2023
annual
report
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
Highlights
Our Capabilities
Chairman’s Review
Managing Director’s Report
Sustainability
People
Financial Report
Corporate Directory
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4
6
10
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18
20
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GENUSPLUS GROUP LTD
Annual Report 2023
1
1
Annual Report 2023 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. We enable customers to
integrate new generation technology into traditional networks and support
emerging networking solutions, meeting the demands of a carbon neutral
economy; and helping to lead the transition to Australia’s clean future
through delivering complex, nationally-significant projects.
Powering Up Australia.
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.
design & engineering
construction
feasibility study
testing & commissioning
decommissioning
shutdowns & maintenance
connecting the future through
innovative power solutions
2
GenusPlus Group Ltd
3
Annual Report 2023 2023 highlights
we're a team of dedicated
industry professionals
$444 million
$36.8 million
Revenue of $444 million
Normalised EBITDA
of $36.8 million
$46.7 million
$15.7 million
Cash balance of $46.7 million
Up 67% on PCP
NPAT-A of $15.7 million
Up 7.6% on PCP
$392 million
Orderbook of $392 million and
strong tendered pipeline of $1.86 billion
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 Genus & our capabilities
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
4
5
6
Generating Source
Terminal
Substations
Transmission
Infrastructure
Zone
Substations
Distribution
Infrastructure
Primary Customer
Connection
Power Station/
E&I Construction
Solar
Wind
Battery Storage/
Hybrid Solutions
Terminal
Substations
Overhead
Transmission
Infrastructure
Underground
Transmission
Infrastructure
Zone
Substations
Overhead
Distribution
Infrastructure
Underground
Distribution
Infrastructure
Primary Customer
Connection
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 Genus & our capabilities
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
Mobile & Wireless
Infrastructure
Digital Solutions
•
•
•
•
Complete network designs
Line route selection & optimisation
Experienced field delivery capability
Field services from planning & design
through to construction & maintenance
•
•
•
•
•
•
Direct ploughing & optic fibre installation
Directional drilling
Trenching
Cable hauling & cable jointing
Pit & pipe installation
Asset installation
•
•
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
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 chairman's
review
A strong result as industry tailwinds increase
Genus produced a strong financial result this year, in the face
of some enforced project delays and both inflationary & skilled
labour-related challenges. Our diversification and growth
strategy remains firmly on track, and our record order book
and tender pipeline provide a solid base for future organic
growth.
Revenue for the year stood at $444 million while normalised
EBITDA increased by 4.8% to $36.8 million, which was above
market guidance and a record for the Company to date. This
result reflects solid performances across all our business
segments, given market conditions.
Pleasingly we continued to grow our market presence on the
East Coast with operations in the region now representing
34% of group revenue at a time of increasingly rapid
infrastructure development. This expansion marks the
achievement of a number of key strategic goals – with strong
growth expected in the medium term leveraging a large
pipeline of renewables and transmission projects to drive long
term growth in the business.
Strategic acquisitions
A key enabler of our ability to build a truly national offering
across our three segments has been a carefully executed
combination of pursuing organic growth whilst also acquiring
and integrating strategically positioned companies, which
were brought into the Group because they complement our
operating model and fit the Genus way of doing business.
This year has shown our ability to maximise the capabilities
of previously stand-alone operations in target markets which
showed value and scalability.
The restructuring of our Industrial Services business in
FY2022 saw improved results from this segment. Industrial
Services is well placed to capitalise on future opportunities,
particularly in the renewable energy sector.
Restructuring of the Communications acquisition in the
first half of FY2023 has seen a measurable improvement to
operational and financial results in the second half of FY2023.
Overall, this approach combined with cementing our existing
relationships with key clients, has elevated Genus’ capacity to
deliver while allowing us to pursue far bigger contracts.
Australia’s networks are evolving. We’re ready.
Positioned for strong growth
We have continued to secure key contract wins in line with
our strategy across our three segments of Infrastructure,
Industrial Services and Communications.
As we announced in March, we are progressing contract
negotiations to begin work on a Joint Venture partnership
on the HumeLink transmission project. This is a new 500kV
transmission line in Southern NSW which will connect Snowy
Hydro's 2.0 expansion to the network; as part of a $10 billion
transmission upgrade helping to drive the National Energy
Market’s renewables transition.
While this has taken longer than anticipated, what this clearly
demonstrates is the market recognising Genus’ ability to
consistently provide the skills and expertise required to
complete complex energy projects at a time when our clients
and the country need it the most.
Other key contract wins through the year include a $30
million award to deliver nbn Co’s N2P Evolution Module
as part of a 3-year Master Module Agreement; a contract to
develop transmission infrastructure for Fortescue’s Project
Energy Connect; and a $30 million award to complete
infrastructure work for Rio Tinto’s Western Range Project.
During the year we completed Stage One of the Kwinana
Battery Energy Storage System (KBESS1) for Synergy, which
positions us well for more utility-scale battery opportunities
across the nation.
Think Safe. Work Safe. Home Safe.
Our focus on safety and the conducting 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”) per million man-hours worked
of 2.4 at 30 June 2023 – surpassing our internal target of
3.5. The Group’s Lost Time Injury Frequency Rate (“LTIFR”)
was again zero, which is a direct result of the tireless effort
displayed by our outstanding operational teams.
Our expanding workforce continues to be built on experienced
professional staff, highly skilled trades people, a network of
trades-based workshops and specialised subcontractors.
Today the Group directly employs nearly 900 people
including 87 apprentices/ trainees. We believe that our
commitment to employing our own people plays a large part
in maintaining the proactive culture of Genus, which is one of
our key strategic pillars.
We ended the year in a strong financial position with a cash
balance of $46.7 million and net cash of $22.4 million, with
the Group’s cash position increasing 67% compared to the
previous year.
The continued strength of our balance sheet positions us
for organic and strategic acquisition opportunities focused
on increasing our existing scale and geographic reach, and
further developing our east coast presence.
Continuing to deliver for shareholders
The Board has declared a fully franked final dividend of 2.0
cents per share (cps), up from 1.8 cps last year
As was the case in the previous financial year, we remain
focused on maintaining a strong balance sheet to support
growth both organically and by strategic acquisition where we
see good value.
Looking to the future
With an extremely strong tender pipeline of $1.86 billion; an
order book standing at $392 million; budget and opportunity
leads in excess of $3 billion; and a workforce approaching
900, our growing and diversified company is well placed to
reach new heights in the years to come.
We are confident that our growth strategy positions us well
to play an active and major role in the expanding pipeline of
infrastructure opportunities across Australia, as the country
continues its crucial energy transition.
Our talented people and their commitment and dedication
always have and always will form the bedrock of our business.
To each and every one – thank you.
Finally, I again would like to thank you, our shareholders, for
continuing to be an integral part of our growth ambitions -
and I trust you will continue to share in our future success.
Simon High
Chairman
As Australia’s energy networks continue to evolve, we have developed a strong
platform for growth - ensuring we are well positioned to be an active participant
in the renewables transition; and the rewiring of the nation.
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 managing
director's
report
The diversification we have built into
the business has helped maintain
strong profitability throughout the
Group; this platform means that we
can consistently provide the expertise
required to complete complex projects
at a time when our clients and the
country need it the most.
A Strong Growth Platform
FY2023 was a strong year for Genus, considering a healthy
forward-looking focus on the integration of acquisitions and
consolidation of internal management systems, procedures
and organisational structures; this creates a solid platform
for future strong growth, with significant progress made to
position the Group to be an active and major participant in the
transition to renewable energy.
The diversification that we continue to build into the business
has helped us maintain strong profitability. East coast revenue
has grown to 34% during 2023 (2022: 22%) and the Group
delivered EBITDA margin improvement in FY2023 to 8.3%, up
from 7.8% in FY2022.
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.
A performance underpinned by strong
operational success
As the Chairman notes, this past year saw Genus shortlisted
to tender for delivery of part of the $3.3 billion Transgrid’s
HumeLink 500kV Transmission Project in NSW while
other major project activity included completion of Stage
1 of Synergy’s Kwinana Battery Energy Storage System
(KBESS) Project - in the process delivering WA’s first utility-
scale BESS - along with key electrical infrastructure package
awards from Rio Tinto and for Fortescue’s milestone Pilbara
Generation Project. 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 robust growth despite the prevailing environment. From
Revenue of $444 million, normalised EBITDA was up 4.8%
to $36.8 million. Net assets increased by $11.6 million which
reflects earnings in the year net of dividend payments.
Our Communications team was awarded a 3-year Master
Module Agreement with nbn under which Genus will deliver
the N2P Evolution Module to deploy additional fibre
infrastructure; including the provision of specialist planning,
design and construction of nbn broadband infrastructure.
This is a key opportunity alongside our ongoing contract
with Telstra to grow the Communications business. The
foundations of the division are in place to enable Genus
to take advantage of significant forecast spend in the
communications industry.
The Group has a strong cash position increasing Cash at bank
to $46.7 million at 30 June 2023, up from $27.9 million in
FY2022. Net cash is up to $22.4 million compared to $6.8
million in 2022.
Revenue
EBITDA1
Non-recurring transactions2
Normalised EBITDA3
Depreciation & Amortisation4
Normalised EBIT-A5
Amortisation of acquisition intangibles
EBIT
Profit for the year
NPAT-A6
FY2023
$
FY2022
$
444,178,894
450,936,669
Change
%
(1.5%)
33,666,128
32,994,800
3,124,369
2,114,658
36,790,497
35,109,458
(11,875,275)
(10,363,641)
24,915,222
24,745,816
(3,337,917)
(1,538,290)
18,452,936
21,089,128
13,405,524
13,556,474
4.8%
0.7%
15,742,065
14,633,277
7.6%
Note The table contains non-IFRS measures that are unaudited but derived from auditor reviewed FY23 Financial Statements. These measures are
presented to provide further insight into the Group’s performance.
EBITDA is earnings before interest, tax, depreciation and amortisation.
Non-recurring transactions relate to Acquisition costs, ECM Claim costs and Restructuring costs.
Normalised EBITDA is EBITDA plus Non-recurring transactions
Depreciation & amortisation excludes amortisation of acquisition intangibles.
Normalised EBIT-A is Normalised EBITDA less depreciation and amortisation (excluding amortisation of acquisition intangibles).
NPAT-A is Profit for the year plus amortisation of acquisition intangibles adjusted for tax effect at 30 June.
1
2.
3.
4.
5.
6.
Our people
Powering Up Australia
As ever, our success is dependent on the effort, capability
and commitment of our people. Their dedication and support
enables us to continue to deliver smart, innovative solutions
across our diverse sectors, which forms a significant part of
Genus’ competitive advantage.
Investing in the next generation of employees is integral to
the continued success of our business and the wider industry.
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.
Formalising our commitment to reconciliation
This year we were very proud to finalise and publish GenusPlus
Group’s first Reflect Reconciliation Action Plan (RAP). Through
this Plan, we reaffirm our commitment to actively work
toward reconciliation with Aboriginal and Torres Strait Islander
peoples.
We are committed to measuring and understanding the
impact of our activities. This includes ensuring that we remain
focused on creating positive and tangible outcomes for our
Aboriginal and Torres Strait Islander colleagues, partners and
communities.
Our RAP includes practical actions that will drive Genus’
contribution to reconciliation both internally and in the
communities in which we operate.
With industry tailwinds gaining momentum, Genus expects to
capitalise on this underlying momentum to deliver high single
to low double-digit growth in EBITDA in FY2024. We expect
to return to strong growth in the medium term with a large
pipeline of renewables and transmission projects to drive the
business.
We expect to see continued growth from our east coast
operations and a related increase in services revenue in
FY2024. The increased focus on the power network around
Australia should see significant opportunities present during
the coming 10- 20 years as the system goes through a
substantial transition from traditional energy sources to
generation from new and renewable technologies.
Whilst we continue to derive the majority of earnings from
the core business in Western Australia, we continue to make
substantial progress in expanding the business into the much
larger east coast markets.
David Riches
Managing Director
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023
Sustainability
innovative people,
delivering results
through expertise
and hard work
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GENUSPLUS GROUP LTD
15
GenusPlus Group LtdAnnual Report 2023 Sustainability
We will continue to implement health and safety initiatives which provide the
foundation for a sustainable safety culture.
SHEQ
With nearly 900 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 further 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.
Our main scope of work is predominantly high risk. To mitigate
the structural challenges of rapid growth, our SHEQ team is
focused on identifying our critical risks based on our Safety
Non-Negotiables.
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 FY23 include:
0
LTIFR at 30 June 2023
2.4
TRIFR at 30 June 2023
(exceeding our internal target of less than 3.5)
connecting the future.together.
powering up Australia
Our dedication goes beyond local sourcing, reflecting our commitment to
nurturing the growth and well-being of the communities we serve.
Community
We are dedicated to supporting the progress of the
communities in which we operate by extending aid through
contributions, grants, and sponsorships to organisations that
play a pivotal role in their development.
Our dedication goes beyond local sourcing, reflecting our
commitment to nurturing the growth and well-being of the
communities we serve. Through our financial contributions,
we actively participate in initiatives that make a meaningful
difference in these communities' development and prosperity.
Some of the organisations we’ve been proud to support
include:
•
•
•
•
•
•
•
•
•
•
•
•
Warwick Senators Under-14 Girls' basketball team
Darkness Into Light Perth walk
Under 10 team at Oran Park Rovers FC in NSW
Pannawonica Primary School, WA
Ronald McDonald House – Up All Night
Lions Cancer Institute inc ‘Special Children’s’ Christmas
Big Day Out’
Cancer Council Victoria
Australasian Institute of Policing
Rockingham Lakes Primary School Sporting Team
Royal Flying Doctors’ Service WA
NSW Rural Fire Service
Multiple Sclerosis Research Australia
We foster employee engagement in local community
endeavours by encouraging participation in volunteer activities
and endorsing attendance at community events. Over the
past year, our employees have actively engaged in a range of
community initiatives, including:
•
•
Collaborating with the Starlight Children’s Foundation
Australia: Our team had the privilege of visiting
the remarkable Starlight Experience Room at Perth
Children's Hospital. This organization tirelessly operates
life-changing programs, offering support, connection,
empathy, and positive distractions to seriously ill children
and their families. We take pride in supporting these
dedicated individuals who uphold the Foundation's
mission of brightening the lives of young patients,
recognizing that childhood experiences have lasting
impacts.
Engaging with the Early Learning Centre in Parkhurst,
Queensland: During Community Helpers Week, the
children at the center had an immersive experience as
honorary members of the GNIQ team. They donned Genus
helmets and line gloves and explored a truck, learning
about its mechanics and safety features. The children
were fascinated by the lights and stabilizers, and we left
them a piece of conductor as a memento. The visit was
a resounding success, with the centre's staff expressing
delight and anticipation for future engagements, including
a planned visit with a Crane Borer!
Our commitment to these community involvements reflects
our dedication to making a positive impact in the places we
operate and supports our ethos of enriching lives and fostering
connections.
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023
connecting the
future through
end-to-end
infrastructure
solutions
Sustainability
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.
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 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
Directors Declaration
Independent Auditor’s Report
22
35
36
37
38
39
40
41
95
96
financial report 2023
connecting
the future.
Powering up Australia -
from inspiration to operation
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20
GENUSPLUS GROUP LTD
21
GenusPlus Group LtdAnnual Report 2023 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 Company or Group) for the year ended 30 June 2023.
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 the Company were in office for the entire period unless otherwise stated.
Mr David Riches
David Riches is the Managing Director and CEO of the Group. 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 not served as a director of any other listed companies.
Mr Paul Gavazzi
Paul Gavazzi is a Non-Executive Director and the Chair of the Audit and Risk Committee, and a member of the Remuneration
and Nominations Committees. Paul has over 40 years’ experience as a practising lawyer in commercial law, specialising in
construction, projects and infrastructure. Paul was formerly senior partner of a large national law firm, and founder of the firm’s
Construction, Projects and Infrastructure Group. He is also the founder & Managing Director of Solve Global Pty Limited, a
company that plans, manages, predicts and solves high-stakes commercial disputes using data-based analytics and strategic
problem solving. 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 not served as a director of any other listed companies.
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 not served as a director of any other listed companies.
Mr José Martins
José Martins is a Non-Executive Director and a member of the Audit and Risk Committee and Chair of the Remuneration and
Nominations Committee. He brings over 25 years’ experience in the financial management of public and private companies. Jose
is a former CFO of ASX listed Ausdrill Ltd, Macmahon Holdings Ltd and Alliance Mining Commodities.
During the past three years he has also served as a director of the following listed companies:
Atlas Pearls Ltd (ASX: ATP).
Company Secretaries
Damian Wright is the Chief Financial Officer and Joint 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.
Strati Gregoriadis (BA, LLB, MBA) is the General Counsel and Joint Company Secretary of GenusPlus Group Ltd since commencing
with the Group in January 2023. Strati has previously, for a number of years, held General Counsel & Company Secretary roles
with ASX listed entities.
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
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 a decrease in contract
revenue from $450,936,669 to $444,178,894. The profit of the Group for the financial year after providing for income tax amounted
to $13,405,524 (FY2022: $13,556,475).
The Group reported a normalised EBITDA of $36.8 million for FY2023 ($35.1 million in FY2022), a strong year despite a year
focused on the integration of acquisitions, consolidation of internal management systems, procedures and organisational
structures in order to create a solid platform for future strong growth with significant progress made to position the Group to
be an active participant in the transition to renewable energy. The Group successfully managed delays in project awards on a
number of key projects, significant cost inflation and skilled labour pressures to deliver the strong results.
Despite these challenges, the diversification that is being built into the business has helped maintain strong profitability of the
Group. East coast revenue has grown to 34% during 2023 (2022: 22%) and the Group delivered EBITDA margin improvement in
FY2023 to 8.3%, up from 7.8% in FY2022.
The Group has a strong cash position increasing Cash at bank to $46.7 million at 30 June 2023, up from $27.9 million in FY2022.
Net cash is up to $22.4 million compared to $6.8 million in 2022.
The Group’s net assets increased by $11,553,060 which reflects earnings in the year net of dividend payments.
The acquisitions which occurred during the year are in line with the Group’s strategy to strengthen its geographical position to
take advantage of significant infrastructure investment in new markets. Refer to Note 37.
A comparison of the Group’s performance from continuing operations is set out below:
Revenue
EBITDA1
Non-recurring transactions2
Normalised EBITDA3
Depreciation & Amortisation4
Normalised EBIT-A5
Amortisation of acquisition intangibles
EBIT
Profit for the year
NPAT-A6
FY2023
$
FY2022
$
444,178,894
450,936,669
Change
%
(1.5%)
33,666,128
32,994,800
3,124,369
2,114,658
36,790,497
35,109,458
(11,875,275)
(10,363,641)
24,915,222
24,745,816
(3,337,917)
(1,538,290)
18,452,936
21,089,128
13,405,524
13,556,474
4.8%
0.7%
15,742,065
14,633,277
7.6%
Note: The table contains non-IFRS measures that are unaudited but derived from auditor reviewed FY23 Financial Statements. These measures are
presented to provide further insight into the Group’s performance.
1
2
3
4
5
6
EBITDA is earnings before interest, tax, depreciation and amortisation.
Non-recurring transactions relate to Acquisition costs, ECM Claim costs and Restructuring costs.
Normalised EBITDA is EBITDA plus Non-recurring transactions
Depreciation & amortisation excludes amortisation of acquisition intangibles.
Normalised EBIT-A is Normalised EBITDA less depreciation and amortisation (excluding amortisation of acquisition intangibles).
NPAT-A is Profit for the year plus amortisation of acquisition intangibles adjusted for tax effect at 30%.
22
22
GENUSPLUS GROUP LTD
23
GenusPlus Group LtdAnnual Report 2023 Directors’ Report
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.
Revenue from recurring works including long term customer/panel revenue and revenue from long term supply & maintenance
contracts has grown to a forecast of $200 million in FY 2024 with a project orderbook of $192 million revenue.
The Group has a current $1.863 billion tender pipeline providing a strong platform for continued growth.
In addition to the tendered pipeline there are further significant budgets and opportunities in progress in excess of $3 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 Australian transmission network grow substantially. In addition to the major
investment in the transmission network and battery storage around Australia, Genus is well positioned to construct connections
to the new transmission network from new energy power sources and renewable energy zones.
Outlook
With industry tailwinds gaining momentum FY2024, Genus expects to capitalise on this underlying momentum to deliver high
single to low double-digit growth in EBITDA. Genus expects 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 in FY2024. The
increase focus on the power network around Australia should see significant opportunities present during the coming 10-20 years
as the network goes through a substantial transition from traditional energy source of coal to generation from new and renewable
energy.
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, which now represents 34% of revenue of the business.
During the year the company acquired the assets of ETS Tasmania and L&M Powerlines in Queensland expanding the Genus
infrastructure services in the east coast.
Genus Communications was awarded a 3-year Master Module Agreement with NBN pursuant to which NBN has awarded the
N2P Evolution Module to deploy additional fibre infrastructure for nbn which includes the provision of specialist planning, design
and construction of nbn broadband infrastructure. This is a key opportunity alongside our contract with Telstra to grow the
Communications business. The foundations of the business are in place to enable the Genus to take advantage of the large
ongoing spend in the communications industry.
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:
Capital structure
Issued shares
In accordance with the acquisition agreement for Blue Tongue Energy Pty Ltd (Blue Tongue), deferred consideration that was due
and payable to the previous owners of Blue Tongue was settled by way of equity allotment on 15 December 2022. 972,528 shares
were transferred to the previous owners at a market value of $923,902 on that date.
Dividends
The Board has resolved to declare a dividend in respect of the year ended 30 June 2023 of 2.0 cents per share fully franked for a
total of $3,554,499. (30 June 2022: $3,181,544). The ex-Dividend Date for this dividend will be 3 October 2023, the Record Date is
4 October 2023 and the Payment Date will be 3 November 2023.
Directors’ Report
Events arising since the end of the reporting period
On 31 July 2023, GenusPlus Group completed the acquisition of 100% of BlueTongue Energy Pty Ltd by acquiring the remaining
50% stake of the business for total consideration of $500,000. The acquisition will enable GenusPlus to expand its capability to
fully service the Australian renewable energy market through BlueTongue’s hybrid energy solutions particularly in the Battery
Energy Storage (BESS) market.
On 21 August 2023, the Directors declared a final fully franked dividend of 2.0 cents per share with a record date of 4 October
2023 and a payment date of 3 November 2023. The total dividend payable is an aggregate of $3,554,499.
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
strategic acquisitions in Tasmania, NSW and QLD;
Pursue substation and battery energy system projects, utilising the ability to be more selective on projects given the
strength of the Genus brand;
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 Communications business in the large telecommunications sector;
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 recurring works including long term customer/panel revenue and revenue from long
term supply & maintenance contracts to provide a stable base line of year on year revenue.
Risk Management
In managing risk, Genus has adopted a proactive approach aligned with ISO31000 and the Corporate Governance Principles and
Recommendations 4th Edition of the ASX Corporate Governance Council.
Genus endeavours to strike the correct balance between managing risks and making effective risk-reward decisions. Given the
breadth, scale and geographies of Genus’ operations, Genus is exposed to a wide range of factors which have the potential to
impact it. It has controls in place to attempt to manage and mitigate risks where it is practicable and efficient to do so, although
there is no guarantee that these efforts will be successful. Below is an overview of:
(i)
some key material risks Genus is exposed to which could potentially have a material adverse impact on the financial
condition and results of Genus’ operations; and
(ii) how it manages those risks. These risks are not set out in any particular order and are not intended as an exhaustive list of all
the uncertainties and risks Genus is or may be exposed to.
Winning New Work
Genus’ performance is impacted by its ability to win and complete new contracts. Any failure by Genus to continue to win new
contracts will impact its financial performance and position.
Genus endeavours to secure and sustain high-quality projects supported by strong financial and commercial practices.
Nevertheless, there exists inherent unpredictability in pricing projects due to the risks prevalent in our operating environment.
24
24
GENUSPLUS GROUP LTD
25
GenusPlus Group LtdAnnual Report 2023 Directors’ Report
Financial
Directors’ Report
Contract Pricing Risk
Maintaining financial stability is crucial for Genus’ long-term success, and a failure by Genus to maintain this financial stability
could adversely impact its operations and financial performance.
If relevant internal processes are not complied with or if Genus materially underestimates the cost of providing services,
equipment, or plant, there is a risk of a negative impact on its financial performance.
Genus actively monitors and manages financial risks through prudent financial planning, budgeting, and risk assessment
processes. Genus continuously evaluates market conditions, manages currency risks, and maintain robust financial controls
and reporting mechanisms. By adhering to these procedures, Genus aims to safeguard its financial performance and ensure the
sustainable growth of its business.
Liquidity Risk
This refers to the potential inability of Genus to meet its financial obligations when they become due. This risk can arise from
factors such as counterparty risk, underperforming projects, and challenges in efficiently managing cash.
Genus manages this risk 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, and with a comprehensive insurance program providing protection against
key risks and losses.
Further information can be found in Note 39 of this Annual Financial Report.
Financing Risk
Genus has financing facilities with external financiers. A default under any of these facilities could result in withdrawal of financial
support or an increase in the cost of financing. Genus manages this risk by monitoring banking covenants regularly and reporting
to the financiers quarterly. Regular meetings are held with the financiers to keep them abreast of the Group performance where
existing and new facility requirements are discussed.
Bank Guarantee and Insurance Bond Facilities
Genus’ customers often require Genus to provide security in the form of bank guarantees or insurance bonds. As Genus wins
more and larger contracts, its bank guarantee and insurance bond facilities are reduced and this could constrain or inhibit Genus
in taking on new work.
Genus manages this risk through early engagement and negotiation with the providers of its facilities, seeking new or additional
facilities as required, and actively managing the return of outstanding guarantees and bonds.
Project Delivery, Margins and Operations
Execution and delivery of projects involves judgement regarding the planning, development and operation of complex operating
facilities and equipment. Genus’ operations, cash flows and liquidity could be affected if the resources or time needed to complete
a project are miscalculated, if it fails to meet contractual obligations, or if it encounters delays or unspecified conditions. Cost
overruns, unfavourable contract outcomes, serious or continued operational failure, adverse industrial relations outcomes,
disruption at key facilities, disruptions to information and communication systems or a safety incident have the potential to have
an adverse financial impact. Genus is also exposed to input costs through its operations, such as the cost of fuel and energy
sources, equipment and personnel. To the extent that these costs cannot be passed on to customers in a timely manner, or at all,
Genus’ financial performance could be adversely affected.
Genus employs project management methodologies to ensure timely and efficient completion of projects while maintaining high-
quality standards. It continuously evaluates project risks, employs project risk mitigation strategies, and monitors project progress
closely. By implementing effective project controls and optimising operational efficiencies, Genus aims to deliver projects within
budget and protect its margins.
Labour Cost and Availability
Genus’ growth and profitability may be limited by loss of key operating personnel, inability to recruit and retain skilled and
experienced employees or by increases in compensation costs. The growth of activity in the power sector has increased demand
for quality resources, creating a tightening market and upward pressures to secure skilled leaders, professionals and personnel.
The Group mitigates these risks by taking a proactive and adaptable approach. The Group regularly plans workforce requirements,
utilising human resource management software to streamline processes to track workforce data, and through contingency
planning, and training and internal promotion.
Genus has strong internal tendering and commercial review processes aimed at ensuring relevant costs and commercial risks are
identified and priced into its bids.
Health and Safety
Genus may experience incidents, including life-changing events which have the potential to cause physical or psychological
harm. This could result in the loss of a contract, have an adverse impact to Genus’ reputation, and potentially difficulty in winning
new work.
Genus is committed to providing a systematic process to manage risks around health and safety. Health and Safety is the
first item discussed at Board and other internal meetings, regular safety audits are undertaken, and it has ongoing employee
engagement initiatives to promote a strong safety culture. Genus has established a Health, Safety, Environment and Quality
(SHEQ) management system aligned with the Australian standards [insert ISO accreditations]. The systems encompass various
key aspects:
•
•
•
•
•
Integration of psychosocial hazards into operational risk management practices, ensuring comprehensive identification and
mitigation of potential risks.
Provision of appropriate training, supervision, and resources to promote a safe working environment.
Implementation of High-Risk Standards and verification processes to establish a framework for managing high-risk incidents
that could lead to severe injuries or fatalities.
Regular review and audit of SHEQ processes and controls to ensure ongoing effectiveness and compliance.
Monitoring of periodic SHEQ reporting and SHEQ bulletins at the Group level to identify trends, areas for improvement, and to
take prompt action when necessary.
Cyber Security
The potential for cyber security attacks, misuse and release of sensitive information are ongoing and real risks to Genus.
Genus has been reviewing and in the process of implementing and upgrading a number of cybersecurity measures to protect
its IT infrastructure, networks, and sensitive data. These measures include investing in systems and infrastructure, firewalls,
encryption protocols, regular vulnerability assessments, and employee training on data security best practices, and implementing:
•
•
•
•
Information security management systems to ensure comprehensive protection and management of information assets.
Utilisation of anti-malware and endpoint detection and response software to detect and prevent malicious activities on our
systems.
Implementation of multi-factor authentication to add an extra layer of security by requiring multiple forms of identification
for access.
Developing business resilience plans that specifically address cyber-related scenarios to ensure continuity of operations in
the event of an incident.
Climate Change and Carbon Emissions
The regulation and focus in these areas has increased significantly, with growing pressure on companies to disclose their
measures for identifying and managing climate related risks.
Genus will seek continual improvements in energy efficiency across its business to understand and reduce the carbon intensity of
operations, and is reviewing and gathering data required for reporting.
26
26
GENUSPLUS GROUP LTD
27
GenusPlus Group LtdAnnual Report 2023 Directors’ Report
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.
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 28 November 2022. There were no adverse comments from
the vote on the Remuneration Report for the financial year ending 30 June 2022.
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 ($)
2023
7.6
2.0
13,405
1.12
2022
8.4
1.8
13,556
1.27
2021
8.6
1.8
13,349
0.94
Directors’ Report
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
17
17
17
17
B
17
17
16
16
A
n/a
3
3
3
B
n/a
3
3
3
A
2
n/a
2
2
B
2
n/a
2
2
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.
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
28
28
GENUSPLUS GROUP LTD
29
GenusPlus Group LtdAnnual Report 2023 Directors’ Report
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1
30
30
GENUSPLUS GROUP LTD
31
GenusPlus Group LtdAnnual Report 2023
Directors’ Report
Directors’ Report
Remuneration Report (audited) (continued)
b
Details of remuneration (continued)
Remuneration Report (audited) (continued)
e
Shares held by key management personnel
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
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
Executive Directors
David Riches
Other Key Management Personnel
Damian Wright
Michael Green
George Lloyd
Strati Gregoriadis
Hasan Murad
Fixed
remuneration
At risk:
Short Term
Incentives (STI)
At risk:
options
43
61
61
61
72
61
57%
39
39
39
28
39
-
-
-
-
-
-
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
Year ended 30 June 2023
David Riches
Simon High
José Martins
Paul Gavazzi
Damian Wright
Michael Green
George Lloyd
Strati Gregoriadis
Hasan Murad
Balance at
start of year
Granted as
remuneration
Other changes
Held at the end of
reporting period
92,583,947
304,167
100,000
204,167
72,917
130,208
1,626,042
-
72,917
-
-
-
-
-
-
-
-
-
1,000,000
93,583,947
-
-
-
-
-
-
-
-
304,167
100,000
204,167
72,917
130,208
1,626,042
-
72,917
Term of agreement
Notice period
Loans to key management personnel
None of the shares included in the table above are held nominally by key management personnel.
Employee
David Riches
Damian Wright
Michael Green
George Lloyd
Strati Gregoriadis
Hasan Murad
Base salary
(incl super)
361,200
298,214
284,863
322,436
350,000
345,292
Unspecified
Six months
Unspecified
Three months
Unspecified
Three months
Unspecified
Six months
Unspecified
Three 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
Strati Gregoriadis2
Hasan Murad
Included in
remuneration
($)
Percentage
vested during
the year
Percentage
forfeited during
the year
-
-
-
99,254
94,800
107,193
-
114,554
55.95
56.18
55.50
-
55.07
44.05%
43.82%
44.50%
-
44.93%
1
2
David Riches has elected not to receive a performance-based incentive in relation to the year ended 30 June 2023.
Strati Gregoriadis was appointed to the Company on 19 January 2023.
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.
f
Other transactions with key management personnel and their related parties
Details and terms and conditions of other transactions with KMP and their related parties:
Purchases
Property leases
During 2023, 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 2023 $680,012 was recognised in the operating result for the year in relation to
these properties. NIL was un-paid as of the reporting date.
Engineering services
During 2023, the Group utilised the engineering services of Partum Engineering Pty Ltd, of which David Riches is also a
Director, for design and other work. $9,893,117 was recognised as an expense in relation to these services. $994,898 was
un-paid as of the reporting date.
Transportation and logistical services
During 2023, 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.
$565,626 was recognised as an expense for these services, of which $49,161 was unpaid as of the reporting date.
Injury management
During 2023, Edge People Management Pty Ltd, in which David Riches holds an interest, provided injury management
services to the Group. $108,833 was recognised as an expense in relation to these services. $15,623 was un-paid as of the
reporting date.
End of audited Remuneration Report.
32
32
GENUSPLUS GROUP LTD
33
GenusPlus Group LtdAnnual Report 2023 Directors’ Report
Auditor’s Independence Declaration
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 (including Independence Standards), 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 34 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
35 and forms part of this Directors’ Report.
Signed in accordance with a resolution of the Board of Directors.
David Riches
Director, XX August 2023
34
34
GENUSPLUS GROUP LTD
Auditor’s Independence Declaration
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Perth WA 6000
PO Box 7757
Grant Thornton Audit Pty Ltd
Cloisters Square
Level 43 Central Park
Perth WA 6850
152-158 St Georges Terrace
Perth WA 6000
T +61 8 9480 2000
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
To the Directors of GenusPlus Group Ltd
Auditor’s Independence Declaration
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 2023, I declare that, to the best of my knowledge and belief,
To the Directors of GenusPlus Group Ltd
there have been:
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
of GenusPlus Group Ltd for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief,
there have been:
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L A Stella
Partner – Audit & Assurance
Perth, 22 August 2023
L A Stella
Partner – Audit & Assurance
Perth, 22 August 2023
www.grantthornton.com.au
ACN-130 913 594
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.
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
ACN-130 913 594
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
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.
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
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
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).
Legislation.
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
w
w
35
GenusPlus Group LtdAnnual Report 2023
Corporate Governance Statement
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2023
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 2023.
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 2023 Corporate Governance Statement, to be released to shareholders towards the end of September 2023, 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.
Revenue
Other income
Employee expenses
Raw materials and consumables expenses
Contractors and labour hire expenses
Motor vehicle expenses
Depreciation expense
Other 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
2023
$
2022
$
444,178,894
450,936,669
3,690,452
1,962,423
28
(140,657,388)
(137,197,766)
(125,597,200)
(139,298,892)
(119,167,019)
(114,602,305)
(13,969,192)
(16,037,478)
(15,213,191)
(11,901,931)
(14,812,420)
(12,771,590)
18,452,935
21,089,130
(212,093)
(401,442)
63,346
401,393
186,990
215,401
8,550
(461,000)
(1,548,058)
(1,077,105)
16,693,733
20,024,314
(3,288,210)
(6,467,839)
13,405,524
13,556,475
22
10
8
9
12
11
12
13
(146,908)
160,117
13,258,616
13,716,592
13,258,616
13,716,592
14
14
7.56
7.56
8.36
8.36
36
36
GENUSPLUS GROUP LTD
37
GenusPlus Group LtdAnnual Report 2023 Consolidated Statement of Financial Position
As at 30 June 2023
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Financial assets
Current tax asset
Other assets
Total current assets
Non-current assets
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
Financial liabilities
Lease liabilities
Current tax liabilities
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
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
Notes
2023
$
2022
$
15
16
17
19
20
13
21
46,737,238
27,882,473
56,948,784
68,872,911
37,595,573
45,734,278
3,796,472
3,728,803
326,741
-
5,439,866
-
4,569,537
1,582,879
150,844,674
152,370,881
20,18
1,130,376
993,833
8
9
22
23
24
25
26
27
23
13
28
29
27
23
13
28
30
31
2,874,206
3,086,299
-
401,442
18,247,524
17,675,106
23,258,391
23,283,092
31,063,401
34,173,243
76,573,898
79,613,015
227,418,572
231,983,896
50,993,122
72,608,068
16,876,882
12,752,963
1,580,000
6,869,953
9,007,690
6,725,475
7,765,884
-
8,607,305
6,487,235
50,000
1,221,721
93,840,474
107,705,824
4,280,000
3,924,000
12,861,963
14,232,018
10,550,113
10,148,438
909,889
2,550,543
28,601,965
30,854,999
122,442,439
138,560,823
104,976,133
93,423,073
55,265,025
53,789,037
(490,350)
(343,442)
50,201,458
39,977,478
104,976,133
93,423,073
Share
capital
$
Retained
earnings
$
Notes
Corporate
Restructure
Reserve
$
Foreign
currency
translation
reserve
$
Total
$
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:
-
-
-
13,556,475
-
13,556,475
-
-
-
proceeds from capital raising
30
20,000,000
share issues pursuant to a business
combination
30,37
6,023,589
cost of share issues
dividend paid
30
32
Changes in ownership interests:
disposal of Burton Training
& Consultancy Pty Ltd
(1,160,306)
-
(2,800,619)
24,863,283
(2,800,619)
-
(66,393)
Sub-total
24,863,283
10,689,463
Balance at 1 July 2022
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
-
-
-
13,405,524
-
13,405,524
share issues pursuant to a business
combination
30,37
923,902
deferred tax adjustments in Equity
558,074
-
-
dividend paid
share issue costs
Sub-total
32
-
(3,181,544)
(5,988)
-
1,475,988
(3,181,544)
1,475,988
10,223,980
-
-
-
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
-
13,405,524
(146,908)
(146,908)
(146,908)
13,258,616
-
-
-
-
-
923,902
558,074
(3,181,544)
(5,988)
(1,705,556)
(146,908)
11,553,060
Balance at 30 June 2022
53,789,037
39,977,478
(511,834)
168,392
93,423,073
53,789,037
39,977,478
(511,834)
168,392
93,423,073
Balance at 30 June 2023
55,265,025
50,201,458
(511,834)
21,484
104,976,133
This statement should be read in conjunction with the notes to the financial statements.
This statement should be read in conjunction with the notes to the financial statements.
38
38
GENUSPLUS GROUP LTD
39
GenusPlus Group LtdAnnual Report 2023
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
Operating activities
Receipts from customers
Payments to suppliers and employees
Income tax refund / (paid)
Notes
2023
$
2022
$
507,229,739
465,134,004
(477,044,403)
(451,425,418)
8,966,552
(2,243,853)
Net cash provided by operating activities
33
39,151,888
11,464,733
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
Receipts of sub-lease instalments
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
2,712,638
1,386,650
(5,697,192)
(4,870,466)
(195,165)
-
-
28,168
170,000
(1,000,000)
37
(4,132,995)
(19,963,360)
(7,312,714)
(24,249,008)
2,900,000
-
(2,210,000)
(1,670,000)
289,335
-
(9,274,224)
(6,975,397)
30
30
-
-
20,000,000
(1,160,306)
(3,181,544)
(2,800,619)
186,990
8,550
(1,548,058)
(1,077,105)
(12,837,501)
6,325,123
19,001,673
(6,459,152)
27,882,473
34,181,508
(146,908)
160,117
Cash and cash equivalents at end of financial year
15
46,737,238
27,882,473
This statement should be read in conjunction with the notes to the financial statements.
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, New South Wales and
Tasmanian 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 2023 were approved and authorised for issue by the Board of
Directors on 21 August 2023.
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 2022
The Group has adopted all the new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1
July 2022.
AASB 2020-3 Amendments to Australian Accounting Standards - Annual Improvements 2018–2020 and Other
Amendments
Annual Improvements
The application of the amendments did not have a material impact on the Group's consolidated financial statements, as the
amendments either do not affect the Group’s existing accounting policies, or apply to situations, transactions and events
that the Group does not undertake.
Amendments to AASB 3 Business Combinations
The amendments are effective for business combinations for which the date of acquisition is on or after the beginning of
the first annual period beginning on or after 1 January 2022. The application of the amendments in the current period have
not impacted the accounting for business combinations which have occurred during the current period.
Onerous Contracts – Cost of Fulfilling a Contract
The application of the amendments did not have a material impact on the Group’s consolidated financial statements.
Certain new accounting standards and interpretations have been published that are mandatory for 30 June 2023 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.
40
40
GENUSPLUS GROUP LTD
41
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023
3.1 New standards adopted as at 1 July 2022 (continued)
4.
Statement of accounting policies
AASB 2021-7 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128
and Editorial Corrections
The editorial corrections in AASB 2021-7 are effective for either annual periods beginning on or after 1 January 2023 (those
in respect of AASB 17 Insurance Contracts) or 1 January 2022.
The application of the amendments did not have a material impact on the Group's consolidated financial statements.
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 2023
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.
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 42.
Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2023. 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.
42
42
GENUSPLUS GROUP LTD
43
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 4.
Statement of accounting policies (continued)
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.
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 contract liabilities in the statement of financial position (see Note 26). 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.
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 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 standalone selling prices.
Work order revenue generated in the Communications division is recognised at a point in time as the customer receives 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) 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. 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 137 takes into account an appropriate allocation of construction overheads.
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.
Borrowing costs
Other borrowing costs are expensed in the period in which they are incurred and reported in ‘finance costs’ (see Note 12).
44
44
GENUSPLUS GROUP LTD
45
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 4.
Statement of accounting policies (continued)
4.
Statement of accounting policies (continued)
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 24 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%
10% - 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.
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.
46
46
GENUSPLUS GROUP LTD
47
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 4.
Statement of accounting policies (continued)
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.
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.
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.
48
48
GENUSPLUS GROUP LTD
49
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 4.
Statement of accounting policies (continued)
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 - Non-current assets held for sale and discontinued operations’.
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 –
Investments in associates and joint ventures’ (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).
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 39 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.
50
50
GENUSPLUS GROUP LTD
51
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 4.
Statement of accounting policies (continued)
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.
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 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.
52
52
GENUSPLUS GROUP LTD
53
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 4.
Statement of accounting policies (continued)
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.
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.
54
54
GENUSPLUS GROUP LTD
55
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 $
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5
56
56
GENUSPLUS GROUP LTD
57
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023
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:
6.
Revenue
The Group’s revenue disaggregated by type is as follows:
Revenues
Total reportable segment revenues
Other segment revenues
Elimination of intersegment revenues
Group Revenues
Profit or loss
Note
2023
$
2022
$
444,178,894
450,936,669
21,509,363
16,573,612
(17,818,911)
(13,589,277)
447,869,346
453,921,004
Total reportable segment operating profit
17,491,329
21,673,380
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
Elimination of intersegment assets
Group assets
Liabilities
Total reportable segment liabilities
Other segment liabilities
Elimination of intersegment liabilities
Group liabilities
(8,395,026)
(6,807,627)
(121,680)
(155,278)
(728)
(65,425)
(30,215)
(87,805)
(2,277,344)
(2,260,574)
(9,691,926)
(7,888,861)
21,513,735
16,646,110
18,452,935
21,089,130
(401,442)
(212,093)
63,346
401,393
(1,548,058)
(1,077,105)
215,401
186,990
(461,000)
8,550
16,693,733
20,024,314
197,993,015
204,057,384
61,379,305
42,254,823
(31,953,748)
(14,328,311)
227,418,572
231,983,896
123,211,089
148,213,941
10,397,753
14,466,983
(11,166,403)
(24,120,101)
122,442,439
138,560,823
Construction
Services
Note
2023
$
2022
$
305,341,500
331,450,121
138,837,394
119,486,548
444,178,894
450,936,669
The Group’s revenue disaggregated by pattern of revenue recognition is as follows:
Construction
Note
2023
$
2022
$
2023
$
Services
2022
$
Products and services
Transferred over time
305,341,500
331,450,121
97,795,450
74,416,276
Transferred at a point in time
-
-
41,041,944
45,070,272
305,341,500
331,450,121
138,837,394
119,486,548
Contract balances
Trade receivables
Contract assets
Note
16
17
2023
$
2022
$
54,623,086
67,729,376
37,595,573
45,734,278
92,218,659
113,463,654
Trade receivables are non-interest bearing and are generally on 30 to 90 day terms. In 2023 ($38,069) (2022: $91,983) was
recognised as provision for expected credit losses on trade receivables. The decrease in trade receivables and contract assets for
2023 is representative of lower operational activity in June compared to the prior year on significant projects.
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 2023.
Revenue recognised as a contract liability in prior period
11,467,739
12,454,989
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
2023
$
2022
$
Unsatisfied performance obligations
Transaction price expected to be recognised in future years for unsatisfied performance obligations at 30 June 2023.
Construction revenue
Services revenue
Note
2023
$
2022
$
165,800,000
188,800,000
4,500,000
2,000,000
170,300,000
190,800,000
58
58
GENUSPLUS GROUP LTD
59
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023
7.
Other income
8.
Joint ventures (continued)
Net gain on disposal of property, plant and equipment
Insurance claims and recoveries
Apprenticeship training subsidies
Scrap metal sales
Equipment hire
Disposal proceeds - Connect Infrastructure Design Pty Ltd
Other income
8.
Joint ventures
Details of material joint ventures
Note
2023
$
1,343,236
280,732
889,898
182,695
215,260
300,000
478,631
2022
$
279,015
161,363
851,412
211,742
-
-
458,891
No dividends were received from Blue Tongue Energy Pty Ltd during the year ended 30 June 2023.
Summarised Financial Information
Opening carrying value of investment in Associate
3,086,299
-
Note
30 Jun 2023
$
30 Jun 2022
$
Initial investment in associate (a)
Investment in associate recognised during the reporting period (b)
Share of profit using the equity method
-
-
1,000,000
2,022,953
(212,093)
63,346
2,874,206
3,086,299
3,690,452
1,962,423
(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 represents contingent consideration paid to the previous owners upon achievement
of earn-out targets as notified in the ASX release dated 20 December 2021. This was settled in cash (14 November 2022 - $1.1m) and equity (15
December 2022 - $0.9m).
On 31 July 2023, GenusPlus acquired the remaining 50% ownership interest in Blue Tongue Energy for cash consideration of $500,000.
Details of each of the Group’s material joint ventures at the end of the reporting period are as follows:
9.
Associates
Name of joint venture
Principal activity
Place of incorporation
Proportion of ownership interest
held by the Group
30 June 2023
30 June 2022
Blue Tongue Energy Pty Ltd Design and construction of
Perth, WA
50%
50%
hybrid power technology
and micro-grid energy
markets
Blue Tongue Energy contributed a loss of ($212,093) (2022 - $63,000 profit) before tax to the Group for the period.
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% (2022: 50%)
Goodwill
Group’s carrying amount of the investment
Note
30 Jun 2023
$
30 Jun 2022
$
1,480,933
929,882
577,229
2,091,329
(1,605,594)
(1,706,362)
(553,962)
(1,138,872)
(101,394)
(50,697)
175,977
87,989
2,924,903
2,998,310
2,874,206
3,086,299
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 2023
$
30 Jun 2022
$
Current assets
Non current assets
Current liabilities
Non-current liabilities
Equity
Group’s share in equity – 39% (2022: 39%)
Share of losses not recognised
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
(Loss) / profit before tax
Income tax benefit / (expense) at 25%
(Loss) / profit for the year (continuing operations)
Total comprehensive income for the year (continuing operations)
Group’s share of (loss) / profit for the year at 39%
11,623,070
8,594,370
1,132,690
823,237
(12,931,974)
(8,388,268)
(423,454)
-
(599,668)
1,029,339
(233,871)
233,871
401,442
-
-
401,442
Note
30 Jun 2023
$
30 Jun 2022
$
40,134,620
24,786,151
(36,487,259)
(22,215,897)
(5,292,908)
(1,166,455)
(526,187)
(31,515)
(2,171,734)
1,372,284
542,934
(343,071)
(1,628,800)
(1,628,800)
(401,442)
1,029,213
1,029,213
401,393
60
60
GENUSPLUS GROUP LTD
61
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 9.
Associates (continued)
Movement in carry value
Summarised Financial Information
Opening carrying value of joint venture
Share of (loss) / profit using the equity method
Note
30 Jun 2023
$
30 Jun 2022
$
401,442
(401,442)
-
49
401,393
401,442
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 2023.
During the year ended 30 June 2023, Maali Group Pty Ltd reported operating losses of ($1,628,800). In accordance with AASB
128, the entity has discontinued recognising its share of losses in excess of the carrying amount of the interest in the associate.
10. Other expenses
Other expenses recognised during the period
Insurance
Consultancy, legal and other professional fees
Computer, and other ICT expenses
Occupancy costs
Stamp duty – acquisition of Pole Foundations
Travel, accommodation and entertainment
Corporate communications and sponsorships
Other expenses
Total other expenses
11. Other gains and losses
Other gains and losses recognised during the period
Net gain arising on financial liabilities designated as at FVTPL
Net (loss) arising on financial assets mandatorily measured as at FVTPL
Net foreign exchange gain
Other gains and (losses)
Total other gains and losses
Note
2023
$
2022
$
6,131,787
5,022,260
1,413,511
2,291,264
1,267,210
1,800,257
1,247,017
879,336
948,370
794,591
314,665
-
313,202
279,869
2,695,269
2,185,402
14,812,420
12,771,590
Note
2023
$
2022
$
601,000
-
(461,000)
(461,000)
115,664
(40,263)
215,401
-
-
(461,000)
12. Finance costs and finance income
Finance income for the reporting periods consist of the following:
Interest income from cash and cash equivalents
Interest on leases
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
13.
Income tax expense
Note
Note
23
2023
$
138,575
48,415
186,990
2023
$
279,088
957,051
1,236,139
2022
$
8,550
-
8,550
2022
$
142,053
703,456
845,509
298,283
231,596
13,636
311,919
1,548,058
-
231,596
1,077,105
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% (2022: 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:
Adjustment for non-deductible expenses:
Adjustments in the current year in relation to the current tax of prior years
Actual tax expense
Tax expense comprises:
Income tax payable
Origination and reversal of temporary differences
Income tax expense reported in the income statement
The applicable effective tax rates are:
2023
$
2022
$
16,693,733
20,024,314
30%
30%
5,008,120
6,007,294
(180,300)
227,110
(1,766,720)
-
202,251
258,294
3,288,210
6,467,839
7,660,030
72,003
(4,371,820)
6,395,836
3,288,210
6,467,839
19.7%
32.3%
62
62
GENUSPLUS GROUP LTD
63
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 13.
Income tax expense (continued)
14. Earnings per share
(a)
Recognised deferred tax assets and liabilities
Deferred income tax balances relate to the following:
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
2023 and 30 June 2022.
1 July
2021
$
Business
Combination
$
Recognised in
profit and loss
$
1 July
2022
$
Recognised in
profit and loss
$
30 June
2023
$
Profit for the period
Note
2023
$
2022
$
13,405,524
13,556,475
Deferred tax liabilities
Trade and other
receivables
-
Contract assets
(6,105,349)
Financial assets
Property, plant and
equipment
(339,625)
(13,879)
Prepayments
-
Right-of-use assets
(1,288,252)
-
-
-
-
-
-
(108,811)
(108,811)
92,591
(16,220)
(7,712,398)
(13,817,747)
2,539,075
(11,278,672)
(1,122)
(340,747)
322,361
(18,386)
(768,048)
(781,927)
(323,167)
(1,105,094)
(454,926)
(454,926)
405,052
(49,874)
(5,696,676)
(6,984,928)
7,411
(6,977,517)
Customer relationships
Other current assets
-
-
(2,557,504)
-
-
-
(2,557,504)
974,547
(1,582,957)
-
(361,466)
(361,466)
(7,747,105)
(2,557,504)
(14,741,981)
(25,046,590)
3,656,404
(21,390,186)
Deferred tax assets
Trade and other
receivables
Other current assets
Accrued expenses
Contract liabilities
Lease liabilities
Statutory liabilities
Employee benefits
34,015
-
-
1,567,606
1,589,881
444,228
2,243,017
Blackhole expenditure
594,290
Capital losses –
Australia
Transferred tax losses
Borrowing costs
61,178
-
17,792
6,552,007
-
-
-
-
-
-
-
-
-
-
-
-
(22,640)
11,375
27,641
39,016
108,812
108,812
(108,812)
150,000
150,000
(150,000)
2,512,084
4,079,690
(4,079,690)
-
-
-
5,009,490
6,599,371
(38,475)
6,560,896
252,201
696,429
45,593
742,022
468,316
2,711,333
231,634
2,942,967
(174,285)
420,005
108,166
528,171
(61,178)
-
-
-
110,235
110,235
(6,890)
10,902
(88,079)
(6,057)
22,156
4,845
8,346,145
14,898,152
(4,058,079)
10,840,073
(1,195,098)
(2,557,504)
(6,395,836)
(10,148,438)
(401,675)
(10,550,113)
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 (payable) / receivable
Note
2023
$
2022
$
(6,725,475)
4,569,537
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
177,277,319
162,218,759
Shares deemed to be issued for no consideration
-
-
Weighted average number of shares used in diluted earnings per share
177,277,319
162,218,759
Note
2023
No.
2022
No.
Earnings per share (basic)
Earnings per share (diluted)
15. Cash and cash equivalents
Cash at bank and in hand
Australian Dollar ($AUD) – unrestricted
Australian Dollar ($AUD) – held as guarantee1
American Dollar ($USD)
Total cash and cash equivalents
7.56
7.56
8.36
8.36
Note
2022
$
2021
$
46,452,195
25,804,868
285,043
738,882
-
1,338,723
46,737,238
27,882,473
1
In accordance with certain contractual arrangements, agreed amounts of cash at bank are held in guarantee to meet ongoing performance
obligations.
64
64
GENUSPLUS GROUP LTD
65
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 16. Trade and other receivables
17. Contract assets
Current
Trade receivables, gross
Allowance for expected credit losses
Trade receivables
Other receivables
Total trade and other receivables
Note
2023
$
2022
$
54,753,138
67,821,359
(130,052)
(91,983)
54,623,086
67,729,376
2,325,698
1,143,535
56,948,784
68,872,911
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. The expected credit losses on trade receivables are estimated by reference to past default experience
of the debtors and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the
forecast direction of conditions at the reporting date. 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.
Current
Contract assets
Total contract assets
Note
2023
$
2022
$
37,595,573
45,734,278
37,595,573
45,734,278
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 decrease from 2022 is representative of
the timing of commencement and progress achieved on significant projects undertaken by the Group.
Remaining performance obligations
As of 30 June 2023, the aggregate amount of the transaction price allocated to the remaining performance obligations is $165.8
million (2022: $190.8 million). The Group will recognise this revenue when the performance obligations are satisfied. Approximately
96% of remaining performance obligations are expected to occur within the next 12 months.
The remaining performance obligations balances for both 30 June 2023 and 30 June 2022 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.
Allowance for expected credit losses
The consolidated entity has recognised a loss of Nil (2022: NIL) in profit or loss in respect of the expected credit losses for the year
ended 30 June 2023.
18. Financial assets and liabilities
Categories of financial assets and liabilities
Expected credit loss rate
Carrying amount
Allowance for
expected credit losses
Note
2023
%
2022
%
2023
%
2022
%
2023
%
2022
%
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Nil
Nil
Nil
Nil
Nil
Nil
45,750,383
57,849,322
4,387,410
5,903,255
932,080
2,426,855
-
-
-
-
-
-
Over 6 months overdue
3.5%
5.6%
3,683,265
1,641,927
(130,052)
(91,983)
54,753,138
67,821,359
(130,052)
(91,983)
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
Debts written off during the year
Balance at 30 June
Note
2023
$
2022
$
(91,983)
(38,069)
-
(130,052)
(147,530)
-
55,547
(91,983)
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 2023
Financial assets
Cash and cash equivalents
Trade and other receivables
Current finance lease receivable
Listed equity securities (a)
Non-current finance lease receivable (a)
Non-current other financial assets (a)
Total financial assets
Amortised cost
$
Note
FVTPL
$
Total
$
15
16
20
20
46,737,238
56,948,784
326,741
-
-
-
-
461,000
402,379
266,997
-
-
46,737,238
56,948,784
326,741
461,000
402,379
266,997
104,682,139
461,000
105,143,139
(a) Non-current financial assets comprises loans to associates, listed equity securities and non-current finance lease receivables valued
at $1,130,376.
30 June 2023
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
27
23
25
27
23
1,580,000
9,007,690
50,993,122
4,280,000
12,861,963
78,722,775
-
-
-
-
-
-
Total
$
1,580,000
9,007,690
50,993,122
4,280,000
12,861,963
78,722,775
66
66
GENUSPLUS GROUP LTD
67
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 18. Financial assets and liabilities (continued)
18. Financial assets and liabilities (continued)
Amortised cost
$
Note
FVTPL
$
Total
$
Other financial instruments
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of fair value:
(b) Other financial assets includes loans to joint ventures and listed equity securities valued at $993,833.
30 June 2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Listed equity securities
Total financial assets
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
15
16
(b)
(b)
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
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
-
-
-
27
23
27
25
27
23
27
Total
$
1,920,000
7,765,884
4,949,953
72,608,068
3,250,000
14,232,018
-
674,000
674,000
99,775,970
5,623,953
105,399,923
Amounts receivable under finance leases
A description of the Group’s financial instrument risks, including risk management objectives and policies is given in Note 39.
The methods used to measure financial assets and liabilities reported at fair value are described in Note 40.
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
2023
$
461,000
461,000
2022
$
922,000
922,000
2023
$
Current
2022
$
2023
$
Non-current
2022
$
1,580,000
1,920,000
4,280,000
3,250,000
1,580,000
1,920,000
4,280,000
3,250,000
Bank borrowings are secured by a floating charge over the assets of the Group (see Note 27). Current interest rates are
variable and average 4.40% (2022: 1.58%). The carrying amount of the other bank borrowings is considered to be a reasonable
approximation of the fair value.
Year 1
Year 2
Year 3
Undiscounted lease payments
Less: unearned finance income
Present value of lease payments receivable
Net investment in the lease
Net investment in the lease analysed as:
Current
Non-current
•
•
•
trade and other receivables
cash and cash equivalents
trade and other payables.
19.
Inventories
Current
At cost:
Raw materials and stores
Total inventories
Note
2023
$
2022
$
3,796,472
3,796,472
3,728,803
3,728,803
In 2023, a total of $125,597,200 of materials was included in profit and loss as an expense (2022: $139,298,892). This includes an
amount of NIL resulting from write down of inventories (2022: NIL).
20. Lease receivables
Note
2023
$
2022
$
343,000
343,000
117,167
803,167
(74,047)
729,120
729,120
2023
$
326,741
402,379
-
-
-
-
-
-
-
2022
$
-
-
Note
68
68
GENUSPLUS GROUP LTD
69
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 20. Lease receivables (continued)
The Group entered into finance leasing arrangements as a lessor for certain commercial properties previously held as right-of-
use assets. The average term of finance leases entered into is 2.3 years. These lease contracts do not include extension or early
termination options.
The Group is not exposed to foreign currency risk as a result, as all leases are denominated in AUD.
The Group’s finance lease arrangements do not include variable payments.
The average effective interest rate contracted approximates 5.6 per cent (2022: N/A per cent) per annum. The directors of the
Group estimate the loss allowance on finance lease receivables at the end of the reporting period at an amount equal to lifetime
ECL. None of the finance lease receivables at the end of the reporting period is past due, the directors of the Group consider that
no finance lease receivable is impaired.
This is the first period in which finance lease receivables have been reported by the Group. The loss allowance for finance lease
receivables will be assessed on an annual basis giving regard to any impairment that may be required due to defaults or changes
in market conditions.
21. Other assets
Current
Prepayments
Security deposits
Total other assets
Note
2023
$
2022
$
5,279,570
160,296
1,516,419
66,460
5,439,866
1,582,879
On an annual basis, the Group undertakes a risk assessment and re-insurance against material risks identified and for assets held
by the Group. This assessment is generally completed prior to the conclusion of the financial reporting period, with new policies in
place at the reporting date which cover the following year. This assessment was not completed at 30 June 2022, so only interim
policies were held at that date. Pre-paid insurance at 30 June 2023, covers the period to April 2024.
$
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70
GENUSPLUS GROUP LTD
71
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023
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22. 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
2023
$
2022
$
114,904
73,759
1,355,062
2,696,961
89,472
797,844
117,580
63,621
129,557
1,433,037
2,481,556
119,996
590,873
165,050
Total depreciation expense for the year
5,245,582
4,983,690
Depreciation – right of use assets
23
6,629,692
5,340,060
Amortisation – intellectual property and customer contracts
Total depreciation and amortisation
3,337,917
15,213,191
1,578,181
11,901,931
The net assets of the Group have been pledged as security for the Group’s other bank borrowings (see Note 27).
23. Leases
Lease liabilities are presented in the statement of financial position as follows:
Current
Non-current
Total leases
Group as a lessee
Note
2023
$
2022
$
9,007,690
7,765,884
12,861,963
14,232,018
21,869,653
21,997,902
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.
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72
72
GENUSPLUS GROUP LTD
73
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023
23. Leases (continued)
Group as a lessee (continued)
The Group also has certain leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of low-
value assets’ recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets and the movement during the period:
Note
2023
$
2022
$
Right-of-use assets – Land and Buildings
As at 1 July
Additions
Adjustments related to changes in lease conditions 1
Re-classified to property, plant and equipment (land and buildings) 2
Depreciation expense
De-recognised during the period 3
As at 30 June
Right-of-use assets – Plant and Equipment
As at 1 July
Additions
Disposal
Re-classification to property, plant & equipment 2
Depreciation expense
As at 30 June
Right-of-use asset – Motor Vehicles
As at 1 July
Additions
Disposals
Re-classification to property, plant & equipment 2
Depreciation expense
As at 30 June
6,188,709
962,547
213,868
(268,342)
4,666,285
3,929,446
91,773
-
(2,120,562)
(2,227,853)
(2,351,382)
(270,942)
2,624,838
6,188,709
7,624,232
3,435,302
(149,638)
(94,399)
4,236,234
5,139,079
(47,199)
-
(2,363,923)
(1,703,882)
8,451,574
7,624,232
9,470,151
5,705,842
(162,204)
(686,603)
4,648,338
6,234,706
(4,568)
-
(2,145,207)
(1,408,325)
12,181,979
9,470,151
Total Right-Of-Use Assets
23,258,391
23,283,092
1
2
3
Increase resulting from a change in the monthly lease payable to the owner.
Re-classification relating to the payout of the applicable finance lease agreement.
Leases surrendered during the period or re-classified as finance lease receivable from a sub-lease arrangement.
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
2023
$
2022
$
6,629,692
5,340,060
957,051
2,591,077
703,456
11,496,147
10,177,820
17,539,663
The group had total cash outflows for leases of $9,274,224 in 2023 (2022: $6,975,397). The Group also had non-cash additions
and other adjustments to right-of-use assets and lease liabilities of $10,317,559 in 2023 (2022: $15,516,763).
The Group does not face a significant liquidity risk with regards to its lease liabilities. Lease liabilities are monitored within the
Group treasury function.
74
74
GENUSPLUS GROUP LTD
24.
Intangible assets
The movements in the net carrying amount of intangible assets is as follows:
Goodwill
Balance 1 July
Note
2023
$
2022
$
19,540,788
5,505,688
Acquired through business combinations
37
74,000
14,035,100
Balance 30 June
Accumulated impairment losses
Accumulated amortisation
Carrying amount at 30 June
Customer contracts
Balance 1 July
19,614,788
19,540,788
-
-
-
-
19,614,788
19,540,788
9,043,890
39,890
Acquired through business combinations
37
-
9,004,000
Disposals
Balance 30 June
Accumulated amortisation
Carrying amount at 30 June
Other intellectual property
Balance 1 July
(39,890)
-
9,004,000
9,043,890
(2,404,434)
(518,879)
6,599,566
8,525,011
7,166,476
-
Acquired through business combinations
37
-
7,165,746
Re-classified from property, plant and equipment
Balance 30 June
Accumulated amortisation
Carrying amount at 30 June
Total intangible assets
154,075
-
7,320,821
7,166,746
(2,471,774)
(1,059,302)
4,849,047
6,107,444
31,063,401
34,173,243
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).
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.
Genus Infrastructure (Qld) Pty Ltd
Proton Power Pty Ltd
KEC Power Pty Ltd
Connect Engineering Pty Ltd
Genus PFA Pty Ltd
L & M Powerlines Australia Pty Ltd
Goodwill allocation at 30 June
Note
2023
$
1,179,147
305,395
129,372
2022
$
1,179,147
305,395
129,372
3,891,774
3,891,774
14,035,100
14,035,100
74,000
-
19,614,788
19,540,788
The recoverable amounts of the cash-generating units were determined based on value-in-use calculations, covering a five-
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.
75
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 24.
Intangible assets (continued)
26. Contract liabilities
Short-term advances for materials
Short-term advances for construction services
Note
2023
$
-
2022
$
885,057
16,876,882
11,867,906
16,876,882
12,752,963
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 where
revenue recognised to date has been exceeded under the cost to complete basis.
27. Other financial liabilities
Secured borrowings – at amortised cost
Bank loan – secured
Current
Non-current
Contingent consideration
Current
Non-current
Note
2023
$
2022
$
1,580,000
1,920,000
4,280,000
3,250,000
5,860,000
5,170,000
Note
2023
$
2022
$
-
-
-
4,949,953
674,000
5,623,953
Genus Infrastructure (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
2023
2022
2023
2022
3%
3%
3%
3%
5%
5%
5%
5%
5%
5%
12%
12%
12%
12%
12%
13%
13%
13%
13%
13%
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 impairment assessment
is sensitive to movements in key assumptions including the discount rate applied and EBITDA margin. Management has
performance sensitivity analysis for these variables to determine if reasonable changes in the assumptions would cause the
carrying amount of the above CGUs to exceed their recoverable amount.
Under the existing assumptions, the Genus PFA Pty Ltd CGU will break even if the EBITDA margin decreased from 27.5% to
25%. The Connect Engineering Pty Ltd GCU will break even if the EBITDA margin decreased from 7% to 5.8%. Under the existing
assumptions, the Genus PFA Pty Ltd CGU will break even if the post tax nominal discount rate increased to 13.9%. The Connect
Engineering Pty Ltd GCU will break even will break even if the post tax nominal discount rate increased to 13.9%.
Discount rates
The discount rates reflect appropriate adjustments relating to market risk and specific risk factors of each unit.
Cash flow assumptions
Genus Infrastructure (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.
25. 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
2023
$
2022
$
25,966,393
33,646,539
1,962,464
2,934,745
2,810,173
4,413,962
20,129,520
31,737,394
50,993,122
72,608,068
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
76
76
GENUSPLUS GROUP LTD
77
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 27. Other financial liabilities (continued)
28. Employee benefits
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 2023.
The group has an equipment finance facility with Commonwealth Bank of Australia Pty Ltd (CBA) with a limit of $7,000,000 (FY22
- $7,000,000) with $3,574,000 available at 30 June 2023 (FY22 - $3,198,984).
The group has an equipment finance facility with Mercedes Benz finance with a limit of $2,000,000 (FY22 - $2,000,000) with
$2,000,000 available at 30 June 2023 (FY22 - $1,981,358).
The group has an equipment finance facility with Toyota Asset Finance with a limit of $12,000,000 (FY22 - $12,000,000) with
$2,760,000 available at 30 June 2023 (FY22 - $5,809,252).
The group has an equipment finance facility with Australia and New Zealand Banking Group Limited (ANZ) with a limit of
$4,000,000 (FY22 - $4,000,000) with $2,000,000 available at 30 June 2023 (FY22 - $708,365).
The group has an equipment finance facility with Westpac Banking Corporation (WBC) with a limit of $2,000,000 (FY22 –
$2,000,000) with $745,000 available at 30 June 2023 (FY22 - $1,507,969)
The bank debt is secured by a General Security Agreement of the group. Under the agreement, the Group is required to satisfy
financial metrics that demonstrate its ongoing financial health and viability. These covenants relate to the Group’s ability to meet
debt service cover, gross leverage and liquidity ratios and tangible net worth thresholds. 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) contingent consideration of $2,022,953
was settled in cash (14 November 2022 - $1.1m) and equity (15 December 2022 - $0.9m).
As part of the purchase agreement with the previous owners of Pole Foundations Australia (Pole Foundations) contingent
consideration of $3.0M was paid in November 2022 for performance conditions that were satisfied. Conditions related to the
remainder of the contingent consideration were not satisfied with a fair value gain of $601,000 recognised in profit for the year.
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Salaries and wages
Superannuation
Amounts provided for employee entitlements
Short term incentives
Other allowances and expenses
Employee benefits expense
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
2023
$
2022
$
115,216,595
114,594,683
9,347,134
9,053,499
6,497,396
1,574,974
6,181,826
617,884
8,021,289
6,749,874
140,657,388
137,197,766
Note
2023
$
2022
$
6,012,936
5,578,530
640,388
1,953,981
357,056
551,649
8,607,305
6,487,235
909,889
2,550,543
Total employee benefits
9,517,194
9,037,778
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.
29. Provisions
Current
Amounts recognised in respected of expected losses or write-downs
Total provisions
Note
2023
$
50,000
50,000
2022
$
1,221,721
1,221,721
78
78
GENUSPLUS GROUP LTD
79
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 30. Share capital
32. Dividends on equity instruments
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
2023
Shares
2022
Shares
2023
$
2022
$
Beginning of the year
176,752,420
155,589,964
53,789,037
28,925,754
Shares issued as part of a capital raising1
-
16,528,926
-
20,000,000
Shares issued as part of a business combination2,3
972,528
4,633,530
Deferred tax adjustments
Share issue costs
-
-
-
-
923,902
558,074
6,023,589
-
(5,988)
(1,160,306)
Total contributed equity at 30 June
177,724,948
176,752,420
55,265,025
53,789,037
Recognised amounts
Fully paid ordinary shares
Final dividend
Year ended 30 June 2023
Year ended 30 June 2022
Cents
per share
Total
$
Cents
per share
Total
$
2.0
3,554,499
1.8
3,181,544
On 30 November 2022, 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 2022.
On 21 August 2023, the directors declared a fully franked dividend of 2.0 cents per share to the holders of fully paid ordinary
shares in respect of the financial year ended 30 June 2023. At the time of reporting, the dividend of $3,554,499 was unpaid. The
record date is 4 October 2023 and the payment date is 3 November 2023.
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.
Distributions made and proposed
1.
2.
3.
4,633,530 shares were issued as part consideration for the acquisition of Pole Foundations Australia on 29 April 2022.
972,528 shares were issued as part consideration for the acquisition of BlueTongue Energy Pty Ltd on 15 December 2022.
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% (2022: 30%)
11,082,528
16,836,429
2023
$
2022
$
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.
31. Reserves
Balance at 1 July 2021
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
160,117
Corporate
Restructure
reserve
$
Total
$
(511,834)
(503,559)
-
160,117
Balance at 30 June 2022
168,392
(511,834)
(343,442)
Balance at 1 July 2022
Movements in asset values measured in foreign currencies
that will subsequently be re-classified to profit or loss
168,392
(146,908)
(511,834)
(343,442)
-
(146,908)
33. 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
decrease in value of investments reported at FVTPL
Balance at 30 June 2023
21,484
(511,834)
(490,350)
share of losses / (profits) of associates and joint ventures
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), Euros (EUR) and Chinese Renminbi (CNY). The balance will be subsequently reported in profit and loss when
the underlying value of the monetary item (accounts payable) is settled.
net finance costs
other fair value gains
Changes in assets and liabilities:
decrease/(increase) in trade and other receivables
decrease / (increase) in other assets
(increase) / decrease in inventories
(decrease)/increase in trade and other payables
Net cash provided by operating activities
2023
$
2022
$
13,405,524
13,556,475
(1,345,062)
-
(279,015)
(70,000)
15,213,191
11,901,931
461,000
613,536
461,000
(464,739)
1,361,068
1,068,555
(594,681)
-
20,062,832
(34,801,667)
(3,856,987)
1,867,047
(67,669)
(1,537,509)
(6,100,864)
19,762,655
39,151,888
11,464,733
80
80
GENUSPLUS GROUP LTD
81
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 34. 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:
35. Related party transactions (continued)
Transactions with related parties (continued)
Auditing services – Grant Thornton
Audit or review of the financial statements
Other services – Grant Thornton
Tax services
Other non-assurance services
Total auditor’s remuneration
35. Related party transactions
Note
2023
$
2022
$
235,000
235,000
112,025
9,845
356,870
7,400
25,500
267,900
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)
Maali Group Pty Ltd
Services provided to related parties
Pastoral Plus (Director D Riches)
Blue Tongue Energy Pty Ltd (Associate)
Maali Group Pty Ltd
All services were contracted at arms’ length basis.
2023
$
2022
$
565,626
-
646,489
1,229
9,893,117
7,396,206
-
623,177
56,834
108,833
2,011,379
9,339
559,244
520,900
41,889
3,655,260
2023
$
2022
$
1,100
68,098
227,068
22,757
498,558
1,019,667
Amounts due to related parties at reporting date
Pastoral Plus (Director D Riches)
Partum Engineering (Director D Riches)
Matt Riches Pty Ltd & Dave Riches Pty Ltd (Director D Riches)
Dave Riches Pty Ltd (Director D Riches)
Edge People Management (Director D Riches)
Maali Group Pty Ltd
Amounts due from related parties at reporting date
Pastoral Plus (Director D. Riches)
Blue Tongue Energy Pty Ltd
Maali Group Pty Ltd
2023
$
2022
$
49,161
994,898
-
-
15,623
56,143
87,002
775,051
21,116
9,832
8,760
134,439
2023
$
2022
$
-
566,656
146,876
18,445
498,558
112,389
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
Total remuneration
2023
$
2022
$
2,272,760
1,890,643
38,702
163,535
7,952
142,858
2,474,997
2,041,453
The Group has previously 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 NIL in the current reporting period (2022:
$9,339), based on normal market rates.
82
82
GENUSPLUS GROUP LTD
83
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 36. Contingent assets and contingent liabilities
The Group has no contingent assets.
37. Acquisitions and disposals (continued)
Businesses disposed
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.
The Group disposed of its interest in Connect Infrastructure Design Pty Ltd during the year ended 30 June 2023 to a related party
Partum Engineering for consideration of $300,000. The disposal is in line with the Group’s strategy to utilise external contractors for
the purposes of design work.
2023
$
2022
$
Businesses acquired - For the year ended 30 June 2023
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 (2022 - $60,000,000).
The Surety bond facilities have a limit of $60,000,000 (2022 - $40,000,000).
37. Acquisitions and disposals
Acquisition of key Tandem Corp assets and contracts
30,151,730
26,601,326
30,924,322
26,264,012
61,076,052
52,865,338
On 4 January 2023 Genus Infrastructure (QLD) Pty Ltd (GNIQ) acquired the assets of L&M Powerline Constructions Pty Ltd (L&M)
including 2 contracts, fixed assets and staff.
Total consideration for the acquisition was $3,000,000 in cash, less an allowance by the Seller in favour of the buyers of $100,000
in respect of working capital. The acquisition was funded using the Buyer’s existing CBA Bank Facility.
No contingent consideration was payable to the seller.
This transaction was accounted for as a business combination.
Consideration transferred / transferrable
Cash
Total
Assets acquired and liabilities assumed at the date of acquisition
Plant and equipment
Inventory
Goodwill
Employee entitlements
Total
Net cash outflow on acquisition of businesses
Consideration paid in cash
Less: cash and cash equivalent balances acquired
Total
L&M Powerlines
$
ETS
$
2,914,443
2,914,443
968,000
968,000
2,826,000
1,033,980
14,443
74,000
-
2,914,443
-
-
(65,980)
968,000
2,914,443
968,000
-
-
2,914,443
968,000
Amounts payable for the acquisition of L&M Powerlines and ETS were funded via the Group’s existing funding facilities.
L&M contributed revenue of $1,707,000 and $395,000 net income to the consolidated group for the period following the
acquisition.
Contingent consideration
Payments during the reporting period to acquire subsidiaries consisted of contingent consideration of $4,132,995 settled in cash.
If L&M had been a part of the consolidated group for the entire year the consolidated position would have been $445,900,000
group revenue and $13,500,000 group net income.
Contingent consideration payable under the terms of the Groups acquisition of 50% of Blue Tongue Energy Pty Ltd was settled in
cash and shares during the reporting period.
Acquisition of Tasmanian assets of ETS Infrastructure Management Pty Ltd
On 5 July 2022 Genus Infrastructure (NSW) Pty Ltd (GNIN) executed an agreement to acquire the net assets of ETS (Tasmania)
including the fixed assets, staff and TasNetworks contracts (x2) from ETS Infrastructure Management Pty Ltd.
In total, $1,132,995 cash and shares valued at $889,958 were transferred to the former majority owners.
Contingent consideration payable under the terms of the Groups acquisition of Pole Foundations Australia was settled in cash during
the reporting period.
Payment was made on 17 August 2022 following the satisfaction of conditions precedent.
In total, $3,000,000 cash was transferred to the former owners.
GNI (NSW) acquired the assets of ETS for $968,000 payable fully in cash.
This transaction was accounted for as a business combination.
ETS contributed revenue of $3,410,000 and $204,000 net income to the consolidated group for the period following the
acquisition.
If ETS had been a part of the consolidated group for the entire year the consolidated position would have been $444,400,000
group revenue and $13,400,000 group net income.
84
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GENUSPLUS GROUP LTD
85
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
38.
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:
Genus Infrastructure 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 Enterprises (WA) Pty Ltd (b)(l)
Genus Infrastructure (Qld) Pty Ltd(c)
Genus Fleet Management Pty Ltd
KEC Power Pty Ltd(d)
Genus Infrastructure (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,j)
Connect Design South Coast (NSW) Pty Ltd(h)(k)
Genus PFA Pty Ltd(j)
(a) GenusPlus Group Ltd was incorporated on 6 July 2017.
Country of
Incorporation
Percentage Ownership
2023
2022
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%
(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
Enterprises (WA) Pty Ltd. Powerlines Plus changed its name to Genus Infrastructure Pty Ltd on 14 September 2022.
(c) Powerlines Plus (Qld) Pty Ltd was re-registered as Genus Infrastructure (Qld) Pty Ltd on 27 June 2023.
(d) KEC Power Pty Ltd was incorporated on 4 February 2019.
(e) Powerlines Plus (NSW) Pty Ltd was incorporated on 26 November 2019 changed its name to Genus Infrastructure (NSW) Pty Ltd on 15 July 2022.
(f) ECM Consultancy Pty Ltd 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) Genus PFA Pty Ltd was incorporated 11 February 2022 and acquired Pole Foundations Australia acquired on 29 April 2022.
(j) Connect Infrastructure Design Pty Ltd was disposed of on 1 February 2023.
(k) Connect Design South Coast was deregistered on 11 January 2023.
(l) GPL Enterprises (WA) Pty Ltd was deregistered on 11 January 2023.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
39. 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 18. 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:
Financial assets
Financial liabilities
Total exposure
2023
Short term
exposure
USD
$
2023
Long term
exposure
USD
$
-
-
-
-
-
-
2022
Short term
exposure
USD
$
922,967
-
922,967
2022
Long term
exposure
USD
$
-
-
-
86
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 39. Financial risk management (continued)
39. Financial risk management (continued)
Foreign currency sensitivity (continued)
Other price risk sensitivity
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 +/- 5% change of the AUD/USD exchange rate for the
year ended 30 June 2023 (2022: 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 5% (2022: 10%) then this would have had the
following impact:
30 June 2023
30 June 2022
Profit for
the year
AUD
$
-
-
If the AUD had weakened against the USD by 5% (2022: 10%) then this would have had the following impact:
30 June 2023
30 June 2022
Profit for
the year
AUD
$
-
-
Equity
AUD
$
-
(121,702)
Equity
AUD
$
-
121,702
The Group is exposed to other price risk in respect of the investment in Volt Power Limited (ASX: VPR).
For the listed investment in Volt Power Limited, an average volatility of 50% has been observed during 2023 (2022: 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 $230,500
(2022: $304,260).
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
2023
$
2022
$
46,737,238
27,882,473
56,948,784
68,872,911
103,686,022
96,755,384
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.
The credit risk is managed on a group basis based on the Group’s credit risk management policies and procedures.
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 2023, 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 as the Group currently holds more funds on deposit in interest bearing accounts than is
owed in bank borrowings.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of +/- 2.00%
(2022: +/- 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 2023
30 June 2022
Profit for the year
$
+2% / +1%
225,090
(103,400)
$
-2% / -1%
(225,090)
103,400
$
+2% / +1%
225,090
(103,400)
Equity
$
-2% / -1%
(225,090)
103,400
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.
88
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GENUSPLUS GROUP LTD
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Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 39. Financial risk management (continued)
39. 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
Trade receivables:
Current
Less than 90 days
Greater than 91 days
Gross
2023
$
2,325,698
Note
16
45,750,383
4,387,410
4,615,345
16
54,753,138
Allowance for
Impairment
2023
$
-
-
-
(130,052)
(130,052)
Gross
2022
$
1,143,535
57,849,322
5,903,255
4,068,782
67,821,359
57,078,836
(130,052)
68,964,894
Allowance for
Impairment
2022
$
-
-
-
(91,983)
(91,983)
(91,983)
The provision of $130,052 relates to expected credit losses of a small number of debtors based on the past default experience
of the debtors combined with analysis of the debtor’s current financial position. 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.
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.
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 16) 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 2023, the Group’s non-derivative financial liabilities have contractual maturities as summarised below:
Current
Non-current
Within 6 months
$
6-12 months
$
1-5 years
$
5+ years
$
30 June 2023
Secured borrowings
Leases
Trade and other payables
Contingent consideration payable
790,000
790,000
4,635,762
4,371,928
4,280,000
12,861,963
50,993,122
-
-
-
-
-
Total
56,418,884
5,161,928
17,141,963
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
-
-
-
-
-
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
-
-
-
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities at the
reporting date.
90
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GENUSPLUS GROUP LTD
91
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 40. 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 2023 and 30 June 2022:
40. 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 1
$
Level 2
$
Level 3
$
Total
$
Level 3 fair value measurements
Contingent consideration (Level 3)
30 June 2023
Financial assets
Listed securities
Lease receivable
Other financial assets
Total assets
Financial liabilities
Contingent consideration
Total liabilities
Net fair value
30 June 2022
Financial assets
Listed securities
Other financial assets
Total assets
Financial liabilities
Contingent consideration
Total liabilities
Net fair value
461,000
-
-
461,000
-
-
-
729,120
266,997
996,117
-
-
461,000
996,117
-
-
-
-
-
-
-
461,000
729,120
266,997
1,457,117
-
-
1,457,117
Level 1
$
Level 2
$
Level 3
$
Total
$
-
71,833
71,833
-
-
-
922,000
71,833
993,833
922,000
-
922,000
-
-
The fair value of contingent consideration related to the acquisition of Blue Tongue Energy Pty Ltd and Pole Foundations Australia
(see Note 37) 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.
41. 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:
-
-
(5,623,953)
(5,623,953)
(5,623,953)
(5,623,953)
Total equity
Financial liabilities
922,000
71,883
(5,623,953)
(4,630,070)
Cash and cash equivalents
There were no transfers between Level 1 and Level 2 in 2023 or 2022.
Capital
Total equity
Borrowings
Overall financing
Capital-to-overall financing ratio
2023
$
2022
$
104,976,133
93,423,073
21,836,048
21,110,359
(46,737,238)
(27,882,473)
80,074,943
86,650,959
104,976,133
93,423,073
21,836,048
21,110,359
126,812,181
114,533,432
0.63
0.76
92
92
GENUSPLUS GROUP LTD
93
The ratio decrease during 2023 is primarily a result of additional cash at bank held at year end compared to the previous reporting
period.
Notes to the Consolidated Financial Statements For the year ended 30 June 2023Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023 Directors’ Declaration
In accordance with a resolution of the directors of GenusPlus Group Limited, I state that:
In the opinion of the directors:
(a) the financial statements and notes of GenusPlus Group Limited for the financial year ended 30 June 2023 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 2023 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 2023.
On behalf of the board
David Riches
Director
Dated the 22nd day of August 2023
42. 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 (2022:$Nil).
43. Events after the reporting date
2023
$
2022
$
8,572,332
2,902,789
38,407,717
40,761,752
9,361,840
(1,455,015)
(14,765,133)
(11,006,876)
53,172,849
51,768,629
55,265,025
53,789,037
(2,092,176)
(2,020,409)
53,172,849
51,768,628
(2,390,224)
(2,560,158)
(2,390,224)
(2,560,158)
On 21 August 2023, the Directors declared a final fully franked dividend of 2.0 cents per share with a record date of 4 October
2023 and a payment date of 3 November 2023. The total dividend payable is an aggregate of $3,554,499.
On 31 July 2023, GenusPlus Group completed the acquisition of the remaining 50% of BlueTongue Energy Pty Ltd for cash
consideration of $500,000.
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.
44. 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
94
94
GENUSPLUS GROUP LTD
95
Notes to the Consolidated Financial Statements For the year ended 30 June 2023GenusPlus Group LtdAnnual Report 2023
Independent Auditor’s Report
For the year ended 30 June 2023
Independent Auditor’s Report
For the year ended 30 June 2023
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Perth WA 6000
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
Independent Auditor’s Report
To the Members of GenusPlus Group Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of GenusPlus Group Ltd (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance
for the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
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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.
‘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
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
w
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Revenue recognition of long-term contracts –
Notes 4 & 6
The Group’s revenues from fixed price construction
contracts ($305.3 million) are recognised over time,
with the amount determined by the percentage of
costs completed.
Revenue is recognised in accordance with AASB 15
Revenue from Contracts with Customer based on:
• The determination of the completion and
measurement of performance obligations under
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 cost
controls designed for determining the revenue
recognised over time utilising the percentage of
completion method;
• Reviewing significant contracts, including agreeing
• The estimation for construction contract inputs
(costs) including costs remaining and the expected
margins earned on the contracts; and
key terms and conditions to contracts along with any
variations or contingencies requiring to be
recognised;
• The determination of contingency and variation
estimates, including the probability of approval for
changes in price and scope
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
that includes contract variations and claims.
Testing a sample of costs to ensure appropriate
allocation to projects;;
• 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 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;
• Assessing variations to historical recoveries and
supporting documentation for claims made for price
and scope changes; and
• Assessing the adequacy of the Group’s presentation
and disclosures in the financial statements.
Grant Thornton Audit Pty Ltd
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 Independent Auditor’s Report
For the year ended 30 June 2023
Independent Auditor’s Report
For the year ended 30 June 2023
Goodwill – Note 24
As disclosed in Note 22, the Group recognised
goodwill totalling $19.6 million at 30 June 2023 across
six cash-generating units (CGUs). Goodwill is required
to be assessed for impairment annually by
management as prescribed in AASB 136 Impairment
of Assets.
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 a 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
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;
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:
− Testing the mathematical accuracy of the
calculations;
− Evaluating the forecast cash inflows and outflows
to be derived by the CGUs assets for
reasonableness;
− Comparing estimates and judgements for growth
rates to available market and industry data;
− Assessing the discount rates applied to forecast
future cash flows for reasonableness with
assistance from internal valuation specialists;
− 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 2023 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.
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 28 to 33 of the Directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of GenusPlus Group Ltd, for the year ended 30 June 2023
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, 22 August 2023
Grant Thornton Audit Pty Ltd
Grant Thornton Audit Pty Ltd
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GENUSPLUS GROUP LTD
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GenusPlus Group LtdAnnual Report 2023 ASX Additional Information
As at 18 August 2023
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
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MATTHEW STEVEN RICHES & DAVID WILLIAM RICHES
NATIONAL NOMINEES LIMITED
CARJAY INVESTMENTS PTY LTD
ARROCHAR PTY LTD
CITICORP NOMINEES PTY LIMITED
MR NEIL DOUGLAS RAE & MRS MELANIE MICHELLE RAE & MR SIMEON DAVID RAE
MR KEMPER SHAW
CC RANKINE PTY LTD
BJ FRASER PTY LTD
CEDARFIELD HOLDINGS PTY LTD
WILLIAM TAYLOR NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
DAVE RICHES PTY LTD
PATRICK LLOYD PTY LTD
GEORGE LLOYD PTY LTD
MR KENNETH JOSEPH HALL
PRECISION OPPORTUNITIES FUND LTD
MR WILLIAM JAMES BEAMENT
Substantial shareholders
Ordinary Shares
117,353
772,728
1,258,697
9,732,520
165,843,650
177,724,948
Number of
ordinary shares
held
Percentage of
capital held
78,922,947
17,834,233
12,800,000
7,416,045
4,000,000
3,850,000
3,410,332
2,392,344
2,376,947
2,316,765
2,316,765
2,281,134
2,148,684
1,963,614
1,861,000
1,600,000
1,600,000
1,550,000
1,266,357
1,196,172
44.41%
10.03%
7.20%
4.17%
2.25%
2.17%
1.92%
1.35%
1.34%
1.30%
1.30%
1.28%
1.21%
1.10%
1.05%
0.90%
0.90%
0.87%
0.71%
0.67%
150,545,882
86.15%
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
93,583,947
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
Strati Gregoriadis
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
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Annual Report 2023
101
GenusPlus Group Ltd powering up Australia.
connecting the future,
together.
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