monetary benefit is disclosed in table 4.3.2 on page 46.
4.3.3 Analysis of Bonuses included in Remuneration
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.
Executive Directors
Mr John Chan
Mr Darren John Pateman
Mr Ronald Chan
Executives
Mr Edward Guy Bank
47
Short Term Incentive Bonus
Included in
Remuneration
$
% vested in year
44,795
44,795
22,398
22,398
134,386
100%
100%
100%
100%
100%
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.3 Analysis of Bonuses included in Remuneration (continued)
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 45). No discretionary bonus was paid to the
Executives in the 2023 financial year (2022: NIL). Any discretionary amounts of executive bonuses relating to 2023 financial year are yet to be
determined, and therefore may impact future financial years.
4.3.4 Directors’ and Executives Interests
Movement in Shares
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:
Held at
1 July 2022
Purchases
Sales/Retired
Held at
30 June 2023
Directors
Mr John Chan*
Mr Darren John Pateman
Mr Ronald Chan**
Mr Kee Kong Loh (Retired on 31 January 2023)
Mr Terence Siong Woon Peh***
Mr Lee Verios
Mr Eldon Wan (Appointed on 31 January 2023)
Executives
Mr Edward Guy Bank
28,568,265
3,632,493
18,894,133
2,000,904
60,431,843
72,393
-
300,000
1,988,187
30,000
2,593,421
-
-
-
-
(2,000,904)
8,119,023
-
-
-
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 2021
Purchases
Sales
27,318,265
3,632,493
17,091,098
2,000,904
55,837,175
72,393
300,000
1,250,000
-
1,803,035
-
4,594,668
-
-
30,556,452
3,662,493
21,487,554
-
68,550,866
72,393
-
300,000
Held at
30 June 2022
28,568,265
3,632,493
18,894,133
2,000,904
60,431,843
72,393
300,000
-
-
-
-
-
-
-
-
-
-
-
* John Chan has interests in Forward International Pty Ltd, Apex Investments Pty Ltd and Blair Park Pty Ltd which hold shares in Finbar Group
Limited.
** 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 or rights 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 the Director Share
Plan 2014. As at 30 June 2023, there were no options or rights on issue.
4.4 Audit Committee
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.
A copy of the Audit Committee Charter is available on Finbar’s website www.finbar.com.au.
48
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
4. Corporate Governance Statement (continued)
4.4 Audit Committee (continued)
The following directors serve on the Audit Committee:
• Lee VERIOS (Chairman) - Non-executive Independent Director
• Kee Kong LOH - Non-executive Director (Retired on 31 January 2023)
• 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.
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. 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.
Financial Reporting
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 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.
The Board is not aware of any significant breaches of environmental regulations during the period covered by this report.
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.
49
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report 4. Corporate Governance Statement (continued)
4.6 Ethical Standards (continued)
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;
• responsibilities to the individual, such as privacy, use of privileged or confidential information, and conflict resolution;
• managing actual or potential conflicts of interest;
• corporate opportunities such as preventing Directors and key executives from taking advantage of property, information or position for
personal gain;
• confidentiality of corporate information;
• fair dealing;
• protection and proper use of the Group’s assets;
• compliance with laws; and
• reporting unlawful or of unethical behaviour including protection of those who report violations in good faith.
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 individuals achievements, skill and expertise.
Gender representation
Board
Key Management Personnel
Senior Management
Group
2023
2022
Female
-
-
50%
56%
Male
100%
100%
50%
44%
Female
-
-
50%
56%
Male
100%
100%
50%
44%
50
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
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).
The Group holds rental property in East Perth, South Perth and Karratha.
There were no significant changes in the nature of the activities of the Group during the financial year.
6. Operating and Financial Review
2023
2022
2021
2020
2019
Total comprehensive income attributable
to Owners of the Group
$2,782,000
$10,975,000
$8,863,000
$7,068,000
$11,372,000
Basic and 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
$0.01
$0.04
$0.03
$0.02
$0.04
$5,442,000
$10,884,000
$8,163,000
$13,606,000
$16,302,000
$0.02
$0.66
-$0.02
1.84%
1.16%
$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%
2.92%
$0.06
$0.84
-$0.10
5.58%
4.58%
Dividends paid in 2023 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 2023 financial year were the completion of AT238
Apartments, sales and settlements of completed stock held at 30 June 2022 and the ongoing rental of the Company’s commercial and
residential properties. See below for further information on the Company’s project completions and overview.
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 through wholly owned subsidiaries,
development agreements with landowners or incorporated special purpose entities, and equity accounted investees. Development
arrangements and equity partners are sought to allow the Company to leverage into larger development projects to take advantage of the
benefits of economies of scale, to help spread project risk, and to leverage the Company’s intellectual property.
The Company operates predominantly within the central suburbs of the Perth metropolitan area. The ability to source new viable development
opportunities and develop product that meets the needs of an evolving residential market is central to Finbar’s ongoing success. The Board
and Management has a long-proven track record of such success.
The administration of the Group 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 the regional Karratha office.
The Company’s Management has remained diligent in ensuring a strong balance sheet is maintained to protect and improve the Company’s
market position through market cycles. The Company completed AT238 Apartments in East Perth during the financial year. Focusing on its
main principal activity, construction continues to progress at Civic Heart in South Perth, Aurora in Applecross and The Point in Rivervale into
the next financial year. The building and completion of the projects will further strengthen the Company’s financial and operating position,
generating revenue, and building cash flows to fund future opportunities and the payment of dividends to shareholders.
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
property sales and rental revenue through property development and investment.
Material Business Risks
With multiple projects in the pipeline, current property shortages and supply constraints, the outlook of the Group is optimistic. Nonetheless,
the Group is exposed to various risk factors which could be business specific or generally macroeconomic. The Group’s operational structure
and unique business relationship arrangements mitigates the inherent risk of the business.
Supply chain and cost control risk – Building and architectural costs are the key development costs of a project. Finbar outsources its design
and construction activities to long-standing external parties. The stable affiliation and adequate project contingencies help cushion project
margins from significant price fluctuations, milestone delays, and contract default risk by key providers. 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.
51
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
6. Operating and Financial Review (continued)
Material Business Risks (continued)
Funding and interest rates risk – As property development requires a large initial capital outlay before property settlement, restricted access
to funds will limit and affect the Company’s ability to pursue new opportunities and to deliver projects in a timely manner. The Company
addresses this as follows:
• Depending on the development arrangement, we have access to capital from equity accounted investees partners and landowners;
• Construction does not commence until sufficient pre-sales are achieved to prove up project viability and provide comfort to
project financiers;
• Where financing criteria is met, development funding from major Australian banks over the specific project is utilised; and
• Land acquisitions and associated holding costs are funded without the use of debt funding.
Valuation of property – The value of land, building, and investment properties may be affected by a wide range of factors which are beyond
of the Company’s control. The effect may be adverse on the overall business result due to impact on net realisable value of inventory,
selling price, compliance on lending covenants and ultimately the liquidity of the Group. 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.
Additionally, changes in government legislation, regulation, rebates, and incentives may impact the Company’s operations. Management
mitigates regulatory risks through constant monitoring, providing appropriate staff training, maintaining relationships with regulatory bodies,
and actively engaging with industry groups conducting property related advocacy work in the Company’s sector.
The Board and Management do not currently have the view that there is a requirement to reposition the Company’s overall business model.
Completed Projects
Dianella Apartments - 36 Chester Avenue, Dianella: 37 units have settled during the period and 1 unit settled post the reporting period. The 128
unit development is now fully sold.
Reva - 5 Harper Terrace, South Perth: 3 commercial units have settled in the reporting period. 4 commercial units remain for sale in the 59 unit
development.
Vue Tower - 63 Adelaide Terrace, East Perth: 1 unit has settled in the reporting period. The 250 unit development is now fully sold and settled.
One Kennedy - 241 Railway Parade, Maylands: 2 units have settled in the reporting period. The 123 unit development is now fully sold and
settled.
AT238 - 240 Adelaide Terrace, Perth: Construction of the AT238 project completed in the second half of the financial year. 67 units have settled
in the reporting period and 4 units settled post the reporting period. 45 units remain for sale in the 121 unit development.
Currently Under Construction
Civic Heart - 1 Mends Street, South Perth: Construction works continue to progress, with completion expected during the financial year
ending 30 June 2024. To date 198 residential sales and 23 commercial sales have been achieved in the development of 309 residential and 26
commercial units.
Aurora Applecross - 3 Kintail Road, Applecross (Stage 2): Construction works continue to progress, with completion expected during the
financial year ending 30 June 2024. To date 60 residential sales have been achieved in the development of 118 residential and 3 commercial
units.
The Point - 31 Rowe Avenue, Rivervale: Construction works continue to progress, with completion expected during the financial year ending 30
June 2025. To date 134 residential sales and 2 commercial sales have been achieved in the development of 167 residential and 9 commercial
units.
Future Projects
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 2024. To date 130 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 has been received for 143 residential units.
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.
52
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report 6. Operating and Financial Review (continued)
Investment Property
Fairlanes - 181 Adelaide Terrace, East Perth: The Fairlanes property has been valued during the reporting period. The valuation resulted in a
$3,000,000 reduction to the value of the property. The company continues to benefit from the investment income generated from the leased
property. The property is currently 47% 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 $45,000 increase in value of the property. The company continues to benefit from the investment income generated
from the leased property. The property is currently 61% 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 $1,638,000 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 95% leased. The company continues to actively market tenancies for rental as
they become available.
Vue Tower Commercial - 63 Adelaide Terrace, East Perth: Lot 2 at Vue Tower was acquired in December 2022 under Finbar Commercial Pty
Ltd. The purchase price was $753,000. The company is marketing the tenancy for rental. Lot 4 at Vue Tower 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
$570,000 increase to the value of the property. Lots 136 and 138 are currently being leased. The company is actively marketing the remaining
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 2023
Final 2022 ordinary
Total Dividends Paid
Cents per Share
Total Amount
$’000
Franked /
Unfranked
Date of Payment
2.00
5,442
5,442
Franked
9 September 2022
Franked dividends declared or paid during the year were franked at the rate of 30%.
No dividend has been proposed after balance date.
Dealt with in the financial report as - Dividends
Dividend Reinvestment Plan
Note
19
$’000
5,442
In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP in the 2023
financial year until further notice.
8. Events Subsequent to Reporting Date
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
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.
The Group will continue planned development projects on existing land and will continue to assess new development opportunities through
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.
53
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
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:
Director
Mr John Chan
Mr Darren John Pateman
Mr Ronald Chan
Mr Terence Siong Woon Peh
Mr Lee Verios
Mr Eldon Wan
Ordinary Shares
30,556,452
3,662,493
21,487,554
68,550,866
72,393
-
11. Indemnification and Insurance of Officers
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 $86,000 (2022: $71,000) 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 auditors independence requirements of the
Corporations Act 2001 for the following reasons:
• 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 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:
Audit Services:
Auditors of the Company
Audit and review of financial statements - KPMG
Services Other Than Statutory Audit:
Taxation advice and tax compliance services - KPMG
Consolidated
2023
$
2022
$
181,778
181,778
21,527
21,527
146,970
146,970
20,700
20,700
54
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report
13. Lead Auditor’s Independence Declaration
The Lead Auditor’s Independence Declaration is set out on Page 98 and forms part of the Directors’ Report for the financial year ended
30 June 2023.
Signed in accordance with a resolution of the Board of Directors:
Darren Pateman
Managing Director
Dated at Perth this Twenty-second day of August 2023.
55
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20232023 Finbar Group Limited Annual Report CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Year Ended 30 June 2023
Note
Consolidated
2023
$’000
2022
$’000
Revenue
Cost of sales
Gross Profit
Other income
Administrative expenses
Advertising expenses
Revaluation (decrease)/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 (Costs)/Income
Share of profit/(loss) 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 (decrease)/increase of property, plant and equipment
Tax on items that will not be reclassified to profit or loss
Other comprehensive (loss)/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)
7
8
10
10
14
11
11
20
20
33,965
91,109
(19,022)
(70,049)
14,943
21,060
226
(7,283)
(152)
(243)
151
(3,671)
491
4,462
945
(2,239)
(1,294)
780
3,948
(813)
3,135
(504)
151
(353)
2,782
1.15
1.15
328
(8,280)
(544)
6,864
283
(4,960)
374
15,125
595
(513)
82
(159)
15,048
(4,142)
10,906
98
(29)
69
10,975
4.01
4.01
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 60 to 91.
56
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2023
Balance as at 1 July 2021
Total comprehensive income for the year
Profit
Other comprehensive income
Transactions with owners, recognised directly in equity
Dividends to shareholders
Balance as at 30 June 2022
Balance as at 1 July 2022
Total comprehensive income for the year
Profit
Other comprehensive loss
Transactions with owners, recognised directly in equity
Dividends to shareholders
Balance as at 30 June 2023
Amounts are stated net of tax
Note
Share Capital
$’000
Retained
Earnings
$’000
Asset
Revaluation
Reserve
$’000
Total Equity
$’000
194,484
47,697
460
242,641
-
-
-
194,484
10,906
-
(10,884)
47,719
-
69
-
529
10,906
69
(10,884)
242,732
194,484
47,719
529
242,732
-
-
-
194,484
3,135
-
(5,442)
45,412
-
(353)
-
176
3,135
(353)
(5,442)
240,072
19
19
The Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements set out on
Pages 60 to 91.
57
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Investment property
Prepayments
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
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
Note
18a
17
16
12
14
17
16
12
14
13
15
23
21
15
22
23
21
15
22
19
19
Consolidated
2023
$’000
2022
$’000
18,176
20,486
145,883
2,050
716
2
51
33,202
20,037
19,338
-
-
590
49
187,364
73,216
19,917
114,878
98,902
115
1,767
9,486
8,053
83
30,799
123,048
102,189
738
990
9,932
5,366
123
253,201
440,565
273,185
346,401
15,086
162,337
1,882
807
180,112
257
14,803
5,310
11
20,381
200,493
240,072
194,484
45,412
176
10,876
23,340
1,936
792
36,944
166
61,857
4,696
6
66,725
103,669
242,732
194,484
47,719
529
240,072
242,732
The Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements set out on
Pages 60 to 91.
58
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2023
Cash Flows from Operating Activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash used in Operating Activities before tax and interest paid
Interest paid
Income tax paid
Note
Consolidated
2023
$’000
2022
$’000
76,994
278,333
(186,127)
(109,133)
(1,738)
(2,788)
3,238
483
590
(206)
-
(716)
-
(2,136)
(5,555)
16,488
12,186
(283,611)
(5,278)
(1,833)
(2,598)
(9,709)
1,785
470
635
(98)
14
(331)
(3)
(2,943)
(23,130)
9,887
(13,714)
100,739
38,659
(8,850)
(5,442)
86,447
(23,749)
(10,884)
4,026
(15,026)
(19,397)
33,202
18,176
52,599
33,202
Net Cash used in Operating Activities
18b
(113,659)
Cash Flows from Investing Activities
Proceeds from sale 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 provided by/(used in) Investing Activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net Cash provided by Financing Activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and Cash Equivalents at 30 June
13
13
21
21
19
18a
The Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements set out on Pages 60 to 91.
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2023
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
14. Investments in Equity Accounted Investees
15. Tax Assets and Liabilities
16. Inventories
62
62
63
68
69
70
73
73
73
73
74
74
76
78
80
80
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
30. Subsequent Events
31. Auditor’s Remuneration
32. Parent Entity Disclosures
80
81
81
83
83
84
85
85
87
88
88
88
90
90
91
91
60
Page
63
63
64
65
65
65
66
66
66
67
67
67
68
68
68
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
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
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 2023 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 22nd August 2023.
(b) Basis of Measurement
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 2023 are included in the following notes:
• Note 12 - Valuation of investment property; and
• Note 13 - Valuation of property, plant & equipment.
(ii) Measurement of fair values
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.
The Group has an established control framework with respect to the measurement of fair values. The Managing Director and Chief Financial
Officer have the 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.
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.
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 2. Basis of Preparation (continued)
(e) Changes in Accounting Policies
The Group’s accounting policies are consistent with those disclosed in the financial statements for the year ended 30 June 2022.
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 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.
(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.
(iv) Transactions Eliminated on Consolidation
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 investees. 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.
(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).
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 3. Significant Accounting Policies (continued)
(b) Financial Instruments (continued)
(i) Non-derivative Financial Instruments (continued)
Non-derivative financial liabilities
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 Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
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
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.
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
Items of plant and equipment are measured at cost or deemed cost less accumulated depreciation and impairment losses.
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.
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.
Losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying
amount of the property, plant & equipment item 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
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.
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 3. Significant Accounting Policies (continued)
(c) Property, Plant and Equipment (continued)
(iv) Revaluation Model for Property
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 depreciation and 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.
(v) Depreciation and Amortisation
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:
• Property
• Office furniture and equipment, fixtures and fittings
• Plant and equipment
40 years
5 - 25 years
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.
(d) Investment Property
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.
(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. When a development is completed and ceases to be a qualifying asset, borrowing costs and other costs are
expensed as incurred.
Inventory is classified as current when it satisfies any of the following criteria:
• 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.
(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’.
The allowance and any changes in the expected credit loss are recognised as impairment gain and losses in profit or loss.
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 3. Significant Accounting Policies (continued)
(f) Impairment (continued)
(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”).
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.
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.
(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.
(iii) Termination Benefits
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.
(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.
(i) Revenue
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 landowners; and
• profit share fees which represent percentage profit sharing revenue based on net project profit.
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.
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.
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 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 property settlement and is measured based on the contracted amount and constrained to the amount that is highly probable.
Management fees include the fees earned by providing property management services, exclusively to Finbar built properties. Revenue is
recognised in profit or loss at the end of each month.
(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 and changes
in the fair value of financial assets at fair value through 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 and
impairment losses recognised on financial assets. 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.
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.
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 3. Significant Accounting Policies (continued)
(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 which directly relates to or supports its core business. 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. Reportable segments that
are significant to the CODM include residential apartment development, commercial development, property rental and business units which
generate revenue by providing supporting services to the core business (Corporate).
Segment results that are reported to the CODM include items directly attributable to a segment and those than that can be allocated on a
reasonable basis. Unallocated items comprise of cash, balances relating to equity accounted investees and tax obligations.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment.
(o) New Standards and Interpretations
A number of new standards are effective for annual periods beginning after 1 July 2023 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.
(b) Trade and Other Receivables
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.
(c) 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).
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 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 10.12% (2022: 11.82%) of the Group’s
revenue is attributable to multiple sales transactions with single customers.
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.
The Group’s trade and other receivables relate mainly to expenses directly recoverable from landowners at project completion and loans to
equity accounted investees and associates. The loans to equity accounted investees bear interest at BBSY plus an agreed margin and are
repaid from proceeds on property settlement.
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.
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 5. Financial Risk Management (continued)
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 2023 the return was 1.09% (2022: 4.52%). In comparison the weighted average interest expense on interest-bearing borrowings
(excluding liabilities with imputed interest) was 3.66% (2022: 0.47%).
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
2023
$’000
2022
$’000
107,661
179,601
287,262
40,041
185,044
225,085
37%
18%
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 2023
financial year until further notice.
6. Operating Segments
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 Corporate and overheads. 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 and overheads represents Finbar Group Limited (parent entity) and business units which generates project management
fees, property management fees and sales commission. This also includes net assets attributable to the corporate offices and other
administrative expenses.
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 6. Operating Segments (continued)
Information about Reportable Segments
For the Year ended 30 June 2023
External Revenues - Company and Subsidiaries
External Revenues - Equity Accounted Investees
External Revenues - Total
Residential
Apartment
Development
$’000
Commercial
Office/Retail
Development
$’000
Rental of
Property
$’000
Corporate
and
Overheads
$’000
19,214
20,573
39,787
3,137
790
3,927
9,454
-
9,454
2,386
-
2,386
Total
$’000
34,191
21,363
55,554
Reportable Segment Profit before Income Tax - Company and
Subsidiaries
Reportable Segment Profit before Income Tax - Equity Accounted
Investees
2,137
(236)
4,020
(2,753)
3,168
1,047
34
-
32
1,113
Reportable Segment Profit before Income Tax - Total
3,184
(202)
4,020
(2,721)
4,281
Reportable Segment Assets - Company and Subsidiaries
Reportable Segment Assets - Equity Accounted Investees
Reportable Segment Liabilities - Company and Subsidiaries
Reportable Segment Liabilities - Equity Accounted Investees*
Capital Expenditure
For the Year ended 30 June 2022
External Revenues - Company and Subsidiaries
External Revenues - Equity Accounted Investees
External Revenues - Total
249,321
31,968
132,802
28,749
-
76,661
6,550
83,211
22,467
101,634
28,225
401,647
2,653
9,295
629
-
-
-
34,621
40,433
10,772
193,302
-
-
2
29,380
206
206
4,842
8,464
1,470
91,437
-
-
-
6,550
4,842
8,464
1,470
97,987
Reportable Segment Profit before Income Tax - Company and
Subsidiaries
Reportable Segment Profit before Income Tax - Equity Accounted
Investees
8,467
(609)
10,259
(2,911)
15,206
(161)
(35)
-
(31)
(227)
Reportable Segment Profit before Income Tax - Total
8,306
(644)
10,259
(2,942)
14,979
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
-
-
36,411
-
-
-
5,281
2
98
36,756
97,036
26,726
98
* Excludes liabilities payable to Finbar Group Limited.
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.
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 6. Operating Segments (continued)
Reconciliation of Reportable Segment Revenues, Profit or Loss, Assets and Liabilities
Revenues including Other Income
Total revenue for development reportable segments
Total revenue for rental segments
Total revenue for other reportable segments
Consolidated Revenue including Other Income
Total revenue for development reportable segments - Equity Accounted Investees
Total Reportable Segments Revenue including Other Income
Profit or Loss
Total profit or loss for reportable segments
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
Unallocated assets**
Consolidated Total Assets
Liabilities
Total liabilities for reportable segments
Unallocated liabilities
Consolidated Total Liabilities
** Includes receivables due to Finbar Group Limited from equity accounted investees.
Geographical information
The Group operates predominantly in the one geographical segment of Western Australia.
2023
$’000
2022
$’000
22,351
81,503
9,454
2,386
34,191
21,363
55,554
8,464
1,470
91,437
6,550
97,987
4,281
(333)
3,948
14,979
69
15,048
401,647
284,404
18,176
33,202
1,769
1,580
18,973
27,215
440,565
346,401
193,302
97,036
7,191
6,633
200,493
103,669
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 2023
$’000
2022
$’000
22,351
81,503
9,454
2,160
-
8,464
818
324
33,965
91,109
158
35
33
226
X
X
253
61
14
328
4,589
5,232
378
(30)
51
228
8
369
66
106
228
7
5,224
6,008
X
X
X
X
3
690
230
22
945
1,350
889
2,239
(1,294)
142
318
32
103
595
503
10
513
82
7. Revenue
Property development sales
Rental income
Management fees
Supervision fees
Total Revenue
8. Other Income
Sales commission income
Administration fees
Other
Total Other Income
9. Personnel Expenses
Wages and salaries
Superannuation contributions
(Decrease)/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 2023.
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 (Costs)/Income
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
11. Income Tax Expense
Recognised in Income Statement
Current Tax Expense
Current year
Income tax recognised directly to equity
Adjustments for prior periods
Reversal of previously recognised deferred tax
Non-recoverable amounts
Deferred Tax Expense Movement
Origination and reversal of temporary differences
Income Tax Expense recognised in profit or loss
Income tax recognised in other comprehensive income
Total Income Tax Expense recognised in total comprehensive income for the year
Numerical Reconciliation between Tax Expense and Pre-tax Net Profit
Profit before Income Tax
Income tax using the domestic rate of 30% (2022: 30%)
Movement in income tax expense due to:
Non-deductible expenses
Non-recoverable amounts
Reversal of previously recognised tax assets
Tax effect of share of equity accounted investees (profit)/loss
Total Income Tax Expense before prior year adjustments
Over provided in prior years
Total Income Tax Expense
Income tax recognised in other comprehensive income
Total Income Tax Expense recognised in total comprehensive income for the year
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
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
2023
$’000
2022
$’000
3,024
3,471
-
(3)
(162)
27
58
-
(424)
2
2,886
3,107
(2,073)
813
(151)
662
1,035
4,142
29
4,171
3,948
15,048
1,185
4,515
-
27
(162)
(234)
816
(3)
813
(151)
662
1
2
(424)
48
4,142
-
4,142
29
4,171
-
-
(58)
(58)
X
X
102,189
97,925
(1,710)
(2,176)
716
-
(243)
331
(755)
6,864
100,952
102,189
Investment property comprises commercial properties at five developments and residential properties at two developments which are leased
to third parties (see Note 25).
The decrease in the revaluation was primarily as a result of a reduction of the weighted average lease term across all properties and an
increase in capitalisation rates broadly across the Western Australia market from prior year.
Investment property worth $2,050,000 has been classified as current assets.
74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
12. Investment Property (continued)
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 2022 on existing properties, Pelago in
Karratha and Fairlanes in East Perth and in June 2023 for Aurelia in South Perth. For the June reporting period, the Directors confirm that
there is no change to the valuations undertaken in December 2022, other than the movements at Note 12a.
The fair value assessment of the Company as at the reporting date includes the best estimates 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 $100,952,000 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
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
1.50% - 4.00%;
The estimated fair value would increase
(decrease) if:
Weighted average 3.15%;
Void periods (average 8.1 months after the
end of each lease);
Occupancy rate 68%;
Risk-adjusted discounted rates
(weighted average 7.75%).
Expected market rental growth were
higher (lower);
Void periods were shorter (longer);
Occupancy rate were higher (lower);
Rent-free periods were shorter (longer); or
Risk-adjusted discount rate were lower
(higher).
Adopted capitalisation rate 7.50% - 9.00%;
Gross rent per annum $450 - $696 per sqm;
Occupancy rate 47% - 95%; and
The estimated fair value would increase
(decrease) if:
Adopted capitalisation rate were higher
(lower);
Rent free period 30 months
Gross rent per annum were higher (lower);
Occupancy rate were higher (lower); or
Lease term remaining were longer
(shorter).
75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
13. Property, Plant and Equipment
Cost or Valuation
Balance at 1 July 2021
Additions
Transferred from investment property
Change in fair value
Reclassification
Disposals
Balance at 30 June 2022
Balance at 1 July 2022
Additions
Change in fair value
Disposals
Balance at 30 June 2023
Depreciation
Balance at 1 July 2021
Reclassification
Disposals
Revaluation
Depreciation and amortisation charge for the year
Balance at 30 June 2022
Balance at 1 July 2022
Disposals
Revaluation
Depreciation and amortisation charge for the year
Balance at 30 June 2023
Carrying Amounts
At 1 July 2021
At 30 June 2022
At 1 July 2022
At 30 June 2023
Office
Furniture and
Equipment
$’000
Property
$’000
Plant and
Equipment
$’000
Fixtures and
Fittings
$’000
Total
$’000
7,288
-
755
180
-
-
8,223
8,223
-
(544)
-
7,679
-
-
-
(201)
201
-
-
-
(191)
191
-
7,288
8,223
8,223
7,679
973
98
-
-
-
(314)
757
757
18
-
(2)
773
766
-
(292)
-
97
571
571
(2)
-
35
604
207
186
186
169
7,683
91
16,035
-
-
-
(4,047)
(147)
3,489
3,489
187
-
-
3,676
5,972
(4,047)
(132)
-
182
1,975
1,975
-
-
71
2,046
1,711
1,514
1,514
1,630
-
-
-
-
-
91
91
1
-
-
92
79
-
-
-
3
82
82
-
-
2
84
12
9
9
8
98
755
180
(4,047)
(461)
12,560
12,560
206
(544)
(2)
12,220
6,817
(4,047)
(424)
(201)
483
2,628
2,628
(2)
(191)
299
2,734
9,218
9,932
9,932
9,486
For each revalued class, the carrying amount that would have been recognised had the assets been carried at historical cost basis are as follows:
Revalued assets at cost
Cost
Less accumulated depreciation
Net book value at 30 June 2023
Property
$’000
7,626
(1,966)
5,660
76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
13. Property, Plant and Equipment (continued)
Measurement of fair values
(i) Fair Value Hierarchy
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 2022 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 2022, other than the movements at Note 13(ii).
The fair value assessment of the Company as at the reporting date includes the best estimate using information available at the time of
preparation of the financial statements and appropriate forward looking assumptions.
The fair value measurement for property of $7,679,000 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
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 (decrease)/increase included in ‘other comprehensive income’
Depreciation
Balance at 30 June
2023
$’000
2022
$’000
8,223
-
151
(504)
(191)
7,679
7,288
755
283
98
(201)
8,223
(iii) Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of property, plant and equipment, 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
1.50% - 4.00%;
The estimated fair value would increase
(decrease) if:
Weighted average 3.15%;
Void periods (average 8.1 months
after the end of each lease);
Expected market rental growth were higher
(lower);
Void periods were shorter (longer);
Occupancy rate 68%;
Occupancy rate were higher (lower);
Risk-adjusted discounted rates
(weighted average 7.75%).
Rent-free periods were shorter (longer); or
Risk-adjusted discount rate were lower (higher).
Adopted capitalisation rate
7.50% - 9.00%;
The estimated fair value would increase
(decrease) if:
Gross rent per annum
$450 - $696 per sqm;
Occupancy rate 47% - 95%; and
Rent free period 30 months
Adopted capitalisation rate were higher (lower);
Gross rent per annum were higher (lower);
Occupancy rate were higher (lower); or
Lease term remaining were longer (shorter).
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.
77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
14. Investments in 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 2023
Ownership
Current Assets
$’000
Non-current Assets
$’000
Total Assets
$’000
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
Total at 100% ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
986
45,394
1
-
-
5
2
46,388
24,141
51
25,127
45,445
-
1
2
-
1
1
2
5
4,360
28,555
4,362
74,943
Equity Accounted Investees Liabilities 2023
Ownership
Garden Towers East Perth Pty Ltd
240 Adelaide Terrace Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Total at 100% ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Current Liabilities
$’000
Non-current Liabilities
$’000
Total
Liabilities
$’000
62
43,591
-
-
1
-
43,654
26,495
428
26,557
44,019
2
7
-
2
7
1
819
27,751
819
71,405
Equity Accounted Investees Assets 2022
Ownership
Current Assets
$’000
Non-current Assets
$’000
Total Assets
$’000
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
Total at 100% ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
1,209
34,431
63
-
-
1,619
1
37,323
20,131
18,166
-
1
2
-
4,245
42,545
21,340
52,597
63
1
2
1,619
4,246
79,868
Equity Accounted Investees Liabilities 2022
Ownership
Current Liabilities
$’000
Non-current Liabilities
$’000
Total
Liabilities
$’000
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
Total at 100% ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
767
35,484
4
-
-
499
5
36,759
21,509
17,745
22,276
53,229
-
2
6
-
688
39,950
4
2
6
499
693
76,709
78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 14. Investments in Equity Accounted Investees (continued)
Profit/(Loss) Before Income Tax Recognised from Equity
Accounted Investees 2023
Ownership
Garden Towers East Perth Pty Ltd
240 Adelaide Terrace Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Total at 100% ownership
50.00%
50.00%
50.00%
50.00%
50.00%
Revenues
$’000
Expenses
$’000
43
42,790
-
13
-
750
39,846
1
6
14
42,846
40,617
Profit/(Loss) Before Income Tax Recognised from Equity
Accounted Investees 2022
Ownership
Revenues
$’000
Expenses
$’000
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
Total at 100% ownership
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
5
2
-
-
13,094
-
13,101
1,337
302
(15)
1
11,920
9
13,554
Profit/
(Loss) before
income tax
$’000
(707)
2,944
(1)
7
(14)
2,229
Profit/
(Loss) before
income tax
$’000
(1,332)
(300)
15
(1)
1,174
(9)
(453)
Reconciliation of net assets and profit or loss
Net assets on investments in equity accounted investees
Total assets
Total liabilities
Net assets at 100% ownership
Net assets at 50% ownership
Profit or Loss on equity accounted investees
Total profit/(loss) before tax
Income tax using the domestic rate of 30% (2022: 30%)
Total profit/(loss) after tax at 100% ownership
Total profit/(loss) after tax at 50% ownership
2023
$’000
2022
$’000
74,943
79,868
(71,405)
(76,709)
3,538
1,769
2,229
(669)
1,560
780
3,159
1,580
(453)
136
(317)
(159)
79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
15. Tax Assets and Liabilities
The current tax liability for the Group of $1,882,000 (2022: $1,936,000) represents the amount of income taxes payable in respect of current
and prior periods.
Recognised Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are attributable to the following:
Inventories
Interest bearing loans and borrowings
Revaluation of investment property
Revaluation of property, plant and equipment*
Other items
Tax value of carry-forward losses recognised
Tax assets/(liabilities)
Set off of tax
Net Tax
Assets
Liabilities
2023
$’000
2022
$’000
2023
$’000
2022
$’000
-
602
-
-
3,416
7,730
11,748
(3,695)
8,053
(1,112)
38
21
-
3,181
4,966
7,094
(1,728)
5,366
(7,068)
-
(1,725)
(129)
(83)
-
(9,005)
3,695
(5,310)
(7,334)
-
(1,882)
(257)
3,049
-
(6,424)
1,728
(4,696)
* The tax effect on the revaluation of property, plant and equipment recognised in other comprehensive income in the current period was
$151,000 (2022: ($29,000)).
16. Inventories
Current
Work in progress
Completed stock
Total Current Inventories
Non-current
Work in progress
Completed stock
Total Non-current Inventories
2023
$’000
2022
$’000
143,199
2,684
145,883
-
19,338
19,338
114,878
122,277
-
771
114,878
123,048
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
Amounts receivable from equity accounted investees bear interest at BBSY plus an agreed margin.
The Group’s exposure to credit risk and impairment losses to trade and other receivables are disclosed at Note 24.
12,565
419
7,502
20,486
1,145
15,357
3,415
19,917
6,716
622
12,699
20,037
8,556
13,094
9,149
30,799
80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
18. Cash and Cash Equivalents
18a. Cash and Cash Equivalents
Bank balances
Cash and cash equivalents
2023
$’000
2022
$’000
18,176
18,176
33,202
33,202
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
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 cost/(income)
Share of net (profit)/loss 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 Operating Activities
Interest paid
Income taxes paid
Net Cash used in Operating Activities
Note
2023
$’000
2022
$’000
13
12a
11
16
22
3,135
10,906
299
-
243
(151)
(491)
405
(780)
813
3,473
2,049
483
23
(6,864)
(283)
(374)
(92)
159
4,142
8,100
560
(118,375)
(2,545)
(93)
20
(304)
171
3,793
(11,260)
(109,133)
(1,738)
(2,788)
(113,659)
(5,278)
(1,833)
(2,598)
(9,709)
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.
19. Capital and Reserves
Share Capital
On issue at 1 July
On Issue at 30 June - Fully Paid
Company
Ordinary Shares
2023
2022
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.
81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 19. Capital and Reserves (continued)
Dividends
Dividends recognised in the current year by the Group are:
Dividends Paid During the Year 2023
Final 2022 ordinary
Total Dividends Paid
Dividends Paid During the Year 2022
Final 2021 ordinary
Interim 2022 ordinary
Total Amount
Cents per
Share
Total Amount
$’000
Franked /
Unfranked
Date of Payment
2.00
5,442
Franked
9 September 2022
5,442
2.00
2.00
5,442
Franked
10 September 2021
5,442
Franked
18 March 2022
10,884
Franked dividends declared or paid during the year were franked at the rate of 30%.
No dividend has been proposed after balance date.
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 2023
financial year until further notice.
Dividend Franking Account
Company
2023
$’000
2022
$’000
30% franking credits available to shareholders of Finbar Group Limited for subsequent financial years
12,251
11,652
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 balance sheet date but not recognised as a liability is
to reduce it by Nil (2022: $2,332,000). No dividend was proposed after balance sheet date.
Nature and purpose of reserve
Asset revaluation reserve
The revaluation reserve relates to the revaluation of property, plant and equipment carried at fair value.
82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 20. Earnings per Share
Basic and Diluted Earnings per Share
The calculation of basic and diluted earnings per share at 30 June 2023 was based on the profit attributable to ordinary shareholders
of $3,135,000 (2022: $10,906,000) and a weighted average number of ordinary shares on issue during the year ended 30 June 2023 of
272,123,142 (2022: 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
2023
$’000
2022
$’000
3,135
10,906
Ordinary Shares
2023
2022
272,123,142 272,123,142
272,123,142 272,123,142
Basic and Diluted Earnings per Share (cents per share)
1.15
4.01
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.
2023
$’000
2022
$’000
97,731
23,340
932
63,674
-
-
162,337
23,340
1,450
13,353
14,803
16,701
45,156
61,857
Nominal Interest Rate
BBSY+2.00%
BBSY+2.40%
BBSY+1.60%
BBSY+1.50%
BBSY+1.50%
2023
2022
Financial
Year of
Maturity
Carrying
Amount
$’000
Carrying
Amount
$’000
2024
2024
2024
2024
2024
2024
2024
21,840
21,840
53,638
413
932
53,674
10,000
1,500
21,840
-
-
-
-
-
162,337
23,340
Current
Commercial bills (Secured)
Investor loans (Secured)
Investor loans (Unsecured)
Total Current Loans and Borrowings
Non-current
Commercial bills (Secured)
Investor loans (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)
Commercial bills (Secured)
Commercial bills (Secured)
Investor loans (Secured)*
Investor loans to subsidiaries (Unsecured)**
Investor loans to subsidiaries (Unsecured)**
Total Current Loans and Borrowings
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 21. Loans and Borrowings (continued)
Non-current
Commercial bills (Secured)
Commercial bills (Secured)
Investor loans (Unsecured)*
Investor loans (Unsecured)*
Investor loans to subsidiaries (Unsecured)**
Investor loans to subsidiaries (Unsecured)**
Investor loans to subsidiaries (Unsecured)**
Total Non-current Loans and Borrowings
Nominal Interest Rate
BBSY+2.00%
BBSY+1.60%
BBSY+1.50%
BBSY+3.00%
2023
2022
Financial
Year of
Maturity
Carrying
Amount
$’000
Carrying
Amount
$’000
2024
2025
2025
2025
2024
2024
2025
-
16,701
1,450
5,446
2,102
-
-
5,805
14,803
-
-
-
33,434
10,000
1,722
61,857
* These are loans from related parties. Please refer to Note 28 for details on related parties.
** These are loans from landowners which are non interest bearing.
Financing Arrangements
Commercial bills
The commercial bills are secured by registered first mortgages over the land and buildings (including those under construction) and a
registered mortgage debenture over the assets and undertakings of the subsidiaries. The loans relate to a specific project or property and
are denominated in Australian dollars. There are no cross securities against other projects or property within the Group to assist in mitigating
risk in the event of default on a commercial bill. The bank guarantees within the Group are disclosed under Note 27.
When a project is undertaken, initial funding is provided by the Group, equity accounted investees partners, and development landowners
where applicable. Project developments are marketed and pre-sales are secured with customer deposits which are held in trust and not
reflected on the Company’s balance sheet. Typically, external funding is accessible when minimum compliant pre-sales are achieved, secured
over a specific project, and only to fund progress development costs. As a project nears its completion date, it is expected that the available
facility will near or be at its fully drawn limit. When a project is completed and settlement proceeds are received, the proceeds are firstly
applied to facility repayments and then payments to the project investors in accordance with the negotiated development agreements. The
returned capital is reinvested into the Group’s future projects and activities as well as payment of dividends to shareholders.
Investor Loans
Investor Loans are generally repayable upon the completion of the project, unless otherwise agreed.
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
2023
$’000
2022
$’000
123
684
807
11
11
153
639
792
6
6
84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 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
2023
$’000
2022
$’000
13,192
1,894
15,086
10,185
691
10,876
257
257
166
166
At 30 June 2023, consolidated trade and other payables include retentions of $467,000 (2022: $204,000) 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
Note
17
17
18a
The Group’s maximum exposure to credit risk for trade and other receivables at the reporting
date by receivable category was:
Amounts receivable from equity accounted investees
GST refunds due and other trade debtors
Other receivables
Working capital advances and bonds
Carrying Amount
2023
$’000
2022
$’000
20,486
19,917
18,176
58,579
10,917
11,208
15,776
2,502
40,403
20,037
30,799
33,202
84,038
21,847
11,508
13,716
3,765
50,836
Impairment Losses
None of the Group’s trade or other receivables are past due. Based on historic default rates and security held, the Group believes that no
impairment allowance is necessary in respect of trade or other receivables.
Liquidity Risk
The following are the contractual maturities of non-derivative financial liabilities, including estimated interest payments and excluding the
impact of netting agreements:
Non-derivative Financial Liabilities
Commercial bills*
Investor Loans*
Trade and other payables
85
Note
21
21
23
30 June 2023
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
1 Year or
Less
$’000
1-3 Years
$’000
99,181
104,798
103,326
77,959
78,474
15,343
15,343
64,609
15,086
1,472
13,865
257
192,483
198,615
183,021
15,594
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 24. Financial Instruments (continued)
Non-derivative Financial Liabilities
Commercial bills*
Investor Loans*
Trade and other payables
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
41,880
24,704
45,156
45,156
11,042
11,042
96,239
98,078
-
10,876
35,580
17,176
45,156
166
62,498
* Refer to Note 21 Loans 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
2023
$’000
2022
$’000
21,819
57,202
(107,661)
(40,041)
(85,842)
17,161
Cash Flow Sensitivity Analysis for Variable Rate Instruments
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.
30 June 2023
Variable rate instruments
30 June 2022
Variable rate instruments
Profit or Loss
Equity
100bp
Increase
$’000
100bp
Decrease
$’000
100bp
Increase
$’000
100bp
Decrease
$’000
(616)
616
(616)
616
100bp
Increase
$’000
100bp
Decrease
$’000
100bp
Increase
$’000
100bp
Decrease
$’000
(460)
-
(460)
-
86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 24. Financial Instruments (continued)
Fair Values
Fair Values Versus Carrying Amounts
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 commercial bills
Investor loans
Trade and other payables
Fair Values
2023
$’000
2022
$’000
40,403
18,176
50,836
33,202
(99,181)
(77,959)
(15,343)
(40,041)
(45,156)
(11,042)
Note
17
18a
21
21
23
The methods and assumptions used to estimate the fair value of financial instruments are as follows:
Trade and other receivables
The carrying amount approximates fair value given the short term nature of the balances and the market based commercial terms.
Cash and cash equivalents
The carrying amount is fair value due to the liquid nature of these assets.
Secured commercial bills
The carrying amount approximates fair value given the short term nature of the balances.
Investor loans
The carrying amount approximates fair value given the short term nature of the balances and the market based commercial terms.
Trade and other payables
The carrying amount approximates fair value given the short term nature of the balances and the market based commercial terms.
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
Future minimum lease receipts
At 30 June, the future minimum lease receipts under non-cancellable leases expected to be
received as follows:
Less than one year
Between one and five years
More than 5 years
Note
2023
$’000
2022
$’000
9,118
336
9,454
8,235
229
8,464
7
5,955
3,551
494
10,000
5,325
3,835
107
9,267
87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 26. Capital and Other Commitments
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
Total Property Development Commitments - Equity Accounted Investees
Group’s Share of Property Development - Equity Accounted Investees
Contracted but not provided for and payable:
Within 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
Group’s Total Property Development Commitments including Equity Accounted Investees
27. Contingencies
The Directors are of the opinion that provisions are not required for the guarantees below, 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
Finbar Group Limited guaranteed commercial bill over investment property in Karratha (Pelago)
Finbar Group Limited guaranteed commercial bill over investment property in East Perth (Fairlanes)
Total Guarantees
28. Related Parties
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
2023
$’000
2022
$’000
130,497
225,462
7,384
2,133
137,881
227,595
-
-
-
-
13,891
13,891
6,946
6,946
130,497
232,408
7,384
2,133
137,881
234,541
X
X
21,840
2,184
24,024
18,201
2,184
20,385
X
X
2,367
2,882
21
111
67
108
2,499
3,057
88
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 28. Related Parties (continued)
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 44 to 48.
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 non-monetary 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 was repaid in September
2022. The related non-monetary benefit is disclosed in table 4.3.2 on page 46.
Equity Accounted Investees
Loans are made by the Group to equity accounted investees for property development undertakings. Loans outstanding from the Group to
equity accounted investees 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
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Rowe Avenue Pty Ltd
2023
$’000
2022
$’000
3,224
7,502
1
3
1,990
19,720
1
3
187
134
10,917
21,848
Ventrade Australia Pty Ltd is a related party of Chuan Hup Holdings Limited who owns 25.19% of Finbar Group Limited. Ventrade Australia Pty
Ltd owns 50% of the following equity accounted investees disclosed in Note 14:
• 240 Adelaide Terrace Pty Ltd (AT238): Construction completed with 67 units settled during the financial year; and
• Garden Towers East Perth Pty Ltd (Garden Towers East Perth): Marketing continues to progress, with construction expected
to commence in the financial year ending 30 June 2024.
Other Related Party Transactions
As at 30 June, related party loans (see Note 21) were as follows:
Ventrade Australia Pty Ltd (Secured)
Ventrade Australia Pty Ltd (Unsecured)
Forward International Pty Ltd (Unsecured)
Nominal
Interest Rate
Financial
Year of
Maturity
2023
$’000
2022
$’000
BBSY+1.50%
BBSY+1.50%
BBSY+3.00%
2024
2025
2025
932
5,446
2,102
8,480
-
-
-
-
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 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 (Liquidated)
175 Adelaide Terrace Pty Ltd
239 Great Eastern Highway Pty Ltd
241 Railway Parade Pty Ltd
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
Country of
Incorporation
Shareholding/
Unit Holding
$
Ownership Interest
2023
2022
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
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
2
1
1
1
1
1
26
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%
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.
90
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023
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 2023, the parent company of the Group was
Finbar Group Limited.
Result of the Parent Entity
Profit for the year (after tax)
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
2023
$
2022
$
181,778
146,970
4,037
4,382
185,815
151,352
21,527
21,527
20,700
20,700
2023
$’000
2022
$’000
6,450
6,450
9,158
9,158
15,815
32,194
220,605
214,029
1,282
6,790
1,186
1,222
194,484
194,484
19,331
18,323
213,815
212,807
The Directors are of the opinion that provisions are not required, as it is not probable that a future sacrifice of economic benefits will be
required or the amount is capable of reliable measurement.
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2023 DIRECTORS’ DECLARATION
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 60 to 91 and the Remuneration report in section 4.3 in the
Directors’ report, set out on Pages 44 to 48, 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 2023 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 2023.
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-second day of August 2023.
92
2023 Finbar Group Limited Annual Report
Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of Finbar Group Limited
To the shareholders of Finbar Group Limited
Report on the audit of the Financial Report
Report on the audit of the Financial Report
Opinion
Opinion
We have audited the Financial Report of
Finbar Group Limited (the Company).
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
In our opinion, the accompanying Financial
the Corporations Act 2001, including:
Report of the Company is in accordance with
the Corporations Act 2001, including:
Giving a true and fair view of the Group’s
Giving a true and fair view of the Group’s
financial position as at 30 June 2023 and of
its financial performance for the year ended
financial position as at 30 June 2023 and of
on that date; and
its financial performance for the year ended
on that date; and
Complying with Australian Accounting
Standards and the Corporations
Complying with Australian Accounting
Regulations 2001.
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
The Financial Report comprises:
Consolidated statement of financial position as
at 30 June 2023;
Consolidated statement of financial position as
at 30 June 2023;
Consolidated statement of profit or loss and
other comprehensive income, Consolidated
Consolidated statement of profit or loss and
statement of changes in equity, and
other comprehensive income, Consolidated
Consolidated statement of cash flows for the
statement of changes in equity, and
year then ended;
Consolidated statement of cash flows for the
year then ended;
accounting policies; and
Notes including a summary of significant
Notes including a summary of significant
accounting policies; and
The Directors’ Declaration.
The Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
The Group consists of the Company and the
to time during the financial year.
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
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.
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.
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
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
accordance with these requirements.
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
Key Audit Matters
Key Audit Matters
The Key Audit Matters we identified are:
The Key Audit Matters we identified are:
Valuation of Investment Properties;
and
Valuation of Investment Properties;
Carrying Value of Inventory.
and
Carrying Value of Inventory.
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
Key Audit Matters are those matters that, in our
our audit of the Financial Report of the current period.
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
These matters were addressed in the context of our
our opinion thereon, and we do not provide a separate
audit of the Financial Report as a whole, and in forming
opinion on these matters.
our opinion thereon, and we do not provide a separate
opinion on these matters.
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
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
a scheme approved under Professional Standards Legislation.
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.
93
Carrying value of Inventories ($260.8million)
Carrying value of Inventories ($260.8million)
Refer to Notes 3(e) and 16 to the Financial Report
Refer to Notes 3(e) and 16 to the Financial Report
The key audit matter
The key audit matter
How the matter was addressed in our audit
How the matter was addressed in our audit
Valuation of inventories, being both completed
Valuation of inventories, being both completed
units and work in progress, is a key audit matter
units and work in progress, is a key audit matter
due to the:
due to the:
Significance of the balance to the financial
Significance of the balance to the financial
statements (59% of total assets);
statements (59% of total assets);
Judgement and our effort applied to
Judgement and our effort applied to
assessing forecast selling prices and costs of
assessing forecast selling prices and costs of
completion for work in progress. These
completion for work in progress. These
factors involve forecasting, which can add
factors involve forecasting, which can add
audit complexity to the assessment of net
audit complexity to the assessment of net
realisable value. It is the Group’s policy, in
realisable value. It is the Group’s policy, in
accordance with accounting standards, that
accordance with accounting standards, that
inventory must be carried at the lower of
inventory must be carried at the lower of
cost and net realisable value.
cost and net realisable value.
Selling prices can fluctuate based on current
Selling prices can fluctuate based on current
property market conditions.
property market conditions.
Work in progress comprises developments
Work in progress comprises developments
currently under construction and future
currently under construction and future
projects, which are long term in nature
projects, which are long term in nature
where forecast costs could be negatively
where forecast costs could be negatively
impacted by issues encountered during
impacted by issues encountered during
planning or construction.
planning or construction.
Our procedures included:
Our procedures included:
Assessing the Group’s policies for the
Assessing the Group’s policies for the
valuation of inventories against the
valuation of inventories against the
requirements of the accounting standards
requirements of the accounting standards
and our understanding of the business
and our understanding of the business
Challenging the Group’s assumptions of
Challenging the Group’s assumptions of
forecast costs of completion by selecting a
forecast costs of completion by selecting a
sample of developments under construction
sample of developments under construction
and future projects to understand project
and future projects to understand project
design complexity, sub-contractor reliance,
design complexity, sub-contractor reliance,
project funding and other project risks such
project funding and other project risks such
as supplier cost increases which could
as supplier cost increases which could
negatively impact costs of completion. This
negatively impact costs of completion. This
was done through enquiry of senior
was done through enquiry of senior
management, and assessment of the
management, and assessment of the
Group’s underlying documentation such as
Group’s underlying documentation such as
budgets, funding agreements, supplier
budgets, funding agreements, supplier
contracts and internal reports.
contracts and internal reports.
Testing a sample of sales of inventories
Testing a sample of sales of inventories
during the year and subsequent to year end
during the year and subsequent to year end
to executed settlement statements to
to executed settlement statements to
assess sales margins and volumes achieved
assess sales margins and volumes achieved
during and post the financial year. This
during and post the financial year. This
informed our evaluation of the carrying value
informed our evaluation of the carrying value
of inventories at balance date against the
of inventories at balance date against the
Group’s policy for recording inventories at
Group’s policy for recording inventories at
the lower of cost and net realisable value.
the lower of cost and net realisable value.
Comparing forecast selling prices to total
Comparing forecast selling prices to total
costs incurred to date and forecast costs of
costs incurred to date and forecast costs of
completion for significant projects. We did
completion for significant projects. We did
this to assess the carrying value of
this to assess the carrying value of
inventories against the Group’s policy for
inventories against the Group’s policy for
recording at the lower of cost and forecast
recording at the lower of cost and forecast
net realisable value.
net realisable value.
Assessing the disclosures in the financial
Assessing the disclosures in the financial
report, using our understanding obtained
report, using our understanding obtained
from our testing, against accounting
from our testing, against accounting
standards requirements.
standards requirements.
94
Valuation of Investment Property ($101 million)
Carrying value of Inventories ($260.8million)
Refer to Note 12 to the Financial Report
Refer to Notes 3(e) and 16 to the Financial Report
The key audit matter
The key audit matter
How the matter was addressed in our audit
How the matter was addressed in our audit
Valuation of Investment Property is a key
Valuation of inventories, being both completed
units and work in progress, is a key audit matter
audit matter due to the:
due to the:
• Significance of the balance to the financial
Significance of the balance to the financial
statements (23% of total assets);
statements (59% of total assets);
• Judgement required by the Group in
• Judgement applied by the Group in the
Judgement and our effort applied to
selection of the valuation methodology to
assessing forecast selling prices and costs of
be used from those methodologies
completion for work in progress. These
available under accounting standards. The
factors involve forecasting, which can add
adoption of alternative methodologies may
audit complexity to the assessment of net
result in a different valuation outcome;
realisable value. It is the Group’s policy, in
accordance with accounting standards, that
inventory must be carried at the lower of
assessing the capitalisation rates applied to
cost and net realisable value.
the projected income of individual
properties in the income valuation
Selling prices can fluctuate based on current
methodology. A small percentage
property market conditions.
movement in the capitalisation rate would
Work in progress comprises developments
result in a significant financial impact to the
currently under construction and future
investment property balance and the
projects, which are long term in nature
income statement; and
where forecast costs could be negatively
impacted by issues encountered during
• Judgement required by the Group in
planning or construction.
assessing any changes that may have
occurred since the 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.
• Assessing the property valuation
Our procedures included:
Working with our real estate valuation
specialists, our procedures included:
Assessing the Group’s policies for the
valuation of inventories against the
• Assessing the Group’s policies for the
requirements of the accounting standards
valuation of Investment Property against the
and our understanding of the business
requirements of the accounting standards
Challenging the Group’s assumptions of
and our understanding of the business;
forecast costs of completion by selecting a
• Obtaining an understanding of the Group’s
sample of developments under construction
process regarding the valuation of
and future projects to understand project
investment property;
design complexity, sub-contractor reliance,
project funding and other project risks such
• Assessing the scope, objectivity, and
as supplier cost increases which could
competence of the Group’s external valuer;
negatively impact costs of completion. This
was done through enquiry of senior
methodology adopted by the Group, key
management, and assessment of the
assumptions and market commentary in the
Group’s underlying documentation such as
valuations for specific properties against
budgets, funding agreements, supplier
accepted industry practices, using the nature
contracts and internal reports.
of the properties, and requirements of the
Testing a sample of sales of inventories
accounting standards;
during the year and subsequent to year end
• Comparing the Group’s external valuations in
to executed settlement statements to
December 2022 to other valuations obtained
assess sales margins and volumes achieved
on the same or similar properties and to the
during and post the financial year. This
director’s own assessment of valuation at
informed our evaluation of the carrying value
June 2023 and where appropriate, to recent
of inventories at balance date against the
Group’s policy for recording inventories at
sales evidence and other published reporting
the lower of cost and net realisable value.
relevant to the Investment Property;
Comparing forecast selling prices to total
• Challenging the capitalisation rates applied
costs incurred to date and forecast costs of
by the Group, based on our knowledge of
completion for significant projects. We did
the property portfolio and other published
this to assess the carrying value of
reports of industry commentators;
inventories against the Group’s policy for
• Comparing the valuations prepared using the
recording at the lower of cost and forecast
capitalisation of income valuation method to
net realisable value.
the alternative valuation method applied by
Assessing the disclosures in the financial
the Group’s external valuers in challenging
report, using our understanding obtained
the captialisation rate input;
from our testing, against accounting
• Testing, on a sample basis, the following key
standards requirements.
inputs to the valuations to existing lease
contracts, leasing schedules and published
CPI statistics by the Australian Bureau of
Statistics;
– Gross rent;
– Occupancy rate;
–
– CPI.
Lease term remaining; and
Assessing the disclosures in the financial
report, using our understanding obtained from
our testing, against accounting standards
requirements.
95
Carrying value of Inventories ($260.8million)
Other Information
Other Information is financial and non-financial information in Finbar Group Limited’s annual reporting
Refer to Notes 3(e) and 16 to the Financial Report
which is provided in addition to the Financial Report and the Auditor's Report. The Directors are
responsible for the Other Information.
The key audit matter
How the matter was addressed in our audit
Our procedures included:
statements (59% of total assets);
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Valuation of inventories, being both completed
report. The Chairman’s Report, Managing Director’s Report, Key Financial Metrics, Finbar Milestones,
units and work in progress, is a key audit matter
Our Finbar, Environmental Social Governance, Finbar Amenities, Finbar Awards, Completed Projects,
Assessing the Group’s policies for the
due to the:
Projects Under Construction, Future Projects and Investment Properties are expected to be made
valuation of inventories against the
available to us after the date of the Auditor's Report.
requirements of the accounting standards
Significance of the balance to the financial
and our understanding of the business
Challenging the Group’s assumptions of
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.
Judgement and our effort applied to
assessing forecast selling prices and costs of
completion for work in progress. These
factors involve forecasting, which can add
audit complexity to the assessment of net
realisable value. It is the Group’s policy, in
accordance with accounting standards, that
inventory must be carried at the lower of
cost and net realisable value.
forecast costs of completion by selecting a
sample of developments under construction
In connection with our audit of the Financial Report, our responsibility is to read the Other
and future projects to understand project
Information. In doing so, we consider whether the Other Information is materially inconsistent with
design complexity, sub-contractor reliance,
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
project funding and other project risks such
misstated.
as supplier cost increases which could
negatively impact costs of completion. This
We are required to report if we conclude that there is a material misstatement of this Other
was done through enquiry of senior
Information, and based on the work we have performed on the Other Information that we obtained
management, and assessment of the
prior to the date of this Auditor’s Report we have nothing to report.
Group’s underlying documentation such as
budgets, funding agreements, supplier
contracts and internal reports.
Selling prices can fluctuate based on current
property market conditions.
Responsibilities of the Directors for the Financial Report
Work in progress comprises developments
currently under construction and future
projects, which are long term in nature
where forecast costs could be negatively
Preparing the Financial Report that gives a true and fair view in accordance with Australian
impacted by issues encountered during
planning or construction.
Testing a sample of sales of inventories
during the year and subsequent to year end
to executed settlement statements to
assess sales margins and volumes achieved
during and post the financial year. This
Implementing necessary internal control to enable the preparation of a Financial Report that
informed our evaluation of the carrying value
gives a true and fair view and is free from material misstatement, whether due to fraud or
of inventories at balance date against the
error.
Group’s policy for recording inventories at
the lower of cost and net realisable value.
Accounting Standards and the Corporations Act 2001.
The Directors are responsible for:
Assessing the Group and Company’s ability to continue as a going concern and whether the use
Comparing forecast selling prices to total
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
costs incurred to date and forecast costs of
matters related to going concern and using the going concern basis of accounting unless they
completion for significant projects. We did
either intend to liquidate the Group and Company or to cease operations, or have no realistic
this to assess the carrying value of
alternative but to do so.
inventories against the Group’s policy for
recording at the lower of cost and forecast
net realisable value.
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
Assessing the disclosures in the financial
report, using our understanding obtained
from our testing, against accounting
standards requirements.
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.
96
Report on the Remuneration Report
Carrying value of Inventories ($260.8million)
Opinion
Refer to Notes 3(e) and 16 to the Financial Report
Directors’ responsibilities
The key audit matter
In our opinion, the Remuneration Report
of Finbar Group Limited for the year
ended 30 June 2023, complies with
Section 300A of the Corporations Act
2001.
Valuation of inventories, being both completed
units and work in progress, is a key audit matter
due to the:
Significance of the balance to the financial
statements (59% of total assets);
Judgement and our effort applied to
assessing forecast selling prices and costs of
completion for work in progress. These
factors involve forecasting, which can add
audit complexity to the assessment of net
realisable value. It is the Group’s policy, in
accordance with accounting standards, that
inventory must be carried at the lower of
cost and net realisable value.
Selling prices can fluctuate based on current
property market conditions.
The Directors of the Company are responsible for the
How the matter was addressed in our audit
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our procedures included:
Our responsibilities
Assessing the Group’s policies for the
valuation of inventories against the
requirements of the accounting standards
We have audited the Remuneration Report included in
and our understanding of the business
paragraph 4.3 of the Directors’ report for the year ended
30 June 2023.
Challenging the Group’s assumptions of
forecast costs of completion by selecting a
Our responsibility is to express an opinion on the
sample of developments under construction
Remuneration Report, based on our audit conducted in
and future projects to understand project
accordance with Australian Auditing Standards.
design complexity, sub-contractor reliance,
project funding and other project risks such
as supplier cost increases which could
negatively impact costs of completion. This
was done through enquiry of senior
management, and assessment of the
Group’s underlying documentation such as
budgets, funding agreements, supplier
contracts and internal reports.
Glenn Brooks
KPMG
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.
Partner
Perth
22 August 2023
Testing a sample of sales of inventories
during the year and subsequent to year end
to executed settlement statements to
assess sales margins and volumes achieved
during and post the financial year. This
informed our evaluation of the carrying value
of inventories at balance date against the
Group’s policy for recording inventories at
the lower of cost and net realisable value.
Comparing forecast selling prices to total
costs incurred to date and forecast costs of
completion for significant projects. We did
this to assess the carrying value of
inventories against the Group’s policy for
recording at the lower of cost and forecast
net realisable value.
Assessing the disclosures in the financial
report, using our understanding obtained
from our testing, against accounting
standards requirements.
97
Carrying value of Inventories ($260.8million)
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
Refer to Notes 3(e) and 16 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Valuation of inventories, being both completed
units and work in progress, is a key audit matter
To the Directors of Finbar Group Limited
due to the:
Our procedures included:
Assessing the Group’s policies for the
valuation of inventories against the
requirements of the accounting standards
and our understanding of the business
i.
ii.
statements (59% of total assets);
Significance of the balance to the financial
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 2023 there have been:
Challenging the Group’s assumptions of
No contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
Judgement and our effort applied to
assessing forecast selling prices and costs of
completion for work in progress. These
factors involve forecasting, which can add
audit complexity to the assessment of net
realisable value. It is the Group’s policy, in
accordance with accounting standards, that
inventory must be carried at the lower of
cost and net realisable value.
forecast costs of completion by selecting a
sample of developments under construction
and future projects to understand project
No contraventions of any applicable code of professional conduct in relation to the audit.
design complexity, sub-contractor reliance,
project funding and other project risks such
as supplier cost increases which could
negatively impact costs of completion. This
was done through enquiry of senior
management, and assessment of the
Group’s underlying documentation such as
budgets, funding agreements, supplier
contracts and internal reports.
Selling prices can fluctuate based on current
property market conditions.
Glenn Brooks
KPMG
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.
Partner
Perth
22 August 2023
Testing a sample of sales of inventories
during the year and subsequent to year end
to executed settlement statements to
assess sales margins and volumes achieved
during and post the financial year. This
informed our evaluation of the carrying value
of inventories at balance date against the
Group’s policy for recording inventories at
the lower of cost and net realisable value.
Comparing forecast selling prices to total
costs incurred to date and forecast costs of
completion for significant projects. We did
this to assess the carrying value of
inventories against the Group’s policy for
recording at the lower of cost and forecast
net realisable value.
Assessing the disclosures in the financial
report, using our understanding obtained
from our testing, against accounting
standards requirements.
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.
98
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 2023)
Substantial Shareholders
The number of shares held by substantial shareholders and their associates are set out below:
Shareholder name
Chuan Hup Holdings Limited
Forward International Pty Ltd
Thorney Holdings Proprietary Limited
Rubi Holdings Pty Ltd (John Rubino S/F A/C)
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
%
68,550,866
30,799,036
28,743,116
20,440,000
25.19
11.32
10.56
7.51
Number of
Holders
Ordinary
Shares
402
442
307
726
106,619
1,294,803
2,397,032
22,718,335
159
245,606,353
2,036
272,123,142
The number of shareholders holding less than a marketable parcel of ordinary shares is 341.
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.
99
ASX ADDITIONAL INFORMATION Twenty largest shareholders of ordinary shares as disclosed in the share register:
Chuan Hup Holdings Limited
UBS Nominees Pty Ltd
Rubi Holdings Pty Ltd (John Rubino S/F A/C)
J P Morgan Nominees Australia Pty Limited
Forward International Pty Ltd
Blair Park Pty Ltd
BNP Paribas Noms Pty Ltd (DRP)
Mr James Chan
3RD Wave Investors Pty Ltd
Forward International Pty Ltd
Hanssen Pty Ltd
Mrs Siew Eng Mah
Citicorp Nominees Pty Limited
Chan Family Super (WA) Pty Ltd (Chan Family S/F A/C)
Giovanni Nominees Pty Ltd (Giovanni Family Fund A/C)
Mr Ah-Hwa Lim
Ms Yi Xian Chan
Apex Investments Pty Ltd
Denshir Pty Ltd
Pateman Equity Pty Ltd
TOP 20
Number of
Ordinary
Shares Held
63,871,363
27,920,536
15,000,000
9,661,227
8,261,109
7,228,813
6,787,921
6,378,032
6,000,000
5,298,135
5,000,000
4,820,000
4,771,638
4,427,072
4,000,000
3,155,770
2,892,126
2,890,212
2,739,322
2,543,844
%
23.47
10.26
5.51
3.55
3.04
2.66
2.49
2.34
2.20
1.95
1.84
1.77
1.75
1.63
1.47
1.16
1.06
1.06
1.01
0.93
193,647,120
71.15
100
ASX ADDITIONAL INFORMATION (Continued) ASX ADDITIONAL INFORMATION (Continued)
OFFICES AND OFFICERS
Directors
Mr John Chan (Executive Chairman)
Mr Darren John Pateman (Managing Director)
Mr Ronald Chan (Chief Operations Officer)
Mr Lee Verios
Mr Terence Siong Woon Peh
Mr Eldon Wan
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 17
221 St Georges Terrace
PERTH WA 6000
Telephone: +61 8 9323 2000
Auditors
KPMG
235 St Georges Terrace
PERTH WA 6000
101
ASX ADDITIONAL INFORMATION finbar.com.au