Annual
Report
2022
CONNECTING
THE FUTURE
Built on a bedrock of three generations of accumulated family expertise, today the GenusPlus
Group is a leading ASX-listed provider of critical infrastructure services to a blue-chip client base.
We provide an integrated service delivered through key complementary businesses to our clients
in the resources, power, utilities, and telecommunications sectors across Australia.
CONTENTS
About GenusPlus Group
Our Capabilities
Highlights
Chairman’s Review
Managing Director’s Report
Sustainability
People
Financial Report
Corporate Directory
2
4
8
10
12
16
17
21
100
ANNUAL REPORT 2022
1
About Genus
CONNECTING
THE FUTURE
GenusPlus Group (ASX:GNP) is an end to end service provider for essential
power and communications infrastructure.
We provide an integrated service delivered through key complementary businesses to our clients
in the resources, power, utilities, and telecommunications sectors across Australia.
Built on a bedrock of three generations of accumulated family expertise, today the GenusPlus
Group is a leading ASX-listed provider of critical infrastructure services to a blue-chip client base.
2
GENUSPLUS GROUP LTD
DESIGN &
ENGINEERING
CONSTRUCTION
FEASIBILITY
STUDY
TESTING &
COMMISSIONING
DECOMMISSIONING
SHUTDOWNS &
MAINTENANCE
CONNECTING THE FUTURE THROUGH
INNOVATIVE POWER SOLUTIONS
Our Services
We cover the full project life-cycle, from design and engineering to commissioning and
decommissioning of power infrastructure assets. Our expertise crosses multiple sectors and
our teams are experienced operators in both brownfield and greenfield sites across Australia.
ANNUAL REPORT 2022
3
POWER
INFRASTRUCTURE
CAPABILITIES
From the generating source to connection, we tick every box.
Our team optimises every stage of an asset’s lifecycle, ensuring certainty with the
lowest risk and whole-of-life cost. We draw on experience to continually develop
advanced solutions which position projects to transition as technology develops.
Our clients include Australia’s largest electricity utilities, infrastructure developers,
telecommunications networks and major mining companies. We have delivered
projects throughout Australia and across metropolitan, regional & remote areas.
1
2
3
GENERATING SOURCE
TERMINAL
SUBSTATIONS
TRANSMISSION
INFRASTRUCTURE
Power Station/
E&I Construction
Solar
Wind
Battery Storage/
Hybrid Solutions
Terminal
Substations
Overhead
Transmission
Infrastructure
Underground
Transmission
Infrastructure
4
GENUSPLUS GROUP LTD
4
5
6
ZONE
SUBSTATIONS
DISTRIBUTION
INFRASTRUCTURE
PRIMARY CUSTOMER
CONNECTION
Zone
Substations
Overhead
Distribution
Infrastructure
Underground
Distribution
Infrastructure
Primary Customer
Connection
ANNUAL REPORT 2022
5
COMMUNICATIONS
INFRASTRUCTURE
CAPABILITIES
End-to-end Communications capability.
Our turnkey communications solutions span the full asset lifecycle
from feasibility, engineering design, site acquisition, logistics,
procurement, construction and integration through to operations
and maintenance.
We focus on improving asset performance and reducing the risk
associated with disruption to operations.
NETWORKS:
FROM CONCEPT TO
CONSTRUCTION
CIVIL &
INFRASTRUCTURE
CONSTRUCTION
•
•
•
•
Complete network designs
• Direct ploughing & optic fibre installation
Line route selection & optimisation
• Directional drilling
Experienced field delivery capability
Field services from planning &
design through to construction &
maintenance
•
•
•
•
Trenching
Cable hauling & cable jointing
Pit & pipe installation
Asset installation
6
GENUSPLUS GROUP LTD
MOBILE & WIRELESS
INFRASTRUCTURE
DIGITAL
SOLUTIONS
•
•
Field services covering site acquisition,
engineering & and design (SAED),
construction & install
Extending mobile construction
capability to grow into mobile
blackspots, 5G and beyond
• Dedicated Workforce Operations Centre
and field management platform (WFM)
• Data analytics toolsets
•
•
Virtual assessment, technician mobility
apps
Proprietary app connecting to customers
ANNUAL REPORT 2022
7
2022 HIGHLIGHTS
8
GENUSPLUS GROUP LTD
$451 million
Revenue of $451 million
Up 42% on PCP of $318 million
$35.1 million
Normalised EBITDA of $35.1 million
Up 8.3% on PCP of $32.4 million
$27.9 million
Cash balance of $27.9 million
Net cash of $6.8 million
$488 million
Orderbook of $304 million in FY2023
and $184 million in FY2024
29%
Normalised ROCE
ROCE normalised for PFA acquisition/
Capital raise in February 2022
ANNUAL REPORT 2022
9
A Strong Year In Challenging Times
Genus produced a strong financial result this year, despite
economic, supply chain and Covid-19 headwinds. Our
diversification and growth strategy is on track, and with
a record order book and pipeline we have a solid base for
future organic growth.
Revenue for the year was in line with forecast, rising 42%
to $451 million while normalised EBITDA increased by 8%
to $35.1 million. This result reflects solid performances
across all our business segments and was underpinned
by a record order intake.
Pleasingly we grew our market presence on the East
Coast with operations in the region now representing
a collective portfolio of over $100m, with a revenue
contribution of 22% compared to 7% in 2021. This marks
the achievement of a number of key strategic goals that
we had established for 2022, with this East Coast growth
expected to continue.
The acquisitions of Connect Infrastructure (NSW)
and select business assets of Tandem Corp have
been successfully integrated into existing operations
throughout the year, bolstering our power networks and
communications offerings respectively. In February we
announced the business acquisition of Pole Foundations
Australia (PFA). PFA is a strategic transaction for
Genus, expanding our capability into a highly specialised
service for Tier 1 customers and allowing us to provide
a full lifecycle service offering across pole inspection,
reinforcement, and replacement.
Genus also acquired a 50% stake in Blue Tongue
Energy Pty Ltd (BT Energy) during the year. BT Energy
specialises in the design and construction of hybrid
power technology and micro-grid energy markets and
provides growth opportunities in the stand-alone power
market.
CHAIRMAN'S
REVIEW
CONNECTING THE
FUTURE THROUGH
INNOVATIVE POWER
AND COMMUNICATIONS
INFRASTRUCTURE
10
GENUSPLUS GROUP LTD
Think Safe. Work Safe. Home Safe.
Continuing To Deliver For Shareholders
We continue with our steadfast commitment to safety and
our goal of zero harm to our people and the environment .
As we strive to achieve this critical objective, we are actively
promoting and encouraging all of our people to take individual
responsibility for their safety, as well as the safety of those
around them, as they carry out their daily activities.
Our focus on safety and the conduct of safety-awareness
initiatives throughout the year have continued to strengthen
our safety culture and deliver improvements in our
performance. This is demonstrated by our Total Recordable
Injury Frequency Rate (“TRIFR”), which reduced in the year
from 7.7 to 3.6 at 30 June – surpassing our internal target.
The Group’s Lost Time Injury Frequency Rate (“LTIFR”) remains
at zero, which is testament to the collective effort of our
outstanding operational teams.
A Robust Platform For Growth
We ended the year in a strong financial position with a cash
balance of $27.9 million and net cash of $6.8 million, with
the Group’s net assets increasing by 61.9% compared to the
previous year. The Group has in excess of $47 million available
in our performance bond facilities which provides headroom
for continued growth.
The continued strength of our balance sheet positions us
for organic growth and strategic acquisition opportunities
focused on increasing our existing scale, improving our
operating margins, further growing our east coast presence
and potentially expanding into new markets or geographies.
On the back of this year’s record financial performance, the
Board has again declared a final dividend of 1.8 cents per
share fully franked.
Looking Ahead
With a tender pipeline of $848 million; an order book standing
at $488 million; budget and opportunity leads in excess of
$2 billion; and a workforce approaching 1,000, our growing
and diversified company is well placed to capitalise on
opportunities in the years to come.
We are confident that our consolidation and growth strategy
positions us positively to play a major role in the expanding
pipeline of infrastructure opportunities across Australia.
My thanks once again to all of our talented people, whose
commitment and dedication forms the foundation of our
business and to our executive leadership who ensure we
deliver on our vision.
Finally, I would like to thank you, our shareholders, for
continuing to be an integral part of the Genus story - and I
trust you will continue to share in our future success.
Simon High
Chairman
Our strategic diversification has delivered significant organic and acquisitional growth,
as we maintain a focus on east coast expansion and recurring revenue streams.
ANNUAL REPORT 2022
11
MANAGING DIRECTOR'S
REPORT
POWERING UP
AUSTRALIA THROUGH
STRONG, EFFECTIVE
CLIENT RELATIONSHIPS
Delivering On Our Strategy
For Genus, FY22 has been a solid year. Our ability to
meet the challenges of prevailing economic & supply
chain issues and deliver another strong financial
performance demonstrates that we are on track
strategically; and well positioned to capitalise on
emerging opportunities across Australia.
Our evolution to a more diversified services model
through the introduction of significant communications
infrastructure capacity – supplementing our existing
power and industrial services capabilities – has seen
Genus deliver record revenue of $451 million and
normalised EBITDA of $35.1 million.
The Group’s focus on both acquisitive and organic
growth along with diversification of recurring revenue
streams underpin the benefits we can deliver to clients
and our shareholders, predominantly through increased
capacity, financial strength and security.
This expansion in capability and access to a greater
forward pipeline has driven a strong order book, which is
again supplemented by the traditionally robust recurring
revenue base that we generate across the business.
Record Revenue, Through Strong Operational
Performance
This past year saw us progress to the final stages
of the Pilbara Transmission & Iron Bridge Projects
for Fortescue; while other major project activity
included the Kangaroo Hill D&C Project for Rio Tinto,
achievement of key milestones at the landmark 250
MW/h Kwinana Battery Energy Storage System (BESS)
Project for Synergy and successful delivery of multiple
Underground Power Program (UPP) projects for Western
Power. Meanwhile, anticipated recurring works for major
utilities across Australia will continue to provide ongoing
revenue in the years ahead.
Against this backdrop, the Group was able to deliver
a year of significant growth despite the prevailing
environment. Record Revenue of $451 million saw an
increase of 42% on the prior comparative period, while
normalised EBITDA was up 8.3% to $35.1 million. The
Group’s net assets also increased by 61.9% compared
to the previous year (FY21: 32%), due to the increase
in retained earnings and the capital raising conducted
to fund the strategic acquisition of Pole Foundations
Australia (PFA).
Genus’ growth strategy is on track and we are well placed to capitalise on emerging
opportunities across the nation. Our growth aspirations are supported by record
revenue, a strong tender pipeline and a robust balance sheet.
12
GENUSPLUS GROUP LTD
EBIT and NPAT were impacted by amortisation of intangible assets acquired from the acquisitions of Tandem and PFA totalling
circa $1.6 million before tax. A larger than usual year of capital expenditure used to bolster the fleet of drills employed in drilling
the foundations for power poles contributed additional depreciation expense of circa $1.1 million before tax.
Revenue
EBITDA1
EBITDA Normalised2
EBIT1
EBIT Normalised2
NPAT
NPAT Normalised2
FY2022
$
FY2021
$
450,936,669
318,207,504
32,994,800
27,274,044
Change
%
41.7%
35,109,457
32,405,782
8.3%
21,092,868
19,858,515
23,207,525
24,992,253
(7.1%)
13,556,474
13,348,769
15,036,735
17,300,033
(13.1%)
1
2
These are non-IFRS measures that are unaudited but derived from auditor reviewed FY22 Financial Statements. These measures are presented
to provide further insight into GenusPlus Group’s performance.
FY 2022 Normalised EBITDA / EBIT / NPAT excluding Acquisition costs $1.1 million, ECM Claim Costs $0.3 million and Restructuring costs of $0.8
million. FY 2021 Normalised EBITDA / EBIT / NPAT excluding Listing costs of $2.7 million, ECM Claim costs of $2.2 million, Director & employee
share issue costs of $0.7 million and Mark to market revaluation increase of investment of ($0.5) million.
Our People
As always, our success is dependent on the effort, capability
and commitment of our people. Their commitment and
support enables us to continue to deliver smart, innovative
solutions across our diverse sectors, which underpins our
strong financial results and growth trajectory.
Our successful apprenticeship program has expanded as we
continue to invest in the growth, development, education and
training for young graduates, apprentices and trainees. We
currently support the career ambitions of 87 apprentices and
trainees, which is building a strong foundation of future skilled
tradespeople.
Our balance sheet remains strong with very low levels of debt
and strong investor and finance support. We are constantly
reviewing opportunities for expansion and are well placed for
further accretive acquisitional growth.
Significant investment has been allocated to growing our east
coast presence, positioning Genus to benefit from the step-
change in power network expansions over the next 10-20
years.
Whilst we continue to derive the majority of earnings from the
core business in Western Australia, substantial progress has
been made expanding the business into the much larger east
coast markets.
Connecting The Future. Together.
With an order book of $488 million, comprising $191 million
of contracted revenues secured for FY2023 & FY2024 and
recurring revenues currently at $149 million p.a - combined
with a tender pipeline of $848 million – Genus has a strong
platform for continued growth.
David Riches
Managing Director
ANNUAL REPORT 2022
13
14
GENUSPLUS GROUP LTD
SUSTAINABILITY
INNOVATIVE PEOPLE,
DELIVERING RESULTS
THROUGH EXPERTISE
AND HARD WORK
ANNUAL REPORT 2022
15
SUSTAINABILITY
We will continue to implement health and safety initiatives which provide the
foundation for a sustainable safety culture.
SHEQ
Community
Genus continues to recognise the importance of building
relationships and supporting the communities in which we
operate, and we are committed to the development, health,
safety and wellbeing of these communities and our people.
During the year we continued to support a variety of local
charities, education and sporting programs.
Earlier this year, we were delighted to be able to help
Starlight's Western Australia operations through an $80,000
donation which enabled their fantastic team to lease state-of-
the-art office space in the heart of Subiaco, Western Australia.
It will also assist them to brighten the hospital experience for
2,000 sick kids in their Starlight Express Room.
This new home will give the team the base they need to keep
on helping kids of all ages regardless of disability, injury or
illness.
CONNECTING
THE FUTURE.
TOGETHER.
With nearly 1,000 people working across Australia, it is
essential for Genus to have a robust approach to health, safety
and environment.
Our goal is to ensure that those influenced by our work
(including employees, subcontractors, and the general public)
go home safely, every day. This approach to health and safety
is embodied in the Group’s “Think Safe. Work Safe. Home Safe.”
message.
We have established and implemented an integrated safety,
health, environment, and quality (SHEQ) management system
that provides the framework for how these areas are managed.
In the years ahead we will continue to maintain our triple-ISO
Management System certification (45001, 14001 & 9001)
and to streamline our Group-wide SHEQ management system.
We will also continue to implement health and safety initiatives
that will provide the foundation for sustainable safety
performance across Genus.
We have established a set of safety non-negotiables, which
identify the Group’s most critical risks and control measures.
These safety non-negotiables were established to increase
awareness and understanding of critical risks and control
measures; provide a clear set of standards that are easily
understood by all; and ultimately create an awareness to
help prevent serious workplace injury and fatality. These
safety non-negotiables are communicated at inductions,
and regularly referred to during toolboxes, health, and safety
communications and during incident investigations.
Milestones achieved during FY22 include:
LTIFR at 30 June 2022
0
3.6 TRIFR at 30 June 2022
(exceeding our internal target)
16
GENUSPLUS GROUP LTD
Employing our own people and trades improves safety, quality and productivity and
enables us to deliver smart, innovative solutions across our diverse sectors.
People
The foundation of our success is the effort, capability and
commitment of our people.
Our unique culture underpinned by core values of safety,
integrity, collaboration and mateship is a crucial piece of the
Group’s competitive advantage.
Genus’ business is built on the efforts and capability of
its employees and we firmly believe that support and
development of our workforce remain a priority in delivering
our critical services.
Investing in the future generation of employees is integral
to our continued success. Genus believes in realising
and developing talent with a structured and supported
Apprenticeship Program. We currently support the career
ambitions of 87 apprentices and trainees across the
business who will form the foundation of our future skilled
tradespeople.
The attraction of high calibre employees is an ongoing
challenge and there continues to be a very competitive
employment market for skilled professionals. Combined
with a continued focus on people-related productivity
improvements, Genus will continue to invest in the
development and retention of key capability and talent to
enable the Company to successfully achieve its vision and to
maintain this vital competitive advantage.
We remain committed to investing in our employees through
generating opportunities to grow on personal and professional
levels, through varied learning and development programmes
for apprentices, trades, operational, professional and
managerial employees. This creates a significant pipeline of
talent throughout the Company.
Our diversity policies promote respect and fair treatment for all
employees, and we seek to create an all-inclusive workplace
where our people are encouraged regardless of age, gender,
ethnicity, disability, sexual orientation or religion.
Our commitment to building a diverse workforce is evident in
all aspects of employee engagement including recruitment,
professional development, promotion and remuneration.
Genus & Maali Group – Sparking Positive Change.
Genus is a key shareholder in Maali Group - a multi-disciplined,
Aboriginal-owned & managed construction and maintenance
contractor servicing clients across the resources, energy,
infrastructure and defence sectors. Through our combined
strength and breadth of capability, our partnership aims
to facilitate more apprenticeships, traineeships and career
opportunities for Aboriginal and Torres Strait Islander people.
Together, our vision is to set a new benchmark in Aboriginal
career engagement and development. Learn more at
maaligroup.com.
ANNUAL REPORT 2022
17
CONNECTING THE FUTURE THROUGH
END-TO-END COMMUNICATIONS
INFRASTRUCTURE
18
GENUSPLUS GROUP LTD
ANNUAL REPORT 2022
19
FINANCIAL REPORT
2022
CONNECTING THE FUTURE
THROUGH INNOVATIVE
POWER SOLUTIONS
20
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 CONTENTS
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
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
Independent Auditor’s Report
22
33
34
35
36
37
38
39
94
POWERING UP AUSTRALIA -
FROM INSPIRATION TO OPERATION
ANNUAL REPORT 2022
21
DIRECTORS’ REPORT
The directors present their report together with the financial statements on the consolidated entity, consisting of GenusPlus
Group Ltd and its controlled entities (the Group) for the year ended 30 June 2022.
Directors’ details
The names and details of the Company’s directors in office during the financial year and until the date of this report are set out
below. Directors of GenusPlus Group Ltd were in office for the entire period unless otherwise stated.
Mr David Riches
David Riches is the Managing Director and CEO of GenusPlus Group Ltd. David is the founder of Powerlines Plus Pty Ltd and is a
third-generation recognised industry expert. David has led the business growth with a successful year on year track record.
During the past three years he has also served as a director of the following listed companies: Nil.
Mr Simon High
Simon High is the Non-Executive Chairman of the Group. Simon is a qualified Civil Engineer, Fellow of the Institute of Engineers
Australia and Fellow of the Australian Institute of Company Directors.
Simon has over 45 years’ experience globally in the Oil & Gas, Mining and Industrial Infrastructure industries. Simon held Senior
Executive roles with Kvaerner Oil & Gas, United Construction, Clough Ltd, Southern Cross Electrical Engineers and Ausgroup Ltd.
During the past three years he has also served as a director of the following listed companies: Nil.
Mr José Martins
José Martins is a Non-Executive Director and Member of the Audit and Risk Committee and Remuneration and Nominations
Committees and brings over 25 years’ experience in the financial management of public and private companies. Jose is the
former CFO of ASX listed Ausdrill Ltd and Macmahon Holdings Ltd. José is the current CFO of Alliance Mining Commodities.
During the past three years he has also served as a director of the following listed companies: Nil.
Mr Paul Gavazzi
Paul Gavazzi is a Non-Executive Director and member of the Audit and Risk and Remuneration and Nominations Committees. Paul
has over 35 years’ experience in commercial law, specialising in construction, projects and infrastructure. Paul is a senior partner
of law firm Sparke Helmore Lawyers. Paul is an associate of the Chartered Institute of Arbitrators (UK), member of the Society of
Construction Lawyers and member of the Australian Institute of Company Directors.
During the past three years he has also served as a director of the following listed companies: Nil.
Company Secretary
Damian Wright is the Chief Financial Officer and Company Secretary of GenusPlus Group 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 a fellow of the Governance Institute of Australia.
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of GenusPlus Group Ltd were:
Director
David Riches
Simon High
José Martins
Paul Gavazzi
22
GENUSPLUS GROUP LTD
Number of
ordinary shares
Interest in
options
92,583,947
304,167
100,000
204,167
-
-
-
-
DIRECTORS’ REPORT
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.
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 $318,207,504 to $450,936,669. The profit of the Group for the financial year after providing for income tax amounted
to $13,556,475 (2021: $13,348,769).
FY2022 was a strong year with Genus achieving guidance despite the challenges of Covid-19, extremely wet weather seen
across NSW and Queensland particularly in the second half, and supply chain issues seen across the country. The turnaround in
communications division has been slowed by the delays in the HyperOne project. The Group improved its capability to deliver to
meet customer requirements on larger scale projects across the nation. The 1.56% increase in profit was delivered during a year in
which the company completed a number of acquisitions and continued its significant investment in the east coast in setting the
company up to capitalize on the significant opportunities as they present over the medium to long term.
The Group’s net assets increased by 61.9% compared to the previous year (FY21: 32%), which is due to the increase in retained
earnings and the capital raising undertaken during the reporting period to fund the business acquisition of Pole Foundations
Australia.
The acquisitions 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 35.
A comparison of the Group’s performance from continuing operations is set out below:
Revenue
EBITDA1
EBITDA Normalised2
EBIT1
EBIT Normalised2
NPAT
NPAT Normalised2
FY2022
$
FY2021
$
450,936,669
318,207,504
32,994,800
27,274,044
Change
%
41.7%
35,109,457
32,405,782
8.3%
21,092,868
19,858,515
23,207,525
24,992,253
(7.1%)
13,556,474
13,348,769
15,036,735
17,300,033
(13.1%)
1
2
These are non-IFRS measures that are unaudited but derived from auditor reviewed FY22 Financial Statements. These measures are presented
to provide further insight into GenusPlus Group’s performance.
FY 2022 Normalised EBITDA / EBIT / NPAT excluding Acquisition costs $1.1 million, ECM Claim Costs $0.3 million and Restructuring costs of $0.8
million. FY 2021 Normalised EBITDA / EBIT / NPAT excluding Listing costs of $2.7 million, ECM Claim costs of $2.2 million, Director & employee
share issue costs of $0.7 million and Mark to market revaluation increase of investment of ($0.5) million.
Pipeline
The Group continues to achieve significant growth in its business underpinned by existing contracted work, recurring revenue
from regular clients, and anticipated revenue from its existing tender pipeline of works.
In addition to revenue from recurring works including long term customer/panel revenue and revenue from long term supply &
maintenance contracts of $149 million, GenusPlus has a project orderbook of $155 million revenue for FY2023 and a further $36
million revenue for FY2024 based on expected revenue from contracts awarded.
GenusPlus has approximately $191 million of contracted revenues secured for FY2023 & FY2024 which, when combined with its
history of recurring revenues currently at $149 million per annum and its current $848 million tender pipeline, provides a strong
platform for continued growth.
In addition to the tendered pipeline there are further significant budgets and opportunities in progress in excess of $2 billion. Work
on initial budgets for clients, which are not yet at formal tender stage, is common in our industry.
Genus is seeing the pipeline for the transition of the east coast transmission network grow substantially. In addition to the
major investment in the transmission network around Australia Genus is well positioned to construct connections to the new
transmission network from new energy power sources.
ANNUAL REPORT 2022
23
DIRECTORS’ REPORT
Review of operations and financial results (continued)
Outlook
FY2023 is anticipated to be a year of consolidation and integrating recent acquisitions following a number of significant years
of growth. Genus expect to return to strong growth in the medium term with a large pipeline of renewables and transmission
projects to drive medium to long term growth in the business.
The Group expects to see continued growth from its east coast operations and increase in services revenue with the acquisition
of Tandem and PFA during FY2022. The increase focus of the network issues around Australia should see significant opportunities
present during the coming 10-20 years as the Australian power network goes through a substantial transition from traditional
energy source of coal to generation from new and renewable energy.
We have seen some impact from supply chain issues and we expect them to continue into FY2023.
Genus continues the rebranding and restructuring some of its divisions to make better use of the “Genus” name, branding and
logo. This will unify the offering to clients and enable better cross selling of the Group’s services.
Growth Strategy
Significant investment has been put into growing the east coast presence of Genus to be positioned for the substantial
investment required to the power network over the next 10-20 years. Whilst the Group continues to derive the majority of earnings
from the core business in Western Australia, substantial progress has been made expanding the business into the much larger
east coast markets.
During the year the company acquired selected assets of Tandem Corp expanding the Genus services in the east coast and the
communications industry and our relationship with Telstra. The foundations of the business are in place to enable the Genus
to take advantage of the large ongoing spend in the communications industry. In February Genus announced the business
acquisition of Pole Foundations Australia (PFA). PFA is a highly strategic transaction for Genus. This transaction expands Genus’
capability into a highly specialised service for Tier 1 customers, allowing Genus to provide a full lifecycle service offering across
pole inspection, reinforcement, and replacement.
Genus acquired a 50% stake in Blue Tongue Energy Pty Ltd (BT Energy) during the year. BT Energy specialises in the design and
construction of hybrid power technology and micro-grid energy markets and provides growth opportunities in the stand-alone
power market.
The Group is focused on replicating its Western Australian business model into the larger east coast market which is dependent
on the Group’s ability to continue to grow the new operations or execute and integrate further strategic bolt-on acquisitions.
Significant changes in the state of affairs
During the year, the following changes occurred within the Group:
•
•
•
On 6 August 2021, GenusPlus Group Ltd through its wholly owned subsidiary Diamond Underground Services Pty Ltd
finalised the purchase of selected key contracts, intellectual property, IT systems, plant and equipment and employee
contracts of Tandem Corp Pty Ltd (Administrators Appointed). This acquisition greatly extends the capability of the Group’s
communications division, and significantly expands the Group’s ongoing relationship with Telstra. For further details refer to
the ASX announcement.
On 2 February 2022, GenusPlus Group Ltd acquired 50% of BT Energy. BT Energy is involved in the design and construction
of hybrid power technology and micro-grid energy markets, furthering Genus’ offering in this strategic space. The acquisition
is subject to further contingent earn out payment due in FY23. The contingent consideration amounts are disclosed under
Note 25. Genus has the option to acquire the remaining 50% of the business in FY25 and FY26 with valuation based on BT
Energy’s earnings at the time.
On 29 April 2022, GenusPlus Group Ltd acquired 100% of Pole Foundations Australia (PFA) for an upfront consideration of
$22.523m (comprised of $16.5m cash and $6.023m in Genus ordinary shares escrowed for 24 months). Under the terms of
the agreement, Genus acquired the net assets of PFA comprising property, plant and equipment, inventory and employee
liabilities. The acquisition is subject to further contingent earn-out payments in cash subject to PFA’s performance in FY22 to
FY24. The performance metric for FY22 was satisfied, with payment due as disclosed under note 25.
Capital structure
Issued shares
The acquisition of Pole Foundations Australia (PFA) was funded by the issue of 16,528,926 Genus ordinary shares with a quoted
price of $1.21 per share. Transaction costs of $1,101,377 and share issuance costs of $58,929 were incurred. 4,633,530 shares were
issued to the previous owners of Pole Foundations at an effective deeming price of $1.30 per share.
24
GENUSPLUS GROUP LTD
DIRECTORS’ REPORT
Dividends
The Board has resolved to declare a dividend in respect of the year ended 30 June 2022 of 1.8 cents per share fully franked for a
total of $3,181,544. (30 June 2021: $2,800,619). The ex-Dividend Date for this dividend will be 27 October 2022, the Record Date is
28 October 2022 and the Payment Date will be 30 November 2022.
Events arising since the end of the reporting period
On 26 August 2022, the Directors declared a final fully franked dividend of 1.8 cents per share with a record date of 28 October
2022 and a payment date of 30 November 2022. The total dividend payable is an aggregate of $3,181,544.
Other than the matter mentioned above, 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 Meetings
Audit and Risk Committee
Remuneration and
Nominations Committee
A
20
20
20
20
B
20
20
19
17
A
-
3
3
3
B
-
3
3
3
A
1
-
1
1
B
1
-
1
1
Board Member
David Riches
Simon High
Paul Gavazzi
José Martins
Where:
Column A: is the number of meetings the Director was entitled to attend
Column B: is the number of meetings the Director attended
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.
ANNUAL REPORT 2022
25
DIRECTORS’ REPORT
Remuneration Report (audited)
The Directors of GenusPlus Group Ltd (the Group) present the Remuneration Report for Non-Executive Directors, Executive
Directors and other Key Management Personnel, prepared in accordance with the Corporations Act 2001 and the Corporations
Regulations 2001.
The Remuneration Report is set out under the following main headings:
a
b
c
d
e
f
a
Principles used to determine the nature and amount of remuneration
Details of remuneration
Share-based remuneration; and
Bonuses included in remuneration
Shares held by key management
Other transactions with key management personnel and their related parties
Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
•
•
•
to align rewards to business outcomes that deliver value to shareholders
to drive a high performance culture by setting challenging objectives and rewarding high performing individuals; and
to ensure remuneration is competitive in the relevant employment market place to support the attraction, motivation
and retention of executive talent
GenusPlus Group Ltd has structured a remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board has established a Nomination and Remuneration Committee which operates in accordance with its charter as
approved by the Board and is responsible for determining and reviewing compensation arrangements for the Directors and
the Executive Team.
The Committee has engaged independent remuneration consultants to provide any necessary information to assist in the
discharge of its responsibilities (refer to the disclosures below).
The remuneration structure that has been adopted by the Group consists of the following components:
•
•
fixed remuneration being annual salary; and
short term incentives, being employee share schemes and bonuses.
The Nomination and Remuneration Committee assess the appropriateness of the nature and amount of remuneration on
a periodic basis by reference to recent employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality Board and Executive Team.
The payment of bonuses, share options and other incentive payments are reviewed by the Nomination and Remuneration
Committee annually as part of the review of executive remuneration and a recommendation is put to the Board for
approval. All bonuses, options and incentives must be linked to pre-determined performance criteria.
Short Term Incentive (STI)
GenusPlus Group Ltd performance measures involve the use of annual performance objectives, metrics, performance
appraisals and continuing emphasis on living the Company values.
The performance measures are set annually after consultation with the Directors and executives and are specifically
tailored to the areas where each executive has a level of control. The measures target areas the Board believes hold the
greatest potential for expansion and profit and cover financial and non-financial measures.
26
GENUSPLUS GROUP LTD
DIRECTORS’ REPORT
Remuneration Report (audited) (continued)
a
Principles used to determine the nature and amount of remuneration (continued)
The Key Performance Indicators (KPIs) for the Executive Team are summarised as follows:
Performance areas
•
•
financial: operating profit and earnings per share; and
non-financial: strategic goals set by each individual business unit based on job descriptions
The STI Program incorporates only cash components for the Executive Team and other employees.
The Board may, at its discretion, award bonuses for exceptional performance in relation to each person’s pre-agreed KPIs.
Voting and comments made at the Company’s last Annual General Meeting
GenusPlus Group Ltd held its Annual General meeting held on 26 November 2021. There were no adverse comments from
the vote on the Remuneration Report for the financial year ending 30 June 2021.
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following indices
in respect of the current financial year and the previous two financial years:
Item
EPS (cents)
Dividends (cents per share)
Net profit ($’000)
Share price ($)
2022
8.4
1.8
13,556
1.27
2021
8.6
1.8
13,349
0.94
2020
7.5
0.88
10,689
n/a
ANNUAL REPORT 2022
27
DIRECTORS’ REPORT
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.
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ANNUAL REPORT 2022
29
DIRECTORS’ REPORT
Remuneration Report (audited) (continued)
b
Details of remuneration (continued)
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Employee
Executive Directors
David Riches
Other Key Management Personnel
Damian Wright
Michael Green
George Lloyd
Hasan Murad
Fixed
remuneration
At risk:
Short Term
Incentives (STI)
At risk:
options
43%
61%
61%
61%
61%
57%
39%
39%
39%
39%
0%
0%
0%
0%
0%
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are
formalised in a Service Agreement. The major provisions of the agreements relating to remuneration are set out below:
Employee
David Riches
Damian Wright
Michael Green
George Lloyd
Hasan Murad
Base salary
(incl super)
358,874
270,560
258,871
303,566
346,030
Term of agreement
Notice period
Unspecified
Six months
Unspecified
Three months
Unspecified
Three months
Unspecified
Six months
Unspecified
Three months
c
Share-based remuneration
No member of the Key Management Personnel has an entitlement to be paid in shares.
d
Bonuses included in remuneration
Details of the short-term incentive cash bonuses awarded as remuneration to each key management personnel, the
percentage of the available bonus that was paid in the financial year, and the percentage that was forfeited because the
person did not meet the service and performance criteria is set out below. No part of the bonus is payable in future years.
Employee
Executive Directors
David Riches1
Other Key Management Personnel
Damian Wright
Michael Green
George Lloyd
Hasan Murad
Included in
remuneration
($)
Percentage
vested during
the year
Percentage
forfeited during
the year
-
60,000
60,000
60,000
60,000
-
37%
39%
33%
29%
-
63%
61%
67%
71%
1
David Riches has elected not to receive a performance-based incentive in relation to the year ended 30 June 2022.
30
GENUSPLUS GROUP LTD
DIRECTORS’ REPORT
Remuneration Report (audited) (continued)
e
Shares held by key management personnel
The number of ordinary shares in the Company during the 2022 reporting period held by each of the Group’s key
management personnel, including their related parties, is set out below:
Employee
Year ended 30 June 2022
David Riches
S. High
J. Martins
P. Gavazzi
Damian Wright
Michael Green
George Lloyd
Hasan Murad
Simon Higgins
Balance at
start of year
Granted as
remuneration
Other changes
Held at the end of
reporting period
91,722,947
304,167
100,000
204,167
72,917
130,208
1,626,042
72,917
520,833
-
-
-
-
-
-
-
-
-
861,000
92,583,947
-
-
-
-
-
-
-
(520,833)
304,167
100,000
204,167
72,917
130,208
1,626,042
72,917
-
None of the shares included in the table above are held nominally by key management personnel.
Loans to key management personnel
The Group allows its employees to take up limited short-term loans to fund merchandise and other purchases through the
Group’s business contacts. This facility is also available to the Group’s key management personnel. No member of the key
management personnel received a loan during the reporting period.
The Group does not have an allowance account for receivables relating to outstanding loans and has not recognised any
expense for impaired receivables during reporting period.
There were no individuals with loans above $100,000 during the financial year.
Other transactions with key management personnel and their related parties
(i) Details and terms and conditions of other transactions with KMP and their related parties:
Purchases
Legal services
During 2022, the Group used the legal services of one Company Director (Mr Paul Gavazzi) and the law firm over which he
exercises significant influence. The amounts billed related to this legal service amounted to $9,339 (2021: $1,144,517), based
on normal market rates. Nil was unpaid as of the reporting date.
Property leases
During 2022, the Group rented various properties from David Riches and his related parties as part of normal business
operations. The amount for which each property was leased was negotiated on commercial terms in accordance with lease
agreements verified by the board. During 2022 $1,080,144 was recognised in the operating result for the year in relation to
these properties. $30,948 was un-paid as of the reporting date.
Engineering services
During 2022, the Group utilised the engineering services of Partum Engineering Pty Ltd, of which David Riches is also a
Director, for design and other work related to FMG sub-station and powerlines. $7,396,206 was recognised as an expense in
relation to these services. $775,051 was un-paid as of the reporting date.
Transportation and logistical services
During 2022, Pastoral Plus, of which David Riches is a Director, provided transportation and logistical services to the Group
in circumstances where independent commercial transport services were unavailable to meet the business’ requirements.
$646,489 was recognised as an expense for these services, of which $87,002 was unpaid as of the reporting date.
Injury management
During 2022, Edge People Management Pty Ltd, in which David Riches holds an interest, provided injury management
services to the Group. $41,889 was recognised as an expense in relation to these services. $8,760 was un-paid as of the
reporting date.
End of audited Remuneration Report.
ANNUAL REPORT 2022
31
DIRECTORS’ REPORT
Environmental regulations
The Group’s operations are subject to the environmental regulations that apply to our clients.
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 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.
Non-audit services
During the year, Grant Thornton, the Company’s auditors, performed certain other services in addition to their statutory audit
duties.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written advice
provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those non-audit services during the
year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
•
•
all non-audit services were subject to the corporate governance procedures adopted by the Company and have been
reviewed by the Audit and Risk Committee to ensure they do not impact upon the impartiality and objectivity of the auditor
the non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks
and rewards
Details of the amounts paid to the auditors of the Company, Grant Thornton, and its related practices for audit and non-audit
services provided during the year are set out in Note 32 to the financial statements.
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
33 and forms part of this Directors’ Report.
Signed in accordance with a resolution of the Board of Directors.
David Riches
Director, 31 August 2022
32
GENUSPLUS GROUP LTD
AUDITOR’S INDEPENDENCE DECLARATION
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Grant Thornton Audit Pty Ltd
Perth WA 6000
Level 43 Central Park
PO Box 7757
152-158 St Georges Terrace
Cloisters Square
Perth WA 6000
Perth WA 6850
PO Box 7757
T +61 8 9480 2000
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
Auditor’s Independence Declaration
Auditor’s Independence Declaration
To the Directors of GenusPlus Group Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
To the Directors of GenusPlus Group Ltd
of GenusPlus Group Ltd for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief,
there have been:
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of GenusPlus Group Ltd for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief,
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
there have been:
the audit; and
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
b no contraventions of any applicable code of professional conduct in relation to the audit.
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L A Stella
Partner – Audit & Assurance
L A Stella
Perth, 31 August 2022
Partner – Audit & Assurance
Perth, 31 August 2022
www.grantthornton.com.au
ACN-130 913 594
www.grantthornton.com.au
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
ACN-130 913 594
‘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 Limited is a member firm of Grant Thornton International Ltd (GTIL).
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
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
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
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
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
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
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
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
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
Legislation.
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 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
#8033301v1
#8033301v1
ANNUAL REPORT 2022
33
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement is available on GenusPlus Group’s website at www.genus.com.au/who-we-are/corporate-
governance.
Corporate Governance Principles And Recommendations
The ASX Corporate Governance Council sets out best practice corporate governance recommendations, including practices
and suggested disclosures. Listing Rule 4.10.3 requires disclosure for companies on the extent to which they comply with these
recommendations, and if not, to give reasons for not following them.
Unless otherwise indicated, the best practice recommendations of the ASX Corporate Governance Council, including corporate
governance practices and suggested disclosures, have been adopted by Genus for the year ended 30 June 2022.
Genus expects to lodge its annual Corporate Governance Statement and Appendix 4G with its full Annual Report to shareholders
at the end of September 2022.
Corporate Governance
Genus is committed to a governance culture that aims to protect shareholder rights, effectively manage risk, enhance disclosure
and transparency (both within the company and to external stakeholders) and facilitate the effective functioning of the board.
We believe that by operating with a strong focus on corporate governance, we will enhance Genus’ sustainable long-term
performance and value creation for all stakeholders. The Board of Directors is responsible for Genus’ corporate governance
framework, which ensures that the Company’s obligations and responsibilities to its various stakeholders are fulfilled. The
Company’s 2022 Corporate Governance Statement, to be released to shareholders towards the end of September 2022, will report
on Genus’ governance practices. Genus has in place charters, policies, and procedures (published on our website) which are
reviewed and revised as appropriate to reflect changes in law and developments in corporate governance.
The Board’s Risk & Audit Committee is responsible for monitoring the effectiveness of the Group’s risk management framework.
34
GENUSPLUS GROUP LTD
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Revenue
Other income
Employee expenses
Raw materials and consumables expenses
Contractors and labour hire expenses
Motor vehicle expenses
Depreciation expense
Other expenses
Initial Public Offering expenses
Operating profit
Share of results of joint ventures
Share of results of associates
Finance income
Other gains and losses
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income for the year
Items that may be reclassified subsequently to profit or loss:
Exchange differences on monetary items denominated in foreign currency
(net of tax)
Total comprehensive income for the year
Profit for the year attributable to
Owners of the company
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
This statement should be read in conjunction with the notes to the financial statements.
Notes
6
7
2022
$
2021
$
450,936,669
318,207,504
1,962,423
3,006,546
26
(137,197,766)
(87,150,489)
(139,298,892)
(96,660,619)
(114,602,305)
(87,414,689)
(16,037,478)
(10,743,266)
(11,901,931)
(7,413,528)
(12,771,590)
(9,697,868)
-
(2,736,076)
21,089,130
19,397,515
63,346
401,393
-
-
8,550
3,216
(461,000)
461,000
(1,077,105)
(707,343)
20,024,314
19,154,388
20
10
8
9
11
11
12
(6,467,839)
(5,805,619)
13,556,475
13,348,769
160,117
8,275
13,716,592
13,357,044
13,716,592
13,357,044
13
13
8.36
8.36
8.63
8.63
ANNUAL REPORT 2022
35
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Current tax asset
Other assets
Total current assets
Non-current assets
Other financial assets
Interests in joint ventures
Investment in associates
Property, plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Other financial liabilities
Lease liabilities
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Other financial liabilities
Lease liabilities
Deferred tax liabilities
Employee benefits
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.
36
GENUSPLUS GROUP LTD
Notes
2022
$
2021
$
14
15
16
18
12
19
17
8
9
20
21
22
23
24
25
21
26
27
25
21
12
26
28
29
27,882,473
34,181,508
68,872,911
57,698,845
45,734,278
20,351,162
3,728,803
2,044,909
4,569,537
1,482,484
1,582,879
3,449,926
152,370,881
119,208,834
993,833
1,483,000
3,086,299
401,442
-
49
17,675,106
15,767,432
23,283,092
13,550,857
34,173,243
5,545,578
79,613,015
36,346,916
231,983,896
155,555,750
72,608,068
64,012,279
12,752,963
5,225,354
6,869,953
1,920,000
7,765,884
4,285,659
6,487,235
6,456,002
1,221,721
50,000
107,705,824
81,949,294
3,924,000
4,920,000
14,232,018
10,148,438
8,758,718
1,195,098
2,550,543
1,022,430
30,854,999
15,896,246
138,560,823
97,845,540
93,423,073
57,710,210
53,789,037
28,925,754
(343,442)
(503,559)
39,977,478
29,288,015
93,423,073
57,710,210
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Share
capital
$
Retained
earnings
$
Notes
Corporate
Restructure
Reserve
$
Foreign
currency
translation
reserve
Total
$
27,732,909
15,939,246
(511,834)
-
-
-
13,348,769
-
13,348,769
Balance at 1 July 2020
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
share issues to Directors
share issues as employee
compensation
share issues pursuant to a
business combination
28,37
28,37
400,000
300,000
28,35
500,000
cost of share issues
28
(7,155)
1,192,845
Sub-total
1,192,845
13,348,769
Balance at 30 June 2021
28,925,754
29,288,015
(511,834)
8,275
57,710,210
Balance at 1 July 2021
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
28,925,754
29,288,015
(511,834)
8,275
57,710,210
-
-
-
13,556,475
-
13,556,475
-
-
43,160,321
13,348,769
8,275
8,275
8,275
13,357,044
-
-
-
-
-
400,000
300,000
500,000
(7,155)
1,192,845
8,275
14,549,889
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,556,475
160,117
160,117
160,117
13,716,592
-
-
-
-
-
-
20,000,000
6,023,589
(1,160,306)
(2,800,619)
22,062,664
(66,393)
160,117
35,712,863
proceeds from capital raising
28
20,000,000
share issues pursuant to a
business combination
cost of share issues
dividend paid
Changes in ownership interests:
disposal of Burton Training &
Consultancy Pty Ltd
28,35
6,023,589
(1,160,306)
28
30
-
(2,800,619)
24,863,283
(2,800,619)
-
(66,393)
-
-
-
-
-
-
-
-
Sub-total
24,863,283
10,689,463
Balance at 30 June 2022
53,789,037
39,977,478
(511,834)
168,392
93,423,073
This statement should be read in conjunction with the notes to the financial statements.
ANNUAL REPORT 2022
37
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Operating activities
Receipts from customers
Payments to suppliers and employees
Government grant income received (JobKeeper)
Income tax paid
Notes
2022
$
2021
$
465,134,004
318,433,388
(451,425,418)
(306,762,419)
-
2,093,000
(2,243,853)
(6,776,048)
Net cash provided by operating activities
31
11,464,733
6,987,921
Investing activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Net loans paid by / (loans to) associated and joint venture entities
Proceeds from disposal of investments
Acquisition of investment in associate
Acquisition of subsidiaries (net of cash)
Net cash used in investing activities
Financing activities
Proceeds from borrowings
Repayments of borrowings
Payment of lease liabilities principal
Proceeds from issue of share capital
Transaction costs for issued share capital
Dividends paid
Interest received
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
Effect of exchange rate fluctuations on cash held
1,386,650
1,190,843
(4,870,466)
(11,294,484)
28,168
170,000
(1,000,000)
(100,000)
-
-
35
(19,963,360)
(2,220,677)
(24,249,008)
(12,424,318)
-
5,000,000
(1,670,000)
(1,170,119)
(6,975,397)
(3,314,831)
28
28
20,000,000
(1,160,306)
(2,800,619)
8,550
(1,077,105)
6,325,123
-
-
-
3,216
(707,343)
(189,077)
(6,459,152)
(5,625,474)
34,181,508
39,798,707
160,117
8,275
Cash and cash equivalents at end of financial year
14
27,882,473
34,181,508
This statement should be read in conjunction with the notes to the financial statements.
38
GENUSPLUS GROUP LTD
1. Nature of operations
GenusPlus Group Ltd and its subsidiaries’ (the Group) principal activities include the construction and maintenance of
transmission and distribution power lines and substations servicing the Western Australian, Queensland and New South
Wales power networks as well as providing specialist engineering, testing and commissioning services to the electrical and
communications industries.
2.
Basis of preparation
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 Ltd is a for-profit entity for the purpose of preparing the financial statements.
GenusPlus Group Ltd is the Group’s Ultimate Parent Company. GenusPlus Group Ltd is an ASX listed Public Company (ASX Code:
GNP) 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 2022 were approved and authorised for issue by the Board of
Directors on 31 August 2022.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of
financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income,
investment properties, certain classes of property, plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are
disclosed in note 4.
3.
Changes in accounting policies
3.1 New standards adopted as at 1 July 2021
Certain new accounting standards and interpretations have been published that are mandatory for 30 June 2022 reporting
periods and have not been adopted by the Group. The Group's assessment of the impact of these new standards do not
have a material impact on the entity in the current reporting periods.
3.2
Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted
early by the Group
The following new accounting standards and interpretations have been published that are not mandatory for 30 June 2022
reporting periods, have not been early adopted by the Group, and are as follows:
i) Amendments to AASB 101: Classification of Liabilities as Current or Non-current
The amendment specify the requirements for classifying liabilities as current or non-current. The amendments clarify:
•
•
•
•
What is meant by a right to defer settlement
That a right to defer must exist at the end of the reporting period
That classification is unaffected by the likelihood that an entity will exercise its deferral right
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a
liability not impact its classification
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied
retrospectively. The Group's assessment of the impact of the new standard is not expected to have a material impact on
the entity in future reporting periods.
ANNUAL REPORT 2022
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 3.
Changes in accounting policies (continued)
3.2
Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted
early by the Group (continued)
ii) Amendments to AASB 3 Business Combinations - Reference to the Conceptual Framework
The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of
Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in
March 2018 without significantly changing its requirements.
The Board also added an exception to the recognition principle of AASB 3 to avoid the issue of potential ‘day 2’ gains or
losses arising for liabilities and contingent liabilities that would be within the scope of AASB 137 or AASB Interpretation
21 Levies, if incurred separately. At the same time, the Board decided to clarify existing guidance in AASB 3 for
contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and
Presentation of Financial Statements.
The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply
prospectively.
iii) Onerous Contracts - Costs of Fulfilling a Contract - Amendments to AASB 137
The amendments to AASB 137 specify which costs an entity needs to include when assessing whether a contract is
onerous or loss-making. The amendments apply a “directly related cost approach”. The costs that relate directly to
a contract to provide goods or services include both incremental costs and an allocation of costs directly related to
contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are
explicitly chargeable to the counterparty under the contract.
The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The Group will
apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual
reporting period in which it first applies the amendments.
iv) AASB 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified
financial liability are substantially different from the terms of the original financial liability. These fees include only those
paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender
on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after
the beginning of the annual reporting period in which the entity first applies the amendment.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption
permitted. The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the
beginning of the annual reporting period in which the entity first applies the amendment.
The amendments are not expected to have a material impact on the Group.
40
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 41.
Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2022. 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 acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or
other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree.
For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate
share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest
in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes
in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in
the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is
recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable
net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the
acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired,
the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest
in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information
obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the
earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine
fair value.
ANNUAL REPORT 2022
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
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.
Segment reporting
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of
resources to operating segments and assessing their performance.
During the year to 30 June 2022, the Groups operating segments were reviewed and reduced in line with the above disclosure. All
comparative information has been restated.
Revenue from contracts with customers
The Group recognises revenue when a customer obtains control of the goods or services, in accordance with AASB 15 Revenue
from contracts with customers. Revenue is measured at the fair value of the consideration received or receivable. Determining the
timing of the transfer of control: either at a point in time or over time requires judgement.
Revenue is recognised over time if one of the following is met:
•
•
•
The customer simultaneously receives and consumes the benefits as the Group performs;
The customer controls the asset as the Group creates or enhances it; or
The Group’s performance does not create an asset for which the Group has an alternative use and there is a right to payment
for the performance to date.
To determine whether to recognise revenue, the Group follows the 5-step revenue recognition model introduced by AASB 15
Revenue from contracts with customers:
1.
2.
Identifying the contract(s) with a customer
Identifying the performance obligations in the contract
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations in the contract
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.
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 24). 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.
42
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
Revenue from contracts with customers (continued)
Construction Contracts
Revenue from construction contracts is recognised when the benefits transfer to the customer as the work is performed and as
such revenue is recognised over the duration of the project according to the percentage of costs completed, or input method.
Under this method revenue is calculated based on the proportion of the contract costs incurred for work performed to date
relative to the estimated total contract costs. Revenue recognised under this method is predominantly derived from projects
containing one performance obligation.
Services revenue
Revenue from the provision of services is recognised as the service is provided. Typically, under the performance obligations of
a service contract, the customer consumes and receives the benefit of the service as it is provided. As such, service revenue is
recognised over time as the services are provided, with each service deemed a separate performance obligation. The transaction
price is allocated to each obligation based on contract prices.
Work order revenue generated in the Communications division is recognised at a point in time as the customer is only deemed
to have received the benefit once the work has been completed. The transaction price is calculated based on a schedule of rates
which define the price of the ticket of work.
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 Group applies the guidance given in AASB 15 in relation to variable consideration. The estimate of variable consideration can
only be recognised to the extent that it 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.
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.
ANNUAL REPORT 2022
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
Borrowing costs
Other borrowing costs are expensed in the period in which they are incurred and reported in ‘finance costs’ (see Note 11).
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 22 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.
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.
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:
Furniture, fixtures and fittings:
Tools and low value assets
Software and technology
Motor vehicles
Depreciation rate
10%
10% - 33%
10% - 33%
10% - 33%
18.8% - 33%
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.
44
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
Leased assets
The Group as lessee
For any new contracts entered into, 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
In respect of leased assets, 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). All other leased assets
are recorded under property, plant and equipment according to the category of asset.
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.
The lease liability is presented as a separate line in the consolidated statement of financial position.
ANNUAL REPORT 2022
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
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.
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.
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.
46
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
Financial instruments (continued)
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’. Instruments within scope 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.
In applying this forward-looking approach, a distinction is made between:
•
•
•
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.
ANNUAL REPORT 2022
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets
of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these financial statements using the equity
method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance
with AASB 5.
Under the equity method, an investment in an associate or a joint venture is recognised initially in the consolidated statement
of financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate or joint venture. When the Group’s share of losses of an associate or a joint venture exceeds the Group’s
interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group’s net
investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are
recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the
associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee
becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost
of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised
as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value
of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or
loss in the period in which the investment is acquired.
The requirements of AASB 136 are applied to determine whether it is necessary to recognise any impairment loss with respect
to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment
(including goodwill) is tested for impairment in accordance with AASB 136 as a single asset by comparing its recoverable
amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised
is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of
that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the investment
subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint
venture. When the Group retains an interest in the former associate or a joint venture and the retained interest is a financial
asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial
recognition in accordance with AASB 9. The difference between the carrying amount of the associate or a joint venture at the date
the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest
in the associate or a joint venture is included in the determination of the gain or loss on disposal of the associate or joint venture.
In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate
on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a
gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit
or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) when the associate or joint venture is disposed of.
When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity
method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other
comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on
the disposal of the related assets or liabilities.
When a Group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions
with the associate or joint venture are recognised in the Group’s consolidated financial statements only to the extent of interests
in the associate or joint venture that are not related to the Group.
The Group applies AASB 9, including the impairment requirements, to long-term interests in an associate or joint venture to which
the equity method is not applied and which form part of the net investment in the investee. Furthermore, in applying AASB 9
to long-term interests, the Group does not take into account adjustments to their carrying amount required by AASB 128 (i.e.
adjustments to the carrying amount of long-term interests arising from the allocation of losses of the investee or assessment of
impairment in accordance with AASB 128).
48
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
Investments in associates and joint ventures (continued)
Trade and other receivables and contract assets and liabilities
Contract assets
A contract asset is initially recognised for revenue earned from construction and maintenance services when the receipt of
consideration is conditional on client acceptance of the successful completion or installation of the underlying contractual
obligation. Upon such notification, the amount recognised as contract assets is reclassified as trade receivables.
Trade receivables
A receivable is recognised if an amount of consideration that is unconditional is due from the customer (i.e. only the passage of
time is required before payment of the consideration is due).
Contract liabilities
A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the
Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the
contract (i.e. transfers control of the related goods or services to the customer.)
Impairment of contract assets and liabilities and trade receivables
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 38 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.
ANNUAL REPORT 2022
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
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.
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.
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.
Management has applied a risk weighted measurement to the tax treatments used in the Group and has determined that there is
no change required under IFRIC 23 Uncertainty over Income Tax Treatments.
50
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
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.
Foreign currency translation reserve: comprises amounts recognised upon translation of certain amounts denominated in
foreign currencies ($USD) into the presentation currency ($AUD)
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 declared by
the Board 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.
Share-based payment transactions
The Group provides remuneration to certain employees, including Directors, of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they are vested. The
fair value is measured using a variation of the binomial option pricing model that takes into account the terms and conditions
on which the instruments were granted and the current likelihood of achieving the specified target. Further, the cost of equity-
settled transactions is recognised, on the date on which they become fully entitled to the award (‘vesting 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.
Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is
considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received under it.
ANNUAL REPORT 2022
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
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.
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.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of GenusPlus Group Ltd, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Contract liabilities
Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are recognised
when a customer pays consideration, or when the consolidated entity recognises a receivable to reflect its unconditional right to
consideration (whichever is earlier) before the consolidated entity has transferred the goods or services to the customer.
52
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 4.
Statement of accounting policies (continued)
Significant management judgement in applying accounting policies and estimation uncertainty
When preparing the Group’s consolidated financial statements, management makes a number of judgements, estimates and
assumptions about the recognition and measurement of assets, liabilities, revenue and expenses.
Critical judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions
on historical experience and on other various factors, including expectations of future events, management believes to be
reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual
results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.
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.
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.
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.
Leases – estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar value to the right of use asset in a similar economic
environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates
are available. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required
to make certain entity-specific estimates.
Recognition of Deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable
income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilised. In
addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax
jurisdictions.
ANNUAL REPORT 2022
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 e
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ANNUAL REPORT 2022
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022
5.
Segment Reporting (continued)
The totals presented for the Group’s operating segments reconcile to the key financial figures as presented in its consolidated
financial statements as follows:
Revenues
Total reportable segment revenues
Other segment revenues
Elimination of intersegment revenues
Group Revenues
Profit or loss
Note
2022
$
2021
$
450,936,669
318,207,504
16,573,612
15,049,992
(13,589,277)
(11,582,446)
453,921,004
321,675,050
Total reportable segment operating profit
21,673,380
22,773,322
Other segment profit
Employment expenses
Consumables and materials used
Contractors and labour hire expenses
Motor vehicle expenses
Depreciation and amortisation expenses
Other expenses
Elimination of intersegment profits
Group operating profit
Share of profit of associates
Share of profit of joint ventures
Finance costs
Other gains / (losses)
Finance income
Group profit before tax
Assets
Total reportable segment assets
Other segment assets
Group assets
Liabilities
Total reportable segment liabilities
Other segment liabilities
Group liabilities
56
GENUSPLUS GROUP LTD
(8,182,390)
(9,075,389)
(345,306)
(31,261)
(319,744)
(49,572)
(4,746,865)
(2,709,554)
(2,276,209)
(1,367,208)
(7,991,238)
(5,918,109)
22,989,019
16,063,769
21,089,130
19,397,515
63,346
401,393
-
-
(1,077,105)
(707,343)
(461,000)
461,000
8,550
3,216
20,024,314
19,154,388
226,035,172
140,812,591
5,948,724
14,743,159
231,983,896
155,555,750
161,590,383
85,116,836
(23,029,560)
12,728,704
138,560,823
97,845,540
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 6.
Revenue
The Group’s revenue disaggregated by type is as follows:
Construction
Services
Note
2022
$
2021
$
331,450,121
257,514,742
119,486,548
60,692,762
450,936,669
318,207,504
The Group’s revenue disaggregated by pattern of revenue recognition is as follows:
Construction
Note
2022
$
2021
$
2022
$
Services
2021
$
Products and services
Transferred over time
331,450,121
257,414,742
74,416,276
60,692,762
Transferred at a point in time
-
-
45,070,272
-
331,450,121
257,414,742
119,486,548
60,692,762
Contract balances
Trade receivables
Contract assets
Note
15
16
2022
$
2021
$
67,729,376
57,678,803
45,734,278
20,351,162
113,463,654
78,029,965
Trade receivables are non-interest bearing and are generally on 30 to 90 day terms. In 2022 ($91,983) (2021: $147,530) was
recognised as provision for expected credit losses on trade receivables. The increase in trade receivables and contract assets for
2022 is representative of the increase in business volume and revenue for the Group during the period, as well as the timing of
recognition of significant claims related to work undertaken.
Contract assets and revenue includes contract modifications recognised in accordance with the Group’s accounting policy for
which amounts are not yet finalised with customers.
The following amounts are included in revenue from contracts for the year ended 30 June 2022.
Revenue recognised as a contract liability in prior period
12,454,989
16,922,957
The amounts recognised as revenue from contract liabilities represents work undertaken on significant transmission projects for
which advance claims were made for materials or services or which payments were made on a milestone basis.
Note
2022
$
2021
$
Unsatisfied performance obligations
Transaction price expected to be recognised in future years for unsatisfied performance obligations at 30 June 2022.
Construction revenue
Services revenue
Note
2022
$
2021
$
188,800,000
219,100,000
2,000,000
12,500,000
190,800,000
231,600,000
ANNUAL REPORT 2022
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 7.
Other income
Net gain on disposal of property, plant and equipment
Insurance claims and recoveries
Government grant income
Apprenticeship training subsidies
Scrap metal sales
Other income
Note
2022
$
279,015
161,363
2021
$
186,258
105,670
(A)
-
2,093,000
851,412
211,742
458,891
445,699
61,366
114,553
1,962,423
3,006,546
(A) As part of economic stimulus measures introduced by the Australian Government related to the COVID19 pandemic, during 2021 Group
companies received or were eligible to receive $2,093,000 in ‘JobKeeper’ wage subsidies. No amount was received during 2022.
8.
Joint ventures
Acquisition of 50% of share capital of Blue Tongue Energy
On 2 February 2022, GenusPlus Group Ltd acquired 50% of Blue Tongue Energy Pty Ltd (BT Energy) for upfront consideration of
$1m cash. Blue Tongue is involved in the design and construction of hybrid power technology and micro-grid energy markets.
Blue Tongue is a private entity that is not listed on any public exchange. The acquisition includes a contingent earn out payment
due in FY23 as disclosed under Note 27. Genus has the option to acquire the remaining 50% of the business in FY25 and FY26
with valuation based on BT Energy’s earning at the time.
BT Energy contributed $63,000 profit before tax to the consolidated group for the period following the acquisition.
The Group’s interest in Blue Tongue is accounted for using the equity method in the consolidated financial statements. The
following table illustrates the summarised financial information of the Group’s investment in Blue Tongue.
Current assets
Non current assets
Current liabilities
Non-current liabilities
Equity
Group’s share in equity – 50% (2021: Nil)
Goodwill
Group’s carrying amount of the investment
Note
30 Jun 2022
$
30 Jun 2021
$
929,882
2,091,329
(1,706,362)
(1,138,872)
175,977
87,989
2,998,310
3,086,299
-
-
-
-
-
-
-
No dividends were received from Blue Tongue Energy Pty Ltd during the year ended 30 June 2022.
Summarised Financial Information
Opening carrying value of investment in Associate
Initial investment in associate (a)
Investment in associate recognised during the reporting period (b)
Share of profit using the equity method
Note
30 Jun 2022
$
30 Jun 2021
$
-
1,000,000
2,022,953
63,346
3,086,299
-
-
-
-
-
(a) The initial investment in Blue Tongue Energy Pty Ltd was paid in cash on 2 February 2022.
(b) The additional investment in Blue Tongue Energy Pty Ltd during the period represents contingent consideration payable to the previous owners
in recognition of the achievement of earn-out targets as notified in the ASX release dated 20 December 2021.
58
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 9.
Associates
The Group has a 39% interest in Maali Group JV Pty Ltd (Maali), a joint venture involved in the supply of labour hire services to a
broad range of customers in the Mining, Energy and Construction sectors. The Group’s interest in Maali is accounted for using the
equity method in the consolidated financial statements. Summarised financial information of the joint venture, based on its IFRS
financial statements, and a reconciliation with the carrying amount of the investment in the consolidated financial statements are
set out below:
Summarised statement of financial position of Maali
Note
30 Jun 2022
$
30 Jun 2021
$
Current assets
Non current assets
Current liabilities
Equity
Group’s share in equity – 39% (2021: Nil)
Goodwill
Group’s carrying amount of the investment
Summarised statement of profit or loss of Maali
Revenue from contracts with customers
Cost of sales
Administrative expenses, including depreciation
Finance costs including interest expense
Profit before tax
Income tax expense at 25%
Profit for the year (continuing operations)
Total comprehensive income for the year (continuing operations)
Group’s share of profit for the year at 39%
Movement in carry value
Summarised Financial Information
Opening carrying value of joint venture
Share of profit using the equity method
8,594,370
823,237
(8,388,268)
1,029,339
401,442
-
401,442
-
-
-
-
49
Note
30 Jun 2022
$
30 Jun 2021
$
24,786,151
(22,215,897)
(1,166,455)
(31,515)
1,372,284
(343,071)
1,029,213
1,029,213
401,393
-
-
-
-
-
-
49
-
Note
30 Jun 2022
$
30 Jun 2021
$
49
401,393
401,442
49
-
49
Associates are accounted for using the equity method in these consolidated financial statements as set out in the Group’s
accounting policies.
No dividends were received from Maali Group Pty Ltd during the year ended 30 June 2022.
ANNUAL REPORT 2022
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 Note
2022
$
2021
$
5,022,260
3,236,339
2,291,264
1,800,257
879,336
2,778,473
4,361,527
949,004
731,762
419,236
12,771,590
9,697,868
Note
Note
2022
$
8,550
8,550
2022
$
142,053
703,456
845,509
231,596
-
231,596
1,077,105
2021
$
3,216
3,216
2021
$
46,093
433,865
479,958
218,335
9,050
227,385
707,343
10. Other expenses
Other expenses recognised during the period
Insurance
Consultancy, legal and other professional fees
Computer, and other ICT expenses
Occupancy costs
Other expenses
Total other expenses
11. Finance costs and finance income
Finance income for the reporting periods consist of the following:
Interest income from cash and cash equivalents
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
Bank fees and charges
Borrowing costs
Total other finance costs
Total finance costs
60
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 12.
Income tax expense
The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax
rate of GenusPlus Group Ltd at 30% (2021: 30%) and the reported tax expense in profit or loss are as follows:
Reconciliation between tax expense and pre-tax accounting profit
Note
Profit before tax
Domestic tax rate for GenusPlus Group Ltd
Expected tax expense
Adjustment for tax-exempt income:
Other tax-exempt income
Adjustment for non-deductible expenses:
Other non-deductible expenses
2022
$
2021
$
20,024,314
19,154,388
30%
30%
6,007,294
5,746,316
-
-
202,251
-
(30,000)
-
-
357,647
Adjustments in the current year in relation to the current tax of prior years
258,294
(268,344)
Actual tax expense
Tax expense comprises:
Income tax payable
Deferred tax (income) / expense:
Origination and reversal of temporary differences
(Over) provision in respect of prior years
Income tax expense reported in the income statement
The applicable effective tax rates are:
6,467,839
5,805,619
72,003
5,597,645
6,395,836
476,318
-
(268,344)
6,467,839
5,805,619
32.3%
30.3%
ANNUAL REPORT 2022
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 12.
Income tax expense (continued)
(a)
Recognised deferred tax assets and liabilities
Deferred income tax balances relate to the following:
1 July
2020
$
Recognised in
profit and loss
$
Business
Combination
1 July
2021
$
Recognised in
profit and loss
$
30 June
2022
$
Deferred tax liabilities
Trade and other
receivables
(14,682)
14,682
-
Contract assets
(1,981,392)
(4,123,957)
(6,105,349)
Financial assets
Property, plant and
equipment
Prepayments
-
(339,625)
(339,625)
(424,442)
410,563
(13,879)
-
-
-
Right-of-use assets
(1,210,088)
(78,164)
(1,288,252)
-
-
-
-
-
-
(108,811)
(108,811)
(7,712,398)
(13,817,747)
(1,122)
(340,747)
(768,048)
(781,927)
(454,926)
(454,926)
(5,696,676)
(6,984,928)
Customer relationships
-
-
-
(2,557,504)
-
(2,557,504)
(3,630,604)
(4,116,501)
(7,747,105)
(2,557,504)
(14,741,981)
(25,046,590)
Deferred tax assets
Trade and other
receivables
-
34,015
34,015
Other current assets
1,395
(1,395)
Accrued expenses
Contract liabilities
Lease liabilities
Statutory liabilities
-
-
1,221,776
285,613
-
-
-
1,567,606
1,567,606
368,105
1,589,881
158,615
444,228
Employee benefits
1,226,406
1,016,611
2,243,017
Blackhole expenditure
Capital losses – Australia
Transferred tax losses
63,201
61,178
-
531,089
594,290
-
-
61,178
-
Borrowing costs
12,405
5,387
17,792
2,871,974
3,680,033
6,552,007
-
-
-
-
-
-
-
-
-
-
-
-
(22,640)
11,375
108,812
108,812
150,000
150,000
2,512,084
4,079,690
5,009,490
6,599,371
252,201
696,429
468,316
2,711,333
(174,285)
420,005
(61,178)
-
110,235
110,235
(6,890)
10,902
8,346,145
14,898,152
(758,629)
(436,468)
(1,195,098)
(2,557,504)
(6,395,836)
(10,148,438)
All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of financial
position.
(b)
Current Income tax
Income tax receivable / (payable)
Note
2022
$
2021
$
4,569,537
1,482,484
62
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 13. Earnings per share
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the parent
company (GenusPlus Group Ltd) as the numerator, i.e. no adjustments to profits were necessary during the year ended 30 June
2022 and 30 June 2021.
Profit for the period
Note
2022
$
2021
$
13,556,474
13,348,769
The weighted average number of shares for the purpose of calculation of diluted earnings per share can be reconciled to the
weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:
Weighted average number of shares used in basic earnings per share
162,218,759
154,742,031
Shares deemed to be issued for no consideration
-
-
Weighted average number of shares used in diluted earnings per share
162,218,759
154,742,031
Note
2022
No.
2021
No.
Earnings per share (basic)
Earnings per share (diluted)
14. Cash and cash equivalents
Cash at bank and in hand
Australian Dollar ($AUD) – unrestricted
Australian Dollar ($AUD) – held as guarantee1
American Dollar ($USD)
Short-term bank deposits
Total cash and cash equivalents
8.36
8.36
8.63
8.63
Note
2022
$
2021
$
25,804,868
29,345,153
738,882
1,338,723
-
611,326
4,137,779
87,250
27,882,473
34,181,508
1
In accordance with certain contractual agreements, agreed amounts of cash at bank are held in guarantee to meet ongoing performance
obligations.
ANNUAL REPORT 2022
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 15. Trade and other receivables
Current
Trade receivables, gross
Allowance for expected credit losses
Trade receivables
Other receivables
Total trade and other receivables
Note
2022
$
2021
$
67,821,359
57,826,333
(91,983)
(147,530)
67,729,376
57,678,803
1,143,535
20,042
68,872,911
57,698,845
Trade receivables are non-interest bearing and are generally on 30 to 90 day terms. The Group has a policy of only dealing
with credit worthy customers and therefore will only recognise an allowance for expected credit losses when some uncertainty
as to collection exists. When the Group is reasonably certain that no recovery of the amount owing is possible, the amount is
considered irrecoverable and written off against the financial asset directly. Once an item is considered uncollectable, all other
amounts relating to the same customer are then also assessed for recoverability. The Group will continue to strongly pursue
all debts provided for. Due to their short-term nature, the net carrying value of trade receivables is considered a reasonable
approximation of fair value.
Allowance for expected credit losses
The consolidated entity has recognised a loss of Nil (FY21: $20,927) in profit or loss in respect of the expected credit losses for the
year ended 30 June 2022.
Expected credit loss rate
Carrying amount
Allowance for
expected credit losses
Note
2022
%
2021
%
2022
$
2021
$
2022
$
2021
$
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Nil
Nil
Nil
Nil
Nil
Nil
57,849,322
51,039,101
5,903,255
3,510,145
2,426,855
777,774
-
-
-
-
-
-
Over 6 months overdue
5.6%
5.9%
1,641,927
2,499,313
(91,983)
(147,530)
67,821,359
57,826,333
(91,983)
(147,530)
The majority of customers of the Group consist of tier 1 miners and industrial services business and government trading entities.
Accordingly, the calculation of expected credit losses is maintained at a relatively low level due to the infrequent nature of default
by any of these customers.
The movement in the allowance for expected credit losses in respect of Trade receivables during the year was as follows:
Movement in provision for expected credit losses
Balance at start of year
Impairment losses recognised
Amounts recognised in acquisition of Connect Engineering Pty Ltd
Debts written off during the year
Balance at 30 June
Note
2022
$
2021
$
(147,530)
-
-
55,547
(91,983)
(77,449)
(20,927)
(49,154)
-
(147,530)
64
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 16. Contract assets
Current
Contract assets
Total contract assets
Note
2022
$
2021
$
45,734,278
20,351,162
45,734,278
20,351,162
Contract assets represents the unbilled amounts expected to be collected from customers for contract work performed to date.
The contract assets are transferred to trade receivables when the rights have become unconditional. This usually occurs when
the Group issues an invoice in accordance with contractual terms to the customer. The increase from 2021 is representative of the
overall increase in business activity experienced by the Group during the reporting period.
Remaining performance obligations
As of 30 June 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations is $190.8
million (2021: $231.6 million). The Group will recognise this revenue when the performance obligations are satisfied. Approximately
81% of remaining performance obligations are expected to occur within the next 12 months.
The remaining performance obligations balances for both 30 June 2022 and 30 June 2021 presented above relate to the revenue
expected to be recognised from ongoing construction type contracts which were not wholly performed at each of those dates.
17. 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 2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets (a)
Listed equity securities (a)
Total financial assets
Amortised cost
$
Note
FVTPL
$
Total
$
14
15
27,882,473
68,872,911
71,833
-
96,827,217
-
-
-
922,000
922,000
27,882,473
68,872,911
71,833
922,000
97,749,217
(a) Other financial assets includes loans to associates and listed equity securities valued at $993,833.
30 June 2022
Financial liabilities
Bank borrowings
Leases
Contingent consideration
Trade and other payables
Non-current - bank borrowings
Non-current - leases
Non-current contingent consideration
Total financial liabilities
Other liabilities
amortised cost
$
Other liabilities
FVTPL
$
Note
1,920,000
7,765,884
-
-
-
4,949,953
72,608,068
3,250,000
14,232,018
-
-
-
25
21
25
23
25
21
25
Total
$
1,920,000
7,765,884
4,949,953
72,608,068
3,250,000
14,232,018
-
674,000
674,000
99,775,972
5,623,953
105,399,923
ANNUAL REPORT 2022
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 17. Financial assets and liabilities (continued)
30 June 2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Listed equity securities
Total financial assets
Amortised cost
$
Note
FVTPL
$
Total
$
14
15
(b)
(b)
34,181,508
57,698,845
100,000
-
-
-
34,181,508
57,698,845
100,000
-
1,383,000
1,383,000
91,980,353
1,383,000
93,363,353
(b) Other financial assets includes loans to joint ventures and listed equity securities valued at $1,483,000.
30 June 2021
Financial liabilities
Bank borrowings
Leases
Trade and other payables
Non-current - bank borrowings
Non-current - leases
Total financial liabilities
Other liabilities
amortised cost
$
Other liabilities
FVTPL
$
Note
25
21
23
25
21
1,920,000
4,285,659
64,012,279
4,920,000
8,758,718
83,896,656
-
-
-
-
-
-
Total
$
1,920,000
4,285,659
64,012,279
4,920,000
8,758,718
83,896,656
A description of the Group’s financial instrument risks, including risk management objectives and policies is given in Note 38.
The methods used to measure financial assets and liabilities reported at fair value are described in Note 39.
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
Total borrowings
Note
2022
$
922,000
922,000
2021
$
1,383,000
1,383,000
2022
$
1,920,000
1,920,000
Current
2021
$
2022
$
Non-current
2021
$
1,920,000
3,250,000
4,920,000
1,920,000
3,250,000
4,920,000
Bank borrowings are secured by a floating charge over the assets of the Group (see Note 25). Current interest rates are
variable and average 1.58% (2021: 0.07%). The carrying amount of the other bank borrowings is considered to be a reasonable
approximation of the fair value.
66
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 17. Financial assets and liabilities (continued)
Other financial instruments
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of fair value:
•
•
•
•
trade and other receivables
cash and cash equivalents
trade and other payables.
contingent consideration payable.
18.
Inventories
Current
At cost:
Raw materials and stores
Total inventories
Note
2022
$
2021
$
3,728,803
2,044,909
3,728,803
2,044,909
In 2022, a total of $139,298,892 of materials was included in profit and loss as an expense (2021: $96,660,619). This includes an
amount of NIL resulting from write down of inventories (2021: $19,219).
19. Other assets
Current
Prepayments
Security deposits
Total other assets
Note
2022
$
2020
$
1,516,419
3,371,850
66,460
78,076
1,582,879
3,449,926
ANNUAL REPORT 2022
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 $
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
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1
ANNUAL REPORT 2022
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022
20. Property, plant and equipment (continued)
All depreciation and impairment charges are included within depreciation, amortisation and impairment of non-financial assets.
Total depreciation and amortisation recognised during the reporting period:
Depreciation
Buildings
Leasehold improvements
Motor vehicles
Plant and equipment
Furniture, fixtures and fittings
Software and technology
Tooling and low value assets
Note
2022
$
2021
$
63,621
129,557
1,433,037
2,481,556
119,996
590,873
165,050
70,489
130,766
2,290,148
1,985,607
83,933
180,560
138,407
Total depreciation expense for the year
4,983,690
4,879,910
Depreciation – right of use assets
21
5,340,060
2,533,618
Amortisation – intellectual property and customer contracts
Total depreciation and amortisation
1,578,181
-
11,901,931
7,413,528
The net assets of the Group have been pledged as security for the Group’s other bank borrowings (see Note 25).
21. Leases
Lease liabilities are presented in the statement of financial position as follows:
Current
Non-current
Total leases
Group as a lessee
Note
2022
$
2021
$
7,765,884
4,285,659
14,232,018
8,758,718
21,997,902
13,044,377
The Group has lease contracts for land and buildings and for various items of plant and equipment and motor vehicles used in
its operations. Leases of plant and equipment and motor vehicles generally have lease terms between 3 and 5 years after which
ownership of the underlying asset passes to the Group. 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.
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.
70
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 21. Leases (continued)
Group as a lessee (continued)
Set out below are the carrying amounts of right-of-use assets and the movement during the period:
Right-of-use assets – Land and Buildings
As at 1 July
Additions
Adjustments related to changes in lease conditions1
Acquired under a business combination2
Depreciation expense
De-recognised during the period3
As at 30 June
Right-of-use assets – Plant and Equipment
As at 1 July
Additions
Acquired under a business combination2
Disposal
Re-classification from property, plant & equipment5
Depreciation expense
As at 30 June
Right-of-use asset – Motor Vehicles
As at 1 July
Additions
Disposals
Acquired under a business combination4
Re-classification from property, plant & equipment5
Depreciation expense
As at 30 June
Note
2022
$
2021
$
35
35
35
4,666,285
3,929,446
91,773
-
4,457,451
283,954
256,001
969,355
(2,227,853)
(1,207,731)
(270,942)
(92,745)
6,188,709
4,666,285
4,236,234
5,139,079
-
(47,199)
-
(1,703,882)
970,233
3,283,569
170,000
-
648,800
(836,368)
7,624,232
4,236,234
4,648,338
6,234,706
(4,568)
-
-
(1,408,325)
1,480,367
2,571,740
-
734,000
351,750
(489,519)
9,470,151
4,648,338
Total Right-Of-Use Assets
23,283,092
13,550,857
1
2
3
4
5
Increase resulting from a change in the monthly lease payable to the owner.
Acquired as part of the acquisition of Connect Engineering Pty Ltd.
Leases surrendered during the period.
Includes motor vehicles acquired as part of the acquisition of Connect Engineering Pty Ltd.
Includes plant and equipment and motor vehicles purchased from Great Southern Electrical Pty Ltd that were financed via a lease arrangement
after transfer to the Group.
The following are the amounts recognised in profit or loss:
Depreciation of right-of-use assets
Interest expense on right-of-use asset lease liabilities
Expense relating to short-term leases
Note
2022
$
5,340,060
703,456
11,496,147
17,539,663
2021
$
2,533,618
433,865
5,320,931
8,288,414
The group had total cash outflows for leases of $6,975,397 in 2022 (2021: $3,314,831). The Group also had non-cash additions to
right-of-use assets and lease liabilities of $15,516,763 in 2022 (2020: $7,139,813).
ANNUAL REPORT 2022
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 21. Lease (continued)
Group as a lessee (continued)
Maturity analysis:
Less than 1 year
Between 1 year and 2 years
Between 2 years and 5 years
Over 5 years
Less: interest
Note
2022
$
2021
$
8,484,431
7,033,025
7,908,245
-
4,829,670
3,943,431
4,949,197
282,362
23,425,701
14,004,660
(1,427,799)
(960,283)
21,997,902
13,044,377
The Group does not face a significant liquidity risk with regards to its lease liabilities. Lease liabilities are monitored within the
Group treasury function.
22.
Intangible assets
The movements in the net carrying amount of intangible assets is as follows:
Goodwill
Balance 1 July
Acquired through business combinations
Balance 30 June
Accumulated impairment losses
Accumulated amortisation
Carrying amount at 30 June
Customer contracts
Balance 1 July
Acquired through business combinations
Balance 30 June
Accumulated amortisation
Carrying amount at 30 June
Other intellectual property
Balance 1 July
Note
2022
$
2021
$
5,505,688
35
14,035,100
1,613,914
3,891,774
19,540,788
5,505,688
-
-
-
-
19,540,788
5,505,688
39,890
35
9,004,000
-
39,890
39,890
-
39,890
-
-
-
-
-
9,043,890
(518,879)
8,525,011
-
7,166,746
7,166,746
(1,059,302)
6,107,444
34,173,243
5,545,578
Acquired through business combinations
35
Balance 30 June
Accumulated amortisation
Carrying amount at 30 June
Total intangible assets
No adjustments to Goodwill were recognised during the reporting period.
Customer contracts and other intellectual property are amortised over their estimated useful lives, which is on average 11 years
(customer contracts) and 9 years (intellectual property).
72
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 22.
Intangible assets (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
Connect Engineering Pty Ltd
Genus PFA Pty Ltd
Goodwill allocation at 30 June
Note
2022
$
1,179,147
305,395
129,372
2021
$
1,179,147
305,395
129,372
3,891,774
3,891,774
35
14,035,100
-
19,540,788
5,505,688
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
Connect Engineering Pty Ltd
Genus PFA Pty Ltd
Growth rates
Growth rates
Discount rates
2022
2021
2022
2021
5%
5%
5%
5%
5%
5%
5%
5%
5%
-
13%
13%
13%
13%
13%
7%
7%
7%
7%
-
The growth rates reflect the long-term average growth rates for the business of the segments and the markets they operate in.
Sensitivity
As disclosed in note 4, the directors have made judgements and estimates in respect of impairment testing of goodwill. Should
these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The sensitivities are as follows:
Gross Margin − Decreased demand and increase costs can lead to a decline in the gross margin and earnings before interest,
taxes and depreciation (EBITDA). A decrease in the gross EBITDA margin by 1.0% would result in impairment in the Connect cash
generating unit.
Growth rate estimates − Rates are based on published industry research. The effect of whether delays, new entrants to the
market could yield a reasonably possible alternative to the estimated long-term growth rate of 5% for the Connect CGU. A
reduction by 1% in the long-term growth rate would result in an impairment.
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, Connect Engineering Pty Ltd & Genus PFA 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.
ANNUAL REPORT 2022
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 23. Trade and other payables
Unsecured liabilities:
Trade payables
Goods and services tax payable
Unpaid wages
Sundry payables and accrued expenses
Total trade and other payables
Note
2022
$
2021
$
33,646,539
37,462,511
2,810,173
4,413,962
1,545,427
3,041,992
31,737,394
21,962,349
72,608,068
64,012,279
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
24. Contract liabilities
Short-term advances for materials
Short-term advances for construction services
Note
2022
$
2021
$
885,057
4,357,461
11,867,906
867,893
12,752,963
5,225,354
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 the next financial year. The amounts recognised in respect of
construction contracts will generally be utilised within the next reporting period. The balance relating to advances for materials
decreased during the period as the related aspects of the contracts were performed. Advances in relation to construction services
increased during the period due to the increase in the Group’s customer base, and the recognition of milestone payments.
25. Other financial liabilities
Secured borrowings – at amortised cost
Bank loan – secured
Current
Non-current
Contingent consideration
Current
Non-current
74
GENUSPLUS GROUP LTD
Note
2022
$
2021
$
1,920,000
1,920,000
3,250,000
4,920,000
5,170,000
6,840,000
Note
2022
$
2021
$
4,949,953
674,000
5,623,953
-
-
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 25. Other financial liabilities (continued)
The bank debt facility comprises term loans with quarterly principal repayments with maturity dates between two and five years.
The group has an overdraft/trade finance facility with a limit of $10,000,000 with $10,000,000 available at 30 June 2022.
The group has an equipment finance facility with Commonwealth Bank of Australia Pty Ltd (CBA) with a limit of $7,000,000 (FY21
- $4,000,000) with $3,198,984 available at 30 June 2022 (FY21 - $2,840,000).
The group has an equipment finance facility with Mercedes Benz finance with a limit of $2,000,000 (FY21 - $2,000,000) with
$1,981,358 available at 30 June 2022 (FY21 - $1,882,500).
The group has an equipment finance facility with Toyota Asset Finance with a limit of $12,000,000 (FY21 - $6,000,000) with
$5,809,252 available at 30 June 2022 (FY21 - $594,000).
The group has an equipment finance facility with Australia and New Zealand Banking Group Limited (ANZ) with a limit of
$4,000,000 (FY21 - $4,000,000) with $708,365 available at 30 June 2022 (FY21 - $2,481,000).
The group has an equipment finance facility with Westpac Banking Corporation (WBC) with a limit of $2,000,000 (FY21 – N/A) with
$1,507,969 available at 30 June 2022 (FY21 - $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.
Contingent consideration
As part of the agreement to purchase 50% of Blue Tongue Energy Pty Ltd (Blue Tongue) a contingent consideration has been
agreed. There will be additional cash payments to the owners of Blue Tongue if the entity generates more than $500,000 profit
before interest and tax in the financial reporting period ended 30 June 2022. This target was met with $2,022,953 recognised as
contingent consideration to be settled within 12 months.
As part of the purchase agreement with the previous owners of Pole Foundations Australia (Pole Foundations), a contingent
consideration has been agreed. There will be additional cash payments to the former owners of Pole Foundations:
i.
ii.
iii.
if the entity generates more than $6.175 million profit before interest, tax, depreciation and amortisation (EBITDA) in the
financial reporting period ended 30 June 2022. This target was met with $2,927,000 recognised as contingent consideration
that is expected to be settled within 12 months.
if the entity generates EBITDA between of $6.675 million and $9.8 million in the financial reporting period ended 30 June
2023. This target is only expected to be partially met with $674,000 recognised as contingent consideration. If EBITDA of
$9.8 million is achieved, $7 million will be payable, with a pro-rata payment for the EBITDA between $6.675 million and $9.8
million.
if the entity generates EBITDA between of $9.8 million and $12.25 million in the financial reporting period ended 30 June
2023. This target is only not expected to be met. No contingent consideration has been recognised. If EBITDA of $12.25
million is achieved, $9 million will be payable, with a pro-rata payment for the EBITDA between $9.8 million and $12.25
million.
ANNUAL REPORT 2022
75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 26. Employee benefits
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Salaries and wages
Superannuation
Amounts provided for employee entitlements
Short term incentives
Share based payments expense
Other allowances and expenses
Employee benefits expense
Note
2022
$
2021
$
114,594,683
69,718,843
9,053,499
5,381,807
6,181,826
4,843,608
617,884
1,300,000
37
-
700,000
6,749,874
5,206,231
137,197,766
87,150,489
During 2021 certain employees and Non-Executive Directors were issued shares in lieu of cash for meeting agreed targets.
Inaugurating employees with Genus Renewables received a sign-on bonus and Non-Executive Directors received shares in
accordance with their contracts for successful listing of the Group on the ASX. No amounts were issued or expected to be issued
as shares for 2022.
Employee benefits
The liabilities recognised for employee benefits consist of the following amounts:
Current
Annual leave
Long service leave
Other short term employee benefits
Non-current
Long service leave
Note
2022
$
2021
$
5,578,530
357,056
551,649
4,756,411
399,591
1,300,000
6,487,235
6,456,002
2,550,543
1,022,430
Total employee benefits
9,037,778
7,478,432
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 and for employees who have satisfied the
service eligibility for long service leave – usually 10 years.
27. Provisions
Current
Amounts recognised in respected of expected losses or write-downs
Total provisions
Note
2022
$
1,221,721
1,221,721
2021
$
50,000
50,000
76
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 28. 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
Beginning of the year
Shares issued to Directors1
2022
Shares
2021
Shares
2022
$
2021
$
155,589,964
154,350,877
28,925,754
27,732,909
-
400,000
-
400,000
Shares issued as part of a capital raising2
16,528,926
-
20,000,000
Shares issued as part of a business combination3,4
4,633,530
Shares issued as employee benefits5
Share issue costs
-
-
529,010
310,077
6,023,589
-
-
500,000
300,000
-
(1,160,306)
(7,155)
Total contributed equity at 30 June
176,752,420
155,589,964
53,789,037
28,925,754
1
2
3
4
5
400,000 shares were issued to Directors in accordance with their contracts upon the successful listing of GenusPlus Group Ltd on the ASX.
GenusPlus Group Ltd (ASX: GNP) officially listed on the ASX on 14 December 2020.
16,528,926 shares were issued as part of a capital raising to fund the acquisition of Pole Foundations Australia as announced to the market 17
February 2022. The share placement was completed on 28 February 2022.
4,633,530 shares were issued as part consideration for the acquisition of Pole Foundations Australia on 29 April 2022.
529,010 shares were issued as consideration for the acquisition of Connect Engineering Pty Ltd on 4 June 2021
310,077 shares were issued as consideration for certain employees entering new employment contracts on 31 March 2021 upon the
commencement of Genus Renewables Pty Ltd.
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 Ltd.
29. Reserves
Balance at 1 July 2020
Movements in asset values measured in foreign currencies
that will subsequently be re-classified to profit or loss
Notes
Foreign
Currency
Translation
reserve
-
8,275
Corporate
Restructure
reserve
$
Total
$
(511,834)
(511,834)
-
8,275
Balance at 30 June 2021
8,275
(511,834)
(503,559)
Balance at 1 July 2021
Movements in asset values measured in foreign currencies
that will subsequently be re-classified to profit or loss
8,275
160,117
(511,834)
(503,559)
-
160,117
Balance at 30 June 2022
168,392
(511,834)
(343,442)
Corporate restructure reserve
The corporate reconstruction reserve recorded the transaction on the introduction of a new ultimate parent entity.
Foreign currency translation reserve
The foreign currency translation reserve records the un-recognised gains / (losses) incurred on translation of monetary items held
in US Dollars ($USD). The balance will be subsequently reported in profit and loss when the underlying value of the monetary item
(cash at bank) is utilised.
ANNUAL REPORT 2022
77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 30. Dividends on equity instruments
Recognised amounts
Fully paid ordinary shares
Final dividend
Year ended 30 June 2022
Year ended 30 June 2021
Cents
per share
Total
$
Cents
per share
Total
$
1.8
3,181,544
1.8
2,800,619
On 28 October 2021, a dividend of 1.8c per share was paid to the holders of fully paid ordinary shares in respect of the financial
year ended 30 June 2021.
On 26 August 2022, the directors declared a fully franked dividend of 1.8 cents per share to the holders of fully paid ordinary
shares in respect of the financial year ended 30 June 2022. At the time of reporting, the dividend of $3,181,544 was unpaid. The
record date is 28 October 2022 and the payment date is 30 November 2022.
Distributions made and proposed
Franking credit balance
The amount of franking credits available for the subsequent financial year are:
Franking account balances as at the end of the financial year at 30% (2021: 30%)
16,836,429
20,268,588
2022
$
2021
$
31. 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
gain on disposal of subsidiary
depreciation and amortisation
increase in value of investments reported at FVTPL
share of profits of associates and joint ventures
net finance costs
share based payments – net of other costs
Changes in assets and liabilities:
(increase) in trade and other receivables
decrease / (increase) in other assets
(increase) / decrease in inventories
increase in trade and other payables
Net cash provided by operating activities
78
GENUSPLUS GROUP LTD
2022
$
2021
$
13,556,475
13,348,769
(279,015)
(70,000)
(186,258)
-
11,901,931
7,413,528
461,000
(464,739)
1,068,555
-
(461,000)
-
704,127
692,798
(34,801,667)
(30,928,713)
1,867,047
(1,393,440)
(1,537,509)
497,003
19,762,655
17,301,107
11,464,733
6,987,921
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 32. Auditor remuneration
During the financial year the following fees were paid or payable for services provided by Grant Thornton, the auditor of the
company, its network firms and unrelated firms:
Auditing services – Grant Thornton
Audit or review of the financial statements
Other services – Grant Thornton
Investigating Accountant Report
Taxation governance review
Review of tax return
Other non-assurance services
Total auditor’s remuneration
33. Related party transactions
Note
2022
$
2021
$
235,000
162,000
-
-
7,400
25,500
267,900
175,000
22,000
-
46,675
405,675
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. A summary of these transactions is included below.
Services provided by related parties
Pastoral Plus (Director D Riches)
Testing Plus WA (Director D Riches)
Partum Engineering (Director D Riches)
Sparke Helmore Lawyers (Director P. Gavazzi)
Matt Riches and Dave Riches (Director D Riches)
Dave Riches (Director D Riches)
Edge People Management (Director D Riches)
Services provided to related parties
Partum Engineering (Director D Riches)
Testing Plus WA (Director D Riches)
Pastoral Plus (Director D Riches)
Blue Tongue Energy Pty Ltd (Associate)
All services were contracted at arms’ length basis.
2022
$
2021
$
646,489
1,229
839,903
96,545
7,396,206
6,673,059
9,339
559,244
520,900
41,889
1,144,517
572,055
524,613
15,662
2022
$
2021
$
-
-
22,757
498,558
102,394
1,980
30,533
-
ANNUAL REPORT 2022
79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 33. Related party transactions (continued)
Transactions with related parties (continued)
Amounts due to related parties at reporting date
Pastoral Plus (Director D Riches)
Testing Plus WA (Director D Riches)
Partum Engineering (Director D Riches)
Innotech Services1 (Director D. Riches)
Sparke Helmore Lawyers (Director P. Gavazzi)
Matt Riches Pty Ltd & Dave Riches Pty Ltd (Director D Riches)
Dave Riches Pty Ltd (Director D Riches)
Edge People Management (Director D Riches)
Amounts due from related parties at reporting date
AUSCON Construction Group (Director D. Riches)
Pastoral Plus (Director D. Riches)
Blue Tongue Energy Pty Ltd
2022
$
2021
$
87,002
-
775,051
-
-
21,116
9,832
8,760
52,345
(1,019)
561,880
1,105,923
87,472
-
-
-
2022
$
2021
$
-
11,192
18,445
498,558
-
-
All amounts outstanding at reporting date were included in accounts payable or accounts receivable, and settled in accordance
with commercial terms.
Transactions with key management personnel
Key management of the Group are the Non-Executive members of the Group’s Board of Directors, the Group’s Chief Executive
Officer and the other members of the Executive team reporting to the Managing Director. Key management personnel
remuneration includes the following expenses:
Salaries including bonuses
Long service leave
Superannuation
Termination benefits
Share-based payment
Total remuneration
2022
$
2021
$
1,890,643
2,075,571
7,952
142,858
-
-
2,041,453
17,197
129,750
-
400,000
2,622,518
During 2022, the Group used the legal services of one Company Director (Mr Paul Gavazzi) a firm over which he exercises
significant influence. The amounts billed related to this legal service amounted to $9,339 (2021: $1,144,517), based on normal
market rates.
80
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 34. 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.
2022
$
2021
$
26,601,326
33,129,277
26,264,012
11,372,443
52,865,338
44,501,720
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
The CBA guarantee facility has a limit of $60,000,000 (FY21 - $35,000,000).
The Surety bond facilities have a limit of $40,000,000 (FY21 - $30,000,000).
35. Acquisitions and disposals
Acquisition of key Tandem Corp assets and contracts
On 6 August 2021, GenusPlus Group Ltd completed the purchase of selected key contracts, intellectual property, IT systems, plant
and equipment and employee contracts of Tandem Corp Pty Ltd out of administration for total consideration of $3.463m in cash.
The assets acquired under the purchase were fair valued at $728,000 with the remaining purchase price allocated to intangibles
that will be amortised over a three year period.
For the period since the date of acquisition, the contracts acquired contributed revenue of $53m and loss before tax of $4.6m to
the consolidated group. This transaction was accounted for as a business combination.
Acquisition of net assets of Pole Foundations Australia
On 29 April 2022, GenusPlus Group Ltd acquired 100% of the Pole Foundations Australia (PFA) business from BJ Fraser Pty Ltd
ACN 139 760 071 as trustee for the BJ Fraser Family Trust and CC Rankine Pty Ltd ACN 098 970 300 as trustee for the CC Rankine
Family Trust for an upfront consideration of $22.523m comprised of $16.5m cash and $6.023m in Genus shares (4,633,530 shares
with a value at date of transfer of $1.21 were issued, escrowed for 24 months).
Under the terms of the agreement, Genus acquired the net assets of PFA comprising property, plant and equipment, inventory
and employee liabilities.
The acquisition is subject to further contingent earn-out payments in cash subject to PFA’s performance in FY22 to FY24. The
performance metric for FY22 was satisfied, with payment due as disclosed under note 27.
Pole Foundations contributed revenue of $2,658,00 and profit before tax of $805,000 to the consolidated group for the period
following the acquisition.
Following the acquisition, a fair value allocation of the purchase price related to the separately identifiable intangible assets was
undertaken by an external expert. Subject to the experts valuation, goodwill of $4,660,000 was recognised from the acquisition.
None of the goodwill is expected to be deductible of income tax purposes.
In relation to the acquisition of Pole Foundations Australia, the Group has performed a provisional assessment of the fair value of
the assets and liabilities as at the date of acquisition as well as the contingent consideration payable for meeting specific earnings
guidance over the succeeding two-year period. For the purposes of the balance sheet, the assets and liabilities have been
recorded at their provisional fair values. Under Australian Accounting Standards, the Group has up to 12 months from the date
of acquisition to complete its initial acquisition accounting. The Group has already commenced this exercise to consider the fair
values of intangible assets acquired. As at the date of this report, this assessment is not complete.
This transaction was accounted for as a business combination.
ANNUAL REPORT 2022
81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022
35. Acquisitions and disposals (continued)
Businesses disposed
The Group disposed of its interest in Burton Training and Consultancy Pty Ltd during the year ended 30 June 2022.
Tandem
Corp
$
Pole Foundations
Australia
$
3,463,360
16,500,000
-
-
-
6,023,589
(246,330)
3,601,000
3,463,360
25,878,259
40,000
1,444,278
800,000
1,146,459
1,685,758
278,286
-
2,934,387
-
-
-
(1,553,037)
(1,868,493)
-
-
-
146,385
4,232,359
9,004,000
14,035,100
(2,701,200)
(282,663)
-
3,463,360
25,878,259
3,463,360
16,500,000
-
-
3,463,360
16,500,000
Consideration transferred / transferrable
Cash
Shares
Adjustment amount
Contingent consideration arrangement
Total
Assets acquired and liabilities assumed at the date of acquisition
Plant and equipment
Software and technology
Deferred tax assets
Work in progress
Prepayments
Inventory
Intellectual property
Customer relationships
Goodwill
Deferred tax liability
Employee entitlements
Liabilities to subcontractors mobilisation costs
Total
Net cash outflow on acquisition of businesses
Consideration paid in cash
Less: cash and cash equivalent balances acquired
Total
82
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 36.
Interests in subsidiaries
Composition of the Group
Set out below details of the subsidiaries held directly by the Group:
Parent Entity:
GenusPlus Group 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)
Powerlines Plus (Qld) Pty Ltd (Burton Power Pty Ltd) (c)
Genus Services Pty Ltd
KEC Power Pty Ltd (d)
Powerlines Plus (NSW) Pty Ltd (e)
ECM Consultancy Pty Ltd (f)
Genus Renewables Pty Ltd (g)
Connect Engineering Pty Ltd (h)
Connect Infrastructure Pty Ltd (h)
Connect Infrastructure Construction Pty Ltd (h)
Connect Infrastructure Design Pty Ltd (h)
Connect Design South Coast (NSW) Pty Ltd (h)
Burton Training & Consultancy Pty Ltd (i)
Genus PFA Pty Ltd (j)
(a) GenusPlus Group Ltd was incorporated on 6 July 2017.
Country of
Incorporation
Percentage Ownership
2022
2021
Aust
Aust
Aust
Aust
Aust
Aust
Aust
Aust
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
(b) 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.
(c) Burton Power Pty Ltd was acquired 1 January 2019.
(d) KEC Power Pty Ltd was incorporated on 4 February 2019.
(e) Powerlines Plus (NSW) Pty Ltd was incorporated on 26 November 2019.
(f) ECM Consultancy was incorporated on 12 December 2019.
(g) Genus Renewables Pty Ltd was incorporated on 3 July 2020.
(h) Connect Engineering Pty Ltd and its subsidiaries were acquired on 1 June 2021.
(i) Burton Training & Consultancy acquisition was completed 15 January 2021 and disposed with effect from 1 July 2021.
(j) Pole Foundations Australia (now Genus PFA Pty Ltd) was acquired on 29 April 2022.
ANNUAL REPORT 2022
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
37. Share based payments
Expense recognised in profit or loss.
Share based payments expenses for the year comprises:
Directors fees
Other employment expense
Total
2022
$
-
-
-
2021
$
400,000
300,000
700,000
No shares were issued to any member or employee during 2022 by way of payment for service.
During 2021 Non-Executive Directors, in accordance with their contracts, were issued shares in GenusPlus Group Ltd upon its
successful listing on the Australian Stock Exchange (ASX: GNP).
Upon the initial business registration of Genus Renewables, certain inaugurating employees received a sign-on bonus in shares.
38. 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 17. 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.
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). The Group holds a bank account in USD for this purpose.
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.
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:
2022
Short term
exposure
USD
$
922,967
-
922,967
2022
Long term
exposure
USD
$
-
-
-
2021
Short term
exposure
USD
$
3,103,646
-
3,103,646
2021
Long term
exposure
USD
$
-
-
-
Financial assets
Financial liabilities
Total exposure
84
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
38. Financial risk management (continued)
Foreign currency sensitivity (continued)
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 30 June 2022 (2021: 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. In any respect, the Group would elect not to realise the underlying value of the financial asset were it
to result in a loss to the Group. Financial assets subject to currency sensitivity were received on 30 June 2020, and valued at the
exchange rate applicable on that date.
If the Australian Dollar (AUD) had strengthened against the US-Dollar (USD) by 10% (2021: 10%) then this would have had the
following impact:
30 June 2022
30 June 2021
Profit for
the year
AUD
$
-
-
If the AUD had weakened against the USD by 10% (2020: 10%) then this would have had the following impact:
30 June 2022
30 June 2021
Profit for
the year
AUD
$
-
-
Equity
AUD
$
(121,702)
(376,192)
Equity
AUD
$
121,702
376,192
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 2022, 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 low due to the current low interest rate setting, and long-term outlook provided by the Reserve
Bank of Australia (RBA).
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of +/- 2.00%
(2021: +/- 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 2022
30 June 2021
Profit for the year
$
+2% / +1%
103,400
68,400
$
-2% / -1%
(103,400)
(68,400)
$
+2% / +1%
(103,400)
(68,400)
Equity
$
-2% / -1%
103,400
68,400
ANNUAL REPORT 2022
85
38. Financial risk management (continued)
Other price risk sensitivity
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 33% has been observed during 2022 (2021: 33%). 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 $304,260
(2021: $461,000).
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.
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
Credit risk management
2022
$
2021
$
27,882,473
34,181,508
68,872,911
57,698,845
96,755,384
91,880,353
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
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each 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.
86
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 38. Financial risk management (continued)
Credit risk analysis (continued)
Impairment losses
The ageing of the Group’s trade and other receivables at the reporting date was:
Other receivables – not past due
Note
16
Trade receivables:
Current
Less than 90 days
Greater than 91 days
Gross
2022
$
1,143,535
57,849,322
5,903,255
4,068,782
14
67,821,359
68,964,894
Allowance for
Impairment
2022
$
-
-
-
Gross
2021
$
3,449,926
51,039,101
3,510,145
Allowance for
Impairment
2021
$
-
-
-
(91,983)
3,513,277,087
(91,983)
(91,983)
57,826,333
61,276,259
(147,530)
(147,530)
(147,530)
The provision of $91,983 relates to expected credit losses. Impairment provision related to specific debts that are more than one
year overdue relating to a small number of customers. The Group continues to strongly pursue all debts provided for. The majority
of un-impaired debtors exceeding one year relate to retention claims that are not due. The debtor aging is relative to the date of
the original invoice claim against which the retention is held.
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, 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, 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.
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.
ANNUAL REPORT 2022
87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 38. Financial risk management (continued)
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 2022, the Group’s non-derivative financial liabilities have contractual maturities as summarised below:
30 June 2022
Secured borrowings
Leases
Trade and other payables
Contingent consideration payable
Total
Current
Non-current
Within 6 months
$
6-12 months
$
1-5 years
$
5+ years
$
960,000
960,000
3,250,000
3,925,439
3,840,445
14,232,018
72,608,068
4,949,953
-
-
-
674,000
82,443,460
4,800,445
18,156,018
-
-
-
-
-
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
30 June 2021
Secured borrowings
Leases
Trade and other payables
Total
Current
Non-current
Within 6 months
$
6-12 months
$
1-5 years
$
5+ years
$
960,000
2,434,166
63,695,989
960,000
2,371,379
316,289
4,920,000
7,813,792
-
-
425,041
-
67,090,155
3,647,668
12,733,792
425,041
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities at the
reporting date.
88
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 39. 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 2022 and 30 June 2021:
30 June 2022
Financial assets
Listed securities
Other financial assets
Total assets
Financial liabilities
Contingent consideration
Total liabilities
Net fair value
30 June 2021
Financial assets
Listed securities
Other financial assets
Total assets
Financial liabilities
Total liabilities
Net fair value
Level 1
$
Level 2
$
Level 3
$
Total
$
922,000
-
922,000
-
-
-
71,833
71,833
-
-
-
922,000
71,833
71,833
-
-
(5,623,953)
(5,623,953)
(5,623,953)
(5,623,953)
922,000
71,883
(5,623,953)
(4,630,120)
Level 1
$
Level 2
$
Level 3
$
Total
$
1,383,000
-
1,383,000
-
100,049
100,049
-
-
1,383,000
100,049
-
-
-
-
-
1,383,000
100,049
1,483,049
-
1,483,049
There were no transfers between Level 1 and Level 2 in 2022 or 2021.
ANNUAL REPORT 2022
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 39. Fair value measurement (continued)
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 3 fair value measurements
Contingent consideration (Level 3)
The fair value of contingent consideration related to the acquisition of Blue Tongue Energy Pty Ltd and Pole Foundations Australia
(see Note 35) has been determined through analysis of past profitability against targets agreed in the purchase agreement and
estimated future cash-flows. Due to the short time frame associated with assessing achievement of the targets related to the
contingent consideration, the impact of discounting of future cash flows was not material in the assessment and the values
stated are consistent with fair value.
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 at 30 June 2022 and
30 June 2021:
30 June 2022
Property, plant and equipment:
Industrial land and buildings acquired under
business combination
30 June 2021
Property, plant and equipment:
Industrial land and buildings acquired under
business combination
Level 1
$
Level 2
$
Level 3
$
Total
$
-
181,000
-
181,000
Level 1
$
Level 2
$
Level 3
$
Total
$
-
181,000
-
181,000
Fair value of the Group’s land assets acquired under business combination through the purchase of KEC Contracting is estimated
based on an evaluation of current market price trends and with regards to the initial valuation of the land at the date of
acquisition. The fair value is reviewed by the Board of Directors and Audit Committee at each reporting date.
90
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 40. 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
2022
$
2021
$
93,423,073
57,710,210
21,110,359
15,463,682
(27,882,473)
(34,181,508)
86,650,959
38,992,384
93,423,073
57,710,210
21,110,359
15,463,682
114,533,432
73,173,892
0.76
0.53
The ratio increase during 2022 is primarily a result of the capital raising undertaken to part-fund the acquisition of Pole
Foundations Australia.
41. Parent entity information
Information relating to GenusPlus Group 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 (2021:$Nil).
2022
$
2021
$
2,902,789
10,365,487
40,761,752
42,407,131
(1,455,015)
2,608,463
(11,006,876)
18,141,008
51,768,629
24,266,123
53,789,037
28,925,754
(2,020,409)
(4,659,631)
51,768,629
24,266,123
(2,560,158)
(2,389,103)
(2,560,158)
(2,389,103)
ANNUAL REPORT 2022
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022
42. Events after the reporting date
On 26 August 2022, the Directors declared a final fully franked dividend of 1.8 cents per share with a record date of 28 October
2022 and a payment date of 30 November 2022. The total dividend payable is an aggregate of $3,181,544.
Other than those mentioned above, 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.
43. Group details
The registered office and principal place of business of the Group is:
GenusPlus Group Ltd
Level 1, 63 – 69 Abernethy Road
Belmont WA 6104
92
GENUSPLUS GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of GenusPlus Group Limited, I state that:
In the opinion of the directors:
(a) he financial statements and notes of GenusPlus Group Limited for the financial year ended 30 June 2022 are in
accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for
the year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2;
and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
This declaration has been made after receiving the declarations required to be made to the directors by the chief executive officer
and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2022.
On behalf of the board
David Riches
Director
Dated the 31st day of August 2022
ANNUAL REPORT 2022
93
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2022
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Independent Auditor’s Report
Independent Auditor’s Report
To the Members of GenusPlus Group Ltd
To the Members of GenusPlus Group Ltd
Report on the audit of the financial report
Report on the audit of the financial report
Independent Auditor’s Report
Opinion
Opinion
We have audited the financial report of GenusPlus Group Ltd (the Company) and its subsidiaries (the
To the Members of GenusPlus Group Ltd
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
We have audited the financial report of GenusPlus Group Ltd (the Company) and its subsidiaries (the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
Opinion
declaration.
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
We have audited the financial report of GenusPlus Group Ltd (the Company) and its subsidiaries (the
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
2001, including:
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
for the year ended on that date; and
for the year ended on that date; and
Report on the audit of the financial report
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
for the year ended on that date; and
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
of our report. We are independent of the Group in accordance with the auditor independence requirements
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
of our report. We are independent of the Group in accordance with the auditor independence requirements
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Basis for opinion
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
our other ethical responsibilities in accordance with the Code.
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
our other ethical responsibilities in accordance with the Code.
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
of our report. We are independent of the Group in accordance with the auditor independence requirements
opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
opinion.
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
Key audit matters
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
the financial report of the current period. These matters were addressed in the context of our audit of the financial
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
opinion.
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
the financial report of the current period. These matters were addressed in the context of our audit of the financial
matters.
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
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‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
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
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
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
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
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556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
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
Legislation.
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
Legislation.
‘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 Limited 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
GENUSPLUS GROUP LTD
94
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2022
Key audit matter
How our audit addressed the key audit matter
Revenue recognition of long-term contracts –
refer to summary of significant accounting
policy Note 4
As disclosed in note 6, the Group recognised
revenue from construction contracts and service
revenue of $331.4 million and $119.4 million
respectively, with revenue recorded over time
totalling $405.8 million. Revenue for these
contracts recognised revenue with reference to the
input method to determine the amount of revenue
to be recognised in the period.
In accordance with AASB 15 Revenue from
Contracts with Customer, revenues from goods
and services are recognised based on the
completion of performance obligations under each
contract. Determining the appropriate timing of
revenue recognition for construction contracts
requires estimating the inputs (costs) remaining in
the contract and the expected margins earned on
the contracts, which requires management
judgement.
•
•
•
•
•
This area is a key audit matter due to the high
level of estimation and management judgement
required to determine the revenue recognised from
each contract.
•
Our procedures included, amongst others:
•
Understanding and documenting the design of internal
controls over project costings and estimating costs to
complete construction projects;
Testing the operating effectiveness of project costs
designed for determining the revenue recognised over
time utilising the percentage of completion method;
Testing a sample of costs to ensure appropriate
allocation to projects;
Testing a sample of project billings to underlying
obligations to consider and evaluate the key inputs
required to determine revenue recognition;
Reviewing management assumptions in determining
the stage of completion, total contract price, costs
incurred and estimated costs to complete to supporting
documentation;
Recalculating the stage of completion based on costs
to date proportionate to forecasted costs or
milestones, including testing a sample of progress
billings and contract costs to ensure the allocation to
revenue, contract assets and liabilities was appropriate
and consistent with the requirements of AASB 15;
Assessing estimated costs to complete through
discussion with project managers and challenging the
key assumptions connected to the stage of completion
method, including potential disputes and claims
relating to variations to the original contract terms and
agreeing to underlying support; and
Business combination – Poles Foundations
Australia Notes 35
As disclosed in Note 35, the Group acquired Poles
Foundations Australia (“PFA”). The acquisitions
were treated as Business Combinations defined by
AASB 3 and accounted for on a provisional basis.
In performing the purchase price allocations for the
acquisitions, the Group identified and estimated
the fair value of all assets acquired, liabilities
assumed, contingent consideration based on
performance hurdles and other intangible assets
associated with the acquisition.
The purchase price allocation has resulted in
goodwill of $14.0 million, intellectual property of
$4.2 million and customer relationships of $9.0
million being recognised.
This area is a key audit matter due to the
management estimates and judgments applied in
identifying separately identifiable intangible assets
and determining the fair value of any separately
identifiable intangible assets and earn-out
liabilities.
•
Assessing the adequacy of the Group’s presentation
and disclosures in the financial statements.
Our procedures included, amongst others:
•
Obtaining and reviewing the terms and conditions
contained in the Sales and Purchase agreements;
•
•
•
•
•
•
•
Obtaining the acquisition trial balance and performing
opening balance audit procedures to evaluate the
completeness and accuracy of assets acquired and
liabilities assumed;
Ensuring the total cost of the combinations included all
elements of consideration paid and payable with
reference to signed purchase agreements;
Tracing cash consideration paid to bank statements;
Evaluating management’s purchase price allocation
documentation and challenging their assessment of
separately identifiable intangible assets;
Engaging with auditor’s expert to assess the discount
rates applied and forecasted future cash flows to
determine valuations for other intangible assets;
Re-calculating the goodwill balance recognised by
deducting the fair value of identifiable net assets
acquired, the value of other intangible assets against
the total consideration paid; and
Ensuring the appropriateness of related financial
statement disclosures.
ANNUAL REPORT 2022
95
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2022
Goodwill – Note 22
As disclosed in Note 22, the Group recognised
goodwill totalling $19.5 million at 30 June 2022
across five cash-generating units (CGUs).
Goodwill is required to be assessed for impairment
annually by management as prescribed in AASB
136 Impairment of Assets.
Our procedures included, amongst others:
• Understanding and documenting management’s
process and controls related to the assessment of
impairment, including management’s identification of
CGUs and the calculation of the recoverable amount
for each CGU;
Management performs annual impairment testing
per AASB 136 to ensure the CGUs’ recoverable
amount is greater than its carrying value, utilising
either the greater of fair value less costs to sell or
its value in use.
The Group uses the discounted cash flow model
for the value-in-use approach to determine the
recoverable amount. In doing so, management
considers the following key inputs;
forecasted budgeted financial performance;
•
estimated growth rates;
• working capital adjustments;
•
•
•
estimated capital expenditure;
discount rate; and
terminal value.
This area is a key audit matter due to the
significant balance carried by the Group that
management has assessed using estimates and
judgement
• Evaluating the value-in-use models against the
requirements of AASB 136, including consultation with
our auditor’s valuation expert;
• Challenging the appropriateness of management’s
revenue and cost forecasts by comparing the
forecasted cash flows to actual growth rates achieved
historically;
• Reviewing management’s value-in-use calculations by:
o Testing the mathematical accuracy of the
calculations;
o Evaluating the forecast cash inflows and outflows
to be derived by the CGUs assets for
reasonableness;
o Comparing estimates and judgements for growth
rates to available market and industry data;
o Assessing the discount rates applied to forecast
future cash flows for reasonableness with
assistance from internal valuation specialists;
o Performing sensitivity analysis on the significant
inputs and assumptions made by management in
preparing its calculation; and
•
Assessing the adequacy of financial report
disclosures.
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 annual report for the year ended 30 June 2022, 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 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 and for 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.
96
GENUSPLUS GROUP LTD
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2022
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/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 26 to 31 of the Directors’ report for the year
ended 30 June 2022.
In our opinion, the Remuneration Report of GenusPlus Group Ltd, for the year ended 30 June 2022
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L A Stella
Partner – Audit & Assurance
Perth, 31 August 2022
ANNUAL REPORT 2022
97
ASX ADDITIONAL INFORMATION
AS AT 30 AUGUST 2022
Distribution of equity security holders
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Twenty largest shareholders
MR DAVID WILLIAM RICHES
DAVID WILLIAM RICHES
MATTHEW STEVEN RICHES & DAVID WILLIAM RICHES
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
CARJAY INVESTMENTS PTY LTD
ARROCHAR PTY LTD
CEDARFIELD HOLDINGS PTY LTD
NEIL RAE & MELAINE RAE & SIMEON RAE & DOMINIQUE RAE
MR KEMPER SHAW
CC RANKINE PTY LTD
BJ FRASER PTY LTD
WILLIAM TAYLOR NOMINEES PTY LTD
PATRICK LLOYD PTY LTD PATRICK LLOYD
GEORGE LLOYD PTY LTD GEORGE LLOYD
MR KENNETH JOSEPH HALL
PRECISION OPPORTUNITIES FUND LTD
MR WILLIAM JAMES BEAMENT
BOTSIS HOLDINGS PTY LTD
Substantial shareholders
Ordinary Shares
108,652
735,863
1,274,674
9,301,777
165,331,454
176,752,420
Number of
ordinary shares
held
Percentage of
capital held
39,461,473
39,461,474
12,800,000
11,547,021
10,271,593
5,012,068
4,734,689
3,850,000
3,041,865
2,392,344
2,376,947
2,316,765
2,316,765
2,148,684
1,600,000
1,600,000
1,550,000
1,266,357
1,196,172
1,140,000
150,084,217
22.33%
22.33%
7.24%
6.53%
5.81%
2.84%
2.68%
2.18%
1.72%
1.35%
1.34%
1.31%
1.31%
1.22%
0.91%
0.91%
0.88%
0.72%
0.68%
0.64%
84.91%
Number
The number of shares held by substantial shareholders and their associates are set out below:
David William Riches & Matthew Steven Riches & David William Riches Dave Riches & Matt Riches Unit
92,583,947
98
GENUSPLUS GROUP LTD
www.genus.com.au
ANNUAL REPORT 2022
99
CORPORATE DIRECTORY
Directors
Simon High
Chairman
Independent Non-Executive Director
David Riches
CEO and Managing Director
José Martins
Independent Non-Executive Director
Paul Gavazzi
Independent Non-Executive Director
Company Secretary
Damian Wright
Auditors
Grant Thornton Audit Pty Ltd
Central Park
Level 43, 152-158 St Georges Terrace
Perth WA 6000
Share Registry
Link Market Services Ltd
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
T: +61 8 9211 6670
Registered Office
GenusPlus Group Ltd
Level 1, 63-69 Abernethy Road
Belmont WA 6104
ASX Code: GNP
100
GENUSPLUS GROUP LTD
INNOVATIVE PEOPLE,
DELIVERING RESULTS
THROUGH EXPERTISE
AND HARD WORK
Connecting the
Future. Together.
genus.com.au
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