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Annual Financial Report
GenusPlus Group Pty Ltd and controlled entities
For the year ended 30 June 2020
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Contents
Section
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
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Page
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6
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61
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Directors’ Report
The Directors of GenusPlus Group Pty Ltd present their report together with the financial statements of the
Consolidated Entity, being GenusPlus Group Pty Ltd and its controlled entities (the Group) for the year ended 30
June 2020 and the Independent Auditor’s Report thereon.
Directors details
The following persons were Directors of GenusPlus Group Pty Ltd during or since the end of the financial year:
Mr David Riches
Mr Simon High
David Riches is the Managing Director and CEO of
Simon High is the Non-Executive Chairman of the
the GenusPlus Group Pty Ltd. David is the founder
Group. Simon is a Civil Engineer and Fellow of the
of Powerlines Plus Pty Ltd and is a third generation
Institute of Engineers Australia. Simon has over 40
recognised industry expert. David has led the
years experience globally in the oil and gas, mining
business growth with a successful year on year
and industrial infrastructure industry. Simon has
track record.
Mr Paul Gavazzi
held senior Executive roles with Clough Ltd, United
Construction and Kvaernar Oil and Gas.
Paul Gavazzi is a Non-Executive Director and
Mr Jose Martins
member of the Audit and Risk and Remuneration
Jose Martins is a Non-Executive Director and
and Nominations Committees. Paul has over 35
Member of the Audit and Risk Committee and
years experience in commercial law, specialising in
Remuneration and Nominations Committees and
construction, projects and infrastructure. Paul is a
brings over 25 years experience in the financial
senior partner of law firm Sparke Helmore Lawyers.
management of public and private companies. Jose
Paul is an associate of the Chartered Institute of
is the former CFO of ASX listed Ausdrill Ltd and
Arbitrators (UK), member of the Society of
Macmahon Holdings Ltd. Jose is the current CFO of
Construction Lawyers and member of the Australian
Alliance Mining Commodities.
Institute of Company Directors.
Company Secretary
Damian Wright is the Chief Financial Officer and Company Secretary of GenusPlus Group Pty Ltd. Damian has
held senior finance positions including CFO and Company Secretary for private and ASX listed entities. Damian
holds a Degree in Commerce, and is a fellow of CPA Australia and the Governance Institute of Australia.
Principal activities
The principal activities of the Group during the financial year were the installation, construction and maintenance
of power and communication systems.
There have been no significant changes in the nature of these activities during the year.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Review of operations and financial results
A review of the operations of the Group during the financial year and the results of those operations saw an
increase in contract revenue from $99,166,632 to $169,955,735. The profit of the Group for the financial year
after providing for income tax amounted to $10,689,642 (2019: $6,012,740). The increases reflect consolidation
of performance across the Group with an improved capability to deliver to meet customer requirements on larger
scale projects.
A private capital raising was undertaken during the year which raised $8.9m net of costs providing additional
operating capital to fund major construction projects as well as positioning the Group in a strong cash position for
2021 to allow for future acquisitions, if appropriate opportunities arise.
The Group’s net assets increased by 74% compared to the previous year, which is due to the increase in
retained earnings and the Group’s capital raising activities.
The acquisitions and disposals which have occurred during the year are in line with the Group’s strategy to
increase its geographical position to take advantage of significant infrastructure investment in new markets.
Refer to Note 31.
Significant changes in the state of affairs
During the year, the following changes occurred within the Group:
• acquisition of EC&M Limited:
− on 20 December 2019, the Group acquired EC&M Limited, a Henderson based Electrical Contracting
business. The acquisition was made to enhance the Group’s position in electrical infrastructure projects in
Australia. EC&M Limited had historically serviced many major clients in the Group’s targeted market. The
cost of the acquisition was $1.5m which was settled in cash.
• acquisition of Picton Power Lines (and incorporation of Powerlines Plus (NSW) Pty Ltd)
− on 26 November 2019, the Group incorporated Powerlines Plus (NSW) Pty Ltd and acquired the net
assets of Picton Power Lines Pty Ltd. The acquisition was made to expand the operating capacity of the
Group into new geographical markets in New South Wales. The cost of the acquisition was $546,000
which was settled in cash.
• Disposal of Genus Engineering Pty Ltd
− on 30 September 2019, the Group disposed of its 100% equity interest in its subsidiary, Genus
Engineering Pty Ltd. The subsidiary was sold to Partum Engineering, a related party for which David
Riches is a Director. There was no gain or loss registered on disposal.
•
issue of share capital:
− on 31 March 2020, the Group issued 15,350,877 shares (representing 11% of the total shares on issue) in
a private equity placement resulting in proceeds of $9.625 million (before costs), each share has the
same terms and conditions as the existing ordinary shares. Under the terms of the capital raising, the
corporate advisors received 478,469 shares in lieu of payment.
Dividends
In respect of the financial year ended 30 June 2020, $1,230,150 in dividends was paid (30 June 2019: $nil). The
dividend paid was to holders of the 1,390 shares on issue prior to the share split, fully franked at $885 per share).
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Events arising since the end of the reporting period
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group
in future financial years.
Likely developments
The Group will continue to seek opportunities to provide its services in installation, construction and maintenance
of power and communication systems across Australia.
The Group’s strategy includes:
• Continuing to replicate its successful business model to penetrate the large east coast markets,
including growing its recent strategic acquisitions in QLD and NSW;
• Rebuilding of the ECM business into a scale but sustainable business, utilising the ability to be more
selective on projects given the strength of the Genus platform;
•
•
Taking advantage of the expected growth in electrical network infrastructure spending by public and
private utility companies in Australia;
Taking advantage of the expected growth in resources sector activity and related electrical network
infrastructure construction;
• Continuing to grow the Diamond business in the large telecommunications sector, which Diamond
currently only has a small market share;
• Continuing to maintain and develop new customer relationships;
• Continuing to maintain Genus’ culture and significant investment into staff training;
• Continuing to maintain its diversification between the Government utilities and the private sectors; and
• Continuing to maintain and grow its panel contract positions to provide a stable base line of year on
year revenue.
Directors’ meetings
The number of meetings of Directors (including meetings of Committees of Directors) held during the year and
the number of meetings attended by each Director is as follows:
Board Member
David Riches
Simon High
Paul Gavazzi
Jose Martins
Where:
Board Meetings Audit and Risk Committee
B
B
A
A
12
12
12
12
12
12
11
11
-
-
1
1
-
-
1
1
• column A: is the number of meetings the Director was entitled to attend
• column B: is the number of meetings the Director attended
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Options
No options over issued shares or interests in the Group were granted during or since the end of the financial year
and there were no options outstanding at the date of this report.
Environmental regulations
The Group’s operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or territory of Australia.
There have been no significant breaches during the period covered by this report.
Indemnities given to, and insurance premiums paid for, auditors and
officers
Insurance of officers
During the year, GenusPlus Group Pty Ltd paid a premium to insure officers of the Group. The officers of the
Group covered by the insurance policy include all Directors.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of the Group, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out
of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of insurance policies are not disclosed as such disclosure is
prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify any current or former officer of the Group against a liability incurred as such
by an officer.
Indemnity of auditors
The Group has agreed to indemnify its auditors, Grant Thornton Audit Pty Ltd, to the extent permitted by law,
against any claim by a third party arising from the Group’s breach of its agreement. The indemnity requires the
Group to meet the full amount of any such liabilities including a reasonable amount of legal costs.
Proceedings on behalf of Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or
any part of those proceedings.
The Group was not a party to any such proceedings during the year.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001
is set out on page 6 and forms part of this Directors’ Report.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Signed in accordance with a resolution of the Board of Directors.
David Riches
Director
7 October 2020
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Auditor’s Independence Declaration
Level 43, Central Park,
152-158 St Georges Terrace,
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
To the Directors of GenusPlus Group Pty Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of GenusPlus
Group Pty Ltd for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the audit.
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GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L A Stella
Partner – Audit & Assurance
Perth, 7 October 2020
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Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
6
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Consolidated Statement of Profit or
Loss and Other Comprehensive
Income
For the year ended 30 June 2020
Revenue
Other income
Employee expenses
Raw materials and consumables used
Contractors and labour hire expenses
Motor vehicle expenses
Depreciation expense
General and administrative expenses
Operating profit
Finance income
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income for the year, net of income tax
Total comprehensive income for the year
This statement should be read in conjunction with the notes to the financial statements.
Notes
5
6
22
15
7
7
8
2020
$
2019
$
169,955,735
99,166,632
4,855,908
732,207
(55,776,253)
(42,043,363)
(44,712,878)
(23,258,398)
(43,182,490)
(12,351,623)
(5,689,793)
(5,265,706)
(5,726,428)
14,458,095
(5,064,368)
(2,973,766)
(4,782,049)
9,425,272
682,945
(686,679)
58,558
(707,321)
14,454,361
8,776,509
(3,764,719)
(2,763,769)
10,689,642
6,012,740
-
-
10,689,642
6,012,740
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Consolidated Statement of Financial
Position
As at 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Other assets
Total current assets
Non-current assets
Financial assets
Property, plant and equipment
Deferred tax assets
Right-of-use assets
Goodwill
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities – right of use
Financial liabilities
Current tax liabilities
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities – right of use
Financial liabilities
Deferred tax liabilities
Employee benefits
Provisions
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
This statement should be read in conjunction with the notes to the financial statements.
Notes
2020
$
2019
$
9
10
11
13
14
12
15
17
16
18
19
20
16
21
17
22
23
16
21
17
22
23
24
25
39,798,707
7,991,601
33,575,545
20,720,885
8,244,464
1,499,852
2,146,732
2,938,770
918,974
1,155,980
85,265,300
33,726,210
922,000
-
18,655,391
13,165,926
2,897,086
4,033,628
1,613,914
782,856
-
1,746,479
28,122,019
15,695,261
113,387,319
49,421,471
26,073,881
13,416,136
26,707,361
627,177
1,184,104
2,298,296
233,274
-
2,096,458
526,248
3,423,018
1,677,190
50,000
440,000
59,969,934
18,783,209
2,888,484
3,047,863
3,655,715
665,002
-
-
-
3,893,498
1,371,598
275,079
260,000
45,732
10,257,064
5,845,907
70,226,998
24,629,116
43,160,321
24,792,355
27,732,909
18,800,695
(511,834)
(511,834)
15,939,246
6,503,494
43,160,321
24,792,355
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Consolidated Statement of Changes
in Equity
For year ended 30 June 2020
Balance at 1 July 2018
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Sub-total
Notes
Share
capital
$
Retained
earnings
$
Reserves
$
Total
$
18,800,695
490,754
(511,834)
18,779,615
-
-
-
-
6,012,740
-
6,012,740
6,012,740
-
-
-
-
6,012,740
-
6,012,740
-
Balance at 30 June 2019
18,800,695
6,503,494
(511,834)
24,792,355
Balance at 1 July 2019
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
• contributions of equity
• costs of equity raising
• dividends paid
Changes in ownership interests
• disposal of Genus Engineering
Sub-total
Balance at 30 June 2020
18,800,695
6,503,494
(511,834)
24,792,355
-
-
-
10,689,642
-
10,689,642
24
24
26
9,625,000
(692,786)
-
-
-
(1,230,150)
8,932,214
(1,230,150)
-
-
(23,740)
(23,740)
8,932,214
9,435,752
-
-
-
-
-
-
-
-
-
-
10,689,642
-
10,689,642
9,625,000
(692,786)
(1,230,150)
7,702,064
(23,740)
(23,740)
18,367,966
27,732,909
15,939,246
(511,834)
43,160,321
This statement should be read in conjunction with the notes to the financial statements.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Consolidated Statement of Cash
Flows
For year ended 30 June 2020
Operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income tax paid
Notes
2020
$
2019
$
172,611,938
105,655,928
(132,974,473)
(98,539,087)
11,861
58,558
(540,349)
(707,320)
(3,786,587)
(2,107,426)
Net cash provided by operating activities
27
35,322,390
4,360,653
Investing activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Proceeds from disposal of investments
Purchase of listed securities
Acquisition of subsidiaries (net of cash)
Net cash used in investing activities
Financing activities
Repayment of borrowings
Proceeds from issue of share capital, net of cost
Dividends paid
Finance costs
Net cash provided by / (used in) financing activities
Net change in cash and cash equivalents held
Cash and cash equivalents at beginning of financial year
849,874
589,404
(7,472,158)
(3,544,447)
66,923
(250,916)
-
-
(2,613,712)
(1,380,764)
(9,419,989)
(4,335,807)
(1,651,129)
(1,665,297)
8,932,314
-
(1,230,150)
-
(146,330)
5,904,705
(1,665,297)
31,807,106
(1,640,451)
7,991,601
9,632,052
Cash and cash equivalents at end of financial year
9
39,798,707
7,991,601
This statement should be read in conjunction with the notes to the financial statements.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Notes to the Consolidated Financial
Statements
1 Nature of operations
GenusPlus Group Pty Ltd and subsidiaries’ (the Group) principal activities include the construction and
maintenance of transmission and distribution power lines and substations servicing the Western Australian power
networks as well as providing specialist Engineering, testing and commissioning services to the electrical and
communications industries.
2 General information and statement of compliance
The consolidated general purpose financial statements of the Group have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards (“AASBs”) and other authoritative
pronouncements of the Australian Accounting Standards Board (AASB). Compliance with Australian Accounting
Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB). GenusPlus Group Pty Ltd is a for-profit entity for the purpose
of preparing the financial statements.
GenusPlus Group Pty Ltd is the Group’s Ultimate Parent Company. GenusPlus Group Pty Ltd is a Private
Company incorporated and domiciled in Australia. The address of its registered office and its principal place of
business is Level 1, 63 – 69 Abernethy Road, Belmont, Australia.
The consolidated financial statements for the year ended 30 June 2020 were approved and authorised for issue
by the Board of Directors on 5 October 2020.
3 Changes in accounting policies
3.1 New standards adopted as at 1 July 2019
The Group has adopted the new accounting pronouncements which have become effective this year, and are as
follows:
AASB 16 Leases
AASB 16 ‘Leases’ replaces AASB 117 ‘Leases’ along with three Interpretations (IFRIC 4 ‘Determining whether
an Arrangement contains a Lease’, SIC 15 ‘Operating Leases-Incentives’ and SIC 27 ‘Evaluating the Substance
of Transactions Involving the Legal Form of a Lease’).
The adoption of this new Standard has resulted in the Group recognising a right-of-use asset and related lease
liability in connection with all former operating leases except for those identified as low-value or having a
remaining lease term of less than 12 months from the date of initial application.
On transition to AASB 16, the Group elected to apply the practical expedient to grandfather the assessment of
which transactions are leases. The AASB 16 Leases definition of a leas is applied only to contracts that were
previously identified as leases at the date of initial application. Contracts that were not identified as leases under
AASB 117 were not reassessed for whether there is a lease under AASB 16. From the date of initial application,
lease accounting under AASB 16 is applied to all leases, including those identified in accordance with the
requirements of AASB 117.
The Group has applied AASB 16 using the practical expedient approach, under which the right-of-use asset and
liability have been calculated based on the present value of future rent payments, without adjusting opening
retained earnings. Additionally, the disclosure requirements of AASB 16 have not generally been applied to
comparative information.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
3.1 New standards adopted as at 1 July 2019 (continued)
The Group has elected not to include initial direct costs in the measurement of the right-of-use asset for
operating leases in existence at the date of initial application of AASB 16, being 1 July 2019. At this date, the
Group has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for
any prepaid or accrued lease payments that existed at the date of transition.
Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Group
has relied on its historic assessment as to whether leases were onerous immediately before the date of initial
application of AASB 16.
On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12
months and for leases of low-value assets the Group has applied the optional exemptions to not recognise right-
of-use assets but to account for the lease expense on a straight-line basis over the remaining lease term.
For those leases previously classified as finance leases, the right-of-use asset and lease liability are measured at
the date of initial application at the same amounts as under AASB 117 immediately before the date of initial
application.
On transition to AASB 16 the weighted average incremental borrowing rate applied to lease liabilities recognised
under AASB 16 was 4.97%.
The Group has benefited from the use of hindsight for determining the lease term when considering options to
extend and terminate leases.
The date of initial application of AASB 16 for the Group is 1 July 2019.
Financial impact of the initial application of AASB 16
The tables below show the amount of adjustment for each financial statement line item affected by the
application of AASB 16 for the current and prior years.
Impact on profit or loss
2020
$
2019
$
Impact on profit/(loss) for the year
Increase in depreciation on right-of-use asset
Increase in finance costs
Decrease in other expenses
Decrease in profit for the year
1,046,292
146,330
(1,153,662)
(38,960)
-
-
-
-
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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3.1 New standards adopted as at 1 July 2019 (continued)
Impact on assets, liabilities and equity as at 1 July 2019
Property, plant and equipment
Right-of-use assets
Net impact on total assets
Lease liabilities
Net impact on total liabilities
Carrying
amount at 30
June 2019
AASB 16 re-
measurement
$
13,165,926
-
-
-
-
$
-
1,853,148
1,853,148
(1,853,148)
(1,853,148)
AASB 16
carrying
amount at 1
July 2019
$
13,165,926
1,853,148
1,853,148
(1,853,148)
(1,853,148)
The following is a reconciliation of total operating lease commitments at 30 June 2019 (as disclosed in the
financial statements to 30 June 2019) to the lease liabilities recognised at 1 July 2019.
Total operating lease commitments disclosed at 30 June 2019
Recognition exemptions:
•
•
Leases of low value assets
Leases with remaining lease term of less than 12 months
Operating lease liabilities before discounting
Discounted using incremental borrowing rate
Operating lease liabilities
Finance lease obligations (note 21)
Total lease liabilities recognised under AASB 16 at 1 July 2019
$
$
1,999,220
(3,007)
(36,604)
(39,611)
1,959,609
(95,482)
1,864,127
1,957,449
3,821,576
For tax purposes the Group receives tax deductions in respect of the right-of-use assets and the lease liabilities
in a manner consistent with the accounting treatment.
3.2 Standards, amendments and interpretations to existing Standards that are not yet effective and
have not been adopted early by the Group
At the date of authorisation of these financial statements, several new, but not yet effective, Standards and
amendments to existing Standards, and Interpretations have been published by the AASB. None of these
Standards or amendments to existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or
after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in
the current year have not been disclosed as they are not expected to have a material impact on the Group’s
financial statements.
13
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
4 Statement of accounting policies
Basis of preparation
The Group’s financial statements have been prepared on an accrual basis and under the historical cost
convention except for the revaluation of investments. Monetary amounts are expressed in Australian Dollars
(AUD) are rounded to the nearest whole dollar.
Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June
2020. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with
the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries
have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales
are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective.
Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net
assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries
between the owners of the parent and the non-controlling interests based on their respective ownership interests
Business combination
The Group applies the acquisition method in accounting for business combinations.
The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the
acquisition date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group,
which includes the fair value of any asset or liability arising from a contingent consideration arrangement.
Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless
of whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition.
Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Business combination (continued)
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the
sum of (a) fair value of consideration transferred; (b) the recognised amount of any non-controlling interest in the
acquiree; and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-
date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated
above, the excess amount (i.e., gain on a bargain purchase) is recognised in profit or loss immediately.
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian Dollars ($AUD), which is also the functional
currency of the Parent Company.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective Group Entity, using the
exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and
losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year
end exchange rates are recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the
exchange rates at the date of the transaction), except for non-monetary items measured at fair value which are
translated using the exchange rates at the date when fair value was determined.
Revenue from contracts with customers
Revenue arises mainly from construction and service contracts.
To determine whether to recognise revenue, the Group follows a 5-step process:
1.
Identifying the contract with a customer
2.
Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied.
The Group often enters into transactions involving a range of the Group’s products and services. In all cases, the
total transaction price for a contract is allocated amongst the various performance obligations based on their
relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected on behalf
of third parties.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance
obligations by transferring the promised goods or services to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance
obligations and reports these amounts as other liabilities in the statement of financial position (see Note 20).
Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group
recognises either a contract asset or a receivable in its statement of financial position, depending on whether
something other than the passage of time is required before the consideration is due.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Revenue from contracts with customers (continued)
Construction Contracts
Revenue from construction contracts is recognised in the income statement when the performance obligations
are considered met, which can be at a point in time, or over time, depending on the service provided. Revenue is
calculated based on the proportion of the contract costs incurred for work performed to date relative to the
estimated total contract costs or with regard to specified milestones detailed in the contract agreement. Before
applying a particular method, the Group will consider the requirements of the contract, and then apply the
method that it considers is the most appropriate measure of the progress towards completion of the contractual
performance obligations under AASB 15.
Services revenue
Revenue from the provision of services is recognised when the service has been provided. Each service is
deemed a separate performance obligation. The transaction price is allocated to each obligations based on
contract prices. Revenue from services is predominantly recognised on the basis of the value of the work
completed.
Transaction price and contract modifications
The transaction price is the amount of consideration to which the company expects to be entitled to under the
customer contract and which is used to value total revenue and is allocated to each performance obligation. The
determination of this amount includes “fixed remuneration”, (for example lump sum, schedule of rates or pricing
for services) and “variable consideration”.
The main variable consideration elements are claims (contract modifications) and consideration for optional
works and provisional sums each of which needs to be assessed. Contract modifications are changes to the
contract approved by the parties to the contract.
The right to the consideration show be provided for contractually generating an enforceable right once the
enforceable right has been identified, the Group applies the guidance given in AASB 15 in relation to variable
consideration. This requires assessment that is highly probable that there will not be a significant reversal of
revenue in the future.
The measurement of additional consideration arising from claims is subject to a high level of uncertainty, both in
terms of the amount that customers will pay and the collection times, which usually depend on the outcome of
negotiations between the parties or decisions taken by judicial/arbitration bodies. The Group considers all
relevant aspects in circumstances such as the contract terms, business in negotiating practices of the sector, the
Group’s historical experiences with similar contracts and consideration of those factors that affect the variable
consideration that are out of control of the Group or other supporting evidence when making the above decision.
Loss making contracts
A provision is made for the difference between expected cost of fulfilling a contract and expected on and portion
of the transaction price whether forecast costs are greater than forecast revenue. The provision is recognised in
full in a period in which the loss-making contract is identified under AASB 137 Provisions, Contingent Liabilities
and Contingent Assets.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Revenue from contracts with customers (continued)
Loss making contracts (continued)
Under AASB 137, the assessment of whether a provision needs to be recognised takes place at the contract
level and there are no segmentation criteria to apply. As a result, there are some instances where loss provisions
recognised in the past have not been recognised under AASB 15 because the contract as a whole is profitable.
In addition, when two or more contracts entered into at or near the same time are required to be combined for
accounting purposes, AASB 15 requires the Group to perform the assessment of whether the contract is onerous
at the level of the combined contracts. The Group also notes that the amount of loss accrued in respect of a loss
contract under AASB 111 takes into account an appropriate allocation of construction overheads. This contrasts
with AASB 137 where loss accruals may be lower as they are based on the identification of ‘unavoidable costs’.
Interest and dividend income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend
income, other than those from investments in associates, are recognised at the time the right to receive payment
is established.
Operating Expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
Expenditure for warranties is recognised and charged against the associated provision when the related revenue
is recognised.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the period in which they are incurred and reported in ‘finance costs’
(see Note 7).
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually
identified and separately recognised. See Business Combinations (above) for information on how goodwill is
initially determined. Goodwill is carried at cost less accumulated impairment losses. Refer to impairment testing
note below for a description of impairment testing procedures.
Property, plant and equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes,
are stated in the statement of financial position at cost, less any recognised impairment loss.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Property, plant and equipment (continued)
Properties held for production, supply or administrative purposes, or for purposes not yet determined, are carried
at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets,
borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets, on
the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation on revalued buildings is recognised in profit or loss. On the subsequent sale or retirement of a
revalued property, the attributable revaluation surplus remaining in the asset revaluation reserve is transferred
directly to retained earnings. No transfer is made from the revaluation reserve to retained earnings except when
an asset is derecognised.
Freehold land is not depreciated.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and
properties under construction) less their residual values over their useful lives, using the straight-line method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
The depreciation rates used for each class of depreciable assets are:
Class of fixed asset
Buildings:
Leasehold improvements:
Plant and equipment:
Leased plant and equipment:
Tools and low value assets
Software and computer equipment
Motor vehicles
Depreciation rate
10%
10%-33%
10%-33%
10%-33%
18.8%-100%
33%
20% - 25%
Depreciation rates and methods shall be reviewed at least annually and, where changed, shall be accounted for
as a change in accounting estimate. Where depreciation rates or methods are changed, the net written down
value of the asset is depreciated from the date of the change in accordance with the new depreciation rate or
method. Depreciation recognised in prior financial years shall not be changed, that is, the change in depreciation
rate or method shall be accounted for on a ‘prospective’ basis.
Assets held under leases are depreciated over their expected useful lives on the same basis as owned assets.
However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term,
assets are depreciated over the shorter of the lease term and their useful lives.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in profit or loss.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Property, plant and equipment (continued)
Leased assets
As described in Note 3, the Group has applied AASB 16 using the modified retrospective approach and therefore
comparative information has not been restated. This means comparative information is still reported under AASB
117 and IFRIC 4.
Accounting policy applicable from 1 June 2019.
The Group as lessee
For any new contracts entered into on or after 1 June 2019, the Group considers whether a contract is or
contains a lease. A lease is defined as a ‘contract, or part of a contract, that conveys the right to use an asset
(the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group
assesses whether the contract meets three key evaluations which are whether:
•
•
•
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by
being identified at the time the asset is made available to the Group
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use, considering its rights within the defined scope of the contract
the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess
whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance
sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset
at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any
incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses
the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments
unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the
Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in
substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual
value guarantee and payments arising from options reasonably certain to be exercised.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It
is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed
payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or
profit and loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straight-line basis over the lease term.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Leased assets (continued)
Measurement and recognition of leases as a lessee (continued)
The lease liability is presented as a separate line in the consolidated statement of financial position.
Accounting policy applicable before 1 July 2019
The Group as a lessee
Finance leases
Management applies judgment in considering the substance of a lease agreement and whether it transfers
substantially all the risks and rewards incidental to ownership of the leased asset. Key factors considered include
the length of the lease term in relation to the economic life of the asset, the present value of the minimum lease
payments in relation to the asset’s fair value, and whether the Group obtains ownership of the asset at the end of
the lease term.
For leases of land and buildings, the minimum lease payments are first allocated to each component based on
the relative fair values of the respective lease interests. Each component is then evaluated separately for
possible treatment as a finance lease, taking into consideration the fact that land normally has an indefinite
economic life.
See Property, Plant and Equipment note (above) for the depreciation methods and useful lives for assets held
under finance leases. The interest element of lease payments is charged to profit or loss, as finance costs over
the period of the lease.
Operating leases
All other leases are treated as operating leases. Where the Group is a lessee, payments on operating lease
agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such
as maintenance and insurance, are expensed as incurred.
Impairment testing of goodwill, other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment
and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are
expected to benefit from synergies of the related business combination and represent the lowest level within the
Group at which management monitors goodwill.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Impairment testing of goodwill, other intangible assets and property, plant and equipment (continued)
Cash-generating units to which goodwill has been allocated (determined by the Group’s management as
equivalent to its operating segments) are tested for impairment at least annually. All other individual assets or
cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount
exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To
determine the value-in-use, management estimates expected future cash flows from each cash-generating unit
and determines a suitable interest rate in order to calculate the present value of those cash flows.
The data used for impairment testing procedures are directly linked to the Group’s latest approved budget,
adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors
are determined individually for each cash-generating unit and reflect management’s assessment of respective
risk profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that
cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-
generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an
impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash-
generating unit’s recoverable amount exceeds its carrying amount.
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is
derecognized when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement
Financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial assets are classified into the following categories:
•
•
•
amortised cost
fair value through profit or loss (FVTPL)
fair value through other comprehensive income (FVOCI)
In the periods presented, the Group does not have any financial assets categorized as FVOCI.
The classification is determined by both:
•
•
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.
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Annual financial report
For the year ended 30 June 2020
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Financial instruments (continued)
Classification and initial measurement (continued)
All income and expenses relating to financial assets that are recognized in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVTPL):
•
•
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most
other receivables fall into this category of financial instruments.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and
sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial assets
whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL.
The category also contains an equity investment. The Group accounts for the investment at FVTPL and did not
make the irrevocable election to account for the investment in Volt Power Pty Ltd at fair value through other
comprehensive income (FVOCI). The fair value was determined in line with the requirements of AASB 9, which
does not allow for measurement at cost.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values
of financial assets in this category are determined by reference to active market transactions or using a valuation
technique where no active market exists.
Impairment of financial assets
AASB 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the
‘expected credit loss (ECL) model’. This replaced IAS 39’s ‘incurred loss model’. Instruments within the scope of the
new requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI,
trade receivables, contract assets recognised and measured under AASB 15 and loan commitments and some
financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the
Group considers a broader range of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Financial instruments (continued)
Impairment of financial assets (continued)
In applying this forward-looking approach, a distinction is made between:
(cid:129)
(cid:129)
(cid:129)
financial instruments that have not deteriorated significantly in credit quality since initial recognition or
that have low credit risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in credit quality since initial recognition and
whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are
recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over
the expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract
assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in
contractual cash flows, considering the potential for default at any point during the life of the financial instrument.
In calculating, the Group uses its historical experience, external indicators and forward-looking information to
calculate the expected credit losses using a provision matrix.
The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk
characteristics they have been grouped based on the days past due. Refer to Note 33 for a detailed analysis of
how the impairment requirements of AASB 9 are applied.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains
or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective
as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or
loss are included within finance costs or finance income.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-
in-first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Taxation
Tax consolidation
The Company and its wholly-owned Australian resident entities are members of a tax-consolidated group under
Australian tax law. The Company is the head entity within the tax-consolidated group. In addition to its own
current and deferred tax amounts, the Company also recognises the current tax liabilities and assets and
deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-
consolidated group.
Amounts payable or receivable under the tax-funding arrangement between the Company and the entities in the
tax consolidated group are determined using a ‘separate taxpayer within group’* approach to determine the tax
contribution amounts payable or receivable by each member of the tax-consolidated group. This approach
results in the tax effect of transactions being recognised in the legal entity where that transaction occurred, and
does not tax effect transactions that have no tax consequences to the group. The same basis is used for tax
allocation within the tax-consolidated group.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as
reported in the statement of profit or loss and other comprehensive income because of items of income or
expense that are taxable or deductible in other years and items that are never taxable or deductible. The
Company’s current tax is calculated using tax rates that have been enacted or substantively enacted by the end
of the reporting period. Adjustments are made for transactions and events occurring within the tax-consolidated
group that do not give rise to a tax consequence for the Company or that have a different tax consequence at the
level of the entity.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences. Adjustments are made for transactions
and events occurring within the tax-consolidated group that do not give rise to a tax consequence for the
Company or that have a different tax consequence at the level of the entity.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the
initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such
investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
24
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Taxation (continued)
Deferred tax (continued)
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner in which the Company expects, at the end of
the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Company intends to settle its current tax assets and liabilities on a net basis.
For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are
measured using the fair value model, the carrying amounts of such properties are presumed to be recovered
entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment
property is depreciable and is held within a business model whose objective is to consume substantially all of the
economic benefits embodied in the investment property over time, rather than through sale. The directors of the
Company reviewed the Company's investment property portfolios and concluded that none of the Company's
investment properties are held under a business model whose objective is to consume substantially all of the
economic benefits embodied in the investment properties over time, rather than through sale. Therefore, the
directors have determined that the ‘sale’ presumption set out in the amendments to AASB 112 is not rebutted.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in
other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised
in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from
the initial accounting for a business combination, the tax effect is included in the accounting for the business
combination.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly
liquid investments that are readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
Equity, reserves and dividend payments
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with
the issuing of shares are deducted from share capital, net of any related income tax benefits.
Other components of equity include the following:
• Corporate restructure reserve: comprises amounts recognised upon the introduction of a new ultimate
parent entity.
25
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Equity, reserves and dividend payments (continued)
Retained earnings include all current and prior period retained profits.
Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have
been approved in a General Meeting prior to the reporting date.
All transactions with owners of the parent are recorded separately within equity.
Employee benefits
Short-term and long-term employee benefits
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the
estimated future cash outflows to be made by the Group in respect of services provided by employees up to
reporting date.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (where the effect of the time value of money is
material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
Goods and services tax
Revenues, 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 taxation authority, it is recognised as part of
the cost of acquisition of an asset or as part of an item of expense, or
•
For receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is
classified within operating cash flows.
26
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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Government grants
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the grants are intended to compensate.
Government grants that are receivable as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or
loss in the period in which they become receivable.
Government assistance which does not have conditions attached specifically relating to the operating activities of
the Group is recognised in accordance with the accounting policies above.
Significant management judgement in applying accounting policies and estimation uncertainty
In the application of the Group’s accounting policies, which are described (above), the directors of the Group are
required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The 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 if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying accounting policies
The following are the critical judgements, apart from those involving estimations, that the directors have made in
the process of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.
Construction contract revenue
Recognised amounts of construction contract revenues and related receivables reflect management’s best
estimate of each contract’s outcome and stage of completion. For more complex contracts in particular, costs to
complete and contract profitability are subject to significant estimation uncertainty.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the
reporting period, that may have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below or elsewhere in the financial statements:
Impairment of non-financial assets and goodwill
In assessing impairment, management estimates the recoverable amount of each asset or cash generating unit
based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to
assumptions about future operating results and the determination of a suitable discount rate.
Calculation of loss allowance
When measuring ECL the Group uses reasonable and supportable forward looking information, which is based
on assumptions for the future movement of different economic drivers and how these drivers will affect each
other.
27
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Key sources of estimation uncertainty (continued)
Calculation of loss allowance (continued)
Loss given default is an estimate of the loss arising on default. It is based on the difference between the
contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from
collateral and integral credit enhancements.
Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the
likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and
expectations of future conditions.
The Group maintains insurance against Domestic Trade Credit defaults and therefore considers the risk of loss
to be minimal.
Useful lives of property, plant and equipment
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the
expected utility of the assets.
Fair value measurements and valuation processes
Some of the Group's assets and liabilities are measured at fair value for financial reporting purposes.
In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is
available.
Business combinations
Management uses valuation techniques in determining the fair values of the various elements of a business
combination. Particularly, the fair value of contingent consideration is dependent on the outcome of many
variables that affect future profitability.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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5 Revenue
For 2020, revenue includes $627,177 (2019: NIL) included in the contract liability balance at the beginning of the
period, and NIL (2019: NIL) from performance obligations satisfied (or partially satisfied) in previous periods due
to changes in transaction price.
The Group’s revenue disaggregated by primary geographical markets is as follows:
Western Australia
Queensland
South Australia
New South Wales
Northern Territory
Victoria
Note
2020
$
2019
$
144,797,215
11,917,163
4,990,284
3,546,720
2,884,536
1,819,816
80,918,052
3,247,575
10,511,873
-
2,194,015
2,295,117
169,955,735
99,166,632
The Group’s revenue disaggregated by pattern of revenue recognition is as follows:
Products and services transferred over time
Products and services transferred at a point in time
Contract balances
Contract assets
Contract liabilities
6 Other income
Net gain on disposal of property, plant and equipment
Insurance claims and recoveries
Government grant income
Other income
Note
2020
$
2019
$
77,759,557
92,196,178
169,955,735
28,541,000
70,625,632
99,166,632
Note
2020
$
2019
$
11
20
8,244,464
26,707,361
2,938,770
627,177
Note
(A)
2020
$
182,239
2,012,117
1,658,000
1,003,552
4,855,908
2019
$
137,954
209,543
-
384,710
732,207
(A) – As part of economic stimulus measures introduced by the Australian Government related to the COVID19
pandemic, during the reporting period Group companies received or were eligible to receive $1,658,000 (FY19 –
Nil) in ‘JobKeeper’ wage subsidies.
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Annual financial report
For the year ended 30 June 2020
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7 Finance costs and finance income
Finance costs for the reporting periods consist of the following:
Interest expenses for borrowings at amortised cost:
Bank loans
Lease liabilities
Total interest expense
Other finance costs
Total finance costs
Finance income for the reporting periods consist of the following:
Interest income from cash and cash equivalents
Change in fair value of equity investments
8
Income tax expense
Note
Note
2020
$
46,746
235,083
281,829
404,850
686,679
2020
$
11,861
671,084
682,945
2019
$
282,849
127,202
410,051
297,269
707,321
2019
$
58,558
-
58,558
The major components of tax expense and the reconciliation of the expected tax expense based on the domestic
effective tax rate of GenusPlus Group Pty Ltd at 30% (2019: 30%) and the reported tax expense in profit or loss
are as follows:
Profit before tax
Domestic tax rate for GenusPlus Group Pty Ltd
Expected tax expense
Adjustment for tax-exempt income:
other tax-exempt income
Adjustment for non-deductible expenses:
other non-deductible expenses
Adjustments in the current year in relation to the current tax of prior years
Actual tax expense
Tax expense comprises:
current tax expense
deferred tax (income) / expense:
origination and reversal of temporary differences
(Over) / under provision in respect of prior years
Tax expense
Note
2020
$
2019
$
14,454,361
8,776,509
30%
30%
4,336,308
2,632,953
(30,000)
-
11,001
(552,590)
13,843
-
3,764,719
2,646,796
3,587,540
2,089,811
729,769
(552,590)
556,985
116,973
3,764,719
2,763,769
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
9 Cash and cash equivalents
Cash at bank and in hand
Australian Dollar ($AUD)
American Dollar ($USD)
Short-term bank deposits
Total cash and cash equivalents
10 Trade and other receivables
Current
Trade receivables, gross
Allowance for expected credit losses
Trade receivables
Other receivables
Total trade and other receivables
Note
2020
$
2019
$
22,026,611
17,684,846
7,902,506
-
87,250
89,095
39,798,707
7,991,601
Note
2020
$
2019
$
31,184,194
20,706,744
(77,449)
(76,966)
31,106,745
20,629,778
2,468,800
91,107
33,575,545
20,720,885
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation
of fair value.
All of the Group’s trade and other receivables in the comparative periods have been reviewed for indicators of
impairment. The impaired trade receivables are mostly due from customers that are experiencing financial
difficulties.
An analysis of unimpaired trade receivables that are past due is given in Note 33.
11 Contract assets
Current
Contract assets
Total contract assets
Note
2020
$
2019
$
8,244,464
8,244,464
2,938,770
2,938,770
Contract assets represents the unbilled amounts expected to be collected from customers for contract work
performed to date.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
12 Financial assets and liabilities
Categories of financial assets and liabilities
Note 4 provides a description of each category of financial assets and financial liabilities and the related
accounting policies. The carrying amounts of financial assets and financial liabilities in each category are as
follows:
30 June 2020
Amortised cost
FVTPL
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Financial assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Listed equity securities - VPR
Total financial assets
30 June 2020
Financial liabilities
Financial liabilities - current
Trade and other payables
Contract liabilities
Financial liabilities – non-current
Total financial liabilities
30 June 2019
Financial assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Total financial assets
30 June 2019
Financial liabilities
Financial liabilities - current
Trade and other payables
Contract liabilities
Financial liabilities – non-current
Total financial liabilities
Notes
$
9
10
11
39,798,707
33,575,545
8,244,464
-
81,618,716
Total
$
39,798,707
33,575,545
8,244,464
$
-
-
-
922,000
922,000
922,000
82,540,716
Other liabilities
amortised cost
Other liabilities
FVTPL
Notes
$
21
19
20
21
2,298,296
26,073,881
26,707,361
3,047,863
58,127,401
$
-
-
-
-
-
Amortised cost
Assets at fair
value through
profit and loss
(FVPL)
Notes
$
9
10
11
7,991,601
20,720,885
2,938,770
31,651,256
$
-
-
-
-
Other liabilities
amortised cost
Other liabilities
FVTPL
Notes
$
21
19
20
21
2,096,458
13,416,136
627,177
3,893,498
20,033,269
$
-
-
-
-
-
Total
$
2,298,296
26,073,881
26,707,361
3,047,863
58,127,401
Total
$
7,991,601
20,720,885
2,938,770
31,651,256
Total
$
2,096,458
13,416,136
627,177
3,893,498
20,033,269
32
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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12 Financial assets and liabilities (continued)
Categories of financial assets and liabilities (continued)
A description of the Group’s financial instrument risks, including risk management objectives and policies is given
in Note 33.
The methods used to measure financial assets and liabilities reported at fair value are described in Note 33.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets at FVTPL include the equity investment in Volt Power Ltd (VPR). The Group accounts for the
investment at FVTPL and did not make the irrevocable election to account for it at FVOCI.
Listed investment in Volt Power Ltd (VPR)
Borrowings
Borrowings include the following financial liabilities:
At amortised cost
Bank borrowings
Lease liabilities
Total borrowings
Note
2020
$
922,000
922,000
2019
$
-
-
2020
$
Current
2019
$
Non-current
2019
$
2020
$
1,170,119
1,128,177
2,298,296
920,000
1,176,458
2,096,458
1,840,000
1,207,863
3,047,863
3,112,507
780,991
3,893,498
Bank borrowings are secured by a floating charge over the assets of the Group (see Note 21). Current interest
rates are variable and average 0.45% (2019: 4.1%). The carrying amount of the other bank borrowings is
considered to be a reasonable approximation of the fair value.
Other financial instruments
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of
fair value:
(cid:129) trade and other receivables
(cid:129) cash and cash equivalents
(cid:129) trade and other payables.
33
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
13
Inventories
Current
At cost:
Raw materials and stores
Total inventories
Note
2020
$
2019
$
1,499,852
1,499,852
918,974
918,974
In 2020, a total of $31,734,993 of materials was included in profit and loss as an expense (2019: $13,076,172).
This includes an amount of $1,269 resulting from write down of inventories (2019: Nil).
14 Other assets
Current
Deferred expense
Prepayments
Security deposits
Total other assets
Note
2020
$
8,958
2,056,665
81,109
2,146,732
2019
$
13,139
1,042,619
100,222
1,155,980
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34
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
15 Property, plant and equipment
For the year ended 30 June 2020
Land and
buildings
Leasehold
improvements
Motor
vehicles
Plant and
equipment
Furniture,
fixtures and
fittings
Software and
technology
Tooling and
low value
assets
$
$
$
$
$
$
$
Total
$
Gross carrying amount
Balance at 1 July 2019
225,602
300,323
14,324,204
18,515,796
200,231
316,904
254,711
34,137,771
Additions
701,418
710,699
3,773,756
1,793,856
174,134
264,652
53,643
7,472,158
Acquisition through business combinations
Disposals
-
-
-
-
205,000
2,667,086
(1,632,440)
(2,485,095)
-
-
-
50,000
2,922,086
(8,325)
-
(4,125,860)
Balance at 30 June 2020
927,020
1,011,022
16,670,520
20,491,643
374,365
573,231
358,354
40,406,155
Depreciation and impairment
Balance at 1 July 2019
(11,727)
(58,984)
(7,142,406)
(13,307,109)
(65,641)
(214,607)
(171,372)
(20,971,846)
Disposals
Depreciation
-
-
1,239,054
2,191,535
1,582
8,325
-
3,440,496
(14,784)
(53,748)
(2,053,807)
(1,889,840)
(71,510)
(67,558)
(68,167)
(4,219,414)
Balance at 30 June 2020
(26,511)
(112,732)
(7,957,159)
(13,005,414)
(135,569)
(273,840)
(239,539)
(21,750,764)
Carrying amount 30 June 2020
900,509
898,290
8,713,361
7,486,229
238,796
299,391
118,815
18,655,391
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
For the year ended 30 June 2019
Land and
buildings
Leasehold
improvements
Motor
vehicles
Plant and
equipment
Furniture,
fixtures and
fittings
Software and
technology
Tooling and
low value
assets
$
$
$
$
$
$
$
Total
$
Gross carrying amount
Balance at 1 July 2018
44,602
160,177
9,909,255
8,594,363
109,069
225,050
202,653
19,245,169
Additions
181,000
140,147
2,047,408
1,423,596
91,162
91,854
52,058
4,027,224
Acquisition through business combinations
Re-valuation of assets acquired under AASB
3 “Business Combinations”
Re-classification
Disposals
-
-
-
-
-
-
-
-
957,892
434,472
1,636,912
8,334,206
138,386
(138,386)
(365,649)
(132,455)
-
-
-
-
-
-
-
-
-
-
-
-
1,392,364
9,971,118
-
(498,104)
Balance at 30 June 2019
225,602
300,323
14,324,204
18,515,796
200,231
316,904
254,711
34,137,771
Depreciation and impairment
Balance at 1 July 2018
(7,320)
(31,654)
(3,754,646)
(3,421,657)
(32,475)
(160,559)
(129,579)
(7,537,890)
Acquisitions through business combinations
Re-valuation of assets acquired under AASB
3 “Business Combinations”
Disposals
Depreciation
-
-
-
-
-
-
(580,567)
(156,318)
(1,666,567)
(8,275,233)
132,248
86,247
-
-
-
-
-
-
-
-
-
(736,885)
(9,941,800)
218,495
(4,407)
(27,330)
(1,272,874)
(1,540,148)
(33,166)
(54,048)
(41,793)
(2,973,766)
Balance at 30 June 2019
(11,727)
(58,984)
(7,142,406)
(13,307,109)
(65,641)
(214,607)
(171,372)
(20,971,846)
Carrying amount 30 June 2019’
213,875
241,339
7,181,798
5,208,687
134,590
102,297
83,339
13,165,926
The carrying value of several assets classified under Motor Vehicles and Plant and Machinery were re-assessed during the prior reporting period. The adjustments to their
carrying value are as stated in the table above.
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Annual financial report
For the year ended 30 June 2020
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15 Property, plant and equipment (continued)
All depreciation and impairment charges are included within depreciation, amortisation and impairment of non-
financial assets.
Total depreciation and amortization recognized during the reporting period:
Depreciation
Depreciation – right of use assets
Note
2020
$
4,219,414
1,046,292
5,265,706
2019
$
2,973,766
-
2,973,766
The net assets of the Group have been pledged as security for the Group’s other bank borrowings (see Note 21).
16 Leases liabilities – right of use
Leases liabilities are presented in the statement of financial position as follows:
Current
Non – Current
Total leases
Group as a lessee
Note
2020
$
1,184,104
2,888,484
4,072,588
2019
$
-
-
-
The Group has lease contracts for land and buildings and for various items of plant, motor vehicles and other
equipment used in its operations. Leases of plant and equipment and motor vehicles and other equipment
generally have lease terms between 3 and 5 years, whilst leases over land and buildings have lease terms of
between 1 and 10 years. The Groups obligations under its leases are secured by the lessor title to the leased
assets. Generally, the Group is restricted from assigning and subleasing the leased assets. There are several
lease contracts that include extension and termination options and variable lease payments, which are further
discussed below.
The Group also has certain leases of office equipment with low value. The Group applies the ‘short-term lease’
and ‘lease of low-value assets’ recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets and the movement during the period:
Buildings
As at 1 July
Additions
Depreciation expense
De-recognised during the period
As at 30 June
Note
2020
$
-
5,147,433
(1,046,292)
(67,513)
4,033,628
2019
$
-
-
-
-
-
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
16 Leases – right of use (continued)
The following are the amounts recognised in profit or loss:
Depreciation of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases
Note
2020
$
1,046,292
146,330
4,697,208
5,889,830
2019
$
-
-
3,314,490
3,314,490
The group had total cash ouflows for leases of $1,590,118 in 2020 (2019: $989,147). The Group also had non-
cash additions to right-of-use assets and lease liabilities of $5,147,433 in 2020. The future cash outflows relating
to leases are disclosed in Note 30.
Future minimum lease payments at 30 June 2020 in respect of right-of-use assets were as follows:
30 June 2020
Lease payments
Finance charges
Within 1
year
$
1-2 years
$
2-3 years 3-4 years 4-5 Years
$
$
$
After 5
years
$
Total
$
1,184,104
958,021
908,522
544,379
428,643
637,275 4,660,944
(193,397)
(145,836)
(105,002)
(67,286)
(44,739)
(32,096)
(588,356)
Net present values
990,707
812,185
803,520
477,093
383,904
605,179 4,072,588
Additional information on the right-of-use assets by class of assets is as follows:
Right-of-use assets
Carrying amounts
Buildings
Cost
Accumulated depreciation
Net carrying value
Note
2020
$
2019
$
4,920,184
(886,556)
4,033,628
-
-
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
17 Taxation
Current
Income tax payable / (receivable)
Note
2020
$
2019
$
233,274
526,248
1 July 2018
$
Recognised in
profit and loss
$
1 July 2019
$
Recognised in
profit and loss
$
30 June 2020
$
Deferred tax liabilities
Deferred tax assets
(1,131,185)
1,099,429
(240,413)
(316,573)
(1,371,598)
782,856
(2,284,117)
2,114,230
(3,655,715)
2,897,086
All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of
financial position.
18 Goodwill
The movements in the net carrying amount of goodwill is as follows:
Gross carrying amount
Balance 1 July
Acquired through business combination
Increase resulting from change in business valuation
Disposal
Balance 30 June
Accumulated impairment losses
Accumulated amortisation
Carrying amount at 30 June
Note
2020
$
1,746,479
-
50,000
(182,565)
2019
$
305,395
1,441,084
-
-
1,613,914
1,746,479
-
-
-
-
1,613,914
1,746,479
The contingent consideration previously recognised under AASB3 Business Combinations for the purchase of
Burton Power Pty Ltd (Powerlines Plus (Qld) Pty Ltd) was re-assessed at 30 June 2020 in accordance with the
terms of the purchase agreement. As a result of the review, $50,000 was recognised as additional goodwill
related to the acquisition.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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18 Goodwill (continued)
Impairment testing
For the purpose of annual impairment testing, goodwill is allocated to the following cash-generating units, which
are the units expected to benefit from the synergies of the business combinations in which the goodwill arises.
Powerlines Plus (Qld) Pty Ltd
Proton Power Pty Ltd
KEC Power Pty Ltd
Genus Engineering Pty Ltd
Goodwill allocation at 30 June
Note
2020
$
2019
$
1,179,147
1,129,147
305,395
129,372
-
305,395
129,372
182,565
1,613,914
1,746,479
The recoverable amounts of the cash-generating units were determined based on value-in-use calculations,
covering a three-year forecast, followed by an extrapolation of expected cash flows for the units’ remaining useful
lives using the growth rates determined by management. The present value of the expected cash flows of each
segment is determined by applying a suitable discount rate.
Powerlines Plus (Qld) Pty Ltd
Proton Power Pty Ltd
KEC Power Pty Ltd
Genus Engineering Pty Ltd
Growth rates
Growth rates
2020
2019
Discount rates
2019
2020
3%
3%
3%
-
3%
3%
3%
3%
5%
5%
5%
-
5%
5%
5%
5%
The growth rates reflect the long-term average growth rates for the business of the segments and the markets
they operate in.
Discount rates
The discount rates reflect appropriate adjustments relating to market risk and specific risk factors of each unit.
Cash flow assumptions
Powerlines Plus (Qld) Pty Ltd, Proton Power Pty Ltd & KEC Power Pty Ltd
Management’s key assumptions include stable profit margins, based on past experience in this market. The
Group’s management believes that this is the best available input for forecasting this mature market. Cash flow
projections reflect stable profit margins achieved immediately before the budget period. No expected efficiency
improvements have been taken into account and prices and wages reflect publicly available forecasts of inflation
for the industry.
40
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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19 Trade and other payables
Unsecured liabilities:
Trade payables
Sundry payables and accrued expenses
Total trade and other payables
Note
2020
$
2019
$
18,027,689
8,046,192
26,073,881
8,472,023
4,944,113
13,416,136
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a
reasonable approximation of fair value.
20 Contract liabilities
Short-term advances for materials
Short-term advances for construction services
Note
2020
$
2019
$
17,684,846
9,022,515
26,707,361
-
627,177
627,177
Advances received for construction contract work represent customer payments received in advance of
performance (contract liabilities) that are expected to be recognised as revenue in 2021.The amounts recognised
in respect of construction contracts will generally be utilised within the next reporting period.
21 Borrowings
Secured – at amortised cost
Current
Bank loan
Lease liability
Non-current
Bank loan
Lease liability
Total borrowings
Note
2020
$
2019
$
1,170,119
1,128,177
2,298,296
1,840,000
1,207,863
3,047,863
5,346,159
920,000
1,176,458
2,096,458
3,112,507
780,991
3,893,498
5,989,956
The group has an unused overdraft/trade finance facility with a limit of $10,000,000.
The group has an equipment finance facility with Commonwealth Bank of Australia Pty Ltd (CBA) with a limit of
$4,000,000 (FY19 - $2,000,000) with $3,232,000 available at 30 June 2020 (FY19 - $1,800,000).
The group has an equipment finance facility with Mercedes Benz finance with a limit of $2,000,000 (FY19 -
$2,000,000) with $1,688,000 available at 30 June 2020 (FY19 - $1,200,000).
The group has an equipment finance facility with Toyota Asset Finance with a limit of $6,000,000 (FY19 - Nil)
with $5,823,000 available at 30 June 2020 (FY19 - N/A).
The bank debt is secured by a General Security Agreement of the group. The Group was not in breach of any
loan agreements permitting the lender to demand accelerated repayments at year end, nor did any breach occur
during the year. The Group was not in default of any loans payable recognised at year end during the year.
41
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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22 Employee remuneration
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Salaries and wages
Superannuation
Leave entitlements
Short term incentives
Other allowances and expenses
Employee benefits expense
Employee benefits
Note
2020
$
2019
$
42,451,022
32,656,741
3,480,637
2,977,199
1,000,000
5,867,395
2,631,646
2,197,758
-
4,557,218
55,776,253
42,043,363
The liabilities recognised for employee benefits consist of the following amounts:
Note
Current
Annual leave
Long service leave
Other short term employee benefits
Non-current
Long service leave
2020
$
2,270,471
152,547
1,000,000
3,423,018
2019
$
1,677,190
-
-
1,677,190
665,002
275,079
Total employee benefits
4,088,020
1,952,269
The current portion of these liabilities represents the groups obligations to which the employee has a current
legal entitlement. These liabilities arise mainly from accrued annual leave entitlement at reporting date.
23 Provisions
Current
Non-current
Total provisions
Note
(a)
(b)
2020
$
50,000
2019
$
440,000
-
260,000
50,000
700,000
(a) Current provision relates to the estimated earn out for the purchase of Burton Power Pty Ltd to be payable
within 12 months of the balance date.
(b) Non-current provision relates to relates to the estimated earn out for the purchase of Burton Power Pty Ltd
to be payable beyond 12 months of the balance date.
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Annual financial report
For the year ended 30 June 2020
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24 Share capital
The share capital of the Group consists only of fully paid ordinary shares; the shares do not have a par value.
Ordinary shares participate in dividends and the proceeds on winding up of the Group in proportion to the
number of shares held.
Fully paid ordinary shares
2020
Shares
2019
Shares
2020
$
2019
$
Beginning of the year
1,390
1,390
18,800,695
18,800,695
Split of existing shares on a 1:100,000 basis
Private equity placement
Share issue costs
138,998,610
15,350,877
-
-
-
9,625,000
(692,786)
-
-
-
Total contributed equity at 30 June
154,350,877
1,390
27,732,909
18,800,695
The Group issued 15,350,877 shares on 31 March 2020 as part of a private equity placement, corresponding to
9.95% of total shares issued. Each share has the same right to receive dividend and the repayment of capital
and represents one vote at the Shareholders’ Meeting of GenusPlus Group Pty Ltd.
25 Reserves
Balance at 1 July 2018
Balance at 30 June 2019
Balance at 1 July 2019
Balance at 30 June 2020
Corporate restructure reserve
Notes
Reconstruction
reserve
$
Total
$
(511,834)
(511,834)
(511,834)
(511,834)
(511,834)
(511,834)
(511,834)
(511,834)
The corporate reconstruction reserve recorded the transaction on the introduction of a new ultimate parent entity.
26 Dividends on equity instruments
Recognised amounts
Fully paid ordinary shares
Final dividend
Year ended 30 June 2020
Dollars per
share
Total
$
Year ended 30 June 2019
Total
$
Dollars per
share
885
1,230,150
-
-
On 4 October 2019, the directors declared a fully franked dividend of $885 per share to the holders of 1,390 fully
paid ordinary shares in respect of the financial year ended 30 June 2019. This dividend was paid to shareholders
on 19 December 2019.
43
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
27 Reconciliation of cash flows
Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit after income tax
Non-cash flows in profit:
• gain on disposal of plant and equipment
• depreciation and amortisation
•
•
increase in value of investments reported at FVTPL
interest paid on right-of-use assets
Changes in assets and liabilities:
•
•
•
•
increase in trade and other receivables
(increase) / decrease in other assets
increase in inventories
increase / (decrease) in trade and other payables
Net cash provided by operating activities
28 Auditor remuneration
2020
$
2019
$
10,689,642
6,012,740
(182,239)
5,265,706
(671,084)
146,330
(589,404)
2,973,766
-
-
(18,022,287)
(3,495,769)
(990,752)
(580,878)
39,667,952
35,322,390
107,375
(187,632)
(460,423)
4,360,653
Remuneration of the auditor of the Group, Grant Thornton Audit Pty Ltd for:
Auditing the financial statements
Other assurance services
Taxation services
Total auditor’s remuneration
Note
2020
$
48,000
-
-
48,000
2019
$
45,000
65,973
19,569
130,542
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
29 Related party transactions
The Group’s related parties include its key management personnel, related parties of its key management
personnel, and others as described below.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees
were given or received. Outstanding balances are usually settled in cash.
Transactions with related parties
As part of normal business operations, the Group undertakes construction work through associated entities, as
well as leasing rental properties and equipment. A summary of these transactions is included below.
Services provided by related parties
Pastoral Plus
Testing Plus WA Pty Ltd
Partum Engineering Pty Ltd
Innotech Services Pty Ltd
Sparke Helmore Lawyers
Matt Riches Pty Ltd and Dave Riches Pty Ltd
Dave Riches Pty Ltd
Genus Engineering Pty Ltd
Services provide to related parties
AUSCON Construction Group Pty Ltd
Innotech Services Pty Ltd
Partum Engineering Pty Ltd
Testing Plus WA Pty Ltd
Pastoral Plus
Genus Engineering Pty Ltd
All services were contracted at arms’ length basis.
Amounts due to related parties at reporting date
Pastoral Plus
Testing Plus WA Pty Ltd
Partum Engineering Pty Ltd
Innotech Services Pty Ltd
Sparke Helmore Lawyers
Dave Riches Pty Ltd
Genus Engineering Pty Ltd
2020
$
483,719
174,727
1,536,130
6,264,572
128,838
327,668
657,339
490,286
2020
$
276,454
25,205
14,569
2,244
4,816
200,630
2020
$
110,312
15,737
375,651
214,545
27,500
-
26,356
2019
$
192.225
280,148
-
531,858
-
209,897
362,019
-
2019
$
-
1,658,855
-
15,854
-
-
2019
$
15,642
62,869
-
312,204
-
39,338
-
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
29 Related party transactions (continued)
Amounts due from related parties at reporting date
Longfield Services
Innotech Services Pty Ltd
Testing Plus WA Pty Ltd
Partum Engineering Pty Ltd
AUSCON Construction Group Pty Ltd
Genus Engineering Pty Ltd
2020
$
2,915
2,945
111
9,836
42,874
166,232
2019
$
572
62,506
-
-
All amounts outstanding at reporting date were included in accounts payable or accounts receivable, and settled
in accordance with commercial terms.
On 30 September 2019, the Group disposed of its interest in Genus Engineering Pty Ltd to a member of the Key
Management Personnel. Refer to note 31.
Transactions with key management personnel
Key management of the Group are the Non-Executive members of the Group’s Board of Directors and the
Group’s Chief Executive Officer. Key management personnel remuneration includes the following expenses:
Short-term employee benefits:
Salaries including bonuses
Total short-term employee benefits
Long service leave
Total other long-term benefits
Post-employment benefits:
superannuation
Total post-employment benefits
Total remuneration
2020
$
2019
$
504,820
504,820
456,388
456,388
-
-
32,652
32,652
537,472
31,710
31,710
488,098
During 2020, the Group used the legal services of one Company Director a firm over which he exercises
significant influence. The amounts billed related to this legal service amounted to $128,838 (2019: Nil), based on
normal market rates and was fully paid as of the reporting date.
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Annual financial report
For the year ended 30 June 2020
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30 Contingent assets and contingent liabilities
The Group has no contingent assets.
There were no material warranty or legal claims brought against the Group during the year. Unless recognised as
a provision, management considers these claims to be unjustified and the probability that they will require
settlement at the Group’s expense to be remote.
Further information on these contingencies is omitted so as not to prejudice the Group’s position in the related
disputes.
Estimates of the potential financial effect of contingent liabilities that may
become payable:
Secured guarantee to company's bankers supported by a floating charge over the
Group assets
Surety bonds secured by the Group assets
2020
$
2019
$
31,852,117
11,378,304
14,230,062
1,377,216
46,082,179
12,755,520
The CBA guarantee facility has a limit of $35,000,000 (FY19 - $17,000,000).
The Surety bond facility has a limit of $20,000,000 (FY19 - $15,000,000). The surety bond provider has a
combined sub limit of the CBA guarantee facility and surety bond facility of $47,000,000.
31 Acquisitions and disposals
Businesses acquired
During the year ended 30 June 2020, the Group acquired the net assets of EC&M Limited (EC&M) and Picton
Power Lines Pty Ltd (“Picton”). Details of the acquisitions are as follows:
Acquisition of net assets of EC&M Limited
On 20 December 2019, KEC Power Pty Ltd acquired the net assets of EC&M including the business name,
contracts and intellectual property (IP).
KEC Power Pty Ltd acquired the assets of EC&M Limited for the following consideration: $1,480,500
The property, plant and equipment value in the balance sheet was fair valued by independent valuations to
$2,341,450, resulting in a gain on bargain purchase of $860,950.
$1,500,000 cash was paid as consideration for the purchase, payable to the vendors with conditions subsequent
and warranties requiring adjustment to the purchase price payable. Some assets were rejected and warranty
adjustments were required.
EC&M contributed revenue of $5,616,592 and ($496,311) net loss to the consolidated group for the period
following the acquisition.
If EC&M had been a part of the consolidated group for the entire year the consolidated position would have been
revenue of $175,570,000 and $9,826,000 net income.
47
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Annual financial report
For the year ended 30 June 2020
31 Acquisitions and disposals (continued)
Acquisition of net assets of Picton Power Lines Pty Ltd (Picton)
On 26 November 2019, Powerlines Plus (NSW) Pty Ltd was incorporated. It acquired the net assets of Picton on
9 January 2020 in consideration of $546,000.
$546,000 cash was payable to the vendor as consideration for the purchase with subsequent warranties requiring
adjustment to the purchase price payable.
Powerlines Plus (NSW) Pty Ltd contributed revenue of $3,392,778 and ($163,226) net loss to the consolidated
group for the period following the acquisition.
If Powerlines Plus (NSW) Pty Ltd had been a part of the consolidated group for the entire year the consolidated
position would have been revenue of $173,347,000 and $10,159,000 net income.
Consideration transferred
Cash
Total
Assets acquired and liabilities assumed at the date of acquisition
Trade and other receivables
Plant and equipment
Deferred tax assets
Trade and other payables
Provisions
Total
Net cash outflow on acquisition of businesses
Consideration paid in cash
Conditions subsequent & warranties requiring adjustment
Acquisition costs charged to expense
Less: cash and cash equivalent balances acquired
Total
EC&M Limited
$
Picton
Powerlines Pty
Ltd
$
1,233,472
1,233,472
413,712
413,712
EC&M Limited
$
Picton
Powerlines Pty
Ltd
$
-
2,341,450
105,869
-
(352,897)
2,094,422
101,173
546,000
-
(101,054)
(132,407)
413,712
EC&M Limited
$
Picton
Powerlines Pty
Ltd
$
(1,500,000)
266,528
(546,000)
132,288
-
-
-
-
(1,233,472)
(413,712)
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
31 Acquisitions and disposals (continued)
Businesses disposed
On 30 September 2019, the Group disposed of its interest in Genus Engineering Pty Ltd.
Consideration received
Consideration received in cash and cash equivalents
Total consideration received
Book value of net assets sold
Cash and cash equivalents
Trade receivables
Other Assets
Payables
Borrowings
Net assets disposed of
Net cash inflow / (outflow) on disposal of business
Consideration received in cash and cash equivalents
Less: cash and cash equivalents disposed of
Total
Genus
Engineering
Pty Ltd
$
66,923
66,923
52,577
239,478
240,140
(139,935)
(325,337)
66,923
66,923
(52,577)
14,346
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Annual financial report
For the year ended 30 June 2020
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32
Interests in subsidiaries
Composition of the Group
Set out below details of the subsidiaries held directly by the Group:
Parent Entity:
GenusPlus Group Pty Ltd (a)
Subsidiaries:
Powerlines Plus Pty Ltd (b)
Diamond Underground Services Pty Ltd (b)
Proton Power Pty Ltd (b)
Complete Cabling and Construction Pty Ltd (b)
Proton Technical Services Pty Ltd (b)
GPL (WA) Pty Ltd (b)
Burton Power Pty Ltd (c)
KEC Power Pty Ltd (d)
Genus Engineering Pty Ltd (e)(f)
Powerlines Plus (NSW) Pty Ltd (g)
ECM Consultancy (h)
Country of
Incorporation
Percentage Ownership
2020
2019
Aust
Aust
Aust
Aust
Aust
Aust
Aust
Aust
Aust
Aust
Aust
Aust
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
GenusPlus Group Pty Ltd was incorporated on 6 July 2017.
Powerlines Plus Pty Ltd was acquired on 17 May 2018. Powerlines Plus Pty Ltd was the 100% shareholder of Diamond Underground Services Pty Ltd, Proton
Power Pty Ltd, Complete Cabling and Construction Pty Ltd, Proton Technical Services Pty Ltd, Proton E&I Pty Ltd and GPL (WA) Pty Ltd.
Burton Power Pty Ltd was acquired 1 January 2019.
KEC Power Pty Ltd was incorporated on 4 February 2019.
Genus Engineering was incorporated on 11 March 2019.
Genus Engineering was disposed on 30 September 2019.
Powerlines Plus (NSW) Pty Ltd was incorporated on 26 November 2019.
ECM Consultancy was incorporated on 12 December 2019.
33 Financial risk management
Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and
liabilities by category are summarised in Note 12. The main types of risks are market risk, credit risk and liquidity
risk.
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of
Directors, and focuses on actively securing the Group’s short to medium-term cash flows by minimising the
exposure to financial markets. Long-term financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write
options. The most significant financial risks to which the Group is exposed are described below.
Market risk analysis
The Group is exposed to market risk through its use of financial instruments and specifically to currency risk,
interest rate risk and certain other price risks, which result from both its operating and investing activities.
50
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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33 Financial risk management (continued)
Foreign currency sensitivity
Most of the Group’s transactions are carried out in Australian Dollars (AUD). Exposures to currency exchange
rates arise from the Group’s sales and purchases denominated in US-Dollars (USD). A contract commencing
during the 30 June 2020 financial year required the settlement of certain transactions in USD. The Group holds a
bank account in USD for this purpose.
The Group’s exposure to foreign currency risk was limited to the period between the initial recognition of the
advance funding receivable in USD and the date funds were deposited. The exchange rate movement in this
period was considered immaterial for adjustment. Any exchange rate difference would have impacted the
balance sheet only, and would have nil effect, being offset by a short-term financial liability.
To mitigate the Group’s exposure to foreign currency risk, non-AUD cash flows are monitored in accordance with
the Group’s risk management policies. Generally, the Group’s risk management procedures distinguish short-
term foreign currency cash flows (due within six months) from longer-term cash flows (due after six months).
Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no
hedging activity is undertaken.
Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are
disclosed below. The amounts shown are those reported to key management translated into AUD at the closing
rate:
Financial assets
Financial liabilities
Total exposure
2020
2020
2019
2019
Short term
exposure
Long term
exposure
Short term
exposure
Long term
exposure
USD
$
USD
$
USD
$
USD
$
12,756,080
-
12,756,080
-
-
-
-
-
-
-
-
-
The following table illustrates the sensitivity of profit and equity in respect of the Group’s financial assets and
financial liabilities and the AUD/USD exchange rate ‘all other things being equal’. It assumes a +/- 10% change
of the AUD/USD exchange rate for the year ended at 30 June 2020 (2019: 10%). The percentage has been
determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity
analysis is based on the Group’s foreign currency financial instruments held at each reporting date. For the year
ended 30 June 2020, the impact has been assessed as nil. Financial assets subject to currency sensitivity were
received on 30 June 2020, and valued at the exchange rate applicable on that date. There was no foreign
currency exposure for the year ended 30 June 2019.
If the Australian Dollar (AUD) had strengthened against the US-Dollar (USD) by 10% (2019: 10%) then this
would have had the following impact:
30 June 2020
30 June 2019
Profit for
the year
USD
$
-
-
Equity
USD
$
-
-
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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33 Financial risk management (continued)
Foreign currency sensitivity (continued)
If the AUD had weakened against the USD by 10% (2019: 10%) then this would have had the following impact:
30 June 2020
30 June 2019
Profit for
the year
USD
$
-
-
Equity
USD
$
-
-
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions.
Nonetheless, the analysis above is considered to be representative of the Group’s exposure to currency risk.
Interest rate sensitivity
The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer-term
borrowings are therefore usually at fixed rates. At 30 June 2020, the Group is exposed to changes in market
interest rates through bank borrowings at variable interest rates. Other borrowings are at fixed interest rates. The
exposure to interest rates for the Group’s money market funds is considered immaterial.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates
of +/- 1% (2019: +/- 1%). These changes are considered to be reasonably possible based on observation of
current market conditions. The calculations are based on a change in the average market interest rate for each
period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All
other variables are held constant.
30 June 2020
30 June 2019
Other price risk sensitivity
Profit for the year
$
+1%
53,460
59,900
$
-1%
(53,460)
(59,900)
$
+1%
(53,640)
(59,900)
Equity
$
-1%
53,640
59,900
The Group is exposed to other price risk in respect of the investment in Volt Power Limited (ASX: VPR).
For the listed investment in Volt Power Limited, an average volatility of 50% has been observed during 2020
(2019: 150%). Volatility at the lower end of this scale is considered a suitable basis for estimating how profit or
loss and equity would have been affected by changes in market risk that were reasonably possible at the
reporting date due to the relatively low volumes traded. If the quoted stock price for VPR increased or decreased
by that amount, profit or loss and equity would have changed by $461,000 (2019: $130,000).
The investment in VPR is considered a long-term, strategic investment. In accordance with the Group’s policies,
no specific hedging activities are undertaken in relation to this investment. The investment is continuously
monitored and voting rights arising from the equity instrument are utilised in the Group’s favour.
52
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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33 Financial risk management (continued)
Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to
credit risk from financial assets including cash and cash equivalents held at banks, trade and other receivables
and contract assets.
The Group’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at
the reporting date, as summarised below:
Classes of financial assets
Carrying amounts:
• cash and cash equivalents
•
trade and other receivables
• contract assets
Credit risk management
2020
$
2019
$
39,798,707
7,991,601
33,575,545
20,720,885
8,244,464
2,938,770
81,618,716
31,651,256
The credit risk is managed on a group basis based on the Group’s credit risk management policies and
procedures.
Cash and cash equivalents
The Group’s cash and cash equivalents are held with major reputable financial institutions.
Trade receivables and contract assets
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer and
contract with customer. The demographics of the Group’s customer base, including the default risk of the
industry and country in which the customers operate, has less of an influence on credit risk. Geographically, the
concentration of credit risk is within Australia and, by industry, the concentration is within the commercial
infrastructure and resources industries.
The Group continuously monitors defaults of customers and other counterparties, identified either by individual or
group and incorporates this information into its credit risk controls. The Group’s policy is to deal only with
creditworthy counterparties. The ongoing credit risk is managed through regular review of ageing analysis,
together with credit limits per customer.
The Group does not require collateral in respect of trade receivables and contract assets.
To mitigate the impact of any single credit default, the Group maintains a policy of Trade Credit Insurance that
provides protection in the event of default.
The Group’s management considers that all the above financial assets that are not impaired or past due for each
of the reporting dates under review are of good credit quality.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
33 Financial risk management (continued)
Credit risk analysis (continued)
Impairment losses
The ageing of the Group’s trade and other receivables and contract assets at the reporting date was:
Allowance
for
Impairment
2020
$
Gross
2020
$
Allowance
for
Impairment
2019
$
Gross
2019
$
Note
-
-
-
-
-
-
Contract assets – not past due
11
8,244,464
-
2,938,770
Other receivables – not past due
10
2,468,800
-
91,107
Trade receivables:
Not past due
Not more than three months
More than three months but not more than six months
More than six months but not more than one year
More than one year
26,184,909
3,621,684
746,050
283,598
347,953
- 16,289,817
-
-
-
3,560,866
373,925
79,284
(77,449)
402,852
(76,966)
10
31,184,194
(77,449) 20,706,744
(76,966)
41,897,458
(77,449) 23,736,621
(76,966)
The provision of $77,449 relates to expected credit losses. Impairment provision related to specific debts that are
more than one year overdue pertains to a small number of customers. The Group continues to strongly pursue all
debts provided for.
The Group has established an allowance for impairment that represents their expected credit losses in respect of
trade receivables and contract assets.
The Group recognises a provision for impairment related to expected credit losses (“ECLs”) for trade receivables,
contract assets and other debt financial assets not held at fair value through profit or loss. ECLs are based on the
difference between the contractual cash flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original effective interest rate.
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date. The Group uses a provision matrix to calculate the ECLs. The provision
matrix is established based on the Group’s historically observed default rates. The Group calibrates the matrix to
adjust historical credit loss experience with forward looking factors specific to debtors and the economic
environment where appropriate. At every reporting date, historical default rates are updated and changes in the
forward-looking estimates are analysed. To date, the Group has not observed or expects to see material decline
in its customers’ abilities to pay as a result of the Coronavirus pandemic due in part to the nature of those
customers, which mainly includes large private sector corporations and government organisations, meaning the
risk of default of receivables is low. Accordingly, no additional expected credit loss allowance pertaining to the
Coronavirus pandemic have been included.
The assessment of the correlation between historical observed default rates, forecast of economic conditions and
ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecasts in
economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also
not be representative of customer’s actual default in the future.
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
33 Financial risk management (continued)
Credit risk analysis (continued)
Impairment losses (continued)
The Group considers a financial asset’s potential for default when contractual payments are more than 120 days
past due, factoring in other qualitative indicators where appropriate. Exception shall apply to financial assets that
relate to entities under common controls or covered by letter of credit or credit insurance. However, in certain
cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Liquidity risk analysis
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity
needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash
inflows and outflows due in day-to-day business. The data used for analysing these cash flows is consistent with
that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a
week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180 to
360 day lookout period are identified monthly. Net cash requirements are compared to available borrowing
facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities
are expected to be sufficient over the lookout period.
The Group’s objective is to maintain cash and marketable securities to meet its liquidity requirements for 30-day
periods at a minimum. This objective was met for the reporting periods. Funding for long-term liquidity needs is
additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial
assets.
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in
particular its cash resources and trade receivables. The Group’s existing cash resources and trade receivables
(see Note 8) significantly exceed the current cash outflow requirements. Cash flows from trade and other
receivables are all contractually due within three months.
As at 30 June 2020, the Group’s non-derivative financial liabilities have contractual maturities (including interest
payments where applicable) as summarised below:
Current
Within 6 months
$
6 - 12 months
$
1 - 5 years
$
Non-current
5+ years
$
30 June 2020
Secured borrowings
Finance leases
Trade and other payables
Contract liabilities
Total
710,119
564,088
25,717,223
460,000
564,089
356,658
14,845,335
11,862,026
1,840,000
1,207,863
-
-
41,836,765
13,242,773
3,047,863
-
-
-
-
-
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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33 Financial risk management (continued)
Liquidity risk analysis (continued)
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods
as follows:
30 June 2019
Secured borrowings
Finance leases
Trade and other payables
Contract liabilities
Total
Current
Within 6 months
$
6 - 12 months
$
1 - 5 years
$
Non-current
5+ years
$
460,000
588,229
13,770,536
627,177
460,000
588,229
272,777
-
3,112,507
780,991
-
-
15,445,942
1,321,006
3,893,498
-
-
-
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of
the liabilities at the reporting date.
34 Fair value measurement
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped
into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant
inputs to the measurement, as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
• Level 3: Unobservable inputs for the asset or liability
• The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair
value on a recurring basis at 30 June 2020 and 30 June 2019:
30 June 2020
Financial assets
Listed securities
Total assets
Financial liabilities
Bank loans
Other financial liabilities
Contingent consideration
Total liabilities
Net fair value
Level 1
$
Level 2
$
Level 3
$
Total
$
922,000
922,000
-
-
-
-
922,000
-
-
(3,010,119)
(2,336,040)
(50,000)
(5,396,159)
(5,396,159)
-
-
-
-
-
-
-
922,000
922,000
(3,010,119)
(2,336,040)
(50,000)
(5,396,159)
(4,474,159)
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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34 Fair value measurement (continued)
30 June 2019
Financial assets
Total assets
Financial liabilities
Bank loan
Other financial liabilities
Contingent consideration
Total liabilities
Net fair value
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
-
-
-
(4,032,507)
(1,957,449)
(700,000)
(6,689,956)
(6,689,956)
-
-
-
-
-
-
-
(4,032,507)
(1,957,449)
(700,000)
(6,689,956)
(6,689,956)
There were no transfers between Level 1 and Level 2 in 2020 or 2019.
Measurement of fair value of financial instruments
The Group’s finance team performs valuations of financial items for financial reporting purposes, including
Level 3 fair values, in consultation with third party valuation specialists for complex valuations. Valuation
techniques are selected based on the characteristics of each instrument, with the overall objective of maximising
the use of market-based information. The finance team reports to the Audit Committee. Valuation processes and
fair value changes are discussed among the Audit Committee and the valuation team at least every year, in line
with the Group’s reporting dates.
The valuation techniques used for instruments categorised in Levels 2 are described below. There were no
instruments categorised as Level 3.
Level 2 fair value measurements
Contingent consideration (Level 2)
The fair value of contingent consideration related to the acquisition of Burton Power (see Note 31) has been
determined through analysis of past profitability against management targets, estimated future cash-flows and
achievement of targets agreed in the purchase agreement.
The following table provides information about the sensitivity of the fair value measurement to changes in the
most significant inputs:
Fair value measurement of non-financial assets
The following table shows the levels within the hierarchy of non-financial assets measured at fair value on a
recurring basis at 30 June 2020:
Level 1
$
Level 2
$
Level 3
$
Total
$
30 June 2020
Property, plant and equipment:
•
Industrial land and buildings acquired under
business combination
-
181,000
-
181,000
Fair value of the Group’s property assets acquired under business combination through the purchase of KEC
Contracting is estimated based on appraisals performed by independent, professionally-qualified property
valuers. The valuation processes and fair value changes are reviewed by the Board of Directors and Audit
Committee at each reporting date.
57
GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
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35 Capital management policies and procedures
The Group’s capital management objectives are:
•
•
to ensure the Group’s ability to continue as a going concern
to provide an adequate return to shareholders by pricing products and services commensurately with the
level of risk.
The Group monitors capital on the basis of the carrying amount of equity plus its bank loans and other financial
liabilities, less cash and cash equivalents as presented on the face of the statement of financial position.
The Group’s goal in capital management is to ensure compliance with the Group’s covenants relating to its
commercial financing arrangements. These covenants measure the Group’s Debt Service Cover, Gross
Leverage and Liquidity Ratios, as well as requiring maintenance of a minimum Tangible Net Worth. The Group
has met all its covenant obligations, since the commercial loan was taken out.
Management assesses the Group’s capital requirements in order to maintain an efficient overall financing
structure while avoiding excessive leverage. The amounts managed as capital by the Group for the reporting
periods under review are summarised as follows:
Total equity
Financial liabilities
Cash and cash equivalents
Capital
Total equity
Borrowings
Overall financing
Capital-to-overall financing ratio
2020
$
2019
$
42,810,655
24,792,355
5,346,159
4,032,507
(39,798,707)
(7,991,601)
8,358,107
20,833,261
42,810,655
24,792,355
5,346,159
4,032,507
48,156,814
28,824,862
0.17
0.72
The ratio reduction during 2020 is primarily a result of new equity funding to enable the Group to expand its
operating capacity (see Note 24).
36 Parent entity information
Information relating to GenusPlus Group Pty Ltd (the Parent Entity):
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings
Total equity
Statement of profit or loss and other comprehensive income
(Loss) for the year
Total comprehensive income
The Parent Entity had no capital commitments at year end (2019:$Nil).
2020
$
2019
$
8,262,236
2,057,771
34,898,999
21,234,568
5,396,952
9,436,619
1,116,592
2,808,702
25,462,381
18,425,865
27,732,909
18,800,695
(2,270,528)
(374,830)
25,462,381
18,425,865
(665,548)
(665,548)
(13,375)
(13,375)
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
37 Events after the reporting date
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group
in future financial years.
38 Group details
The registered office and principal place of business of the Group is:
GenusPlus Group Pty Ltd
Level 1, 63 – 69 Abernethy Road
Belmont WA 6104
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GenusPlus Group Pty Ltd and controlled entities
Annual financial report
For the year ended 30 June 2020
Directors’ Declaration
1.
In the opinion of the Directors of GenusPlus Group Pty Ltd:
a. The consolidated financial statements and notes of GenusPlus Group Pty Ltd are in
accordance with the Corporations Act 2001, including:
i. Giving a true and fair view of its financial position as at 30 June 2020 and of its
performance for the financial 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 GenusPlus Group Pty Ltd will be able to pay its
debts as and when they become due and payable.
2. Note 2 confirms that the consolidated financial statements comply with International Financial Reporting
Standards.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
David Riches
Director
Dated the 7th day of October 2020
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60
Central Park, Level 43
152-158 St Georges Terrace
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6000
T +61 8 9480 2000
F +61 8 9480 2050
E info.wa@au.gt.com
W www.grantthornton.com.au
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Independent Auditor’s Report
To the Members of GenusPlus Group Pty Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of GenusPlus Group Pty Ltd (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
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Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s financial report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors’ responsibility also includes
such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 this 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: http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf. This description forms part of our
auditor’s report.
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GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L A Stella
Partner – Audit & Assurance
Perth, 7 October 2020
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