Annual
Report
2022–2023
CONTENTS
OVERVIEW
Kelsian Group
REVIEW OF
OPERATIONS
Five Year Financial Highlights
Chair Report
MD and GCEO Report
Our Brands
Our Global Operations
Review of Operations
Australian Bus
International Bus
Marine & Tourism
Risk Management
Key Results
DIRECTORS’
REPORT
Directors and other information
Audited Remuneration Report
FINANCIAL
REPORT
ASX ADDITIONAL
INFORMATION
2
3
4
5
6
8
11
12
13
14
15
19
21
28
49
114
We acknowledge the Traditional Owners and
Custodians of Country throughout Australia and
their continuing connection to the land, waterways
and community. We pay our respects to Aboriginal
and Torres Strait Island cultures, people and
Elders past, present and emerging.
Cover photo
Superyacht, The Jackson cruising
Sydney Harbour, New South Wales
This page
Tiwi Islands, Northern Territory
OVERVIEW
KELSIAN GROUP
Our purpose is to be a world leader in
delivering essential journeys through
safe, intelligent and sustainable
transport solutions, while creating
brilliant customer experiences.
Kelsian Group (“Kelsian” or the “Group”) is Australia’s largest
integrated multi-modal transport provider and tourism operator
providing essential journeys for our customers by delivering safe and
intelligent transport solutions designed to improve the sustainability
and liveability of the communities we serve.
Headquartered in Adelaide since 1989, the Group has demonstrated
its ability to be agile through uncertain times and is uniquely
positioned for growth.
The Group is made up of:
Marine & Tourism: connecting travellers with Australia’s most
iconic holiday destinations and experiences.
Australian Bus: operating domestic public transport contracts,
resource contracts and charters.
International Bus: operating international public transport
contracts and motorcoach services.
Collectively, in FY23 Kelsian moved more than 274 million
customers, has over 11,000 employees and operates over 4,800
buses, 113 vessels and 24 light rail vehicles.
We are proud of our people. They are the best in the business
and are committed to providing our customers with brilliant
experiences every time.
FIVE YEAR FINANCIAL HIGHLIGHTS
KELSIAN GROUP
PERFORMANCE
Total Revenue
Underlying* EBIT
EBIT margin
Underlying* NPAT
Statutory NPAT
Operating cash flow
Underlying* EPS (basic)
Dividend per share (100% franked)
FINANCIAL STRENGTH
Net Assets
Net Tangible Assets per share
Gearing
$m
$m
%
$m
$m
$m
cents
cents
$m
cents
%
2019
251.4
31.5
12.5
23.4
21.5
40.6
23.1
15.0
157.9
106.0
36
2020
646.5
29.9
4.6
8.7
(13.6)
90.1
5.3
11.0
600.2
5.0
31
2021
1,211.7
2022
1,297.4
2023
1,417.8
73.1
6.0
43.0
37.8
111.9
19.7
16.0
608.1
27.0
31
80.1
6.2
48.5
52.9
115.0
22.2
16.5
640.0
35.0
31
84.5
6.0
49.6
21.0
129.0
21.4
17.0
923.6
15.0
40
*Adjusted for significant items for the period ending 30 June 2023. This is a non-IFRS measure and has not been audited.
NET PROFIT/(LOSS) AFTER TAX
UNDERLYING EARNINGS PER SHARE UNDILUTED
$60m
$50m
$40m
$30m
$20m
$10m
($10m)
($20m)
25 cents
20 cents
15 cents
10 cents
5 cents
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23
Statutory NPAT
Underlying* NPAT
Underlying* Earnings per share (ave) – undiluted
Electric bus, Transit Systems – New South Wales
SeaLink - North Stradbroke Island, Queensland
2
Kelsian Group 2022/23 Annual Report 3
OVERVIEW
CHAIR REPORT
Dear fellow shareholders,
The FY23 result reflects the strength of our business and the
benefits of our diversified contracts and geographies. The result
can be attributed to several years of organic growth as well
as strategic acquisitions that have positioned Kelsian as an
established global transport provider that is highly scalable.
FY23 Result Highlights
The strong rebound in domestic travel and solid growth in the
Marine & Tourism division underpinned the strong growth in Group
Revenue, up 9.3% to $1,417.8m. Underlying EBIT increased by
5.5% to $84.5m. Pleasingly, this result was achieved despite the
ongoing challenges associated with labour constraints, particularly
in Adelaide, Sydney, and Singapore, which resulted in cost
headwinds.
Underlying Net Profit After Tax and before Amortisation (NPATA),
(adjusted for one-off costs associated with M&A), increased by
4.3% to $70.0m, including one month of contribution (June 2023)
from All Aboard America! Holdings, Inc (“AAAHI”). Net operating
cash flow increased by $13.9m or 12.1% to $128.9m and there
were significant cash reserves of $157.9m as at 30 June 2023.
During the period, there were several highlights including Transit
Systems’ new contracts for operating bus services in south-
western Sydney. In addition, in June, we successfully completed
the acquisition of AAAHI for an enterprise value of $512.4 million.
Combined with our operational expertise, the Board is confident
that this acquisition will form a solid foundation for growth in the
large and attractive USA market.
The Board declared a final dividend of 9.5 cents per share, which
is in line with the final dividend last year and brings the full year
dividend to 17.0 cents per share, an increase of 3% over last year.
Taking into consideration the timing of the capital raising and only
one month contribution from AAAHI, the Board has determined
a final dividend at the mid-point of the stated dividend pay-out
range of 50-70% of underlying net profit after tax and before
amortisation (“NPATA”).
Kelsian remains committed to making safety a priority in everything
we do to ensure we create a safe and healthy environment for our
employees, contractors, and customers. Throughout the year we
made further enhancements and strengthened Kelsian’s safety
management system ‘SafeConnect’.
The Board’s focus remains on representing and serving the
interests of shareholders by overseeing the Group’s strategy
execution, policies, and performance to deliver long-term
shareholder value for all shareholders. The Board regularly
reviews its structure, size, and composition to ensure it has the
range of skills, experience and expertise required for effective
performance and governance. The Board recognises that it must
continue to evolve to reflect Kelsian’s size as well as its diverse
mix of businesses across different geographies and the Board
is committed to targeting adherence to the ASX Governance
Principles.
During the past year, there has been some Board renewal and we
welcomed Fiona Hele as an Independent Deputy Chair in August
2022 and Ms Diane Grady AO as an Independent Director in
September 2022.
At the end of the 2023 AGM, Chris Smerdon will retire from the
Board after 19 years of dedicated service to the Company over a
transformational period for Kelsian. On behalf of the Board, I would
like to thank Chris once again for his commitment to the Company.
In relation to my own position, I have advised the Board that I
intend to offer myself for re-election at the upcoming AGM and, if
re-elected, I plan to retire during the ensuing term. I am committed
to representing and serving the interests of shareholders including
through supporting Board renewal by early notification of my
longer-term intentions to enable optimal planning and oversight of
an orderly transition for a replacement Chair. A dedicated subset
of directors including the Chair of the Nomination Committee,
Terry Dodd, will support me in this process, and I look forward to
working with them to ensure an orderly transition.
In July 2023, we announced the appointment of Kelsian’s Group
Chief Executive Officer, Clint Feuerherdt as Managing Director.
Clint has an eminent track record in leadership and an outstanding
track record in driving our strategy to deliver long-term shareholder
value. I thank Clint and his leadership team for their hard work and
commitment during FY23.
I would also like to thank my fellow Board members for their
contribution, advice, and commitment.
Jeffrey Ellison AM
Chair
MD AND GCEO REPORT
C E O R E P O R T
Dear fellow shareholders,
I am very pleased to present the financial year 2023 result which
reflects the ongoing efforts and commitment of our 11,000+
employees, led by our highly experienced leadership team. As
well as delivering a solid result, we also made excellent progress
on executing our well-defined strategy of organic growth and
strategic acquisitions, which will ensure the business is well
placed to continue to deliver growth into the future.
Kelsian Group companies are people focused businesses.
Employees are our most important asset, and our customers are
at the centre of everything we do. It is pleasing to report that we
have seen an increase in employee engagement through the year
and a marked increase in customer satisfaction, despite some of
the challenging operating conditions in a tight labour market.
Safety remains a key focus across the Group, and we are
committed to continuous improvement. During the period, we
continued to invest in new technology to support our safety
initiatives. Most notably, our Australian Bus Division’s ongoing
investment into driver assistance, fatigue monitoring and vehicle
collision avoidance technology to provide a safe, efficient, and
reliable transport experience for employees, customers, and the
communities we serve. Total reportable injuries for the Group
reduced by 6.3% this financial year.
The majority of our contracts are long-term, low-risk, government-
backed service contracts and combined with the diversified
nature of our businesses, and geographic spread, they provide
a consistent and predictable earnings base. Through the
growth achieved this year, the contracted and non-discretionary
component of our total revenue increased to an impressive 92%,
further reinforcing the predictivity and resilience of the Group.
Furthermore, the business is well hedged in the current highly
inflationary environment with indexation clauses in most of our
contracts for fuel, wages and CPI and the ability to pass on fare
increases in our Marine & Tourism division. The solid underlying
financial result in FY23 was achieved despite the ongoing
challenges associated with labour availability in parts of the
business which led to higher costs.
Our focus on organic growth and strategic acquisitions delivered
several milestones during the period. Key highlights include
securing substantial new contracts in Sydney and the successful
acquisition of All Aboard America! Holdings, Inc. (‘AAAHI’)
which completed in June 2023, together with the associated
equity capital raising of $278 million to fund the acquisition. The
successful acquisition of AAAHI provides an entry into the large
and highly attractive USA market. AAAHI is the fourth largest
motorcoach operator in the USA and has market-leading regional
brands across a multi-state footprint. The established business
provides a solid base for further expansion in a large, highly
fragmented market.
As a result of the successful retention of the Sydney Region 3
contract and the award of three further Sydney Metropolitan
bus regions, we are the largest bus operator in Sydney. We are
also proud to operate the largest zero-emissions bus fleet and
electrified bus depot in Australia. These contract wins further
validate our leadership in transitioning bus contracts as well as
operational excellence, decarbonisation, and efficiency.
Completion of several acquisitions including bus operations in
the Channel Islands of Guernsey and Jersey (September 2022),
North Stradbroke Island Buses (December 2022), Horizons West
Bus and Coachlines (January 2023) and Grand Touring (Northern
Territory) (February 2023).
The Marine & Tourism business performed very well during the
period, benefiting from the strong rebound in domestic tourism.
We were also awarded two new 10-year contracts to provide
marine services to ConocoPhillips and Shell Santos in Gladstone,
Australia. We purchased several new vessels including Starship
Sydney, Starship Aqua and Sydney Crystal in Sydney Harbour and
Reef Quest for the Whitsundays/Hayman Island operations and
our fleet renewal plan has progressed with two newly constructed
replacement vessels being delivered and five more commenced
construction.
Bus sector offers compelling solution to drive decarbonisation
Transport is Australia’s third largest source of greenhouse gas
emissions, with the highest rate of growth. Cars are responsible for
roughly half of Australia’s transport emissions. Kelsian is a leading
business in zero-emission transport technology with a genuine
focus on the environment and a culture of sustainability. We are
proud to be the largest zero-emission bus operator in the country
with the largest electrified bus depot. As our cities move towards
a net zero future, Kelsian is well positioned to assist via mode shift
and expanding our public transport networks.
During the period we continued to work with government on
decarbonisation solutions. As at 30 June 2023, we had a fleet
of 73 Battery Electric Buses (BEBs) and two Hydrogen Fuel Cell
Buses (HFCBs), with work underway across the country (including
grid upgrades and charging infrastructure) to reach 375 BEBs and
4 x HFCBs before the end of calendar year 2025.
The FY23 results are a testament to our strategy and leading
market position which we continued to strengthen during the
period. Looking to the future, we are well placed to continue to
deliver growth by leveraging our scale advantages.
I take this opportunity to thank our employees across our global
operations who have worked as a team to deliver exceptional
results, and my executive team for their hard work and
commitment. In addition, I would like to thank all our clients,
suppliers, and you; our shareholders for your ongoing support.
Clint Feuerherdt
Managing Director and
Group Chief Executive Officer
4
Kelsian Group 2022/23 Annual Report 5
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OVERVIEW
OUR BRANDS
AUSTRALIAN BUS
MARINE & TOURISM
INTERNATIONAL BUS
NORTHERN
TERRITORY
South Australia
Sydney Harbour
North Queensland
Whitsundays
Gladstone
K’gari
South East Queensland
Western Australia
Tasmania
Northern Territory
6
Kelsian Group 2022/23 Annual Report 7
OVERVIEW
OUR GLOBAL OPERATIONS
Through 2022-23, Kelsian’s operations
continued to grow and diversify. Here is a
snapshot of the numbers at 30 June 2023.
More than
274 million
passengers
Australia
USA
Singapore
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Sacramento, CA
San Jose, CA
San Simeon, CA
Golden, CO
Anaheim, CA
Santa Fe, NM
San Diego, CA
Mesa, AZ
El Paso, TX
Midland, TX
Austin, TX
Houston, TX
Biloxi, MS
New Orleans, LA
Lafayette, LA
Port Arthur, TX
Mandai Bus Depot
Bulim Bus Depot
Channel
Islands
Guernsey
Jersey
UK
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Tiwi Islands
Mandorah
DARWIN
Katherine
Groote Eylandt
Port Hedland
Karratha
Tom Price
Newman
Swan River
Kalgoorlie
Rottnest Island
PERTH
Bunbury
Busselton
Hopetoun
Albany
Denmark
Kangaroo Island
Palm Island
Magnetic Island
Townsville
Hayman Island
Whitsunday Islands
Curtis Island
Gladstone
Hervey Bay
BRISBANE
K’gari
(formerly Fraser Island)
Brisbane River
North Stradbroke Island
Southern Moreton Bay Islands
ADELAIDE
Murray River
SYDNEY
MELBOURNE
HOBART
Bruny Island
PUBLIC TRANSPORT
RESOURCE AND CHARTER
MOTORCOACH
MARINE & TOURISM
OVER
11,000
EMPLOYEES
8
113
VESSELS
108
DEPOTS / PORTS
24
TRAMS
OVER
4,800
BUSES
19
ISLAND
CONNECTIONS
Kelsian Group 2022/23 Annual Report 9
REVIEW OF OPERATIONS
30 August 2023
The Review of Operations forms part of the Directors’ report as at
30 August 2023.
Kelsian Group Limited (“Kelsian” or “Group”) delivered growth and
illustrated cost base resilience in what was otherwise a challenging
year of persistent labour shortages and a highly inflationary
environment. A solid underlying financial result for the twelve months
ended 30 June 2023 (FY23), was driven by the highly defensive
nature of our contracted transport portfolio, a continued rebound in
domestic tourism and further expansion and diversification of the
essential transport portfolio.
The strong FY23 result was achieved despite the ongoing challenges
associated with labour availability in parts of the bus operations
which led to higher overtime labour costs and lower special event
charter work. Overall, the Kelsian business is well hedged in an
inflationary environment, due to the inclusion of indexation for
fuel price increases, wages adjustments, and CPI for most of its
contracts. The business also has the ability to pass on persistent or
structural cost base increases via fare increases in most parts of its
Marine & Tourism division.
Underlying contracted revenue represented approximately 90% of
total revenue, reflecting the essential nature of our operations and the
successful execution of our well-defined growth strategy. Throughout
the period, we continued to invest in improving the quality of our
assets, as well as expanding the diversification and geographic reach
of the operations through several acquisitions, the most notable
being the acquisition of All Aboard America! Holdings, Inc.(“AAAHI”)
in the USA, which completed on 1 June 2023.
Kelsian recorded a statutory Net Profit after Tax (NPAT) of $21.0m for
the twelve-month period ended 30 June 2023 compared to a NPAT
of $52.9m in the previous year. The statutory result was impacted by
the due diligence advisory and settlement costs associated with the
AAAHI acquisition.
Underlying Earnings Before Interest, Tax, Depreciation and
Amortisation (EBITDA) was $161.9m compared to an EBITDA of
$155.9m for the June 2022 year. Underlying EBITDA has been
adjusted for significant one-off items during the period.
The balance sheet also remained in a strong position at the end of
the year with undrawn liquidity of $97.8m and a leverage ratio of
2.26x proforma EBITDA to Net Debt, which lowers to 2.07x when
excluding the government backed bus finance liabilities. Capital
expenditure for the year was $100.2m (2022: $43.1m) as we
continued to invest in and improve the underlying asset base.
Kelsian’s underlying cashflow profile and the cash position at 30
June 2023 is strong with all financial covenants comfortably met and
undrawn capacity, if required. Gearing (net interest-bearing debt to
net debt + equity) at year end was 39.8% up from 31.2% at 30 June
2022, which is well within target gearing levels and positions us well
for future investment and growth.
Taking into consideration the timing of the capital raising and only
one month’s contribution from AAAHI, the Board has taken a
prudent approach to capital management and has determined a
final dividend at the mid point of the stated dividend pay-out range
of 50-70% of underlying net profit after tax and before amortisation
(NPATA). Kelsian has declared a final dividend of 9.5 cents per
share, the same as the prior comparable period. This brings the full
year dividend to 17.0 cents per share, up from 16.5 cents per share
last year.
Kelsian’s achievements for the year were:
FY23 Financial Highlights
• A partial contribution from acquired bus businesses, effective
contract indexation and strong rebound in domestic travel
and continued solid growth in the Marine & Tourism segment
contributed to 9.3% growth in Group Revenue to $1.42bn
• Underlying EBIT increased by 5.5% to $84.5m despite high
inflation throughout the period
• Underlying Net Profit After Tax and before Amortisation of
$70.0m, up 4.3% on prior year, including one month contribution
(June 2023) from the AAAHI business
• Strong operating cashflow, up 12.1% to $129.0m, with $157.9m
in cash reserves as at the end of the period
• Successful capital raise of $278m to facilitate the AAAHI
acquisition which completed on 1 June 2023
• Increase of our multi-tranche debt and revolving credit facilities
by A$227m (USD facilities) for the AAAHI acquisition
• Deployment of $100.2m (2022: $43.1m) of capital expenditure to
replace bus fleet, advance vessel builds, improve infrastructure
and acquire strategic property assets
• Final dividend of 9.5 cents per share (FY22:9.5 cents)
FY23 Operational Highlights
• Collectively during FY23, Kelsian moved more than 274 million
customers, operated approximately 4,800 buses, 113 vessels
and 24 light rail vehicles and finished the period with
more than 11,000 employees
• Signed two seven+ year metropolitan bus contracts in NSW,
commencing services in August 2023 (Regions 3 & 13) and in
October 2023 (Regions 2 & 15) - to become Sydney’s largest
urban bus operator
• Awarded two new 10-year contracts to provide marine
services to ConocoPhillips and Shell Santos in Gladstone
• Purchase of several new vessels including Starship, Starship
Aqua and Sydney Crystal in Sydney Harbour and Reef Quest
for the Whitsundays/Hayman Island operations
• Entered the large, attractive USA market, through acquisition
of an established, highly regarded, customer centric operator
– AAAHI
• Completion of several acquisitions including bus operations in
the Channel Islands of Guernsey and Jersey (September
2022), North Stradbroke Island Buses (December 2022),
Horizons West Bus and Coachlines (January 2023) and
Grand Touring (NT) (February 2023)
• Largest zero emissions bus fleet and electrified bus depot
in Australia
Kelsian Group 2022/23 Annual Report 11
All Aboard America!
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REVIEW OF OPERATIONS
AUSTRALIAN BUS
Throughout FY23, labour shortage issues, particularly impacting
drivers and mechanics, remained a challenge in Adelaide and some
parts of Sydney, despite the Group’s ongoing focus on recruiting,
attracting and retaining key talent. This resulted in increased costs
associated with short-term employment incentives, driver training
and increased overtime costs. We continue to work closely with our
government clients to find solutions to this issue.
Delivering a reliable service and meeting contract KPIs has been a
key focus of the period and all businesses continue to perform at
the top of their peer group, despite the labour challenges. Without
doubt, the reputation of the Transit Systems’ operations has further
contributed to growth with the award of three additional contract
regions in Sydney, which will make Transit Systems the largest urban
bus operator in NSW, when the last of these new contracts come
online in October 2023.
During the period we saw patronage on the network steadily
increase, and the operating environment (congestion, on time
running, accidents and fuel consumption etc.) have returned to pre
COVID-19 levels. The inflationary protection mechanisms in our
government bus contracts continue to work effectively to hedge
our cost base in what has been an exceptionally high inflationary
period. Temporary margin compression has occurred from the higher
overtime labour costs to deliver services and inability to take on as
much higher margin charter work, outside of the contracted services,
which remain our priority to deliver.
Safety remains a key focus across the Australian Bus Division, and
we have continued to roll out collision avoidance systems and to fit
vehicle telematics to buses to provide a safer operating environment
for employees, customers, and other road users.
The Go West Tours operation has performed well and continues to
build on opportunities in Western Australia to service existing clients
as well as explore growth opportunities locally and interstate.
The acquisition of Horizons West Bus and Coachlines, which was
announced in late October 2022 and completed on 31 January
2023, has provided an exciting opportunity to enter the education
sector from a transport operator perspective and is complementary
to our Western Australian operations. The integration of the business
was completed during the second half of FY23, and the business is
performing in line with expectations.
During the period we acquired several smaller but strategic
businesses including North Stradbroke Island Bus Lines, a business
complementary to our marine operations to Stradbroke Island.
This further strengthens our position in Southeast Queensland and
provides a base from which to grow our Queensland bus presence.
We also acquired Grand Touring in the Northern Territory, a business
that provides coach and charter solutions in Darwin and Katherine.
In addition to the growth delivered from the contract wins in Sydney,
the Group pursued opportunities for international acquisitions in the
USA and UK markets. The focus remains on executing the growth
strategy of pursuing organic growth in core markets and maintaining
a disciplined approach to acquisitions.
During the period we continued to work with government on de-
carbonisation solutions. At June 2023, we had a fleet of 73 Battery
Electric Buses (BEBs) and two Hydrogen Fuel Cell Buses (HFCBs),
with work underway across the country (including grid upgrades and
charging infrastructure) to more than double this to 168 BEBs and
4 HFCBs in calendar year 2023. The Group continues to lead the
way in the transition to a zero-emission fleet in Australia and further
capital is earmarked for this transition in the future.
Electric buses, Transit Systems - Victoria
INTERNATIONAL BUS
During FY23, the International Bus Division has continued to
undergo further significant repositioning. Most notably, the recent
acquisition of All Aboard America! Holdings, Inc. in the USA in June
2023 and the acquisition of bus operations in the Channel Islands
on Guernsey and Jersey in September 2022.
The focus throughout the period was on ensuring the business
is well placed to capitalise on the strong pipeline of new tender
opportunities across United Kingdom, Singapore and New Zealand
as well as pursuing acquisitions to deliver shareholder value
Singapore
From an operational perspective, the driver shortages experienced
in Singapore at the beginning of FY23 re-emerged in the second
half and were not fully resolved until the end of the period.
Ongoing support from the Singapore Land Transport Authority
(SLTA) to address this issue for all operators has resulted in a
gradual increase in the resumption of route services and an
increase in patronage levels across the network. By the end of
July 2023, a full service was being delivered by Tower Transit
Singapore and operational performance was on track to meeting
pre-COVID-19 service standards and achieving associated
performance incentives.
Electric Bus, Tower Transit - Singapore
UK
USA
In September 2022, Kelsian acquired two businesses in the
Channel Islands operating exclusive contracted bus services on
the islands of Guernsey and Jersey. Collectively, these businesses
operate 120 buses from two depots and have 237 employees.
Pleasingly, both businesses recently negotiated contract
extensions and are performing in line with expectations.
There has, and continues to be, a high level of tender and organic
growth opportunities for the International Bus Division in UK, with
a strong pipeline of ongoing tender opportunities in Manchester.
We have maintained a comprehensive management structure and
overheads to be able to pursue these opportunities. While we were
not successful in our first two contract bids in Manchester, the
feedback on our bids was encouraging and we remain well placed
to capitalise on the strong pipeline of tender opportunities in
Manchester and the surrounding regions during the coming years.
The Group’s focus on expanding its international footprint has
seen some impressive milestones achieved this year, most
notably the successful entry into the large and highly attractive
USA market with the acquisition of motor coach operator All
Aboard America! Holdings, Inc. (AAAHI).
On 1 June 2023, we completed the acquisition of AAAHI, the
fourth largest motorcoach operator in the USA operating in
California, Arizona, New Mexico, Texas, Colorado, Louisiana,
and Mississippi. AAAHI’s market-leading regional brands
include Hotard Coaches, All Aboard America, Sun Diego
Charters, Ace Express Coaches, Lux Bus America and First-
Class Transportation.
AAAHI provides an entry point into the large and fragmented USA
bus market, through an established, highly regarded, customer
centric operator with a multi-state footprint. The acquisition of
AAAHI brings with it a capable and experienced management
team with local expertise and strong brand presence.
The FY23 results include one month’s trading result for AAAHI
(June 2023), which was in line with expectations.
Electric bus, Go West Tours – Western Australia
buses.gg - Guernsey, Channel Islands
All Aboard America! – USA
12
Kelsian Group 2022/23 Annual Report 13
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REVIEW OF OPERATIONS
MARINE & TOURISM
The Australian tourism industry rebounded strongly during the
period following the removal of domestic travel restrictions post
COVID-19 and an increase in consumer confidence in the ability
to resume travel. Despite the higher costs of airline travel and
capacity constraints, domestic tourism demand has been strong
throughout the period. Although there has been a gradual recovery in
international visitor numbers, it is still well below pre COVID-19 levels
and indications are this is unlikely to recover until the FY25 year.
agency staff incurred because of staff shortages. Several fare
increases were implemented at various times during the period to
offset cost increases and pleasingly there was minimal impact to
demand. By the end of the period, cost inflation had stabilised and
the labour availability situation improved.
Several of our larger vessels in the fleet had major out of water repair
and maintenance works undertaken during the period which had
been delayed due to COVID-19 restrictions.
Operationally, most parts of the portfolio performed well with
accommodation and touring numbers on K’gari (Fraser Island)
rebounding strongly. Pleasingly, there were also increases in
visitation to Kangaroo, Magnetic and North Stradbroke Islands.
Our operations on Sydney Harbour and Rottnest Island finished the
period well with the Vivid light festival in Sydney being particularly
well attended.
It was pleasing to be awarded two new 10-year contracts to
provide marine services to ConocoPhillips and Shell Santos in
Gladstone as well as a new 15-year contract to provide passenger
transport services to Lane Cove for Transport for NSW (TfNSW) on
Sydney Harbour.
The severe flooding experienced throughout the Murray River
impacted the performance of the Murray Princess which resulted in
all river cruising being suspended in November 2022 due to access
restrictions and safety concerns and cruising did not resume until
late March 2023. Additionally, full services for RiverCity Ferries on
the Brisbane River resumed in February 2023 after the floods of
February 2022 damaged key infrastructure and required a reduced
service while repairs were undertaken.
From a cost and margin perspective, the high inflationary
environment during the period has seen pressure on margins with
increases in fuel and higher wages due to increased overtime and
Investment in our fleet continued with construction progressing
on two passenger/vehicle ferries and one passenger ferry for the
Southern Moreton Bay Islands service and the commencement
of construction for the two new vessels to service the Kangaroo
Island operations.
Several vessels were acquired including the Starship Sydney,
Starship Aqua and Sydney Crystal vessels on Sydney Harbour
which target the event and conference market and a new
vessel to support the demand for our recently established
Whitsundays/Hayman Island business.
At the corporate level, several key appointments in Governance
and Assurance were made and further enhancements were
made around our Cyber Security as well as significant ongoing
investment in the Marine & Tourism technology and customer
relationship platform to enhance the customer digital experience
and improve direct sales opportunities.
The Directors would like to thank our employees, customers,
suppliers and shareholders for their ongoing support and
commitment over the past year. The hard-working talented people
at Kelsian are central to our ongoing future growth and success.
RISK MANAGEMENT
To deliver our strategy it is important we understand and manage the
risks that face the Group. Kelsian’s Risk Management Framework
supports a holistic approach to business risk management, identifying
and understanding principal risks across our operating divisions then
consolidating these with Group risks to produce a Group view of our
material business risks.
Material risks are reported to and reviewed by the Board, the Audit,
Risk and Sustainability Committee and Group Executive as part of
risk reporting processes. The Board Audit, Risk and Sustainability
Committee, along with the Group Executive, monitor these risks to
ensure the risk is within the Group’s risk appetite, whilst at the same
time identifying and analysing emerging risks that we face in the pursuit
of our objectives. The Group has developed a risk appetite framework
which informs the business of the Board’s appetite for certain risks.
Risk management is also integrated into key business decision-making
activities, including strategic planning, investment decisions, financial
risk management and project/change management. Internal audits
and risk reviews are undertaken to confirm risks are being effectively
managed and continually improve the quality of risk management
information reported to the Board through the Audit, Risk and
Sustainability Committee.
The achievement of Kelsian’s strategic objectives and future financial
performance is subject to various risks that arise from the activities and
operations of the Group. The table below outlines our principal risks
that could affect results and performance.
(Note this is not an exhaustive list nor in order of materiality.)
EXTERNAL RISKS
DESCRIPTION
MITIGATION
Economic Condition
Climate Change
Geopolitical/
Government Policy
Like all organisations, the Group is exposed
to economic fluctuations which can impact on
customer needs, supply chain costs and growth
opportunities. The global economic outlook is
looking uncertain specifically in respect of supply
chain costs, labour and fuel prices all of which
increase uncertainty around financial resources.
In addition to hedging through financial instruments,
the Group have natural hedging within many of
its contracts to significantly manage this risk. This
is further supported by innovative and efficient
business operating models that support our
clients in delivering safe, reliable, sustainable and
economical solutions.
Businesses globally continue to come under
increasing pressure from all stakeholders to
demonstrate strong progress on understanding
their climate related risks and performance. Failure
to manage the risks, and expectations, in respect
of climate-change could negatively impact the
Group’s reputation, performance and growth
opportunities.
Kelsian believes that the transition to a lower
carbon economy presents opportunities as well as
risks for our business.
The transition to decarbonisation presents
opportunities to embrace new technologies that
are more efficient and innovate our services.
Increased use of public transport services can be a
positive contributor to lowering carbon emissions in
metropolitan cities where we operate.
The risks include transition risks; extensive policy,
legal, technology and market changes as well as
physical risks which result from climate change.
Depending on the nature, speed, and focus of
these changes, transition risks may pose varying
levels of financial and reputational risk to the Group.
In FY22, Kelsian undertook a comprehensive review
of the climate related transitional and physical
risks, and opportunities, relevant to the Group.
To understand Kelsian’s current climate-related
risks and opportunities, high level research was
conducted around the primary climate-related risks
and opportunities relevant to Kelsian. The analysis
was drawn from relevant academic, industry and
government publications such as IPCC Reports,
IEA publications and other relevant material.
The risks and opportunities identified in this
exercise have been analysed and evaluated using
the Group’s risk methodology, which is based on
ISO31000, shared with the Group’s Board and
Executive and targeted plans developed to mitigate
risk and progress opportunities.
In FY23 we continued our analysis of climate
related risks by conducting a preliminary qualitative
review of climate risks and opportunities using two
scenarios (high and low carbon) and a selection of
assumptions to predict the impact on our business.
The results of that analysis are then being used to
confirm our risk mitigation actions and plan over
short, medium and long time horizons.
Kelsian is exposed to risks of changes in
government policies and regulations which may
impact financially on the Group’s cost base or
future prospects and opportunities for new or
renewed contracts. The Group’s operations depend
heavily on government policy, funding regimes and
infrastructure plans initiatives continuing to support
private company operators in public transport.
Such changes have the potential to impact (both
positively and adversely) on Kelsian’s profitability
and future growth prospects.
Kelsian manages these risks by putting in place
dedicated resources to manage and monitor
government policies and implement appropriate
systems and processes to ensure compliance with
changing regulatory environments.
Kelsian, as far as possible, incorporates
consideration of changes in regulatory requirements
and government policies into its corporate and
financial plans and forecasts.
SeaLink – Whitsunday Islands, Queensland
14
Kelsian Group 2022/23 Annual Report 15
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REVIEW OF OPERATIONS
RISK MANAGEMENT CONTINUED
OPERATIONAL RISKS
DESCRIPTION
MITIGATION
STRATEGIC RISKS
DESCRIPTION
MITIGATION
Financial Risks
Competition Growth
Kelsian provides its services and products to
individuals, companies and government agencies
across a range of economic sectors. This is carried
out in competitive markets where we compete in
areas of price, quality and service options.
Failure to effectively compete in the market and/or
develop new and innovative solutions could lead
to non-renewal of contracts and failure to win new
tenders. Should these crystallise these risks can
impact on the financial performance of the Group.
Kelsian’s focus is on being a world leader in
delivering essential travels through safe, intelligent
and sustainable transport solutions while creating
brilliant customer experiences. This purpose is
built on core strategic strengths within the Group
– Customer Experience, Operational Excellence,
Safety and Innovation and Sustainability.
Kelsian has a dedicated Business Development
Function who oversee the Group’s competitive
tendering process as well as monitoring and
assessing market conditions in areas where we bid/
operate. This team also work with our operational
divisions to identify and evaluate new business
opportunities.
Our continued focus in these areas will ensure
Kelsian will continue to remain competitive and
attractive to customers and clients who value these
values in their business partner.
Contracted Services
Integration Risk –
Acquisitions
Over 70% of the Group’s revenue is secured
through long-term government/commercial
contracts. Such contracts attract inherent risks
around achieving operational and financial
performance. Unmanaged, these risks can impact
on the Group’s financial performance as well as
our reputation and ability to renew and secure
new contracts.
As an experienced and established operator,
Kelsian and its Operating Division have extensive
expertise to ensure we meet the requirements and
standards on all our contracts. This is backed up
with excellent customer/client relations to ensure
expectations are understood and managed.
Kelsian’s financial and operational excellence
models provide for effective financial monitoring of all
business activities and efficient business operations.
There are potential integration risks associated
with any acquisition, including due diligence
risks, and risks that integration could take longer,
be more complex or costly than expected,
encounter unexpected challenges, divert
management attention or that the anticipated
benefits may not be achieved. Any material failure
to fully integrate the operations of an acquired
business, or material failure to achieve anticipated
benefits, could adversely impact the operational
performance and profitability of the Group.
Kelsian uses its risk management process to
identify and assess the integration risks and then
putting in place dedicated resources to manage,
monitor and report on the integration process.
Reflecting the nature and scale of the AAAHI
acquisition in FY23 Kelsian has in place a dedicated
team and process for closely monitoring the
integration risks of the acquisition with oversight
of the Board and advice from external experts to
support and challenge management thinking.
Integration and
Transition Risks –
New Public Transport
Contracts
There are potential integration and transition
risks associated with commencing large new
public transport services contracts including
employee relations risks, reputational risks,
risks of operating from new depots (delay and
construction/suitability) and risks that transitioning
services may be more complex or costly than
expected, encounter unexpected challenges,
divert management attention or attract adverse
media attention.
Kelsian manages these risks through use of
robust transition processes including dedicated
transition team planning and resources which it
has developed during its experience in transitioning
large public transport bus contracts over many
years in Australia and Singapore.
SeaLink – Whitsunday Islands, Queensland
Kelsian’s continued ability to operate its business
and effectively implement its business plans is
exposed to a variety of financial risks including
credit risk, interest and currency risk, liquidity risk
as well as Balance Sheet risk.
Information on how Kelsian manages its financial
risks are outlined in the Notes of the Financial
Report.
Health & Safety
Transport, tourism and hospitality inherently include
safety risks many of which are outside our control.
Significant safety incidents, or failings in our safety
management systems, could result in reputational,
legal and financial damage.
Kelsian has a strong safety culture and is
committed to continuous improvement and
maintaining safety standards for all our operations.
Kelsian has robust Safety Management Systems
across all its operations which ensure that safety
hazards and risks are identified and managed.
Many of our operations are certified to AS 4801
/ ISO 45001 and those that are not, are either
working towards certification or have safety
systems that meet the equivalent of these
standards.
As an experienced transport and tourism operator,
Kelsian understand the safety risks inherent in our
business and have an extensive range of controls
to protect our people and customers.
The Group employs dedicated professionals to
manage health and safety outcomes and to provide
support, education and training to the Group’s
employees with respect to health and safety
matters in the workplace.
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Environmental
The nature of our activities which occur in some
environmentally sensitive areas such as marine
waters in Australia have the potential to cause harm
to the environment if not managed appropriately.
Kelsian undertakes comprehensive risk
assessments to ensure the environmental risks and
hazards we face are identified and risks managed
to acceptable standards.
Cyber and
Information Security
People
Failure to operate in accordance with environmental
standards not only has the potential to result in
environmental harm but also increases compliance
costs, jeopardises our community relations and
causes reputational damage with our stakeholder
and investors.
Kelsian like any business faces an ever-changing
cyber security threat and needs to have adequate
arrangements in place to prevent, detect and
respond to such threats ensuring no loss of or
disruption to our systems and data.
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The Group aligns with ISO 27001 (Information
Security Management) and the ACSC (Australian
Cyber Security Centre) Essential 8 Maturity Model.
We have an established suite of technical and
procedural solutions, as well as routine activities,
such as cyber awareness training, to ensure levels
of security and resilience are at the optimum level.
Our security arrangements are routinely reviewed,
through external and internal reviews, and
upgraded or reinforced as necessary to ensure
their adequacy.
Employee costs represent the largest operating
cost of the Group. In addition to the management
of the various financial aspects of employee
costs, the Group also face challenges around
talent management - recruitment, retention and
training, regulatory compliance and Industrial
Relations management. Failing to manage these
appropriately could have adverse financial,
reputational and operational impacts.
Kelsian have a team of dedicated People & Culture
professionals to support the business on all P&C
related matters. We have HR strategies, policies and
remuneration packages to attract, retain and motivate
our people, whilst ensuring succession planning
is in place for key staff. We are also experienced
at industrial relations management and take into
consideration changes in the labour market in our
financial planning and contractual arrangements.
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16
Kelsian Group 2022/23 Annual Report 17
REVIEW OF OPERATIONS
RISK MANAGEMENT CONTINUED
OPERATIONAL RISKS
DESCRIPTION
MITIGATION
Business Resilience
As a key element of a location’s infrastructure,
prolonged and unplanned interruption to Kelsian’s
operations could significantly impact the financial
performance of the Group and its reputation.
Whilst a number of these risks are outside our
control, we need to ensure that we manage
those within our control and our response to
their occurrence in order to provide high levels of
availability and reliability of our services and products.
Kelsian has an extensive range of controls and
strategies in place to manage such risks, including
crisis management plans, business continuity
plans, inspection and maintenance procedures,
customer service training, compliance programs as
well as appropriate insurances.
SUSTAINABILITY
ENVIRONMENTAL REGULATION
In FY23 we continued to improve our sustainability performance and
transparency of reporting, whilst building and refining our processes.
We recognise that the scale of global sustainability challenges and
expectations are becoming more significant.
We also understand and recognise the role of passenger transport
in society, including the importance of managing impacts on the
environment and being part of the solution to decarbonisation in
urban environments.
During the year we have developed and set sustainability targets for
the Group including adoption of an aspirational net zero target to
achieve net zero group-wide emissions by 2050, and targets related
to reducing our carbon intensity, promoting a diverse and inclusive
culture, tracking and reducing waste generation, employee health
and safety, and working in our communities which will be outlined in
more detail in our 2023 Sustainability Report planned for publication
in September 2023.
The Group’s operations are subject to various Australian
Commonwealth, State and Territory environmental regulations as
well as certain environmental regulations applicable to USA, Channel
Islands and Singapore activities. The types of key activities subject to
these regulations relate to emissions reporting, storage of fuels and
hazardous substances, regulatory controls on water quality, marine
parks, noise, and other impacts of operating transport.
Each operating Division has an environmental management framework
and supporting environmental management systems to manage these
risks, maintain standards and ensure compliance with applicable
regulatory and licence requirements. Environmental performance
is monitored by site and business division and information about
the Group’s performance is reported to and reviewed by divisional
management, Group Executive management and the People, Culture
and Remuneration Committee. All of the public bus operations within
the Group’s business units have achieved or are working towards
certification to ISO14001:2015. Marine safety systems applicable to
our marine businesses also apply a systematic approach to managing
environmental impacts of our marine businesses.
KEY RESULTS
RESULTS IN BRIEF
STATUTORY RESULTS
UNDERLYING RESULTS#
JUNE 2023
$M
JUNE 2022
$M
CHANGE
%
JUNE 2023
$M
JUNE 2022
$M
CHANGE
%
Revenue from Ordinary Activities
1,417.8
1,297.4
EBITDA *
Depreciation
EBITA
Amortisation of customer contracts
EBIT
Net finance costs
Profit Before Tax
Tax
Profit after Tax and before Amortisation
Profit after Tax
130.5
(57.0)
73.5
(20.4)
53.1
(19.7)
33.4
(12.4)
41.4
21.0
157.8
(57.1)
100.7
(18.6)
82.1
(17.6)
64.5
(11.6)
71.5
52.9
9.3
(17.3)
(0.2)
(27.0)
9.7
(35.3)
11.9
(48.2)
6.9
(42.1)
(60.3)
# Underlying Results adjusted for significant items for the period.
Acquisition, transaction related costs and other^
Net gain on investments
Total significant items
Tax effect of significant trading items and one off tax adjustments
9.3
3.9
(0.2)
6.3
9.7
5.5
11.9
3.7
8.6
4.3
2.3
1,417.8
1,297.4
161.9
(57.0)
104.9
(20.4)
84.5
(19.7)
64.8
(15.2)
70.0
49.6
(31.6)
0.2
(31.4)
2.8
155.8
(57.1)
98.7
(18.6)
80.1
(17.6)
62.5
(14.0)
67.1
48.5
(3.0)
5.0
2.0
2.4
* EBITDA - Earnings Before Interest, Tax, Depreciation & Amortisation. EBITDA, EBITA and EBIT are all non-IFRS measures.
^ Costs associated with the acquisition of All Aboard America! Holdings, Inc, Horizons West Bus and Coachlines, the Go Ahead transaction and other
acquisitions including stamp duty, legal, due diligence, accounting, tax, unrealised FX, net/gain loss on investments and other costs.
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DIVIDEND INFORMATION
FINAL DIVIDEND DATES
AMOUNT
PER SHARE
(CENTS)
FRANKED AMOUNT
PER SHARE
(CENTS)
Record date
Payment date
2022
Interim Dividend
Final Dividend
2023
Interim Dividend
Final Dividend
7.0
9.5
7.5
9.5
7.0
9.5
7.5
9.5
NET TANGIBLE ASSETS*
Net tangible assets
per ordinary share
15 September 2023
20 October 2023
JUNE
2023
$0.15
JUNE
2022
$0.35
*Net tangible asset calculation includes right-of-use assets and lease liabilities.
The report is based on the consolidated financial statements which have been
audited by Ernst & Young. Additional Appendix 4E disclosure requirements can
be found in the Directors’ Report and the consolidated financial statements.
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SeaLink – Whitsunday Islands, Queensland
18
Kelsian Group 2022/23 Annual Report 19
DIRECTORS’ REPORT
30 August 2023
The Directors present their report, together with the financial statements, on the
consolidated entity (referred to hereafter as the ‘Group’ or ‘Kelsian’) consisting of
Kelsian Group Limited (referred to hereafter as the ‘Company’ or ‘parent entity’)
and the entities it controlled at the end of, or during, the year ended 30 June 2023.
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 on the following pages. Directors
have been in office for the entire period unless otherwise stated.
DIRECTORS
Jeffrey Ellison AM
B. Acc, FCA, FAICD
Chair
Mr Ellison holds a Bachelor of
Arts Degree in Accounting from
the University of South Australia,
is a Fellow of the Institute of
Chartered Accountants Australia
and New Zealand and the
Australian Institute of Company
Directors. He previously held
the position of Chief Executive
Officer of Kelsian Group Limited
since 1997 and was appointed
Managing Director in 2008.
Mr Ellison retired as Managing
Director and CEO on 16 January
2020 and following a month
of transition as an Executive
Director, became a non-executive
director from 17 February 2020.
He was subsequently appointed
Acting Chair with effect from
1 July 2020 and Chair on 23
February 2021.
Mr Ellison is Deputy Chair of
Tourism Australia and Chair
of Hayborough Investment
Partners Pty Ltd. Mr Ellison
is a former Board member of
the South Australian Tourism
Commission, Tourism and
Transport Forum Australia, the
Adelaide Convention Centre and
the South Australian Botanic
Gardens and State Herbarium
Board. Mr Ellison was a member
of the Company’s People,
Culture and Remuneration
Committee from February to
October 2022 and is classified
by the Company as non-
independent director.
Fiona Hele
B.Com, FCA, FAICD
Deputy Chair,
Non-Executive Director
Ms Hele is a Non-Executive
Director and an experienced
Audit & Risk Chair with a
strong commercial and finance
background. Ms Hele is a
Chartered Accountant with
over 30 years’ experience in
both the private and public
sectors specialising in strategic
business advisory, mergers and
acquisition, risk management
and corporate governance.
Ms Hele is a Fellow of
the Institute of Chartered
Accountants, Australia and New
Zealand, and a Fellow of the
Australian Institute of Company
Directors.
Ms Hele is also a Director of
Adelaide Venue Management
Corporation, Argo Global Listed
Infrastructure Limited and CEA
Technologies Pty Ltd. Past
Directorships include the South
Australian Tourism Commission,
Celsus Securitisation Pty Ltd,
Prime Q, Adelaide Fringe Festival
and SA Water.
Ms Hele joined the Board in
2016 and is Deputy Chair of the
Board, Chair of the Company’s
Audit, Risk and Sustainability
Committee and member of the
Nomination Committee.
Ms Hele is classified by the
Company as an independent
director.
Clint Feuerherdt
B.Ecom, B.Com (Hons)
Managing Director &
Group Chief Executive Officer
Mr Feuerherdt joined Kelsian
Group as Group CEO in 2020
following the acquisition of the
Transit Systems Group.
Mr Feuerherdt was CEO Transit
Systems Group for 10 years
and, under his guidance, Transit
Systems Australia was entrusted
with more franchised bus
service contracts than any other
company in Australia, growing
revenue by over 400%.
In 2012-2013 Mr Feuerherdt led
the expansion of Transit Systems
Group into the United Kingdom,
making Transit Systems Group
the only Australian owned
multinational public transport
operator and further expanded
into Singapore in 2015.
Mr Feuerherdt graduated from
the University of Queensland
with an Honours Degree in
Commerce and was awarded
the University Medal. Mr
Feuerherdt previously worked in
investment banking.
Mr Feuerherdt was appointed
Managing Director & Group
Chief Executive Officer in July
2023.
Kelsian Group 2022/23 Annual Report 21
SeaLink –
Kangaroo Island,
South Australia
20
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DIRECTORS’ REPORT
DIRECTORS
Christopher Smerdon
MAICD
Non-Executive Director
Terry Dodd
Non-Executive Director
Neil Smith
MTM, B.Arts, FCILT
Non-Executive Director
Mr Smerdon has extensive
experience in the Information
Technology and cyber security
field having established and
built companies with national
and international operations. He
is currently Managing Director of
Vectra Corporation, a company
that provides specialist
cyber security services to
organisations globally handling
sensitive data, financial
information and large volumes
of credit card transactions.
Clients include banks, telcos,
payment gateways, airlines and
utilities.
Mr Smerdon joined the Board
in 2004 and has previously
held directorships on both
government and public
company boards. He is a
Member of the Australian
Institute of Company Directors
and is classified by the
Company as an independent
director.
Mr Smerdon is a member
of the People, Culture and
Remuneration Committee and
the Nomination Committee.
Mr Dodd has extensive
experience in business
management and the marine
industry. After qualifying as a
commercial diver in the USA
and working as a commercial
diver in the onshore and
offshore oil and gas industry,
he successfully established a
recreational diving business
and a travel agency in North
Queensland.
Mr Dodd is Managing Director
and owner of Pacific Marine
Group Pty Ltd, one of Australia’s
largest marine construction and
commercial diving companies.
Mr Dodd was previously
Managing Director of Sunferries,
a ferry transport business based
in Townsville, prior to its sale
to Kelsian in March 2011 when
Mr Dodd joined the Board of
Kelsian.
Mr Dodd is a member of the
Company’s Audit, Risk and
Sustainability Committee,
Chair of the Nomination
Committee and is classified as
an independent director by the
Company.
Mr Smith was one of the
founding shareholders and
the former Chair of the Transit
Systems Group prior to
the acquisition by Kelsian.
He has over 30 years of
commuter transport operations
experience.
Mr Smith commenced his
career within the Sydney bus
industry, before acquiring a
number of bus operations
in rural NSW and then
Queensland. Mr Smith was a
founding shareholder of Tower
Transit.
Mr Smith holds a Bachelor of
Arts Degree and a Masters of
Transport Management from
the University of Sydney and
is a Fellow of the Chartered
Institute of Transport and
Logistics.
Mr Smith joined the Board
in 2020, is a member of
the Nomination Committee
and is classified as a non-
independent director by the
Company.
Lance Hockridge
FCILT, FIML, MAICD
Non-Executive Director
Mr Hockridge has extensive
international experience in the
transportation, manufacturing
and logistics sectors with a
focus on safety, operational
and financial transformation of
businesses.
Mr Hockridge was previously
the Managing Director and
CEO of Aurizon Holdings
Limited (2010 to 2016) following
the demerger of Queensland
Rail and QR National from a
government owned railway
to an ASX50 company. Other
notable accomplishments as an
executive include the oversight
of BHP’s global transport
business, together with key
roles in financial and operational
reform in the heavy industrial
sector and leading a major
turnaround for BlueScope Steel’s
North American operations.
Mr Hockridge is Chair and
Director of AVADA Group Limited
as well as Chair of the Salvation
Army Queensland Advisory
Council, and an active advocate
for diversity in the workforce.
Mr Hockridge joined the Board
in July 2021, is a member of
the Audit, Risk & Sustainability
Committee and the Nomination
Committee and, Chair of
the People, Culture and
Remuneration Committee.
Mr Hockridge is classified by
the Company as an independent
director.
Diane Grady AO
B. Arts, M. Arts, MBA, FAICD
Non-Executive Director
(appointed 1 September 2022)
Ms Grady is a highly regarded
company director with extensive
international experience across
a variety of industries. She has
been a full-time independent
director since 1994 serving
on a range of public company
and not-for-profit boards, and
was previously a partner of
McKinsey & Co where she
led the Consumer Goods,
Marketing and Retailing practice
in Australia and was a global
leader of the Firm’s Organisation,
Culture and Change
Management practice.
Ms Grady is currently a non-
executive director on the Boards
of Grant Thornton and Tennis
Australia and is on the Strategy
Council of Heads Over Heels
(a not for profit that supports
women entrepreneurs seeking to
scale up their businesses). Her
former directorships include the
Macquarie Group, Woolworths,
BlueScope Steel, Goodman
Group, Lend Lease, and Wattyl.
She has also served as a Trustee
of The Sydney Opera House,
President of Chief Executive
Women, Chair of Ascham
School, and Chair of The Hunger
Project Australia.
Ms Grady is a member of
the People, Culture and
Remuneration Committee and
the Nomination Committee and
is classified by the Company as
an independent director.
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Andrew Muir
B.Ec, MBA
Joint Company Secretary
Joanne McDonald
LLB, B.Ec, GAICD, FGIA
Joint Company Secretary
Mr Muir was appointed
Company Secretary on 1 June
2018. Mr Muir has also held
a number of similar financial
positions with other ASX listed
and private companies. Mr
Muir holds a Bachelor of
Economics and a Master of
Business Administration from
the University of Adelaide.
Ms McDonald was appointed
Company Secretary on 21
August 2018. Ms McDonald
has over 25 years‘ experience
in governance, commercial
and corporate law holding
company secretarial and senior
legal and commercial positions
with private and statutory
corporations. She holds a
Bachelor of Laws (Hons) and
Bachelor of Economics from
the University of Adelaide as
well being a graduate of the
Australian Institute of Company
Directors and Fellow of the
Australian Governance Institute.
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Kelsian Group 2022/23 Annual Report 23
DIRECTORS’ REPORT
INTEREST IN THE SHARES OF THE COMPANY
AND RELATED BODIES CORPORATE
As at 30 August 2023, the interests of the Directors
in the shares of the Company were:
NUMBER OF ORDINARY SHARES
N Smith
C Smerdon
C Feuerherdt
T Dodd
J Ellison AM
L Hockridge
F Hele
D Grady AO
DIVIDENDS
25,986,572
6,098,868
5,980,041
5,819,010
5,529,742
111,765
53,840
19,559
PRINCIPAL ACTIVITIES
NON-AUDIT SERVICES
During the financial year the principal continuing activities of the
consolidated entity consisted of:
international public bus transport operations
• domestic metropolitan public bus transport operations
•
• urban, regional and school bus charter and coach tours
• domestic ferry services
•
•
•
tourism cruises, charter cruises and accommodated cruising
travel agency services and packaged holidays
tourist accommodation
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There were no significant changes in the state of affairs
of the Group during the financial year.
Details of the amounts paid or payable to the auditor for non-audit
services provided during the financial year by the auditor are outlined
in note 33 to the financial statements.
• all non-audit services have been reviewed and approved to
ensure that they do not impact the integrity and objectivity of the
auditor; and
The Directors are satisfied that the provision of non-audit services
during the financial year, by the auditor (or by another person or firm
on the auditor’s behalf), is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in
note 33 to the financial statements do not compromise the external
auditor’s independence requirements of the Corporations Act 2001
for the following reasons:
• none of the services undermine the general principles relating to
auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants issued by the Accounting Professional
and Ethical Standards Board, including reviewing or auditing the
auditor’s own work, acting in a management or decision-making
capacity for the Company, acting as advocate for the Company
or jointly sharing economic risks and rewards.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
A fully franked dividend of 9.5 cents per share was declared by Kelsian’s Directors on 30 August 2023, representing a total payment of
$25,575,682 to be paid 20 October 2023 based on the current number of ordinary shares on issue.
Dividends paid during the financial year were as follows:
CONSOLIDATED
MEETINGS OF DIRECTORS
Interim fully franked dividend for the year ended 30 June 2023 paid 17 March 2023 of 7.5 cents
(2022: 7.0 cents) per ordinary share
Final fully franked dividend for the year ended 30 June 2022 paid 6 October 2022 of 9.5 cents
(2021: 9.0 cents) per ordinary share
2023
$’000
16,391
20,761
37,152
2022
$’000
15,288
19,656
34,944
Kelsian’s Directors on 30 August 2023 declared a 9.5 cents per
share fully franked final dividend payable on 20 October 2023 to
shareholders registered on 15 September 2023. Total 2023 dividends
of 17.0 cents represents a 60% return of underlying net profit after
tax and before amortisation to shareholders, which is in line with the
Company’s policy of returning 50% - 70% of underlying net profit after
tax and before amortisation, subject to business needs and ability to
pay. The interim dividend for the half-year ended 31 December 2022
was 7.5 cents per share.
The Board will continue to consider Kelsian’s growth requirements, its
current cash position, market conditions and the need to maintain a
healthy balance sheet, when determining future dividends.
SHARES UNDER OPTION
INDEMNITY AND INSURANCE OF AUDITOR
At 30 June 2023, there were 722,711 (2022: 742,219) options/
performance rights outstanding to acquire ordinary shares in the
Company. No options or performance rights to acquire shares or
interests in the Company or a controlled entity were granted since
the end of the financial year.
To the extent permitted by law, the Company has agreed to indemnify
its auditors, Ernst & Young Australia, as part of the terms of its audit
engagement agreement against claims by third parties arising from
the audit (for an unspecified amount). No payment has been made to
indemnify Ernst & Young during or since the financial year.
During the year 299,130 of performance rights were exercised
by employees.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the Directors and executives of
the Company for costs incurred, in their capacity as a Director or
executive, for which they may be held personally liable, except where
there is a lack of good faith.
During the financial year, the Company paid a premium in respect
of a contract to insure the Directors and executives of the Company
against a liability to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits disclosure of the nature of
the liability and the amount of the premium.
The Company is party to Deeds of Indemnity in favour of each of the
Directors, referred to in this report who held office during the year and
certain officeholders of the Company. The indemnities operate to the
full extent permitted by law and are not subject to a monetary limit.
Kelsian is not aware of any liability having arisen, and no claims have
been made, during or since the financial year ending 30 June 2023
under the Deeds of Indemnity.
PROCEEDINGS ON BEHALF OF THE
COMPANY
No person has applied to the Court under section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company
is a party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in Corporations Instrument
2016/191, issued by the Australian Securities and Investments
Commission, relating to ‘rounding-off’. Amounts in this report have
been rounded off in accordance with that Corporations Instrument to
the nearest thousand dollars, or in certain cases, the nearest dollar.
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 immediately after
this Directors’ report.
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board Committee held during the year ended 30 June
2023, and the number of meetings attended by each Director during the period were:
BOARD
MEETINGS
ATTENDED
AUDIT, RISK AND
SUSTAINABILITY
COMMITTEE MEETINGS
ATTENDED
PEOPLE, CULTURE AND
REMUNERATION
COMMITTEE MEETINGS
ATTENDED
NOMINATION
COMMITTEE MEETINGS
ATTENDED
2
2
2
2
2
1
2
1
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Total number of meetings held:
J Ellison AM (Board Chair)*
F Hele (Deputy Chair)*
C Smerdon*
T Dodd*
N Smith
L Hockridge
D Grady AO* (appointed 1 September 2022)
A Staines OAM* (resigned 25 October 2022)
21
20
21
21
19
21
20
15
5
Held: represents the total number of meetings held during the
financial year.
Attended: represents the number of meetings attended by a Director.
To the extent that Directors who are not members of the relevant
Committee attend Committee meetings as guests from time to time
their attendance is not recorded in the table above.
*During FY23 the number of eligible Committee meetings held
during the time the following Directors were members of the relevant
Committee is less than the total meetings for the year indicated in the
above table and is as follows:
A Staines OAM - eligible to attend nine Board Meetings, one Audit,
Risk and Sustainability Committee Meeting and one Nomination
Committee Meeting
D Grady AO - eligible to attend seventeen Board Meetings, four
People, Culture and Remuneration Committee Meetings and one
Nomination Committee Meeting
C Smerdon - eligible to attend four People, Culture and Remuneration
Committee Meetings
J Ellison AM - eligible to attend two People, Culture and Remuneration
Committee Meetings
T Dodd - eligible to attend two People, Culture and Remuneration
Committee Meetings and four Audit, Risk and Sustainability Meetings
Note: C. Feuerherdt became a Director on 3 July 2023.
4
–
4
–
4
–
4
–
1
6
2
–
4
2
–
6
4
–
Committee Membership
During the reporting period the Company had the following
Committees with membership for the period as follows:
Audit, Risk and Sustainability Committee
F Hele (Committee Chair)
L Hockridge
T Dodd (Member from October 2022)
A Staines OAM (Member to October 2022)
Nomination Committee
T Dodd (Committee Chair)
All non-executive directors as members
People, Culture and Remuneration Committee
L Hockridge (Committee Chair)
D Grady AO (Member from October 2022)
C Smerdon (Member from October 2022)
J Ellison AM (Member to October 2022)
T Dodd (Member to October 2022)
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24
Kelsian Group 2022/23 Annual Report 25
DIRECTORS’ REPORT
LETTER FROM CHAIR OF PEOPLE, CULTURE AND REMUNERATION COMMITTEE
Dear Shareholder,
I am pleased to present our Remuneration Report for the financial
year ended 30 June 2023 (FY23), which summarises Kelsian
Group Limited’s (‘Kelsian’ or the ‘Group’) remuneration framework,
governance, and outcomes for Key Management Personnel
(Executives and Non-Executive Directors) (‘KMP’).
In FY23, we continued to develop and implement our
Remuneration Framework to further strengthen the alignment
of the remuneration outcomes to business outcomes. We will
continue to develop and review our Remuneration Framework
year on year to align with good governance principles.
Our approach to remuneration and rewarding Executives ensures
that remuneration is competitive, and Executives are incentivised to
drive long-term sustainable growth and increase shareholder value.
Our focus remains to ensure Executive reward satisfies key criteria
for good reward governance practices including competitiveness
and reasonableness; acceptability to shareholders; performance
linkage/alignment; and transparency.
The Remuneration Framework for Executives is designed to align
Executive rewards with shareholders’ interests.
FY23 Highlights
Kelsian’s financial performance illustrates the business’s
resilience and the management team’s capability in managing a
dynamic operating environment. The results for this year include:
• Revenue $1,417.8 million
• Underlying EBITDA $161.9 million
• Underlying NPATA $70.0 million
• Operating Cashflow $129.0 million
• Fully franked final dividend 9.5 cents per share
This financial performance was underpinned by several key
strategic achievements for the period, including:
• Successful acquisition of All Aboard America! Holdings, Inc.
(‘AAAHI’) in the USA which was completed on 1 June 2023.
• A capital raising of $278 million to fund the AAAHI acquisition.
• The awarding of Transport for NSW Contracts for Greater
Sydney Bus Regions 2, 3, 13, and 15.
• Acquisitions of Horizons West Bus and Coachlines, Grand
Touring, North Stradbroke Island Buses and Denmark Buses WA.
• Acquisition of the Starship Group (vessels) on Sydney
Harbour.
• Acquisition of Liberty Bus and CT Plus in the Channel Islands.
• Expansion of the Transit Systems Electric and Hydrogen bus
fleet across Australia.
• Extension of the Gladstone contracts.
Kelsian remains committed to making safety a priority in
everything we do to ensure we create a safe and healthy
environment for our employees, contractors, and customers.
Throughout the year we made further enhancements and
strengthened Kelsian’s safety management system SafeConnect.
In Australia, we implemented this automated system for
reporting hazards, incidents, and investigations providing real-
time reporting and automated workflows for notifications and
management of corrective actions.
In addition to a range of forward-looking safety performance
KPIs, Kelsian measures two key safety performance metrics, Total
Recordable Incident Frequency Rate (TRIFR) and Lost Time Injury
Frequency Rate (LTIFR). Both frequency rates are measured per
million hours worked.
Kelsian achieved a 6.3% reduction in TRIFR versus FY22, but
this fell short of the 10% improvement safety objective. Kelsian’s
LTIFR increased from 7.5 to 8.3, however, a reduction in the
severity of incidents resulted in a 7.9% reduction in the average
days lost from LTIs. As a result of these outcomes, no payment
for the group-wide safety objective was paid. Divisionally
Singapore achieved its TRIFR target. We acknowledge that more
needs to be done to improve our safety performance and remain
resolutely focused on achieving this.
During the year, Kelsian completed the annual employee
engagement survey for Australia, Singapore, London, and the
Channel Islands with an overall 10% improvement in engagement
achieved across the Group. This significant improvement was
particularly pleasing given our continued focus on providing a
safe and inclusive workplace for our employees.
Response to FY22 Remuneration Report Feedback
The FY22 Remuneration Report received strong support from
shareholders (83.46% in favour) at the 2022 AGM. However,
the People, Culture & Remuneration Committee and the Board
continue to engage with shareholders and proxy advisers and
listen to the feedback received. One key area of feedback was a
request to include greater disclosure of performance objectives
that are not commercially sensitive to provide improved clarity
and transparency. We have included greater disclosure in
the FY23 Remuneration Report. Furthermore, we have also
introduced a cash deferral into equity for FY23 STI awards where
50% of financial objectives for the Executive Leadership Team
Short Term Incentive Plan are awarded in deferred equity, with a
plan to continue to increase the percentage deferred into equity
to 50% of the total potential maximum awards across both
financial and non-financial objectives by FY26.
Board and Executive Changes
During the year, Fiona Hele was appointed as Deputy Chair
(24 August 2022). Diane Grady AO joined the Kelsian Board (1
September 2022) and Andrea Staines OAM retired at the October
2022 AGM.
Throughout FY23, there were several changes to the Group
Executive Leadership Team (ELT).
In August 2022, a new role of Chief Legal & Risk Officer was
created with responsibility for group-wide corporate governance,
risk and legal matters that will streamline and strengthen
management in these areas. Joanne McDonald was appointed to
this role.
As a result of a retirement in the Australian Bus Division, a new
role of Chief Executive Officer of Transit Systems was created,
and Michael McGee was appointed in December 2022. The new
CEO role has expanded responsibilities, replacing the scope of
the previous Transit Systems Chief Operating Officer.
With the successful completion of the acquisition of All Aboard
America! Holdings, Inc. in June 2023, William Trimarco became a
member of the ELT.
Subsequent to the end of the period, on 3 July 2023, Clint
Feuerherdt, Kelsian’s Chief Executive Officer was appointed as
Managing Director of Kelsian. This appointment was made in
recognition of Clint’s exceptional leadership skills and track record
of successfully driving strategy to achieve long-term shareholder
value.
In addition, in July 2023, Donna Gauci was appointed as CEO
SeaLink Marine & Tourism (previously COO of Marine & Tourism)
and Graeme Legh was appointed as CEO of AAAHI effective
1 September 2023.
Mr. L Hockridge
Chair, People, Culture & Remuneration Committee
Kelsian Group Limited
30 August 2023
26
Kelsian Group 2022/23 Annual Report 27
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AUDITED REMUNERATION REPORT
Table of Contents
1. Key Management Personnel (KMP)
2. FY23 Remuneration Snapshot
3. Remuneration Governance
4. Overview of Financial Performance
5. Remuneration Framework
6. Remuneration Outcomes
7. Executive and NED Remuneration
8. Options, Shareholdings, and Performance Rights of KMP
1. KEY MANAGEMENT PERSONNEL (KMP)
The Remuneration Report forms part of the Directors’ Report
and sets out the remuneration framework and arrangements
of Kelsian Group Limited (‘Group’ or ‘Kelsian’) for the Key
Management Personnel (‘KMP’) of the consolidated entity, for
the purposes of the Corporations Act 2001 and Accounting
Standards for the financial year ended 30 June 2023.
This information has been audited as required by Section 308
(3A) of the Corporations Act 2001.
The KMP for the purposes of this Report are those having the authority and responsibility for planning, directing, and controlling major
activities of the Group, directly or indirectly, including any Director (whether Executive or otherwise) of Kelsian.
The term Executive includes the Group Chief Executive Officer and other Executives. Members of the People, Culture & Remuneration
Committee (‘PCRC’) are identified in the last column. The following persons set out in the table below were KMP for the reporting period 1
July 2022 to 30 June 2023:
TABLE 1.1: KMP from 1 July 2022 to 30 June 2023
NON-EXECUTIVE
DIRECTORS (NEDS)
Name
Role
Appointed
Term as
KMP in FY23
People,
Culture and
Remuneration
Committee
J Ellison AM
Chair, Non-Executive Director
Appointed Chair on 23 February 2021
Director since 9 July 2008
F Hele
Deputy Chair,
Non-Executive Director
13 September 2016
Appointed Deputy Chair on 24 August 2022
C Smerdon
Non-Executive Director
13 May 2004
T Dodd
N Smith
Non-Executive Director
28 March 2011
Non-Executive Director
16 January 2020
L Hockridge
Non-Executive Director
1 July 2020
D Grady AO
Non-Executive Director
1 September 2022
A Staines OAM
Non-Executive Director
15 February 2016
(retired AGM October 2022)
Full
Full
Full
Full
Full
Full
Part
Part
^ part-year Committee member
EXECUTIVES
Name
Role
C Feuerherdt
Group Chief Executive Officer*
Appointed
16 January 2020
Group Chief Financial Officer & Joint Kelsian Secretary
5 January 2017
A Muir
G Legh
D Gauci
W Toh
Chief Development Officer**
R Carpenter
Chief People & Culture Officer****
16 January 2020
12 April 2021
M McGee
Chief Executive Officer - Transit Systems
12 December 2022
Chief Operating Officer – SeaLink Marine & Tourism***
11 October 2013
Managing Director – Singapore
W Trimarco
Chief Executive Officer – AAAHI
G Balkin
Chief Operating Officer – Transit Systems
16 January 2020
1 June 2023
1 September 2020
P^
P
P^
Committee Chair
P^
Term as KMP in FY23
Full
Full
Full
Full
Part
Full
Full
Part
Part
2. FY23 REMUNERATION SNAPSHOT
The below information provides a high-level overview of remuneration outcomes and any changes to the framework or disclosures in
respect of FY23.
KEY FOCUS
OUTCOME
SUMMARY
EXECUTIVE
REMUNERATION
3.35% - 3.75% increase
For roles remaining the same throughout the year, there were increases of between
3.35% to 3.75% in fixed remuneration (inclusive of mandatory superannuation
increases, where applicable) from 1 July 2022. The following changes in executive roles
were made during the year:
• Joanne McDonald commenced in the new role of Chief Legal & Risk Officer in August
2022, also as a member of the Executive Leadership Team.
• Michael McGee was appointed to the role of Chief Executive Officer of Transit
Systems in December 2022 with expanded responsibilities, replacing the scope of
the previous Transit Systems Chief Operating Officer role.
• William Trimarco, CEO of AAAHI became a KMP on 1 June 2023 with the successful
purchase of the AAAHI business by Kelsian.
STI OUTCOMES
32.70% - 68.00%
Amounts were paid for FY23 STI based on performance against Group and Divisional
financial performance and individual performance.
During FY23, there were several changes to the setting of Executives’ performance
objectives to further strengthen the alignment of Group and Divisional targets, as well
as alignment to performance outcomes, improved transparency and ease of reporting.
The changes are summarised below:
• Formal STI Plan Rules were developed which will be reviewed annually to ensure the
Plan remains aligned to relevant market trends and shareholder expectations.
• Shift from Key Performance Indicators to Performance Objectives, shifting the primary
focus from inputs to outcomes.
• Performance objectives were limited to a maximum of eight and weighted according
to the level of impact on Kelsian.
• The performance objectives were also tailored to the responsibilities of each KMP, to
ensure Executives focus on objectives for their areas with the largest
impact on Kelsian.
• Deferral of 50% of the financial objective component of the STI potential award for
FY23, to be paid as equity, subject to a 12-month deferral period and any disposal
restrictions required for legal compliance reasons.
Note - No service test will apply to the deferred component.
Refer to Section 5 for further information relating to the STI Plan and STI Outcomes.
In addition, the Board approved a discretionary STI for the successful completion of the
AAAHI acquisition (50% of the STI payment is deferred for twelve months subject to
meeting certain AAAHI financial outcomes) which was aligned with Kelsian’s long-term
growth strategy of establishing operations in the United States of America.
Refer to Table 7.3 for further information.
The FY21 Performance Rights vested in full following the achievement of the threshold
gates and performance hurdles for both Tranche 1 and Tranche 2 of the Rights issued
under the LTI Plan.
Note – The proposed grant of Performance Rights in FY23 for the Group CEO was
submitted for shareholder vote at the 2022 AGM prior to the grant of such Rights. The
vote was 86.59% in favour.
The Kelsian Group Rights Plan (formerly the SeaLink Travel Group Limited Rights Plan)
was also approved at the 2022 AGM for purposes of Listing Rule 7.2 and Exception 13.
Refer to Section 5 for further information relating to the LTI Plan.
LTI OUTCOMES
100%
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* Appointed as Managing Director from 3 July 2023; ** Appointed as CEO of AAAHI from 1 September
2023 and William Trimarco retiring during FY24; *** Appointed as CEO of SeaLink Marine & Tourism from
3 July 2023; **** Appointed Group Chief People and Culture Officer from 3 July 2023
28
Kelsian Group 2022/23 Annual Report 29
AUDITED REMUNERATION REPORT
2. FY23 REMUNERATION SNAPSHOT CONTINUED
3. REMUNERATION GOVERNANCE
KEY FOCUS
OUTCOME
SUMMARY
NON-EXECUTIVE
REMUNERATION
3.97% increase
Non-Executive Director fees were increased by 3.97% inclusive of mandatory
superannuation increases where applicable, effective the first full pay period post
1 July 2022.
FY24 AND BEYOND
Fiona Hele was appointed as Deputy Chair (24 August 2022) and to reflect the additional
duties of the position of Deputy Chair, received an increase to the relevant Director fee
from August 2022.
To reflect additional Director responsibilities and time commitments of Neil Smith related
to the AAAHI acquisition, additional fees were also paid during FY23.
Refer to Section 7 for information relating to Non-Executive Directors.
Throughout FY23, Kelsian continued to review and refine its Remuneration Framework
with market insights provided by Korn Ferry, Godfrey Remuneration Group and Morrow
Sodali to understand market trends and peer comparisons. Feedback was also
considered from shareholders, the AGM and proxy advisors.
One consistent insight was the importance of a deferral component to Executives’
short-term incentives. Following the initial introduction of a deferred element for FY23 STI
awards, the Kelsian Board has also approved a three-year staged approach to apply the
deferral across both the financial and non-financial STI objectives and increase the level
of deferral from 25% of total potential STI awards in FY24, 33% for FY25 and to 50% STI
deferral in FY26 for Executive KMP. No service test will apply to the deferred component.
The proposed issue of Performance Rights and Restricted Rights to the Managing
Director and Group CEO, Clint Feuerherdt, will be submitted for shareholder vote at the
upcoming 2023 AGM of Kelsian prior to the granting of those Rights.
With the expansion of Kelsian into the USA in June 2023, it is proposed to extend
the offer of Restricted Stock Units (the US equivalent of Performance Rights), under
the Kelsian Rights Plan to senior managers residing in the USA with the adoption of
appropriate sub-plan rules for USA employees.
For FY24, it is also proposed to extend the offer of Performance Rights under the
Kelsian Rights Plan to senior managers of Australian businesses, further strengthening
shareholder and business unit leadership alignment through equity in the business.
Given the additional responsibilities and time commitments of the Board Directors with
the expansion of Kelsian into the USA, growth in the business and consideration of the
benchmarking undertaken by external consultants, the following changes have been
approved by the Board:
• Board Chair remuneration be adjusted in line with benchmarked data, being
an annual payment of $262,500 inclusive of all sub-committee activities and
superannuation contributions.
• The introduction of a Committee Chair and membership fee of $25,500 for Directors
chairing Board sub-committees, which include the People, Culture & Remuneration
Committee, and Audit, Risk and Sustainability Committee. Committee Chair fees are
inclusive of committee membership.
• The introduction of a committee membership fee of $11,200 for Directors serving on
Board sub-committees, commencing with fees being paid for serving on the People,
Culture & Remuneration Committee and Audit, Risk & Sustainability Committee.
• Other than as outlined above and passing through the mandatory increase in
Superannuation Guarantee Charges, no annual increase in Non-Executive Directors’
base fees is proposed for FY24.
Kelsian’s Remuneration governance is illustrated below. While the Board retains ultimate responsibility, Kelsian’s
Remuneration principles and policies are implemented through the People, Culture & Remuneration Committee.
Kelsian Group Limited Board
Overall Responsibilities
• Overall responsibility for the remuneration strategy and outcomes for Executives and Non-Executive Directors.
• Setting the remuneration of Directors, the MD & Group CEO and generally endorsing the same for direct reports to
the MD & Group CEO and monitoring the Company’s remuneration policies and practices.
• Reviews and, as appropriate, approves recommendations from the People, Culture & Remuneration Committee.
People, Culture & Remuneration Committee
Board Committees
Monitors, recommends and reports to the Board on:
• Non-Executive Director remuneration within aggregate limit
approved by shareholders.
• Equitably, consistently, and responsibly rewarding executives
including incentive targets and achievement of remuneration
outcomes having regard to the performance of Kelsian, the
performance of executives, and the general remuneration
environment.
• Alignment of remuneration policy framework and practices to
Group and Divisional strategic goals including people, financial
and non-financial objectives designed to support retention of
executives and directors who create value for shareholders.
• Kelsian Rights Plan (long-term incentive and other equity
incentives)
• Remuneration reporting.
• MD & Group CEO and Executive succession planning.
• The implementation and effectiveness of work health and safety.
• Organisational culture and people-related strategies.
Managing Director & Group CEO and
Group Chief People & Culture Officer
Provides information to the Committee to recommend on:
• Remuneration policy and practices.
• Individual remuneration and contractual arrangements
for senior executives.
• Incentive targets and outcomes.
• Information exchange with other Kelsian Group Board
Committees, to ensure that all relevant matters are
considered.
• Nomination Committee has responsibility for oversight
and recommendations on Board succession planning,
evaluation and director appointments.
External Stakeholders
• Feedback from shareholders and other external
stakeholders such as proxy advisers.
Independent Remuneration Advisors
• Provide independent advice, information, and
recommendations relevant to remuneration decisions.
• Throughout the year the People, Culture and
Remuneration Committee and management receive
information from specialist external advisors related to
remuneration market data and analysis.
People & Culture Management Team
Monitor, recommend and report to the
Committee and Board on:
• People and culture initiatives to continually develop
culture and talent aligned to strategic objectives.
• Long and short-term incentive participation.
• Assessment of performance against measurable
objectives.
• Talent pool for senior management succession.
• Engagement and Culture surveys.
30
Kelsian Group 2022/23 Annual Report 31
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AUDITED REMUNERATION REPORT
3. REMUNERATION GOVERNANCE CONTINUED
The People, Culture & Remuneration Committee operates
under a Charter that outlines its structure and responsibilities.
The Charter is available on the Kelsian corporate website at
kelsian.com/our-governance.
Membership of the People, Culture & Remuneration Committee
during the period 1 July 2022 to 30 June 2023 was comprised of the
following Non-Executive Directors (NEDs) and chaired by an
independent NED for the entire year:
L. Hockridge
Non-Executive Director, Independent
(Committee Chair)
T. Dodd
Non-Executive Director, Independent
(ceased October 2022)
J. Ellison AM,
(Board Chair)
Non-Executive Director,
Non-Independent (ceased October 2022)
C. Smerdon
D. Grady AO
Non-Executive Director, Independent
(member from October 2022)
Non-Executive Director, Independent
(member from October 2022)
The People, Culture & Remuneration Committee met regularly
throughout the year. The Group Chief Executive Officer, Group Chief
Financial Officer, Chief People & Culture Officer and Chief Legal &
Risk Officer attend Committee meetings by invitation, where
management input is required. However, Executives are not present
during discussions related to their own remuneration arrangements.
4. OVERVIEW OF FINANCIAL PERFORMANCE
Throughout the year, the People, Culture & Remuneration Committee
and Kelsian Executive received updates regarding remuneration
practices, market trends and general information related to
remuneration market data and analysis from external advisors such as
Korn Ferry and Godfrey Remuneration Group.
Korn Ferry and Godfrey Remuneration Group are renowned global
remuneration specialists who have assisted Kelsian in establishing a
Remuneration Framework, which also included the benchmarking of all
KMP, senior management and other salaried roles throughout Kelsian.
In addition, Kelsian engaged with Morrow Sodali, to provide Australian
market insights. Specialist expert tax and legal advice were obtained
during the year in relation to the offer of its Long-Term Incentive Program
to ensure legal and regulatory compliance of the plan terms and its
administration for residents of Australia, United Kingdom, Singapore,
and potential extension of the plan for FY24 for residents in the USA.
The recommendations that the People, Culture & Remuneration
Committee makes to the Board are based on its own independent
assessment of the information and advice provided by Korn Ferry and
other external remuneration consultants.
No remuneration recommendations as defined in Section 9B of the
Corporations Act 2001 were received from any external party providing
the services described above.
The Kelsian Group Limited Employee Share Trust was established in
August 2022 to facilitate the acquisition and transfer of shares in the
Company to eligible participants in accordance with Kelsian’s Rights Plan.
The first trustee of the Employee Share Trust is Certane CT Pty Ltd ABN
12 106 424 088, a highly experienced independent trustee company.
Kelsian has successfully navigated another challenging operational
year considering the tight labour markets across all the operating
divisions and the highly inflationary operating environment. The
return of both domestic and international travel resulted in a strong
performance within the Marine & Tourism division, underpinned by
the strength of the underlying contracted revenue and the essential
nature of operations resulted in another strong financial result.
The acquisition of AAAHI was another significant achievement
throughout FY23 that was aligned with Kelsian’s long-term growth
strategy of establishing operations in the United States of America.
The acquisition will provide considerable future shareholder value
with additional EBIT contributions in FY24 and beyond.
Kelsian recorded a statutory Net Profit after Tax and before
Amortisation (NPATA) of $41.4 million for the twelve months ended
30 June 2023 compared to a statutory NPATA of $71.5 million
in the previous year. Kelsian’s statutory results include the costs
associated with capital raising undertaken during the period as well
as the due diligence and advisor costs associated with the numerous
acquisitions completed.
Underlying Earnings Before Interest, Tax, (EBIT), another record was
achieved at $84.5 million compared to an underlying EBIT of $80.1
million for FY22. Underlying EBIT has been adjusted for significant
one-off items during the period including capital raising costs and due
diligence-related expenses.
Taking into consideration the timing of the capital raising and only
one month’s contribution from AAAHI, the Board has taken a prudent
approach to capital management and determined a final dividend of
9.5 cents per share (the same as last year) which is at the mid-point
of the stated dividend payout range of 50% to 70% of underlying net
profit after tax and before amortisation.
TABLE 4.1
Kelsian’s financial performance as measured by statutory Earnings Before Interest Tax and Depreciation (EBITDA),
Earnings Before Interest and Tax (EBIT), Net Profit After Tax and before Amortisation (NPATA) from continuing operations,
earnings per share, gross dividends paid, the dividend paid per share, and the share price at year-end.
Revenue ($m)
EBITDA ($m)
EBIT ($m)
NPATA ($m)
Gross Dividend Paid ($m)
Earnings Per Share (basic) (cents)
Dividend Paid Per Share (cents)
Share Price ($)
30 JUNE 2019
$’000
251.4
47.5
29.5
22.5
15.2
21.3
15.0
3.81
30 JUNE 2020
$’000
30 JUNE 2021
$’000
30 JUNE 2022*
$’000
646.5
56.7
2.4
7.3
18.1
(8.2)
11.0
4.42
1,211.7
132.7
1,297.4
157.8
66.6
69.5
25.1
17.3
16.0
9.41
82.1
71.5
34.9
24.2
16.5
5.87
30 JUNE 2023
$’000
1,417.8
130.5
53.1
41.4
37.1
9.1
17.0
7.26
*Restated to reflect the change in accounting treatment
32
CHART 4.2: KELSIAN’S share price performance since 1 July 2018 relative to S&P ASX 300:
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
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KLS
S&P ASX 300
The Compound Annual Growth Rate (CAGR) of Kelsian’s share price during the five years 2018-2023 period was 62.7%
compared with the CAGR of the S&P ASX300 which was 16.6%.
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5. REMUNERATION FRAMEWORK
Remuneration Framework and
Details for Executives
(i) Objectives
Kelsian’s approach to remunerating and rewarding Executives
ensures that:
• Remuneration is at levels that are competitive with market rates
to attract, motivate and retain high-calibre candidates;
• Parity exists for similar roles to maintain stability within the
Executive group; and
• Executives are incentivised to drive long-term sustainable growth
and increase shareholder value.
The objective of Kelsian’s Remuneration Framework is to ensure it
aligns Executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to
conform to market best practices for the delivery of the reward.
The Board ensures that Executive reward satisfies the following key
criteria for good reward governance practices:
• Competitiveness and reasonableness;
• Acceptability to shareholders;
The Board have considered that it should seek to enhance
shareholders’ interests by:
• Having economic profit as a core component of the reward
framework design;
• Focusing on sustained growth in shareholder wealth, consisting
of growth in dividends and in earnings per share, and delivering
a constant or increasing return on assets as well as focusing
Executives on key non-financial drivers of value; and
• Attracting, motivating, and retaining high calibre Executives.
(ii) Components
The Remuneration Framework has three components:
• Fixed remuneration;
• Short-term performance incentives (STI); and
• Long-term performance incentives (LTI).
The combination of these comprises the Executive’s total remuneration.
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• Performance linkage/alignment of Executive remuneration with
Kelsian’s strategic goals; and
• Transparency.
Kelsian has taken advice on market remuneration practices and
considered the appropriate level of fixed and “at-risk components” for
Executive remuneration.
The People, Culture & Remuneration Committee reviews the current
mix, market practice and levels of Executive remuneration as part of
our ongoing commitment to ensuring Kelsian’s remuneration practices
are transparent, fit for purpose and exhibit a strong alignment between
value creation, Executive reward, and shareholders’ interests. The
remuneration mix will be reviewed again during FY24. While it is
encouraged, there is no requirement for KMP to hold shares in Kelsian.
Fixed Remuneration (FY23)
Fixed remuneration, consisting of base salary, superannuation, and
non-monetary benefits, is reviewed annually by the People, Culture
& Remuneration Committee on behalf of the Board. Whilst the Fixed
Remuneration is reviewed annually, increases are not guaranteed.
Any proposed increase is based on individual responsibility and
contribution, business unit performance, the overall performance of
the consolidated entity and comparable market remuneration taking
into account the scale of Kelsian’s business and responsibilities.
Executives may receive their fixed remuneration in the form of cash
and other fringe benefits (for example motor vehicle benefits) where
it does not create any additional costs to Kelsian and provides
additional value to the Executive.
Kelsian Group 2022/23 Annual Report 33
AUDITED REMUNERATION REPORT
5. REMUNERATION FRAMEWORK CONTINUED
TABLE 5.3: Executive Short-Term Incentive Program FY23* CONTINUED
STI Plan (FY23)
For FY23, the short-term performance incentives (‘STI’) program is
designed to align the strategic objectives of Kelsian and its operating
business units with the performance hurdles of Executives.
Kelsian’s Strategic Pillars of safety, people, customer, growth,
technology & innovation, ESG, and operational excellence underpin
the setting of Executive objectives for both financial and non-
financial performance objectives at Group and Business Unit
levels. STI payments are granted to Executives based on specific
annual financial and operational targets and the achievement of set
objectives which include stretch targets for both financial and non-
financial goals.
The specific objectives set for each Executive are chosen to drive
outcomes and behaviours that support the safe operation and
delivery of Kelsian’s Strategy and lead to the creation of long-term
growth in shareholder value.
The financial targets set are based on Earnings Before Interest and Tax
(EBIT) (Group EBIT, and where applicable, Divisional, and business unit
EBIT) is the primary financial measure against which management and
the Board assess the short-term financial performance of Kelsian.
In FY23, Non-Financial performance objectives were further tailored to
each KMP, to ensure Executives focus on objectives with the largest
contribution to the business. Each of these performance objectives
was weighted according to the level of impact on Kelsian.
STI payments are “at-risk” cash components paid to Executives when
agreed targets have been met, however, are discretionary and do not
form part of the employment contract.
For KMP, STI remuneration paid varies by Executive depending on
the impact on the Group and the Business Unit, achievement of
defined business targets, achievement of specific business unit EBIT
targets as well as the extent to which the Group achieved financial
performance targets for the year.
CHART 5.1: Executive Potential Remuneration Mix FY23 – Group CEO
The approximate mix of fixed and at-risk components (STI and LTI) of potential remuneration of the Group CEO based on the current
remuneration mix for FY23 is shown below for the achievement of maximum stretch opportunities.
In October 2021, the Group CEO remuneration mix was adjusted slightly to reflect a reduction in short-term remuneration and an increase in
fixed remuneration taking into account receipt of independent benchmarking and market information on the Group CEO role from Korn Ferry.
For FY23, the Group CEO remuneration mix remained consistent with the FY22 mix, consisting of both fixed and variable components.
Maximum Potential Remuneration Mix - Group CEO
FY21
FY22
FY23
39%
41%
41%
37%
35%
35%
24%
24%
24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Fixed Remuneration
STI – Cash
LTI – PR
TABLE 5.2: Executive Potential Remuneration Mix FY23 – Other KMP*
The remuneration mix of other Executive KMP potential opportunities ranges in FY23 as follows:
Fixed Remuneration
STI-Cash
LTI-Performance Rights
MAXIMUM
46.5% to 75.4%
18.5% to 33.3%
5.0% to 24.2%
TABLE 5.3: Executive Short-Term Incentive Program FY23*
How is it paid?
STI awards are paid in cash and in FY23, partly in the form of Deferred Equity.
Deferral into equity (rather than cash award) applies to 50% of the financial component
which in turn comprises 25% of the total STI potential award. The Deferred Element will
be paid as rights to Kelsian shares (‘equity’) under the Kelsian Group Rights Plan.
What is the performance
period and how much can
the Executive earn?
The effective maximum STI opportunity for the Group CEO during this period is 90% of the Base Salary
per annum.
The effective maximum STI opportunity for other Executives during this period is a range of between
20%-70% of Base Salary per annum. The actual outcome depends on the Executive’s actual achievement
against each Performance Objective.
Board discretion may be applied to remunerate executives for delivery of outstanding performance for
Executives that were not foreseen at the time of target formulation.
How is performance
measured?
Performance Objectives are specific targets to be achieved against Kelsian’s Strategic Pillars.
The Board sets and assesses the performance objectives applicable to the Group CEO and approves the
performance objectives for direct reports to the Group CEO. The Group CEO then sets and assesses the
performance objectives for Executives.
Performance objectives cover Group and/or Divisional financial performance and individual objectives that are
non-financial and reflect the Group’s key measures of success as well as the Group’s values.
For FY23, the rationale for choosing the objectives is outlined in the table below. The STI performance measures
were chosen as they reflect the key drivers of short-term performance and also provide a framework for delivering
sustainable, long-term value to Kelsian and its shareholders
*Note that Mr William Trimarco’s remuneration mix reflects those of the previous owner of AAAHI
and does not reflect the Kelsian Remuneration Framework.
FINANCIAL MEASURES: UP TO 50%
PERFORMANCE AREAS & WEIGHTINGS
RATIONALE FOR CHOOSING THIS MEASURE
Group Profit Incentive
Group CEO, CDO, CFO, CPCO = 50%
All Other KMP = 20%
Divisional or Business Unit Profit Incentive
All Other KMP = 30%
Financial measures focus senior executives on
improving business efficiency and effectiveness
along with sustained financial performance and value
creation for our shareholders.
NON-FINANCIAL MEASURES: UP TO 50%
PERFORMANCE AREAS & WEIGHTINGS
RATIONALE FOR CHOOSING THIS MEASURE
Group Safety
Group CEO = 10%
Group KMP 10%
Divisional KMP 10%
Kelsian remains committed to making safety a priority
in everything we do to ensure we create a safe and
healthy environment for our employees and customers.
Safety
Two KMP (not Group CEO) between 5% to 7.5%
Safety measures assigned to nominated KMP to drive
strategic safety outcomes in a specific focus area.
People
Group CEO = 12.5%
All other KMP between 5% to 17.5%
Customer
Group CEO = 10%
All other KMP between 5% to 10%
Environmental, Social and Governance
Group CEO = 5%
Technology & Innovation
KMP between 5% to 10%
Employees are at the heart of our business and are
focused on delivering a brilliant experience for our
customers. Building a highly engaged workforce that
celebrates diversity is a key pillar of our success.
Delivering and exceeding our customer’s expectations
to continue to attract customers and renew contracts
is key to our sustained performance and business
growth.
Ensure Kelsian’s sustainability targets and strategic
objectives are aligned to achieve more sustainable
outcomes in our operations.
Investing in our digital and data solutions to provide
innovative customer solutions is also key to attracting
and retaining customers.
Ensuring the security and privacy of customer and
employee information is maintained.
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Kelsian Group 2022/23 Annual Report 35
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5. REMUNERATION FRAMEWORK CONTINUED
TABLE 5.3: Executive Short-Term Incentive Program FY23* CONTINUED
NON-FINANCIAL MEASURES: UP TO 50%
PERFORMANCE AREAS & WEIGHTINGS
RATIONALE FOR CHOOSING THIS MEASURE
Operational Excellence
Group CEO = 5%
All other KMP between 5% to 10%
Growth
Group CEO = 7.5%
All other KMP between 10% to 27.5%
Operational Excellence is an essential part of our
business, with a continual focus on maximising
efficiency through intelligent optimisation, capacity
utilisation and disciplined yield management.
Growth is a key pillar in unlocking future sustained
shareholder value. We aim to achieve this by
maximising our contracted business opportunities and
through acquisitive growth to unlock future organic
growth opportunities.
Gate
How is STI assessed?
There is a specific safety gate that applies and accounts for 10% of the total STI award. In the event of
a ‘severe employee injury’ (fatality or serious permanent impairment), the Board will assess all available
information relating to the incident and determine if the safety gate will result in a 0% outcome.
The Board Chair reviews the Group CEO’s performance against the performance targets and objectives
set for that year. The Group CEO assesses the performance of the Executive team as he has direct
oversight of their work. The performance assessment of the Group CEO and direct reports to the Group
CEO are reviewed by the People, Culture & Remuneration Committee and approved by the Board.
What happens to STI awards
when an Executive ceases
employment?
If the Executive’s employment is terminated for cause, no STI will be paid.
If the Executive resigns before the end of the performance period or release of full-year financial
accounts for the relevant performance period, the STI may be granted on a pro-rata basis in relation
to the period of service completed, subject to the discretion of the Board and conditional upon the
individual performance of the Executive and taking into consideration the interests of Kelsian and its
shareholders.
Is there an overriding
performance condition or
clawback provision?
Yes. The Board has the discretion to not pay or reduce the amount of the STI otherwise payable, taking
into consideration the interests of Kelsian and its shareholders.
In the event of a critical or serious safety incident, the Board will assess all available information relating
to the incident and apply discretion where appropriate.
In the event of serious misconduct or a material misstatement in Kelsian’s financial statements, the
Board may cancel the STI payment and may also claw back STI payments paid in previous financial
years, to the extent this can be done in accordance with the applicable law.
Are any STI payments deferred?
For FY23, a deferral component of 12 months applicable to 50% of the STI payments arising from the
Financial STI measure will be applied to KMP.
Deferral of a portion of STI into equity was introduced in FY23 using equity rights to meet the deferred
STI component. Using equity rights for the award of a portion of STI further aligns Executive interests
with those of shareholders. For STI amounts awarded and deferred into equity, the rights are fully vested
at Grant Date and in the form of Restricted Rights (Restricted Stock Units for US employees) granted
to the Executive KMP and other eligible executives under and subject to the terms of the Kelsian Group
Rights Plan. For equity rights to be issued for the FY23 STI financial award component, the rights are
subject to an exercise restriction until 31 August 2024 and have no service requirement applicable.
The quantum of equity rights granted is calculated using the 10-day volume-weighted average price
(VWAP) after the date of release of full-year results for the financial year for the deferred amount
awarded.
Long-Term Incentive Plan
To align the interests of Executives with the creation of long-term
shareholder value, Kelsian generally awards its KMP long-term
incentives (LTI) in the form of Performance Rights. Performance Rights
are granted at no cost to the Executive and only vest if Kelsian meets
a number of performance hurdles.
If a KMP resigns before the Performance Rights has vested then
any unvested rights are forfeited, unless and to the extent otherwise
determined by the Board.
The LTI Plan is discretionary and does not form part of the
employment contract. Vesting conditions for Performance Rights
are determined by the Board annually as part of each invitation with
the conditions selected for Performance Rights being intended to
create alignment with indicators of shareholder value creation over the
measurement period.
The Kelsian Group Limited Employee Share Trust was established
in August 2022 to facilitate the acquisition and transfer of shares in
Kelsian to eligible participants in accordance with Kelsian Group’s
Rights Plan. The first trustee of the Employee Share Trust is Certane
CT Pty Ltd ABN 12 106 424 088, a highly experienced independent
trustee company appointed in August 2022.
Shareholder approval of the Kelsian Group Rights Plan (formerly called
the SeaLink Travel Group Limited Rights Plan) was renewed at the
2022 AGM, enabling Kelsian to exempt issues of securities post the
2022 AGM under the Plan from the 15% limit on new securities issues
that may be made during any twelve-month period pursuant to the
ASX Listing Rules.
TABLE 5.4: Executive Long-Term Incentive Rights Plan FY23
How is the award delivered?
Awards are in the form of Performance Rights over ordinary shares in Kelsian for no consideration.
The Performance Rights carry neither Rights to dividends nor voting.
How often are awards made
and was an award made
in FY23?
Awards are made annually at the discretion of the Board and were made to KMP and others in FY23.
What is the quantum of the
award and what allocation
methodology is used?
The quantum of Performance Rights granted to an Executive is determined by the Executive’s Base
Salary; the applicable multiplier; and the face value of Kelsian shares, calculated as the 10-day volume-
weighted average price (VWAP) after the date of release of full-year results for the financial year prior to
the year of grant of Performance Rights.
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What are the performance
conditions?
For FY23, the Group CEO’s maximum potential Performance Rights award is set as 62.5%
of the Base Salary.
The maximum potential Performance Rights award for other Executives’ during this period is a
range of between 20.0% - 57.8% of Base Salary per annum.
Overarching Gate: The Company’s TSR must be positive.
There are two tranches of Performance Rights with the following weighting of performance conditions,
referred to as vesting conditions:
Tranche 1: Earnings Per Share Compound Annual Growth Rate (EPS CAGR): 50% weighting
at target performance.
Tranche 2: Indexed Total Shareholder Return (iTSR): Total Shareholder Return (TSR) measured
against companies in the ASX200 Total Return Index, 50% weighting at target performance.
There is also a service-based condition that is met if employment with Kelsian is continuous for the period
commencing on or around the grant date until the date the Performance Rights vest.
What is EPS CAGR?
EPS CAGR is a method for calculating the compound annual growth rate in the Company’s earnings per
common share, calculated on a fully diluted basis from continuing operations.
What is iTSR?
TSR is a method for calculating the return shareholders would earn if they held a notional number of
shares over a period of time. iTSR measures the growth in a company’s share price together with the
value of dividends during the period, assuming that all those dividends are reinvested into new shares.
TSR growth is measured against the applicable index for Kelsian at the commencement of the first year
of the measurement period for the Performance Rights. For FY23, this was the ASX200 Total Return
Index following Kelsian’s entry into the ASX200 Index in September 2021. (Rights issued in FY21 and
FY22 are measured against the ASX300 Total Return Index.)
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Kelsian Group 2022/23 Annual Report 37
AUDITED REMUNERATION REPORT
5. REMUNERATION FRAMEWORK CONTINUED
6. REMUNERATION OUTCOMES
TABLE 5.4: Executive Long-Term Incentive Rights Plan FY23 CONTINUED
Why were the performance
conditions selected?
In selecting the performance conditions and the structure of the tranches the Board through a process
of consultation with external advisers, reviewing market trends and Kelsian’s strategic objectives
in structuring the existing LTI plan. The Board then reviews the performance conditions annually to
determine the appropriate hurdles based on Kelsian’s strategy and prevailing market practice.
Service-based conditions are used to encourage retention.
Following its annual review of the most appropriate measures to align the interests of shareholders
and management, the Board selected the following:
• EPS CAGR as a measure of incentivising growth to reflect long-term growth yields for shareholders.
• TSR as an external measure of long-term return performance with the strongest link to
shareholder returns.
The LTI performance period is three financial years commencing 1 July of each applicable financial year.
What is the
performance period?
What level of relative EPS
and iTSR performance is
required for the Rights
to vest?
Fixed Remuneration
In FY23, Non-Executive Directors received a 3.97% increase in fixed
remuneration for FY23 (inclusive where applicable of an 0.5% increase
in Superannuation Guarantee Charge).
For the additional responsibilities and time commitments allocated to
Neil Smith in FY23 related to the AAAHI acquisition, additional director
fees were paid.
During the period, Executives received an increase of between 3.35%
to 3.75% in fixed remuneration effective from the first full pay period
post 1 July 2022. For Executive roles that were changed during the
period, salaries were set in line with the overall Kelsian Remuneration
Framework.
William Trimarco became a KMP of Kelsian on 1 June 2023 and the
remuneration outcomes for Mr Trimarco for the relevant part period are
included in the remuneration amounts of Executive KMPs set out in
Table 7.3 of this Report. William Trimarco did not receive any variable
remuneration pursuant to Kelsian’s STI program or LTI program during
the month of June 2023.
For Performance Rights granted in FY23, half of the Performance Rights will vest where the EPS CAGR
performance is:
STI Outcomes
EPS CAGR (annualised)
of Kelsian
Less than 5%
5%
Percentage of Performance
Rights that vest
Nil
50% of Rights vest
Greater than 5% but less than 10%
Between 50% and 100% Rghts vest
10% and above
100% of Rights vest
For Performance Rights granted in FY23, half of the Performance Rights will vest where the TSR
performance of Kelsian relative to the Total Return Index for the financial year in which the Performance
Rights are granted is:
TSR of Kelsian relative to ASX 200
Total Return Index
Percentage of Performance
Rights that vest
Less than Index TSR
Index TSR
Greater than Index TSR but less than
10% above Index TSR
Greater than Index TSR + 10%
Nil
50% of Rights vest
Between 50% and 100% Rights vest
100% of Rights vest
Kelsian intends to employ an independent organisation to calculate the TSR ranking at the time of the
potential vesting of any LTI to ensure an objective assessment of the relative TSR comparison.
Table 6.1 expands on that information in relation to the Group CEO.
Table 6.2 identifies the performance measures, relevant weightings, and
outcomes for FY23 short-term incentives for Executive KMP (except for
William Trimarco).
Kelsian has successfully navigated another challenging operational year
considering the tight labour markets across all the operating divisions
and the highly inflationary environment. Despite these challenges
throughout the reporting period, a strong financial performance was
achieved for the Group at levels slightly above the target set for the
financial Group measure applicable to all KMP but below the stretch
target, consequently, a 56% payout was achieved. At the Divisional
level, there was some variation in the achievement of financial targets
with Marine & Tourism businesses achieving above stretch targets,
while a number of Australian Bus and International Bus divisions failed
to meet set financial targets, largely due to the ongoing effects of the
pandemic impact on labour supply.
For the financial objectives that were met, 50% of those amounts will
be offered as Restricted Rights or Restricted Stock Units, as applicable,
under the Kelsian Group Rights Plan, subject to exercise restrictions
until 31 August 2024.
In order for the safety-related incentive to be awarded, the performance
gate of no employee suffering a ‘severe injury’ occurring in any part of
Kelsian during the reporting period must be achieved. The safety gate
was achieved for FY23 1.
Kelsian achieved a 6.3% reduction in TRIFR versus FY22, but this
fell short of the 10% improvement safety objective. Kelsian’s LTIFR
increased from 7.5 to 8.3, however, a reduction in the severity of
incidents resulted in a reduction in the average days lost from LTIs
by 7.9%. As a result of these outcomes, no payment for the Group
safety objective was paid. However, payment was made for Singapore
achieving their divisional safety target. We acknowledge that more
needs to be done to improve our safety performance and we remain
resolutely focused on achieving our objectives.
Individual non-financial STI targets for FY23 were set to achieve
initiatives and target outcomes identified in our strategic plans aligned
to delivering long-term growth and shareholder value. Important
growth opportunities were achieved along with a continued focus
on stakeholder relations and tender pipeline opportunities. Key goals
achieved during the period include:
• Outperformance of growth objectives with the successful
acquisition of All Aboard America! Holdings, Inc (‘AAAHI’) in the USA.
• A capital raising of $278 million to fund the AAAHI acquisition.
• The awarding of Transport for NSW Contracts for Greater Sydney
Bus Regions 2, 3, 13, and 15.
• Acquisitions of Horizons West Bus and Coachlines, Grand Touring,
Stradbroke Buses and Denmark WA.
• Acquisition of the Starship Group in Sydney Harbour.
• Acquisition of Liberty Bus and CT Plus in the Channel Islands.
• Expansion of the Australian Electric and Hydrogen bus fleet.
• The extension of the Gladstone contracts.
A particular technology focus has seen the development and
implementation of the enhanced Cyber Security Plan to build resilience
and security into our technology platforms. In addition, the SeaLink
Marine & Tourism Division implemented the 1SeaLink website to provide
an enhanced customer experience and cross-selling opportunities with
all SeaLink destinations.
What happens to
Performance Rights granted
under the LTI Plan when an
Executive ceases
employment?
If the Executive’s employment is terminated for cause, or due to resignation, all unvested Performance
Rights will lapse, unless the Board determines otherwise. In all other circumstances, unless the Board
decides otherwise, a pro-rata portion of the Executive’s Performance Rights, calculated in accordance with
the proportion of the performance period that has elapsed, will remain on foot, subject to the performance
condition as set by the Board.
If and when the Performance Rights vest, shares will be allocated in accordance with the Plan rules and
any other condition of the grant.
Can Kelsian clawback LTI
awards?
In the event of serious misconduct or a material misstatement in the Company’s financial statements, the
Board may:
• Reset the vesting conditions and/or alter the performance period applying to the award;
• Deem all awards which have not vested to have lapsed or been forfeited.
Where shares have been allocated to an Executive and have been subsequently sold, require the
Executive to repay the net proceeds of such as sale to the extent this can be done in accordance with
relevant laws.
What happens in the event
of a change in control?
In the event of a change in control, the Board will exercise its discretion, and determine the treatment of
the unvested awards which may include a pro-rata vesting.
1. Employee fatality is reported as zero, as the one employee fatality during the year was due to a not-at-fault motor vehicle accident.
38
Kelsian Group 2022/23 Annual Report 39
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AUDITED REMUNERATION REPORT
6. REMUNERATION OUTCOMES CONTINUED
TABLE 6.2: STI Remuneration Payable to KMP for the current reporting period – STI achieved FY23
The following table outlines the percentage of each target STI achieved (and forfeited) in relation to the amount payable to each KMP for FY23
TABLE 6.1: Group CEO FY23 Performance Objectives and Outcomes
TYPE OF
PERFORMANCE
MEASURE AND WEIGHTING
KMP
PERFORMANCE
MEASURE
PERFORMANCE OBJECTIVE
FY23
PERFORMANCE
Group Financial
50% of total STI
Group EBIT
(50%)
Achieve Underlying Group EBIT
which is 105% at target.
Target EBIT met.
Stretch EBIT target partially met.
ACHIEVEMENT*
28.00%
(56.00%
outcome)
Safety
(10%)
Safety Gate: No employee suffering a
‘severe injury’ (fatality or serious permanent
impairment) during the period.
One employee fatality during the
year was due to a truck missing
a red light, resulting in a collision.
Employee fatality is reported as zero
as this was a not-at-fault incident.
0.00%
(0.00%
outcome)
Achieve a 10% reduction in Group LTIFR
and TRIFR.
Not Achieved.
People
(12.5%)
Achieve a 10% improvement in Kelsian
Group’s annual Employee Engagement
Survey and a 10% improvement in
employee engagement.
Achieved a 5% improvement in
employee participation and a 10%
improvement in Kelsian’s employee
engagement.
Succession Planning – a comprehensive
improvement in succession planning and
implementation for the Group.
Growth
(7.5%)
Development of a strategy for optimal capital
structure, review of target geographies and at
least two new business acquisitions pursued.
Operational
Excellence
(5%)
Improve profitability and operational
efficiency of the business.
Environmental,
Social &
Governance
(5%)
Advance Kelsian Group’s ESG position
by ensuring Kelsian Group’s sustainability
targets and strategic objectives are aligned
to achieving more sustainable transport
outcomes.
A comprehensive Succession Plan
was developed for the Executive
Leadership Team and other key
Executives.
New capital structure developed
and implemented. Target
geographies and market sectors
were identified, and execution
commenced.
Several profitability and efficiency
initiatives were achieved, which
were in part eroded due to costs
associated with managing labour
shortages.
Significant achievements on ESG
initiatives with benchmarking data
and goals set for future years.
Customer
(10%)
Improvement in customer experience across
the group via a blended assessment of
customer complaints, compliments, Net
Promotor Scores (NPS) and local measures.
5% reduction in customer complaints
in Transit Systems and a 60+%
improvement in NPS for SeaLink.
Advance Kelsian Group’s interactions with
key stakeholders, which include shareholders,
government, and communities.
Further enhanced relationships
with most key stakeholders
during the year.
8.75%
(70.00%
outcome)
7.50%
(100.00%
outcome)
1.25%
(25.00%
outcome)
3.75%
(75.00%
outcome)
6.25%
(62.50%
outcome)
55.50%
Non-Financial
50% of total STI
TOTAL
*The ‘outcome’ represents the Kelsian Boards’ assessment of the actual achievement of the weighted performance measure out of 100%
(max). In the example of Safety, this performance measure is weighted at 10% of the overall maximum STI value. The outcome for Safety is
0% of 100% (max), or the weighted performance measure is 0% of 10%, as shown above.
TARGET
STI
OPPORTUNITY
MAX
STI
OPPORTUNITY
EXECUTIVE
C Feuerherdt
$526,105
$789,157
A Muir
G Legh
$202,227
$303,340
$212,215
$318,322
R Carpenter
$77,625
$116,438
M McGee*
$43,000
$64,500
$74,247
$111,370
$95,737
$143,605
D Gauci
W Toh
W Trimarco**
G Balkin***
FINANCIAL
NON-FINANCIAL
WEIGHTING
%
ACHIEVED
%
FORFEITED
%
WEIGHTING
%
ACHIEVED
%
FORFEITED
%
% OF
MAXIMUM
STI AWARDED
STI AWARDED
50%
50%
50%
50%
50%
50%
50%
56.0% 44.0%
56.0% 44.0%
56.0% 44.0%
56.0% 44.0%
22.4% 77.6%
82.4% 17.6%
22.4% 77.6%
50%
50%
50%
50%
50%
50%
50%
0.0%
0.0%
55.0%
45.0%
55.5%
$437,982
60.0%
80.0%
55.3%
77.6%
52.0%
43.0%
0.0%
0.0%
40.0%
20.0%
44.8%
22.4%
48.0%
57.0%
N/A
N/A
58.0%
$175,937
68.0%
$216,459
55.6%
50.0%
67.2%
32.7%
0.0%
0.0%
$64,768
$32,250
$74,842
$46,959
$0
$0
$0
$0
$0
$0
0.0%
0.0%
0.0%
0.0%
N/A
N/A
* Appointed 12 December 2022 - half year award; ** No award - Appointed 1 June 2023; *** No award - Resigned 16 December 2022.
LTI Outcomes
The LTI award granted in FY21 consisted of two performance measures, EPS CAGR annualised (50% weighting) and index
TSR relative to the performance of the ASX300 Total Return Index (50% weighting). The vesting scales are as below:
EPS CAGR (ANNUALISED) OF KELSIAN
PERCENTAGE OF PERFORMANCE RIGHTS THAT VEST
Less than 10%
10%
Nil
50% of Rights vest
Greater than 10% but less than 12%
Between 50% and 100% of Rights vest
12% and above
100% of rights vest
Note the Board has the discretion to normalise EPS results by making adjustments to normalise results as it may see fit in
assessing this calculation. As statutory NPATA has been adopted as a consistent measure of EPS CAGR no discretion to
normalise EPS has been applied to the assessment of achievement for rights issued in FY21.
TSR OF KELSIAN RELATIVE TO ASX300 TOTAL RETURN INDEX
PERCENTAGE OF PERFORMANCE RIGHTS THAT VEST
Less than Index TSR
Index TSR
Nil
50% of Rights vest
Greater than Index TSR but less than 10% above Index TSR
Between 50% and 100% of Rights vest pro-rata
Greater than Index TSR + 10%
100% of rights vest
The index TSR tranche resulted in the TSR of Kelsian outperforming
the ASX300 Total Return Index of 36.1% and exceeding the stretch
requirement of 10% above the TSR index percentage (Kelsian TSR
was 69.7% for the performance period). This resulted in 100% of the
TSR tranche vesting.
The EPS CAGR annualised, based on statutory NPATA, is
approximately 63%, which is above the stretch requirement of 12.0%.
This resulted in 100% of the EPS CAGR tranche vesting.
The calculation of EPS CAGR for Kelsian is set to ensure that the
measure is fit for purpose and reflects alignment with shareholder
value creation. Accounting standards require Kelsian to recognise and
amortise identifiable goodwill (customer contracts) for acquisitions
such as Transit Systems where we recognised $142.9 million of
contracts. The recent AAAHI acquisition has seen $133.8 million of
customer contracts recognised in the financial statements. The non-
cash amortisation charge is excluded (i.e., added back) to statutory
NPAT to determine EPS. Kelsian’s dividend policy specifically adds
this non-cash amortisation chargeback when determining the
dividend payout ratio. The Board has, as a result, determined that the
NPATA statutory results be used to assess the achievement of EPS
CAGR each year for EPS tranche assessment.
Further details on the vested awards can be found in the table in
section 8.
The Board also retains the discretion to increase or decrease
the extent of vesting in relation to each Tranche of Performance
Rights if it forms the view that it is appropriate to do so given the
circumstances that prevailed during the Measurement Period. No
such discretion has been applied in FY23.
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Kelsian Group 2022/23 Annual Report 41
AUDITED REMUNERATION REPORT
7. EXECUTIVE AND NED REMUNERATION
TABLE 7.1: Group CEO and Executive KMP employment termination conditions
CONTRACT TERM
Contract Type
Notice Period by Kelsian
Notice Period by Executive
Termination Payment
GROUP CEO
Permanent
6 Months
6 Months
OTHER EXECUTIVES
Permanent
2 – 4 Months
2 – 4 Months
All Executives have termination benefits that are within the limit allowed by the Corporations Act
2001 without security holder approval.
Specifically, in the case where the Executive is not employed for the full period of notice, a payment
in lieu of notice may be made.
The payment in lieu of notice is based on fixed remuneration unless other arrangements are required
to align with applicable local employment legislation and rules.
Remuneration Framework and Details for
Non-Executive Directors (NEDs)
(i) Objectives
NEDs are entitled to be reimbursed for all business-related expenses.
The remuneration of NEDs consists of Director fees, inclusive of
statutory superannuation, which for FY23 were as follows, on an
annualised basis:
The key objectives of Kelsian’s NED Remuneration Framework are to:
• Chair receives; $233,224;
• Secure and retain talented and qualified Directors – fee levels
are set with regard to time commitment and workload, experience
and expertise, risk and responsibility of the role, and market
benchmarking of listed companies with a similar market
capitalisation;
• Promote independence and impartiality – fee levels do not vary
according to the performance of the Group; and
• Align Director and shareholder interests – Kelsian encourage its
NEDs to build a long-term stake in the Group and Directors can
acquire shares through acquisition on the market during permitted
trading windows.
(ii)
Details
NED fees are reviewed annually by the People, Culture &
Remuneration Committee. The People, Culture & Remuneration
Committee may, from time to time, receive advice from independent
remuneration consultants to ensure NED fees and payments are
appropriate and in line with the market.
NEDs do not receive share options, other incentives, or retirement
benefits. For FY23 there were no additional fees for chairing or serving
on a sub-committee of the Board. However, to reflect the additional
Director responsibilities and time commitments of Neil Smith related
to the AAAHI acquisition, an additional fee was paid during FY23 of
$78,000.
After considering the strategic importance of Board oversight of
significant projects and initiatives, the Board may from time to
time allocate additional responsibilities and commensurate fees to
nominated directors.
• Deputy Chair receives; $159,018; and
• All other NEDs receive $126,979.
The increase in fixed remuneration of NEDs for FY23 was 3.97%,
which includes the 0.5% increase in Superannuation Guarantee
Charge where applicable. In addition, Fiona Hele received an increase
to the Deputy Chair Director fee from August 2022.
For FY24, Committee fees have been introduced for NED chairing
and serving on the Audit, Risk & Sustainability Committee and People,
Culture & Remuneration Committee with effect from 1 July 2023.
For FY24 the Board Chair remuneration has been adjusted in line
with benchmarked data to an annual payment of $262,500 inclusive
of all sub-committee activities and superannuation contributions.
No increase to FY24 base NED fees has been made other than as
outlined above for the Chair and passing through the FY24 increase
in the Superannuation Guarantee Charge applicable to Australian
Directors (or the equivalent if located overseas).
With respect to the NED Remuneration Principles, adopted by Kelsian,
every two years a more detailed market review and benchmarking
analysis of Director remuneration is undertaken including with
appropriate use of external reports and input from independent
remuneration experts. This work commenced in FY23 and will be
completed during FY24.
In accordance with Kelsian’s Constitution and ASX Listing Rules, the
aggregate amount paid to all NEDs must not exceed the maximum
determined and approved by shareholders in a General Meeting.
The most recent determination of the maximum aggregate remuneration
(‘pool’) for NEDs was at the General Meeting of shareholders held on
18 December 2019, where the shareholders approved a pool of $1.25
million. The total Directors’ fees paid for FY23 were $1,118,538 which is
less than the maximum approved pool.
TABLE 7.2: NED remuneration for the years ended 30 June 2022 and 30 June 2023
Details of the nature and amount of each major element of the remuneration paid or payable to each Director are:
NON-EXECUTIVE
DIRECTOR
YEAR
DIRECTOR
FEE
SHORT TERM
INCENTIVE
NON-MONETARY
BENEFITS
OTHER
SUPER
LONG TERM
BENEFIT LSL
PERFORM.
RIGHTS/ OPTIONS
J Ellison AM
2023
210,674
2022
203,927
F Hele*
2023
139,156
2022
111,233
C Smerdon
2023
114,913
2022
111,233
T Dodd
2023
114,913
2022
111,233
N Smith^
2023
126,979
2022
122,356
L Hockridge
2023
114,913
D Grady AO**
2022
111,233
2023
2022
94,315
-
A Staines OAM***
2023
37,867
2022
111,233
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
78,000
-
-
-
-
-
-
-
22,121
20,393
14,611
11,123
12,066
11,123
12,066
11,123
-
-
12,066
11,123
9,903
-
3,976
11,123
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Appointed Deputy Chair 24 August 2022; ** Appointed 1 September 2022; *** Retired 25 October 2022.
^ Other remuneration relates to additional fees for involvement in AAAHI Acquisition.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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S
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TOTAL
232,795
224,319
153,768
122,356
126,979
122,356
126,979
122,356
204,979
122,356
126,979
122,356
104,218
-
41,843
122,356
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Kelsian Group 2022/23 Annual Report 43
AUDITED REMUNERATION REPORT
7. EXECUTIVE AND NED REMUNERATION CONTINUED
8. OPTIONS, SHAREHOLDINGS AND PERFORMANCE RIGHTS OF KMP
TABLE 7.3: Executive remuneration for the years ended 30 June 2022 and 30 June 2023
Details of the nature and amount of each major element of the remuneration paid or payable to each Executive are:
There were no Options granted, awarded/forfeited, or exercised by KMP in FY22 or FY23.
TABLE 8.1: Shareholdings held by KMP in previous and current reporting years
EXECUTIVE
YEAR
SALARY
SHORT TERM
INCENTIVE
NON-MONETARY
BENEFITS
OTHER
SUPER
LONG TERM
BENEFIT LSL
DEFERRED SHORT
TERM INCENTIVE
PERFORM.
RIGHTS
TOTAL
C Feuerherdt^
2023
875,701
327,500
20,953
200,000
27,500
48,660
110,482
392,623 2,003,419
2022
848,586
648,100
29,018
-
27,500
48,610
-
475,272 2,077,085
A Muir^
2023
432,779
133,469
2022
418,450
260,842
-
-
150,000
27,167
22,828
42,468
110,004
918,716
-
25,000
21,998
-
116,416
842,707
G Legh^
2023
454,155
171,894
17,458
150,000
27,273
16,090
44,565
206,321 1,087,755
2022
436,906
267,575
20,629
25,000
11,672
-
243,266 1,005,048
26,941
2,970
16,301
33,088
515,387
R Carpenter
2023
387,620
48,467
2022
371,819
102,375
M McGee*
2023
233,192
28,638
2022
-
-
D Gauci
2023
380,745
51,899
2022
366,987
51,650
W Toh
2023
552,665
38,917
2022
486,190
131,817
W Trimarco **
2023
81,820
2022
-
G Balkin***
2023
243,245
-
-
-
2022
327,188
59,378
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,000
14,556
-
26,857
25,000
15,427
-
-
995
176
-
9,932
9,634
-
-
-
-
182,376
9,730
2,115
-
30,261
33,674
-
-
-
-
12,646
23,568
1,901
9,808
-
15,017
515,206
3,612
16,455
296,630
-
-
-
22,943
56,020
548,395
-
65,427
518,698
8,042
23,907
638,958
-
-
-
-
-
16,574
826,687
-
-
-
83,935
-
288,054
36,106
489,721
DIRECTORS
J Ellison AM
F Hele*
C Smerdon
T Dodd
N Smith
L Hockridge
D Grady AO**
A Staines OAM***
OTHER KMP
C Feuerherdt
A Muir
G Legh
R Carpenter
M McGee^
D Gauci
W Toh
W Trimarco ^^
TOTAL
BALANCE AT THE
BEGINNING OF YEAR
EXERCISE OF RIGHTS
ACQUIRED / (SOLD)
BALANCE AT YEAR END #
5,049,769
38,172
5,686,875
5,386,578
25,444,556
100,000
-
-
5,044,171
100,000
60,000
-
-
31,250
30,000
-
46,971,371
-
-
-
-
-
-
-
-
156,392
31,904
78,196
-
-
21,269
-
-
-
479,973
15,668
411,993
432,432
542,016
11,765
19,559
-
779,478
19,431
69,064
-
-
-
15,847
259,009
3,056,235
5,529,742
53,840
6,098,868
5,819,010
25,986,572
111,765
19,559
-
5,980,041
151,335
207,260
-
-
52,519
45,847
259,009
50,315,367
* Appointed 12 December 2022; ** Appointed 1 June 2023, (Note that Mr William Trimarco’s remuneration mix reflects those of the previous
owner of AAAHI and does not reflect the Kelsian Remuneration Framework); *** Resigned 16 December 2022; ^ AAAHI Acquisition STI
Payment (50% of the payment is deferred for twelve months subject to meeting certain AAAHI financial outcomes);
and ^^ Sembawang Yishun Contract Bonus Payment.
* Appointed Deputy Chair 24 August 2022; ** Appointed 1 September 2022; *** Retired 25 October 2022.
^ Appointed 12 December 2022; ^^ Appointed 1 June 2023.
# The balance reflects the number of shares held as of 30 June 2023.
TABLE 7.3 Explanatory Notes:
• Non-monetary benefits represent the inclusion of reportable fringe benefits (such as the provision of motor vehicles)
• Short Term Incentive represents the cash component of the STI. STI cash is paid after the end of the financial year to which it relates
but is allocated to the earning year.
• Introduced in FY23, the balance of the STI is Deferred Short Term Incentive.
All equity transactions with KMP have been entered into under terms and conditions no more favourable than those Kelsian would have
adopted if dealing on an arm’s length basis.
Performance Rights are generally granted to Executive KMP as part of an LTI Plan. When a participant ceases employment prior to the vesting
of their Performance Rights or where the performance hurdle is not met, the Performance Rights are forfeited, unless and to the extent that
the Board determines otherwise.
Should all conditions be met, one Ordinary Share is issued for each Performance Right at no consideration.
There was a total of 300,419 Performance Rights issued to Executives in the 12-month period to 30 June 2023 with 241,912 of those being
issued to KMP. As of 30 June 2023, 722,711 Performance Rights in total remained outstanding.
There were no loans to Directors or Executives during the 2023 financial year.
44
Kelsian Group 2022/23 Annual Report 45
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AUDITED REMUNERATION REPORT
8. OPTIONS, SHAREHOLDINGS AND PERFORMANCE RIGHTS OF KMP CONTINUED
TABLE 8.2: Performance Rights held by KMP in previous and current reporting
DATE OF
GRANT
12/06/2020
21/12/2020
25/10/2021
6/12/2022
12/06/2020
21/12/2020
25/10/2021
27/09/2022
12/06/2020
21/12/2020
25/10/2021
27/09/2022
KEY MANAGEMENT
PERSONNEL
C Feuerherdt
Total
Total $
A Muir
Total
Total $
G Legh
Total
Total $
R Carpenter
25/10/2021
27/09/2022
Total
Total $
M McGee
6/12/2022
Total
Total $
D Gauci
Total
Total $
W Toh
Total
Total $
12/06/2020
21/12/2020
25/10/2021
27/09/2022
21/12/2020
25/10/2021
27/09/2022
PERFORMANCE RIGHTS
ON ISSUE
30 JUNE 2022
FAIR VALUE
PER PR
$
156,392
100,604
60,115
-
317,111
31,904
27,666
16,328
-
75,898
78,196
53,879
29,688
161,763
8,775
-
-
8,775
-
-
21,269
13,921
8,393
-
45,583
6,036
3,510
-
9,546
-
-
-
3.1095
-
-
-
3.491
-
-
-
3.491
-
3.491
3.491
-
-
-
3.491
-
-
3.491
VESTED/
EXERCISED
156,392
-
-
-
-
31,904
-
-
-
-
78,196
-
-
-
-
-
-
-
-
-
21,269
-
-
-
-
-
-
GRANTED
-
-
-
109,622
109,622
340,870
-
-
-
28,894
28,894
100,883
-
-
-
52,577
-
183,573
-
15,527
15,527
54,213
14,139
14,139
49,366
-
-
-
14,852
-
51,856
-
-
6,301
6,301
22,000
PERFORMANCE RIGHTS
ON ISSUE
30 JUNE 2023
-
100,604
60,115
109,622
270,341
-
27,666
16,328
28,894
72,888
VESTING
DATE
31/08/2022
31/08/2023
31/08/2024
31/08/2025
31/08/2022
31/08/2023
31/08/2024
31/08/2025
-
53,879
29,688
52,577
31/08/2022
31/08/2023
31/08/2024
31/08/2025
136,144
24,302
15,527
31/08/2024
31/08/2025
39,829
14,139
31/08/2025
14,139
-
13,921
8,393
14,852
37,166
31/08/2022
31/08/2023
31/08/2024
31/08/2025
6,036
3,510
6,301
31/08/2023
31/08/2024
31/08/2025
15,847
121 King William Street
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
Tel: +61 8 8417 1600
Fax: +61 8 8417 1775
ey.com/au
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors' Report for the year ended 30 June 2023.
In our opinion, the Remuneration Report of Kelsian Group Limited for the year ended 30 June 2023, complies with section 300A of
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo tthhee DDiirreeccttoorrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
the Corporations Act 2001.
As lead auditor for the audit of the financial report of Kelsian Group Limited for the financial year ended 30 June 2023, I declare to
Responsibilities
the best of my knowledge and belief, there have been:
No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with
a.
section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our
b.
audit conducted in accordance with Australian Auditing Standards.
No contraventions of any applicable code of professional conduct in relation to the audit; and
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c.
No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Kelsian Group Limited and the entities it controlled during the financial year.
Ernst & Young
Ernst & Young
David Sanders
Partner
Adelaide
David Sanders
30 August 2023
Partner
30 August 2023
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Disclosures required in the remuneration report by the Corporations
Act, particularly the inclusion of accounting values for LTI
Performance Rights awarded but not vested, can vary significantly
from the remuneration actually paid to Executives. This is because
Accounting Standards require a value to be placed on the
Performance Rights at the time it is granted to an Executive and
then reported as remuneration even if ultimately the Executive does
not receive any actual value, for example, because performance
conditions are not met, and the Performance Rights do not vest.
Signed in accordance with a resolution of the Directors.
On behalf of the Directors
Mr. L Hockridge
Chair, People, Culture & Remuneration Committee
Kelsian Group Limited
30 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
46
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
96
36
Kelsian Group 2022/23 Annual Report 47
FINANCIAL REPORT
GENERAL
INFORMATION
The financial statements cover Kelsian Group Limited (formerly
SeaLink Travel Group Limited) as a consolidated entity consisting
of Kelsian Group Limited and the entities it controlled at the end
of, or during, the year. The financial statements are presented in
Australian dollars, which is Kelsian Group Limited’s functional and
presentation currency.
Kelsian Group Limited is a listed public company limited by
shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 3, 26 Flinders Street, Adelaide SA 5000
A description of the nature of the Group’s operations and its
principal activities are included in the Directors’ report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance
with a resolution of Directors, on 30 August 2023. The Directors
have the power to amend and reissue the financial statements.
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CONTENTS
Statement of Profit or Loss
Statement of other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditior’s Report
50
51
52
54
55
56
107
108
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Kelsian Group 2022/23 Annual Report 49
Electric Bus,
Tower Transit –
Singapore
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 2023
Revenue from contracts with customers
Other income
Interest income
Expenses
Direct operating expenses:
Direct wages
Repairs and maintenance
Fuel
Commission
Meals and beverage
Tour costs
Depreciation
Depreciation - ROUA
Other direct expenses
Administration expenses:
Indirect wages
General and administration
Marketing
Financing charges
Amortisation
Acquisition and transaction costs
Total expenses
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners of Kelsian
Group Limited
Basic earnings per share
Diluted earnings per share
Refer to note 3 for detailed information on Restatement of comparatives.
Note
5
6
2023
$'000
Consolidated
2022
Restated
$'000
1,417,840
1,297,409
13,475
2,639
21,243
136
(711,456)
(91,240)
(147,797)
(8,279)
(17,608)
(8,923)
(42,867)
(14,182)
(97,223)
(110,366)
(71,274)
(6,501)
(22,333)
(20,360)
(30,180)
(1,400,589)
(694,010)
(77,437)
(111,539)
(3,987)
(10,720)
(4,166)
(37,654)
(19,486)
(86,467)
(104,602)
(58,166)
(5,597)
(17,736)
(18,643)
(4,104)
(1,254,314)
33,365
64,474
(12,366)
(11,564)
20,999
52,910
Cents
Cents
9.1
9.0
24.2
24.2
7
28
43
43
KELSIAN GROUP LIMITED
STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2023
Note
Consolidated
2022
Restated
$'000
2023
$'000
Profit after income tax expense for the year attributable to the owners of Kelsian
Group Limited
28
20,999
52,910
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
Foreign currency translation
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss) for the year attributable to the owners of Kelsian
Group Limited
Refer to note 3 for detailed information on Restatement of comparatives.
98
22,721
6,964
5,832
22,819
12,796
43,818
65,706
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The above statement of profit or loss should be read in conjunction with the accompanying notes
The above statement of other comprehensive income should be read in conjunction with the accompanying notes
5050
The above statement of profit or loss should be read in conjunction with the accompanying notes
34
The above statement of other comprehensive income should be read in conjunction with the accompanying notes
35
Kelsian Group 2022/23 Annual Report 51
FINANCIAL REPORT
KELSIAN GROUP LIMITED
STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial assets
Income tax refund due
Other assets
Non-current assets classified as held for sale
Total current assets
Non-current assets
Derivative financial assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Intangibles
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Derivative financial liabilities
Income tax
Employee benefits
Provisions
Other liabilities
Liabilities directly associated with assets classified as held for sale
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Derivative financial liabilities
Deferred tax liabilities
Employee benefits
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Note
2023
$'000
2022
Restated
$'000
Consolidated
1 July 2021
Restated
$'000
8
9
10
12
7
13
14
12
15
16
11
17
13
18
19
20
21
7
22
23
24
25
20
21
7
22
24
157,939
166,939
27,338
4,543
2,897
22,111
381,767
-
381,767
141,093
118,602
19,338
3,211
-
20,869
303,113
7,657
310,770
103,497
92,319
14,308
549
-
16,716
227,389
-
227,389
2,519
-
656,443
135,614
989,316
12,407
1,796,299
3,711
948
404,818
105,897
584,820
12,622
1,112,816
-
-
373,375
149,604
563,008
-
1,085,987
2,178,066
1,423,586
1,313,376
91,344
14,634
-
15,200
-
-
97,340
40,101
96,240
354,859
-
354,859
677,755
113,425
-
100,559
7,763
98
899,600
67,162
14,354
19,411
11,579
-
3,057
92,635
27,589
79,156
314,943
997
315,940
345,000
83,128
-
21,310
8,451
9,745
467,634
66,285
12,991
19,477
15,951
1,283
13,170
90,112
35,259
40,303
294,831
-
294,831
284,845
87,768
2,292
13,541
9,606
12,387
410,439
1,254,459
783,574
705,270
923,607
640,012
608,106
KELSIAN GROUP LIMITED
STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Equity
Issued capital
Reserves
Retained profits
Equity attributable to the owners of Kelsian Group Limited
Non-controlling interest
Total equity
Refer to note 3 for detailed information on Restatement of comparatives.
Note
26
27
28
29
2023
$'000
2022
Restated
$'000
Consolidated
1 July 2021
Restated
$'000
849,943
27,260
46,401
923,604
3
572,377
5,078
62,554
640,009
3
572,377
(8,862)
44,588
608,103
3
923,607
640,012
608,106
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The above statement of financial position should be read in conjunction with the accompanying notes
The above statement of financial position should be read in conjunction with the accompanying notes
52
The above statement of financial position should be read in conjunction with the accompanying notes
36
The above statement of financial position should be read in conjunction with the accompanying notes
37
Kelsian Group 2022/23 Annual Report 53
FINANCIAL REPORT
KELSIAN GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Consolidated
Issued
capital
$'000
Reserves
$'000
Retained Non-controlling
interest
$'000
profits
$'000
Total equity
$'000
Balance at 1 July 2021
572,377
(8,862)
44,588
Profit after income tax expense for the year
Other comprehensive income/(loss) for the year,
net of tax
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 44)
Dividends paid (note 30)
-
-
-
-
-
-
52,910
12,796
-
12,796
52,910
1,144
-
-
(34,944)
Balance at 30 June 2022
572,377
5,078
62,554
Refer to note 3 for detailed information on Restatement of comparatives.
3
-
-
-
-
-
3
608,106
52,910
12,796
65,706
1,144
(34,944)
640,012
Consolidated
Issued
capital
$'000
Reserves
$'000
Retained Non-controlling
interest
$'000
profits
$'000
Total equity
$'000
Balance at 1 July 2022
572,377
5,078
62,554
Profit after income tax expense for the year
Other comprehensive income/(loss) for the year,
net of tax
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 26)
Share-based payments - non cash (note 44)
Employee rights converted (note 44)
Dividends paid (note 30)
-
-
-
-
20,999
22,819
-
22,819
20,999
276,788
-
778
-
-
1,009
(1,646)
-
-
-
-
(37,152)
Balance at 30 June 2023
849,943
27,260
46,401
3
-
-
-
-
-
-
-
3
640,012
20,999
22,819
43,818
276,788
1,009
(868)
(37,152)
923,607
KELSIAN GROUP LIMITED
STATEMENT OF CASH FLOWS
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees*
Interest received
Other income
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payments for purchase of business, net of cash acquired
Payments for prior period's business acquisition
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of business
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Drawdown of facilities
Payments for leases
Repayment of vendor loan
Movements in equity - other
Dividends paid
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Note
2023
$'000
Consolidated
2022
Restated
$'000
1,423,342
(1,261,197)
1,313,894
(1,180,581)
162,145
2,639
9,661
(22,015)
(23,450)
133,313
136
21,243
(15,682)
(23,974)
128,980
115,036
(543,371)
(20,134)
(100,169)
(763)
-
14,200
(68,027)
-
(43,108)
(1,183)
17,634
8,602
(650,237)
(86,082)
274,876
332,755
(13,932)
(20,000)
(868)
(37,152)
-
79,000
(15,634)
(20,000)
-
(34,944)
535,679
8,422
14,422
141,093
2,424
37,376
103,497
220
42
37
24
16
17
26
30
Cash and cash equivalents at the end of the financial year
8
157,939
141,093
* Included in FY23 operating cashflows are $27.2m acquisition costs (of the total $30.2m expensed).
The above statement of changes in equity should be read in conjunction with the accompanying notes
The above statement of cash flows should be read in conjunction with the accompanying notes
54
The above statement of changes in equity should be read in conjunction with the accompanying notes
38
The above statement of cash flows should be read in conjunction with the accompanying notes
39
Kelsian Group 2022/23 Annual Report 55
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FINANCIAL REPORT
INDEX TO NOTES TO THE FINANCIAL STATEMENTS
NOTES
PAGE
Significant accounting policies
Critical accounting judgements, estimates and assumptions
Restatement of comparatives
Operating segments
Revenue from contracts with customers
Other income
Income tax
Cash and cash equivalents
Trade and other receivables
Inventories
Right-of-use assets
Derivative financial assets
Other assets
Non-current assets classified as held for sale
Other financial assets
Property, plant and equipment
Intangibles
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Employee benefits
Provisions
Other liabilities
Liabilities directly associated with assets classified as held for sale
Issued capital
Reserves
Retained profits
Non-controlling interest
Dividends
Financial instruments
Key management personnel disclosures
Remuneration of auditors
Commitments
Related party transactions
Parent entity information
Business combinations
Interests in subsidiaries
Interests in joint ventures
Deed of cross guarantee
Events after the reporting period
Reconciliation of profit after income tax to net cash from operating activities
Earnings per share
Share-based payments
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KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the
financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise
stated.
New or amended Accounting Standards and
Interpretations adopted
The consolidated entity has adopted all of the new or amended
Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the
current reporting period and relevant.
Any new or amended Accounting Standards or Interpretations that
are not yet mandatory have not been early adopted. These
standards are outlined below. The impact of the standards not yet
mandatory is not expected to be material for the Group.
The following Accounting Standards and Interpretations are not
yet mandatory until their effective date as disclosed below.
● AASB 2020-1 Amendments to AASs – Classification of
Liabilities as Current or Noncurrent (1 July 2023)
● AASB 2021-5 Amendments to AASs – Deferred Tax related to
Assets and Liabilities arising from a Single Transaction (1 July
2023)
● AASB 2022-1 Amendments to AASs – Initial Application of
AASB 17 and AASB 9 – Comparative Information (1 July
2023)
● AASB 2022-5 Amendments to AASs – Lease Liability in a Sale
and Leaseback (1 July 2023)
● AASB 2023-1 Amendments to AASs – Amendments to AASB
107 and AASB 7 – Disclosures of Supplier Finance
Arrangements (1 July 2024)
Basis of preparation
These general purpose financial statements have been prepared
in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards
Board ('AASB') and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
From time to time comparative balances are restated to better
align with current year classification or for compliance with the
Group’s accounting policies.
Comparatives have been restated to adjust for $2.6m reclassified
from Indirect wages to Direct wages in the Australian Bus
segment. In addition, $8.4m of rechargeable costs have been
reclassified from General and Administration expenses to Other
Direct expenses for the International Bus segment. There is no
impact on the Group’s reported profit or net operating cashflows
for the comparative periods.
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
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 Group'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 2.
Going concern
The financial statements are prepared on a going concern basis.
As at 30 June 2023, the Consolidated Statement of Financial
Position reflected net current assets of $26.9m (2022:($5.2m)).
Parent entity information
In accordance with the Corporations Act 2001, these financial
statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 36.
Principles of consolidation
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of Kelsian Group Limited ('Company'
or 'parent entity') as at 30 June 2023 and the results of all
subsidiaries for the year then ended. Kelsian Group Limited and
its subsidiaries together are referred to in these financial
statements as the 'Group'.
Subsidiaries are all those entities over which the Group has
control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on
transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group.
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity
transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the
parent.
Non-controlling interest in the results and equity of subsidiaries
are shown separately in the statement of profit or loss, statement
of financial position and statement of changes in equity of the
Group. Losses incurred by the Group are attributed to the non-
controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises
the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Group recognises the fair
value of the consideration received and the fair value of any
investment retained together with any gain or loss in profit or loss.
Operating segments
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
their
performance.
to operating segments and assessing
Foreign currency translation
The financial statements are presented in Australian dollars,
which is Kelsian Group Limited's functional and presentation
currency.
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Kelsian Group 2022/23 Annual Report 57
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 1. Significant accounting policies (continued)
Note 1. Significant accounting policies (continued)
Foreign currency transactions
Foreign currency transactions are translated into Australian
dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at
financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in
profit or loss.
Interest
Interest revenue is recognised as interest accrues using the
effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net
carrying amount of the financial asset.
Other income
Other income is recognised when it is received or when the right
to receive payment is established.
Government grants
Revenue for government grants is recognised when you have
reasonable assurance that the obligations under the government
grant will be satisfied. Government grants relating to costs are
deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to
compensate.
Income tax
The income tax expense or benefit for the period is the tax payable
on that period's taxable income based on the applicable income
tax rate for each jurisdiction, adjusted by the changes in deferred
tax assets and liabilities attributable to temporary differences,
unused tax losses and the adjustment recognised for prior
periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary
differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax
rates that are enacted or substantively enacted, except for:
● When the deferred income tax asset or liability arises from the
initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the
time of the transaction, affects neither the accounting nor
taxable profits; or
● When the taxable temporary difference is associated with
interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses.
The carrying amount of recognised and unrecognised deferred tax
assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable
that future taxable profits will be available for the carrying amount
to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future
taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a
legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax
liabilities; and they relate to the same taxable authority on either
the same taxable entity or different taxable entities which intend
to settle simultaneously.
Foreign operations
The assets and liabilities of foreign operations are translated into
Australian dollars using the exchange rates at the reporting date.
The revenues and expenses of foreign operations are translated
into Australian dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the
period. All resulting foreign exchange differences are recognised
in other comprehensive income through the foreign currency
reserve in equity.
The foreign currency reserve is recognised in profit or loss when
the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
from
transport of passengers,
Revenue from contracts with customers
Good transferred at a point in time
Revenue
freight and
the
accommodation is recognised at the time of delivery of the service
to the customer. This is the time where the control is transferred
and when each separate performance obligation in the customer
contract is fulfilled given the short time services are provided (less
than a day). This typically occurs on a departure date or booking
date basis whereby customers who have paid for services have
actually departed on those travel or accommodation services. The
revenue is recognised in the month of the departure date.
Some of the ferry and freight transportation have a series of
performance obligations, but as the duration of these are short
term the impact from splitting these contract into “distinct services”
does not have material impact.
Revenue in relation to retailing of travel services is recognised on
a gross basis when customers have paid for their travel services.
the amount
is recognised at
Revenue
the
consideration to which the Group expects to be entitled in
exchange for transferring goods or services to a customer,
excluding GST and after deduction of trade discounts. Trade
Receivables typically do not contain a significant financing
component. The general credit terms are overall short and aligned
with market terms.
that reflects
Accounting estimates and judgements are made in order to
determine time of delivery and account for income accruals when
it is deferred. These accounting estimates and judgements are
based on experience and continuous follow-up on services
delivered.
Services transferred over time
Revenue from bus contracts to provide services is recognised
over time as the services are delivered based on agreed
contractual rates for delivery of the defined services. If services
are
increased or decreased, a pre-determined contractual
adjustment on a per kilometre basis is made against the
contractual rates.
Contract revenue includes the revenue from any pre-operational
phase, initial amount agreed in the contract plus any variations in
contract work, claims and incentive payments, to the extent that it
is probable that they will result in revenue and can be measured
reliably.
58
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The parent entity and its wholly-owned Australian subsidiaries
have formed an income tax consolidated group under the tax
consolidation regime. The head entity and each subsidiary in the
tax consolidated group continue to account for their own current
and deferred tax amounts. The tax consolidated group has applied
the 'separate taxpayer within group' approach in determining the
appropriate amount of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax amounts, the parent
entity also recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused
tax credits assumed from each subsidiary in the tax consolidated
group.
Assets or liabilities arising under tax funding agreements with the
tax consolidated entities are recognised as amounts receivable
from or payable to other entities in the tax consolidated group. The
tax funding arrangement ensures that the intercompany charge
equals the current tax liability or benefit of each tax consolidated
group member, resulting in neither a contribution by the head
entity to the subsidiaries nor a distribution by the subsidiaries to
the parent entity.
Current and non-current classification
Assets and liabilities are presented in the Consolidated Statement
of Financial Position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be
realised or intended to be sold or consumed in the Group's normal
operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets are classified
as non-current.
A liability is classified as current when: it is either expected to be
settled in the Group's normal operating cycle; it is held primarily
for the purpose of trading; it is due to be settled within 12 months
after the reporting period; or there is no unconditional right to defer
the settlement of the liability for at least 12 months after the
reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-
current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at transaction price and
subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses.
Trade receivables are generally due for settlement between 30-60
days.
The consolidated entity has established a provision matrix that is
based on its historical loss experience, adjusted for forward
looking factors specific for the debtors and the economic
environment. To measure the expected credit losses, trade
receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any
allowance for expected credit losses.
Customer acquisition costs
Customer acquisition costs are capitalised as an asset where
such costs are incremental to obtaining a contract with a customer
and are expected to be recovered. Customer acquisition costs are
amortised on a straight-line basis over the term of the contract.
Costs to obtain a contract that would have been incurred
regardless of whether the contract was obtained or which are not
otherwise recoverable from a customer are expensed as incurred
to profit or loss. Incremental costs of obtaining a contract where
the contract term is less than one year is immediately expensed
to profit or loss.
Inventories
Stock on hand is stated at the lower of cost and net realisable
value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a
derivative contract
into and are subsequently
remeasured to their fair value at each reporting date. The
accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument, and
if so, the nature of the item being hedged.
is entered
Derivatives are classified as current or non-current depending on
the expected period of realisation.
Cash flow hedges
Cash flow hedges are used to cover the Group's exposure to
variability in cash flows that is attributable to particular risks
associated with a recognised asset or liability or a firm
commitment which could affect profit or loss. The effective portion
of the gain or loss on the hedging instrument is recognised in other
comprehensive income through the cash flow hedges reserve in
equity, whilst the ineffective portion is recognised in profit or loss.
Amounts taken to equity are transferred out of equity and included
in the measurement of the hedged transaction when the forecast
transaction occurs.
Cash flow hedges are tested for effectiveness on a regular basis
prospectively to ensure that each hedge is highly effective and
continues to be designated as a cash flow hedge. If the forecast
transaction is no longer expected to occur, the amounts
recognised in equity are transferred to profit or loss.
If cashflow hedge accounting is discontinued, the amount that has
been accumulated in OCI must remain in accumulated OCI if the
hedged future cashflows are still expected to occur and released
to profit or loss when the forecast transaction occurs. Otherwise
the amount will be immediately reclassified to profit or loss as a
reclassification adjustment.
Hedges of a net investment
Hedges of a net investment in a foreign operation include
monetary items that are considered part of the net investment.
Gains or losses on the hedging instrument relating to the effective
portion of the hedge are recognised directly in equity whilst gains
or losses relating to the ineffective portion are recognised in profit
or loss. On disposal of the foreign operation, the cumulative value
of any such gains or losses recognised directly in equity is
transferred to profit or loss.
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 1. Significant accounting policies (continued)
Note 1. Significant accounting policies (continued)
Non-current assets or disposal groups
classified as held for sale
Non-current assets and assets of disposal groups are classified
as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through
continued use. They are measured at the lower of their carrying
amount and fair value less costs of disposal. For non-current
assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present
condition and their sale must be highly probable.
Where there has not been a significant increase in exposure to
credit risk since initial recognition, a 12-month expected credit loss
allowance is estimated. This represents a portion of the asset's
lifetime expected credit losses that is attributable to a default event
that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit
risk has increased significantly, the loss allowance is based on the
asset's lifetime expected credit losses. The amount of expected
credit loss recognised is measured on the basis of the probability
weighted present value of anticipated cash shortfalls over the life
of the instrument discounted at the original effective interest rate.
An impairment loss is recognised for any initial or subsequent
write down of the non-current assets and assets of disposal
groups to fair value less costs of disposal. A gain is recognised for
any subsequent increases in fair value less costs of disposal of a
non-current assets and assets of disposal groups, but not in
excess of any cumulative impairment loss previously recognised.
For financial assets mandatorily measured at fair value through
other comprehensive income, the loss allowance is recognised in
other comprehensive income with a corresponding expense
through profit or loss. In all other cases, the loss allowance
reduces the asset's carrying value with a corresponding expense
through profit or loss.
Non-current assets are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to be
recognised.
Non-current assets classified as held for sale and the assets of
disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in
current assets. The liabilities of disposal groups classified as held
for sale are presented separately on the face of the statement of
financial position, in current liabilities.
Investments and other financial assets
Investments and other financial assets are initially measured at
fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through
profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification.
Classification is determined based on both the business model
within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash
flows have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all
of a financial asset, its carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the
following conditions are met: (i) it is held within a business model
whose objective is to hold assets in order to collect contractual
cash flows; and (ii) the contractual terms of the financial asset
represent contractual cash flows that are solely payments of
principal and interest.
fair value
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses
on financial assets which are either measured at amortised cost
or
income. The
through other comprehensive
measurement of the loss allowance depends upon the Group's
assessment at the end of each reporting period as to whether the
financial instrument's credit risk has increased significantly since
initial
recognition, based on reasonable and supportable
information that is available, without undue cost or effort to obtain.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation and
impairment. Historical cost
includes expenditure that is directly attributable to the acquisition
of the items.
Depreciation is calculated on a straight-line basis to write off the
net cost of each item of property, plant and equipment (excluding
land) over their expected useful lives as follows:
Buildings
Leasehold improvements
Plant and equipment
Vessels
Motor vehicles
14-60 years
4-22 years
3-30 years
5-25 years
3-20 years
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired
period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon
disposal or when there is no future economic benefit to the Group.
Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
Right-of-use assets (ROUA)
A right-of-use asset is recognised at the commencement date of
a lease. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as
applicable, any
the
commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost
of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the
site or asset.
lease payments made at or before
Right-of-use assets are depreciated on a straight-line basis over
the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the consolidated entity
expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-
of-use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and
corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments
on these assets are expensed to profit or loss as incurred.
Intangible assets
Intangible assets acquired as part of a business combination,
other than goodwill, are initially measured at their fair value at the
date of the acquisition. Intangible assets acquired separately are
initially recognised at cost. Indefinite life intangible assets are not
amortised and are subsequently measured at cost less any
impairment. Finite
intangible assets are subsequently
measured at cost less amortisation and any impairment. The
gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference
between net disposal proceeds and the carrying amount of the
intangible asset. The method and useful lives of finite life
intangible assets are reviewed annually. Changes in the expected
for
life are accounted
pattern of consumption or useful
prospectively by changing the amortisation method or period.
life
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not
amortised. Instead, goodwill is tested annually for impairment, or
more frequently if events or changes in circumstances indicate
that it might be impaired, and is carried at cost less accumulated
impairment losses. Impairment losses on goodwill are taken to
profit or loss and are not subsequently reversed.
Patents and trademarks
Significant costs associated with patents and trademarks are
deferred and amortised on a straight-line basis over the period of
their expected benefit, being their finite life of 10 years.
Customer contracts
Customer contracts acquired in a business combination are
amortised on a straight-line basis over the period of their expected
benefit, being their estimated finite life of between 1 to 10 years.
Customer relationships
Customer relationships acquired in a business combination are
amortised on a straight-line basis over the period of their expected
benefit, being their estimated finite life of between 1 to 10 years.
Software
Significant costs associated with software are deferred and
amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 5 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful
life are not subject to amortisation and are tested annually for
impairment, or more
in
circumstances indicate that they might be impaired. Other non-
financial assets including right of use assets are reviewed 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
carrying amount exceeds its recoverable amount.
if events or changes
frequently
Recoverable amount is the higher of an asset's fair value less
costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset using
a pre-tax discount rate specific to the asset or cash-generating
unit to which the asset belongs. Assets that do not have
independent cash flows are grouped together to form a cash-
generating unit.
Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are
measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30-60 days of
recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer
goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a
receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods
or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of
the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective
interest method.
Lease liabilities
A lease liability is recognised at the commencement date of a
lease. The lease liability is initially recognised at the present value
of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments comprise of fixed payments less
any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option
when the exercise of the option is reasonably certain to occur, and
lease
any anticipated
payments that do not depend on an index or a rate are expensed
in the period in which they are incurred.
termination penalties. The variable
Lease liabilities are measured at amortised cost using the
effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising
from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if
the carrying amount of the right-of-use asset may fully written
down after taking into account remaining lease term and any
options to extend or terminate the agreement.
Finance costs
Finance costs attributable to qualifying assets are capitalised as
part of the asset. All other finance costs are expensed in the period
in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or
constructive) obligation as a result of a past event, it is probable
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 reporting date,
taking into account the risks and uncertainties surrounding the
obligation. If the time value of money is material, provisions are
discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is
recognised as a finance cost.
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 1. Significant accounting policies (continued)
Note 1. Significant accounting policies (continued)
Employee benefits
for wages and salaries,
Short-term employee benefits
Liabilities
including non-monetary
benefits, annual leave, long service leave and accumulating sick
leave expected to be settled wholly within 12 months of the
reporting date are measured at the amounts expected to be paid
when the liabilities are settled. Non-accumulating sick leave is
expensed to profit or loss when incurred.
Other long-term employee benefits
The liability for annual leave and long service leave not expected
to be settled within 12 months of the reporting date are measured
at the present value of expected future payments to be made in
respect of services provided by employees up to the reporting
date using the projected unit credit method. Consideration is given
to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date
on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future
cash outflows.
Share-based payments
Equity-settled and cash-settled share-based compensation
benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over
shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of
cash for the exchange of services, where the amount of cash is
determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value
on grant date. Fair value is independently determined using either
the Binomial or Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the option, together with non-
vesting conditions that do not determine whether the Group
receives the services that entitle the employees to receive
payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an
expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based
on the grant date fair value of the award, the best estimate of the
number of awards that are likely to vest and the expired portion of
the vesting period. The amount recognised in profit or loss for the
period is the cumulative amount calculated at each reporting date
less amounts already recognised in previous periods.
The cost of cash-settled transactions are initially, and at each
reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into
consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of
the liability is calculated as follows:
● during the vesting period, the liability at each reporting date is
the fair value of the award at that date multiplied by the expired
portion of the vesting period.
● from the end of the vesting period until settlement of the award,
the liability is the full fair value of the liability at the reporting
date.
All changes in the liability are recognised in the Statement of Profit
or Loss. The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
Market conditions are taken into consideration in determining fair
value. Therefore, any awards subject to market conditions are
considered to vest irrespective of whether or not that market
condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense
is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting
period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of
modification.
If the non-vesting condition is within the control of the Group or
employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group
or employee and is not satisfied during the vesting period, any
remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has
vested on the date of cancellation, and any remaining expense is
recognised
is
substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
If a new replacement award
immediately.
Fair value measurement
When an asset or liability, financial or non-financial, is measured
at fair value for recognition or disclosure purposes, the fair value
is based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the
transaction will take place either: in the principal market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets,
the fair value measurement is based on its highest and best use.
Valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value
are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into
three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the
lowest level of input that is significant to the fair value
measurement.
Valuation techniques for fair value measurements categorised
within levels 1 & 2
Level 1 and 2 financial assets and liabilities have been valued
using quoted market rates. This valuation technique maximises
the use of observable market data where it is available and relies
as little as possible on entity specific estimates.
Valuation techniques for fair value measurements categorised
within level 3
Level 3 financial assets and liabilities have been valued by using
the discounted cash flows (DCF) method.
For recurring and non-recurring fair value measurements, external
valuers may be used when internal expertise is either not available
or when the valuation is deemed to be significant. External valuers
are selected based on market knowledge and reputation. Where
there is a significant change in fair value of an asset or liability
from one period to another, an analysis is undertaken, which
includes a verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with external
sources of data.
Business combinations are initially accounted for on a provisional
basis. The acquirer retrospectively adjusts
the provisional
amounts recognised and also recognises additional assets or
the measurement period, based on new
liabilities during
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.
Issued capital
Ordinary shares are classified as equity.
From time to time comparative balances are restated to better
align with current year classification or for compliance with the
Group’s accounting policies.
Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the
proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of Kelsian Group Limited, 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.
Goods and Services Tax ('GST') and other
similar taxes
Revenues, expenses and assets are recognised net of the amount
of associated GST, unless the GST incurred is not recoverable
from the tax authority. In this case it is recognised as part of the
cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of
GST receivable or payable. The net amount of GST recoverable
from, or payable to, the tax authority is included in other
receivables or other payables in the statement of financial
position.
Cash flows are presented on a gross basis. The GST components
of cash flows arising from investing or financing activities which
are recoverable from, or payable to the tax authority, are
presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount
of GST recoverable from, or payable to, the tax authority.
The Company is of a kind referred to in Corporations Instrument
2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have
been rounded off in accordance with that Corporations Instrument
to the nearest thousand dollars, or in certain cases, the nearest
dollar.
Dividends
Dividends are recognised when declared during the financial year
and no longer at the discretion of the Company.
Business combinations
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 Group assesses the financial
assets acquired and
for appropriate
classification and designation in accordance with the contractual
terms, economic conditions, the Group's operating or accounting
policies and other pertinent conditions in existence at the
acquisition-date.
liabilities assumed
Where the business combination is achieved in stages, the Group
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.
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 2. Critical accounting 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. From time to time comparative balances are restated to
better align with current year classification or for compliance with
the Group’s accounting policies. 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.
Carrying value of property, plant & equipment
The Group has assessed the carrying value of its tangible assets
at the reporting date for indicators of impairment and, where
applicable, reviewed the measurement of the carrying value of
such tangible assets.
Impairment of financial assets specifically trade receivables
The Group has reviewed the expected credit losses for its trade
forward-looking
receivables balances. AASB 9
information
to be
considered both when assessing whether there has been a
significant increase in credit risk and when measuring expected
credit losses.
(including macroeconomic
information)
requires
Impairment of non-financial assets
Intangible assets comprise of goodwill and other intangible assets
with both finite and indefinite lives. Consistent with the Group’s
accounting policies, it has evaluated the conditions specific to the
Group and the assets subject to impairment to assess whether
any impairment triggers that may lead to impairment have been
identified. In doing this, the Group has reviewed the key
assumptions in its previous annual impairment assessment to
assess whether any changes to the assumptions within that
impairment assessment would result in an impairment loss at 30
June 2023 (refer note 17).
Risk management
The Group’s risk management framework continues to be applied
and the CODM continue to monitor the Group's risk profile.
Non
financial risks emerging from global and local movement
restrictions, liquidity, remote working by our staff, counterparties,
clients and suppliers, are being identified, assessed, managed
and governed
timely application of Group's risk
through
management framework.
‑
Share-based payment transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined
by using either the Binomial or Black-Scholes model taking into
account the terms and conditions upon which the instruments
were granted. The accounting estimates and assumptions relating
to equity-settled share-based payments would have no impact on
the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss and equity.
Fair value measurement hierarchy
The Group is required to classify all assets and liabilities,
measured at fair value, using a three level hierarchy, based on the
lowest level of input that is significant to the entire fair value
measurement, being: Level 1: Quoted prices (unadjusted) in
active markets for identical assets or liabilities that the entity can
access at the measurement date; Level 2: Inputs other than
quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly; and Level 3:
Unobservable inputs for the asset or liability. Considerable
judgement is required to determine what is significant to fair value
and therefore which category the asset or liability is placed in can
be subjective.
The fair value of assets and liabilities classified as level 3 is
determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that
require significant adjustments based on unobservable inputs.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related
depreciation and amortisation charges for its property, plant and
equipment and finite life intangible assets. The useful lives could
change significantly as a result of technical innovations or some
other event. The depreciation and amortisation charge will
increase where the useful lives are less than previously estimated
lives, or technically obsolete or non-strategic assets that have
been abandoned or sold will be written off or written down.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes
in circumstances indicate impairment, whether goodwill and other
indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in note 1. The
recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These
calculations require the use of assumptions, including estimated
discount rates based on the current cost of capital and growth
rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and
other indefinite life intangible assets
The Group assesses impairment of non-financial assets other
than goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Group and
to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is
determined. This involves fair value less costs of disposal or
value-in-use calculations, which incorporate a number of key
estimates and assumptions including estimated discount rates
based on the current cost of capital and growth rates of the
estimated future cash flows.
Estimation of unregulated revenue for bus contracts
The Company has contracts with different government bodies to
provide bus and ferry services across the Group. Management
have assessed that where unregulated services are permitted
under the respective contracts and such revenue streams are
to contribute to significant
expected at contract
unregulated revenue compared to the total contract revenue, for
the arrangement to fall out of scope of AASB Interpretation 12
'Service Concession Arrangements' (AASB Interpretation 12). The
Company has exercised judgement on what is considered
‘significant’ in respect to unregulated revenue to cause a whole
arrangement to fall out of scope of AASB Interpretation 12.
inception
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Income tax
The Group is subject to income taxes in the jurisdictions in which
it operates. Significant judgement is required in determining the
provision for income tax. There are many transactions and
calculations undertaken during the ordinary course of business for
which the ultimate tax determination is uncertain. The Group
recognises liabilities for anticipated tax audit issues based on the
Group's current understanding of the tax law. Where the final tax
outcome of these matters is different from the carrying amounts,
such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary
differences only if the Group considers it is probable that future
taxable amounts will be available to utilise those temporary
differences and
in
estimating future taxable profits from internal budgets and
forecasts. Deferred tax assets are reduced to the extent that it is
no longer probable that the related tax benefit will be realised.
losses. The Group applies
judgement
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected
to be settled more than 12 months from the reporting date are
recognised and measured at the present value of the estimated
future cash flows to be made in respect of all employees at the
reporting date. In determining the present value of the liability,
estimates of attrition rates and pay increases through promotion
and inflation have been taken into account.
Business combinations
As discussed in note 1, business combinations are initially
accounted for on a provisional basis. The fair value of assets
acquired, liabilities and contingent liabilities assumed are initially
estimated by the Group taking into consideration all available
information at the reporting date, a key judgement of which is the
identification, recognition and measurement of intangible assets
recognised on acquisition. Fair value adjustments on
the
finalisation of
the business combination accounting are
retrospective, where applicable, to the period the combination
occurred and may have an impact on the assets and liabilities,
depreciation and amortisation reported.
Note 3. Restatement of comparatives
Change in accounting
The Company has reviewed the recording of their lease payments in the International Bus segment (Singapore). Previously, lease
payments made to the Singapore Land Transport Authority ("SLTA") for the use of buses to service contracts were recorded on a gross
basis with right of use assets and associated lease liabilities being recorded on the balance sheet. As the lease payments to SLTA are
ultimately re-funded, the arrangement will now be recorded on a net basis, resulting in the relevant right of use assets and lease liability
being de-recognised from the balance sheet. No impact on Net Profit before Tax, Net Profit after Tax, net cashflows, net assets, financial
covenants or Kelsian operations or prospects of the Company.
Statement of profit or loss and other comprehensive income
Extract
2022
$'000
Reported
$'000
Adjustment
Consolidated
2022
$'000
Restated
Revenue from contracts with customers
1,324,672
(27,263)
1,297,409
Expenses
Depreciation - ROUA
Other direct expenses
Administration expenses:
Indirect wages
General and administration
Financing charges
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners of
Kelsian Group Limited
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss) for the year attributable to the owners of
Kelsian Group Limited
(42,978)
(78,073)
(104,807)
(66,355)
(21,507)
64,474
(11,564)
52,910
12,796
65,706
23,492
(8,394)
205
8,189
3,771
-
-
-
-
-
(19,486)
(86,467)
(104,602)
(58,166)
(17,736)
64,474
(11,564)
52,910
12,796
65,706
64
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Kelsian Group 2022/23 Annual Report 65
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 3. Restatement of comparatives (continued)
Basic earnings per share
Diluted earnings per share
Cents
Reported
Cents
Adjustment
Cents
Restated
24.2
24.2
-
-
24.2
24.2
Statement of cash flows
For the prior period ended 30 June 2022 the net impact to the Statement of Cashflows of the change in accounting for leases was an
increase in Payments to suppliers and employees (inclusive of net GST) of $27.3m and a reduction in financing charges of $3.8m (both
in Net cash from operating activities) with a reduction of $23.5m in Payments for leases (Cash flows from financing activities).
Statement of financial position at the beginning of the earliest comparative period
Extract
Assets
Current assets
Trade and other receivables
Total current assets
Non-current assets
Right-of-use assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
1 July 2021
$'000
Reported
$'000
Adjustment
Consolidated
1 July 2021
$'000
Restated
92,398
227,468
(79)
(79)
92,319
227,389
206,119
1,142,502
(56,515)
(56,515)
149,604
1,085,987
1,369,970
(56,594)
1,313,376
27,193
306,073
(11,242)
(11,242)
15,951
294,831
133,120
455,791
(45,352)
(45,352)
87,768
410,439
761,864
(56,594)
705,270
608,106
-
608,106
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 3. Restatement of comparatives (continued)
Statement of financial position at the end of the earliest comparative period
Extract
Assets
Current assets
Trade and other receivables
Total current assets
Non-current assets
Right-of-use assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Retained profits
Total equity
2022
$'000
Reported
$'000
Adjustment
Consolidated
2022
$'000
Restated
119,900
312,068
(1,298)
(1,298)
118,602
310,770
209,888
1,216,807
(103,991)
(103,991)
105,897
1,112,816
1,528,875
(105,289)
1,423,586
37,071
341,431
(25,492)
(25,491)
11,579
315,940
162,925
547,431
(79,797)
(79,797)
83,128
467,634
888,862
(105,288)
783,574
640,012
(0)
640,012
62,554
640,012
(0)
(0)
62,554
640,012
Note 4. Operating segments
Identification of reportable operating segments
For management purposes the consolidated entity is organised into four operating segments. The principal products and services of
each of these operating segments are as follows:
Marine & Tourism – operates vehicle and passenger ferry services, barging, coach tours and package holidays, lunch, dinner and
charter cruises and accommodation facilities throughout Australia;
Australian Bus – operates metropolitan public bus services on behalf of governments in Sydney, Melbourne, Perth and Adelaide.
Operates regional and remote bus services supporting the resources sector in Western Australia. Operates charter bus services in the
Northern Territory.
International Bus– operates metropolitan public bus services on behalf of governments in London, Channel Islands and Singapore;
Operates charter coaches for corporates, local and federal government and education sectors in the United States of America.
Corporate (Head Office) – provides finance, domestic and international sales and marketing, information and technology, business
development, fleet management, health and safety and administration and risk management support.
These operating segments are based on the internal reports that are reviewed and used by the Board of Directors and Executive
Committee (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the
allocation of resources. There is no aggregation of operating segments.
66
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Kelsian Group 2022/23 Annual Report 67
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 4. Operating segments (continued)
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal
reporting to the CODM are consistent with those adopted in the financial statements.
Current taxes and deferred taxes are not allocated to the individual segments below as the underlying instruments are managed on a
group basis.
Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment properties including assets
from the acquisition of subsidiaries.
The information reported to the CODM is on a monthly basis.
Intersegment transactions
Transfer pricing between operating segments is on an arm’s length basis in a manner similar to transactions with third parties and inter-
segment revenues are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that earn or
incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on
consolidation.
Major customers
During the year ended 30 June 2023, approximately 72.0% (2022: 83.0%) of the consolidated entity's external revenue was derived from
sales to governments.
Operating segment information
Consolidated - 2023
Revenue
Sales to external customers
Interest received
Total revenue
EBITDA
Depreciation
Depreciation ROUA
Amortisation of customer contracts
Net finance costs
Acquisition and transaction costs
Net foreign exchange gain/(loss)
Net gain on investment
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities:
Deferred tax liability
Total liabilities
Marine and Australian
International Corporate
Tourism
$'000
Bus
$'000
Bus
$'000
$'000
Total
$'000
329,390
230
329,620
72,867
(16,718)
(2,449)
(426)
(99)
(33)
-
-
53,142
845,014
997
846,011
104,089
(19,971)
(8,712)
(17,080)
(1,855)
(1,618)
-
-
54,853
243,436
14
243,450
14,062
(5,799)
(2,382)
(2,854)
(1,860)
(17,055)
-
242
(15,646)
-
1,398
1,398
1,417,840
2,639
1,420,479
(29,170)
(379)
(638)
-
(15,880)
(11,475)
(1,442)
-
(58,984)
161,848
(42,867)
(14,181)
(20,360)
(19,694)
(30,181)
(1,442)
242
33,365
(12,366)
20,999
2,178,066
2,178,066
331,899
747,940
963,734
134,493
75,220
224,647
144,086
709,947
1,153,900
100,559
1,254,459
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 4. Operating segments (continued)
Marine and Australian
International Corporate
Tourism
$'000
Bus
$'000
Bus
$'000
$'000
Total
$'000
Restated
Consolidated - 2022
Revenue
Sales to external customers
Interest received
Total revenue
EBITDA
Depreciation
Depreciation ROUA
Amortisation of customer contracts
Net finance costs
Business acquisition expenses
Revaluation of deferred consideration
Net gain on investment
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities:
Deferred tax liability
Total liabilities
Geographical information
Australia
Singapore
United Kingdom
United States
252,608
2
252,610
55,358
(15,419)
(2,663)
(610)
(456)
(15)
-
-
36,195
803,913
96
804,009
109,007
(20,263)
(6,362)
(18,033)
(2,717)
(13)
-
-
61,619
240,888
-
240,888
14,214
(1,644)
(9,728)
-
(1,896)
(1,132)
-
4,960
4,774
O
V
E
R
V
I
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W
R
E
V
I
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W
O
F
O
P
E
R
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O
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S
I
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E
P
O
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I
D
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E
C
T
O
R
S
’
-
38
38
1,297,409
136
1,297,545
(22,541)
(328)
(733)
-
(12,666)
(2,944)
1,098
-
(38,114)
156,038
(37,654)
(19,486)
(18,643)
(17,735)
(4,104)
1,098
4,960
64,474
(11,564)
52,910
1,423,586
1,423,586
299,108
798,889
262,646
62,943
72,230
211,803
60,105
418,126
762,264
21,310
783,574
Sales to external customers
2022
Restated
$'000
2023
$'000
Geographical non-current
assets
2022
Restated
$'000
2023
$'000
1,174,404
185,179
25,665
31,845
1,056,521
156,164
84,724
-
1,002,015
124,096
71,044
599,144
904,816
125,353
82,648
-
1,417,093
1,297,409
1,796,299
1,112,817
R
E
P
O
R
T
I
N
F
O
R
M
A
T
O
N
I
I
F
N
A
N
C
A
L
I
A
S
X
A
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D
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N
A
L
I
I
The geographical non-current assets above are exclusive of, where applicable, financial instruments and deferred tax assets.
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Kelsian Group 2022/23 Annual Report 69
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 5. Revenue from contracts with customers
Goods transferred at a point in time
Services transferred over time
Revenue from contracts with customers
2023
$'000
Consolidated
2022
$'000
313,596
1,104,244
224,989
1,072,420
1,417,840
1,297,409
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 7. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Due to a change in accounting there was a restatement in relation to the International segment. Refer note 3 for further details.
Aggregate income tax expense
Note 6. Other income
Net gain on investments
Gain on disposal of property, plant and equipment
Other income
Other income
2023
$'000
241
3,814
9,420
Consolidated
2022
$'000
4,970
-
16,273
13,475
21,243
Other income earned includes grants, rebates and other sundry items. Prior year Other income earned also included some Covid relief,
favourable derivative movement and insurance proceeds $5.2m.
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based expenses
Non-taxable income
Tax effect of other non-assessable foreign income
Other non-deductible expenses
Adjustment recognised for prior periods
Difference in overseas tax rates
Transferred losses
Deferred adjustment recognised for prior periods
Other
Income tax expense
Amounts charged/(credited) directly to equity
Deferred tax assets
2023
$'000
Consolidated
2022
$'000
13,879
(1,959)
446
13,087
(769)
(754)
12,366
11,564
(1,959)
(769)
33,365
64,474
10,010
19,342
303
(4,478)
(515)
5,615
10,935
446
412
324
1,020
(771)
343
(2,050)
(7,688)
573
10,520
(754)
(1,723)
1,870
1,180
471
12,366
11,564
2023
$'000
Consolidated
2022
$'000
(3,009)
2,981
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Kelsian Group 2022/23 Annual Report 71
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R
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O
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O
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 7. Income tax (continued)
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Allowance for expected credit losses
Employee benefits
Leases
Provisions
Property, plant and equipment
Customer contracts and other intangible assets
Other
Amounts recognised in equity:
Derivative financial instruments
Deferred tax liability
Movements:
Opening balance
Credited to profit or loss
Credited/(charged) to equity
Additions through business combinations (note 37)
Other
Closing balance
Income tax refund due
Income tax refund due
Provision for income tax payable
Provision for income tax payable
2023
$'000
Consolidated
2022
$'000
2,168
108
32,842
22,119
3,535
(96,766)
(69,339)
6,893
1,587
50
32,160
23,431
1,543
(51,399)
(28,066)
1,461
(98,440)
(19,233)
(2,119)
(2,077)
(100,559)
(21,310)
(21,310)
1,959
3,009
(84,217)
-
(13,541)
769
(2,981)
-
(5,557)
(100,559)
(21,310)
2023
$'000
Consolidated
2022
$'000
2,897
-
2023
$'000
Consolidated
2022
$'000
-
3,057
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 8. Cash and cash equivalents
Current assets
Cash on hand
Cash at bank
Cash on deposit
Note 9. Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
2023
$'000
Consolidated
2022
$'000
847
131,117
25,975
729
109,092
31,272
157,939
141,093
2023
$'000
Consolidated
2022
$'000
142,746
(401)
142,345
94,231
(168)
94,063
24,594
24,539
166,939
118,602
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V
I
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W
R
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I
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W
O
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O
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O
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S
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Allowance for expected credit losses
Trade receivables are non-interest bearing and are generally on 30-60 day terms. An allowance is made for trade receivables and other
receivables as the Group applies a simplified approach in calculating expected credit losses (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 has established
a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and
the economic environment.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 1 month overdue
1 to 2 months overdue
2 to 3 months overdue
Over 3 months overdue
Expected credit loss rate
2022
%
2023
%
-
-
-
-
14.48%
-
-
-
-
32.74%
Carrying amount
2022
$'000
2023
$'000
Allowance for expected credit
losses
2022
$'000
2023
$'000
107,086
47,971
7,427
2,086
2,770
109,967
4,188
1,189
2,913
513
167,340
118,770
-
-
-
-
401
401
-
-
-
-
168
168
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E
P
O
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T
I
N
F
O
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M
A
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O
N
I
I
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A
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Kelsian Group 2022/23 Annual Report 73
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 9. Trade and other receivables (continued)
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Additions through business combinations
Exchange differences
Receivables written off during the year as uncollectable
Closing balance
Note 10. Inventories
Current assets
Goods held for resale - at cost
Less: Provision for impairment
Fuel at cost
Spare parts at cost
Less: Provision for impairment
2023
$'000
Consolidated
2022
$'000
168
16
235
(4)
(14)
401
194
-
-
-
(26)
168
2023
$'000
Consolidated
2022
$'000
4,766
(31)
4,735
3,512
20,605
(1,514)
3,587
(31)
3,556
3,753
12,299
(270)
27,338
19,338
The majority of the increase in the provision for impairment associated with spare parts at costs relates to the acquisition of the US
operations.
Note 11. Right-of-use assets
Non-current assets
Land and buildings - right-of-use
Less: Accumulated depreciation
Motor vehicles - right-of-use
Less: Accumulated depreciation
2023
$'000
Consolidated
2022
$'000
111,884
(28,329)
83,555
59,181
(7,122)
52,059
72,776
(20,919)
51,857
57,824
(3,784)
54,040
135,614
105,897
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 11. Right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Additions
Additions through business combinations (note 37)
Disposals
Exchange differences
Write off of assets
Transfers in/(out)
Depreciation expense
Balance at 30 June 2022
Additions
Additions through business combinations (note 37)
Exchange differences
Transfers in/(out)
Depreciation expense
Land and
buildings
$'000
Motor
vehicles
$'000
Total
$'000
107,010
8,979
3,851
(54,854)
(3,094)
-
-
(10,035)
51,857
2,829
37,882
645
(71)
(9,587)
40,804
65,312
-
(40,401)
(1,304)
(255)
(961)
(9,155)
54,040
2,121
2,019
(38)
(1,488)
(4,595)
147,814
74,291
3,851
(95,255)
(4,398)
(255)
(961)
(19,190)
105,897
4,950
39,901
607
(1,559)
(14,182)
Balance at 30 June 2023
83,555
52,059
135,614
Current year additions include $2.0m (2022:$42.8m) of operating leases for the electric bus infrastructure in NSW. Prior year included
$10.0m hire purchase financed replacement bus fleet program in Go West Tours. There was $37.9m of leased property and $2.0m of
leased coaches as part of the All Aboard America! acquisition refer note 37.
Due to a change in accounting there was a restatement in relation to the International Bus segment. Refer note 3 for further details.
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R
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W
O
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O
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O
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Note 12. Derivative financial assets
Current assets
Interest rate swap contracts - cash flow hedges
Fuel price swap contracts - cash flow hedges
Non-current assets
Interest rate swap contracts - cash flow hedges
Refer to note 31 for further information on financial instruments.
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F
O
R
M
A
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O
N
I
2023
$'000
Consolidated
2022
$'000
4,042
501
4,543
2,519
7,062
2,401
810
3,211
3,711
6,922
I
F
N
A
N
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Kelsian Group 2022/23 Annual Report 75
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 13. Other assets
Current assets
Prepayments
Deferred expenses
Other deposits
Deferred consideration receivable
Other current assets
Non-current assets
Deferred consideration receivable
2023
$'000
Consolidated
2022
$'000
15,739
3,580
726
1,316
750
12,178
4,411
-
1,846
2,434
22,111
20,869
12,407
12,622
34,518
33,491
Deferred expenses relate to the new Singapore bus contract which commenced in September 2021 and will be amortised over the life
of the contract.
Deferred consideration receivable relates to the divestment of the Lea interchange business in London in June 2022. The deferred
component of the Lea interchange divestment will be payable in ten equal instalments of 1.0m Pound Sterling on the anniversary of the
sale for the remaining 9 years and is shown at present value converted to Australian dollars.
Note 14. Non-current assets classified as held for sale
Plant and equipment
Motor vehicles
Stock and parts
2023
$'000
Consolidated
2022
$'000
-
-
-
-
113
7,271
273
7,657
Kelsian was unsuccessful with it's tender for the new, expanded Darwin public bus services contract package and was therefore required
to sell all of the operating assets (buses, fuel and spare parts) to the incoming operator on commencement of the new contract on 1 July
2022. The assets and liabilities held for sale were reported in the Australian Bus segment in prior year. Proceeds on sale of $9.7m are
included in cashflow in current year.
Note 15. Other financial assets
On 11 December 2021, Kelsian through it's Tower Transit subsidiaries, Tower Transit Operations Ltd and Tower Transit Ltd, completed
entry into an incorporated joint venture with RATP Dev UK Ltd called RATP Dev Transit London Ltd (Joint Venture Company) via transfer
of net assets and liabilities. Kelsian's wholly owned subsidiary Tower Transit Ltd owns a 12.5% interest in the Joint Venture Company
with a carrying value of $0.0m.
The Joint Venture has been challenged by labour shortages and high inflationary environment in London and with little chance of dividend
return in the short to medium term the small investment in the Joint Venture has been written down to nil.
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 15. Other financial assets (continued)
Non-current assets
Shares in RATP Dev Transit London Ltd - at fair value
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current and previous financial
year are set out below:
Opening carrying amount
Additions
Revaluation decrements
Foreign currency translation
Closing carrying amount
2023
$'000
Consolidated
2022
$'000
-
948
948
-
(948)
-
-
1,000
-
(52)
-
948
The investment in RATP Dev Transit London Ltd is a level 3 financial instrument and changes in its fair value are determined with
reference to a the discounted cash flow (DCF) model. The inputs used in the DCF calculations are derived from the approved business
plan of the Joint Venture Company and management’s assumption of an appropriate discount rate, terminal growth rate and associated
volatility. As at 30 June 2023 management have reviewed the projected DCF calculations for the operations of the underlying investment
and concluded that the fair value of the financial asset was not supported and has been reduced to nil.
Kelsian has accounted for this as an investment under AASB 9 Financial Instruments. The Group has made the election to present in
Other Comprehensive Income (OCI) subsequent changes in the fair value of the investment.
Note 16. Property, plant and equipment
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’
Non-current assets
Land and buildings - at cost
Less: Accumulated depreciation
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
Vessels - at cost
Less: Accumulated depreciation
Less: Accumulated impairment
Capital works in progress - at cost
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I
2023
$'000
Consolidated
2022
$'000
115,803
(9,651)
106,152
10,456
(3,901)
6,555
51,864
(29,878)
21,986
406,306
(67,471)
338,835
235,846
(86,243)
(2,526)
147,077
88,970
(7,257)
81,713
5,222
(3,264)
1,958
44,933
(24,118)
20,815
183,965
(38,873)
145,092
221,098
(75,725)
(3,908)
141,465
35,838
13,775
656,443
404,818
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Kelsian Group 2022/23 Annual Report 77
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 16. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Additions
Additions through business
combinations (note 37)
Classified as held for sale (note
14)
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Balance at 30 June 2022
Additions
Additions through business
combinations (note 37)
Disposals
Exchange differences
Write off of assets
Transfers in/(out)
Depreciation expense
Land &
buildings
$'000
Leasehold
improve
$'000
Plant &
equipment
$'000
Motor
vehicles
$'000
Vessels
$'000
CWIP
$'000
Total
$'000
77,530
7,679
4,015
1,020
18,343
4,850
127,109
8,416
129,435
1,577
16,943
19,566
373,375
43,108
1,203
161
746
45,546
-
-
47,656
-
(167)
(1,404)
(1,934)
(1,194)
81,713
22,614
-
(35)
2,687
-
646
(1,473)
-
(2,788)
32
15
(497)
1,958
523
4,236
(4)
(5)
(128)
314
(339)
(113)
(911)
262
3,061
(5,423)
(7,271)
(10,052)
(61)
1,229
(19,824)
-
(155)
-
21,324
(10,716)
-
-
-
(22,734)
-
(7,384)
(14,073)
(1,171)
961
(37,654)
20,815
2,719
145,092
31,367
141,465
11,497
13,775
31,449
404,818
100,169
2,596
(6)
124
-
1,660
(5,922)
188,093
(1,625)
(3,072)
-
2,296
(23,316)
-
(413)
-
-
6,345
(11,817)
869
(919)
(16)
-
(9,320)
-
195,794
(3,002)
(282)
(128)
1,941
(42,867)
Balance at 30 June 2023
106,152
6,555
21,986
338,835
147,077
35,838
656,443
At 30 June 2023, 4 vessels are under construction and 2 electric buses (Go West Tours) and a further 425 conventional buses (New
and expanded regions in Sydney, NSW) are under contract (427 buses total).
At 30 June 2022, three vessels were under construction and nine electric buses (Victoria) and two hydrogen fuel cell buses (NSW) with
a further eight conventional buses (Go West Tours) were under contract (19 buses total).
Refer to note 20 for further information on assets pledged as security for financing arrangements.
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 17. Intangibles
Non-current assets
Goodwill - at cost
Less: Accumulated impairment
Brands and trademarks - at cost
Customer contracts - at cost
Less: Accumulated amortisation
Software - at cost
Less: Accumulated amortisation
Other intangible assets - at cost
Less: Accumulated amortisation
Customer relationships - at cost
Less: Accumulated amortisation
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P
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T
O
R
S
’
2023
$'000
Consolidated
2022
$'000
714,153
(7,799)
706,354
499,067
(7,799)
491,268
50,573
2
163,165
(85,500)
77,665
1,063
(44)
1,019
14,764
(9,459)
5,305
151,981
(3,581)
148,400
158,975
(74,836)
84,139
-
-
-
3,379
(1,341)
2,038
8,700
(1,327)
7,373
989,316
584,820
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Additions
Additions through business
combinations (note 37)
Exchange differences
Amortisation expense
Balance at 30 June 2022
Additions
Additions through business
combinations (note 37)
Exchange differences
Transfers in/(out)
Amortisation expense
Goodwill
$'000
Customer
contracts
$'000
Other
intangibles
$'000
Customer
relationships
$'000
Trademarks
Brands
$'000
Software
$'000
Total
$'000
467,386
50
18,419
5,413
-
491,268
-
212,244
3,333
(491)
-
85,406
954
15,436
-
(17,657)
84,139
-
10,133
635
-
(17,242)
2,180
181
-
-
(323)
2,038
763
3,710
(386)
-
(820)
8,036
-
-
-
(663)
7,373
-
-
2
-
-
-
2
-
-
-
-
-
-
-
-
145,682
(2,401)
-
(2,254)
51,464
(893)
-
-
1,063
-
-
(44)
563,008
1,187
33,855
5,413
(18,643)
584,820
763
424,296
288
(491)
(20,360)
Balance at 30 June 2023
706,354
77,665
5,305
148,400
50,573
1,019
989,316
Included in other intangible additions through business combinations are amounts related to 'concession assets' recognised in
accordance with AASB Interpretation 12 representing the Group's right to charge users in respect of the operation of certain government
bus contracts.
There was no impairment of assets made in 2023 (2022: $Nil). See commentary below.
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Kelsian Group 2022/23 Annual Report 79
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 17. Intangibles (continued)
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 17. Intangibles (continued)
Impairment Testing
Goodwill, trademarks and brands acquired through business combinations have been allocated to the following cash-generating units
(CGU's):
SeaLink - QLD and NT
An increase of 3.0% in traffic has been built into forecast sales based on strong domestic growth to both Magnetic Island and Tiwi
Islands, continued recovery of the backpacker and adventure tourist markets as well as a growing population base in Townsville.
Transit - WA & NT
Tower Transit - Singapore
Hotard, USA
Transit - NSW
Transit - SA
LuxBus America, USA
Transit - Victoria (Sita)
SeaLink - South East QLD
All Aboard America!, USA
First Class Transportation, USA
Go West Tours - WA
Ace Express Coaches, USA
SunDiego, USA
Horizons West, WA
SeaLink - QLD
Fraser Island, QLD
Grand Touring, NT
Swan Valley Tours, WA
Brands
2023
'000
Brands
2022
'000
Goodwill
Goodwill
2023
'000
2022
'000
-
-
17,799
-
-
13,725
-
-
5,430
4,223
2
4,977
2,715
1,099
-
-
603
-
50,573
-
-
-
-
-
-
-
-
-
-
2
-
-
-
-
-
-
-
2
162,030
111,174
67,768
61,155
59,649
54,627
45,727
30,081
26,610
21,583
17,929
15,314
11,300
10,127
6,420
3,500
1,310
50
162,030
104,237
-
61,155
59,649
-
45,727
30,081
-
-
18,419
-
-
-
6,420
3,500
-
50
706,354
491,268
The business combinations assessment for the businesses of All Aboard America, Horizons West, Grand Touring and North Stradbroke
Island Bus are provisional. Refer note 37 for further details.
The recoverable amount of the consolidated entity's goodwill has been determined by value-in-use calculations using a discounted cash
flow model. The cashflow projections are based on annual financial budgets approved by senior management and the Board,
extrapolated using the growth rates below for a five-year period as approved by management together with a terminal value. The
assumptions for determining the recoverable amount are based on past experience and senior management’s expectation for the future
taking into consideration the longer-term recovery from COVID-19 and recent trading performance.
A terminal value growth rate of 3.0% has been used for Marine & Tourism and 1.5% for Australian and International Public Bus
CGUs (2022: 3.0% for Marine & Tourism CGUs and 1.5% for all Australian and International Public Bus CGUs ). The terminal value
growth rates are used to determine the terminal value of a CGU based on long range forecasts for CPI or comparable indices in the
geographies we operate in.
Key assumptions are those to which the recoverable amount of an asset or CGU is most sensitive. The key general assumptions used
in the discounted cash flow models and value in use calculations are the pre-tax discount rates and the projected revenue growth rates
detailed below.
The pre-tax discount rates reflect management’s estimate of the time value of money and the consolidated entity’s weighted average
cost of capital adjusted for, the risk-free rate and the volatility of the share price relative to market movements.
Discount rate used in impairment calculations for 2023
Discount rate used in impairment calculations for 2022
Marine &
Tourism
%
Australian
Bus
%
International
Bus
%
12.8%
11.9%
11.1%
10.2%
9.1%
8.9%
Management believe the projected revenue growth rates are prudent and justified given the current uncertainty of the market.
Marine & Tourism CGU’s
Marine & Tourism CGU’s have had growth rates applied of 3.0% (2022: 3.0%), this is based on historical experience and current
operating trends within these CGUs.
This specific application to Marine & Tourism CGUs is outlined further below:
SeaLink - SE Queensland
An increase in revenue of 3.0% to reflect underlying traffic growth based on increased tourism flow to Stradbroke Island, CPI increases
built into fixed contracts and growth in vessel charter opportunities and rates.
Fraser Island - QLD
An increase in revenue of 3% to reflect the underlying growth in traffic and visitation to the Island. Domestic demand has recovered
strongly post COVID-19 and there has been a moderate recovery of international tourism.
Swan Valley Tours - WA
An increase in revenue of 3.0% to reflect the Western Australian tourism industry’s ongoing recovery post COVID-19.
Australian Bus CGUs
Contracted increases in revenue – all CGU’s within the Australian Bus Segment have had contracted revenue grow by at least 1.5%
(2022: 1.5%). This is based on the contracted nature of these businesses and the increases reflected in the contracts it has with its
government clients.
International Bus - Singapore
An increase in contracted revenue by at least 1.5% (2022: 1.5%). This is based on the contracted nature of these businesses and the
increases reflected in the contracts it has with its primary government client. An increase in performance incentives has been assumed
to return to pre-COVID levels by year 2 of the forecast period.
Sensitivity
As disclosed in note 2, Management have made assumptions and estimates in respect of impairment testing of goodwill. Should these
assumptions and estimates not occur the resulting goodwill carrying amount may decrease.
Summary of goodwill impairment testing
Management have reviewed the changes to the key assumptions in the model and based on those changes have assessed there would
not be an impairment of goodwill for any of the Group's CGU's (2022:$Nil).
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of each segment's
goodwill is based would not cause the CGU’s carrying amount to exceed its recoverable amount.
Customer Contracts, Relationships and Other intangibles (Permits and Trademarks)
Customer contracts of $7.4m are associated with several government contracts for ferry services in the Southern Moreton Bay,
Gladstone and Perth. As part of the Fraser Island acquisition in 2018, touring and access permits were acquired with a fair value of
$3.2m.
As part of the Transit Systems Group acquisition in 2020, bus contracts in Australia and Singapore were acquired with a fair value of
$134.7m. In addition, $8.7m of intangible customer relationships were also recognised for Transit - Victoria (Sita).
A further $15.4m of customer contracts associated with bus contracts in the resources sector were part of the Go West Tours acquisition
on 1 July 2021. In addition, the asset acquisition of Dave's Transit in June 2022 resulted in a further $0.9m customer contract intangible
being recognised.
As part of the All Aboard America acquisition, $49.8m of trademarks/brand names and $133.8m of customer relationship intangibles
were recognised. As part of the Horizons West acquisition, $9.8m of customer relationship intangibles, $1.1m of software and $1.1m of
trademarks/brand names were recognised. For the Grand Touring acquisition, $2.1m of customer relationships intangibles and $0.6m
of trademarks/brand names were recognised.
During the period the Group recorded amortisation of $20.4m (2022: $18.6m) associated with customer contracts and permits with an
associated reduction in the Deferred Tax Liability of $6.1m (2022: $5.6m).
All customer contracts and relationships are amortised over their estimated finite life and the amortisation period ranges between 1 and
10 years.
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Kelsian Group 2022/23 Annual Report 81
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I
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P
O
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C
T
O
R
S
’
R
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P
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I
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 18. Trade and other payables
Current liabilities
Trade payables
BAS payable
Other payables
Refer to note 31 for further information on financial instruments.
Trade creditors are non-interest bearing and are normally settled on 30-60 day terms.
Note 19. Contract liabilities
Current liabilities
Contract liabilities
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and previous
financial year are set out below:
Opening balance
Deferred during the year
Recognised during the year
Closing balance
2023
$'000
Consolidated
2022
$'000
50,837
10,789
29,718
36,760
10,419
19,983
91,344
67,162
2023
$'000
Consolidated
2022
$'000
14,634
14,354
14,354
113,974
(113,694)
12,991
74,833
(73,470)
14,634
14,354
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).
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the reporting
period was $6,221,837,000 as at 30 June 2023 ($3,576,692,000 as at 30 June 2022) and is expected to be recognised as revenue in
future periods as follows:
Within one year
More than one year
2023
$'000
Consolidated
2022
$'000
1,339,656
4,882,181
962,224
2,614,468
6,221,837
3,576,692
The increase in unsatisfied performance obligations relates to the renewed and extended Region 3 bus contract and the new Region 2
contract in Sydney, NSW.
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 20. Borrowings
Current liabilities
Other loans
Non-current liabilities
Commercial bills payable
2023
$'000
Consolidated
2022
$'000
-
19,411
677,755
345,000
677,755
364,411
Refer to note 31 for further information on financial instruments.
Total secured liabilities
Commercial bills payable are under the Group's multi tranche facility were negotiated immediately preceding the Transit Systems Group
acquisition in 2020. These facilities were increased by $150.0m in June 2022 and the term extended. As part of the recent All Aboard
America! Holdings, Inc. acquisition the facility was increased and the lender pool expanded providing additional term loan facilities of
$151m USD for the transaction and revolving credit of up to $55m USD for future US based growth opportunities.
The final $20.0m instalment for the Sita vendor financing (Other Loans) was repaid 2 months early in February 2023 (2022: $19.4m).
Interest bearing loans and borrowings have a fair value of $677.8m (2022: $364.4m) and a carrying value of $677.8m (2022:
$364.4m). During the year $332.8m funds (2022: $79.0m) were drawn down.
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P
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O
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S
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P
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Kelsian Group 2022/23 Annual Report 83
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 20. Borrowings (continued)
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 20. Borrowings (continued)
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Various guarantees / performance bonds have been provided as surety on a range of material operational contracts and lease
contracts. Guarantees provided total $77.2m (2022: $74.7m), the net increase relates to the increase of existing guarantees on the
anniversary of the contract and various changes to lease related guarantees.
2023
$'000
Consolidated
2022
$'000
Note 21. Lease liabilities
Total facilities
Facility A - multi currency term loan
Facility B1 - revolving credit
Facility B2 - revolving credit
Facility C - revolving letter of credit
Facility D1 - USD term loan
Facility D2 - USD revolving credit
Vendor financing facility
Insurance bonds
Used at the reporting date
Facility A - multi currency term loan
Facility B1 - revolving credit
Facility B2 - revolving credit
Facility C - revolving letter of credit
Facility D1 - USD term loan
Facility D2 - USD revolving credit
Vendor financing facility
Insurance bonds
Unused at the reporting date
Facility A - multi currency term loan
Facility B1 - revolving credit
Facility B2 - revolving credit
Facility C - revolving letter of credit
Facility D1 - USD term loan
Facility D2 - USD revolving credit
Vendor financing facility
Insurance bonds
230,000
200,000
65,000
125,000
227,753
52,790
-
14,003
914,546
230,000
200,000
20,000
77,151
227,753
-
-
14,003
768,907
-
-
45,000
47,849
-
52,790
-
-
145,639
230,000
200,000
65,000
125,000
-
-
19,411
13,130
652,541
230,000
50,000
65,000
74,737
-
-
19,411
13,130
452,278
-
150,000
-
50,263
-
-
-
-
200,263
Current liabilities
Lease liability - Current
Non-current liabilities
Lease liability - Non current
Opening balance
Additions
Additions through business combinations (note 37)
Exchange differences
Lease payments
Lease related interest
Lease relinquishment (non cash)
Short term lease payments of $2.6m were made during the period (2022: $2.4m)
Refer to note 31 for further information on financial instruments.
Note 22. Employee benefits
The AUD based facilities are provided on a floating rate basis referenced to the BBSY rate and the USD based facilities are provided on
a floating rate basis referenced to the SORA rate. As at year end, the balance of Facility A (fully drawn) $230.0m had an average rate
of 5.60% (2022: 2.96%), Facility B $220.0m had an average rate of 5.47% (2022:2.80%) and Facility D $151.9m USD had an average
rate of 6.73% with the weighted average rate for Facility A, B and D 5.84% (2022: 2.93%). All current facilities are at floating
rates. Committed financing facilities A, B1, B2, D1 and D2 total $776.5m (2022: $495.0m) and were available to the consolidated entity
at the end of the financial year. As at that date, $677.8m (2022: $345.0m) of these facilities were in use.
During the current year, there were no defaults or breaches.
Financing cash flows
During the period $333.8m (2022:$79.0m) of borrowings were drawn down together with a net $2.4m increase in letters of credit drawn
the latter having no cashflow impact.
Assets pledged as security
Kelsian and each borrower, have provided security in respect of all of their respective assets and undertakings, including direct shares
and units in entities within the Group other than those which cannot be charged without third party consent and real property mortgages
over its freehold real property (excluding the bus depot at Westbourne Park, UK) and certain leasehold property. Also registered
mortgages over all vessels and buses in the fleet that are not leased, except for the Tasmanian Bruny Island vessels. Assets pledged
as security (minus exclusions) total $608.3m (2022:$366.7m). Kelsian and certain guarantors have provided a guarantee and indemnity
to the Lenders in respect of the financing facilities.
Current liabilities
Annual leave
Long service leave
Sick leave
Employee benefits
Non-current liabilities
Long service leave
2023
$'000
Consolidated
2022
$'000
15,200
11,579
113,425
83,128
128,625
94,707
2023
$'000
Consolidated
2022
$'000
94,707
7,758
42,717
26
(13,932)
(2,651)
-
103,719
68,354
3,921
239
(15,634)
(574)
(65,318)
128,625
94,707
2023
$'000
Consolidated
2022
$'000
56,768
39,340
296
936
52,601
38,719
1,118
197
97,340
92,635
7,763
8,451
105,103
101,086
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Kelsian Group 2022/23 Annual Report 85
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 23. Provisions
Current liabilities
Deferred consideration
Other provisions
2023
$'000
Consolidated
2022
$'000
26,621
13,480
24,646
2,943
40,101
27,589
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2023
Carrying amount at the start of the year
Additional provisions recognised
Additions through business combinations (note 38)
Amounts used
Payments
Exchange differences
Carrying amount at the end of the year
Note 24. Other liabilities
Motor claims
$'000
Bus parts
$'000
Deferred
consideration
$'000
Other
$'000
Workers
compensation
$'000
2,429
383
5,029
337
(350)
99
7,927
239
-
-
(239)
-
-
24,646
-
-
-
-
1,975
275
-
1,731
-
(240)
(31)
-
-
3,925
-
(36)
(71)
-
26,621
1,735
3,818
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 25. Liabilities directly associated with assets classified as held for sale
Current liabilities
Employee entitlements
Refer note 14 for further details of the transaction requiring the liabilities be held for sale.
Note 26. Issued capital
2023
$'000
Consolidated
2022
$'000
-
997
2023
Shares
2022
Shares
2023
$'000
Consolidated
2022
$'000
Ordinary shares - fully paid
269,217,706 218,399,048
849,943
572,377
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the
number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a
limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Share buy-back
There is no current on-market share buy-back.
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Current liabilities
Deferred consideration
Accrued expenses
Deferred revenue
Revenue received in advance
Subsidies and grants received in advance
Other current liabilities
Non-current liabilities
Deferred consideration
Subsidies and grants received in advance
2023
$'000
Consolidated
2022
$'000
16,470
68,654
6,931
3,468
119
598
20,725
50,928
7,150
42
217
94
96,240
79,156
-
98
98
9,530
215
9,745
96,338
88,901
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns
for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the
current Company's share price at the time of the investment. The Group is not actively pursuing additional investments in the short term
as it continues to integrate and grow its existing businesses in order to maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management
decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2022 Annual Report.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is
calculated as total borrowings (including 'trade and other payables' and 'borrowings' as shown in the statement of financial position) less
'cash and cash equivalents' as shown in the statement of financial position. Total capital is calculated as 'total equity' as shown in the
statement of financial position (including non-controlling interest) plus net debt.
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There is one remaining instalment of deferred consideration $8.1m and the earn out consideration of up to $1.8m due in relation to the
acquisition of Go West Tours payable in August 2023. (2022: One remaining instalment of deferred consideration in relation to acquisition
of Transit Systems Group and 2 instalments for Go West Tours.)
Deferred consideration of $5.1m and $1.3m has been recognised in relation to the business combinations of Horizons West Bus and
Coachlines and Grand Touring NT respectively refer note 37.
Deferred consideration of $20.1m was paid during the period, $12m in relation to the Transit Systems Group acquisition and $8.1 in
relation to Go West Tours.
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Kelsian Group 2022/23 Annual Report 87
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 26. Issued capital (continued)
The gearing ratio at the reporting date was as follows:
Current liabilities - trade and other payables (note 18)
Current liabilities - borrowings (note 20)
Non-current liabilities - borrowings (note 20)
Total borrowings
Current assets - cash and cash equivalents (note 8)
Net debt
Total equity
Total capital
Gearing ratio
Note 27. Reserves
Foreign currency reserve
Hedging reserve - cash flow hedges
Other capital reserves
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 27. Reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
2023
$'000
Consolidated
2022
$'000
91,344
-
677,755
769,099
(157,939)
611,160
923,607
1,534,767
67,162
19,411
345,000
431,573
(141,093)
290,480
640,012
930,492
40%
31%
2023
$'000
Consolidated
2022
$'000
19,631
4,944
2,685
(3,090)
4,846
3,322
27,260
5,078
Consolidated
Balance at 1 July 2021
Revaluation - gross
Deferred tax
Share based payment expense
Foreign currency translation
Balance at 30 June 2022
Revaluation - gross
Deferred tax
Share based payment expense
Employee rights converted
Foreign currency translation
Balance at 30 June 2023
Note 28. Retained profits
Share option Cash flow
hedging
$'000
surplus
$'000
Foreign
currency
$'000
Total
$'000
2,179
-
-
1,143
-
3,322
-
-
1,009
(1,646)
-
(2,118)
9,948
(2,984)
-
-
4,846
140
(42)
-
-
-
(8,923)
-
-
-
5,833
(3,090)
-
-
-
-
22,721
(8,862)
9,948
(2,984)
1,143
5,833
5,078
140
(42)
1,009
(1,646)
22,721
2,685
4,944
19,631
27,260
2023
$'000
Consolidated
2022
$'000
62,554
20,999
(37,152)
44,588
52,910
(34,944)
46,401
62,554
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Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to
Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.
Hedging reserve - cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is determined to be an
effective hedge.
Retained profits at the beginning of the financial year
Profit after income tax expense for the year
Dividends paid (note 30)
Retained profits at the end of the financial year
Note 29. Non-controlling interest
Other capital reserves
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and
other parties as part of their compensation for services.
The non-controlling interest $3.0k, relates to Torrens Connect Pty Ltd which is a majority owned subsidiary in the consolidated group
under accounting standards however operationally is a joint venture entity used to service the Torrens Transit Tram contract in South
Australia.
Note 30. Dividends
Dividends
Dividends paid during the financial year were as follows:
Interim fully franked dividend for the year ended 30 June 2023 paid 17 March 2023 of 7.5 cents
(2022: 7.0 cents) per ordinary share
Final fully franked dividend for the year ended 30 June 2022 paid 6 October 2022 of 9.5 cents (2021:
9.0 cents) per ordinary share
2023
$'000
Consolidated
2022
$'000
16,391
15,288
20,761
19,656
37,152
34,944
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Kelsian Group 2022/23 Annual Report 89
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 30. Dividends (continued)
Franking credits
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits available for subsequent financial years based on a tax rate of 30%
The above amounts represent the balance of the franking account as at the end of the financial year.
Note 31. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The
consolidated entity uses derivative financial instruments such as forward foreign exchange contracts to hedge certain risk exposures.
Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The consolidated entity uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of
interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios
to determine market risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board').
These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits.
Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance reports to the Board on a monthly
basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated
in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
In order to protect against exchange rate movements, the consolidated entity has entered into forward foreign exchange contracts.
These contracts are hedging highly probable forecasted cash flows for the ensuing financial year. Management has a risk management
policy to hedge 100% of foreign currency purchases and 50% of anticipated foreign currency transactions (i.e. acquisitions) for the
subsequent 6 months.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting date were as
follows:
Consolidated
US dollars
Pound Sterling
Singapore dollars
2023
$'000
227,753
2,857
44,790
Assets
2022
$'000
-
2,645
45,119
2023
$'000
227,753
26,621
-
Liabilities
2022
$'000
-
24,646
-
275,400
47,764
254,374
24,646
The consolidated entity had net current liabilities denominated in foreign currencies of $26.6m (assets of $0.0m less liabilities of $26.6m)
as at 30 June 2023 (2022: Net current liabilities of $24.6m, assets of $0.0m less liabilities of $24.6m). Based on this exposure, had the
Australian dollar weakened by 5.0%/strengthened by 5.0% (2022: weakened by 5.0%/strengthened by 5.0%) against these foreign
currencies with all other variables held constant, the consolidated entity's profit before tax for the year would have been $1.3m
higher/$1.3m lower (2022: $1.2m lower/$1.2m higher) and equity would have been $0.9m higher/$0.9m lower (2022: $0.8m lower/$0.8m
higher). The percentage change is the expected overall volatility of the significant currencies, which is based on management's
assessment of reasonable possible fluctuations taking into consideration movements over the last 6 months each year and the spot rate
at each reporting date. The net foreign exchange loss for the year ended 30 June 2023 was a non cash unrealised loss of ($1.4m)
(2022: gain of $1.0m). There is no expectation the foreign exchange movements will be realised in the future as they relate to indefinite
intercompany loans and provisions.
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 31. Financial instruments (continued)
2023
$'000
Consolidated
2022
$'000
129,660
124,806
129,660
124,806
Price risk
The consolidated entity is not exposed to any significant price risk from fluctuations in fuel price as this is indexed in the bus contracts
and passed through to the customer.
Interest rate risk
The consolidated entity's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the
consolidated entity to interest rate risk. Borrowings obtained at fixed rates expose the consolidated entity to fair value interest rate risk.
The policy is to maintain approximately 50% of current borrowings at fixed rates using interest rate swaps to achieve this when necessary.
As at the reporting date, the consolidated entity had the following average interest rate borrowings and interest rate swap contracts
outstanding:
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Consolidated
Commercial bills - floating
Vendor financing - fixed
Net exposure to cash flow interest rate risk
Weighted
average
interest rate
%
6.60%
-
2023
Balance
$'000
677,755
-
677,755
Weighted
average
interest rate
%
2.96%
6.00%
2022
Balance
$'000
345,000
19,411
364,411
The consolidated entity has entered into a interest rate swap of $338.9m (2022: $120.0m) that effectively hedges approximately 50.0%
(2022: 50.0%) of the company's exposure to fluctuations in interest rates.
An analysis by remaining contractual maturities is shown in Liquidity Risk management below.
For the consolidated entity the commercial bills outstanding, totalling $677.8m (2022: $345.0m) are interest only payment loans. Monthly
cash outlays of approximately $3.4m (2022: $0.4m) per month are required to service the interest payments. An official increase in
interest rates of 0.5% and decrease of 1.0% (2022: increase 1.0%, decrease 0.5%) basis points would have an adverse effect on profit
before tax of $2.4m and positive effect of $4.8m respectively (2022: adverse effect on profit before tax of $2.3m and positive effect of
$1.2m). The percentage change is based on the expected volatility of interest rates using market data and analysts forecasts. There are
no minimum principal repayments due (2022: nil).
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit
limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting
date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements. The Group does not hold any collateral.
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to
customer credit risk management. Credit quality of a customer is assessed based on references, industry knowledge, ability to pay and
individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored with
an analysis reported to the Board monthly. Material debtors are largely associated with government agencies and are reviewed by
management taking into consideration the associated credit ratings and risk applicable to the relevant country for (international
operations) or state within Australia and are generally considered relatively low risk.
Generally, trade and other receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period
greater than 1 year.
There were no exposures that comprised more than 30% of trade receivables. Collection of this debt is generally not considered doubtful
however some small provisions have been made for debts with the indicators of no reasonable recovery.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Audit, Risk and Sustainability Committee in accordance
with the Group’s policy. Investments of surplus funds are only placed with the Group's major bank.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk using a liquidity planning tool and by maintaining adequate cash reserves and available
borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
90
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Kelsian Group 2022/23 Annual Report 91
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 31. Financial instruments (continued)
Note 31. Financial instruments (continued)
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank
loans, interchangeable limits, finance leases and hire purchase contracts. The Group’s policy is to ensure that the core funding limits
have no less than a 12 month maturity date. The Group assessed the concentration of risk with respect to refinancing its debt and
concluded it to be low. Access to sources of funding is sufficiently available and debt maturing within 12 months can be rolled over with
existing or alternative lenders.
Financing arrangements
Unused borrowing facilities at the reporting date:
Facility B1 - revolving credit
Facility B2 - revolving credit
Facility C - revolving letter of credit
Facility D2 - USD revolving credit
2023
$'000
Consolidated
2022
$'000
-
45,000
47,849
52,790
145,639
150,000
-
50,263
-
200,263
Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time and have an average maturity
of 2.5 years (2022: 4.0 years).
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. Except for leases, the tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities
and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2023
Non-derivatives
Non-interest bearing
Trade payables
Other payables
BAS payables
Financial guarantee contracts (on demand)
Insurance bonds
Interest-bearing variable
Commercial bills
Interest-bearing - fixed rate
Hire purchase
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
-
-
-
-
-
50,837
29,719
10,789
77,151
14,003
-
-
-
-
-
6.60%
44,731
789,573
-
-
-
-
-
-
50,837
29,719
10,789
77,151
14,003
834,304
3.33%
4.11%
3,984
17,937
249,151
7,335
55,695
852,603
-
55,843
55,843
11,319
129,475
1,157,597
Consolidated - 2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
BAS payables
Other loans
Financial guarantee contracts (on demand)
Insurance bonds
Interest-bearing variable
Commercial bills
Interest-bearing - fixed rate
Hire purchase
Lease liability
Vendor financing
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
-
-
-
-
-
-
36,760
19,983
10,419
19,411
74,737
13,130
-
-
-
-
-
-
2.96%
10,195
345,000
-
-
-
-
-
-
-
3.17%
2.49%
6.00%
2,139
38,267
20,000
245,041
6,786
122,234
-
474,020
-
33,950
-
33,950
36,760
19,983
10,419
19,411
74,737
13,130
355,195
8,925
194,451
20,000
753,011
Details about the financial guarantee contracts are provided in note 20. The amounts disclosed in the above tables are the maximum
amounts allocated to the earliest period in which the guarantee could be called upon. The Group does not expect these payments to
eventuate.
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Valuation techniques for fair value measurements categorised within level 2
Derivative financial instruments have been valued using quoted market rates. This valuation technique maximises the use of observable
market data where it is available and relies as little as possible on entity specific estimates.
The interest rate swap is categorised as a level 2 within the fair value hierarchy with the fair value determined using a present value
valuation technique based on market inputs (including interest rates) which are actively traded and quoted through the Australian banking
system.
The fuel forward contract is categorised as a level 2 within the fair value hierarchy with the fair value determined using a present value
valuation technique based on market inputs (including commodity swap pricing) which are actively traded and quoted through the
Australian banking system. The two product types we have under the fuel forward contract are PLATTS Sing Gas Oil 10ppm and ICE
Gas Oil.
Valuation techniques for fair value measurements categorised within level 3
Level 3 financial assets and liabilities have been valued by using the discounted cash flows (DCF) method.
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Kelsian Group 2022/23 Annual Report 93
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 31. Financial instruments (continued)
Note 32. Key management personnel disclosures (continued)
The fair values of financial assets and liabilities, together with their carrying amounts in the statement of financial position, for the Group
are as follows:
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major activities of the Group,
directly or indirectly, during the financial year:
Consolidated
Assets
Cash on hand
Cash at bank
Cash on deposit
Trade receivables
Other receivables
Cash flow hedges
Liabilities
Trade payables
Other payables
BAS payable
Commercial bills
Lease liability
Vendor financing
Carrying
amount
$'000
33,709
98,255
25,975
142,345
24,594
7,062
331,940
50,837
29,719
10,789
677,745
128,625
-
897,715
2023
Fair value
$'000
33,709
98,255
25,975
142,345
24,594
7,062
331,940
50,837
29,719
10,789
677,745
128,625
-
897,715
Carrying
amount
$'000
729
109,092
31,272
94,063
24,539
6,922
266,617
36,760
19,983
10,419
345,000
94,707
19,411
526,280
2022
Fair value
$'000
729
109,092
31,272
94,063
24,539
6,922
266,617
36,760
19,983
10,419
345,000
94,707
19,411
526,280
The fair value of the financial assets and liabilities is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
Management assessed that cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities
approximate their carrying amounts largely due to the short-term maturities of these instruments.
Note 32. Key management personnel disclosures
Directors
The following persons were Directors of Kelsian Group Limited during the financial year:
Non-executive Directors
J Ellison AM
F Hele
C Smerdon
N Smith
L Hockridge
T Dodd
D Grady AO
A Staines OAM
Chair
Non-Executive Director & Deputy Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Appointed 1 September 2022
Resigned 25 October 2022
Senior executives
C Feuerherdt
A Muir
G Legh
R Carpenter
M McGee
D Gauci
W Toh
B Trimarco
G Balkin
Group Chief Executive Officer
Group Chief Financial Officer & Joint Kelsian Secretary
Group Chief Development Officer
Group Chief People and Culture Officer
Chief Executive Officer - Australian Bus
Chief Executive Officer - Marine & Tourism
Managing Director - Singapore
Chief Executive Officer - All Aboard America! Holdings, Inc.
Chief Operating Officer - Australian Bus
Appointed 12 December 2022
Appointed 1 June 2023
Resigned 16 December 2022
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Long-term benefits
Share-based payments
2023
$'000
6,558
103
838
7,499
Consolidated
2022
$'000
6,554
103
999
7,656
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Kelsian Group 2022/23 Annual Report 95
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 33. Remuneration of auditors
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 35. Related party transactions (continued)
During the financial year the following fees were paid or payable for services provided by Ernst & Young, the auditor of the Company,
its network firms and unrelated firms:
Subsidiaries
Interests in subsidiaries are set out in note 38.
2023
$'000
Consolidated
2022
$'000
860
680
238
274
15
527
1,387
106
43
15
164
844
107
-
-
-
-
107
417
8
425
425
276
272
183
10
193
469
112
119
231
503
2023
$'000
Consolidated
2022
$'000
50,511
80,047
8,639
7,650
9,511
3,924
139,197
21,085
Audit services - Ernst & Young
Audit or review of the financial statements
Other services - Ernst & Young
Preparation of the tax return
Due diligence
Fuel tax credit assurance review
Audit services - network firms
Audit or review of the financial statements
Other services - network firms
Due diligence
Other
Audit services - unrelated firms
Audit or review of the financial statements
Other services - unrelated firms
Preparation of the tax return
Other
Note 34. Commitments
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Vessels
Buses and motor vehicles
Other
Note 35. Related party transactions
Parent entity
Kelsian Group Limited is the parent entity.
96
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Key management personnel
Disclosures relating to key management personnel are set out in note 32 and the remuneration report included in the Directors' report.
Transactions with related parties
The following transactions occurred with related parties at arms length prices:
Consolidated
2022
$
2023
$
Payment for goods and services:
Pacific Marine Group Pty Ltd (controlled by Mr T Dodd) - Provision of marine piling services following
a formal selective tender process.
1,106,009
-
ST Property Trust, ST Property Trust No. 2, Newton No. 2 Trust (controlled or jointly controlled by Mr
N Smith) -Rental for bus depots operated by Transit Systems Group in Australia.
2,993,343
2,869,037
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 36. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income/(loss)
2023
$'000
Parent
2022
$'000
83,961
20,354
83,961
20,354
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Kelsian Group 2022/23 Annual Report 97
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 36. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Hedging reserve - cash flow hedges
Other capital reserves
Accumulated losses
Total equity
2023
$'000
Parent
2022
$'000
9,201
42,434
1,174,339
903,676
32,330
42,742
318,634
335,652
849,943
4,944
2,685
(1,867)
572,378
4,846
3,322
(12,522)
855,705
568,024
The have been some reclassifications of prior year balances in the parent entity note to ensure comparability with current year.
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent has entered into various cross-guarantees with it's subsidiaries to support borrowings across the Group. Refer note 40 for
further details.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 (2022:Nil).
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 (2022:Nil).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an
impairment of the investment.
Note 37. Business combinations
Acquisition of All Aboard America! Holdings Inc.
On 1 June 2023, Kelsian through it's subsidiary Kelsian USA Inc. acquired 100% of the ordinary shares of All Aboard America! Holdings
Inc. (AAAHI) for total consideration transferred of $512.4m. AAAHI is a leading provider of passenger motorcoach services to corporate,
government, education, LNG, and tourism sector customers in the USA and its results are reported in the International Bus segment of
the Group. It was acquired to provide an entry point into the large and attractive USA market, through an established, highly regarded,
customer centric operator with a multi-state footprint.
The goodwill of $200.8m represents the value of expected synergies and future benefits arising from the acquisition associated with
AAAHI's track record and experience to win and retain future contracts that are not separately recognised. The acquired business would
have contributed revenues of $356.0m and profit after tax of $23.0m to the Group for the period from 1 July 2022 to 30 June 2023 if held
for the full period. The values identified in relation to the acquisition of AAAHI are provisional as at 30 August 2023.
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 37. Business combinations (continued)
Acquisition of Horizons West Bus and Coachlines
On 31 January 2023, Kelsian through it's subsidiary WA Bus and Coachlines Pty Ltd acquired the business assets of Horizons West
Bus and Coachlines (“Horizons West”) for an enterprise value of $28.4 million including a contingent,deferred consideration and earn-
out component of up to $7.0 million. Horizons West is a market leading provider of contracted bus services and bus charter services to
the education sector in Western Australia. The acquisition creates a platform for growth, complementing and enhancing existing Kelsian
businesses in Western Australia, and allowing expansion into the adjacent education bus transportation sector in Australia.
The goodwill of $10.1m represents the value of expected synergies and future benefits arising from the acquisition associated with
Horizon West's track record and experience to win and retain future contracts that are not separately recognised. The acquired business
would have contributed revenues of $19.0m and profit after tax of $3.2m to the Group for the period from 1 July 2022 to 30 June 2023 if
held for the full period. The values identified in relation to the acquisition of Horizons West are provisional as at 30 August 2023 pending
finalisation.
Other Acquisitions
Other acquisitions during the period were strategic extensions of our existing bus operations including public transport contracts in the
Channel Islands (reported in International segment) and North Stradbroke Island Bus, school bus contracts in Western Australia with
Denmark and regional charter bus business in the Northern Territory, the latter 3 reported in Australian Bus segment. The amounts are
provisional pending finalisation.
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Kelsian Group 2022/23 Annual Report 99
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 37. Business combinations (continued)
Details of the acquisitions are as follows:
All Aboard
America!
Horizons
West
Channel
Islands
North
Stradbroke
Island Bus
Grand
Touring
Denmark
Fair value Fair value Fair value Fair value Fair value Fair value
$'000
$'000
$'000
$'000
$'000
$'000
Total
$'000
Cash and cash equivalents
Trade receivables
Other receivables
Inventories
Accrued revenue
Prepayments
Other current assets
Property, plant & equipment
Right-of-use assets
Brands and trademarks
Customer contracts
Software
Customer relationships
Other intangible assets
Trade payables
Other payables
Provision for income tax
Deferred tax liability
Employee benefits
Other provisions
Accrued expenses
Deferred revenue
Revenue received in advance
Lease liability
6,366
48,721
1,185
4,698
-
2,225
576
182,018
39,901
49,762
-
-
133,774
349
(4,142)
(2,999)
(1,699)
(78,973)
(2,758)
(10,613)
(12,155)
(268)
(4,443)
(39,901)
-
453
-
-
-
-
-
9,336
-
1,099
-
1,063
9,803
-
(56)
-
-
(3,184)
(288)
-
-
-
-
-
Net assets acquired
Goodwill
311,624
200,807
18,226
10,127
55
67
228
731
398
35
-
727
-
-
5,267
-
-
3,361
(1,872)
(287)
-
-
-
(72)
(722)
-
-
(2,816)
5,100
-
2
-
-
-
-
-
-
1,172
-
-
3,020
-
-
-
-
-
-
(906)
(3)
-
-
-
-
-
3,285
-
-
-
-
-
-
-
-
1,768
-
603
-
-
2,105
-
-
-
-
(813)
-
-
-
-
-
-
3,663
1,310
-
-
-
-
-
-
-
773
-
-
1,846
-
-
-
-
-
-
(554)
-
-
-
-
-
-
2,065
-
6,423
49,241
1,413
5,429
398
2,260
576
195,794
39,901
51,464
10,133
1,063
145,682
3,710
(6,070)
(3,286)
(1,699)
(84,430)
(3,049)
(10,685)
(12,877)
(268)
(4,443)
(42,717)
343,963
212,244
Acquisition-date fair value of the
total consideration transferred
Representing:
Cash paid or payable to vendor
Contingent consideration
Acquisition costs expensed to
profit or loss
Cash used to acquire business,
net of cash acquired:
Acquisition-date fair value of the
total consideration transferred
Less: cash and cash equivalents
Less: payments to be made in
future periods
512,431
28,353
5,100
3,285
4,973
2,065
556,207
512,431
-
23,271
5,082
5,100
-
3,285
-
3,642
1,331
2,065
-
549,794
6,413
512,431
28,353
5,100
3,285
4,973
2,065
556,207
17,851
2,363
703
183
300
2
21,402
512,431
(6,366)
28,353
-
5,100
(55)
3,285
(2)
4,973
-
2,065
-
556,207
(6,423)
-
(5,082)
-
-
(1,331)
-
(6,413)
Net cash used
506,065
23,271
5,045
3,283
3,642
2,065
543,371
100
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KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 38. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in note 1:
Name
AAAHI Acquisition Corporation
AAAHI TempCo Holdings LLC
AAAHI Intermediate Holdings LLC
AAAHI Topco Corporation
Ace Express Coaches, LLC
All Aboard America! Holdings, Inc
All Aboard America! School Transportation, LLC
All Aboard America! Transit Services, LLC
Australia Inbound Pty Ltd
Avonward Pty Ltd
Big Red Cat Pty Ltd
BITS Assets Pty Ltd
BITS Ferry Services Pty Ltd
Captain Cook Cruises Pty Ltd
CT Plus Guernsey Ltd
CT Plus Jersey Ltd
Curtis Island Assets Pty Ltd
Curtis Island Services Pty Ltd
First Class Transportation, LLC
Hotard Coaches, Inc
Industrial Bus Lines, Inc
Kangaroo Island Adventure Tours Pty Ltd
Kangaroo Island Odysseys Pty Ltd
Kangaroo Island SeaLink Pty Ltd
KBRV Resort Operations Pty Ltd
KBRV Services Pty Ltd
Kelsian International Holdings Pty Ltd
Kelsian UK Limited
Kelsian USA Inc.
Lux Bus America Co
Lux Leasing, LLC
Magnetic Island Cruise Corporation Pty Ltd
McClintock Enterprises, Inc
NT Bus and Coachlines Pty Ltd
Pacific Transit Pty Ltd
PDW Pty Ltd
RiverCity Ferries Pty Ltd
S. V. Haoust Pty Ltd
Sea Stradbroke Services Pty Ltd
SeaCap Pte Ltd
SeaLink Ferries Pty Ltd
SeaLink Fraser Island Pty Ltd
SeaLink KI Ferries Pty Ltd
SeaLink KI Holding Pty Ltd
SeaLink Marina Pty Ltd
SeaLink Northern Territory Pty Ltd
SeaLink Queensland Pty Ltd
SeaLink SA Ferry Services Pty Ltd
SeaLink Tasmania Pty Ltd
SeaLink Vessels Pty Ltd
Sita Coaches Pty Ltd
Sita Tours Pty Ltd
STG Properties Pty Ltd
Stradbroke Assets Pty Ltd
Principal place of business /
Country of incorporation
Ownership interest
2022
%
2023
%
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
Australia
Australia
Australia
Australia
Australia
Australia
Channel Islands
Channel Islands
Australia
Australia
United States of America
United States of America
United States of America
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
United States of America
United States of America
United States of America
Australia
United States of America
Australia
New Zealand
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
84
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
-
-
-
-
-
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
100.00%
100.00%
-
-
-
100.00%
100.00%
100.00%
100.00%
100.00%
-
100.00%
-
-
-
100.00%
-
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Kelsian Group 2022/23 Annual Report 101
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 38. Interests in subsidiaries (continued)
Note 38. Interests in subsidiaries (continued)
Name
Stradbroke Ferries Pty Ltd
Sunferries Travel Pty Ltd
Sureride Charter, Inc
Swan Transit Canning Pty Ltd
Swan Transit Group Pty Ltd
Swan Transit Kalamunda Pty Ltd
Swan Transit Marmion Pty Ltd
Swan Transit Midland Pty Ltd
Swan Transit Pty Ltd
Swan Transit Services (South West) Pty Ltd
Swan Transit Services (South) Pty Ltd
Swan Transit Services Pty Ltd
Swan Transit South West Pty Ltd
Swan Transit Southern River Pty Ltd
Swan Transit Trust
Territory Transit Holdings Pty Ltd
Territory Transit Pty Ltd
The Living Classroom Pty Ltd
The Port Jackson & Manly Steamship Company Pty Ltd
The South Australian Travel Company Pty Ltd
Torrens Connect Pty Ltd*
Torrens Transit Group Pty Ltd
Torrens Transit Pty Ltd
Torrens Transit Services (North) Pty Ltd
Torrens Transit Services Pty Ltd
Torrens Transit Trust
Tower Transit Asset Holdings Limited
Tower Transit Europe Pty Ltd
Tower Transit Holdings USA, Inc.
Tower Transit Limited
Tower Transit Operations Ltd
Tower Transit Property Holdings Limited
Tower Transit Singapore Pte Ltd
Tower Transit Training Singapore Pty Ltd
Transit (NSW) Group Pty Ltd
Transit (NSW) Liverpool Pty Ltd
Transit (NSW) Services Pty Ltd
Transit (NSW) Trust
Transit Systems (Victoria) Pty Ltd
Transit Systems Finance Holdings Pty Ltd
Transit Systems MBF Pty Ltd
Transit Systems Melbourne Pty Ltd
Transit Systems NSW Pty Ltd
Transit Systems NSW R6 Assets Pty Ltd
Transit Systems NSW SW Pty Ltd
Transit Systems Pty Ltd
Principal place of business /
Country of incorporation
Ownership interest
2022
%
2023
%
Australia
Australia
United States of America
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
Australia
United States of America
United Kingdom
United Kingdom
United Kingdom
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
55.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
55.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
-
100.00%
Name
Transit Systems Queensland Pty Ltd
Transit Systems WA Holdings Pty Ltd
Transit Systems WA Pty Ltd
Transit Systems West Pty Ltd
Transit Systems West Services Pty Ltd
TravelLink Pty Ltd
TravelLink Technology Pty Ltd
Vivonne Bay Outdoor Education Centre Pty Ltd
Vyscot Pty Ltd
WA Bus and Coachlines Pty Ltd
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2022
%
2023
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
*Torrens Connect Pty Ltd is a subsidiary member of the consolidated group for accounting purposes but operationally functions as a
joint venture. Refer note 29.
Note 39. Interests in joint ventures
Kelsian has a 50% joint controlling interest in International Travel Technology Pty Ltd which was not trading at 30 June 2023 (2022: Not
trading).
Note 40. Deed of cross guarantee
The parent has entered into various cross-guarantees with its subsidiaries to support borrowings across the Group. Pursuant to ASIC
Corporations (Wholly-owned Companies) Instrument 2016/785, Kelsian Group Limited and the following subsidiaries have entered into
a Deed of Cross Guarantee on 3 June 2019: Kangaroo Island SeaLink Pty Ltd, Captain Cook Cruises Pty Ltd, SeaLink Queensland Pty
Ltd, Curtis Island Assets Pty Ltd, Curtis Island Services Pty Ltd, TSA Ferry Group Pty Ltd, Stradbroke Ferries Pty Ltd, Stradbroke Assets
Pty Ltd, Sealink Ferries Pty Ltd, KBRV Resort Operations Pty Ltd and SeaLink Fraser Island Pty Ltd.
On 9 June 2020 the following subsidiaries entered into a deed of assumption and also became parties to that Deed of Cross Guarantee:
Transit Systems (Victoria) Pty Ltd (formerly Sita Bus Lines Pty Ltd), Sita Coaches Pty Ltd, Transit Systems Pty Ltd, Swan Transit Pty
Ltd, Swan Transit Services Pty Ltd, Torrens Transit Pty Ltd, Torrens Transit Services Pty Ltd, Transit (NSW) Services Pty Ltd, Transit
Systems West Pty Ltd, Transit Systems West Services Pty Ltd, Sita Tours Pty Ltd, Swan Transit Group Pty Ltd and Transit (NSW) Group
Pty Ltd.
On 25 June 2021, the following subsidiary entered into a deed of assumption and also became party to that Deed of Cross Guarantee:
Transit NSW (Liverpool) Pty Ltd.
On 23 June 2022, the following subsidiary entered into a deed of assumption and also became party to that Deed of Cross Guarantee:
S.V. Haoust Pty Ltd (trading as Go West Tours).
On 30 June 2023, the following subsidiaries entered into a deed of assumption and also became party to that Deed of Cross Guarantee:
Transit Systems WA Holdings Pty Ltd, WA Bus and Coachlines Pty Ltd and Kelsian International Holdings Pty Ltd.
The effect of the deed is that Kelsian Group Limited has guaranteed to pay any deficiency in the event of winding up any controlled entity
or if they do not meet their obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee. The
controlled entities have also given a similar guarantee in the event Kelsian Group Limited is wound up or it does not meet its obligations
under the terms of the overdrafts, loans, leases or other liabilities subject to the guarantee.
In reliance on ASIC Corporations (Audit Relief) Instrument 2016/784, subsidiary companies in the closed group (as described above)
that are also large proprietary companies have complied with the terms of that instrument and relied on it for relief from individual auditing
requirements for those companies as separate entities.
The statement of profit or loss and other comprehensive income and statement of financial position are substantially the same as the
Group and therefore have not been separately disclosed.
Note 41. Events after the reporting period
No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
102
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Kelsian Group 2022/23 Annual Report 103
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FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 42. Reconciliation of profit after income tax to net cash from operating activities
Note 44. Share-based payments
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Write off of assets
Net gain on disposal of non-current assets
Other expenses - non-cash
Finance costs - non-cash
Foreign currency differences
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase in inventories
Increase in income tax refund due
Decrease/(increase) in deferred tax assets
Decrease in accrued revenue
Increase in derivative assets
Decrease/(increase) in prepayments
Decrease/(increase) in other operating assets
Increase/(decrease) in trade and other payables
Increase in contract liabilities
Increase/(decrease) in derivative liabilities
Decrease in provision for income tax
Increase/(decrease) in deferred tax liabilities
Increase in employee benefits
Increase/(decrease) in other provisions
Increase in other operating liabilities
Net cash from operating activities
Note 43. Earnings per share
Profit after income tax attributable to the owners of Kelsian Group Limited
2023
$'000
Consolidated
2022
$'000
20,999
52,910
77,409
1,009
619
(3,814)
1,442
98
25,799
2,318
(2,571)
(2,897)
(42)
398
(2,519)
(1,301)
4,031
(5,842)
280
2,519
(4,756)
(3,354)
969
830
17,356
75,783
1,144
-
-
-
2,025
3,296
(18,386)
(3,254)
-
1,439
-
-
834
(18,024)
19,604
1,363
(2,984)
(14,634)
785
533
(6,673)
19,275
128,980
115,036
2023
$'000
Consolidated
2022
$'000
20,999
52,910
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Performance rights
231,410,432 218,399,048
696,709
683,312
Weighted average number of ordinary shares used in calculating diluted earnings per share
232,107,141 219,082,360
Basic earnings per share
Diluted earnings per share
Cents
Cents
9.1
9.0
24.2
24.2
Recognised share-based payment expenses
Expense arising from performance rights issued in 2020
Expense arising from performance rights issued in 2021
Expense arising from performance rights issued in 2022
Expense arising from performance rights issued in 2023
Forfeited performance rights
Types of share option plans
2023
$'000
Consolidated
2022
$'000
-
422
310
336
(59)
375
446
323
-
-
1,009
1,144
Employee Performance Rights Plan "EPRP"
Performance rights are generally granted to senior executives with more than 12 months service. The EPRP is designed to align
participants interests with those of shareholders. When a participant ceases employment prior to the vesting of their performance rights
or where the performance hurdle is not met, the performance rights lapse. Should all conditions be met, one ordinary share is issued for
each performance right for no consideration to the participant.
For the 2021 and 2022 EPRP issue there are two tranches of Performance Rights with the following weighting:
a. 50% for earnings per share growth (Tranche 1).
b. 50% for Total Shareholder Return (TSR) measured against companies in the ASX 300 Total Return Index (Tranche 2).
For the 2023 EPRP issue there are two tranches of Performance Rights with the following weighting:
a. 50% for earnings per share growth (Tranche 1).
b. 50% for Total Shareholder Return (TSR) measured against companies in the ASX 200 Total Return Index (Tranche 2).
For the 2021, 2022 and 2023 Performance Rights to vest in total, Kelsian must achieve the following conditions:
Tranche 1 - a compound annual growth rate (CAGR) of earnings per share (EPS) measured over a three-year measurement period,
commencing 1 July 2021 (2021 issue), 1 July 2021 (2022 issue) and 1 July 2022 (2023 issue). A target CAGR over that three-year
period of 10% for the 2020 and 2021 issues will result in 50% of the Performance Rights vesting, with pro rata vesting for the 2020 and
2021 issues for achievement for between 10% and 12% of CAGR for the three-year measurement period. For the 2022 and 2023 issues
a target threshold CAGR over that three-year period of 5% will result in 50% of the Performance Rights vesting, with pro rata vesting for
the 2022 issue for achievement for between 5% and 10% of CAGR for the three-year measurement period.
Tranche 2 - an Annualised Indexed TSR measured against the ASX300 Total Return Index for the three-year measurement period,
commencing 1 July 2020 (2021 issue), 1 July 2021 (2022 issue) and measured against the ASX200 Total Index Return for 1 July 2022
(2023 issue). A threshold annualised TSR over that three year period meeting the Index will result in 50% of the Performance Rights
vesting, with pro rata vesting of the remaining remainder of the tranche for achievement up to 10% above the Index TSR for the three-
year measurement period.
The amount recognised as an expense is only adjusted when performance rights do not vest due to non
market
related conditions.
The fair value of the performance rights granted is estimated at the date of grant using a custom binomial lattice pricing model, taking
into account terms and conditions upon which the performance rights were granted.
‑
‑
Effective date issued
2023 Issue
2022 Issue
2021 Issue
Number of Performance Rights issued
Minimum hurdle share price
Dividend yield
Expected volatility (as per valuation)
Risk free interest rate
Expected life (years)
Valuation per performance right (Tranche 1 - KMP)
Valuation per performance right (Tranche 1 - CEO)
Valuation per performance right (Tranche 2 - KMP)
Valuation per performance right (Tranche 2 - CEO)
300,419
Nil
3.30%-3.50%
40%
3.6%-3.7%
2.7-2.8
$2.362
$1.954
$4.621
$4.265
188,572
Nil
2.2%
40%
0.7%
2.7
$3.250
$3.250
$7.018
$7.018
254,517
Nil
2.45%
40.0%
0.1%
2.5
$4.351
$4.351
$6.153
$6.153
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Kelsian Group 2022/23 Annual Report 105
FINANCIAL REPORT
KELSIAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 June 2023
Note 44. Share-based payments (continued)
Performance rights
Number
(000's)
2023
Weighted average
exercise price
Number
(000's)
2022
Weighted average
exercise price
Outstanding at the beginning of the year
Granted (under the Employee Performance Rights
Plan)
Forfeited
Exercised
742
300
(20)
(300)
722
n/a
$Nil
$Nil
$5.49
554
188
-
-
742
n/a
$Nil
$Nil
n/a
KELSIAN GROUP LIMITED
DIRECTORS' DECLARATION
30 June 2023
In the Directors' opinion:
●
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2023 and of its
performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be
able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in note 40 to the financial statements.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Jeffrey R Ellison AM
Chair
30 August 2023
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Kelsian Group 2022/23 Annual Report 107
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FINANCIAL REPORT
AUDITOR’S REPORT
Ernst & Young
Ernst & Young
121 King William Street Fax:
121 King William Street Fax:
Adelaide SA 5000 Australia
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
GPO Box 1271 Adelaide SA 5001
ey.com/au
ey.com/au
Tel: +61 8 8417 1600
Tel: +61 8 8417 1600
+61 8 8417 1775
+61 8 8417 1775
Ernst & Young
121 King William Street Fax:
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
ey.com/au
Tel: +61 8 8417 1600
+61 8 8417 1775
IInnddeeppeennddeenntt AAuuddiittoorr''ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
IInnddeeppeennddeenntt AAuuddiittoorr''ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
Report on the Audit of the Financial Report
Report on the Audit of the Financial Report
Opinion
Opinion
We have audited the financial report of Kelsian Group Limited (the Company) and its subsidiaries (collectively the Group), which
We have audited the financial report of Kelsian Group Limited (the Company) and its subsidiaries (collectively the Group), which
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit and loss, the
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit and loss, the
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting
statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a)
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated
financial performance for the year ended on that date; and
financial performance for the year ended on that date; and
b)
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further
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
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
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
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
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.
ethical responsibilities in accordance with the Code.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
IInnddeeppeennddeenntt AAuuddiittoorr''ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to
our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the
Report on the Audit of the Financial Report
procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.
Opinion
Impairment of Intangible Assets
a)
WWhhyy ssiiggnniiffiiccaanntt
HHooww oouurr aauuddiitt aaddddrreesssseedd tthhee kkeeyy aauuddiitt mmaatttteerr
The Group carries a significant amount of goodwill and other intangible assets.
We have audited the financial report of Kelsian Group Limited (the Company) and its subsidiaries (collectively the Group), which
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit and loss, the
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated
Our audit procedures included the following:
We considered the relationship between market capitalisation
statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
As stated in Note 18 to the financial statements, the carrying value of goodwill
and other intangible assets are tested annually for impairment. The Group
performed its annual impairment test and determined the recoverable amount
on a value in use basis, of its individual cash generating units (CGUs) to which
the goodwill was allocated. The Group’s impairment assessment resulted in no
impairment for the period.
model to Board approved budgets for the 2024 financial year
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
We tested the mathematical accuracy of the cash flow model
used for the Group’s value in use impairment assessment.
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated
We evaluated the Group’s key input assumptions, analysed the
Goodwill impairment was considered a key audit matter because impairment
extent to which the outcome of the impairment test was
financial performance for the year ended on that date; and
assessment requires estimation and significant judgement in respect of
sensitive to changes in key assumptions and assessed the
assumptions used in the value in use calculation. The Group makes
historical accuracy of the Group’s budgeting process.
assumptions in respect of future market and economic conditions such as
economic growth, expected inflation rates, demographic developments,
revenue and margin development. Key assumptions relating to the impairment
test are disclosed in Note 18 to the financial statements.
We involved our valuation specialists to assess the discount rate
and both the short and long term growth rates used in the
Group’s s impairment models for its CGUs.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
We agreed the forecast cash flows used in the impairment
Basis for Opinion
and net assets of the Group.
Key assumptions used in the impairment testing, are inherently subjective and
in times of economic uncertainty the degree of subjectivity is higher than it
might otherwise be. Changes in certain assumptions can lead to significant
changes in the recoverable amount of these assets.
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
We assessed the adequacy of the disclosures in Note 18 to 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.
In this situation disclosure in the financial report provides important
information about the assumptions made in the impairment testing and the
market conditions at 30 June 2023. For this reason, we consider it important
that attention is drawn to the information in Note 16 to the financial
statements.
We compared the recoverable amount calculated within the
value in use models to the carrying value recorded at 30 June
2023.
financial statements.
b)
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key Audit Matters
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
addressed the matter is provided in that context.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
108
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Kelsian Group 2022/23 Annual Report 109
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FINANCIAL REPORT
AUDITOR’S REPORT
Ernst & Young
121 King William Street Fax:
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
ey.com/au
Tel: +61 8 8417 1600
+61 8 8417 1775
Ernst & Young
121 King William Street Fax:
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
ey.com/au
Tel: +61 8 8417 1600
+61 8 8417 1775
IInnddeeppeennddeenntt AAuuddiittoorr''ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
Provisional business combination accounting for the acquisition of All Aboard America Holdings Inc
(‘AAAHI’)
Report on the Audit of the Financial Report
WWhhyy ssiiggnniiffiiccaanntt
Opinion
On 1 June 2023, Kelsian acquired the All Aboard America Holdings Inc
(‘AAAHI’) for $512 million.
HHooww oouurr aauuddiitt aaddddrreesssseedd tthhee kkeeyy aauuddiitt mmaatttteerr
Our audit procedures included the following:
With the assistance of our valuation specialists, we:
•
The acquisition resulted in the recognition of goodwill of $199.9 million after
the allocation of the purchase price across the identifiable assets acquired,
liabilities and contingent liabilities assumed. This provisional allocation of the
purchase price is based on estimated fair values as 30 June 2023 and will be
finalised within twelve months of the acquisition date. Kelsian engaged an
independent expert to assist in the identification and valuation of the main
tangible and intangible assets and liabilities of AAAHI.
We have audited the financial report of Kelsian Group Limited (the Company) and its subsidiaries (collectively the Group), which
Assessed whether the valuation methodologies used by the
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit and loss, the
Group to measure the fair value of identifiable assets
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated
acquired and liabilities and contingent liabilities assumed
as part of the acquisition were in accordance with the
statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting
requirements of Australian Accounting Standards.
policies, and the directors’ declaration.
Tested the mathematical accuracy of those models.
Assessed the key inputs and assumptions used in the fair
value calculations prepared by the Group with assistance
from their independent valuation experts.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
We considered the Group’s provisional business combination accounting to be
a key audit matter given the significance of the transaction and the level of
judgement exercised by the Group to identify the acquired assets, liabilities and
contingent liability and to assess their fair values.
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated
financial performance for the year ended on that date; and
We assessed the qualifications, competence and objectivity of
the independent valuation experts used by the Group to
measure the provisional fair values of acquired fleet, being a
significant component of acquired plant and equipment.
•
•
complying with Australian Accounting Standards and the Corporations Regulations 2001.
We involved our tax specialists to consider the current and
a)
b)
Basis for Opinion
deferred tax balances recorded as part of the provisional
business combination accounting.by the Group.
We tested the recognition of goodwill as part of the business
combination was consistent with the requirements of Australian
Accounting Standards.
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
combination were recorded in profit and loss for the year.
We assessed the adequacy of the disclosures in Note 38 to 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 tested transaction costs associated with business
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
IInnddeeppeennddeenntt AAuuddiittoorr''ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
Information Other than the Financial Report and Auditor’s Report Thereon
Report on the Audit of the Financial Report
The directors are responsible for the other information. The other information comprises the information included in the Company’s
2023 Annual Report other than the financial report and our auditor’s report thereon. We obtained the Directors’ Report that is to be
included in the Annual Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the Annual
Opinion
Report after the date of this auditor’s report.
We have audited the financial report of Kelsian Group Limited (the Company) and its subsidiaries (collectively the Group), which
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit and loss, the
conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
policies, and the directors’ declaration.
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.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated
a)
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this
financial performance for the year ended on that date; and
regard.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
Responsibilities of the Directors for the Financial Report
Basis for Opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further
necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement,
described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the
whether due to fraud or error.
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
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern,
Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors
ethical responsibilities in accordance with the Code.
either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Auditor's Responsibilities for the Audit of the Financial Report
Key Audit Matters
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
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial
addressed the matter is provided in that context.
report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain
professional scepticism throughout the audit.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
110
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A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Liability limited by a scheme approved under Professional Standards Legislation
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Kelsian Group 2022/23 Annual Report 111
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FINANCIAL REPORT
AUDITOR’S REPORT
Ernst & Young
121 King William Street Fax:
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
ey.com/au
Tel: +61 8 8417 1600
+61 8 8417 1775
Ernst & Young
121 King William Street Fax:
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
ey.com/au
Tel: +61 8 8417 1600
+61 8 8417 1775
IInnddeeppeennddeenntt AAuuddiittoorr''ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
We also:
Report on the Audit of the Financial Report
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Opinion
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
We have audited the financial report of Kelsian Group Limited (the Company) and its subsidiaries (collectively the Group), which
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit and loss, the
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a)
b)
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated
financial performance for the year ended on that date; and
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the
financial report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance
of the Group audit. We remain solely responsible for our audit 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 communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence,
Key Audit Matters
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards applied.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless
addressed the matter is provided in that context.
law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
IInnddeeppeennddeenntt AAuuddiittoorr''ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff KKeellssiiaann GGrroouupp LLiimmiitteedd
Report on the Audit of the Remuneration Report
Report on the Audit of the Financial Report
Opinion on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the Directors' Report for the year ended 30 June 2023.
We have audited the financial report of Kelsian Group Limited (the Company) and its subsidiaries (collectively the Group), which
In our opinion, the Remuneration Report of Kelsian Group Limited for the year ended 30 June 2023, complies with section 300A of
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit and loss, the
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated
the Corporations Act 2001.
statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
Responsibilities
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
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
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated
a)
financial performance for the year ended on that date; and
audit conducted in accordance with Australian Auditing Standards.
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
Ernst & Young
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
David Sanders
Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
Partner
ethical responsibilities in accordance with the Code.
Adelaide
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
30 August 2023
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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Kelsian Group 2022/23 Annual Report 113
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ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is as follows.
The information is current as of 30 August 2023.
B Substantial shareholders
A Distribution of EQUITY securities
(i) Ordinary share capital
269,217,706 fully paid ordinary shares are held by 5,309 individual shareholders. All issued ordinary shares carry one vote per share and
carry the right to dividends.
(ii) Performance Rights
722,711 performance rights are held by eighteen employees of the Company. Pursuant to the Rules of the Kelsian (formerly SeaLink
Travel) Group Rights Plan, performance rights do not carry voting or dividend entitlements. Shares issued when performance rights vest
rank equally with fully paid ordinary shares.
The number of holders of equity securities, by size of holding in each class are:
FULLY PAID ORDINARY SHARES
PERFORMANCE RIGHTS
HOLDING RANGES
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
NUMBER OF
HOLDERS
1,955
1,918
691
660
85
NUMBER OF
SECURITIES
755,676
4,945,235
4,990,360
14,864,221
243,662,214
Total
5,309
269,217,706
% OF
CLASS
0.28
1.84
1.85
5.52
90.51
100.00
NUMBER OF
HOLDERS
NUMBER OF
SECURITIES
0
0
1
15
2
18
0
0
5,409
310,817
406,485
722,711
N/A
% OF
CLASS
0.00
0.00
0.75
43.01
56.24
100.00
N/A
Holdings less than
a marketable parcel
(based on a closing
price of $6.50 on
30 August 2023)
292
5,698
0.00212
N/A
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Substantial shareholders as disclosed by notices received by the Company as at 30 August 2023.
SUBSTANTIAL HOLDER^
SMITH ENTITIES^^
LEISHMAN ENTITIES^^^
^Sarto Pty Ltd provided a notice on 21/06/2019 stating that it
had a relevant interest in 5,331,000 voting shares. No notice of
ceasing to be a substantial holder has been received from Sarto
Pty Ltd as at 30/08/2023. However, as at 30/08/2023 Sarto Pty
Ltd held approximately 2.8% based on details of the previous
notice and accordingly has not been listed a substantial holder in
the table above.
^^ As at 28 March 2023, the registered holders of the voting shares
in which the Smith Entities had a relevant interest were: (i) Relay
(Australia) Pty Ltd (formerly Pacific Transit Pty Limited) as trustee
for The Relay Trust (Australia) (formerly the Pacific Transit Trust); (ii)
Accuro Trustees (Jersey) Ltd as trustee for the Inubia Paulista Trust;
and (iii) BNP Paribas Nominees Pty Ltd as described in the ASX
notice dated 28 March 2023; and
NUMBER OF VOTING SHARES IN WHICH THE
SUBSTANTIAL HOLDER OR AN ASSOCIATE HAD A
RELEVANT INTEREST AS AT THE DATE OF NOTICE
26,765,276
DATE OF NOTICE
28/03/2023
23,000,000
^^^^
20/02/2022
^^^ As at 20 February 2022 the registered holders of the voting
shares in which the Leishman Entities had a relevant interest
were: (i) Leishman Australia Pty Ltd as trustee for the Leishman
Enterprises Trust; and (ii) Finchton Enterprises Pty Ltd as trustee
for the Leishman Family Trust No 2 as described in the ASX notice
dated 20 February 2022.
^^^^As at 30 August 2023 Leishman Australia Pty Ltd as trustee
for the Leishman Enterprises Trust and Finchton Enterprises Pty
Ltd as trustee for the Leishman Family Trust No 2 are the registered
holders of 23,929,387 voting shares.
C Twenty largest holders of quoted equity securities
ORDINARY SHAREHOLDERS
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
FINCHTON ENTERPRISES PTY LTD
RELAY (AUSTRALIA) PTY LTD
NATIONAL NOMINEES LIMITED
ACCURO TRUSTEES (JERSEY) LTD
WINDFURY PTY LIMITED
SARTO PTY LTD
BNP PARIBAS NOMS PTY LTD
PRESCOTT NO 22 PTY LTD
SMITH FEUERHERDT HOLDINGS PTY LTD
LEISHMAN AUSTRALIA PTY LTD
SUNROP PTY LTD
WG ADMINISTRATION PTY LTD
EQUILINK PTY LTD
ARISTOS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR JEFFREY ROY ELLISON & MRS TONI ALICE ELLISON
BELAHVILLE PTY LTD
Total Securities of Top 20 Holdings
Total of Securities
BALANCE AS AT
30/08/2023
33,981,945
32,904,160
24,779,874
19,300,959
14,392,292
13,632,462
10,994,280
10,282,353
7,071,309
5,677,623
5,197,360
5,044,171
4,628,428
4,562,863
4,400,000
3,721,000
3,363,692
3,311,769
2,680,000
2,435,644
212,363,184
269,217,706
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%
12.622%
12.222%
9.204%
7.169%
5.346%
5.064%
4.084%
3.819%
2.627%
2.109%
1.931%
1.874%
1.719%
1.695%
1.634%
1.382%
1.249%
1.230%
0.995%
0.905%
78.881%
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Kelsian Group 2022/23 Annual Report 115
Our purpose is to be a world leader in delivering
essential journeys through safe, intelligent and
sustainable transport solutions, while creating
brilliant customer experiences.
SeaLink – Exploring Australia’s marine life
Head Office
Level 3, 26 Flinders Street
Adelaide SA 5000
Web Kelsian.com
Email info@kelsian.com
Phone +61 8 8202 8688
ABN 49 109 078 257
ACN 109 078 257
ASX Code KLS