ANNUAL REPORT
2018
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Contents
Highlights 2018
Chairman’s Report
Managing Director’s Report
Creation of One Company
Elton Consulting
Veris in the Community
Veris Racing
Health, Safety, Environment and Quality
Annual Financial Report
I
II
IV
VI
VII
VIII
IX
XI
01
Corporate Directory
Veris Limited
ABN : 80 122 958 178
ASX Code : VRS
Address
Level 12, 3 Hasler Road,
Osborne Park, WA, 6017
P: +61 8 9317 0600
www.veris.com.au
Corporate Directory
Directors
Derek La Ferla
Non-Executive Chairman
Adam Lamond
Managing Director
Brian Elton
Executive Director
Tom Lawrence
Non-Executive Director
Karl Paganin
Non-Executive Director
Executive Team
Adam Lamond
Managing Director
Brian Mangano
Chief Financial Officer
Lisa Wynne
Company Secretary
Principal Registered Address
Veris
Level 12, 3 Hasler Road,
Osborne Park, WA, 6017
P: +61 8 9317 0600
E: veris@veris.com.au
www.veris.com.au
Auditor
KPMG
235 St George’s Terrace,
Perth, WA, 6000
P: +61 8 9263 7171
F: +61 8 9263 7129
Solicitors
Steinepreis Paganin
Level 4,
The Read Buildings,
16 Milligan Street,
Perth, WA, 6000
P: +61 8 9321 4000
F: +61 8 9321 4333
Share Registry
Computershare
Level 11,
172 St Georges Terrace,
Perth WA 6000
P: +61 8 9323 2005
F: +61 8 9323 2033
Highlights 2018
References in this report
to ‘the year’ or ‘the
reporting period’ relate
to the financial year,
which is 1 July 2017 to
30 June 2018, unless
otherwise stated. All
figures are expressed in
Australian currency.
This Annual Report
is a summary of
Veris Limited’s
operations,
activities and
financial position
as at 30 June 2018
EBITDA from continuing operations $11.2m, up 96%
Surveying EBITDA up 27%
Significant acquisition of Elton – foundation for Veris Professional
and Advisory Pillar
Elton Consulting contributed EBITDA of $1.1m at a run rate of 20%
in its first quarter
Net profit after tax before amortisation from continuing operations $1.8m
Strong organic growth achieved
Cash at bank $5.6m
Integration of eight surveying businesses into one surveying
entity completed
Third consecutive fully franked dividend of 0.5 cents per share
VERIS LIMITED ANNUAL REPORT 2018 I
Chairman’s Report
“It has been a busy and
interesting journey for us over
the past four years with this
year being the culmination of
the first stage of our journey in
terms of integration and truly
becoming one professional
services company with offices
across Australia.”
II VERIS LIMITED ANNUAL REPORT 2018
With the conclusion of the
financial year it is an appropriate
time for us to reflect on our
journey so far, in becoming
Australia’s premium professional
services business. This particular
journey commenced when the
Veris Board first approved our
strategy of creating a national
surveying business in January 2014.
Prior to this, in 2013 the group
consisted of the Western
Australian surveying business
Whelans and the much larger
OTOC Australia resources
contracting business.
Management had recognised
the impending downturn in
the WA resources sector and
the potential growth in the
Eastern Australian property and
infrastructure markets. This
foresight led to the development
of our strategy to diversify away
from a dependence on the one
sector and state, to the creation
of a professional services
business with markets covering
a broad range of sectors across
the whole of Australia.
Since that time we have acquired
eight surveying businesses, with
a focus on Eastern Australia, and
invested over $50 million. As the
first mover in consolidating the
surveying industry in Australia
we were able to acquire the
premier businesses in each state
and ensure that they were not
only aligned in terms of quality
and culture but also shared our
vision to create a truly national
professional services business.
The first measures of success
when acquiring businesses is
the maintenance and growth of
revenue after acquisition and the
retention of staff that made that
business successful in the first
instance. In the early years of our
strategy this organic growth was
one of several focus points, the
other being declining revenue in
the resources contracting market
in WA. As revenue was stabilised
via winning non resources related
work, we were also able to clearly
demonstrate the organic growth
that was being achieved by the
surveying businesses that had
been acquired.
With strong revenue growth
and the acquired businesses
operating well under our overall
corporate structure, we embarked
on the process of bringing the
eight businesses together as the
one entity with the one operating
model. This very significant
integration process was largely
completed by 30 June 2018.
We enter a new and exciting
phase of our corporate journey
as a national professional services
business. We are now the largest
multidiscipline surveying business
in Australia, a market leader
in infrastructure, property and
resources. Helping to build the
Australia of the future.
What we have achieved is not
to be underestimated. This has
been recognised in the form of
an increased share price and the
recent awards for Professional
Service, Large Company and
overall winner of the Business
News Rising Star awards for 2018.
Now that the surveying business
has reached critical mass with
annualised revenues of circa
$100 million, we have the
resources and the reach to begin
to realise the synergistic benefits
from integration. We expect to
see these benefits flow during the
course of FY19. The other benefits
from scale and integration
include our proximity and ability
to service our clients’ needs
across Australia with specialist
staff across all sectors, the latest
equipment and quality systems.
Our scale and stability also
provide opportunity for our people
to broaden their skill set, as well
as attracting new and talented
people to our company.
The second pillar to our strategy,
being the establishment of
a professional and advisory
business, has grown substantially
during the reporting period
through the strategic acquisition
of the Elton Consulting Group,
one of the premier professional
and advisory consulting firms
in Australia, offering a range
of services including strategy
and policy, urban and regional
planning, communications and
engagement, social sustainability,
bid preparation and design studio.
By way of this acquisition, we
have gained greater exposure to
the entire infrastructure project
lifecycle - from conception to
completion and beyond. This
increased exposure enables
earlier engagement with our
growing client base, allowing
for the cross selling of services
across our group. Brian Elton, the
founder of Elton Consulting has
been appointed to our Board and,
as an industry leader, has greatly
added to our overall executive and
strategic capability.
As we continue to grow our
business, we recognise the need
to refine the skills and diversity
of our Board. We are mindful of
the need for diversity and will
continue to strive for the highest
possible standards for Veris as
we grow. On behalf of the Board,
may I acknowledge the hard work
and achievements of all of the
Veris team, and thank them for
this. I particularly thank all of our
senior management team who
have set Veris on the path to a
successful future.
Derek La Ferla
CHAIRMAN
VERIS LIMITED ANNUAL REPORT 2018 III
Managing Director’s Report
The last financial year saw Veris
embark on a purposeful and
considered strategy to achieve
three distinct objectives:
1.
Complete the integration of our surveying
group into one company and align shared
services and systems
2.
Ensure organic growth across the business
3.
Continue to grow the Veris brand in our
chosen markets
Reflecting back over the year, it
is clear that we not only achieved
these outcomes but also
completed secondary objectives
that have further laid a solid
foundation for Veris.
The primary objective and most
significant challenge we set for
ourselves was the roll out of our
National Operating Model and
the integration of the separate
business entities; each with their
own balance sheets and way of
operating, into one company –
Veris Australia Pty Ltd.
This task involved transitioning
each entity into Veris Australia and
implementing the new systems
and processes to all staff. The
timescales were unrelenting,
with one company transition
every four weeks over eight
consecutive months. The attitude
and dedication of the teams
who led this process have been
outstanding, as has the level
of engagement across Veris.
I thank everyone for their focus
and cooperation which enabled
us to achieve such an ambitious
objective.
We now have one common
system and platform for Finance,
HSEQ, Marketing, HR, Legal
and ICT; helping to deliver a
consistent reporting with which
to make more informed decisions
as a business.
Another key component of this
process was the migration of
500 staff to a standard national
employment agreement.
This agreement provides our
staff the opportunity to move
more freely around Australia
- to support our clients and
experience this great country.
This approach was critical, not
only to ensure continuity but to
ensure our business is future
ready, as by 2020 50% of our
workforce will be ‘Millennials’
who are very motivated to fulfil
a work-life balance that includes
experiencing new places
and people.
Twelve months ago OTOC
Australia was discontinued
following the completion of
existing projects. The revenue
from this operation has been
replaced by four key areas:
-
-
Organic growth of 27% in
surveying revenue on FY17
driven by infrastructure
projects in Eastern Australia.
The acquisition of LandData,
a prominent surveying
consultancy with operations in
the Australian Capital Territory
and New South Wales.
“Reflecting back over the year,
it is clear that we not only
achieved these outcomes but
also completed secondary
objectives that have further
laid a solid foundation for Veris.”
IV VERIS LIMITED ANNUAL REPORT 2018
-
-
Strong revenue growth
from Aqura Technologies, an
industry front-runner in the
provision of communications
technology solutions.
The acquisition of Elton
Consulting, a market leader
in professional and advisory
services for the property and
built environment, transport,
infrastructure, water, energy,
housing and public policy
sectors.
This structured approach now
ensures that we are achieving
comparative annual revenue
of over $100 million from our
professional services operations.
This approach has led to an
increase in our EBITDA from
$5.7 million in FY17, to $11.2
million in FY18.
As of 30 June 2018, the
rebranding of all our surveying
entities to Veris was complete.
The strength of the brand
continues to grow, which
was evidenced at the UDIA
National Congress 2018 as
Veris dominated coverage and
reinforced its positon as market
leaders in the field.
The strength of the Veris brand
in our chosen markets has
grown rapidly over the last two
years, which has been further
strengthened by the quality
people who have joined our
business - with over 150 new
staff coming on board in FY18.
The strength of what we have
achieved, by bringing together so
many quality people under the
Veris brand, has also resulted
in our ability to win works on
some of the largest infrastructure
projects on the East Coast,
including Western Sydney Airport
and Melbourne Metro to name
a few.
Achieving this has now cemented
Veris as Australia’s largest
surveying company with revenue
this year approaching $100 million.
Having established our first pillar
of surveying, has enabled us to
commence with the growth of
our second pillar, professional
and advisory.
The acquisition of Elton
Consulting in April 2018 has
provided the cornerstone of our
professional advisory pillar and
opened up the depth, quality of
services and people we have
in our organisation. The cultural
diversity Elton Consulting brings
will only enhance our business
into the future.
Brian Elton, the founder of Elton
Consulting and renowned expert
in his field, has joined our Board
as an Executive Director. Brian
has a clear focus of driving the
synergistic benefits between
the surveying, geospatial,
professional and advisory
pillars to deliver greater project
outcomes to our clients, and
ultimately satisfying work for
our people and value to our
shareholders.
This year saw the launch of the
Aqura Technologies business.
Beginning as a technology arm
within OTOC Australia, Aqura
pivoted to take advantage of its
relationships with tier 1 clients
and an existing revenue stream,
whilst rebranding to define itself
as an innovative technology
business. With renewed contracts
in place, across its existing client
base, that include BHP and
Bunnings, Aqura continues to
position itself for future growth.
Having successfully deployed
several industry disruptive trials
in the underground mining
environment, Aqura have proven
their ability to bring a fresh
perspective and positive change
to the mining sector. Aqura’s
investments and capabilities
within the Industrial IoT space
has sparked significant interest
from industry leading, Global
organisations. These partnerships
and the industry’s perspective
have positioned Aqura as a front-
runner to take advantage of this
high growth market. With its
innovative approach and extensive
skill set, Aqura is set to widen its
footprint across multiple market
segments.
As a company we continue to
create shared value through the
Cycling Development Foundation
Veris Racing cycling team who
help to continue growing the
Veris brand as they expand and
compete nationally. One of the
strongest draw cards to me is the
amazing work the athletes do to
give back to the community, as
well as creating pathways and
career guidance to many.
This year we launched our
Women in Engineering
Scholarship through University of
NSW. I congratulate Kristi Plavsic,
our first of hopefully many
recipients of this scholarship.
None of this can be achieved
without the dedication of our
staff and the families who
support them. I would like to
thank everyone involved with
our company, either directly or
indirectly, for their part in our
journey and achievements.
I look forward to another exciting
year, building on the foundations
of our achievements that will
enable us to realise the benefits
of our new look business.
Adam Lamond
MANAGING DIRECTOR
VERIS LIMITED ANNUAL REPORT 2018 V
Creation of One Company
There were nine
key parameters
that the company
set to deliver:
Through our work Veris
leaves a lasting impression
on our nation from our
infrastructure and city
skyline, to designing
communities that support
population growth and
helping to improve the
efficiency of increasingly
important industries
like agriculture and land
development. Therefore in
FY18 the company undertook
an ambitious project to
migrate the 8 companies
under the Veris brand into
one company. This was a
rare opportunity for everyone
involved, to not just ensure
the sustainable performance
for the business, but shape
the industry in which Veris
operates.
One Brand
To deliver a consistent quality
in message and identity, to
build a reputation as market
leaders in Australia. Support
the offering of new services to
clients across geographic and
industry boundaries and ensure
consistency in behaviours through
our values.
One ABN, Veris Australia Pty Ltd
Unifying work under a single
structure to ensure back office
efficiencies, transparency and
simplification of processes.
All employees in Veris Australia
Alignment of terms, benefits and
opportunities for professional
development and training.
Providing a national support
structure behind every employee.
One HSEQ Platform
National HSEQ practices
to ensure the wellbeing of
everyone in Veris. Ensure
environmental considerations
in the communities we serve.
The standardisation of quality
and accreditations to reflect the
consistent quality of delivery.
One Customer Management
System
The creation of one source of
truth to allow the company to
understand our client better,
identify opportunities to
strengthen relationships, provide
local expertise with a national
overview and offer a broader
range of services to clients.
One Information and
Communication Technology
Standard
Ensuring the better capture,
movement and utilisation of
data, increase the ease of
communication and sharing of
knowledge nationally and put
in place best practice tools to
enhance delivery and client
experience.
One Financial System
A single system to ensure
consistent reporting, accurate
time management and leading
indicators for improvements and
efficiencies. All supported by a
back office to provide consistent
quality and enable employees to
focus on clients.
Consistent Reporting across
the company
A single source of truth to allow
the alignment of priorities,
orientation of resources to
prospects and the streamlining
of decision making.
All client projects managed in
Veris Australia
Delivering a consistent
experience for clients, unify
operations and reporting,
understand potential of services
lines through their performance
and support client growth needs
nationally.
The successful delivery of this
project within the timescales is
a pivotal step in achieving the
company mandate, to be an
efficient national professional
services company. Veris is now
well placed to provide end-to-
end solutions across a project’s
lifecycle, integrate and enhance
services capabilities, develop new
clients regionally and nationally
and provide best practice
operational control.
The completion of the integration
work positions Veris to deliver
operational efficiencies, enhanced
margins, ensure consistency in
delivery and build a culture that
continues to attract and retain the
best talent across Australia.
VI VERIS LIMITED ANNUAL REPORT 2018
Elton
Consulting
In March
2018, Veris
completed
the acquisition
of Elton
Consulting
Group Pty Ltd.
Elton Consulting is a market
leader in professional and
advisory services for the property
and built environment, transport,
infrastructure, water, energy,
housing and public policy sectors.
Since 1989, Elton Consulting
has worked in partnership with
clients to make a difference to
cities and regions, communities
and organisations. Staff provide
strategic advice and services to
all levels of government, private
and not-for-profit sectors.
The acquisition of Elton
Consulting was an important
strategic priority for Veris,
significantly broadening and
expanding our multi-disciplinary
capabilities around Australia.
Veris identified Elton Consulting
as a sought after acquisition
opportunity given its longstanding
history and reputation, top calibre
people, market presence, trusted
relationships with government
and private clients and strong
financial returns based on a
focused professional services
business model.
Elton Consulting comprises
approximately 110 staff, with
offices in New South Wales,
Victoria, Australian Capital
Territory and Northern Territory
and a presence in Queensland.
Services will also be offered in
Western Australia commencing
early in FY19.
The organisation has a dedicated
and experienced team of senior
management and consultants
across each of its service
offerings. These include:
> Communications and
Engagement
> Community Relations
> Strategy and Policy
> Urban and Regional Planning
> Social Sustainability
> Bid Strategy and Preparation
> Design Studio
These service offerings are
enhanced through the Veris
established surveying, planning,
urban design and 3D spatial
services. Together, Veris and Elton
Consulting form one of the largest
leading professional advisory and
surveying companies in Australia.
The acquisition has allowed Elton
Consulting to broaden and expand
its multi-disciplinary professional
and advisory services to current
and new clients nationally, as well
as creating new opportunities for
staff. Together, we now have over
600 people in over 20 locations
across Australia.
Brian Elton, founder of Elton
Consulting, has joined the
Board of Veris as an Executive
Director. Brian is spearheading
Veris’ strategy of developing the
national business in professional
and advisory services and
promoting our combined service
offerings across and into the
national surveying business.
VERIS LIMITED ANNUAL REPORT 2018 VII
Veris and Elton Consulting staff
and management are eager
contributors. The final such
initiative of FY18 saw Veris and
Elton Consulting offices around
Australia dressed in their favourite
sporting team colours to raise
money for the National Aboriginal
Sporting Chance Academy
(NASCA). NASCA collaborate
with young Aboriginal and Torres
Strait Islanders to improve school
performance, develop career
pathways and work-ready skills,
strengthen cultural identity, build
life skills, personal development
and long-term resilience.
Our Managing Director,
Adam Lamond participates in the
Vinnies CEO Sleep Out each year;
raising $5,558 in 2018; surpassing
his stated goal of $5,000.
Veris Wins 2018 Business News
Rising Stars Awards
In June 2018 Veris won the 2018
Business News Rising Stars
award as well as the Large
Company and Professional
Services categories. Aqura
Technologies were also runner up
in the Start Up category.
Now in its 15th year, the Rising
stars awards recognise the
achievements of the fastest
growing companies from Western
Australia. Entrants are judged
across a number of criteria
including revenue, staff growth
not-for-profit involvement and
diversity. Organisations need to
be able to demonstrate not only
a strong foundation but present
a solid and sustainable growth
strategy.
Veris in the Community
At Veris, our success hinges
on the population at large
– and, as such, we are
all about people. For this
and many other reasons,
we are actively involved
in the communities in
which we operate and we
are committed to making
a difference by forging
long-term, strategic and
sustainable sponsorships.
The major expressions of this
commitment are outlined in
further detail below.
Veris Racing
Veris is proud to be the title
sponsor for the Veris Racing
Men’s, Women’s and Youth
teams. In conjunction with the
Exercise Institute, the Veris Racing
initiative ensures emerging young
athletes receive the support
required to compete at elite levels
in the international arena.
The program provides athletes
with direction, focus, wellbeing
and the potential for progression;
as well as mentoring, support,
development and guidance
beyond the sporting environment.
Scholarships
To encourage diversity in the
industry, Veris has created
the Women in Engineering
Scholarship for the University of
New South Wales. The aim of
the scholarship is to encourage
a female high school graduate to
undertake a degree in Surveying
and/or Geospatial Engineering.
One student per year receives
assistance for the 4 year term
of their degree. Our inaugural
recipient, Kristi Plavsic is currently
in her first year, studying a
Bachelor of Engineering (Hons) in
Surveying Engineering.
Another student who Veris
has been assisting financially,
Elizabeth Evans, has completed
work experience with our
Canberra office before
commencing her studies at
University of Newcastle. Elizabeth
was awarded the 2018 NSW
Surveyor General Undergraduate
Award. Our Canberra office will
be happy to have Elizabeth as
a long term employee after she
graduates and will be offering her
ongoing vacation work throughout
her degree.
Charity Events
As a diverse collection of more
than 600 professionals across
over 20 locations Australia
wide, our people seldom miss
an opportunity to raise money
through an event. Whether
Australia’s Biggest Morning
Tea, or Jeans for Genes Day,
VIII VERIS LIMITED ANNUAL REPORT 2018
Veris Racing
Our continued support
has seen the Cycling
Development Foundation
(CDF) supporting riders and
hosting events on behalf of
Veris across Australia; as
well as racing nationally and
internationally at elite levels.
Athletes are able to access
funding and grants in exchange
for community pursuits and
endeavours. Some of the
highlights and successes of the
past year are outlined below.
National Community Events
Community events around the
country provide the opportunity
for Veris’ corporate network and
community to engage with the
riders, first hand. A community
ride involving approximately
50 cyclists of all abilities was
recently held in Brisbane; while
in Melbourne a larger scale event
was hosted, raising additional
funds for a nominated charity.
Womens ‘Liv’ Ride
Veris Racing athletes manage and
attend a monthly women-only
ride that encourages women
to cycle together, returning for
coffee provided by the racing
team itself. Around 30-50 women
attend this complimentary ride
each month.
Ride 2 Work Day
Every month, Veris Racing
athletes attend this event hosted
in the city for all commuters.
Coffee is provided by Veris for
all attendees; encouraging the
healthy alternative commuting
practice of cycling to work.
Hope2day Charity Ride
With the more than $4,000 raised
through the Hope2Day Charity
Ride, Veris Racing athletes helped
fund a Youth Mentoring program
in the Goldfields region – details
below. SMEC partnered with the
charity event, giving Veris and
the Veris Racing team additional
exposure and corporate reach.
This event is now supported by
the likes of Anglo Gold Ashanti,
and Minara Resources.
Youth Mentoring Program
Held in Laverton, the program
teaches young Aboriginal children
how to build their own bike
through a mentoring program
by Veris athletes who assist the
youths in bike maintenance and
preparation, where they can then
keep the bike for future use. This
provides a degree of exercise,
freedom, autonomy and transport
to the attending youths.
Veris Athletes also implemented a
youth exercise program teaching
the children how to ride a bike
and ‘train’ for health benefits
within a finite period, similar to
their own training practices. That
is getting 45 minutes of exercise
in 15 minutes through interval
training.
VERIS LIMITED ANNUAL REPORT 2018 IX
Veris Racing Cont.
The international event instils
racing confidence in young riders
and is of immense benefit to their
development. The opportunity
is something to which few
nationally registered cycling
teams have access.
Veris Racing Women’s team
member, Sabine Bird, was
crowned World 24hr Cycling
Champion this year. Sabine
qualifies for the Race Across
America; which is widely known
as ‘the hardest cycling event
in the world’. The Veris Racing
team is one of just 10 teams in
Australia which supports female
riders.
National events
Oceania Championships
At the Oceania Championships
this year, both the Junior male
and Junior female teams finished
within the top 10 in time trial
discipline. Two elite female athletes
finished in the top 10 of the road
race event; earning them an
international ranking (presently
ranked within the top 500
professional cyclists in the world).
National Championships
At the National Championships
in Victoria, the Junior male and
female teams again finished in
the top 10 – and two female team
members were among just 40
women to finish the elite open
event.
Ride Against Domestic
Violence (radv)
Sabine Bird, a world-champion
Veris Racing athlete, assisted
in implementing the RADV
alongside noticeable politicians
and business community
members. This event raised
$10,000 for women’s refuges in
the south west and metropolitan
area of Western Australia.
Red sky ride
Veris Racing athletes assisted
in raising over $250,000 for
Solaris Cancer Care through the
Red Sky Ride in March 2018.
This four day event consisted of
approximately 600km of cycling
through the south west of
Western Australia. Veris Racing
athletes attended the event and
prior training sessions to assist
the attendees in completing
the event comfortably. Most
attendees were completely new
to cycling, with the Veris Racing
athletes mentoring many through
the rigours of training and event
completion.
International events
Veris Racing athletes attended a
month of racing in the Belgium-
Nederland region of Europe.
Elite Open male, Elite Open
female, Junior male and Junior
female teams were represented;
claiming multiple top ten finishes
and were among the top 10% in
fitness measures in their races.
X VERIS LIMITED ANNUAL REPORT 2018
National Road Series (NRS)
Veris racing is the only team in
Australia to foster both a female
and male national registered
team. Veris Racing also has one
of the youngest racing teams
in the competition, owing to its
focus on developing youth, and
female riders in particular.
Veris Racing attended 80% of
the NRS events in 2017. Notable
highlights of the series were Erin
Nolan winning the Melbourne to
Warrnambool event and Emily
Mascaro finishing third in the
junior rider classification at the
Mersey Valley tour event. Sarah
Duffield also managed to be
ranked in the top 10 classification
overall for a good part of the
season.
Junior rider Matthew Connan won
the prestigious Victorian Road
Series, the highest ranking junior
series nationally, by winning 3 of
the 5 events outright. Matthew
also finished 7th in the National
Time Trial Championships and
9th in the National Road Race
Championships.
Junior triathlete Daniel Kempson
won a national triathlon round
in Adelaide; finishing top 5 in
most national rounds. Daniel was
ranked 2nd in Australia for the
2017-18 season.
The combination of all results
for the year means Veris Racing
is the most podiumed team in
Western Australia; including:
>
>
>
Multiple state champions
across criterion, road racing
and time trial
Junior cyclist Zak Jakobson
winner of the U17
State MTB series
Mathew Connan winning
State Junior Time Trial
Championships
Federal Safety Commission Accreditation
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18 Mar-18
Apr-18 May-18
Jun-18
12 Month
HOURS
76,493
83,275
78,822
84,128
82,643
78,026
85,637
91,296
94,505
84,505
101947
88,309
1,209,930
FAC
RWI
TRIFR
1
0
0
4
0
0
4
0
0
4
0
0
3
0
0
1
0
0
0
1
1
1
11.68
10.95
AIFR
13.36
36.46
51.92
47.39
36.44
13.58
11.58
21.91
0
0
0.00
0.00
1
1
1
1
6
1
23.66
9.81
11.32
35.5
19.62
79.27
26
6
5.83
31.07
Health, Safety, Environment and Quality
Veris Australia gained
certification under the new
accreditations standards
ISO9001:2015 and
ISO14001:2015 (Quality &
Environment) and maintained
AS/NZS4801:2001 (Safety).
Veris also continued to meet
Federal Safety Commission
Accreditation requirements.
An alignment of systems has
provided a stable foundation
towards fulfilling the challenges
of an ever-changing workplace.
This has enabled Veris employees
to safely provide an excellent
level of service and delivery to
clients, without harming the
environment. The structured
alignment of pillars, platforms and
protocols has enabled all areas
to concentrate a coordinated
focus on safety, environment
and quality processes to keep
our people safe, the environment
protected and the quality of our
service delivery at a higher than
industry leader standard.
The implementation of the onsite
leadership strategy ensures
that safety is in the forefront
of the leaders minds, as they
engage with the workforce
regarding meaningful risk based
conversations and provide visible
and appropriate guidance in a
proactive manner. The mobile
portal has improved engagement
around personal digital risk
evaluation and provided a stable
foundation for safety in the
field whilst maintaining ongoing
procedural ownership to ensure
a proven high level of accuracy
and performance that safeguards
a focus on service and delivery
to clients.
Health, Safety, Environment and
Quality are essential components
of the strategic platform as
driven by the Veris Board and is
highly visible with the leadership
team rotating site inspection and
engagement with the workforce
on a personal level. The
continuous improvement ethos
ensures processes never remain
static and continual evolution is
supported by the Veris core value
of sustainability which manifests
in the culture of the company.
Outstanding HSE Performance
> 1 million hours completed
FY18 Lost time injury free.
> FY18 TRIFR = 5.83
> FY18 AIFR = 31.07
Continuous Improvement
Initiatives
> Mobile platform for risk
mitigation and hazard
reporting
> Leadership Frontline
Inspection Protocol
> Focus on leading indicators as
a measure of performance.
> Process Improvement
Working Group
Certification
Accreditation to the following
standards:
> SO 9001:2015
> ISO14001:2015
> AS/NZS 4801:2001
> Federal Safety Commission
Accreditation
VERIS LIMITED ANNUAL REPORT 2018 XI
XII VERIS LIMITED ANNUAL REPORT 2018
Annual Financial Report 2018
Contents
Director’s Report
Consolidated Financial Statements
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flow
Notes to the Consolidated Financial Statements
Director’s Declaration
Independent Auditor’s Report
Lead Auditor’s Independence Declaration
Additional Information
Corporate Information
02
26
27
28
29
30
71
72
77
78
80
VERIS LIMITED ANNUAL REPORT 2018 01
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Your Directors present their report together with the consolidated financial statements of Veris Limited ABN
80 122 958 178 (“the Company” or “Veris”) and the entities it controlled (together referred to as ‘’the Group’’)
at the end of, or during, the year ended 30 June 2018.
Information on Directors
Directors of the Company during the whole of the financial year ended 30 June 2018 and up to the date of
this report are as follows:
NAME
PERIOD OF DIRECTORSHIP
Derek La Ferla
Independent Non-Executive Chairman
Appointed 28 October 2011
Tom Lawrence
Independent Non-Executive Director
Appointed 13 October 2011
Karl Paganin
Independent Non-Executive Director
Appointed 19 October 2015
Adam Lamond
Managing Director
Appointed 13 October 2011
(Managing Director from 29 March 2017)
Brian Elton
Executive Director
Appointed 29 March 2018
The experience, other directorships or special responsibilities of the directors in office at the date of this
report are as follows:
Derek La Ferla- Independent Non-Executive Chairman
Experience
Mr La Ferla is an experienced corporate lawyer and company director with more than 30 years' experience.
He has held senior positions with some of Australia's leading law firms, and is currently a Partner with
Western Australian firm, Lavan, in the firm's Corporate Services Group.
Mr La Ferla also serves as the chairman of Sandfire Resources Limited and Threat Protect Australia
Limited and is a director of Goldfields Money Limited.
He is a fellow of the Australian Institute of Company Directors (AICD) and member of the AICD Western
Australian Council.
Special Responsibilities
Member of the Nomination and Remuneration Committee
Member of the Audit and Risk Committee
Other Listed Company Directorships in last 3 years
Sandfire Resources Limited (May 2010 – Current)
Threat Protect Australia Limited (September 2015 – Current)
Goldfields Money Limited (November 2015 – Current)
Interests in Shares of Veris
584,501 fully paid ordinary shares
02 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
2
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Information on Directors (continued)
Adam Lamond - Managing Director
Experience
Mr Lamond has over 20 years’ commercial experience with particular expertise in construction and
infrastructure activities across Australia.
Mr Lamond held the position of Chief Executive Officer of OTOC Limited from its listing in October 2011 to
January 2014. Mr Lamond held the role of Executive Director – Business Development from January 2014
to March 2017, when he was appointed Managing Director. During this time Mr Lamond led the Company
into its new strategic direction and diversification and has continued an active role within the Company
throughout, supporting the evolution of the national surveying strategy and continued growth across
infrastructure, property and resource markets throughout Australia.
Special Responsibilities
Member of the OHS Committee
Interests in Shares of Veris
45,841,815 fully paid ordinary shares
Tom Lawrence - Independent Non-Executive Director
Experience
Mr Lawrence is a qualified accountant with a Bachelor of Laws and a Masters Degree in taxation. Mr
Lawrence was the principal of Lawrence Business Management for over 15 years, providing tax and
management advice to a diverse range of businesses. He now works as a solicitor for Capital Legal, advising
clients on a broad range of business related transactions.
Special Responsibilities
Chairman of the Audit and Risk Committee
Member of the Nomination and Remuneration Committee
Member of the OHS Committee
Interests in Shares of Veris
3,222,598 fully paid ordinary shares
Karl Paganin - Independent Non-Executive Director
Experience
Mr Paganin has over 15 years senior experience in Investment Banking, specialising in transaction
structuring, equity capital markets, mergers and acquisitions and strategic management advice to listed
companies. Mr Paganin was a Director of Major Projects and Senior Legal Counsel for Heytesbury Pty Ltd
(the private trading company of the Holmes à Court Family) which was the proprietor of John Holland Group
Pty Ltd. Mr Paganin holds degrees in Law (B.Juris, LLB) and Arts (BA) from the University of Western
Australia and is a Non-Executive Director of ASX listed Southern Cross Electrical Engineering Limited.
Special Responsibilities
Chairman of the Nomination and Remuneration Committee
Member of the Audit and Risk Committee
Member of the OHS Committee
Other Listed Company Directorships in last 3 years
Southern Cross Electrical Engineering Ltd (June 2015 – current)
Interests in Shares of Veris
5,662,721 fully paid ordinary shares
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 03
3
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Information on Directors (continued)
Brian Elton – Executive Director
Experience
Brian Elton has over 40 years of experience in urban and regional planning in the UK and Australia focussing
on urban strategy, urban policy and governance and the delivery of major projects. Mr Elton has expertise
in the areas of strategic communications and engagement, housing, social planning and is a highly regarded
strategic advisor to public and private sectors organisations and to not-for-profit groups. He has held senior
executive positions in local and State Government and founded Elton Consulting in 1989. Mr Elton was
appointed Executive Director on 29 March when Elton Consulting Pty Ltd was acquired by the Company.
Mr Elton has been involved in some of Australia’s largest urban renewal, major infrastructure and city-making
projects and in ground breaking urban policy reforms. He is passionate about sustainable urbanism.
Mr Elton is a Fellow of the Planning Institute of Australia and a Member of the Australian Institute of Company
Directors. His affiliations include the International Association of Public Participation, Green Building Council
of Australia and the Urban Development Institute of Australia.
Interests in Shares of Veris
11,179,560 fully paid ordinary shares
Information on Company Secretary
Lisa Wynne - Company Secretary
Experience
Ms Lisa Wynne is a Chartered Accountant and Chartered Secretary with significant experience across the
commercial sector with particular experience in the finance, accounting, corporate services, urban planning
and resources industries across ASX & TSX listed companies. Former owner of a consulting company, for
11 years, Ms Wynne provided corporate and financial services to public companies and held the role of
Company Secretary and Chief Financial Officer of a number of ASX listed companies.
Directors Meetings
The number of directors meetings and number of meetings attended by each of the directors of the Group
during the financial year are:
Director
Board Meetings
Audit & Risk
Committee
Remuneration &
Nomination
Committee
Derek La Ferla
Adam Lamond
Tom Lawrence
Karl Paganin
Brian Elton
A
13
13
13
13
4
B
13
13
13
13
4
A
2
*
2
2
*
B
2
*
2
2
*
A
3
*
3
3
*
B
3
*
3
3
*
Occupational
Health & Safety
Committee
B
A
*
2
2
2
*
*
2
2
2
*
A
B
*
=
=
=
Number of Meetings attended
Number of meetings held during the time the director held office during the year
Not a member of the relevant committee
04 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
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Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Dividends
Dividends paid or declared by the Company to members since the end of the previous financial year were:
Declared and paid during
the year 2017
Cents per
share
(cents)
Franked
amount per
share (cents)
Total
Amount
$’000 (1)
Record Date
Date of
Payment
Final FY2017 ordinary
0.5
0.5
1,636
1 September
2017
15 September
2017
(1)
The Dividend paid in cash to shareholders was $1,256,645 and 2,238,596 shares were issued under the Veris
Dividend Reinvestment Plan.
After the balance sheet date the directors have approved to pay a dividend of 0.5 cent per share out of
2018 financial year profits.
Principal Activities
Veris is a professional service business delivering surveying, professional and advisory, and geospatial
services to the infrastructure; property; energy, mining & resource; and defence, agribusiness, tourism,
leisure and government sectors throughout Australia. Veris Limited is the Group’s holding company that is
listed on the ASX under the code VRS.
Veris Limited had three operating segments in the 2018 financial year namely surveying, professional &
advisory and communications. The surveying business continues from prior year and is currently the largest
segment in the group. Professional and Advisory was created from the Elton Consulting Group Pty Ltd
acquisition in March 2018 (refer Note 4), and the Communications business has been extracted from the
infrastructure operations that was discontinued in July 2017.
Surveying
Surveying is a profession that involves examining and recording the features of a piece of land or
infrastructure in order to create maps, plans, detailed descriptions and to facilitate construction. Surveying
services are provided across multiple markets including Land & Property, Resources, Infrastructure and
Defence.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 05
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Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Principal Activities (continued)
Professional and Advisory
Elton was acquired on 29 March 2018. This entity forms the basis of the professional and advisory services
pillar. It was a key acquisition which allows the Group to maximise its exposure at the front-end to the project
development lifecycle (illustrated below), leading to greater market share and immediate revenue synergies.
Professional and Advisory Services include the provision of expert advice to businesses, governments and
not-for-profit organisations to support them to make considered and informed decisions on policy, strategy,
city-making and service delivery.
Communications
Veris also owns AQURA Technologies Pty Ltd (formerly OTOC Australia Pty Ltd). The construction
operations of OTOC Australia were discontinued in July 2017 at which time the company changed its name
to AQURA Technologies to represent its focus on communications technologies. AQURA complements the
accomplished existing spatial solution capabilities of the survey segment with highly specialised ICT and
Communications services, offering industry- leading technology solutions.
Significant Changes
The following significant changes in the nature of the activities of the Group occurred during the year:
Payment of the Group’s second dividend of $0.005 per share in September 2018.
Commonwealth Bank of Australia continued supporting the business with the approval of increased
banking facilities for the Group, namely additional asset refinancing facility agreed for $6.0m.
The acquisition of LANDdata a Canberra based surveying business, which was settled in July 2017.
The integration of 9 surveying business.
The increase in scale of the surveying business from $66,775,000 revenue in FY17 to $89,402,000
in FY18.
06 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
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Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Principal Activities (continued)
Securing work on long term East Coast projects such as Sydney Metro, Sydney Light Rail, Western
Sydney Airport, Melbourne Metro, North Connex, Canberra Light Rail, Newcastle Light Rail, NBN
Eden to Brisbane.
The acquisition of Elton’s national Consulting Business in Professional and Advisory Services in
March 2018
Operating and Financial Review
Veris is a professional service business delivering surveying, professional and advisory, and geospatial
services to the infrastructure; property; energy, mining & resource; and defence, agribusiness, tourism,
leisure and government sectors throughout Australia.
For the year ended 30 June 2018 the Group reported EBITDA of $11,189,000 (Earnings before Interest,
Tax, Depreciation and Amortisation) up from $5,704,000 in 2017. This growth was the result of the Group’s
strategy of developing a premier national professional business in surveying, professional and advisory
services with exposure to infrastructure, property & resources markets.
In 2018 Veris Group continued to implement its national professional services strategy with the acquisition
of LandData in ACT and NSW, and Elton Consulting’s National Professional and Advisory Services
Company. Elton is engaged to provide expert advice to businesses, governments and not-for-profit
organisations. They support them to make considered and informed decisions on policy, strategy, city-
making and service delivery. Their services include communications and engagement, community relations,
urban and regional planning, social sustainability, strategy and policy, bid strategy and preparation and
design studio capabilities.
During the 2018 financial year the Group completed the integration of nine companies in the professional
services surveying business. It now operates under one brand, one ABN, one employment company, one
customer relationship management system, one HSEQ platform, one Information & Communication
Technology Standard and one financial system.
Integration was pivotal in achieving the vision to be an efficient national Professional Services Group. It gives
the Group the ability to provide end-to-end solutions across a project lifecycle, to enhance our service
capabilities, and develop new clients regionally and nationally. Internally it assists our culture to continue to
attract and retain talent, with the ability to service larger projects, which is a key differentiator to
smaller/regional peers, whilst maintaining operation control, quality and best practice.
The business has established shared service support functions and a new operating model which focuses
on inclusion, consolidation and efficiencies. 2019 will focus on EBITDA delivery by enhancing margins, and
driving cost synergies whilst maintaining quality and consistency. It will also focus on improving working
capital and its conversion into cash, which saw a lower conversion rate in 2018 mainly due to the 34% growth
in the surveying business revenue from $66,775,000 in 2017 to $89,402,000 in 2018. We expect to continue
our progress on acquiring businesses that enhance the service offering and/or geographic market position
of our business including further expansion into professional and advisory Services and geospatial
segments.
2018 saw the launch of the AQURA business - AQURA complements the accomplished existing spatial
solution capabilities of the survey segment with highly specialised ICT and communications services, offering
industry- leading technology solutions.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 07
7
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Operating and Financial Review (continued)
Key points to assist in understanding Veris’ results are as below:
Key Item
Revenue
FY2018
$000
106,834
FY2017
$000
73,516
EBITDA*
11,189
5,704
Acquisition costs
1,628
1,192
Comments
Revenue from continuing operations was up
45% mainly due to the increase in the
surveying segment as a result of organic
growth and
in professional and advisory
segment due to the acquisition of Elton
Consulting
EBITDA from continuing operations increased
year on year primarily as a result of the
increase in the surveying segment EBTIDA of
$2,586,000, $819,000 from Communications
and a contribution from newly acquired Elton
Consulting of $1,033,000
Increase was mainly due to work activity to
secure Elton which was one of the largest
revenue acquisitions to date
Net Assets
Working Capital**
68,203
12,426
66,937
Net assets were in line with prior year
18,769
Working capital reduced in FY18 due to an
increase in Trade and other receivables, Work
in progress offset by an increase in employee
benefits, loans & borrowings and creditors; and
a decrease
to the
expansion of the surveying business and the
acquisitions of LandDATA and Elton
Consulting.
in cash mainly due
* EBITDA is defined as earnings before depreciation, amortisation, interest, tax, impairment, restructuring, share-based
payments and acquisition costs and is an unaudited non-IFRS measure.
** Working capital is defined as current assets less current liabilities.
EBIT and EBITDA is a non-IFRS measure that in the opinion of Veris provides useful information to assess
the financial performance of the Group. A reconciliation between statutory results and underlying results
is provided below. The non-IFRS measure is unaudited:
Statutory profit/(loss) after tax
Add back:
Tax benefit
Net finance expense
Restructuring costs
Acquisition costs
Share-based payment
EBIT profit
Depreciation and amortisation
Discontinued operations
EBITDA
FY2018
$000
(1,304)
(871)
1,006
1,770
1,628
1,031
3,260
7,681
248
11,189
FY2017
$000
48
.
(3,792)
618
914
1,192
298
(722)
7,905
(1,479)
5,704
08 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
8
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Risks
There are specific risks associated with the activities of the Group and general risks, some are within and
some are beyond the control of the Company and the Directors. The most significant risks identified that
may have a material impact on the future financial performance of the Company and the market price of
the Group’s shares are:
Project Delivery Risk
Execution of projects involves professional judgment regarding scheduling, development and delivery.
Failure to meet scheduled milestones could result in professional product liability, warranty or other
claims against the Company. The Company maintains a range of review processes, insurance policies
and risk mitigation programs designed to closely monitor progress and services and outputs delivered.
Legal and Contractual Risk
Errors, omissions or incorrect rates and quantities mean the Group may not achieve full benefits of
project deliverables and may lead to a negative impact on financial performance. Additionally, failure to
understand the contract terms can lead to disputes with third parties and litigation over contractual
terms. The Company seeks to mitigate these risks by following a tendering process and estimation
programme and using the knowledge and experience of staff to conduct pricing appropriately and
contract review and screening.
Political Risk
Major infrastructure and civil work may depend on Government approval and funding. Project timing
may vary when government approval and funding is either delayed and/or withheld due to reasons such
as political, economic and environmental changes. The Group have diversified its revenue base across
multiple sectors, suppliers and states to mitigate and reduce potential impact to results.
Integration Risk
In the last 3 years Veris has integrated 8 companies as part of its strategy to create a national
professional services surveying business. A key focus is embedding a “one business” culture and
approach, including systems and processed, and integrating the acquired businesses so that synergies
and economies of scale can continue to be achieved and to offer a better service to our growing national
customer base. This will mitigate against companies operating in silos with increased costs and risks
to the Group.
Goodwill
As a result of the acquisition of 9 companies Veris has purchased a significant amount of Goodwill.
This Goodwill has been generated by the vendors of the acquired businesses over a number of years
and has resided in a variety of business names. Veris has created a national corporate brand and has
transitioned the goodwill generated by 9 of the individual vendors, to create corporate Goodwill in the
Veris Brand. This mitigates the risk associated with individuals as the business grows in scale.
Goodwill for the professional and advisory segment remains separate and is made up of the Elton
Consulting business. The goodwill is attributable mainly to the skills and technical talent of workforce,
and the synergies expected to be achieved from integrating the companies into the Group’s existing
business.
Growth risk
If the Group does not meet performance targets or adequately manage market expectations, the ability
to fund growth opportunities may be compromised. Veris has a defined strategy which is supported by
the board and senior management and while expectations for growth are clearly communicated to the
market, a more comprehensive internal and external communications plan is being developed to ensure
transparency with the market and alignment with the workforce.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 09
9
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of the Group other than that referred to in the
financial statements or notes thereto and sections of this report.
Events Subsequent to Reporting Date
Subsequent to the 30 June, Veris Limited has declared that it will pay a fully franked dividend for 2018 of
0.5 cents per share in September 2018.
Likely Developments
The Veris Group continues on its national strategy of developing a national professional services business
and increasing its capabilities and geographical market presence. Other than the matters discussed
above, there has not arisen in the interval between the end of the financial year and the date of this report
any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the
Company, to affect significantly the operations of the Group, the results of those operations, or the state
of affairs of the Group, in future financial years.
10 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
10
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited
The directors are pleased to present your Company’s 2018 Remuneration Report which sets out the
remuneration information for Veris Limited’s Non-Executive Directors, Executive Directors and other Key
Management Personnel. The information provided in this Remuneration Report has been audited as
required by section 308(3C) of the Corporations Act 2001. This Remuneration Report forms part of the
Directors’ Report. For the purposes of this report ‘Key Management Personnel’ (KMP) of the Company
are defined as those persons having authority and responsibility for planning, directing and controlling the
major activities of the Company, directly or indirectly.
The report contains the following sections:
Directors and Executive Disclosures
Remuneration Policy
Remuneration Advice
Performance linked compensation
Details of share-based compensation and bonuses
Voting and comments made at the Company’s 2017 Annual General Meeting
Contractual Arrangements
Details of remuneration
Analysis of bonuses included in remuneration
Equity Instrument Disclosure Relating to Key Management Personnel
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k) Other Transactions with Key Management Personnel
a) Director and Executive Disclosures
The details of directors and key management personnel disclosed in this report are outlined below.
Non-Executive
Directors
Derek La Ferla
Tom Lawrence
Karl Paganin
Executive KMP
Adam Lamond
Brian Elton
Brian Mangano
Lisa Wynne
Chairman
Non-Executive Director
Non-Executive Director
(Independent)
(Independent)
(Independent)
Managing Director
Executive Director Appointed 29 March 2018
Chief Financial Officer
Company Secretary
b) Remuneration policy
The Group has high expectations of its personnel and its executive leadership team. The Group aligns
the performance outcomes of its executives with its own corporate outcomes and as such remuneration
will be based on merit, performance and responsibilities assigned and undertaken.
Remuneration & Nomination Committee
The Group has a Remuneration and Nomination Committee, which is responsible for:
Assessing appropriate remuneration policies, levels and packages for Board Members, the MD,
and (in consultation with the MD) other senior executive officers;
Monitoring the implementation by the Group of such remuneration policies; and
Recommending the Group’s remuneration policy so as to:
o motivate directors and management to pursue the long-term growth and success of the
Group within an appropriate control framework; and
demonstrate a clear relationship between key executive performance and remuneration.
o
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 11
11
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
Non-executive director remuneration policy
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive
Directors shall be determined from time-to-time by a general meeting. The Constitution was amended by
special resolution of the members on 23 November 2016 with the aggregate remuneration increasing
from $250,000 to $500,000 per annum, which is to be apportioned amongst Non-Executive Directors.
The Company has entered into service agreements with its current Non-Executive Directors; refer details
of the contractual arrangements on page 19 of this remuneration report. Retirement payments, if any,
are agreed to be determined in accordance with the rules set out in the Corporations Act 2001 at the time
of the Directors retirement or termination. Non-Executive Directors’ remuneration may include an
incentive portion consisting of bonuses and/or options, as considered appropriate by the Board, which
may be subject to shareholder approval in accordance with the ASX Listing Rules.
Executive remuneration policy
The Company’s remuneration policy is to ensure the remuneration package appropriately reflects the
person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and
motivating people of the highest quality. The Company aims to reward executives with a level of
remuneration commensurate with their position and responsibilities within the Company so as to attract
and retain executives of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The overall executive remuneration framework has three components and is presented in the diagram
below:
Base pay and superannuation (TFR)
Short-term incentives (STI)
Long-term incentives (LTI) through participation in Company’s Performance Rights Plan
12 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
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Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
Remuneration Framework
EXECUTIVE REMUNERATION FRAMEWORK
FIXED REMUNERATION
Comprises base salary and superannuation
VARIABLE REMUNERATION
At Risk Components (STI/LTI)
STI PLAN
LTI PLAN
Annual reward in the form of a cash bonus of 30%
of Total Fixed Remuneration determined by
performance against annual financial, safety and
personal Key Performance Indicators
Annual grant of performance rights with a three
year vesting period subject to the achievement of
Total Shareholder Return (TSR) and Earnings Per
Share (EPS) hurdles (equally weighted).
Performance Measures (Annual)
10%
30%
60%
(cid:6)(cid:8)(cid:18)
FY18 Plan
No Performance Rights were issued in FY2018
Prior Year Plan Performance Measures (3 Years)
FY17 Plan
50%
50%
Absolute Veris
TSR(A)
Absolute Veris EPS
target – 3 year
pool(B)
(cid:8)(cid:5)(cid:12)(cid:23)(cid:7)(cid:4)
(cid:12)(cid:17)(cid:7)(cid:12)(cid:25)(cid:12)(cid:7)(cid:24)(cid:4)(cid:15)
(cid:23)(cid:21)(cid:12)(cid:9)(cid:21)(cid:523)(cid:8)(cid:524)
Pre FY17 Plans
40%
(cid:18)(cid:150)(cid:138)(cid:135)(cid:148)
(cid:14)(cid:16)(cid:19)(cid:149)
60%
50%
50%
rTSR(C) compared to
the ASX All
Ordinaries Index
EPSCAGR(D)
(cid:8)(cid:5)(cid:12)(cid:23)(cid:7)(cid:4)
(cid:12)(cid:17)(cid:7)(cid:12)(cid:25)(cid:12)(cid:7)(cid:24)(cid:4)(cid:15)
STI at Risk
30% of TFR
LTI at Risk
32-46% of TFR
(A)
(B)
(C)
(D)
(E)
TSR means the Total Shareholder Return of VRS
Absolute EPS target means a normalised Earnings Per Share pooled over 3 years, i.e. setting an aggregate
value of dollars of EPS that must be achieved over the three years (i.e. a pool consisting of year 1 EPS plus
year 2 EPS plus year 3 EPS). EPS is normalised for extra-ordinary items such as acquisitions costs (including
amortisation of acquisitions), restructuring costs and other significant or non-recurring items.
rTSR means Relative total Shareholder Return
EPSCAGR means Earnings Per Share Compounded Annual Growth
TRIFR means Total Recordable Injury Frequency Rate
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 13
13
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
The table below represents the target remuneration mix for the KMP’s in the current year. The short-term
incentive and the long-term incentive amount is provided based on target levels and not the value granted
during the year.
MD
Executive Director
CFO
Company Secretary
At Risk
Fixed Remuneration
77%
100%
57%
59%
Short-term Incentive
23%
-
17%
22%
Long-Term Incentive
-
-
26%
19%
Total Fixed Remuneration
The Base Salary is a monetary recognition for the undertaking of task and assumption of responsibilities
in line with an individual’s role in the organisation. It is set against industry and regional benchmarking for
role, market conditions and complexity of task. Where appropriate independent remuneration advice is
obtained. There are no guaranteed base pay increases included in any executive contracts. Statutory
superannuation is payable in addition to the base pay.
Short-term incentives
Executives have the opportunity to earn an annual short-term incentive (STI) if predefined targets are
achieved (KPIs). The Group’s STIs are paid in the form of cash and are calculated as a percentage of
Total Fixed Remuneration, based on achievement of set financial, safety and personal KPIs that provide
a measured return to the organisation set by the Remuneration and Nomination Committee. The
behaviours of our employees against the values of the Company are also assessed through a
performance evaluation process. STIs play a key role in aligning superior operational outcomes for
shareholders with the remuneration outcomes for management.
For the financial year ended 30 June 2018 the KMP’s had target STIs of between $60,000 and $124,385,
which represents 30% of the KMP’s individual Total Fixed Remuneration linked to EBITDA, safety and
personal performance hurdles within their individual roles.
The KPI’s cover financial, non-financial, company and individual objectives, chosen as they represent the
key drivers for the short-term success of the business and provide a framework for delivering long-term
value. The KPI’s for the KMP’s are as follow:
Measure
Weighting
KPI
Rationale
Safety
0%-10%
TRIFR
incentive plan
Safety is paramount and the inclusion of safety in
the
the Company’s
commitment to provide an incident-free work
environment
reflects
Financial
60%
Achievement
EBITDA
of Budgeted
Key profitably driver
Individual
30%-40%
Based on individual objectives
set annually which align with
the Company’s strategy and
the Company
assist with
meeting
overall
its
performance targets – for FY18
these were directly linked to
Integration activities
Drives focus on key performance elements that
align to overall company performance targets and
strategy
14 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
14
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
The Remuneration and Nomination Committee is responsible for determining the STI payable based on
an assessment of whether the KPIs are met. The performance evaluation in respect of the year ended
30 June 2018 has taken place and STIs payable to the KMP’s have been accrued and presented in the
table outlined in part (h) of this report.
Long-term Incentives
The Group bases its Long Term Incentive Plan on a combination of continued valued service of the
particular executive and overall corporate performance of the Group as a whole so as to align each of the
executives’ incentives with the total performance of the Group.
In 2014 the Group adopted a Performance Rights Plan (“Plan”) as an essential part of retaining senior
executives in an increasingly competitive market. The Plan provides the long term incentive component
of the remuneration for executives and KMP’s to be identified by the Board. The purpose of the Plan is
to issue a performance based bonus in the form of Performance Rights based on KPI’s and performance
hurdles to encourage alignment of personal and shareholder interest and:
Foster a long term perspective within the employees necessary to increase shareholder return;
Drive sustainable, long term performance of the Company;
Retain key senior executives;
Provide an opportunity for employees to participate in the Company’s share price performance;
and
Ensure that the Company has a remuneration model that makes it an attractive employment option
for talented personnel
LTI Performance measures and hurdles (including tenure provisions) are determined by the Board and
linked to financial measures and share price.
Remuneration Review and proposed changes for FY19
During the period, no Rights were issued under the current Veris LTI program as the Board is undertaking
a full review of the current remuneration structure to apply to the next and future financial years. The
Board sought advice as it considered the existing remuneration structure may not be driving performance
and is considering a structure that is more suitable and aligned with the company’s current business cycle
and long term strategy. The Board is considering a revised remuneration structure to link reward more
directly to the strategy and drivers of Veris, and its shareholders, over a longer timeframe creating long
term shareholder value.
c) Remuneration Advice
Remuneration is regularly compared with the external market by participation in industry salary surveys
and during recruitment activities generally. During the period, the Board engaged consulting firms, The
Reward Practice and PWC to provide advice in regards to remuneration. The Reward Practice provided
advice in the form of a written report detailing benchmarking of executive salaries. PWC provided advice
in regards to long-term incentive structures to ensure effective alignment with business requirements and
key shareholder group expectations. During the period no remuneration recommendations, as defined
by the Corporations Act, were provided by The Reward Practice and PWC.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 15
15
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
d) Performance Linked Compensation
The following table shows key performance indicators for the Group over the last five years.
LTI
STI
Financial Year Ended 30 June
Closing Share Price ($)
EPS (cents)
Profit/(Loss) from Continuing
Operations ($’000)
EBITDA
Average % of Maximum STI
awarded to Executives (i) (%)
Dividends paid ($’000)
2018
0.24
(0.39)
(1,056)
11,189
29%
2017
0.15
0.02
48
5,704
25%
2016
0.23
7.4
19,698
16,176
92%
2015
0.07
(3.6)
(8,786)
2014
0.14
2.8
5,496
4,681
34%
12,883
59%
1,636
1,368
-
-
-
(i)
Represents STI payable/paid as a percentage of the maximum STI payable.
e) Details of share-based compensation and bonuses
(i) Options
No options were granted to directors and key management personnel during or since the
end of the reporting period.
(ii) Performance Rights granted as compensation to key management personnel
No Performance Rights were granted to directors and key management personnel during
or since the end of the reporting period.
(iii)
Exercise of Performance Rights Granted as Compensation in Prior Years
During the period, the following shares were issued on the vesting of performance rights previously
granted as compensation in previous financial years:
Key Management Personnel
Number of Shares
Amount paid $/share
Adam Lamond
Brian Elton
Brian Mangano
Lisa Wynne
-
-
1,041,577
287,163
-
-
-
-
(iv)
Details of Long Term Incentives affecting current and future remuneration
Key
Management
Personnel
Instrument
#
Brian
Mangano
Performance
Rights
Lisa Wynne
Performance
Rights
1,950,229
828,848
2,779,077
661,765
328,500
990,265
%
veste
d in
year
#
vested in
year (B)
%
forfeited/la
psed in
year
#
forfeited
/lapsed in
year
100
1,950,229
-
-
100
661,765
-
-
-
-
-
-
-
-
-
-
Grant
date
20 Jan
2016
5 June
2017
20 Jan
2016
5 June
2017
Finan
cial
years
in
which
grant
vests
2018
2019
Face
value of
vested
rights (A)
$477,806
-
2018
$162,132
2019
-
16 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
16
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
(A)
(B)
The face value of the vested rights is based on the share price as at 30 June 2018 of 24.5 cents multiplied by
the number of rights vested.
Performance Rights that have satisfied the vesting criteria during the measurement period, however
Performance Rights do not convert to ordinary shares until the Board notifies the employee and provides a
vesting notification advising them that the Performance Rights have vested. The vesting notice is provided
post 30 June 2018.
(v) Vesting and Exercise of Performance Rights Granted as Remuneration
FY2017 LTI Plan Performance Outcomes
In the prior period, vesting of the Performance Rights was subject to the achievement of the two
separate financial performance hurdles (over a three year vesting period) outlined in the table
below. Subject to the achievement of the performance hurdles, each Key Executive
Performance Right may be converted (on a one for one basis) into one Share.
*Performance Vesting
Hurdles:
50% Absolute TSR**
50% Absolute EPS Pool (cents
per share)***
<100%
>100% <
180%
Nil
Pro-rata vesting
between
25% and 100%
<6c
>6 < 6.5c
180%>
100%
6.5c>
Nil
pro rata
vesting
between 25%-
100%
100%
* Safety must be maintained at all times and no LTI’s will vest in the instance of a major
safety breach such as a serious injury or fatality
** Performance of management measured against absolute shareholder return target
*** Performance of management measured against a normalised EPS pooled approach setting an
aggregate value of dollars of EPS that must be achieved over the three years (i.e. a pool consisting
of year 1 EPS plus year 2 EPS plus year 3 EPS)
The Board believes a Total Shareholder Return (“TSR”) performance hurdle alongside the use
of an Earnings per Share (“EPS”) hurdle provides an appropriate balance. These performance
measures are mutually exclusive, meaning, that if one measure is not met, there is still the ability
to earn an LTI under the other measure. No rights under this plan vested during the year as the
measurement period is 1 July 2016 to 30 June 2019.
Absolute TSR
Veris’ justification for the use an absolute TSR target as opposed to a comparison against a
selected comparator group is companies such as Veris that are in a diversification and growth
phase and small to mid-capitalised are unique in their operations and appropriate and relevant
comparator groups are difficult to identify.
EPS Pool
Veris’ believes that pooling the EPS over three years focuses on long term EPS performance,
incorporating all performance periods into the final outcome.
Subject to the terms and conditions of a grant of a Performance Right, the Board has discretion
determine that all or a portion of the unvested Performance Rights automatically vest and
automatically exercise on the occurrence of a Change of Control.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 17
17
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
FY2016 LTI Plan Performance Outcomes
As the Company had been lacking a long term incentive plan until the introduction of the Plan in
2014, in the prior periods, the Board has adopted a transitional vesting approach for the grant of
rights to long standing KMP’s (CEO, CFO and Company Secretary) and therefore 75% of the
LTI performance rights issued to KMP’s in January 2016 were subject to the Group achieving
the EPSCAGR and rTSR growth rates set out in the table below over the three year period 1
July 2015 to 30 June 2018. 25% of the LTI performance rights issued vested in the prior period.
The table below outlines the hurdles linked to vesting of the FY2016 Performance Rights and
the performance of the Group against these hurdles.
50% rTSR
Hurdle
Performance
30/06/18
50% EPS CAGR
Hurdle
Performance
30/06/18
Nil
<5%
Nil
50%, plus 2% for every
one percentile
increase above 50th
percentile
95th
Percentile
>5%-
<25%
pro rata
vesting
between 25%-
100%
33%
100%
25%>
100%
< 50%
percentile
>50th
percentile,
<75th
percentile
75th percentile
or more
The achievement of the above hurdles was assessed in August 2018 against the base FY2015
Normalised EPS of 0.9 cents and base share price of Veris at 30 June 2015 of 7 cents.
Total Shareholder Return
Veris’ TSR was 259% during the performance period 1 July 2015 to 30 June 2018 ranking Veris
in the 95th percentile against the ASX All Ordinaries Index, resulting in the following outcomes
for the vesting of the FY2016 Performance Rights:
1,305,997 Performance Rights vested to KMP’s
3,000,000 Performance Rights vested to other employees
Normalised Earnings Per Share
Veris’ normalised EPS has increased by 33% since the beginning of the performance period of
1 July 2015 to 30 June 2018, hence achievement of the EPS growth target by 100%, resulting
in the following outcomes for the vesting of the FY2016 Performance Rights:
1,305,998 Performance Rights vested to KMP’s
3,000,000 Performance Rights vested to other employees
18 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
18
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
f) Voting and comments made at the Company’s 2017 Annual General Meeting
The adoption of the Remuneration Report for the financial year ended 30 June 2017 was put to the
shareholders of the Company at the Annual General Meeting held 22 November 2017. The Company
received more than 97% of votes, of those shareholders who exercised their right to vote, in favour of the
remuneration report for the 2017 financial year. The resolution was passed without amendment on a show
of hands.
g) Contractual Arrangements
On appointment to the board, all non-executive directors enter into a service agreement with the Company
in the form of a letter of appointment. The letter summarises the board policies and terms, including
remuneration, relevant to the office of director.
Remuneration and other terms of employment for the managing director, chief executive officer, chief
financial officer and other key management personnel are also formalised in service agreements. Major
provisions of the agreements relating to remuneration are set out below.
Name
Term of agreement
Derek La Ferla
Mr La Ferla will hold office until the next
annual general meeting of
the
Company where he may be subject to
retirement by
the
company’s constitution.
rotation under
Base Salary
including
superannuation
$125,744
Termination
In accordance with
the company’s
constitution and the Corporations Act
2001 (Cth).
Adam Lamond (A) (B)
(C)
Until validly terminated in accordance
with the terms of the Agreement.
$414,616
Tom Lawrence
Karl Paganin
Brian Elton
rotation under
Mr Lawrence will hold office until the
next annual general meeting of the
Company where he may be subject to
the
retirement by
company’s constitution.
Mr Paganin will hold office until the next
annual general meeting of
the
Company where he may be subject to
retirement by
the
company’s constitution.
24 Months or until validly terminated in
accordance with the terms of the
Agreement.
rotation under
$77,305
$350,000
Brian Mangano (A)
(B) & (C)
Until validly terminated in accordance
with the terms of the Agreement.
$331,538
Lisa Wynne (A) (B) &
(C)
Until validly terminated in accordance
with the terms of the Agreement.
$200,000
Termination by Company with reason –
1 months’ notice
Termination by Company without
reason – 3 months’ notice (or payment
of the equivalent of 5 months’ salary to
dispense of the notice period)
In accordance with the company’s
constitution and the Corporations Act
2001 (Cth).
$77,305
In accordance with
the company’s
constitution and the Corporations Act
2001 (Cth).
Termination by Company with reason –
1 months’ notice
Termination by Company without
reason – Following the 24 months, 3
months’ notice (or payment of the
to
equivalent of 5 months’ salary
dispense of the notice period)
Termination by Company with reason –
1 months’ notice
Termination by Company without
reason – 3 months’ notice (or payment
of the equivalent of 3 months’ salary to
dispense of the notice period)
Termination by Company with reason –
1 months’ notice
Termination by Company without
reason – 3 months’ notice (or payment
of the equivalent of 5 months’ salary to
dispense of the notice period)
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 19
19
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
(A)
(B)
(C)
Key management personnel are also entitled to receive on termination of employment their statutory
entitlements of accrued annual and long service leave, together with any superannuation benefits.
Key management personnel’s contracts allow for participation in the Company’s Long-Term Incentive Plan
(subject to Board and Shareholder approval, if applicable).
These contracts provide for the provision of short-term incentives by way of a cash bonus subject to key
performance indicators to be determined by the Remuneration & Nomination Committee annually.
h) Remuneration of directors and key management personnel of the group for the current
and previous financial year
Short-term employee benefits
Post-
employ
-ment
benefit
s
Termination
Benefits
Share-
based
Payments
Salary
& fees
$(B)
STI
Cash
bonus
$(A)
Non-
mone
tary
$
Super-
annuation
$
Ca
sh
$
Perfor-
mance
Rights
$ (E)
Perfor-
mance
Rights
$ (E)
Total
$
Proportion of
remuneration
performance
related
Directors
Non-Executive Directors
Derek La Ferla
(Chairperson)
2018
130,580
2017
115,983
Tom Lawrence
Karl Paganin
2018
77,305
2017
77,305
2018
77,305
2017
77,305
Executive Directors
Adam Lamond
(Managing
Director) (C)
2018
399,136
49,754
2017
178,804
Brian Elton
Exec
Director(D)
2018
94,138
2017
-
-
-
-
-
-
-
-
-
-
Total
Directors’
Remuneration
2018
778,465
49,754
2017
449,397
-
-
-
-
-
-
-
-
-
-
-
-
-
7,343
-
-
-
-
20,049
-
9,891
8,943
-
28,992
17,234
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
130,580
123,326
77,305
77,305
77,305
77,305
-
-
-
-
-
-
468,939
11%
188,695
103,081
-
902,515
466,631
-
-
-
7%
-
20 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
20
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
Short-term employee
benefits
Post-
employ-
ment
benefits
Termination
Benefits
Salary
& fees
$(A)
STI
Cash
bonus
$(B)
Non-
monet
ary
$
Super-
annuation
$
Cash
$
Perfor-
mance
Rigts
$ (F)
Share-
based
Payment
s
Perfor-
mance
Rights
$ (F)
Total
$
Proportion of
remuneration
performance
related
2018
308,598
31,828
29,317
Other Executives
Brian
Mangano
(CFO)
Lisa Wynne
(Company
Secretary) (E)
2017
295,788
67,454
2018
150,000
19,200
2017
145,000
26,735
Simon Thomas
(CEO,
resigned 29
March 2017)
2018
-
2017
330,891
-
-
Total
Executives’
Remuneration
Total
Directors’ and
Executives’
Remuneration
2018
458,598
51,028
2017
771,679
94,189
2018
1,237,062
100,782
2017
1,221,076
94,189
28,100
15,243
14,623
-
-
-
-
-
-
-
155,010
523,576
6%
229,818
621,160
48%
54,135
238,112
8%
73,165
259,523
38%
-
-
-
24,520
251,981
239,324
116,645
484,712
24%
44,560
-
-
207,503
761,688
34%
67,242
251,981
239,324
419,627 1,365,395
118,856
-
-
207,503 1,664,202
84,477
251,981
239,324
419,627 1,832,026
38%
17%
28%
-
-
-
-
-
-
-
-
Notes in relation to the table of directors’ and executive officers’ remuneration
(A) Salary and Fees includes annual leave and long service leave.
(B) Short-term incentive bonus is for the achievement of KPIs within their individual roles for the financial year ended
30 June 2018. The performance evaluation in respect of the year ended 30 June 2018 has taken place and the
short-term incentive bonuses have been accrued but not paid during the period.
(C) Adam Lamond served as an Executive Director from January 2014 to March 2017, when he was appointed
Managing Director.
(D) Brian Elton was appointed on 29 March 2018.
(E) Pro-rata based on annual salary of $200,000.
(F) The value of the Performance Rights granted in the year is the fair value of the rights calculated at grant date.
This amount is allocated to remuneration over the vesting periods (in years 1 July 2015 to 30 June 2019). The
fair value of the Performance Rights has been measured using Monte Carlo simulation model.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 21
21
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
i) Analysis of bonuses included in remuneration – audited
Details of the vesting profile of the short-term incentive cash bonuses awarded as remuneration to key
management personnel during the period are detailed below.
Key Management
Personnel
Adam Lamond
Brian Elton
Brian Mangano
Lisa Wynne
Maximum
Potential
Value of STI
Payment $
124,385
-
99,461
60,000
Short-term incentive bonus
Included in
remuneration $(A)
% of Maximum
Potential STI Payment
Awarded
% Maximum
Potential STI
Payment Forfeited
49,754
-
31,828
19,200
40%
-
32%
32%
60%
-
68%(B)
68%(B)
(A)
(B)
Amounts included in remuneration for the financial year is for the achievement of between 80% - 100%
of Safety KPIs and personal KPIs and performance within their individual roles for the financial year
ended 30 June 2018. The performance evaluation in respect of the year ended 30 June 2018 has taken
place and the short-term incentive bonuses have been accrued but not paid during the period.
The amounts forfeited are due to Financial KPIs not being met in relation to the financial year.
j) Equity Instrument Disclosure Relating to Key Management Personnel
Analysis of movements in Performance Rights issued, held and transacted by directors and key
management personnel
KMP
# Held 1
July 2017
Granted
in year
Grant
Value
Grant Face
Value
Adam Lamond
Brian Elgon
Brian Mangano
Lisa Wynne
-
-
2,779,078
990,265
-
-
-
-
-
-
-
-
-
-
-
-
Number
Vested in
year
-
-
(1,950,230)
(661,765)
Number
forfeited /
lapsed in
year
Number
held at 30
June 2018
-
-
-
-
-
-
828,848
328,500
Analysis of movements in Shares Issued, held and transacted by directors and key management
personnel
The number of ordinary shares in the Company held during the reporting period by each director and key
management personnel of the Group, including their personally related parties are set out below. There
were no shares granted as compensation during the reporting period.
Balance at 30/06/2017
Movement
Balance at 30/06/2018
Directors
Derek La Ferla
Adam Lamond
Tom Lawrence(A)
Karl Paganin
Brian Elton
KMP’s
Simon Thomas (B)
Brian Mangano (C)
Lisa Wynne (C)
Total
567,704
45,841,815
3,662,596
5,550,000
-
2,527,344
1,836,202
75,205
60,010,866
16,797
-
(439,998)
162,721
11,179,560
(2,527,344)
1,083,032
297,884
9,772,652
584,501
45,841,815
3,222,598
5,662,721
11,179,560
-
2,919,234
373,089
69,783,518
22 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
22
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Remuneration Report – Audited (continued)
(A)
Includes the transfer of 439,998 shares to employees on vesting of performance rights held by OTC ESP Pty Ltd
as trustee of the Veris Employee Share Plan of which Tom Lawrence is a Director but in which shares Tom
Lawrence has no beneficial interest.
(B) KMP shareholding at cessation of employment.
(C) KMP shareholdings do not include the Performance Rights which have vested during the period as Performance
Rights do not convert to ordinary shares until the Board notifies the employee and provides a vesting notification
advising them that the Performance Rights have vested. The vesting notice is provided post 30 June 2018.
d) Other Transactions with Key Management Personnel
The Company rents office space from Elton Property, a company controlled by director, Brian Elton.
Amounts paid during the year of $83,201 are based on market rates and normal commercial terms. This
amount has not been included as remuneration in the tables above.
THIS CONCLUDES THE AUDITED REMUNERATION REPORT
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 23
23
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Shares Under Option
As at 30 June 2018 there are no shares under option.
Indemnification and Insurance of Officers
During the financial year the Group paid insurance premiums of $54,950 (2017: $31,000) to insure the
directors, secretaries and executive officers of the Group and its subsidiary companies. The liabilities
insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the directors and officers in their capacity as directors and officers of Veris Limited and its
subsidiary companies, and any other payments arising from liabilities incurred by the officers in
connection with such proceedings, other than where such liabilities arise out of conduct involving wilful
breach of duty by the officers or the improper use by the officers of their position or of information to gain
advantage for themselves or someone else to cause detriment to the Group. The directors have not
included details of the nature of the liabilities covered or the amount of the premium paid in respect of the
directors’ and officers’ liability and legal expenses insurance contracts, as such disclosure is prohibited
under the terms of the contract.
Non-Audit Services
During the year KPMG, the Group’s auditor, has performed certain other services in addition to its
statutory duties. The board has considered the non-audit services provided during the year by the auditor
and in accordance with advice provided by the Audit Committee, is satisfied that the provision of those
non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor
independence requirements of the Corporations Act 2001 for the following reasons: All non-audit services
were subject to the corporate governance procedures adopted by the Group and have been reviewed by
the Audit Committee to ensure they do not impact the integrity and objectivity of the auditor; and the non-
audit services provided do not undermine the general principals relating to the auditor independence as
set out in APES110 Code of Ethics for the Professional Accountants, as they did not involve reviewing or
auditing the auditors own work, acting in a management or decision making capacity for the Group, acting
as an advocate for the Group or jointly sharing risks and rewards.
Details for the amounts paid to KPMG, the Group’s auditor, and its related practices for audit and non-
audit services to the Group provided during the year are set out below.
Consolidated
Audit services:
Audit and review of the financial reports
Services other than audit services:
Other services (Due Diligence)
Other services (Integration)
2018
$000
254
51
551
856
2017
$000
222
142
405
769
Environmental Regulations and Performance
It is the Group’s policy to comply with all environmental regulations applicable to it. The Company
confirms, for the purposes of section 299(1)(f) of the Corporations Act 2001 that it is not aware of any
breaches by the Group of any environmental regulations under the laws of the Commonwealth of
Australia, or of a State of Territory of Australia.
In the majority of the Veris’ business situations, Veris is not the owner or operator of plant and equipment
requiring environmental licences. Veris typically assists its clients with the management of their
environmental responsibilities, rather than holding those responsibilities directly.
The Group is not aware of any breaches by Veris of any environmental regulations under the laws of the
Commonwealth of Australia, or of a State or Territory.
24 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
24
Veris Limited Annual Financial Report
30 June 2018
Director’s Report
Directors Report
Proceedings on Behalf of the Group
There are no proceedings on behalf of the Group under Section 237 of the Corporations Act 2001 in the
financial year or at the date of the report.
Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 77 and forms part of the directors’ report
for the year ended 30 June 2018.
Rounding off
The Company is of a kind referred to in ASIC Instrument 2016/191 and in accordance with that Instrument,
amounts in the condensed consolidated interim financial statements and directors’ report have been
rounded off to the nearest thousand dollars, unless otherwise stated.
Corporate Governance Statement
Veris is committed to implementing sound standards of corporate governance. In determining what those
standards should involve, the Group has had regard to the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations (3rd Edition) (“ASX Recommendations”). This
corporate governance statement outlines the key principles and practices of the Company which in the
terms of the Group’s Corporate Governance Charter, define the Group’s system of governance. A copy
of the Group’s Corporate Governance Statement has been placed on the Group’s website under the
Investors tab.
Signed in accordance with a resolution of the directors:
Derek La Ferla
Chairman
Dated at Perth 30 August 2018
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 25
25
Veris Limited Annual Financial Report
30 June 2018
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2018
For the Year Ended 30 June 2018
Revenue
Operating expenses
Depreciation
Amortisation
Acquisition related
Restructuring costs
Share-based payment
Note
3
14
15
4
2018
$000
106,834
(95,645)
11,189
(3,585)
(4,096)
(1,628)
(1,770)
(1,031)
2017
$000
73,516
(67,812)
5,704
(3,737)
(4,168)
(1,192)
(914)
(298)
Results from operating activities
(921)
(4,605)
Financial income
Finance costs
Net finance costs
18
(1,024)
(1,006)
42
(660)
(618)
Profit / (loss) before income tax
(1,927)
(5,223)
Income tax benefit
16
871
3,792
Profit / (loss) from continuing operations
(1,056)
(1,431)
Profit / (loss) from discontinued operations, net of tax
Profit / (loss) for the period
Total comprehensive income/ (loss) for the year
Earnings/ loss per share
Basic earnings cents per share
Diluted earnings cents per share
Earnings/ loss per share – Continuing operations
Basic earnings cents per share
Diluted earnings cents per share
2
5
5
(248)
(1,304)
(1,304)
(0.39)
(0.39)
(0.32)
(0.32)
1,479
48
48
0.02
0.02
(0.46)
(0.46)
The accompanying notes form an integral part of these consolidated financial statements.
26 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
26
Veris Limited Annual Financial Report
30 June 2018
Consolidated Statement of Financial Position
As at 30 June 2018
Consolidated Statement of Financial Position
As at 30 June 2018
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Work in progress
Other current assets
Total current assets
Non-current assets
Plant and equipment
Intangible assets
Deferred tax asset
Total non-current assets
Total assets
Liabilities
Current Liabilities
Trade and other payables
Deferred vendor payments
Loans and borrowings
Employee benefits
Current tax liability
Total current liabilities
Non-current liabilities
Loans and borrowings
Deferred vendor payments
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share based payment reserve
Retained earnings
Total equity
Note
30 Jun 2018
$000
30 Jun 2017
$000
18
11
14
15
17
12
8
20
13
20
8
13
21
21
5,588
30,932
10,538
1,705
48,763
15,242
58,598
6,275
80,115
128,878
17,532
2,386
6,381
9,505
533
36,337
19,647
3,625
1,066
24,338
60,675
68,203
40,887
2,349
24,967
68,203
14,574
15,983
4,616
1,118
36,291
11,049
40,525
7,636
59,210
95,501
7,291
1,544
2,593
5,481
613
17,522
8,935
1,200
907
11,042
28,564
66,937
37,283
1,747
27,907
66,937
The accompanying notes form an integral part of these consolidated financial statements.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 27
27
Veris Limited Annual Financial Report
30 June 2018
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2018
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2018
Balance at 1 July 2017
Total comprehensive income for the year
Loss for the year
Total comprehensive loss for the year
Transactions with owners of the Company,
recognised directly in equity
Issue of ordinary shares (net of costs)
Dividends paid
Share-based payment transactions
Total transactions with owners of the
Company
Note
Share
Based
Payment
Reserve
$000
Share
Capital
$000
Retained
Earnings
$000
Total
Equity
$000
37,283
1,747
27,907
66,937
-
-
3,604
-
-
3,604
-
-
-
-
(1,304)
(1,304)
(1,304)
(1,304)
-
3,604
(1,636)
(1,636)
602
602
-
(1,636)
602
2,570
21
22
Balance at 30 June 2018
40,887
2,349
24,967
68,203
Note
Share
Capital
$000
Share
Based
Payment
Reserve
$000
Retained
Earnings
$000
Total
Equity
$000
Balance at 1 July 2016
22,622
1,449
29,227
53,298
Total comprehensive income for the year
Profit for the year
Total comprehensive profit for the year
Transactions with owners of the Company,
recognised directly in equity
Issue of ordinary shares (net of costs)
Dividends paid
21
22
Share-based payment transactions
Total transactions with owners of the Company
-
-
14,661
-
-
14,661
-
-
-
-
298
298
48
48
48
48
-
(1,368)
-
14,661
(1,368)
298
(1,368)
13,591
Balance at 30 June 2017
37,283
1,747
27,907
66,937
The accompanying notes form an integral part of these consolidated financial statements.
28 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
28
Veris Limited Annual Financial Report
30 June 2018
Consolidated Statement of Cash Flow
For the Year Ended 30 June 2018
Consolidated Statement of Cash Flow
For the Year Ended 30 June 2018
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Cash generated from operations
Tax received
Interest paid
Interest received
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Deferred vendor payment
Acquisition of subsidiaries net of cash acquired
Net cash (used in) investing activities
Cash flows from financing activities
Dividends paid
Repayment of borrowings and lease liabilities
Proceeds from loans
Proceeds from share issues (net of costs)
Net cash (used in) from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Note
2018
$000
2017
$000
101,980
(101,021)
959
121,709
(114,737)
6,969
14
(1,133)
22
(138)
3,828
(1,844)
(1,928)
(14,071)
(14,015)
(1,258)
(4,575)
11,000
-
5,167
(8,986)
14,574
5,588
272
(901)
55
6,395
395
(822)
(2,545)
(7,500)
(10,472)
(1,060)
(5,578)
-
12,321
5,683
1,606
12,968
14,574
19
18
The accompanying notes form an integral part of these consolidated financial statements.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 29
29
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
BASIS OF PREPARATION
REPORTING ENTITY
Veris Limited (the “Company” or “Veris”) is a for-profit company domiciled in Australia. The Company’s
registered office is at Level 12, 3 Hasler Road, Osborne Park WA 6017. The consolidated financial
statements of the Company as at and for the year ended 30 June 2018 comprises the Company and its
subsidiaries (together referred to as the “Group”). The Group is a diversified infrastructure and survey
solutions company.
STATEMENT OF COMPLIANCE
The consolidated financial statements are general purpose financial statements prepared in accordance
with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board
(AASB) and the Corporations Act 2001. The consolidated financial statements comply with International
Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB).
This consolidated annual report was approved by the board of directors on 30 August 2018.
NOTE INDEX
GROUP PERFORMANCE
NET DEBT
Operating Segments……………………………
Discontinued Operations……………………….
Revenue………………………………………….
Acquisitions………………………………………
Earnings per share…………………………….
Subsequent events…………………………….
RISK MANAGEMENT
Critical accounting estimates and
judgements……………………………………….
Financial instruments………………………....
Commitments for expenditure……………….
Contingent liabilities……………………………
WORKING CAPITAL
Trade and other receivables……………….
Trade and other payables………………….
CAPITAL EMPLOYED
Employee benefits……………………………..
Property, plant and equipment and
impairment……………………………………….
Intangible assets……………………………….
TAXATION
Income taxes……………………………………
Deferred tax assets/liabilities………………
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Cash and cash equivalents…………………
Reconciliations of operating profit after
income tax to net cash inflow from
operating activities……………………………..
Loans and borrowings………………………..
EQUITY
Share capital…………………………………….
Dividends………………………………………….
Share-based payments……………………….
OTHER INFORMATION
Related party transactions……………………
Remuneration of auditors…………………….
GROUP STRUCTURE
Subsidiaries………………………………………
Deed of cross guarantee……………………
Parent entity financial information…………
ACCOUNTING POLICIES
Basis of preparation……………………………
Summary of significant accounting policies
New standards and interpretations not yet
adopted…………………………………………….
Determination of fair values………………….
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
30 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
30
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
GROUP PERFORMANCE
1. OPERATING SEGMENTS
The Group has three reportable segments that are being managed separately by the service provided. In
2018 the segments include surveying, communications and professional and advisory.
In 2017 the reportable segments were surveying and infrastructure construction. The latter is not
applicable for 2018 as the business was discontinued in July 2017. This segment was operated out of
OTOC Australia. In July 2017 OTOC Australia was renamed to Aqura Technologies and the new segment
of communications was launched.
In March 2018 Veris LTD purchased Elton Consulting who operate in the professional and advisory space,
therefore leading to Veris increasing their reportable segments to 3. The Group also acquired LANDdata
Survey during the year which is included in the Surveying segment.
The 2018 reportable segments and the services they provide are :
Surveying – examine and record the features of a piece of land or infrastructure in order to create
maps, plans, detailed descriptions and to facilitate construction
Communications – provides specialised ICT and Communications services
Professional and Advisory – provide expert advice to businesses, governments and not-for-profit
organisations to support them to make considered and informed decisions on policy, strategy, city-
making and service delivery.
Information regarding the results of each reporting segment is detailed below for the year ended 30 June
2018.
Surveying
Communications
Professional &
Advisory
Total
2018
$000
94,214
(4,812)
89,402
2017
$000
68,831
(2,056)
66,775
2018
$000
12,430
(140)
12,290
2017
$000
6,741
-
6,741
2018
$000
5,142
-
5,142
2017
$000
-
-
-
2018
$000
111,786
(4,952)
106,834
2017
$000
75,572
(2,056)
73,516
Revenues
Inter-segment revenues
External revenues
Costs
Inter-segment costs
External costs
(82,191)
4,812
(77,379)
(59,394)
2,056
(57,338)
(11,530)
140
(11,390)
(6,660)
-
(6,660)
(4,110)
-
(4,110)
EBITDA*
12,023
9,437
900
81
1,032
(3,440)
(3,848)
4,735
(3,531)
(4,168)
1,738
(38)
-
862
(72)
-
9
(26)
(248)
759
-
-
-
-
-
-
-
(97,831)
4,952
(92,878)
(66,054)
2,056
(63,998)
13,956
9,518
(3,503)
(4,096)
6,357
(3,603)
(4,168)
1,747
2018
$000
92,012
(29,558)
2017
$000
69,301
(15,018)
2018
$000
6,378
(5,149)
2017
$000
5,074
(1,628)
2018
$000
22,891
(3,010)
2017
$000
-
-
2018
$000
121,281
(37,716)
2017
$000
74,375
(16,646)
Depreciation
Amortisation
EBIT** for reportable
segments
Segment assets
Segment liabilities
*EBITDA is defined as earnings before depreciation, amortisation, interest, tax, impairment, restructuring, share-
based payments and acquisition costs.
**EBIT is defined as earnings before interest, tax, impairment, restructuring, share-based payments and acquisition
costs.
During the year there were no major customers of the Group, individually representing more than 10%
of total Group revenue. (2017: Canstruct represented more than 10% total Group revenue; $24.7 million
which is now presented as a discontinued operation).
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 31
31
Veris Limited Annual Financial Report
30 June 2018
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1. OPERATING SEGMENTS (CONTINUED)
1. OPERATING SEGMENTS (CONTINUED)
RECONCILIATIONS OF REPORTABLE SEGMENT REVENUES, PROFIT OR LOSS, ASSETS AND
LIABILITIES
RECONCILIATIONS OF REPORTABLE SEGMENT REVENUES, PROFIT OR LOSS, ASSETS AND
LIABILITIES
Revenues
Revenues
Total revenue for reportable segments
Total revenue for reportable segments
Elimination of inter-segment revenue
Elimination of inter-segment revenue
Consolidated revenue
Consolidated revenue
Expenses
Expenses
Total expenses for reportable segments
Total expenses for reportable segments
Elimination of inter-segment costs
Elimination of inter-segment costs
Corporate overheads
Corporate overheads
Consolidated operating expenses
Consolidated operating expenses
Profit (loss)
Profit (loss)
EBIT for reportable segments
EBIT for reportable segments
Unallocated amounts (including corporate overheads)
Unallocated amounts (including corporate overheads)
Acquisition related cost/income
Acquisition related cost/income
Restructuring costs
Restructuring costs
Net finance expense
Net finance expense
Consolidated profit (loss) before income taxes
Consolidated profit (loss) before income taxes
Assets
Assets
Total assets for reportable segments
Total assets for reportable segments
Other unallocated amounts
Other unallocated amounts
Consolidated total assets
Consolidated total assets
Liabilities
Total liabilities for reportable segments
Other unallocated amounts
Consolidated total liabilities
Liabilities
Total liabilities for reportable segments
Other unallocated amounts
Consolidated total liabilities
2. DISCONTINUED OPERATIONS
2. DISCONTINUED OPERATIONS
2018
$000
2018
$000
2017
$000
2017
$000
111,786
111,786
(4,952)
(4,952)
106,834
106,834
97,831
97,831
(4,952)
(4,952)
2,766
2,766
95,645
95,645
6,357
6,357
(3,880)
(3,880)
(1,628)
(1,628)
(1,770)
(1,770)
(1,006)
(1,006)
(1,927)
(1,927)
2018
2018
$000
$000
121,281
121,281
7,597
7,597
128,878
128,878
37,716
22,959
60,675
37,716
22,959
60,675
75,572
(2,056)
73,516
75,572
(2,056)
73,516
66,054
66,054
(2,056)
(2,056)
3,814
3,814
67,812
67,812
1,747
1,747
(4,246)
(4,246)
(1,192)
(1,192)
(914)
(914)
(618)
(618)
(5,223)
(5,223)
2017
2017
$000
$000
74,375
74,375
21,126
21,126
95,501
95,501
16,646
11,918
28,564
16,646
11,918
28,564
In July 2017, the construction operations of Aqura’s Infrastructure business were discontinued. The
Communications business has been extracted from the Infrastructure operations and forms part of the
continued operations of the group.
In July 2017, the construction operations of Aqura’s Infrastructure business were discontinued. The
Communications business has been extracted from the Infrastructure operations and forms part of the
continued operations of the group.
The construction operations were not previously classified as held-for-sale or as a discontinued operation.
The construction operations were not previously classified as held-for-sale or as a discontinued operation.
32 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
32
32
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
2. DISCONTINUED OPERATIONS (CONTINUED)
Results of Discontinued Operations
Revenue
Expenses
Depreciation
Restructuring
Net finance costs
Profit (loss) from discontinued operations for the period
before tax
2018
$000
2,449
(2,405)
44
(217)
-
(112)
(285)
2017
$000
34,360
(30,249)
4,111
(350)
(395)
(230)
3,136
Income tax (expense)/ benefit
37
(1,658)
Profit (loss) from discontinued operations for the period,
net of tax
(248)
1,479
Earnings per share
Basic earnings cents per share
Diluted earnings cents per share
Cash flows from (used in) discontinued operations
Net cash flows from (used in) operating activities
Net cash flows from (used in) investing activities
Net cash flows from (used in) financing activities
Results from discontinued operating activities
3. REVENUE
Surveying
Communications
Professional & Advisory
(0.07)
(0.07)
2018
$000
(769)
3,826
(395)
2,662
2018
$000
89,402
12,290
5,142
106,834
0.48
0.47
2017
$000
14,806
302
(2,019)
13,089
2017
$000
66,775
6,741
-
73,516
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 33
33
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
4. ACQUISITIONS
During the year, as part of its national strategic plan, the Company made the following acquisitions as
detailed below:
Acquisition of business – LANDdata Surveys Pty Ltd
On 31 July 2017, the Group entered into an agreement to acquire the business and certain assets of
LANDdata Survey PTY LTD, a Canberra and Sydney-based surveying consultancy. The purchase price
comprises $3,450,000 in cash plus an adjustment of up to $350,000. A net adjustment of $129,000 was
paid upon completion of the acquisition. A further $1,000,000 in cash will be paid if LANDdata achieves
performance milestones. An instalment of $232,000 was paid during the year ended 30 June 2018. In
addition an incentive bonus will be paid if the Gross Margin over a two year period is greater than certain
amounts. For the eleven months ended 30 June 2018, LANDdata contributed revenue of $5,600,000 and
EBITDA of $1,156,000. If the acquisition had occurred on 1 July 2017, the Company estimates that
contributed revenue would have been $6,100,000 and contributed EBITDA would have been $1,230,000.
The acquisition of LANDdata enhances the Group’s surveying businesses in New South Wales, and
provides an entry into the ACT market, adding scale and capability to the Group’s existing surveying
businesses.
Consideration transferred
The following table summarises the acquisition-date fair value of each major class of consideration
transferred.
Cash
Adjustment settlement
Deferred vendor payment
30 June 2017
Disclosure
$000
3,450
-
1,960
5,410
At Settlement
$000
3,450
129
1,179
4,758
Deferred vendor payment
As part of the purchase price the Company has agreed to pay LANDdata an earn out of up to $1.0 million
cash over 2 years subject to meeting certain Revenue and Gross Margin hurdles and an Incentive Bonus
if Gross Margin is greater than $4,400,000. Please see Deferred Vendor Payment note under Note 8
Financial Instruments for further detail.
34 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
34
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
4. ACQUISITIONS (CONTINUED)
Identifiable assets acquired and liabilities assumed
The following summarises the recognised fair value amounts of assets acquired and liabilities assumed
at settlement date.
Customer Relationships
Other current assets
Property, plant and equipment
Deferred Tax Asset
Employee benefits
Deferred tax liability
Goodwill
Goodwill arising from the acquisition has been recognised as follows:
Total consideration transferred
Fair value of identifiable assets and liabilities
Goodwill
30 June
2017
Disclosure
$000
3,360
44
322
-
At
Settlement
$000
3,360
32
328
71
(238)
(238)
(1,008)
(1,008)
2,480
2,546
30 June
2017
At
Settlement
Disclosure
$000
5,410
(2,480)
2,930
$000
4,758
(2,546)
2,212
The goodwill is attributable mainly to the skills and technical talent of LANDdata Group’s workforce, and
the synergies expected to be achieved from integrating the company into the Group’s existing surveying
business.
Acquisition Costs
The Group incurred acquisition costs of $118,000 in relation to the acquisition of LANDdata.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 35
35
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
4. ACQUISITIONS (CONTINUED)
Acquisition of business – Elton Consulting Group Pty Ltd
On 29 March 2018, the Group entered into an agreement to acquire Elton Consulting Group Pty Ltd, a
national professional and advisory business. The purchase price comprises $9 million in cash and $3
million in shares. A settlement adjustment of $1.9 million was paid following completion of the acquisition.
A further $2 million will be paid if Elton achieves performance milestones over 2 years (payable 50% in
cash and 50% in shares) and $2 million in Deferred payments two years after completion (payable 50%
cash and 50% shares). For the three months ended 30 June 2018, Elton contributed revenue of $5.1
million and EBITDA of $1.0 million. If the acquisition had occurred on 1 July 2017, the Company estimates
that contributed revenue would have been $17.9 million and contributed EBITDA would have been $2.9
million.
Consideration transferred
The following table summarises the acquisition-date fair value of each major class of consideration
transferred.
Cash
Equity instruments (15.6 million ordinary shares)
Adjustment settlement
Deferred vendor payment
Deferred vendor payment
30 June
2018
$000
9,000
3,125
1,904
3,864
17,893
As part of the purchase price the Company has agreed to pay the vendors of Elton an earn out of up to
$2.0 million (50% cash, 50% shares) over 2 years subject to meeting certain EBITDA hurdles of at least
$2.6 million in a performance period. It has also agreed to pay a deferred payment two years after
completion (Payable 50% cash and 50% shares). Please see Deferred Vendor Payment note under Note
8 Financial Instruments for further detail.
36 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
36
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
4. ACQUISITIONS (CONTINUED)
Identifiable assets acquired and liabilities assumed
The following summarises the recognised fair value amounts of assets acquired and liabilities assumed
as at 30 June 20018.
Cash
Trade and other receivables
Work in progress
Other current assets
Property, plant and equipment
Customer relationships
Brand
Trade and other payables
Loans and borrowings
Employee benefits
Deferred tax liability
Goodwill
Goodwill arising from the acquisition has been recognised as follows:
Total consideration transferred
Fair value of identifiable assets and liabilities
Goodwill
30 June
2018
$000
336
2,896
1,772
84
554
3,496
293
(1,255)
(230)
(1,122)
(1,182)
5,642
30 June
2018
$000
17,893
(5,642)
12,251
The provisional goodwill is attributable mainly to the skills and technical talent of Elton Consulting Group’s
workforce, and the synergies expected to be achieved from integrating the company into the Group’s
existing business.
Acquisition Costs
The Group incurred acquisition costs of $692,000 to acquire Elton Consulting Pty Ltd.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 37
37
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
4. ACQUISITIONS (CONTINUED)
Prior Year Acquisitions
The following entities were acquired during the year ended 30 June 2017 and the original disclosures
made in the 2017 Annual Report were on a provisional basis.
Lawrence Group Pty Ltd (i)
WKC Spatial
Goodwin Midson
Lester Franks Survey & Geographic Pty Ltd (ii)
2018
Goodwill
$000
2017
Goodwill
$000
3,968
671
324
1,798
3,833
671
324
1,365
i)
ii)
$135,000 adjustment made in relation to pre-acquisition Trade Receivables written off
$74,000 adjustment made in relation to pre-acquisition Trade Receivables written off and
$359,000 adjustment made in relation to detailed fixed asset review carried out during the
year.
Other acquisition costs of $818,000 have been incurred in relation to previous and potential acquisitions.
5. EARNINGS PER SHARE
Earnings/ (losses) used to calculate basic EPS ($000)
2018
(1,304)
2017
48
Weighted average number of ordinary shares outstanding during
the year used in calculating basic EPS (number of shares)
331,684,479
309,734,798
Basic earnings per share (cents per share)
(0.39)
0.02
Diluted Earnings per share
Dilutive potential shares relate to Performance Rights granted to eligible employees under the Group’s
Long Term Incentive Plan (refer Note 23). There is no material impact on basic EPS arising from dilutive
potential shares.
6. SUBSEQUENT EVENTS
Veris Limited has declared after the balance sheet date that it will pay a fully franked dividend for 2018 of
0.5 cents per share in September 2018.
Other than the matters discussed above, there has not arisen in the interval between the end of the
financial year and the date of this report any item, transaction or event of a material and unusual nature
likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group,
the results of those operations, or the state of affairs of the Group, in future financial years.
38 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
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Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
RISK MANAGEMENT
7. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the consolidated financial statements in conformity with AASBs require management
to make judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expense. Actual results may differ from these
estimates.
Critical judgements in applying accounting policies that have the most significant effect on the amounts
recognised in the financial statements relate to contract revenue, contract work in progress, deferred
vendor payments, contingent consideration and impairment of assets such as goodwill (refer Note 15).
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period which the estimates are revised and in any future periods affected.
Contract revenue and work in progress
Revenue from contracts is recognised using the percentage of completion method. Judgement is
exercised in determining the stage of completion of the contract and in reliably estimating the total contract
revenue and contract costs to completion. The stage of contract completion is generally measured by
reference to physical completion. An assessment of total labour hours and other costs incurred to date
as a percentage of estimated total costs for each contract is used if it is an appropriate proxy for physical
completion. Task lists and milestones are also used to calculate or confirm the percentage of completion
if appropriate.
The key judgement in determining revenue from contracts is estimating the unapproved variations and
claims to be included in project forecast revenue and work in progress. The Company uses its best
estimate and its expertise to determine the value included supported by qualified external experts where
necessary. The outcome of the events which are the subject of these judgements are by nature uncertain
such that final positions resolved with clients can differ materially from original estimates which may
impact the recoverability of work in progress.
Deferred vendor payments
As part of the purchase price of the two acquisitions during the year, the Group agreed to pay the vendors
performance payments subject to the acquisitions reaching certain targeted earn out values – one of
these acquisitions was based on Gross Margin & Revenue, and the other is based on EBITDA. The value
for deferred vendor payment is estimated based on actual results to date plus forecasts. Actual results
may differ from these estimates. This information is set out under Note 4 and 8.
8. FINANCIAL INSTRUMENTS
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. The Board has established an Audit & Risk Committee, which is responsible
for overseeing how management monitors risk and reviewing the adequacy of the risk management
framework in relation to the risks faced by the Group. The Committee reports regularly to the Board of
Directors on its activities.
Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities. The Group, through their training and management standards and procedures, aim to develop
a disciplined and constructive control environment in which all employees understand their roles and
obligations.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 39
39
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
8. FINANCIAL INSTRUMENTS (CONTINUED)
The fair values and carrying amounts of various financial instruments recognised at reporting date are
noted below:
2018
2017
Carrying
Amount
$000
Fair Values
$000
Carrying
Amount
$000
Hire purchase liabilities
(12,403)
(12,403)
(8,153)
Cash advance facility
(13,625)
(13,625)
(3,375)
Fair Values
$000
(8,153)
(3,375)
The carrying amounts of the financial instruments are a reasonable approximation of their fair values, on
account of their short maturity cycle.
Measurement at fair values
i. Valuation techniques and significant unobservable inputs
The following table shows the valuation technique used in measuring Level 3 fair values at 30 June 2018,
as well as the significant unobservable inputs used.
Type
Valuation Technique
Significant unobservable
inputs
Inter-relationship between
significant unobservable inputs
and fair value measurement
target
For Elton
is
the
EBITDA, for LandDATA it’s
a combination of Gross
Margin and Revenue. For
further details refer to the
Deferred Vendor Payment
note below.
The estimated fair value of the
deferred vendor payments would
decrease if any of the conditions
were not met.
Generally, a change in the annual
revenue will
impact Elton and
LandDATA. We expect a change in
revenue to be accompanied by a
directionally similar change
in
margin.
Deferred
vendor
payments
The Company forecast that
LandData and Elton will
reach their targeted earn
out values for the
performance milestones
and therefore have
recognised the maximum
amount payable under the
contract for contingent
consideration. Given that
payments are due within
two years of acquisition the
amount recognised
approximates to fair value.
Elton also have a deferred
payment which is based on
the lapse of time. Lawrence
and Lester Franks earn-
outs have been guaranteed
subject to certain integration
requirements
ii. Level 3 fair values
Sensitivity analysis
For the fair values of deferred vendor payments, reasonably possible changes at 30 June 2018 to one of
the significant unobservable inputs, holding other inputs constant, would have the following effects.
40 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
40
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
8. FINANCIAL INSTRUMENTS (CONTINUED)
Movements in the value of Deferred Vendor Payments
Opening
Balance
Acquired
in the
year
Paid in
the year
Adjusted in the
year
Closing
Balance
$000
$000
$000
$000
$000
70
300
1,000
1,374
-
-
-
-
-
-
1,179
3,864
(80)
(300)
(500)
(687)
(361)
-
2,744
5,043
(1,928)
10
-
-
13
129
-
152
-
-
500
700
947
3,864
6,011
Goodwin
Linker
Lawrence
Lester Franks
LANDdata
Elton Consulting
Lawrence
Deferred Vendor Payment Provision at 30 June 2018 is based on Earnout Period 2 which runs from 30
July 2017 to 29 July 2018. The earnout value has been guaranteed subject to a number of conditions as
part of the integration of Lawrence into Veris Australia. $500,000 is the value assigned to Earnout period
2.
Lester Franks
Deferred Vendor Payment Provision at 30 June 2018 is based on Earnout Period 2 which runs from 1
December 2017 to 30 November 2018. The earnout value has been guaranteed subject to a number of
conditions as part of the integration of Lester Franks into Veris Australia. $700,000 is the value assigned
to Earnout period 2.
Landdata
Deferred Vendor Payment Provision at 30 June 2018 is based on Earnout Period 1 which runs from 31
July 2017 to 30 July 2018 and Earnout Period 2 which runs from 31 July 2018 to 30 July 2019. Earn-out
is conditional on a percentage Gross Margin being achieved and of minimum revenues and maximum
revenue of $3,937,500 and $4,312,500 respectively in year 1 for Earnout in Period 1, and of minimum
revenues of $8,625,000 in Earnout Period 2 for years 1 and 2. An incentive bonus of 25% is payable at
the end of Earnout Period 2 if Gross margin is greater than $4,400,000. The incentive bonus calculation
has been re-calculated subsequent to the 30 June 2017 Disclosure to incorporate 11 months of actual
results to 30 June 2018 and budgeted results to 31 July 2019. As a results the amount has been revised
to $1,308,000 as at 30 June 2018 from $1,960,000 at 30 June 2017.
Elton
Deferred Vendor Payment Provision at 30 June 2018 will be up to $2,000,000 payable 50% in cash and
50% in shares and will be based on performance criteria over two years. Earn-out Period 1 for $1,000,000
runs from 30 March 2018 to 29 March 2019, and Earn-out Period 2 for $1,000,000 runs from 30 March
2019 to 29 March 2020. Earn-out in both periods required EBITDA to be over $2,600,000 and is capped
at $3,100,000. There is an additional deferred payment of $2,000,000 payable 50% in cash and 50% in
shares and will be paid 2 years after completion of the acquisition.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 41
41
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
8. FINANCIAL INSTRUMENTS (CONTINUED)
Risk Management Strategies
The Group is primarily exposed to (i) credit risks; (ii) liquidity risks; and (iii) interest rate risks. The nature
and extent of risk exposure, and the Group's risk management strategies are noted below.
Credit risks
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from
customers.
As detailed in Note 1, the Company has successfully implemented its diversification strategy, through the
acquisition surveying businesses, and thus mitigated the risk of dependence on key customers.
Credit risk is kept continually under review and managed to reduce the incidence of material losses being
incurred by the non-receipt of monies due.
Credit risk is managed through monitoring and follow-up of accounts receivable on a regular basis, and
follow up on overdue customer balances.
Bad debts are written off in the year in which they are identified. Specific provisions are made against
identified doubtful debts.
There has been no change in the above policy since the prior year.
The Group’s maximum exposure to credit risk is:
Cash and cash equivalents
Trade and other receivables
2018
$000
5,588
30,932
36,520
2017
$000
14,574
15,983
30,557
The Group does not hold collateral against the credit risks, however, management considers the credit
risks to be low on account of the risk management policy noted above. The trading terms generally offer
30 days credit from the date of invoice. As of the reporting date, none of the receivables have been subject
to renegotiated terms.
The ageing analysis of past due trade and other receivables at reporting date are:
0 – 30 days not past due
Past due 1 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
Past due 90 days
Provision for impairment
Total
2018
$000
14,996
10,534
2,672
1,045
1,892
(207)
30,932
2017
$000
9,921
3,499
1,139
985
700
(261)
15,983
The Group is also subject to credit risks arising from the failure of financial institutions that hold the entity’s
cash and cash equivalents. However, the management considers this risk to be negligible.
The Group’s maximum exposure to credit risk for trade and other receivables at the reporting date by
geographic region was $30,932,000 (2017: $15,983,000) for Australia. The allowance for impairment for
2018 amounted to ($207,000) (2017: $261,000). Based on historic default rates, the Group believes that
no impairment allowance is necessary in respect of trade receivables not past due or past due by up to
30 days.
42 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
42
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
8. FINANCIAL INSTRUMENTS (CONTINUED)
The movement in the allowance for impairment in respect of trade receivables during the year was as
follows:
Balance 1 July
Impairment loss reversed
Impairment loss provided
Total
2018
$000
261
(247)
193
207
2017
$000
152
(143)
252
261
Liquidity risks
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation. Liquidity risk is constantly
monitored and managed through forecasting short term operating cash requirements and the committed
cash outflows on financial liabilities.
The table below details the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements.
The following are the contractual maturities of financial liabilities including interest:
2018
Non-derivative
financial liabilities
Hire purchase
liabilities
Trade and other
payables
Deferred vendor
payments
Cash advance facility
Carrying
Amount
$000
Contractual
Cash Flows
$000
12,403
13,154
6
Months
or less
$000
2,022
6 – 12
Months
$000
1 – 2
Years
$000
2 – 5 Years
$000
>5
Years
$000
1,842
3,229
6,061
17,532
17,532
17,532
-
-
6,011
6,147
1,406
980
3,761
-
-
13,625
49,571
16,059
52,892
1,843
22,803
1,818
4,640
3,405
10,395
8,993
15,054
-
-
-
-
-
Deferred vendor payment Contractual Cash Flows is the amount payable under the contingent
consideration arrangement discussed above before any adjustments for the time value of money
2017
Non-derivative
financial liabilities
Hire purchase
liabilities
Trade and other
payables
Deferred vendor
Payments
Cash advance facility
Carrying
Amount
$000
8,153
Contractual
Cash Flows
$000
8,541
6 Months
or less
$000
1,098
6 – 12
Months
$000
931
1 – 2
Years
$000
1,154
2 – 5
Years
$000
5,358
>5
Years
$000
-
7,291
2,744
3,375
21,563
7,291
2,744
5,021
23,597
7,291
1,244
583
10,216
-
-
300
1,200
-
-
576
1,807
1,135
3,489
2,727
8,085
-
-
-
-
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or
at significantly different amounts.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 43
43
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
8. FINANCIAL INSTRUMENTS (CONTINUED)
Market risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect
the Group’s income. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
Interest rate risk
Interest rate risk is the risk that the fair values and cash-flows of the Group's financial instruments will be
affected by changes in the market interest rates.
The Group's cash and cash equivalents, and loans and borrowings are exposed to interest rate risks. The
average nominal interest rate is 4.70% for loans and borrowings (2017: 4.59%) detailed in note 20.
Interest sensitivity is calculated for a 1% change below:
Consolidated Group
Cash and cash equivalents
Loans and borrowings
2018
+1%
$000
-1%
$000
2017
+1%
$000
-1%
$000
56
(260)
204
(56)
260
(204)
146
(115)
31
(146)
115
(31)
Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors has not
implemented a formal capital management policy or a dividend policy.
There were no changes in the Group’s approach to capital management during the year other than
updated loan covenants (refer Note 20). The Group is not subject to externally imposed capital
requirements. Capital comprises share capital and retained earnings.
Currency risk
The Group receivables are all denominated in Australian dollars and accordingly no currency risk exists.
9. COMMITMENTS
Operating leases
Commitments in relation to future minimum lease payments under non-cancellable operating leases:
Not later than one year
Later than one year but not later than five years
Later than five years
Total commitments not recognised in financial statements
2018
$000
3,244
3,668
-
6,912
2017
$000
2,412
3,624
-
6,036
The non-cancellable operating leases are predominately for the lease of office and staff accommodation.
The leases are generally for a term of between 1 to 5 years.
10. CONTINGENT LIABILITIES
There were no contingent liabilities as at the date of this report.
44 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
44
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
WORKING CAPITAL
11. TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
2018
$000
30,829
103
30,932
2017
$000
15,772
211
15,983
The Group’s exposure to credit and currency risk is disclosed in note 8. Payment terms are typically 30
days end of month.
12. TRADE AND OTHER PAYABLES
Trade and other payables
2018
$000
17,532
17,532
2017
$000
7,291
7,291
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in note 8.
CAPITAL EMPLOYED
13. EMPLOYEE BENEFITS
Current
Annual leave
Long service leave
Superannuation
Other employee provisions
Shares
Non-current
Long service leave
Shares
2018
$000
4,081
3,502
1,558
181
183
9,505
920
146
1,066
2017
$000
2,554
2,107
491
329
-
5,481
907
-
907
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 45
45
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
14. PLANT AND EQUIPMENT
Leasehold Improvements at cost
Less: accumulated depreciation
Plant and equipment at cost
Less: accumulated depreciation
Motor vehicles at cost
Less: accumulated depreciation
Total written down value
2018
$000
1,300
(368)
932
2017
$000
425
(72)
353
20,838
(10,702)
10,136
21,453
(13,554)
7,899
7,941
(3,767)
4,174
7,703
(4,906)
2,797
15,242
11,049
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end
of the current financial year are set out below
2018
Leasehold
Improvements
Carrying amount at 1 July 2017
Acquired through business acquisitions
Additions at cost
Disposals at carrying value
Depreciation from all operations
Transfers between classes at carrying
value
Carrying amount at 30 June 2018
2017
Plant &
Equipment
$000
Motor
Vehicles
$000
7,899
349
5,860
(1,619)
(2,280)
(73)
2,797
180
2,873
(466)
(1,210)
-
Total
$000
11,049
882
9,158
(2,121)
(3,726)
-
10,136
4,174
15,242
$000
353
353
425
(36)
(236)
73
932
Leasehold
Improvements
$000
Plant &
Equipment
$000
Motor
Vehicles
$000
Total
$000
8,048
3,538
3,926
(376)
(4,087)
Carrying amount at 1 July 2016
Acquired through business acquisitions
Additions at cost
Disposals at carrying value
Depreciation
Carrying amount at 30 June 2017
56
77
284
-
(64)
353
5,571
2,972
2,488
(197)
(2,935)
2,421
489
1,154
(179)
(1,088)
7,899
2,797
11,049
The carrying value of finance leased assets at 30 June 2018 is $8.7 million (2017: $5.0 million).
Impairment Loss
The Group assesses whether there are indicators that assets, or groups of assets, may be impaired at
each reporting date. There were no indicators present in 2018 however goodwill is assessed annually
regardless of indicators, refer Note 15.
In this regard a formal estimate of the recoverable amount is
made. Veris has made an assessment of the recoverable amount of its assets as at 30 June 2018. No
impairment loss was recognised in the year ended 30 June 2018 (2017: $nil).
46 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
46
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
15. INTANGIBLE ASSETS
Carrying amount at 1 July 2016
Additions
Amortisation
Impairment
Carrying value 1 July 2017
Additions
Amortisation
Adjustments
Goodwill
$000
25,468
6,193
-
-
31,661
14,465
-
556
Customer
Relationships
$000
Brands
$000
6,376
6,656
(4,168)
-
8,864
6,856
(4,076)
-
-
-
-
-
-
292
(20)
-
272
Total
$000
31,844
12,849
(4,168)
-
40,525
21,613
(4,096)
556
58,598
Carrying amount at 30 June 2018
46,682
11,644
Goodwill has arisen on businesses purchased and an impairment review is carried out annually. At
present there are no indicators of impairment and no impairment recognised.
Impairment Review
The Group tests annually whether the above intangible assets or goodwill are impaired, in accordance
with the accounting policy stated in note 30 e(ii). An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount of goodwill and other intangible assets are determined based on value in use of
the company’s CGU’s which management have assessed to be its operating divisions. The discounted
cash flow method (value in use) estimates the value of the CGU as being equal to the present value of
the future cash flows which are expected to be derived from the CGU.
For the purpose of impairment testing, goodwill has been allocated to CGU’s as follows:
Surveying
Professional & Advisory
2018
$000
34,430
12,252
2017
$000
31,661
-
Carrying value of consolidated goodwill
46,682
31,661
The CGU’s have changed from 2017. In 2017 the CGU’s were individual surveying entities. In 2018 all
the surveying entities were integrated into Veris Australia, as these businesses are now operating as one
it was appropriate to update the CGU’s into Surveying.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 47
47
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
15. INTANGIBLE ASSETS (CONTINUED)
The recoverable amount of the surveying CGU has been determined using a value in use discontinued
cash flow model.
Recoverable amount testing – Key assumptions
In determining value in use, it is necessary to make a series of assumptions to estimate future cash flows.
The key assumptions requiring judgement include projected cash flows, growth rate estimates, discount
rates, working capital and capital expenditure. The key assumptions utilised in the “value in use”
calculations across all CGUs are budgeted EBITDA, long term growth rate (2.0%) (2017: 2.9%) and
discount rate (9.3%) (2017: 8.2% - 9.5%).
(i) Projected cash flows
The Group determines the recoverable amount based on a “value in use” calculation, using five years
cash flow projections. The projections are based on the approved budget for the year ending 30 June
2019 and the management forecast for the subsequent financial years ending 30 June 2023.
Budgeted EBITDA has been based on past experience and the Group’s assessment of economic and
regulatory factors affecting the industry within which the Group operates.
(ii) Long term growth rate
The future annual growth rates for FY 2023 onwards to perpetuity are based on a growth rate of 2.0%
(2017: 2.9%)
(ii) Discount rate (9.3%) (2017: 8.2% - 9.5%)
Post tax nominal discount rate of 9.3% (2017: 8.2% - 9.5%) reflect the Group’s estimate of the time value
of money and risks specific to each CGU.
Sensitivities
The directors and management have performed an assessment of reasonably possible changes in the
key assumptions and have not identified any instances which could cause the carrying amount of the
Group’s CGU to exceed its recoverable amount. Following impairment testing for the current reporting
period, no impairment of intangible assets has been recognised as the recoverable amount of the Group’s
CGU which all of its assets are assigned exceeds the carrying amount of the CGU.
48 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
48
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
16. INCOME TAX BENEFIT
Current tax - Australia
Deferred tax
Adjustment for prior periods
Adjustment - other
Income tax benefit reported in income statement
2018
$000
-
(60)
(697)
(114)
(871)
2017
$000
-
(3,346)
(111)
(335)
(3,792)
The prima facie tax on the result from ordinary activities before income tax is reconciled to the income tax
as follows:
Reconciliation of effective tax rate
(Loss)/ Profit before income tax – continuing operations
Income tax at 30% (2016: 30%)
Add (less) tax effect of:
Other non-allowable/ assessable items
Research and development offset
Adjustment for prior periods
Adjustment - other
2018
$000
(1,927)
(578)
518
-
(697)
(114)
2017
$000
(5,223)
(1,567)
(1,561)
(218)
(111)
(335)
Income tax expense/ (benefit) – continuing operations
(871)
(3,792)
(Loss)/ Profit before income tax – discontinued operations
Income tax at 30% (2016: 30%)
Foreign Jurisdiction tax at 10%
Add (less) tax effect of:
Other non-allowable/ assessable items
Adjustment for prior periods
Income tax expense/ (benefit) – discontinued operations
(285)
(86)
-
(3)
126
37
3,136
941
717
-
-
1,658
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 49
49
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
17. DEFERRED TAX ASSETS/ LIABILITIES
Deferred tax liability
Work in progress
Plant & Equipment
Employee Benefits
Provisions
Intangibles
Carried forward R&D
offset available
Carried
losses available
Other
forward
tax
Assets
2018
$000
-
-
3,046
579
-
8,453
262
245
2017
$000
-
307
1,838
226
-
7,875
1,924
330
Liabilities
Net
2018
$000
(2,654)
(30)
-
-
(3,594)
-
-
(31)
2017
$000
(1,349)
(30)
-
-
(3,477)
-
-
(8)
2018
$000
(2,654)
(30)
3,046
579
(3,594)
8,453
262
214
2017
$000
(1,349)
277
1,838
226
(3,477)
7,875
1,924
322
Tax assets/ (liabilities)
12,585
12,500
(6,309)
(4,864)
6,276
7,636
Movement in deferred tax balances
2018
$000
2017
$000
Opening balance
7,636
6,716
Deferred tax liability on intangibles – Business Combinations
(2,145)
(2,193)
Subsidiaries acquired opening balances
Prior year adjustments
Charge to profit or loss – continuing operations
Charge to profit or loss – discontinued operations
10
628
61
86
401
306
2,405
-
Closing deferred tax asset
6,276
7,636
During the prior year the Company provided construction and installation services external to Australia
through a permanent establishment in another country. The earnings from this permanent establishment
are subject to the taxation regime within that country and are considered exempt from Australian income
tax. There is $nil impact of this tax treatment in the current financial year (2017: $0.7 million income tax
credit recognised in the statement of comprehensive income and a deferred tax asset of $0.7 million
reflected in the balance sheet as at 30 June 2017).
50 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
50
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NET DEBT
18. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Cash and cash equivalents in the statement of cash flows
2018
$000
5,588
5,588
2017
$000
14,574
14,574
The Group’s exposure to interest rate risk and a sensitivity analysis for the financial assets and liabilities
disclosed in note 8.
19. RECONCILIATION OF CASH FLOW FROM OPERATIONS WITH PROFIT AFTER INCOME TAX
Cash flows from operating activities
Profit/(loss) after income tax
Non-cash flows in profit:
Depreciation (Note 14)
Amortisation of intangible assets (Note 15)
Profit on sale of fixed assets
Other
Share based payment
Income tax expense/ (benefit) from all operations
Change in trade and other debtors
Change in other assets
Change in work in progress
Change in trade creditors
Change in provisions and employee benefits
2018
$000
(1,304)
3,585
4,096
(2,254)
265
1,031
(908)
4,511
(11,512)
(1,939)
(4,222)
10,507
2,517
2017
$000
48
4,087
4,168
(181)
(76)
298
(2,134)
6,210
598
804
2,759
(4,313)
337
Net cash provided by operating activities
(138)
6,395
Significant non-cash investing and financing transactions
Property, plant and equipment of $7.3 million (2017: $3.0 million) was acquired under finance leases.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 51
51
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
19. RECONCILIATION OF CASH FLOW FROM OPERATIONS WITH PROFIT AFTER INCOME TAX
(CONTINUED)
Movements in borrowings
Opening balance 1 July 2017
Movements:
Proceeds from borrowings1
Repayments of borrowings and lease liabilities
Closing balance 30 June 2018
20. LOANS AND BORROWINGS
Current liabilities
Hire purchase liabilities (HP)
Cash advance facility
Non-current liabilities
Hire purchase liabilities
Cash advance facility
$000
11,528
19,075
(4,575)
14,500
26,028
2018
$000
3,431
2,950
6,381
8,972
10,675
19,647
2017
$000
1,843
750
2,593
6,310
2,625
8,935
TERMS AND DEBT REPAYMENT SCHEDULE
Terms and conditions of outstanding loans were as follows:
Nominal
interest rate%
4.0 – 9.5
Year of
maturity
2017 – 2023
2018
$000
Carrying
Amount
12,403
2017
$000
Carrying
Amount
8,153
4.5 – 4.8
2018 – 2022
13,625
3,375
26,028
11,528
Hire purchase
liabilities (HP)
Cash advance
facility
Hire purchase rate is fixed at contract agreement stage. The cash advance facility has a variable interest
rate. All loans and borrowings are denominated in Australian Dollars.
1 Proceeds from borrowings include cash inflows to the bank from CBA borrowings of $11,000,000 and $8,075,000 of
Hire Purchase borrowings which were paid directly to the supplier of the asset.
52 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
52
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
20. LOANS AND BORROWINGS (CONTINUED)
Facility
Available
2018
$000
25,000
5,000
10,300
40,300
Used
2018
$000
(13,625)
(812)
(432)
(14,869)
Unused
2018
$000
11,375
4,188
9,868
25,431
Facility
Available
2017
$000
25,000
15,000
10,300
50,300
Used
2017
$000
(3,375)
(1,753)
(1,345)
(6,473)
Unused
2017
$000
21,625
13,247
8,955
43,827
Cash advance facility (a)
Insurance Bonds
Other (b)
Total financing facilities
a) The Group drew down on the Cash advance facility during 2018 to facilitate the cash settlement of the
Elton acquisition. The carrying amount of this facility was $13.6 million as at 30 June 2018 (2017: $3.4
million). The funds are available for business acquisitions. The facility is repayable in tranches over the
next three years. The loan contains covenants stating that at the end of each quarter the Group is to
maintain the Group’s Leverage Ratio (defined as the Group’s Total Debt plus 50% of drawn Bank
Guarantees and Insurance Bonds) at less than 2.5 times EBITDA and the Group will maintain EBITDA
greater than Debt Commitments (i.e. Debt Service Cover Ratio DSCR of greater than 1.6). The Group is
in compliance with the covenants at 30 June 2018.
b) Other facilities include a $5 million bank overdraft, $5 million multi option facility and bank guarantees
and $300,000 credit card facility.
c) Lease liabilities are effectively secured as the rights to leased assets revert to the lessor in the event
of default.
Hire Purchase Liabilities
Hire purchase liabilities of the Group are payable as follows:
Future
minimum HP
payments
Interest
Present value
of minimum
HP payments
Future
minimum
HP
payments
Interest
2018
$000
3,814
9,340
2018
$000
(383)
(368)
2018
$000
3,431
8,972
13,154
(751)
12,403
2017
$000
2,029
6,512
8,541
2017
$000
(186)
(202)
(388)
Present
value of
minimum
HP
payments
2017
$000
1,843
6,310
8,153
Less than 1 year
Between 1 & 5
years
Financing is arranged for major leasehold improvements, plant & equipment, and motor vehicle
additions
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 53
53
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
EQUITY
21. CAPITAL AND RESERVES
Share capital
Balance at the beginning of the year
Issued via Dividend Reinvestment
Plan
Conversion of Performance Rights
Issued as consideration for business
combinations
Balance at the end of the year
Issues of ordinary shares
2018
$000
37,283
379
-
3,225
2017
$000
22,622
12,626
-
2,035
2018
No. of
Shares
325,705,364
2,238,596
2017
No. of
Shares
266,470,630
49,000,865
1,289,426
16,125,000
3,431,522
6,802,347
40,887
37,283
345,358,386
325,705,364
On 31 August 2017, 1,289,426 ordinary shares were issued for $nil consideration on vesting of
Performance Rights to a key executive under the Veris FY15 & FY16 Employee Incentive
Scheme.
On 19 September 2017, 2,238,596 shares were issued at a price of $0.169 in accordance with
the DRP.
On 29 March 2018, 15,625,000 ordinary shares were issued as part of the consideration for the
acquisition of Elton Consulting Group. The shares were issued for nil cash consideration with a
fair value of $0.192 per share.
On 4 May 2018, 500,000 ordinary shares were issued as an incentive for continued employment
to key personnel following the acquisition of Linker Surveying in May 2016. The shares were
issued for nil cash consideration with a fair value of $0.20 per share.
The Group does not have authorised capital or par value in respect of its issued shares.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Group. All shares rank equally with regard to the Group’s
residual assets.
Reserves
Balance at the beginning of the year
Profit/ (loss) for the year
Dividends paid
Share based payment transactions
2018
$000
Share
Based
Payments
1,747
-
-
602
2017
$000
Share
Based
Payments
1,449
-
-
298
2018
$000
Retained
Earnings
2017
$000
Retained
Earnings
27,907
(1,304)
(1,636)
-
29,227
48
(1,368)
-
Balance at the end of the year
2,349
1,747
24,967
27,907
The retained earnings reserve represents profits of entities within the Group. Such profits are available
to enable payment of franked dividends in future years. Dividends amounting to $1.6 million were
distributed during the year (2017: $1.4 million).
54 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
54
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
22. DIVIDENDS
On 15 September 2017 the Company declared a fully franked dividend for 2017 of 0.5 cents per share,
totalling $1,636,000 (2017: $1,368,000). The Dividend paid in cash to shareholders was $1,256,646 and
2,238,596 shares issued under the Dividend Reinvestment Plan (DRP) on the same date at 16.9 cents
per share raising $378,329. The 16.9 cents price per share was based on 5% discount to the VWAP on
each day during the Price Determination Period which was 5 days.
Franking Credit Balance
The amount of franking credits available for the subsequent financial year are:
2018
$
2017
$
Franking account balance as at the end of financial year at 30%
(2017:30%)
6,295,357
5,191,567
The ability to utilise the franking credits is dependent upon there being sufficient available profits to
declare dividends.
The above available amounts are based on the balance of the dividend franking account at year-end
adjusted for:
•
•
•
•
franking credits that will arise from the payment of the current tax liabilities;
franking debits that will arise from the payment of dividends recognised as a liability at the year-
end;
franking credits that will arise from the receipt of dividends recognised as receivables by the tax
consolidated group at the year-end; and
franking credits that the entity may be prevented from distributing in subsequent years.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 55
55
Veris Limited Annual Financial Report
Veris Limited Annual Financial Report
30 June 2018
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
23. SHARE-BASED PAYMENTS
23. SHARE-BASED PAYMENTS
(a) Share – Based Payment Arrangements
(a) Share – Based Payment Arrangements
As at 30 June 2018, the Group had the following share-based payment arrangements.
As at 30 June 2018, the Group had the following share-based payment arrangements.
(i)
(i)
2016 Performance Rights Plan
2016 Performance Rights Plan
On 20 January 2016, the Group granted Performance Rights to eligible employees under the Group’s
Long Term Incentive Plan in respect of the three financial years ended 30 June 2016 to 30 June 2018.
Subject to continued employment and achievement of financial performance hurdles (relative total
shareholder return and compounded earnings per share growth), the Performance Rights will vest as
follows:
On 20 January 2016, the Group granted Performance Rights to eligible employees under the Group’s
Long Term Incentive Plan in respect of the three financial years ended 30 June 2016 to 30 June 2018.
Subject to continued employment and achievement of financial performance hurdles (relative total
shareholder return and compounded earnings per share growth), the Performance Rights will vest as
follows:
Number of
Number of
Performance
Performance
Rights
Rights
granted
granted
Vesting
Vesting
Date
Date
(A)
(A)
Vested
Vested
(C)
(C)
Vesting Hurdles
Vesting Hurdles
Lapsed
(B)
Lapsed
(B)
2,239,415
2,239,415
30 June
30 June
2017
2017
684,375
684,375
1,555,039
1,555,039
15,698,638
15,698,638
30 June
30 June
2018
2018
7,086,642
7,086,642
8,611,997
8,611,997
17,938,053
17,938,053
7,771,017
7,771,017
10,167,036
10,167,036
50% EPS CAGR
50% EPS CAGR
5%
5%
Nil
Nil
>5%-
<25%
>5%-
<25%
pro rata
pro rata
vesting
vesting
between
between
25%-100%
25%-100%
50% rTSR
50% rTSR
Nil
<50th
<50th
percentile
percentile
Nil
50%, plus
50%, plus
2% for
2% for
every one
every one
percentile
percentile
increase
increase
above 50th
above 50th
percentile
percentile
>50th
>50th
percentile
percentile
, <75th
, <75th
percentile
percentile
75th
75th
percentile
percentile
or more
or more
100%
100%
25%>
25%>
100%
100%
(A) On vesting, Performance Rights will convert to ordinary shares on a one for one basis. Performance Rights that do
not vest will lapse.
An unvested Performance Right will lapse upon the earlier to occur of:
(A) On vesting, Performance Rights will convert to ordinary shares on a one for one basis. Performance Rights that do
not vest will lapse.
An unvested Performance Right will lapse upon the earlier to occur of:
i. failure to satisfy the applicable vesting conditions;
ii. the holder purporting to transfer the Performance Right otherwise than with the consent of the Board or by
force of law;
iii. the employment of the holder ceasing, where such a condition was imposed on the grant of the Performance
Right;
iv. in the opinion of the Board, the holder commits any fraudulent or dishonest act or is in breach of his or her
obligations to the Company or subsidiary;
v. the expiry date; or
vi. the seven year anniversary of the date of grant of the Performance Rights.
i. failure to satisfy the applicable vesting conditions;
ii. the holder purporting to transfer the Performance Right otherwise than with the consent of the Board or by
force of law;
iii. the employment of the holder ceasing, where such a condition was imposed on the grant of the Performance
Right;
iv. in the opinion of the Board, the holder commits any fraudulent or dishonest act or is in breach of his or her
obligations to the Company or subsidiary;
v. the expiry date; or
vi. the seven year anniversary of the date of grant of the Performance Rights.
(B) During the period, 313,725 Performance Rights lapsed due to cessation of employment and during the prior period,
7,457,292 Performance Rights lapsed due to cessation of employment
(C) During the period 8,611,997 Performance Rights vested due to the achievement of 100% of the rTSR financial
performance hurdle and the EPSCAGR hurdle (rTSR = 95th percentile; EPSCAGR =25% )
During the prior period, 1,555,039 Performance Rights vested due to the following:
(B) During the period, 313,725 Performance Rights lapsed due to cessation of employment and during the prior period,
7,457,292 Performance Rights lapsed due to cessation of employment
(C) During the period 8,611,997 Performance Rights vested due to the achievement of 100% of the rTSR financial
performance hurdle and the EPSCAGR hurdle (rTSR = 95th percentile; EPSCAGR =25% )
During the prior period, 1,555,039 Performance Rights vested due to the following:
- 684,374 on cessation of employment under the good leaver provisions of the Plan; and
- 870,665 due to the achievement of 100% of the rTSR financial performance hurdle and the EPSCAGR hurdle
(rTSR = 92nd percentile; EPSCAGR =33%)
- 684,374 on cessation of employment under the good leaver provisions of the Plan; and
- 870,665 due to the achievement of 100% of the rTSR financial performance hurdle and the EPSCAGR hurdle
(rTSR = 92nd percentile; EPSCAGR =33%)
56 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
56
56
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
23. SHARE-BASED PAYMENTS (CONTINUED)
(ii)
2017 Performance Rights Plan
On 5 June 2017, the Group granted further Performance Rights to eligible employees under the Group’s
Long Term Incentive Plan in respect of the three financial years 30 June 2017 to 30 June 2019. Subject to
continued employment and achievement of financial performance hurdles absolute total shareholder return
and absolute earnings per share growth), the Performance Rights will vest as follows:
Number of
Performance
Rights
granted
Vesting Date
(A)
Lapsed (B)
Vested
during the
Period
3,002,848 30 June 2019
93,000
3,002,848
93,000
-
-
Vesting Hurdles
50% TSR (C)
50% 3 Year
Absolute EPS
Pooling (D)
<100%
Nil
< 6 c
Nil
100% <
180%
Pro-rata
vesting
between
25% and
100%
>6-
<6.5 c
pro rata
vesting
between
25%-
100%
180%
100%
6.5 c >
100%
(A) On vesting, Performance Rights will automatically convert to ordinary shares on a one for one basis. Performance
Rights that do not vest will lapse. An unvested Performance Right will lapse upon the earlier to occur of:
i.
ii.
failure to satisfy the applicable vesting conditions;
the holder purporting to transfer the Performance Right otherwise than with the consent of the Board or by
force of law;
the employment of the holder ceasing, where such a condition was imposed on the grant of the Performance
Right;
in the opinion of the Board, the holder commits any fraudulent or dishonest act or is in breach of his or her
obligations to the Company or subsidiary;
the expiry date; or
the seven year anniversary of the date of grant of the Performance Rights.
iii.
iv.
v.
vi.
(B) During the period, 93,000 Performance Rights lapsed due to cessation of employment
(C) Performance of management measured against an absolute shareholder return target of VRS
(D) Performance management measured against a normalised EPS pooled approach setting an aggregate value of dollars
of EPS that must be achieved over the three years (i.e. a pool consisting of year 1 EPS plus year 2 EPS plus year 3
EPS
(b) Measurement of Fair Values of Share-Based Payments
During the period, no Performance Rights were issued (2017: 3,002,848).
(c) Unvested Unlisted Performance Rights
2,909,848 Performance Rights issued during 2017 remain unvested at 30 June 2018 (2017: 3,002,848
Performance Rights issued 2017 and 8,925,722 Performance Rights issued 2016).
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 57
57
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
OTHER INFORMATION
24. RELATED PARTIES
Key management personnel compensation
The key management personnel compensation included in ‘employee benefits’ is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payment
Termination benefit - Cash
Termination benefit – Share-based
2018
$
1,337,843
118,856
207,503
-
-
1,664,202
2017
$
1,315,265
84,477
419,627
251,981
(239,324)
1,832,026
During the year, the Company did not have or repay any loans from related parties (2017: $nil).
Individual directors and executives compensation disclosures
Information regarding individual directors and executive’s compensation and some equity instruments
disclosures as required by Corporations Regulations 2M.3.03 is provided in the remuneration report section
of the directors’ report on pages 11 to 23.
Key management personnel transactions
The aggregate value of transactions and outstanding balances related to key management personnel and
entities over which they have control of significant influence was as follows.
Transaction
Rent (a)
Transaction values
for the year ended
30 June
2018
$
83,201
83,201
2017
$
-
-
Balance outstanding
as at 30 June
2018
$
2017
$
-
-
-
-
(a) The Company rents office space from Elton Property, a company controlled by a director. Amounts
billed were based on market rates and were due and payable under normal payment terms.
Apart from the details disclosed in this note, no director has entered into a material contract with the Group
since the end of the previous financial year and there were no material contracts involving directors’ interests
existing at year-end.
25. AUDITOR’S REMUNERATION
Audit and review services
KPMG
Audit and review of financial reports
Due Diligence
Integration
58 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
2018
$
254,000
51,413
551,031
856,444
2017
$
222,320
141,861
405,029
769,210
58
Veris Limited Annual Financial Report
30 June 2018
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
GROUP STRUCTURE
26. SUBSIDIARIES
The following entities are consolidated:
Name of Entity
Parent Entity
Veris Limited
Controlled Entity
Veris Australia Pty Ltd
Elton Consulting Group Pty Ltd
Aqura Technologies Pty Ltd
(previously named OTOC Australia Pty Ltd)
Emerson Stewart Pty Ltd
Whelans Australia Pty Ltd
Whelans International Pty Ltd
Bosco Jonson Pty Ltd
Geo-metric Surveying Pty Ltd
Linker Surveying Pty Ltd
Queensland Surveying Pty Ltd
Southern Hemisphere Investments Pty Ltd
A Perfect Day Elise Pty Ltd
TBBK Pty Ltd
Lawrence Group Pty Ltd
Lester Franks Survey & Geographic Pty Ltd
27. DEED OF CROSS GUARANTEE
Country of
Incorporation
Ownership Interest
2018
%
2017
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
Pursuant to ASIC Corporation (wholly-owned companies) Instrument 2016/785, all the wholly-owned
subsidiaries of Veris Limited are relieved from the Corporations Act 2001 requirements for preparation, audit
and lodgement of financial reports, and Directors’ report.
It is a condition of the Instrument that the Company and each of the subsidiaries (referenced in Note 26)
enter into a Deed of Cross Guarantee (“the Deed”). The effect of the Deed is that the Company guarantees
to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under certain
provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the
Company will only be liable in the event that after six months any creditor has not been paid in full. The
subsidiaries have also given similar guarantees in the event that the Company is wound up.
The consolidated statement of comprehensive income and consolidated statement of financial position,
comprising the Company and controlled entities which are a party to the Deed as at 30 June 2018, after
eliminating all transactions between parties to the Deed of Cross Guarantee, as of and for the year ended
30 June 2018 is the same as the consolidated statement of comprehensive income and consolidated
statement of financial position of the Group as of and for the year ended 30 June 2018.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
28. PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ended 30 June 2018 the parent company of the Group was Veris
Limited.
Results for the Year
Profit/(loss) for the year
Other comprehensive income
2018
$000
2,758
-
2017
$000
2,629
-
Total comprehensive profit/ (loss) for the year
2,758
2,629
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated loss
Total equity
29. BASIS OF PREPARATION
(a)
Presentation Currency
2018
$000
14,462
84,732
(6,772)
(29,910)
40,887
41,041
(27,106)
54,822
2017
$000
19,027
69,756
(1,490)
(20,885)
37,283
39,844
(28,256)
48,871
These consolidated financial statements are presented in Australian dollars, which is the Company’s
functional currency. The Company is of a kind referred to in ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instruments 2016/191 dated 1 April 2016. All financial information presented
in Australian dollars has been rounded to the nearest thousand unless otherwise stated.
(b)
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the
following material items in the statement of financial position:
financial instruments at fair value through profit or loss are measured at fair value
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied consistently by Group entities.
(a) Basis of consolidation
(i)
Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to
the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the
identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a
bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred,
except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent
consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or
loss.
If share-based payment awards (replacement awards) are required to be exchanged for awards held by the
acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement
awards is included in measuring the consideration transferred in the business combination. This
determination is based on the market-based measure of the replacement awards compared with the market-
based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre-
combination service.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases.
(iii) Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
(b)
Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are originated. All
other financial assets (including assets designated at fair value through profit or loss) are recognised initially
on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in
transferred financial assets that is created or retained by the Group is recognised as a separate asset or
liability.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets and liabilities are offset and the net amount presented in the statement of financial position
when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net
basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets: cash, loans and receivables.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an
active market. Such assets are recognised initially at fair value plus any directly attributable transaction
costs. Subsequent to initial recognition loans and receivables are measured at amortised cost using the
effective interest method, less any impairment losses.
Loans and receivables comprise trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months
or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash
management are included as a component of cash and cash equivalents for the purpose of the statement
of cash flows.
(ii) Non-derivative financial liabilities
The Group initially recognises financial liabilities (including liabilities designated at fair value through profit
or loss) on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or
expired. Financial assets and liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Group has a legal right to offset the amounts and intends either to settle
on a net basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, and
trade and other payables.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective
interest rate method for all others.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity, net of any tax effects. Dividends on
ordinary shares are recognised as a liability in the period in which they are declared.
(c)
Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that
is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts
of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment and are recognised in
profit or loss.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to the Group
and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs
of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is recognised in profit or loss on either a straight-line or diminishing value basis over the
estimated useful lives of each part of an item of property, plant and equipment. Items of property, plant and
equipment are depreciated from the date that they are installed and are ready for use.
The depreciation rates for the current and comparative periods are as follows:
Plant and equipment
Motor vehicles
Leasehold Improvements
25%
20%
20%
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
(d)
Intangible assets and goodwill
(i) Goodwill
Goodwill represents the excess of the cost of a business acquisition over the fair value of the Group’s share
of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill acquired in a
business combination is not amortised. Instead goodwill is tested for impairment annually or more frequently
if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Gains and losses on disposal of an entity include the carrying amount of
goodwill relating to the entity sold. Goodwill is allocated to individual cash generating units for the purpose
of impairment testing.
(ii) Other intangible assets
Other intangible assets including customer relationships and brands that are acquired by the Group, which
have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment
losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill
and brands, is recognised in profit or loss as incurred.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(iv) Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible
assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the
current and comparative periods are as follows:
Customer relationships and Brands
3-5 years
(e)
Impairment
(i) Non-derivative financial assets (including receivables)
A financial asset is assessed at each reporting date to determine whether there is any objective evidence
that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or
more events have had a negative effect on the estimated future cash flows of that asset.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor,
restructuring of an amount due to the Group on terms that the Group would not consider otherwise,
indications that a debtor or issuer will enter bankruptcy, the disappearance of an active market for a security.
The Group considers evidence of impairment for receivables and they are assessed for specific impairment.
All individually significant receivables found not to be specifically impaired are then collectively assessed for
any impairment that has been incurred but not yet identified. Receivables that are not individually significant
are collectively assessed for impairment by grouping together receivables with similar risk characteristics.
In assessing collective impairment the Group uses historical trends of the probability of default, timing of
recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current
economic and credit conditions are such that the actual losses are likely to be greater or less than suggested
by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the
original effective interest rate.
Individually significant financial assets are tested for impairment on an
individual basis. The remaining financial assets are assessed collectively in groups that share similar credit
risk characteristics. All impairment losses are recognised in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised
in profit or loss.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists
then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite
lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together
into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill
acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating
units that are expected to benefit from the synergies of the combination.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in
respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated
to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro
rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and
liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax
assets and employee benefit assets, which continue to be measured in accordance with the Group’s
accounting policies. Impairment losses on initial classification as held for sale and subsequent gains of
losses on re-measurement are recognised in profit or loss. Gains are not recognised in excess of any
cumulative impairment loss.
Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised
or depreciated.
(f) Employee benefits
(i) Other long-term employee benefits
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods plus related on-costs. That
benefit is discounted to determine its present value.
(ii) Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
(iii) Share-based payment transactions
The grant date fair value of rights granted to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the employees become unconditionally entitled to the
options. The amount recognised as an expense is adjusted to reflect the actual number of performance
rights for which the related service and non-market vesting conditions are met.
(g) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h)
Revenue
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
Construction contract revenue is recognised in profit or loss in proportion to the stage of completion of the
transaction at the reporting date. The stage of completion is assessed by reference to surveys of work
performed.
Contract revenue includes the 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. As soon as the outcome of a construction contract can be estimated reliably, contract
revenue is recognised in profit or loss in proportion to the stage of completion of the contract. Contract
expenses are recognised as incurred unless they create an asset related to future contract activity.
(i)
Work in progress
Work in progress represents the gross unbilled amount expected from customers for contract work
performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised
losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and
variable overheads incurred in the Group's contract activities based on normal operating capacity.
(j)
Leased assets
(i) Lease payments
Payments made under operating leases are recognised in profit or loss on a straight line basis over the
term of the lease. Lease incentives received are recognised as an integral part of the total lease expense,
over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and
the reduction of the outstanding liability. The finance expense is allocated to each period during the lease
term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
(ii) Lease classification
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are
classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the
lower of its fair value and the present value of the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
Other leases are operating leases and the leased assets are not recognised in the Group's statement of
financial position. Investment property held under an operating lease is recognised on the Group's statement
of financial position at its fair value.
(k)
Finance income and expense
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues
in profit or loss, using the effective interest method. Finance expenses comprise interest expense on
borrowings. Borrowing costs that are not directly attributable to the acquisition, construction or production of
a qualifying asset are recognised in profit and loss using the effective interest method.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in
equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
years. Additional income taxes that arise from the distribution of dividends are recognised at the same time
as the liability to pay the related dividend is recognised.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly
controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In
addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of
goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or
on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(i)
Tax consolidation
The Group and its wholly-owned entities are part of a tax-consolidated group. As a consequence, all
members of the tax-consolidated group are taxed as a single entity from that date. The head entity within
the tax-consolidated group is Veris Limited.
The Group recognises deferred tax assets arising from unused tax losses of the tax-consolidated group
to the extent that it is probable that future taxable profits of the tax-consolidated group will be available
against which the asset can be utilised. Any subsequent period adjustments to deferred tax assets arising
from unused tax losses as a result of revised assessments of the probability of recoverability is
recognised by the head entity only.
(ii) Nature of tax funding arrangements and tax sharing arrangements
The head entity, in conjunction with other members of the tax-consolidated group, has entered into a tax
funding arrangement which sets out the funding obligations of members of the tax-consolidated group in
respect of tax amounts. The head entity in conjunction with other members of the tax-consolidated group
has also entered into a tax sharing agreement. The tax sharing agreement provides for the determination
of the allocation of income tax liabilities between the entities should the head entity default on its tax
payment obligations. No amounts have been recognised in the financial statements in respect of this
agreement as payment of any amounts under the tax sharing agreement is considered remote.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(iii) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST),
except where the amount of GST incurred is not recoverable from the taxation authority. In these
circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the
expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST
recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which are recoverable from, or payable to, the ATO
are classified as operating cash flows.
(m)
Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted
average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding for the effects of all dilutive potential ordinary shares, which comprise performance rights
granted to employees.
(n)
Segment reporting
The Group determines and presents operating segments based on the information that internally is provided
to the Managing Director, who is the Group's chief operating decision maker.
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of
the Group's other components. All operating segments' operating results are regularly reviewed by the
Group's Managing Director to make decisions about resources to be allocated to the segment and assess
its performance, and for which discrete financial information is available.
Segment results that are reported to the Managing Director include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate
assets (primarily the Group's headquarters), head office expenses, and income tax assets and liabilities.
(o) Prior year comparatives
Certain comparative information has been re-presented so it is in conformity with the current year
classification.
(p)
Changes in accounting policies
Veris has adopted all of the new and revised Accounting Standards and Interpretations issued by the AASB
that are relevant to the operations of Veris and effective for reporting periods beginning on or after 1 July
2017.
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
31. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
A number of new accounting standards and amendments have been issued but are not yet effective, none
of which have been early adopted by the Group in this financial report. These new standards and
amendments, when applied in future periods are not expected to have a material impact on the financial
position or performance of the Group, other than as set out below.
AASB15 Revenue from Contracts with Customers
AASB 15 Revenue from Contracts with Customers (AASB 15) is effective for the Group from 1 July 2018.
AASB 15 establishes a comprehensive framework for determining the timing and quantum of revenue
recognised. It replaces existing guidance, including AASB 118 Revenue and AASB 111 Construction
Contracts. The core principle of AASB 15 is that an entity shall recognise revenue when control of a good
or service transfers to a customer. This standard will become mandatory for reporting periods beginning on
or after 1 January 2018. The standard permits either a full retrospective or a modified retrospective approach
for the adoption.
Significant judgments and estimates are used in determining the impact, such as the assessment of the
probability of customer approval of variations and acceptance of claims, estimation of project completion
date and assumed levels of project execution productivity. In making this assessment we have considered,
for applicable contracts, the individual status of legal proceedings, including arbitration and litigation. The
implementation project is ongoing and therefore all impacts are current estimates which are subject to
finalisation prior to final implementation.
Revenue from the Group arises from providing professional services to our customers whereby we deliver
surveying, professional and advisory, and geospatial services to the infrastructure; property; energy, mining
& resource; and defence, agribusiness, tourism & leisure markets. Under AASB 15, these are predominantly
to be recognised over time with reference to inputs on satisfaction of the performance obligations. The
services that have been determined to be one performance obligation are highly inter-related and fulfilled
over time therefore revenue continues to be recognised over time. Incentives, variations and claims exist
which are subject to the same higher threshold criteria of only recognising revenue to the extent it is highly
probable that a significant reversal of revenue will not happen.
Whilst the Group’s analysis is still on going, based on the current assessment no material impact will result
from the implementation of this standard. The Group plans to adopt AASB 15 from 1 July 2018.
AASB16 Leases
AASB 16 Leases specifies how to recognise, measure and disclose leases. The standard provides a single
lessee accounting model, requiring lessees to recognise right-of-use assets and lease liabilities for almost
all leases but will have the option not to recognise ‘short-term’ leases and leases of ‘low-value’ assets.
Lessor accounting remains similar to the current standard – i.e. lessors continue to classify leases as finance
or operating leases. AASB 16 applies to annual reporting periods beginning on or after 1 January 2019 and
replaces AASB 117 Leases and the related interpretations as at the reporting date, the Group has non-
cancellable operating lease commitments of $6,912,000, refer to Note 9.
The Group manages its owned and leased assets to ensure there is an appropriate level of equipment to
meet its current obligations and to tender for new work. The decision as to whether to lease or purchase an
asset is dependent on a broad range of considerations at the time including financing, risk management and
operational strategies following the anticipated completion of a project. The Group has not finalised its
quantification of the effect of the new standard, however the following impacts are expected:
- the total assets and liabilities on the balance sheet will increase with a decrease in total net assets, due to
the reduction of the capitalised asset being on a straight line basis whilst the liability reduces by the principal
amount of repayments. Net current assets will show a decrease due to an element of the liability being
disclosed as a current liability;
- the straight-line operating lease expense will be replaced with a depreciation charge for the right-of-use
assets and interest expense on lease liabilities;
- interest expenses will increase due to the unwinding of the effective interest rate implicit in the lease.
Interest expense will be greater earlier in a leases life due to the higher principal value causing profit
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Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
31. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED (CONTINUED)
variability over the course of a lease life. This effect may be partially mitigated due to a number of leases
held in the Group at different stages of their terms; and
- repayment of the principal portion of all lease liabilities will be classified as financing activities.
AASB9 Financial Instruments
AASB 9 Financial Instruments is effective for the Group from 1 July 2018. AASB 9 includes revised guidance
on the classification and measurement of financial instruments, including a new expected credit loss model
for calculation of impairment on financial assets, and new general hedge accounting requirements. During
the year ended 30 June 2018 Veris made provisions for bad debts on a case by case basis and in FY19 the
Group will adopt AASB9 and record provisions based on historical evidence. The impact of AASB 9 is not
expected to have a material impact on the group.
32. DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both
financial and non-financial assets and liabilities. Fair values have been determined for measurement and /
or disclosure purposes based on the methods set out below. Where applicable, further information about
the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
(i) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is
based on market values. The market value of property is the estimated amount for which a property
could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s
length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently
and without compulsion. The market value of items of plant, equipment, fixtures and fittings is based
on the quoted market prices for similar items.
(ii)
Intangible assets
The fair value of customer relationships acquired in a business combination is determined using the
multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return
on all other assets that are part of creating the related cash flows.
(iii) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows,
discounted at the market rate of interest at the reporting date.
(iv) Share-based payment transactions
The fair value of employee stock options is measured using a binomial option pricing model. The fair
value of share performance rights is measured using the Monte Carlo formula.
Measurement inputs include share price on measurement date, exercise price of the instrument,
expected volatility (based on weighted average historic volatility adjusted for changes expected due to
publicly available information), weighted average expected life of the instruments (based on historical
experience and general option holder behaviour), expected dividends, and the risk-free interest rate
(based on government bonds). Service and non-market performance conditions attached to the
transactions are not taken into account in determining fair value.
(v) Deferred Vendor Payments
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay
contingent consideration that meets the definition of a financial instrument is classified as equity, then
it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent
consideration is remeasured at fair value at each reporting date and subsequent changes in the fair
value of the contingent consideration are recognised in profit or loss.
70 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
70
Veris Limited Annual Financial Report
30 June 2018
Director’s Declaration
Directors’Declaration
1.
In the opinion of the directors of Veris Limited (“the Company”):
(a) the consolidated financial statements and notes set out on pages 26 to 70 and the
Remuneration report on pages 11 to 23 in the Directors’ report, are in accordance with the
Corporations Act 2001 including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
2.
3.
4.
There are reasonable grounds to believe that the Company and the group entities identified in note
26 will be able to meet any obligations or liabilities to which they are or may become subject to by
virtue of the Deed of Cross Guarantee between the Company and those group entities pursuant to
ASIC Class Order 2016/191.
The directors have been given the declarations required by Section 295A of the Corporations Act
2001 from the chief executive officer and the chief financial officer for the financial year ended
30 June 2018.
The directors draw attention to page 30 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Derek La Ferla
Chairman
Dated at Perth 30 August 2018
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 71
71
Independent Auditor’s Report
kpmg
Independent Auditor’s Report
kpmg
To the shareholders of Veris Limited
Independent Auditor’s Report
Report on the audit of the Financial Report
To the shareholders of Veris Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Veris
Limited (the Company).
Opinion
The Financial Report comprises:
• Consolidated Statement of Financial Position as at
We have audited the Financial Report of Veris
Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
In our opinion, the accompanying Financial
Report of the Company is in accordance with
•
the Corporations Act 2001, including:
giving a true and fair view of the Group’s
financial position as at 30 June 2018 and of
its financial performance for the year ended
on that date; and
giving a true and fair view of the Group’s
financial position as at 30 June 2018 and of
its financial performance for the year ended
on that date; and
The Financial Report comprises:
30 June 2018
• Consolidated Statement of Financial Position as at
30 June 2018
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flow for the year then ended
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flow for the year then ended
• Notes including a summary of significant accounting
• Notes including a summary of significant accounting
policies
policies
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
• Directors’ Declaration.
• Directors’ Declaration.
•
•
•
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Basis for opinion
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
The Key Audit Matters we identified are:
• Goodwill and intangible assets value
Key Audit Matters
• Acquisitions (including deferred vendor
payments)
The Key Audit Matters we identified are:
• Goodwill and intangible assets value
• Acquisitions (including deferred vendor
payments)
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Liability limited by a scheme approved
under Professional Standards Legislation.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved
under Professional Standards Legislation.
72 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
Independent Auditor’s Report
kpmg
Independent Auditor’s Report
Goodwill and intangible assets value ($58.6m)
Refer to Note 15 to the Financial Report
To the shareholders of Veris Limited
The key audit matter
How the matter was addressed in our audit
Our procedures included:
Report on the audit of the Financial Report
The Group’s annual testing of goodwill and
intangible assets was a key audit matter, given
the size of the balance (being 45.5% of total
Opinion
assets). We focused on the significant forward
looking assumptions the Group applied in their
We have audited the Financial Report of Veris
value in use model for the surveying Cash
Limited (the Company).
Generating Unit (CGU), including:
In our opinion, the accompanying Financial
•
Report of the Company is in accordance with
the Corporations Act 2001, including:
Forecast cash flows –The estimation by the
Group of industry conditions and operating
costs, including labour lead to greater audit
giving a true and fair view of the Group’s
effort to gather evidence about forecast
financial position as at 30 June 2018 and of
market activity and cost assumptions.
its financial performance for the year ended
Forecast growth rates and terminal growth
on that date; and
rates – the Group’s model is sensitive to
complying with Australian Accounting
small changes in these assumptions. This
Standards and the Corporations
drives additional audit effort specific to their
Regulations 2001.
feasibility and consistency of application to
the Group’s strategy.
•
•
•
• Discount rate – it is complicated in nature and
Basis for opinion
varies according to the conditions and
environment the specific CGU is subject to
from time to time.
The Financial Report comprises:
• Consolidated Statement of Financial Position as at
• We assessed the Group’s determination of the
three CGUs (surveying, communications and
professional advisory) against the requirements of
accounting standards, our understanding of the
Group’s business and the completion of the
integration of the acquired businesses. We
analysed the Group’s internal reporting to assess
how earnings are monitored and reported, the
independency of cash flow generation and the
implications to CGU identification.
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flow for the year then ended
30 June 2018
policies
• We considered the Group’s determination of their
• Notes including a summary of significant accounting
• Directors’ Declaration.
CGUs based on our understanding of the
operations of the Group’s business, impact of
business acquisitions, and how independent cash
inflows were generated, against the requirements
The Group consists of the Company and the entities it
of the accounting standards.
controlled at the year end or from time to time during
the financial year.
• We considered the appropriateness of the value in
use model applied by the Group to perform the
annual test of goodwill for impairment against the
requirements of the accounting standards.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
The Group has a number of operating businesses
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
and has completed an integration strategy
audit of the Financial Report section of our report.
following acquisitions in recent years. This has
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
necessitated our consideration of the Group’s
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
determination of CGUs, based on the status of
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
the integration and the smallest group of assets
have fulfilled our other ethical responsibilities in accordance with the Code.
to generate largely independent cash flows.
• We assessed the accuracy of previous forecast
cash flows by comparing to actuals to challenge
the ability of the Group to estimate future cash
flows.
our knowledge of the Group and their industry, to
challenge the value in use model and key
assumptions, including:
• Working with our valuation specialists, we used
In the current year, the Group has determined it
Key Audit Matters
has three reportable segments; surveying,
communications and professional advisory which
The Key Audit Matters we identified are:
have been assessed as the Group’s CGUs also.
This results from the restructure in business
• Goodwill and intangible assets value
operations and integration of survey business
• Acquisitions (including deferred vendor
from legal entity to national operation by the
Group.
payments)
In assessing this key audit matter, we involved
senior audit team members, including valuation
specialists, who understand the Group’s
business, industry and environments it operates
in.
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
− Comparing forecast cash flows to the
Group’s board approved budget and
challenging these by analysing the forecast
pipeline of work and industry drivers of this
growth.
These matters were addressed in the context of our
− Comparing the Group’s growth assumptions
audit of the Financial Report as a whole, and in
to historical averages and relevant external
forming our opinion thereon, and we do not provide a
data of industry trends.
separate opinion on these matters.
− Analysing the discount rate against publicly
available data of a group of comparable
companies.
− We assessed the Group’s underlying
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved
under Professional Standards Legislation.
methodology and documentation for the
allocation of corporate costs, to the forecast
cash flows contained in the value in use
model. We assessed for consistency with
our understanding of the business and the
criteria in the accounting standards.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 73
Independent Auditor’s Report
kpmg
Independent Auditor’s Report
To the shareholders of Veris Limited
Report on the audit of the Financial Report
• We considered the sensitivity of the model by
varying key assumptions such as forecast growth
rates, terminal growth rate and discount rate,
within a reasonably possible range, to identify
those assumptions at higher risk of bias or
inconsistency in application and to focus our
further procedures.
Acquisitions (including deferred vendor payments $23.3m)
Opinion
Refer to Note 4 and Note 8 to the Financial Report
We have audited the Financial Report of Veris
Limited (the Company).
The key audit matter
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
Acquisitions are a Key Audit Matter due to:
The Financial Report comprises:
• Consolidated Statement of Financial Position as at
How the matter was addressed in our audit
30 June 2018
•
•
•
•
•
giving a true and fair view of the Group’s
financial position as at 30 June 2018 and of
its financial performance for the year ended
on that date; and
The size of the acquisitions: the Group made
two acquisitions during the year, being
Landdata Surveys Pty Ltd and Elton Consulting
Group Pty Ltd
policies
For each acquisition, our procedures included:
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flow for the year then ended
• Reading the sale and purchase agreement to
understand the nature and fair value of
consideration, the identification of assets and
liabilities acquired and the key terms and
conditions.
• Notes including a summary of significant accounting
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The level of judgement required by us in
evaluating the Group’s purchase price allocation
including identifiable intangible assets acquired,
and
• Directors’ Declaration.
• Critically evaluating the model developed by the
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Group to determine the fair value of the
customer relationship intangible asset. This
included:
− Comparing the forecast future revenue,
Basis for opinion
The level of judgement required by us in
evaluating the Group’s determination of the
liability in relation to potential deferred vendor
payments for earn-out arrangements.
•
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
gross margins and customer retention rates
to pre-acquisition documentation available
regarding the prior performance of the
acquired business.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
The significant judgements we focused on
included;
− Comparing forecast gross margins and
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
customer retention rates to the estimates
made for other acquisitions made by the
Group, adjusted for our knowledge of the
acquired customer base and Group’s
strategy.
Estimation by the Group of the fair value of the
customer relationships intangible asset. This
involves judgements of future revenues, gross
margins, customer retention rates and the
discount rate. Given the Group have no history
with the acquired businesses, there is
judgement involved in evaluating the accuracy
of forecast information, thereby increasing audit
risk
− Assessing the discount rate applied, using
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
our knowledge of the Group and its
industry, as well as comparing it against the
discount rate used for intangible asset
impairment testing purposes.
The Key Audit Matters we identified are:
Key Audit Matters
•
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
For each business acquired remaining in the
earn-out period at year end, our procedures for
assessing the liability for earn out arrangements
included:
− Comparing forecast measures of financial
performance as required in the relevant sale
and purchase agreement to recent results.
We also compared to our understanding of
the Group’s initial strategy on acquisition to
challenge the Group’s assessment of the
likelihood of a future deferred vendor
payment.
Liability limited by a scheme approved
under Professional Standards Legislation.
payments)
• Goodwill and intangible assets value
• Determination by the Group of the liability for
• Acquisitions (including deferred vendor
potential deferred vendor payments in earn-out
arrangements: the earn-out arrangements vary
in each contract and are dependent on future
revenue and operating results of the acquired
businesses. As described above, the risk
surrounding the Group’s forecasts means there
are a wider range of possible outcomes, and
therefore a focus of our audit.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
74 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
Independent Auditor’s Report
kpmg
Independent Auditor’s Report
To the shareholders of Veris Limited
Report on the audit of the Financial Report
Other Information
− Re-calculated the liability recognised and
assessed the components of the liability
recognised for earn out arrangements
against the criteria contained in the contract
for consistency.
Other Information is financial and non-financial information in Veris Limited’s annual reporting which is
provided in addition to the Financial Report and the Auditor's Report. The Directors are responsible for the
Opinion
Other Information.
We have audited the Financial Report of Veris
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report,
Limited (the Company).
Remuneration Report, Corporate Governance Statement and Shareholder Information. The Chairman’s
In our opinion, the accompanying Financial
Report, Managing Director’s Report and Overview of operations are expected to be made available to us
Report of the Company is in accordance with
after the date of the Auditor’s Report.
the Corporations Act 2001, including:
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and
•
will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flow for the year then ended
• Consolidated Statement of Financial Position as at
The Financial Report comprises:
30 June 2018
giving a true and fair view of the Group’s
financial position as at 30 June 2018 and of
its financial performance for the year ended
on that date; and
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
•
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
• Directors’ Declaration.
policies
• Notes including a summary of significant accounting
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
Responsibilities of the Directors for the Financial Report
Standards and the Corporations Act 2001
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
The Directors are responsible for:
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
•
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
•
have fulfilled our other ethical responsibilities in accordance with the Code.
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group and Company’s ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Key Audit Matters
The Key Audit Matters we identified are:
Auditor’s responsibilities for the audit of the Financial Report
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
• Goodwill and intangible assets value
Our objective is:
• Acquisitions (including deferred vendor
•
payments)
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
•
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved
under Professional Standards Legislation.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf.
This description forms part of our Auditor’s Report.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 75
Independent Auditor’s Report
kpmg
Independent Auditor’s Report
Report on the Remuneration Report
Opinion
Directors’ responsibilities
To the shareholders of Veris Limited
In our opinion, the Remuneration Report of Veris
Limited for the year ended 30 June 2018,
complies with Section 300A of the Corporations
Act 2001.
Report on the audit of the Financial Report
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 responsibilities
Opinion
We have audited the Financial Report of Veris
Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
•
•
giving a true and fair view of the Group’s
financial position as at 30 June 2018 and of
its financial performance for the year ended
on that date; and
KPMG
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
We have audited the Remuneration Report included in
pages 11 to 23 of the Directors’ report for the year
ended 30 June 2018.
The Financial Report comprises:
• Consolidated Statement of Financial Position as at
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
30 June 2018
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flow for the year then ended
• Notes including a summary of significant accounting
policies
R Gambitta
• Directors’ Declaration.
Partner
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Perth
30 August 2018
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
The Key Audit Matters we identified are:
• Goodwill and intangible assets value
• Acquisitions (including deferred vendor
payments)
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved
under Professional Standards Legislation.
76 VERIS LIMITED ANNUAL FINANCIAL REPORT 2018
Lead Auditor’s Independence Declaration
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Veris Limited
kpmg
I declare that, to the best of my knowledge and belief, in relation to the audit of Veris Limited for the
financial year ended 30 June 2018 there have been:
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
Independent Auditor’s Report
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
no contraventions of any applicable code of professional conduct in relation to the audit.
To the shareholders of Veris Limited
i.
ii.
KPMG
Report on the audit of the Financial Report
To the Directors of Veris Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Veris Limited for the
Opinion
financial year ended 30 June 2018 there have been:
We have audited the Financial Report of Veris
Limited (the Company).
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
• Consolidated Statement of Financial Position as at
The Financial Report comprises:
Perth
i.
no contraventions of any applicable code of professional conduct in relation to the audit.
30 August 2018
30 June 2018
R Gambitta
Partner
ii.
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
•
giving a true and fair view of the Group’s
financial position as at 30 June 2018 and of
its financial performance for the year ended
on that date; and
•
KPMG
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flow for the year then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
R Gambitta
Partner
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Perth
Basis for opinion
30 August 2018
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
The Key Audit Matters we identified are:
• Goodwill and intangible assets value
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
• Acquisitions (including deferred vendor
International Cooperative (“KPMG International”), a Swiss entity.
payments)
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
Liability limited by a scheme approved under
Professional Standards Legislation.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved
under Professional Standards Legislation.
Liability limited by a scheme approved under
Professional Standards Legislation.
VERIS LIMITED ANNUAL FINANCIAL REPORT 2018 77
Veris Limited Annual Financial Report
30 June 2018
Additional Information
Additional Information
Additional Information per ASX Listing Rules - Unaudited
Additional information requires by ASX Listing Rules and not disclosed elsewhere in this report is set out
below.
Corporate Governance Statement
The Group’s Corporate Governance Statement can be found at:
http://www.veris.com.au/media/1228/veris_corporate_governance_statement.pdf
Shareholder Information as at 22 August 2018
Top 20 Shareholders of Quoted Securities
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
16
18
19
20
OCEAN TO OUTBACK ELECTRICAL PTY LTD
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