ANNUAL REPORT
2019
CHAIRMAN’S REPORT
01
DIRECTORS’ REPORT
CONTENTS
iii
iv
viii
ix
MANAGING DIRECTOR’S REPORT
RECONCILIATION ACTION PLAN
HEALTH, SAFETY, ENVIRONMENT
AND QUALITY
x
CORPORATE SOCIAL RESPONSIBILITY
- VERIS RACING
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
i
i
24
25
26
27
28
71
72
77
78
80
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
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
LEAD AUDITOR’S INDEPENDENCE
DECLARATION
ADDITIONAL INFORMATION
CORPORATE INFORMATION
CORPORATE DIRECTORY
VERIS LIMITED
Executive Team
SOLICITORS
ABN : 80 122 958 178
ASX Code : VRS
Level 12, 3 Hasler Road
Osborne Park, WA, 6017
P: +61 8 9317 0600
www.veris.com.au
Adam Lamond
Managing Director
Lisa Wynne
Chief Financial Officer
& Company Secretary
CORPORATE DIRECTORY
PRINCIPAL
REGISTERED ADDRESS
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
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
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
CHAIRMAN’S REPORT
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
i
i
i
In 2018 we commenced an
Operational Review focussed
on Veris Australia. In the 2019
financial year we embarked on
Phase 2 of the review process,
with a significant number of
measures undertaken to increase
margins and profitability.
In parallel, we also reviewed our
corporate structure, overhead
costs, service lines and office
locations in Veris Australia and
Corporate, with the aim of driving
further efficiencies and lowering
expenditure. In total, these
corrective measures and changes
will result in ongoing annual cost
reductions of approximately
$3 million.
These changes have not occurred
in isolation – they align with a new
five-year Strategic Plan 2019-2024,
endorsed by the Board in June.
The plan charts a clear future
direction for the Veris Group,
aligned with the needs of our
shareholders, clients, employees
and other stakeholders.
This financial year we also launched
the Group’s first Corporate Social
Responsibility Strategy and our
Reconciliation Action Plan, Veris
Reflect, which was endorsed by
Reconciliation Australia. We are
extremely proud to have these in
place and look forward in sharing
our success stories.
our systems across the Group;
purposeful rebuilding toward
ongoing growth; and delivering to
our Strategic Plan. There will be
increased efforts to secure higher
value, higher margin projects
with greater technical content.
This will include a greater focus
on geospatial and 3D spatial
work for Veris Australia, as well
as capitalising on opportunities
provided by government
infrastructure policy, both
federally and at a state level.
In the coming year, we will
continue to ensure excellent
service delivery, and work toward
continued growth in our pipeline
across the Group’s surveying,
professional and advisory (Elton
Consulting), and technologies
(Aqura) businesses.
Revenue in the business
remains stable and in line with
expectations and we believe that
the actions taken in the past year,
whilst difficult, were essential to
provide the solid base on which
we will continue to build a more
sustainable and profitable future
for Veris.
On behalf of the Board, I would
like to thank our shareholders,
clients, employees and suppliers
for their support, patience
and understanding during a
challenging financial year.
Our focus for the 2020 financial
year will remain on streamlining
Derek La Ferla
Chairman
It has been a year of
consolidation for Veris,
following a strategic and
considered acquisition
strategy across Australia.
We can proudly call
ourselves a national
professional services
business, offering our
clients an integrated,
multi-disciplinary service
that supports urban
planning, property
and infrastructure
development, and
construction.
MANAGING DIRECTOR’S REPORT
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
i
v
The 2019 financial year saw Veris
successfully move to becoming
a truly national business with a
suite of brands that provide a
diverse range of professional and
advisory, surveying, geospatial
and technology services to the
infrastructure, policy and strategy,
property and housing, resources,
industrial and commercial, and
retail sectors.
Significant progress has been
made in strengthening the
company’s operational capability
following a now-complete
Operational Review focussed
on optimising the strength of
Veris Australia through increased
efficiencies, improved margins
and delivering greater value for
shareholders and clients.
VERIS AUSTRALIA
A number of key changes for Veris
Australia have resulted from the
Operational Review undertaken
during the 2019 financial year.
Specifically, structural changes
were made to Veris Australia’s
management, reporting lines and
systems to provide improved line
of sight into the performance
of the business. Improvements
were made to local reporting and
greater controls implemented
over new contracts, margin
targets and working capital
management, all aimed at
increasing operating margins.
Immediate corrective measures
resulting from the Operational
Review, including restructuring
of the organisation, resulted
in a total reduction in costs of
approximately $3 million on an
annualised basis.
Throughout the 2019 financial
year, a number of key
opportunities were identified
to grow the business through
its exposure to the large
infrastructure pipeline on the
east coast, with specific exciting
growth areas in geospatial and 3D
spatial services.
During the year, a new Veris
Australia office opened in
Southbank, Melbourne, while
three offices in Victoria and one in
Tasmania were closed to enable
further improvement across
the region.
Financial year 2020 is Veris
Australia’s first full year budgeted
as a single business; as we head
into the new financial year, the
business is well positioned to
deliver improved earnings back
into the Group through increasing
our engagement with our people
and clients.
GROUP STRATEGY
ELTON CONSULTING
In June, our Board and Senior
Executive Team approved the
new five-year Strategic Plan 2019-
2024. The Strategic Plan seeks to
align the focus of the business
with our vision to be recognised
as a leader in integrated urban,
regional and community building
services across Australia,
supporting top tier businesses,
community organisations and all
levels of government.
In the process of developing the
Strategic Plan, our Group values
were reviewed and refreshed
to ensure they best represent
what we stand for as a business.
The new Veris values statement
describes the way we are
striving to work with our clients,
each other and the broader
community. Our values are:
Integrity and authenticity
We act ethically and
demonstrate fairness,
openness and transparency.
Inclusiveness and respect
We value differences and treat
others with dignity and courtesy.
Pride and optimism
We celebrate achievements
and are confident about our
shared future.
Quality and responsibility
We are client focused and care
deeply about the quality of
our work.
Collaboration and innovation
We bring people together to
spark ideas and solve problems.
Leadership
We commit to leadership that
drives a culture of collaboration
and performance.
Commercial success
We are committed to the
commercial success of our
business and our clients.
Elton Consulting was our first
acquisition in the professional
advisory sector, and our focus
for the business during the 2019
financial year was to drive cross-
selling revenue from Elton into
the Group. Despite earnings being
impacted by multiple state and
federal elections and overlaying
macro-economic challenges,
the Elton business continued its
organic growth through expansion
during the year, and now has a
true national footprint with offices
across Australia.
An upside of the past year’s
elections has been the resulting
increase in government spending
commitments on the eastern
seaboard, especially in areas
such as social, health, education
and transport infrastructure.
Traditionally, the Elton business
recovers strongly after election
years and we believe financial
year 2020 will be no different,
with promising signs of
improvement across the business
already visible from May this year.
Elton achieved significant project
awards this year in the health,
education, social housing,
transport and social infrastructure
sectors, in addition to property
development awards for local,
state and federal governments
and tier one companies. Elton’s
presence in Victoria has continued
to grow over the last 12 months
and this underpins ongoing
growth as we move forward into
the new financial year.
AQURA TECHNOLOGIES
Aqura Technologies achieved
another year of solid revenue
growth, and the business has now
established east coast offices in
Melbourne and Brisbane through
the Veris footprint.
With a strong order book going
into the new financial year,
Aqura Technologies now also
has increasing opportunities to
continue its transition to annuity
revenue through changes to its
business model – from a project
delivery model to operating as a
service business.
The opportunities are supported
by long-term umbrella agreements
with tier 1 clients that were
confirmed during the year,
indicating strong market demand
for Aqura Technologies’ offerings.
RECONCILIATION ACTION
PLAN AND CORPORATE
SOCIAL RESPONSIBILITY
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
v
This year, we launched our
inaugural Reconciliation
Action Plan, Veris Reflect,
which represents a genuine
commitment to:
• increase the cultural
competency of team members
by increasing knowledge of
Aboriginal and Torres Strait
Islander cultures, histories and
contemporary issues;
• build meaningful relationships
with Aboriginal organisations,
peoples and communities in
our markets; and
• explore new and innovative
approaches to deepen cultural
awareness across all facets of
our business.
Veris also introduced its Corporate
Social Responsibility Strategy
2019 – 2024 during the year.
The strategy aims to unlock key
drivers of change within the
organisation and couple these
with clients’ efforts to elevate CSR
across the diversity of sectors in
which our Group operates.
MANAGING DIRECTOR’S REPORT continued
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
v
i
The broad priorities outlined in
the Veris CSR Strategy relate to:
• prioritising environmental
sustainability;
• increasing diversity across all
levels of our organisation;
• developing an engaged,
healthy and safe workforce;
• ensuring Veris team members
receive appropriate training and
development opportunities; and
• partnering with organisations
that align with our Group’s
CSR priorities.
In line with our CSR Strategy,
Veris continues to work with the
Cycling Development Foundation
through its support of the
Veris Racing national cycling
team. The Veris Racing cycling
team encourages women and
junior cyclists into the sport
and continues to develop on
a national level. Through Veris
Racing, the Cycling Development
Foundation also gives back
to the community through
fundraising events such as the
Perth-Laverton Cycling Classic.
GROUP FINANCIAL
PERFORMANCE
During the year Veris achieved
revenue growth across all
businesses and diversified its
revenue portfolio. While the
Group’s underlying EBITDA
was down 44 per cent on the
prior period, and a non-cash
impairment of $34 million before
tax to the carrying value of
goodwill of the national surveying
business was recognised, Veris
saw enhanced operational cash
flow and a reduced net debt
position during the period.
New banking facilities were
negotiated with Commonwealth
Bank of Australia to support the
Group’s growth strategy. These
new facilities are a testament
to the strength of the ongoing
relationship developed with the
Veris Group’s bankers, along
with their continued support of
the Group’s strategic direction.
PRIORITIES FOR
FINANCIAL YEAR 2020
As we move into the new
financial year, the business will
seek to prioritise the following
initiatives in line with the
Strategic Plan 2019 - 2024:
• improvement of Veris Australia
margins with a clear direction
away from lower margin survey
work toward higher margin
areas within the business;
• fast-tracking of the Veris
Leadership Elevation Program,
centred around our Principal’s
Academy and further
investment into our team
to deliver value for clients
and maximise returns for
shareholders;
• continued development of a
collaborative, communicative
and commercially savvy culture
throughout the Group;
• continued growth for the
Group’s geospatial and 3D
spatial capability;
• development and
implementation of our
pricing strategy;
• commencement of a new
digital transformation
strategy; and
• improvements in strategic
client management across
the Group.
CONCLUSION
Our people are the very
cornerstone of the Veris business,
and I thank each and every one of
them for their continued tenacity
and resilience throughout what
can only be described as a
challenging year.
To close, I would like to
thank our investors for their
continued support this year.
While the financial performance
of the business has been
disappointing, we now have the
correct measures in place and
are poised for great success in
the 2020 financial year.
Adam Lamond
Managing Director
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
v
i
i
RECONCILIATION ACTION PLAN
We will strive to build and
promote better understanding
of Aboriginal and Torres Strait
Islander history, culture and
heritage throughout Veris via
cross cultural awareness training
delivered to parts of the business.
Our values state that we
prioritise diversity and inclusion,
and we believe that through our
first RAP we can demonstrate
this value in the ways that we
work. The Veris RAP will guide us
to act from a place of leadership
in the reconciliation space, and
we hope to demonstrate to
other organisations how the
creation and adoption of a plan
such as Veris Reflect can have
far reaching benefits.
We are committed to the
promotion of respect, awareness
and understanding within our
organisation and we look forward
to sharing the ongoing benefits
and outcomes of the first
Veris RAP.
This year marked an
important milestone for
Veris, with the creation
of the Group’s first
Reconciliation Action
Plan (RAP), Veris Reflect,
developed in partnership
with Reconciliation
Australia for
2019 - 2020.
Reconciliation
Action Plan
July 2019 - December 2020
Veris
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
v
i
i
i
Introduced in July, the new Veris
Reflect Reconciliation Action
Plan (RAP) provides an 18-month
framework upon which Veris
can continue to foster a diverse
and inclusive work culture, and
respectfully work in partnership
with Aboriginal and Torres
Strait Islander organisations
and peoples. It outlines actions
and deliverables around
areas including relationships,
governance, and the creation
of better Aboriginal and
Torres Strait Islander
employment opportunities.
While we are only in the initial
stages of the Veris reconciliation
journey, the companies within
our Group have a long history
of working with Aboriginal and
Torres Strait Islander peoples and
communities on a philanthropic
and project basis.
We recognise that we have
an important role to play in
contributing to reconciliation.
We provide employment
opportunities, work with partners
across the country, operate
and support initiatives in
Aboriginal and Torres Strait
Islander communities, and
communicate with shareholders
and the wider community.
Through the development and
implementation of our RAP, we
will continue to build meaningful
relationships with Aboriginal
and Torres Strait Islander
organisations, peoples and
communities in our markets.
HEALTH, SAFETY, ENVIRONMENT AND QUALITY
Health, Safety, Environment
and Quality are essential
components of the strategic
platform driven throughout all
levels of Veris, with leadership
in these areas demonstrated
through a rotation of site
inspections and ongoing
engagement with the Group’s
workforce. This area of focus
is reinforced through the Veris
Frontline Leadership Program.
The implementation of the
Veris Access Portal (VAP)
digital platform has improved
commitment around personal
risk evaluation and leadership
engagement throughout the
Group, and has provided a focus
for safety in the field while
maintaining ongoing procedural
ownership. The inclusion of
vehicle checks in this digital
portal has provided additional
risk mitigation capacity around
the business-critical risk of light
vehicle movement.
Veris business service systems
were stabilised during the
2019 financial year, alongside
improvements to internal
processes to meet the
challenges and requirements
of an ever-changing workforce.
The alignment of processes,
platforms and protocols has
enabled all areas of the business
to concentrate a coordinated
focus on Safety, Environment
and Quality, to keep our people
safe, the environment protected
and the quality of our service
delivery at a higher-than-industry-
leader standard.
During the year, Veris Australia
continued the process of
certification under ISO9001:2015,
ISO14001:2015 (Quality
& Environment) and AS/
NZS4801:2001 (Safety) standards;
the Group continues to meet
Federal Safety Commission
Accreditation requirements.
The continuous improvement
ethos of our teams ensures
process never stands still.
An endless evolution of
improvement is supported by the
Veris core value of sustainability,
which manifests in the culture
of the Group and enables
employees to safely provide
consistent service excellence
without harm to the environment.
OUTSTANDING HSEQ
PERFORMANCE
• 1.3 million hours completed
lost time injury free in FY19
• FY19 Total Recordable Injury
Frequency Rate (TRIFR) – 3.85
• FY19 All Injury Frequency Rate
(AIFR) – 29.28
CONTINUOUS
IMPROVEMENT
INITIATIVES
• Safe to Stop initiative
• Business Resilience Protocol
• Process Improvement Working
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
i
x
Group
CERTIFICATION
Accreditation to the
following standards:
• ISO 9001:2015
• ISO14001:2015
• AS/NZS 4801:2001
Jul-18Aug-18Sept-18Oct-18Nov-18Dec-18Jan-19Feb- 19Mar-19Apr-19May-19Jun-1912 MonthHours103,495121,410105,541122,710119,03181,618105,099109,930111,84698,466120,35898,3071,297,811FAC22236124512232RWI0020000001205OE0000000000101TRIFR0.000.009.480.000.000.000.00.00.010.1516.610.03.85AIFR19.3216.4737.9024.4550.4512.2519.0236.3844.7020.3141.5420.3429.28
CORPORATE SOCIAL RESPONSIBILITY – VERIS RACING
VERIS CORPORATE SOCIAL
RESPONSIBILITY STRATEGY
2019-2024
June 2019
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
x
Veris is very proud to have
introduced its first Corporate
Social Responsibility Strategy
this year.
The Strategy will support
key levers of change within
the Group across the areas
of climate, environmental
sustainability, diversity, the
creation of healthy and safe
workplaces across all Veris
offices, employee training and
development, and partnerships
with organisations aligned with
our CSR priorities.
We believe that by bringing the
Veris CSR strategy to life, we
have the capacity to not only
enact change ourselves, but to
also influence our clients’ CSR
efforts across a broad range
of sectors.
Veris has always believed in
being actively involved with
the communities in which we
operate, and we are committed
to making a difference through
long-term, strategic and
sustainable partnerships.
To this end, we work closely
with the Cycling Development
Foundation, and we are proud
to be the name sponsor of the
Veris Racing national cycling
team. This team focusses
on encouraging women and
junior cyclists into the sport,
ensuring young and emerging
athletes receive the support they
require to compete at an elite
international level. The program
continues to develop on a
national level.
Through Veris Racing, Veris
and the Cycling Development
Foundation give back to the
community through major
fundraising events such as the
Perth-Laverton Cycling Classic
and initiatives such as road
safety programs for primary
school students and training
programs at Western Australia’s
Clontarf Aboriginal College.
To encourage female high
school leavers to undertake
tertiary studies in surveying
or Geospatial Engineering,
Veris created the Veris Women
in Engineering Scholarship
through the University of New
South Wales. The scholarship is
awarded to one young woman
per year, providing $10,000 in
financial assistance per year
for four years. Recipients are
also given the opportunity to
undertake up to 12 weeks of
industrial training with Veris
during the holiday periods at the
end of their first, second and
third years of study.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
x
i
DIRECTORS’ REPORT
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
1
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 2019.
Information on Directors
Directors of the Company during the whole of the financial year ended 30 June 2019 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 Derek La Ferla has 30 years’ experience as a corporate lawyer and company director. In addition to his
role as Non-Executive Chairman of Veris, he is currently chairman of ASX listed companies Sandfire
Resources NL and Threat Protect Australia Limited, and deputy chairman of BNK Banking Corporation
Limited. Mr La Ferla is also a member of the WA Council for the Australian Institute of Company Directors
and a member of its National Board. Mr La Ferla 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.
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)
BNK Banking Corporation Limited (November 2015 – Current)
Interests in Shares of Veris
598,417 fully paid ordinary shares
DIRECTORS’ REPORT
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
46,041,815 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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
2
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
8,136,093 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)
Poseidon Nickel Limited (1 October 2018 – current)
Interests in Shares of Veris
8,125,170 fully paid ordinary shares
DIRECTORS’ REPORT
Information on Directors (continued)
Brian Elton – Executive Director
Experience
Mr 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 2018 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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
3
Interests in Shares of Veris
14,835,733 fully paid ordinary shares
Information on Company Secretary
Lisa Wynne - Company Secretary & Interim Chief Financial Officer
Experience
Ms 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 and 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. Ms Wynne was
appointed to the role of Interim Chief Financial Officer of Veris on 21 June 2019.
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
Derek La Ferla
Adam Lamond
Tom Lawrence
Karl Paganin
Brian Elton
A
17
17
17
17
17
B
17
17
17
17
17
A
2
*
2
2
*
B
2
*
2
2
*
Remuneration &
Nomination
Committee
A
3
*
3
3
*
Occupational
Health & Safety
Committee
A
*
4
4
4
*
B
*
4
4
4
*
B
3
*
3
3
*
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
DIRECTORS’ REPORT
Dividends
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
4
Dividends paid or declared by the Company to members since the end of the previous financial year were:
Declared and paid during
the year 2018
Cents per
share
(cents)
Franked
amount per
share (cents)
Total
Amount
$’000 (1)
Record Date
Date of
Payment
Final FY2018 ordinary
0.5
0.5
1,770
11 September
2018
25 September
2018
(1) The Dividend was fully underwritten. On 25 September 3,332,125 shares were issued under the Veris Dividend
Reinvestment Plan (DRP) and on 26 September 5,096,593 shares were issued in accordance with the DRP
Underwriting Agreement.
Principal Activities
Veris is a professional service business delivering surveying, professional and advisory and geospatial
services to the infrastructure, land and property, energy, mining and resources, defence, agribusiness,
tourism, leisure and government sectors throughout Australia. Veris Limited is the Group's holding company,
listed on the ASX under the code VRS.
Veris Limited had three operating segments in the 2019 financial year namely Veris Australia, Elton
Consulting and Aqura Technologies.
Veris Australia
Veris Australia is a professional surveying business that covers a broad spectrum of service lines including
cadastral, civil and construction, and engineering surveying along with 3D spatial services such as lidar, 3D
laser scanning, ground penetrating radar, mobile laser scanning and hydrographic surveys. It also provides
town planning and urban design services. Veris Australia markets include infrastructure, land and property,
resources and defence.
Elton Consulting
Elton Consulting’s professional and advisory services include urban and regional planning, communications
and engagement, strategy and policy, social sustainability, bid strategy and preparation and a design studio.
It provides expert advice to businesses, governments and not-for-profit organisations across infrastructure,
property, housing, resources, energy, public policy and human services.
Aqura Technologies
Aqura Technologies complements the accomplished existing spatial solution capabilities of the Veris
Australia segment with highly specialised ICT and communications services, offering industry-leading
technology solutions to the industrial communications sector.
DIRECTORS’ REPORT
Principal Activities (continued)
Significant Changes
The following significant changes in the nature of the activities of the Group occurred during the year:
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
5
• Payment of the Group’s third dividend of $0.005 per share in September 2018.
• Commonwealth Bank of Australia continued supporting the business with the approval of new banking
facilities for the Group. The facilities have a term to 30 November 2020.
• A non-cash goodwill impairment charge to the carrying value of goodwill of the Veris Australia segment
was recognised during the year.
• Consolidation of Melbourne properties and closure of less profitable office locations in Veris Australia.
• Operational review of the Veris Australia business conducted during the year, with final phase completed
in June 2019.
• Securing work on long term east coast projects such as Melbourne Metro, Westgate Tunnel, North
Connex, Inland Rail, M4 Smart motorway project, Sydney Metro, West Connect and Eaton Range
Realignment project.
• First full year contribution for Elton Consulting following its acquisition in March 2018.
• Strategic Plan 2019 – 2024 was endorsed by the Board in June 2019.
Operating and Financial Review
2019 saw Veris Australia operating as one company and the achievement of multi state project awards. In
late 2018, the Company commenced an Operational Review to improve gross margin in the Veris Australia
business. Phase 1 of the Operational Review was completed in December 2018 with Phase 2 completed in
June 2019. A significant number of measures have been undertaken to increase efficiency and improve
margins, particularly across the Veris Australia business.
During the year, Elton Consulting achieved a national footprint, building on its Sydney, Melbourne, Canberra
and Darwin offices with start-up offices in Brisbane and Perth, co-located with Veris Australia. Elton had
significant project awards in health, education, social housing, transport and social infrastructure as well as
property development for state, federal and local governments and Tier 1 companies. After significant
revenue growth in 2018, revenue was stable showing only minor growth in 2019, as a result of slowdowns
in government awards associated with election periods in NSW, Victoria and federally.
Aqura continued into 2019 to provide services to key tier 1 clients including awards of new works packages
totalling in excess of $13 million across its key service lines, Industrial Wireless, Content Access Networks
and Unified Communications. These awards are as a result of the a three-year services contract entered
into with BHP in 2019 and in addition, in 2019 Aqura successfully entered into an umbrella supply agreement
with Rio Tinto demonstrating Aqura’s ability to sustain strong revenue growth year-on-year. These awards
signify the demand for Aqura’s diverse range of service capabilities across Australia and New Zealand.
In addition to improving the Veris Australia operations and successfully diversifying into professional and
advisory services, the Company has also approved the five-year Strategic Plan 2019-2024. This strategy
was endorsed by the Veris Board in June 2019 and is supported by the Company’s bankers. At Veris
Australia this strategy includes targeting opportunities in higher value, higher margin projects with greater
technical content including 3D spatial and geospatial work. Investments made in geospatial in the 2019
financial year set a strong platform to grow this work in financial year 2020.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
6
DIRECTORS’ REPORT
Operating and Financial Review (continued)
For the year ended 30 June 2019, the Group reported earnings before interest, tax, depreciation and
amortisation (EBITDA) of $6,498,000 - down from $11,189,000 in 2018.
Key points to assist in understanding Veris’ results are as below.
Key Item
FY2019
$000
FY2018
$000
Comments
Revenue
125,884
106,834
EBITDA*
6,498
11,189
Acquisition costs
95
1,628
Restructuring costs
3,294
1,770
Impairment of intangibles
34,431
-
Net assets
27,094
68,203
Working capital**
5,483
12,426
Revenue from continuing operations was up
18% mainly due to Elton Consulting
contributing a full year followings its
acquisition in 2018 and the increase in the
Veris Australia segment as a result of organic
growth.
EBITDA from continuing operations
decreased year-on-year primarily as a result
of the decrease in the Veris Australia
segment EBTIDA of $6,244,000, offset by
increases in EBITDA of $964,000 from Aqura
Technologies and a full year contribution from
Elton Consulting contributing a year on year
increase of $1,271,000.
Decrease due to no material acquisition
activity during the financial year
Increase as a result of restructuring costs for
Veris Australia of $2,589,000, following the
Operational Review and in Corporate for
$650,000 and $55,000 for Aqura
Technologies.
Impairment of the Veris Australia segment
goodwill, refer Note 15 Intangible Assets
Net assets decreased on prior year, with the
non-cash impairment of goodwill in Veris
Australia segment accounting for $34m of the
decrease.
Working capital reduced in FY19 due to a
decrease in Trade and other receivables and
Work in progress offset by a decrease in
loans & borrowings; and a decrease in cash,
even with the significant increase in cash
generated from operations.
* 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.
DIRECTORS’ REPORT
Operating and Financial Review (continued)
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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
7
Statutory profit/(loss) after tax
Add back:
Tax benefit
Net finance expense
Restructuring costs
Acquisition costs
Share-based payment
Impairment of Intangibles
EBIT profit/(loss)
Depreciation and amortisation
Discontinued operations
EBITDA
Risks
FY2019
$000
(40,089)
(2,143)
1,339
3,294
95
586
34,431
(2,487)
8,985
-
6,498
FY2018
$000
(1,304)
(871)
1,006
1,770
1,628
1,031
-
3,260
7,681
248
11,189
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, accepting
unfavourable and/or failing to understand contractual terms can lead to disputes with third parties and
litigation. The Company seeks to mitigate these risks by defining the company’s commercial appetite for
contractual and financial risk, following a tendering process and estimation programme and using the
knowledge and experience of staff for pricing, contract reviews 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 has 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 9 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
clear articulation of our ‘one business’ vision across the business and standardisation of systems and
processes. This ensures acquired businesses are integrated so that synergies and economies of scale can
continue to be achieved, along with offering 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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
8
DIRECTORS’ REPORT
Risks (continued)
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 Elton
Consulting segment remains separate. 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 a comprehensive internal and external communications plan ensures
transparency with the market and alignment with the workforce.
Competition Risk
There is potential for changes in the market, whereby a competitor’s product or technology may lead to
loss of competitive advantage of the Group, or a competitor may become more aggressive in response to
our strategy which may compromise our ability to achieve growth targets. The business has a process in
place to monitor competitor behaviour, both in response to Veris’ strategy, as well as changing market
conditions, business environment and innovations.
Technology Risk
Information technology and data are critical to Veris’ value-creating activities and lost access to its IT
systems and data would have a major impact on the business. An IT security audit has been completed to
understand our control environment in relation to information technology and data, and a plan has been
established to address any shortfalls and to ensure appropriate cyber security, disaster recovering and
business continuity planning are in place.
Business Integrity and Reputation Risk
As a listed company with a national presence, the Group is subject to numerous rapidly evolving and
complex laws and regulations. Stakeholder trust is directly tied to ethical behaviour, compliance with
applicable rules and regulations and internal policies and procedures. The Group has commenced an
operation and enterprise risk assessment during the year to clearly identify and manage potential risks.
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.
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.
DIRECTORS’ REPORT
Remuneration Report – Audited
The Directors are pleased to present the Company’s 2019 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:
a) Directors and Executive Disclosures
b) Remuneration Policy
c) Remuneration Advice
d) Performance linked compensation
e) Details of share-based compensation and bonuses
f)
g) Contractual arrangements
h) Details of remuneration
i)
j)
k) Other Transactions with key management personnel
Analysis of bonuses included in remuneration
Equity Instrument Disclosure Relating to Key Management Personnel
Voting and comments made at the Company’s 2019 Annual General Meeting
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
0
9
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
Chief Financial Officer
Company Secretary and
Interim Chief Financial Officer
(Ceased Employment 1 July 2019)
(Appointed Interim CFO 21 June 2019)
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
o demonstrate a clear relationship between key executive performance and remuneration.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
0
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 to details
of the contractual arrangements on page 17 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.
During the period, the overall executive remuneration framework was overhauled and a revised
remuneration structure has been designed to link reward more directly to the strategy and drivers of Veris
over a longer timeframe of 4 years creating long term shareholder value. Previously Veris had separate
LTI and STI structures whereby the STI was an annual cash payment and the LTI was the issue of
performance rights with TSR and EPS vesting hurdles over a 3 year period. On advice received from
external consultants, Veris has now combined and simplified its incentive structures so that the LTI and
STI are now combined and the hurdles are fit for purpose for the phase of the company’s life cycle.
Veris is in a growth phase, acquiring 9 entities in the last 4 years. Veris now has a National footprint and
over 700 staff. Veris has implemented a new operating model which is crucial to ensure success over the
next 1-4 years. The primary objectives of the new plan were to reflect the new operating model implemented
effective 1 July 2018 where each region is accountable for strategy execution and daily operational
performance and improvement and to reward executives for share price growth, retention and stated
objectives in line with the Veris strategy.
The FY19 Plan allows for a payment equal to up to 50-80% of TEC based on the achievement of an annual
scorecard encompassing, corporate (absolute EPS) financial (EBITDA and Budget), personal, behavioural
and safety hurdles. The payment that will be made will be mandated to be taken 50% in cash and 50% in
equity. The equity will be issued by way of performance rights, of which 60% will vest based on achievement
of a 3 year absolute TSR hurdle and 40% will vest in a future period in time, depending on continued
employment for 4 years post issue (33% year 2; 33% year 3, 33% year 4).
The reasoning for the use of an absolute TSR hurdle as opposed to a comparator group is that Veris does
not have a comparator group listed on the ASX, given it is the only listed Professional Advisory, Surveying
& Geospatial group, hence a comparator group to measure TSR against does not exist.
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
The 2019 incentive structure is outlined as follows:
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
1
Key features of the Veris Incentive Plan (VIP) area summarised below.
Plan design
Eligibility
Opportunity
Initial performance period & score
card (MD)
Instruments
Cash v Equity
Equity allocation method
Performance Periods
& Restrictions
TSR measure
Dividends
Leaver
Clawback
Details
KMPs (currently 3, 4 as at 30 June 2019)
MD target = 80%
Other KMPs target = 50%-60%
1 year
EPS: 30% (to be determined but circa min 5% growth for base)
Budget EBITDA: 25%
Personal: 20%
Behavioural: 5%
Cash and Performance Rights
50:50 ratio of cash and equity (with 40% in Retention
Performance Rights (T1) and 60% in 3 Year Performance Rights
linked to TSR (T2)
The number of T1 & T2 Performance Rights issued is based on
the dollar value of the Executive’s VIP outcome, multiplied by
50% divided by 30 cents.
T1 Rights – vesting equally over 3 years (33% per year) with
additional 1 year disposal restriction
T2 Rights – 100% vesting over 3 year measurement period (4
year from plan inception) subject to achievement of absolute
TSR hurdle.
T2 Rights – will only vest into Veris ordinary shares if Veris
share price achieves a 20%-30% compounded growth over the
three year measurement period.
No dividends are paid on Rights prior to vesting.
Good leaver and Board discretion to apply
Board has discretion to claw back Rights and Shares if certain
clawback events occur during the performance periods.
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
The following graph represents the target remuneration mix for KMP in the current year. The incentive
amount (at risk amount) is provided based on target levels and not the value granted during the year.
Remuneration Framework
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
2
Notes:
1.
2.
T1 Rights are Performance Rights issued (subject to the achievement of the Year 1 Balanced Score Card) which
vest evenly over a 3 year period (1/3 per year) based on retention (with disposal restrictions).
T2 Rights are Performance Rights issued (subject to achievement of a 3 year absolute TSR target).
Total Fixed Remuneration
The Base Salary is a monetary recognition for the undertaking of tasks 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.
Incentives (VIP)
In 2019 the Group adopted a Veris Incentive Plan (VIP), a 4 year plan with 50/50 cash/equity split as an
essential part of retaining senior executives in an increasingly competitive market. The VIP provides a
combined short-term and long-term incentive component of the remuneration for executives and KMP to
be identified by the Board. The purpose of the Plan is 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
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
Executives have the opportunity to earn an annual incentive if predefined targets are achieved. The pre-
defined targets are set by the Remuneration and Nomination Committee and comprise of a Balanced Score
Card covering 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:
Balanced Scorecard and Weightings
'
s
P
M
K
&
D
M
Financial
Market
Individual
Values
Budgeted EBITDA
(14%)
Absolute EPS
(19%)
KPI's
(20%)
Behaviours
(5%)
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
3
The Group’s incentives are paid in the form of cash and Performance Rights (mandated to be paid 50/50)
and are calculated as a percentage of Total Fixed Remuneration, based on achievement of the Balanced
Scorecard in year 1. The behaviours of our employees against the values of the Company are also
assessed through a performance evaluation process. Incentives play a key role in aligning superior
operational outcomes for shareholders with the remuneration outcomes for management.
The Group bases its VIP 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.
For the financial year ended 30 June 2019 the KMP’s had target Incentives of between $210,000 and
$356,000, which represents between 50% and 80% of the KMP’s individual Total Fixed Remuneration. The
Remuneration and Nomination Committee is responsible for determining the Incentives payable based on
an assessment of whether the KPIs are met. The performance evaluation in respect of the year ended 30
June 2019 has taken place and no Incentives have been paid or will be payable to the KMP’s.
c) Remuneration Advice
Remuneration is regularly compared with the external market by participation in industry salary surveys
and during recruitment activities generally. During the year no consulting firms were engaged to provide
advice in regards to remuneration. In the prior year, to assist with the design of the FY19 Incentive Plan,
the Board engaged consulting firms, The Reward Practice and PWC to provide advice in regards to
remuneration. The Reward Practice provided advice in the form of a written report detailing benchmarking
of executive salaries. PWC provided advice in regards to long-term incentive structures to ensure effective
alignment with business requirements and key shareholder group expectations. During the current and
prior year, no remuneration recommendations, as defined by the Corporations Act, were provided by The
Reward Practice and PWC.
d) Performance Linked Compensation
The following table shows key performance indicators for the Group over the last five years.
LTI
STI
Financial Year Ended 30 June
Closing Share Price ($)
EPS (cents)
Profit/(Loss) from Continuing
Operations ($’000)
EBITDA
Average % of Maximum STI
awarded to Executives (i) (%)
Dividends paid ($’000)
2019
0.047
(11.13)
(40,089)
2018
0.24
(0.39)
(1,056)
2017
0.15
0.02
48
2016
0.23
7.4
19,698
2015
0.07
(3.6)
(8,786)
6,498
-
11,189
29%
5,704
25%
16,176
92%
4,681
34%
-
(i) Represents STI payable/paid as a percentage of the maximum STI payable.
1,636
1,368
-
-
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
4
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
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
1,297,196 Performance Rights were granted to directors and key management personnel
during the reporting period, however the Balanced Scorecard was not achieved for the
FY19 year and all Performance Rights have lapsed.
(iii) Exercise of Performance Rights Granted as Compensation in Prior Years
During the year, 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
-
-
1,950,230
661,765
-
-
-
-
(iv) Details of Long-Term Incentives affecting current and future remuneration
Key
Management
Personnel
Instrument
#
Grant
date
%
vested
in year
#
vested in
year (B)
%
forfeited/laps
ed in year
#
forfeited
/lapsed in
year
Brian
Mangano
Lisa Wynne
828,848
354,392
5 June
2017
12 April
2019
1,183,240
5 June
2017
12 April
2019
328,500
142,524
471,024
-
-
-
-
-
-
328,500
142,524
-
-
-
-
-
-
-
Financi
al years
in
which
grant
vests
2020
2020
2019
2022
Face value
of vested
rights
-
-
-
-
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
(v) Vesting and Exercise of Performance Rights Granted as Remuneration
FY2019 Veris Incentive Plan (VIP) Performance Outcomes
During the current period, under the new VIP (a 4 year plan with 50/50 Cash/Equity split) to be paid/issued
at the end of FY2019 following the achievement of KPIs outlined in the below Balanced Scorecard:
Balanced Scorecard and Weightings
'
s
P
M
K
&
D
M
Financial
Market
Individual
Values
Budgeted EBITDA
(14%)
Absolute EPS
(19%)
KPI's
(20%)
Behaviours
(5%)
On the basis that the Balanced Scorecard is achieved, 50% will be paid in cash and 50% in equity by way
of issue of Performance Rights, of which 60% will vest based on achievement of a 3 year absolute TSR
hurdle and 40% will vest in a future period in time, depending on continued employment for 4 years post
issue (33% year 2; 33% year 3, 33% year 4). The absolute TSR hurdle is outlined in the below table:
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
5
*Performance Vesting
Hurdles:
TSR over 3 years
% of Grant to Vest
< 75%
>75 % 120%
>120%
0%
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
At the beginning of the year 1,297,196 Performance Rights were issued to KMPs under the VIP. With the
exception of vesting on cessation of employment of a good leaver, no Performance Rights have vested
under the VIP to remaining KMPs and all of the 1,297,196 Performance Rights have lapsed.
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**
<100%
>100% <
180%
180%>
Nil
Pro-rata vesting
between
25% and 100%
100%
50% Absolute EPS Pool (cents
per share)***
<6c
>6 < 6.5c
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)
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
The achievement of the above hurdles was assessed in August 2018 against the base 3 year EPS pool for
the period 2017 to 2019 and the base share price of Veris at 30 June 2017 of 15 cents.
Absolute Total Shareholder Return
Veris TSR was 59% during the performance period 1 July 2016 to 30 June 2019, resulting in nil vesting of
the FY2017 Performance Rights (with the exception of 637,500 relating to a good leaver on termination of
employment).
3 Year EPS Pool
Veris 3 year EPS Pool for the period 30 June 2017 to 30 June 2019 was 4.53 resulting in nil vesting of the
FY2017 Performance Rights.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
6
f) Voting and comments made at the Company’s 2018 Annual General Meeting
The adoption of the Remuneration Report for the financial year ended 30 June 2018 was put to the
shareholders of the Company at the Annual General Meeting held 21 November 2018. The Company
received more than 99% of votes, of those shareholders who exercised their right to vote, in favour of the
remuneration report for the 2018 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.
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
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
Base Salary
including
superannuation
Termination
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 rotation under
the company’s constitution.
$125,744
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.
$444,567
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)
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
7
Tom Lawrence
Karl Paganin
Brian Elton
Mr Lawrence will hold office
until the next annual general
meeting of the Company
where he may be subject to
retirement by rotation under
the 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 rotation under
the company’s constitution.
$77,305
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).
24 Months or until validly
terminated in accordance with
the terms of the Agreement.
$350,000
Termination by Company with reason –
1 months’ notice
Termination by Company without
reason – Following the 24 months, 3
months’ notice (or payment of the
equivalent of 5 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)
Termination by Company with reason –
1 months’ notice
Brian Mangano (A) (B) (C) (D)
Until validly terminated in
accordance with the terms of
the Agreement.
$331,538
Lisa Wynne (A) (B) (C) (E)
Until validly terminated in
accordance with the terms of
the Agreement.
$290,175
Termination by Company without
reason – 3 months’ notice (or payment
of the equivalent of 5 months’ salary to
dispense of the notice period)
(A)
(B)
(C)
(D)
(E)
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 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.
Brian Mangano held the role of Chief Financial Officer until 21 June 2019.
Lisa Wynne assumed the role of Interim Chief Financial Officer effective 21 June 2019. Lisa holds the role of
Interim Chief Financial Officer and Company Secretary at the date of this report.
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
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
benefits
Termination
Benefits
Share-
based
Payments
Accounting
Value (at
risk)(F)
Salary
& fees
$(A)
Incentive
Cash
bonus
$(B)
Non-
monet
ary
$
Super-
annuation
$
Cash
$
Perfor-
mance
Rights
$ (D)
Perfor-
mance
Rights
$ (E)
Total
$
Proportion of
remuneration
performance
related
Directors
Non-Executive Directors
Derek La Ferla
(Chairperson)
2019
125,744
2018
130,580
Tom Lawrence
Karl Paganin
2019
77,305
2018
77,305
2019
77,305
2018
77,305
Executive Directors
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
125,744
130,580
77,305
77,305
77,305
77,305
-
-
-
-
-
-
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
8
2019
415,286
-
-
20,531
-
-
-
435,817
0%
Adam Lamond
(Managing
Director)
2018
399,136
49,754
Brian Elton
Exec Director
2019
319,638
2018
94,138
-
-
-
-
-
20,049
30,365
8,943
Total
Directors’
Remuneration
2019
1,015,278
-
-
50,896
2018
778,465
49,754
-
28,992
-
-
-
-
-
- 468,939
11%
-
-
-
- 350,003
-
103,081
- 1,066,174
-
902,515
0%
-
0%
7%
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
1
9
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
Short-term employee benefits
Post-
employ-
ment
benefits
Termination Benefits
Share-
based
Payments
Accountin
g Value (at
risk)(E)
Salary
& fees
$(A)
Incentive
Cash
bonus
$(B)
Non-
monet
ary
$
Super-
annuation
$
Cash
$
Perfor-
mance
Rights
$ (D)
Perfor-
mance
Rights
$ (E)
Total
$
Proportion of
remuneration
performance
related
Other Executives
Brian Mangano
(CFO)
to cessation of
employment
Lisa Wynne
(Company
Secretary) (C)
2019
311,640
-
2018
308,598
31,828
2019
158,322
-
2018
150,000
19,200
Total
Executives’
Remuneration
Total
Directors’ and
Executives’
Remuneration
2019
469,962
-
2018
458,598
51,028
2019
1,485,240
-
2018
1,237,062
100,782
-
-
-
-
-
-
-
-
32,629
363,385
18,874
-
726,528
29,317
16,225
15,243
-
-
-
-
-
155,010
523,576
2,377
176,924
-
6%
1%
54,135
238,112
8%
48,854
363,385
18,874
2,377
903,452
-
44,560
-
-
207,503
761,688
34%
99,750
363,385
18,874
2,377 1,969,626
-
118,856
-
-
207,503 1,664,202
17%
Notes in relation to the table of directors’ and executive officers’ remuneration
(A)
(B)
(C)
(D)
(E)
Salary and Fees includes annual leave and long service leave.
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 2019 has taken place and no
short-term incentive bonuses will be paid.
Pro-rata based on annual salary of $213,786.
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 for the FY17 Rights Plan (in years 1 July 2016
to 30 June 2019), and over a one year period for the FY19 Rights Plan which were issued to Brian Mangano on
cessation of employment. As announced on 1 July 2019, no other KMP’s received incentives during the year.
The fair value of the Performance Rights has been measured using Monte Carlo simulation model.
The value of the Performance Rights granted in the year is the fair value of the rights calculated at grant date that
had not yet fully vested at the commencement of the financial year. This amount is allocated to remuneration over
the vesting periods (in years 1 July 2016 to 30 June 2022). The fair value of the Performance Rights has been
measured using Monte Carlo simulation model. This value includes an assumption that the instruments will vest
at the end of the vesting period unless forfeited during the financial year, which they did.
DIRECTORS’ REPORT
Remuneration Report – Audited (continued)
i) Analysis of bonuses included in remuneration – audited
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
0
Details of the vesting profile of the cash component of the Veris VIP combined short-term and long-term
incentives 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 Cash
Incentive
Payment $ (A)
194,720
105,000
106,318
42,757
Incentive bonus – Cash Component
Included in remuneration
$
% of Maximum
Potential Incentive
Payment Awarded
% Maximum Potential STI
Payment Forfeited
-
-
-
-
-
-
-
-
100%(B)
100%(B)
100%(B)
100%(B)
(A)
(B)
These amounts represent the cash component of the Incentive bonus, KMP’s also had the opportunity to
receive the equal value outlined in the table above in Performance Rights in accordance with the Veris VIP
combined short-term & long term Incentives.
The amounts forfeited are due to the KPIs in the balanced scorecard 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 2018
Granted in
year
Grant Value Grant Face
Value
Adam Lamond
Brian Elton
Brian Mangano
Lisa Wynne
-
-
491,113
309,167
828,848
354,392
328,500
142,524
-
-
-
-
-
-
-
-
Number
Vested in
year
Number
forfeited /
lapsed in year
(491,113)
(309,167)
Number held
at 30 June
2019
-
-
-
1,183,240(A)
(471,024)
-
-
-
-
-
(A) Subsequent to the end of the financial year, 1,183,240 Performance Rights held by former CFO, Brian
Mangano vested on cessation of employment.
DIRECTORS’ REPORT
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
1
Remuneration Report – Audited (continued)
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 30/06/2018
Movement
Balance at 30/06/2019
Directors
Derek La Ferla
Adam Lamond
Tom Lawrence
Karl Paganin
Brian Elton
KMP
Brian Mangano (A)
Lisa Wynne
Total
584,501
45,841,815
3,222,598
5,662,721
11,179,560
2,919,234
373,089
69,783,518
13,916
200,000
4,913,495
2,462,449
3,656,173
1,880,766
483,768
13,610,567
598,417
46,041,815
8,136,093
8,125,170
14,835,733
4,800,000
856,857
83,394,085
(A) KMP shareholding at cessation of employment.
k) 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 $372,514.11 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
DIRECTORS’ REPORT
Shares Under Option
As at 30 June 2019 there are no shares under option.
Indemnification and Insurance of Officers
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
2
During the financial year the Group paid insurance premiums of $43,500 (2018: $54,950) 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.
Audit services:
Audit and review of the financial reports
Services other than audit services:
Other services (Due Diligence)
Other services (Integration)
Consolidated
2019
$000
226
-
9
235
2018
$000
254
51
551
856
DIRECTORS’ REPORT
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
3
Environmental Regulations and Performance
It is the policy of the Group to comply with all applicable environmental regulations. 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.
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 2019.
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 in the
corporate governance section –
https://www.veris.com.au/media/2781/corporate-governance-statement-2019-final-final.pdf
Signed in accordance with a resolution of the directors:
Derek La Ferla
Chairman
Dated at Perth 30 August 2019
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Revenue
Operating expenses
Depreciation
Amortisation
Acquisition related
Restructuring costs
Share-based payment
Impairment of Intangibles
Note
3
1
14
15
4
15
2019
$000
125,884
(119,386)
6,498
(5,087)
(3,898)
(95)
(3,294)
(586)
(34,431)
2018
$000
106,834
(95,645)
11,189
(3,585)
(4,096)
(1,628)
(1,770)
(1,031)
-
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
4
Results from operating activities
(40,893)
(921)
Financial income
Finance costs
Net finance costs
3
(1,342)
18
(1,024)
(1,339)
(1,006)
Profit / (loss) before income tax
(42,232)
(1,927)
Income tax benefit
16
2,143
871
Profit / (loss) from continuing operations
(40,089)
(1,056)
Profit / (loss) from discontinued operations, net of tax
2
-
(248)
Profit / (loss) for the period
(40,089)
(1,304)
Total comprehensive income/ (loss) for the year
(40,089)
(1,304)
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
5
5
(11.13)
(11.13)
(11.13)
(11.13)
(0.39)
(0.39)
(0.32)
(0.32)
The accompanying notes form an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
5
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
(Accumulated losses)/retained earnings
Total equity
Note
30 Jun 2019
$000
30 Jun 2018
$000
18
11
14
15
17
12
8
20
13
20
8
13
21
21
3,685
25,864
8,280
3,039
40,868
13,551
19,190
8,913
41,654
82,522
18,765
3,554
3,356
9,176
534
35,385
18,403
-
1,640
20,043
55,428
27,094
43,051
2,949
(18,906)
27,094
5,588
30,932
10,538
1,705
48,763
15,242
58,598
6,275
80,115
128,878
17,532
2,286
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
The accompanying notes form an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Balance at 1 July 2018
Adjustment on initial application of AASB 9
Adjustment on initial application of AASB 15
Adjusted balance at 1 July 2018
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
30
30
21
22
Share
Based
Payment
Reserve
$000
Share
Capital
$000
40,887
2,349
40,887
2,349
Retained
Earnings
$000
Total
Equity
$000
24,967
(721)
(1,293)
22,953
68,203
(721)
(1,293)
66,189
-
-
2,164
-
-
2,164
-
-
-
-
(40,089)
(40,089)
(40,089)
(40,089)
-
2,164
(1,770)
(1,770)
600
600
-
(1,770)
600
994
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
6
Balance at 30 June 2019
43,051
2,949
(18,906)
27,094
Note
Share
Capital
$000
Share
Based
Payment
Reserve
$000
Retained
Earnings
$000
Total
Equity
$000
Balance at 1 July 2017
37,283
1,747
29,907
66,937
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
-
-
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
Balance at 30 June 2018
40,887
2,349
24,967
68,203
The accompanying notes form an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 30 JUNE 2019
Note
2019
$000
2018
$000
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
7
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
19
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
18
143,784
(136,212)
7,572
101,980
(101,021)
959
-
(1,330)
3
6,245
1,769
(1,858)
(2,140)
266
(1,963)
-
(6,185)
-
-
(6,185)
(1,903)
5,588
3,685
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
The accompanying notes form an integral part of these 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 2019 comprises the Company and its
subsidiaries (together referred to as the “Group”). The Group is a professional service business delivering
surveying, professional and advisory, and geospatial services to the infrastructure; property; energy,
mining & resource; defence; agribusiness; tourism; leisure and government sectors throughout Australia.
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 2019.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
8
NOTE INDEX
GROUP PERFORMANCE
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
NET DEBT
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…………………………………...
8
9
10 OTHER INFORMATION
Related party transactions……………………………….
Remuneration of auditors………………………………..
11
12 GROUP STRUCTURE
Subsidiaries………………………………………………..
Deed of cross guarantee…………………………………
13 Parent entity financial information……………………….
14
15 ACCOUNTING POLICIES
Basis of preparation………………………………………
Summary of significant accounting policies
New standards and interpretations not yet adopted…..
17 Determination of fair values………………………………
16
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
GROUP PERFORMANCE
1. OPERATING SEGMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
2
9
The Group has three reportable segments that are being managed separately by the service provided.
In 2019 the segments include Veris Australia, Aqura Technologies and Elton Consulting.
The 2019 reportable segments and the services they provide are:
•
•
•
Veris Australia – examine and record the features of a piece of land or infrastructure in order
to create maps, plans, detailed descriptions and to facilitate construction
Aqura Technologies – provides specialised ICT and Communications services
Elton Consulting – 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 2019.
Veris Australia*
2019
$000
93,058
(111)
2018
$000
94,214
(4,812)
Aqura
Technologies
2019
$000
14,710
(99)
2018
$000
12,430
(140)
Elton
Consulting**
2019
$000
18,396
(70)
2018
$000
5,142
-
Total
2019
$000
126,164
(280)
2018
$000
111,786
(4,952)
92,947
89,402
14,611
12,290
18,326
5,142
125,884
106,834
Revenues
Inter-segment
revenues
External revenues
Costs
Inter-segment costs
External costs
(87,279)
111
(87,168)
(82,191)
4,812
(77,379)
(12,846)
99
(12,747)
(11,530)
140
(11,390)
(16,093)
70
(16,023)
(4,110)
-
(4,110)
(116,218)
280
(115,938)
(97,831)
4,952
(92,878)
EBITDA***
5,779
12,023
1,864
900
2,303
1,032
9,946
13,956
Depreciation
Amortisation
EBIT**** for reportable
segments
(4,811)
(2,908)
(1,940)
(3,440)
(3,848)
4,735
(171)
-
1,693
(38)
-
862
(90)
(990)
1,223
(26)
(248)
759
(5,072)
(3,898)
976
(3,503)
(4,096)
6,357
Segment assets
Segment liabilities
2019
$000
45,648
(29,093)
2018
$000
92,012
(29,558)
2019
$000
6,605
(7,380)
2018
$000
6,378
(5,149)
2019
$000
21,196
(2,335)
2018
$000
22,891
(3,010)
2018
$000
73,449
(38,808)
2019
$000
121,281
(37,716)
*Relates to Veris Australia and legacy surveying businesses
**2018 comparative relates to 3 months from acquisition
***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 (2018: none).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. OPERATING SEGMENTS (CONTINUED)
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities
Revenues
Total revenue for reportable segments
Elimination of inter-segment revenue
Consolidated revenue
Expenses
Total expenses for reportable segments
Elimination of inter-segment costs
Corporate overheads
Consolidated operating expenses
Profit (loss)
EBIT for reportable segments
Unallocated amounts (including corporate overheads)
Acquisition related cost/income
Restructuring costs
Impairment of Intangibles (Note 15)
Net finance expense
Consolidated profit (loss) before income taxes
Assets
Total assets for reportable segments
Other unallocated amounts
Consolidated total assets
Liabilities
Total liabilities for reportable segments
Other unallocated amounts
Consolidated total liabilities
2. DISCONTINUED OPERATIONS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
0
2019
$000
126,164
(280)
125,884
116,218
(280)
3,448
119,386
976
(4,049)
(95)
(3,294)
(34,431)
(1,339)
(42,232)
2019
$000
73,449
9,073
82,522
38,808
16,620
55,428
2018
$000
111,786
(4,952)
106,834
97,831
(4,952)
2,766
95,645
6,357
(3,880)
(1,628)
(1,770)
-
(1,006)
(1,927)
2018
$000
121,281
7,597
128,878
37,716
22,959
60,675
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. DISCONTINUED OPERATIONS (CONTINUED)
Results of Discontinued Operations
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
1
Revenue
Expenses
Depreciation
Restructuring
Net finance costs
Profit (loss) from discontinued operations for the period
before tax
Income tax (expense)/ benefit
Profit (loss) from discontinued operations for the period,
net of tax
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
Veris Australia
Aqura Technologies
Elton Consulting
2019
$000
2018
$000
-
-
-
-
-
-
-
-
-
-
-
2,449
(2,405)
44
(217)
-
(112)
(285)
37
(248)
(0.07)
(0.07)
2019
$000
2018
$000
-
-
-
-
(769)
3,826
(395)
2,662
2019
$000
92,947
14,611
18,326
125,884
2018
$000
89,402
12,290
5,142
106,834
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
2
4. ACQUISITIONS
Prior Year Acquisitions
The following entities were acquired during the year ended 30 June 2018 and the original disclosures made
in the 2018 Annual Report were on a provisional basis.
Elton Consulting Group Pty Ltd (i)
2019
Goodwill
$000
2018
Goodwill
$000
11,172
12,251
Adjustments made in relation to KMP and vendor leaving employment at Elton Consulting Group, 180 day
adjustment and associated tax adjustments.
Other acquisition costs of $95,000 have been incurred in relation to previous and potential acquisitions.
5. EARNINGS PER SHARE
2019
2018
Earnings/ (losses) used to calculate basic EPS ($000)
(40,089)
(1,304)
Weighted average number of ordinary shares outstanding during the
year used in calculating basic EPS (number of shares)
360,068,213 331,684,479
Basic earnings per share (cents per share)
(11.13)
(0.39)
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 due to loss in 2019.
6. SUBSEQUENT EVENTS
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
RISK MANAGEMENT
7. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
3
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.
Going Concern
For the year ended 30 June 2019, the Group recorded a loss before income tax of $42,232,000, this
included an impairment of intangible assets of $34,431,000. The Group’s net cash flow from operating
activities was $7,572,000 with a net current asset position of $5,483,000.
During the year the Group negotiated new covenant and payment terms with its primary bankers for the
remainder of the FY19 financial year and for the FY20 financial year. The facilities were utilised to
$18,987,417 as at 30 June 2019 and have a term to 30 November 2020. The loan covenants state that the
Group is to maintain EBITDA in line with bank agreed forecasts as set out in note 20, which is dependent
on the Group achieving its FY20 budget. Prior to the expiration of the term of these facilities, it is the
intention by both parties to revisit the terms beyond this period. Should these terms not be agreed with the
Group’s bankers, the company may pursue other funding alternatives available to it to support the ongoing
requirements of the business.
For these reasons the Directors continue to adopt the going concern basis in preparing these financial
statements.
Contract revenue and work in progress
Revenue is recognised when a customer obtains control of the goods or services. Determining the timing
of the transfer of control – at a point in time or over time – requires judgement 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 these assessments we
have considered, for applicable contracts, the individual status of legal proceedings, including arbitration
and litigation.
Revenue from the Group arises from providing professional services to our customers whereby we deliver
surveying, professional and advisory, and geospatial services to various industries. These are to be
predominately 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 or revenue will not happen.
Deferred vendor payments
As part of the purchase price of the two acquisitions during the prior 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
4
7. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Deferred tax assets relating to tax losses
The Group recognises a deferred tax asset relating to tax losses incurred, as detailed in Note 17. The
recoverability of this deferred tax asset is dependent on the generation of sufficient taxable income to utilise
those tax losses. Management judgements and estimates are required in the assessment of this
recoverability, including forecasting sufficient future taxable income.
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.
The fair values and carrying amounts of various financial instruments recognised at reporting date are
noted below:
2019
2018
Carrying
Amount
$000
Fair Values
$000
Carrying
Amount
$000
Fair Values
$000
Hire purchase liabilities
(10,349)
(10,349)
(12,403)
(12,403)
Cash advance facility
(11,410)
(11,410)
(13,625)
(13,625)
The carrying amounts of the financial instruments are a reasonable approximation of their fair values, on
account of their short maturity cycle.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
5
8. FINANCIAL INSTRUMENTS (CONTINUED)
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 2019,
as well as the significant unobservable inputs used.
Type
Valuation Technique
Significant
unobservable inputs
Inter-relationship between
significant unobservable inputs
and fair value measurement
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.
For Elton the target is
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.
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.
Movements in the value of Deferred Vendor Payments
Lawrence
Lester Franks
LANDdata
Elton Consulting
Opening
Balance
Acquired
in the year
Paid in the
year
Adjusted in the
year
Closing
Balance
$000
$000
$000
$000
$000
500
700
947
3,864
6,011
-
-
-
-
-
(500)
(647)
(518)
(475)
(2,140)
-
(53)
62
(326)
(317)
-
-
491
3,063
3,554
Landdata
Deferred Vendor Payment Provision at 30 June 2019 is based on 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 of $8,625,000 in Earnout Period 2. An incentive bonus of 25% is payable at the end of
Earnout Period 2 if Gross margin is greater than $4,400,000.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. FINANCIAL INSTRUMENTS (CONTINUED)
Elton
Deferred Vendor Payment Provision at 30 June 2019 is based on Earn-out Period 2 for $1,000,000 which
runs from 30 March 2019 to 29 March 2020 and is payable 50% in cash and 50% in shares. Earn-out
requires EBITDA to be over $2,600,000 and is capped at $3,100,000. In addition, 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.
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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
6
The Group’s maximum exposure to credit risk is:
Cash and cash equivalents
Trade and other receivables
Work in progress
2019
$000
3,685
25,864
8,280
37,829
2018
$000
5,588
30,932
10,538
47,058
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:
Current (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
2019
$000
14,289
7,441
2,046
816
2,092
(820)
25,864
2018
$000
14,996
10,534
2,672
1,045
1,892
(207)
30,932
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, management considers this risk to be negligible.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. FINANCIAL INSTRUMENTS (CONTINUED)
The Group’s maximum exposure to credit risk for trade and other receivables at the reporting date by
geographic region was $25,864,000 (2017: $30,932,000) for Australia. The allowance for impairment for
2019 amounted to ($820,000) (2018: $207,000). 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.
The movement in the allowance for impairment in respect of trade receivables during the year was as
follows:
Balance 1 July under IAS 39
Adjustment on initial application of IFRS 9
Balance 1 July under IFRS 9
Impairment loss reversed
Impairment loss provided
Total
2019
$000
207
721
928
(203)
95
820
2018
$000
261
-
261
(247)
193
207
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:
2019
Non-derivative
financial liabilities
Hire purchase
liabilities
Trade and other
payables
Deferred vendor
payments
Cash advance facility
Carrying
Amount
$000
10,349
Contractual
Cash Flows
$000
11,131
6 Months
or less
$000
1,752
6 – 12
Months
$000
1,751
1 – 2
Years
$000
3,447
18,765
18,765
18,765
-
3,554
3,681
491
3,190
-
-
2 – 5
Years
$000
4,181
>5
Years
$000
-
-
-
-
-
11,410
44,078
13,405
46,982
287
21,295
287
5,228
3,359
6,806
8,737
12,918
735
735
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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
8
8. FINANCIAL INSTRUMENTS (CONTINUED)
2018
Non-derivative
financial liabilities
Hire purchase
liabilities
Trade and other
payables
Deferred vendor
Payments
Cash advance facility
Carrying
Amount
$000
12,403
Contractual
Cash Flows
$000
13,154
6 Months
or less
$000
2,022
6 – 12
Months
$000
1,842
1 – 2
Years
$000
3,229
17,532
17,532
17,532
-
-
6,011
6,147
1,406
980
3,761
2 – 5
Years
$000
6,061
-
-
13,625
49,571
16,059
52,892
1,843
22,803
1,818
4,640
3,405
10,395
8,993
15,054
>5
Years
$000
-
-
-
-
-
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or
at significantly different amounts.
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 4.42% for loans and borrowings (2018: 4.70%) detailed in note 20. Interest
sensitivity is calculated for a 1% change below:
Consolidated Group
Cash and cash equivalents
Loans and borrowings
2019
+1%
$000
37
218
255
-1%
$000
(37)
(218)
(255)
2018
+1%
$000
56
(260)
204
-1%
$000
(56)
260
(204)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. COMMITMENTS
Operating leases
Commitments in relation to future minimum lease payments under non-cancellable operating leases:
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
3
9
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
2019
$000
4,206
8,676
1,597
14,479
2018
$000
3,244
3,668
-
6,912
The non-cancellable operating leases are predominately for the lease of office accommodation and
motor vehicles. The leases are generally for a term of between 1 to 5 years and the leases typically have
options to extend the term. The above figures do not contain values for these options as the group is not
committed to taking the options as at 30 June 2019
10. CONTINGENT LIABILITIES
A contingent liability is a possible obligation arising from past events and whose existence will be
confirmed only by occurrence or non-occurrence of one of more uncertain future events not wholly within
the control of the Group. A contingent liability may also be a present obligation arising from past events
but is not recognised on the basis that an outflow of economic resources to settle the obligation is not
viewed as probable, or an amount of the obligation cannot be reliably measured. When the Group has a
present obligation, and an outflow of economic resources is assessed as probable and the Group can
reliably measure the obligation, a provision is recognised.
As a result of operations the Group may receive contractual claims from clients or end users seeking
compensation or litigation. The Group maintains professional indemnity insurance or other contractual
arrangements that would severally apply to such claims. At 30 June 2019 no individually significant
matters exist where the Group estimates a more than remote likelihood of economic outflow.
WORKING CAPITAL
11. TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
2019
$000
25,864
-
25,864
2018
$000
30,829
103
30,932
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
2019
$000
18,765
18,765
2018
$000
17,532
17,532
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in note 8.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAPITAL EMPLOYED
13. EMPLOYEE BENEFITS
Current
Annual leave
Long service leave
Superannuation
Other employee provisions
Shares
Non-current
Long service leave
Shares
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
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
0
2019
$000
4,396
2,697
1,693
390
-
9,176
1,640
-
1,640
2019
$000
1,669
(627)
1,042
2018
$000
4,081
3,502
1,558
181
183
9,505
920
146
1,066
2018
$000
1,300
(368)
932
22,998
(13,598)
9,400
20,838
(10,702)
10,136
5,402
(2,293)
3,109
7,941
(3,767)
4,174
13,551
15,242
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. PLANT AND EQUIPMENT (CONTINUED)
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
2019
Leasehold
Improvements
$000
Plant &
Equipment
$000
Motor
Vehicles
$000
Carrying amount at 1 July 2018
Acquired through business acquisitions
Additions at cost
Disposals at carrying value
Depreciation
Transfers between classes at carrying
value
Carrying amount at 30 June 2019
2018
Carrying amount at 1 July 2017
Acquired through business acquisitions
Additions at cost
Disposals at carrying value
Depreciation
Transfers between classes at carrying
value
932
-
319
-
(209)
-
1,042
10,136
-
2,975
(23)
(3,688)
-
9,400
Total
$000
15,242
-
3,774
(378)
(5,087)
4,174
-
480
(355)
(1,190)
-
3,109
-
13,551
Leasehold
Improvements
$000
Plant &
Equipment
$000
Motor
Vehicles
$000
353
353
425
(36)
(236)
73
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)
-
Carrying amount at 30 June 2018
932
10,136
4,174
15,242
The carrying value of finance leased assets at 30 June 2019 is $5.9 million (2018: $8.7 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 2019 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 2019. No impairment
loss was recognised in the year ended 30 June 2019 (2018: $nil).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
2
15. INTANGIBLE ASSETS
Carrying amount at 1 July 2017
Veris Australia
Elton Consulting
Movements during the year
Additions:
Veris Australia
Elton Consulting
Amortisation:
Veris Australia
Elton Consulting
Adjustments:
Veris Australia
Elton Consulting
Carrying value 1 July 2018
Veris Australia
Elton Consulting
Movements during the year
Amortisation:
Veris Australia
Elton Consulting
Adjustments:
Veris Australia
Elton Consulting
Impairment:
Veris Australia
Elton Consulting
Carrying amount at 30 June 2019
Veris Australia
Elton Consulting
Goodwill
$000
Customer
Relationships
$000
Brands
Total
$000
$000
31,661
-
31,661
3,395
11,070
8,864
-
8,864
-
-
-
40,525
-
40,525
3,360
3,496
-
292
6,755
14,858
-
-
(3,848)
(228)
-
(20)
(3,848)
(248)
(625)
1,181
34,431
12,251
46,682
-
-
8,376
3,268
11,644
-
-
-
272
272
(625)
1,181
42,807
15,791
58,598
-
-
(2,908)
(912)
-
(78)
(2,908)
(990)
-
(1,079)
(34,431)
-
-
11,172
11,172
-
-
-
-
-
-
-
-
-
(1,079)
(34,431)
-
5,468
2,356
7,824
-
194
194
5,468
13,722
19,190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. INTANGIBLE ASSETS (CONTINUED)
Goodwill has arisen on businesses purchased and an impairment review is carried out annually. For the
purpose of impairment testing, goodwill has been allocated to CGU’s as per the above.
Impairment Assessment
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
3
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.
At 31 December 2018 reporting date, there were two indicators of impairment:
- Market capitalisation was less than net asset value (Veris Group)
- Revenue and EBITDA % was not meeting budgeted expectations (Veris Australia CGU)
The Group determined value in use to be higher than fair value and therefore 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 businesses. 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.
Recoverable amount testing
Key assumptions – Veris Australia CGU
The recoverable amount of the Veris Australia CGU has been determined using a value in use discounted
cash flow model.
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 for the Veris Australia CGU are budgeted EBITDA, long term growth rate (2.5%) (2018: 2.0%)
and discount rate (9.9%) (2018: 9.3%).
(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
2020 and the management forecast for the subsequent financial years ending 30 June 2024.
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 FY2024 onwards to perpetuity are based on a growth rate of 2.5%
(2018: 2.0%)
(iii) Discount rate (9.9%) (2018: 9.3%)
Post tax nominal discount rate of 9.9% (2018: 9.3%) reflect the Group’s estimate of the time value of
money and risks specific to each CGU.
(iv) Terminal value (2.5%) (FY18: 2.0%)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
4
15. INTANGIBLE ASSETS (CONTINUED)
As a result of changes in key assumptions, impairment testing of the Veris Australia CGU for the current
reporting period resulted in an impairment loss of $34,431,000 being recognised to reflect the amount by
which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount testing
Key assumptions – Elton Consulting CGU
The recoverable amount of the Elton Consulting CGU has been determined using a value in use discounted
cash flow model.
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 for the Elton Consulting CGU are budgeted EBITDA, long term growth rate (2.5%) and discount
rate (9.9%). There are no comparative rates for the Elton Consulting CGU for FY18, as it was only acquired
in the months prior to 30 June 2018 year end, in March 2018.
(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
2020 and the management forecast for the subsequent financial years ending 30 June 2024.
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 (2.5%)
The future annual growth rates for FY 2024 onwards to perpetuity are based on a growth rate of 2.5%.
(iii) Discount rate (9.9%)
Post tax nominal discount rate of 9.9% reflect the Group’s estimate of the time value of money and risks
specific to each CGU.
(iv) Terminal value (2.5%)
Following impairment testing for the current reporting period, no impairment of Elton Consulting intangible
assets has been recognised as the recoverable amount of the Elton Consulting CGU which all of its assets
are assigned exceeds the carrying amount of the CGU.
Sensitivities – Elton Consulting CGU
The directors and management have performed an assessment of reasonably possible changes in the key
assumptions. Management has identified that a reasonably possible change in two key assumptions could
cause the carrying amount to exceed the recoverable amount. The following table shows the amount (in
percent) by which these two assumptions would need to change individually for the estimated recoverable
amounts to be equal to the carrying amount.
Discount rate
Budgeted EBITDA growth rate
2019
$000
3.0
(3.2)
2018
$000
-
-
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
2019
$000
-
(2,130)
(13)
-
(2,143)
2018
$000
-
(60)
(697)
(114)
(871)
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
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
5
(Loss)/ Profit before income tax – continuing operations
Income tax at 30% (2018: 30%)
Add (less) tax effect of:
Other non-allowable/ assessable items
Research and development offset
Adjustment for prior periods
Adjustment - other
2019
$000
2018
$000
(42,232)
(12,670)
(1,927)
(578)
10,540
-
4
(17)
518
-
(697)
(114)
Income tax expense/ (benefit) – continuing operations
(2,143)
(871)
(Loss)/ Profit before income tax – discontinued operations
Income tax at 30% (2018: 30%)
Add (less) tax effect of:
Other non-allowable/ assessable items
Adjustment for prior periods
Income tax expense/ (benefit) – discontinued operations
17. DEFERRED TAX ASSETS/ LIABILITIES
-
-
-
-
-
(285)
(86)
(3)
126
37
Deferred tax liability
Work in progress
Plant & Equipment
Employee Benefits
Provisions
Intangibles
Carried
offset available
Carried
losses available
Other
forward
forward R&D
tax
Assets
2019
$000
-
-
3,182
747
-
8,453
916
145
2018
$000
-
-
3,046
579
-
8,453
262
245
Liabilities
Net
2019
$000
(1,524)
(526)
-
-
(2,425)
-
-
(55)
2018
$000
(2,645)
(30)
-
-
(3,594)
-
-
(31)
2019
$000
(1,524)
(526)
3,182
747
(2,425)
8,453
916
90
2018
$000
(2,645)
(30)
3,046
579
(3,594)
8,453
262
214
Tax assets/ (liabilities)
13,443
12,585
(4,530)
(6,309)
8,913
6,276
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. DEFERRED TAX ASSETS/ LIABILITIES (CONTINUED)
Movement in deferred tax balances
2019
$000
2018
$000
Opening balance
6,276
7,636
Deferred tax liability on intangibles – Business Combinations
Subsidiaries acquired opening balances
Prior year adjustments
Other adjustment
Charge to profit or loss – continuing operations
Charge to profit or loss – discontinued operations
-
-
490
17
2,130
-
(2,145)
10
628
-
61
86
Closing deferred tax asset
8,913
6,276
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
6
NET DEBT
18. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
2019
$000
3,685
2018
$000
5,588
Cash and cash equivalents in the statement of cash flows
3,685
5,588
The Group’s exposure to interest rate risk and a sensitivity analysis for the financial assets and liabilities
disclosed in note 8.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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)
Impairment of Intangible assets
Profit on sale of fixed assets
Other
Share based payment
Income tax expense/ (benefit) from all operations
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
7
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
2019
$000
2018
$000
(40,089)
(1,304)
5,087
3,898
34,431
(1,391)
24
586
(2,143)
403
4,347
(1,208)
965
1,219
519
3,585
4,096
-
(2,254)
265
1,031
(908)
4,511
(11,512)
(1,939)
(4,222)
10,507
2,517
Net cash used in operating activities
6,245
(138)
Significant non-cash investing and financing transactions
Property, plant and equipment of $1.9 million (2018: $7.3 million) was acquired under finance leases.
Movements in borrowings
Opening balance 1 July 2018
Movements:
Proceeds from borrowings
Repayments of borrowings and lease liabilities
Closing balance 30 June 2019
$000
26,028
1,916
(6,185)
21,759
Proceeds from borrowings relates to $1,916,000 of Hire Purchase borrowings which were paid directly to
the supplier of the asset.
20. LOANS AND BORROWINGS
Current liabilities
Hire purchase liabilities (HP)
Cash advance facility
Non-current liabilities
Hire purchase liabilities
Cash advance facility
2019
$000
3,356
-
3,356
6,993
11,410
18,403
2018
$000
3,431
2,950
6,381
8,972
10,675
19,647
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
8
20. LOANS AND BORROWINGS (CONTINUED)
TERMS AND DEBT REPAYMENT SCHEDULE
Terms and conditions of outstanding loans were as follows:
Nominal
interest rate%
4.15 – 5.35
Year of
maturity
2019 – 2024
2019
$000
Carrying
Amount
2018
$000
Carrying
Amount
10,349
12,403
4.0 – 4.6
2019 – 2024
11,410
13,625
21,759
26,028
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.
Facility
Available
2019
$000
17,000
5,000
8,500
30,500
Used
2019
$000
(11,410)
(56)
(433)
(11,899)
Unused
2019
$000
5,590
4,944
8,067
18,601
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
Cash advance facility (a)
Insurance Bonds
Other (b)
Total financing facilities
a) The carrying amount of this facility was $11.4 million as at 30 June 2019 (2018: $13.6 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 EBITDA in line with Bank agreed forecast.
b) Other facilities include a $5.5 million bank overdraft, $2.5 million contingent instrument facility
and $500,000 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
2019
$000
3,802
7,329
11,131
Interest
2019
$000
(448)
(334)
(782)
Present value
of minimum HP
payments
2019
$000
Future
minimum HP
payments
2018
$000
Interest
2018
$000
Present value
of minimum
HP payments
2018
$000
3,354
6,995
10,349
3,814
9,340
13,154
(383)
(368)
(751)
3,431
8,972
12,403
Less than 1 year
Between 1 & 5 years
Financing is arranged for major leasehold improvements, plant & equipment, and motor vehicle additions
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
EQUITY
21. CAPITAL AND RESERVES
Share capital
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
4
9
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
40,887
1,696
-
468
2018
$000
37,283
379
-
3,225
2019
No. of
Shares
345,358,386
8,428,718
9,249,495
6,977,990
2018
No. of Shares
325,705,364
2,238,596
1,289,426
16,125,000
43,051
40,887
370,014,589
345,358,386
• On 12 July 2018, 37,037 ordinary shares were issued as an incentive for continued employment
to key personnel following the acquisition of Lester Franks in November 2016. The shares were
issued for nil cash consideration with a fair value of $0.24 per share.
• On 8 August 2018, 4,305,997 ordinary shares were issued for $nil consideration on vesting of
Performance Rights to a key executive under the Veris FY17 Employee Incentive Scheme.
• On 10 September 2018, 4,305,998 ordinary shares were issued for $nil consideration on vesting
of Performance Rights to a key executive under the Veris FY17 Employee Incentive Scheme.
• On 25 September 2018, 3,332,125 ordinary shares were issued and on 26 September 2018,
5,096,593 ordinary shares were issued, all at a price of $0.21 in accordance with the DRP.
• On 9 November 2018, 637,500 ordinary shares were issued for $nil consideration on vesting of
Performance Rights to a key executive under the Veris FY17 Employee Incentive Scheme on
cessation of employment.
• On 12 December 2018, 425,926 ordinary shares were issued as an incentive for continued
employment to key personnel following the acquisition of Lester Franks in November 2016. The
shares were issued for nil cash consideration with a fair value of $0.10 per share.
• On 9 April 2019, 4,098,360 ordinary shares were issued as an incentive for continued
employment to key personnel following the acquisition of Elton Consulting in March 2018. The
shares were issued for nil cash consideration with a fair value of $0.061 per share.
• On 8 May 2019, 7,916,667 ordinary shares were issued to the vendors of Elton Consulting as
part consideration for the Milestone Payment One under the Share Sale Agreement. The shares
were issued for nil cash consideration with a fair value of $0.069 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. CAPITAL AND RESERVES (CONTINUED)
Reserves
2019
$000
Share Based
Payments
2018
$000
Share
Based
Payments
Balance at the beginning of the year
Profit/ (loss) for the year
Dividends paid
Adoption of new standards
Share based payment transactions
2,349
-
-
-
600
1,747
-
-
-
602
2019
$000
Retained
Earnings/
(Accumulated
Losses)
24,967
(40,327)
(1,770)
(2,014)
-
2018
$000
Retained
Earnings
27,907
(1,304)
(1,636)
-
-
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
0
Balance at the end of the year
2,949
2,349
(19,144)
24,967
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 $1.8 million were
distributed during the year (2018: $1.6 million).
22. DIVIDENDS
On 30 August 2018 the Company declared a fully franked dividend for 2018 of 0.5 cents per share, totalling
$1,770,000 (2018: $1,636,000). On 25 September 3,332,125 shares issued under the Dividend
Reinvestment Plan (DRP) at 21.0 cents per share and on 26 September a further 5,096,593 shares were
issued at 21.0 cents per share in accordance with the DRP Underwriting Agreement. The 21.0 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:
2019
$
2018
$
Franking account balance as at the end of financial year at 30% (2018:30%)
5,535,898
6,295,357
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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. SHARE-BASED PAYMENTS
(a)
Share – Based Payment Arrangements
As at 30 June 2019, the Group had the following share-based payment arrangements.
(i)
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 (C)
-
30 June 2019
1,443,500
637,500,
Vesting Hurdles
50% TSR (D)
50% 3 Year
Absolute EPS
Pooling (E)
<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%
-
1,443,500
637,500
(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, 334,000 Performance Rights lapsed due to cessation of employment
(C) During the period, 637,500 Performance Rights vested on cessation of employment and 1,109,500 lapsed due to the
hurdles not being achieved.
(D) Performance of management measured against an absolute shareholder return target of VRS
(E) 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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. SHARE-BASED PAYMENTS (CONTINUED)
2019 Performance Rights Plan
(ii)
DIRECTORS & KMP’S
On 20 December 2018, the Group granted Performance Rights to the Managing Director, Adam Lamond
and Executive Director, Brian Elton and on 12 April 2019, the Group granted Performance Rights to Key
management Personnel under the Group’s new Veris combined Incentive Plan (“VIP”) relating to financial
years 30 June 2019 to 30 June 2022 based on the achievement KPIs outlined in the below Balanced
Scorecard:
Financial
Budgeted EBITDA
(14%)
Balanced Scorecard and Weightings
Individual
KPI’s
(20%)
Market
Absolute EPS
(19%)
Values
Behaviours
(5%)
On the basis that the Balanced Scorecard was achieved, 50% will be paid in cash and 50% in equity by way
of issue of Performance Rights, of which 60% would have vested based on achievement of a 3 year absolute
TSR hurdle and 40% would have vested in a future period in time, depending on continued employment for
4 years post issue (33% year 2; 33% year 3, 33% year 4). The Balanced Scorecard was not achieved for
the FY19 year and all Performance Rights have lapsed. The absolute TSR hurdle is outlined in the below
table:
Number of
Performance
Rights
granted
Vesting Date
(A)
Lapsed (B)
Vested
during the
Period
Vesting Hurdles*
60% TSR (C)
40% 3 Year
Retention (D)
1,297,196
30 June 2022
942,804
-
<75%
Nil
Yr 2
1/3
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
2
75% <
120%
Pro-rata
vesting
between
25% and
100%
Yr 3
1/3
1,297,196
942,804
-
* 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
120%
100%
Yr 4
1/3
(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:
vii.
viii.
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.
ix.
x.
xi.
xii.
(B) During the period, 942,804 Performance Rights lapsed due to the KPI’s outlined in the Balanced Scorecard not being
achieved
(C) Performance of management measured against an absolute shareholder return target of VRS
(D) Based on continued employment and disposal restrictions
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. SHARE-BASED PAYMENTS (CONTINUED)
SENIOR MANAGEMENT
On 12 April 2019 the Group granted 2,419,949 Performance Rights to eligible employees which will vest
subject to their continued employment over a two year period.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
3
Number of
Performance
Rights
granted
Vesting Date
(A)
Lapsed (B)
Vested
during the
Period
2,419,949
30 June 2021
1,334,622
-
Vesting Hurdles*
100%
2 Year Retention (C)
2,419,949
1,334,622
-
(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:
xiii.
xiv.
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
xvii.
xviii. the seven year anniversary of the date of grant of the Performance Rights.
xv.
xvi.
(B) During the period, 104,960 Performance Rights lapsed due to cessation of employment and 1,229,662 Performance
Rights lapsed due to a portion of the KPI’s outlined in the Balanced Scorecard not being met.
(C) Based on continued employment for two years to 30 June 2021
(b) Measurement of Fair Values of Share-Based Payments
During the period, 3,717,145 Performance Rights were issued (2018: nil). The fair value of the Tranche A,
Tranche B, Tranche C and Tranche E Rights Performance Rights issued under the Group’s VIP during 2019
has been measured using the Black Scholes option pricing model. The fair value of the Tranche D Rights
has been measured using the Monte Carlo simulation, which simulates the Company’s share price at the
test date and incorporates the probability of the TSR vesting condition being met.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. SHARE-BASED PAYMENTS (CONTINUED)
The inputs used in the measurement of the fair values at grant date of the equity-settle share-based payment
plans were as follows:
Performance Measure
Grant Date
Share Price at Grant Date
Exercise Price
Commencement of Annual Balanced
Scorecard Performance Period
Annual Scorecard Measurement Date
Annual Scorecard Measurement
Period (Years)
Commencement
Period
Performance Measurement Date
Vesting Period/Life of Rights (Years)
Volatility
Risk-free Rate
Number of Rights
Fair Value at Grant Date
of Performance
Tranche A (A)
1 Yr Retention
20 Dec 2018
$0.095
Nil
1 Jul 2018
EXECUTIVE DIRECTORS RIGHTS
Tranche C (A)
1 Yr Retention
20 Dec 2018
$0.095
Tranche B (A)
1 Yr Retention
20 Dec 2018
$0.095
Nil
1 Jul 2018
Nil
1 Jul 2018
Tranche D (B)
TSR
20 Dec 2018
$0.095
Nil
1 Jul 2018
30 Jun 2019
1
30 Jun 2019
1
30 Jun 2019
1
30 Jun 2019
1
1 Jul 2019
1 Jul 2019
1 Jul 2019
1 Jul 2019
30 Jun 20
1.53
60%
1.93%
106,704
$0.091
30 Jun 21
2.53
60%
1.93%
106,704
$0.089
30 Jun 22
3.53
60%
1.87%
106,704
$0.087
30 Jun 22
3.53
60%
1.87%
480,168
$0.043
(A)
(B)
40% of Rights subject to retention (1/3 Year 2; 1/3 Year 3; 1/3 Year 4)
60% of Rights subject to achievement of a 3 year absolute TSR target
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
4
Performance Measure
Grant Date
Share Price at Grant Date
Exercise Price
Commencement of Annual Balanced
Scorecard Performance Period
Annual Scorecard Measurement Date
Annual Scorecard Measurement
Period (Years)
Commencement
Period
Performance Measurement Date
Vesting Period/Life of Rights (Years)
Volatility
Risk-free Rate
Number of Rights
Fair Value at Grant Date
of Performance
KEY MANAGEMENT PERSONNEL RIGHTS
Tranche A (A)
1 Yr
Retention
12 Apr 2019
$0.058
Tranche B (A)
1 Yr
Retention
12 Apr 2019
$0.058
Tranche C (A)
1 Yr
Retention
12 Apr 2019
$0.058
Nil
Nil
Nil
Tranche D (B)
TSR
12 Apr 2019
$0.058
Nil
SNR MGMT
RIGHTS
Tranche E (C)
2 Yr
Retention
12 Apr 2019
$0.058
Nil
1 Jul 2018
1 Jul 2018
1 Jul 2018
1 Jul 2018
1 Jul 2018
30 Jun 2019
1
30 Jun 2019
1
30 Jun 2019
1
30 Jun 2019
1
30 Jun 2019
1
1 Jul 2019
1 Jul 2019
1 Jul 2019
1 Jul 2019
1 Jul 2019
30 Jun 20
1.22
60%
1.50%
66,255
$0.055
30 Jun 21
2.22
60%
1.50%
66,255
$0.053
30 Jun 22
3.22
60%
1.44%
66,256
$0.052
30 Jun 22
3.22
60%
1.44%
298,150
$0.025
30 Jun 21
2.22
60%
1.50%
2,419,949
$0.053
(A)
(B)
(C)
40% of Rights subject to retention (1/3 Year 2; 1/3 Year 3; 1/3 Year 4)
60% of Rights subject to achievement of a 3 year absolute TSR target
100% of Rights subject to retention (continued employment to 30 June 2021)
The measure of volatility used in option pricing models is the annualised standard deviation of the continuously
compounded rates of return on the share over a period of time. For the Rights, the recent volatility of the share price of
Veris was calculated for one, two, and three-year periods, using data extracted from Bloomberg.
(c) Unvested Unlisted Performance Rights
828,848 Performance Rights issued during 2017 remain unvested at 30 June 2019 (2018: 2,909,848
Performance Rights issued 2017). 1,439,719 Performance Rights issued during 2019 remain unvested at
30 June 2019 (2018:N/A).
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:
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
5
Short-term employee benefits
Post-employment benefits
Share-based payment
Termination benefit - Cash
Termination benefit – Share-based
2019
$
2018
$
1,485,240
99,750
2,377
363,385
18,874
1,337,843
118,856
207,503
-
-
1,969,626
1,664,202
During the year, the Company did not have or repay any loans from related parties (2018: $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 9 to 21.
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
2019
$
372,514
372,514
2018
$
83,201
83,201
Balance outstanding
as at 30 June
2019
$
2018
$
-
-
-
-
(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
2019
$
2018
$
226,448
-
8,724
235,172
254,000
51,413
551,031
856,444
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
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
6
Country of
Incorporation
Ownership Interest
2019
%
2018
%
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
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 2019, after
eliminating all transactions between parties to the Deed of Cross Guarantee, as of and for the year ended
30 June 2019 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 2019.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ended 30 June 2019 the parent company of the Group was Veris
Limited.
Results for the Year
Profit/(loss) for the year
Other comprehensive income
2019
$000
(35,000)
-
2018
$000
2,758
-
Total comprehensive profit/ (loss) for the year
(35,000)
2,758
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
Accumulated loss & Reserves
Total equity
29. BASIS OF PREPARATION
(a)
Presentation Currency
2019
$000
8,504
48,847
(14,774)
(26,273)
43,051
(20,477)
22,574
2018
$000
14,462
84,732
(6,772)
(29,910)
40,887
13,935
54,822
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
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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
8
(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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
5
9
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.
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:
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
0
•
•
•
Plant and equipment
Motor vehicles
Leasehold Improvements
14-33%
14-33%
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
1
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.
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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
2
(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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Revenue
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
3
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
4
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(iii) Goods and services tax
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
5
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
2018.
AASB 9 Financial instruments
The Group has initially adopted AASB 9 Financial Instruments from 1 July 2018.
AASB 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some
contracts to buy or sell non-financial items. This standard replaces AASB 139 Financial Instruments:
Recognition and Measurement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The following table summarises the impact, net of tax, of transition to AASB 9 on the opening balance of
retained earnings.
Retained earnings
Recognition of expected credit losses under AASB 9
2018
$000
721
The effect of adopting AASB 9 on the carrying amounts of financial assets at 1 July 2018 relates solely to
the new impairment requirements. The following table explains the original measurement categories under
AASB 139 and the new measurement categories under AASB 9.
Trade and other receivables
Classification
Original
(AASB 139)
New
(AASB 9)
Loans and
receivables
Amortised
cost
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
6
Trade and other receivables that were classified as loans and receivables under AASB 139 are now
classified as financial assets measured at amortised cost. An increase of $651,000 in the allowance for
impairment over these receivables was recognised in opening retained earnings at 1 July 2018 on transition
to AASB 9.
AASB 9 replaces the ‘incurred loss’ model in AASB 139 with an ‘expected credit loss’ (ECL) model. The new
impairment model applies to financial assets measured at amortised cost, contract assets and debt
investments at Fair Value through Other Comprehensive Income (FVOCI) but not to investments in equity
instruments. Under AASB 9, credit losses are recognised earlier than under AASB 139. The financial assets
at amortised cost consist of trade receivables, cash and cash equivalents, and corporate debt securities.
Under AASB 9, loss allowances are measured on either of the following bases:
- 12 month ECLs: these are ECLs that result from possible default events within the 12 months
after reporting date; and
- Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of
a financial instrument.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which
are measured as 12-month ECLs:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk has not increased significantly since
initial recognition
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
7
The Group has elected to measure loss allowances for trade receivables and contract assets at an amount
equal to lifetime ECLs. When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating ECLs, the Group considers reasonable and
supportable information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on the Group’s historical experience and
informed credit assessment and including forward-looking information.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value
of all cash shortfalls (i.e. variance between contractual cash inflow and cash flow expected by the Group).
ECLs are discounted at the effective interest rate of the financial asset.
Credit-Impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
Presentation of impairment
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of the assets.
The Group has determined that the application of AASB 9’s impairment requirements at 1 July 2018 result
in an additional impairment as follows:
Loss allowance at 30 June 2018 under AASB 139
Additional impairment recognised at 1 July 2018 on:
2018
$000
313
Trade and other receivables as at 30 June 2018(A)
721
Loss allowance at 1 July 2018 under AASB 139
1,034
(A) $651k was disclosed at 31 December 2018
Trade Receivables
The ECLs were calculated on actual credit loss experience over the past 12-18 months. The ECL analysis
was limited in the absence of a sufficient timeframe of historical data, which would prove difficult to collate
without undue cost or effort. The Group considers the approach and some of the assumptions used in
calculating these ECLs as key sources of estimation uncertainty.
AASB 15 Revenue from Contracts with Customers
The Group has initially adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018.
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue
is recognised. It replaces existing guidance, including AASB 118 Revenue and AASB 111 Construction
Contracts and related interpretations.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Group has adopted AASB 15 using the cumulative effect method, with the effect of initially applying this
standard recognised at the date of initial application. Accordingly, the information presented for 2018 has
not been restated.
The following table summarises the impact, net of tax, of transition to AASB 15 on retained earnings at 1
July 2018:
Retained earnings
Work in progress(A)
Impact at 1 July 2018
(A) $780k was disclosed at 31 December 2018
2018
$000
1,293
1,293
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
8
Under AASB 15, revenue is recognised when a customer obtains control of the goods or services.
Determining the timing of the transfer of control – at a point in time or over time – requires judgement 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 these
assessments we have considered, for applicable contracts, the individual status of legal proceedings,
including arbitration and litigation.
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.
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.
AASB16 Leases
A new accounting standard AASB16 Leases has been published but is not mandatory for 30 June 2019
reporting periods. The Group’s assessment of the impact of this new standard is set out below.
AASB 16 Leases specifies how to recognise, measure and disclose leases. It will result in almost all leases
being recognised on the balance sheet by lessees, as the distinction between operating and finance leases
is removed for lessees.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED (CONTINUED)
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
6
9
The standard provides a single lessee accounting model, requiring lessees to recognise assets (the right to
use the leased item) and lease liabilities (obligations to make lease repayments) for almost all leases. The
Group plans to apply the practical expedients in relation to short term leases (less than or equal to 12
months) and leases of low value assets whereby lease accounting remains similar to current practice.
The standard will affect primarily the accounting for the Group’s operating leases of offices and motor
vehicles.
As at the reporting date, the Group has non-cancellable operating leases commitments of $14,479,000 refer
to Note 9.
Right of-use assets will be measured at the amount of the lease liability on adoption. This will be different to
the approximate values of the operating leases disclosed in Note 9, as the new standard requires that
optional renewable periods are included in the leases liability where reasonably certain an extension will
occur. The Group’s property leases, which make up the majority of lease commitments, generally include
significant optional renewal periods which if reasonably certain will significantly impact the lease liability upon
transition to AASB16 Leases.
Operating EBITDA used to measure segment results is expected to significantly increase as most occupancy
costs will be excluded from EBITDA calculations and sit below the line as amortisation of the right-of-use
assets and interest on the lease liability. Motor vehicle operating lease payments are not expected to have
a material impact on EBITDA as these leases commenced in June 2019. 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 variability over the course of a lease life.
Operating cash flows will increase under IFRS16 as the element of cash paid attributable to the repayment
of principal will be included in financing cash flows. The net increase/decrease in cash and cash equivalents
will remain the same.
The lease term is determined at inception of the lease. Leases allow for options to extend the term of the
lease. Exercising or letting an option lapse can have a material impact on the lease valuations for the larger
offices within the group.
The Group will apply the standard from its mandatory adoption date of 1 July 2019. The Group intends to
apply the modified retrospective transition approach and will not restate comparative amounts for the year
prior to first adoption, which will be presented in the 31 December 2019 half year financial report.
There are no other standards that are not yet effective and that would be expected to have a material impact
on the entity in the current or future reporting periods and on foreseeable future transactions.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
0
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.
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 24 to 70 and the
Remuneration report on pages 9 to 21 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 2019 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.
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 2019.
The directors draw attention to page 28 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
1
2.
3.
4.
Signed in accordance with a resolution of the directors:
Derek La Ferla
Chairman
Dated at Perth 30 August 2019
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
To the shareholders of Veris Limited
Report on the audit of the Financial Report
Independent Auditor’s Report
Independent Auditor’s Report
Opinion
To the shareholders of Veris Limited
We have audited the Financial Report of Veris
Limited (the Company).
In our opinion, the accompanying Financial Report
To the shareholders of Veris Limited
Report on the audit of the Financial Report
of the Company is in accordance with the
Corporations Act 2001, including:
• giving a true and fair view of the Group's
Report on the audit of the Financial Report
Opinion
financial position as at 30 June 2019 and of its
financial performance for the year ended on that
date; and
We have audited the Financial Report of Veris
Limited (the Company).
Opinion
• complying with Australian Accounting Standards
In our opinion, the accompanying Financial Report
and the Corporations Regulations 2001.
of the Company is in accordance with the
We have audited the Financial Report of Veris
Corporations Act 2001, including:
Limited (the Company).
•
•
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
2
The Financial Report comprises:
Consolidated statement of financial position as
at 30 June 2019.
Consolidated statement of profit or loss and
other comprehensive income, Consolidated
statement of changes in equity, and
Consolidated statement of cash flows for the
year then ended.
The Financial Report comprises:
The Financial Report comprises:
•
•
Notes including a summary of significant
Consolidated statement of financial position as
accounting policies.
at 30 June 2019.
Directors' Declaration.
•
•
Consolidated statement of profit or loss and
The Group consists of Veris Limited (the Company)
other comprehensive income, Consolidated
and the entities it controlled at the year end or from
statement of changes in equity, and
time to time during the financial year.
Consolidated statement of cash flows for the
year then ended.
Consolidated statement of financial position as
at 30 June 2019.
•
• giving a true and fair view of the Group's
In our opinion, the accompanying Financial Report
financial position as at 30 June 2019 and of its
of the Company is in accordance with the
financial performance for the year ended on that
Corporations Act 2001, including:
date; and
Basis for opinion
• giving a true and fair view of the Group's
• complying with Australian Accounting Standards
financial position as at 30 June 2019 and of its
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
and the Corporations Regulations 2001.
financial performance for the year ended on that
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
date; and
Consolidated statement of profit or loss and
other comprehensive income, Consolidated
Notes including a summary of significant
statement of changes in equity, and
accounting policies.
Consolidated statement of cash flows for the
year then ended.
Directors' Declaration.
The Group consists of Veris Limited (the Company)
Notes including a summary of significant
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
and the entities it controlled at the year end or from
• complying with Australian Accounting Standards
accounting policies.
audit of the Financial Report section of our report.
time to time during the financial year.
and the Corporations Regulations 2001.
•
•
•
•
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
Basis for opinion
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 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 consists of Veris Limited (the Company)
and the entities it controlled at the year end or from
time to time during the financial year.
•
Directors' Declaration.
Basis for 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 conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
audit of the Financial Report section of our report.
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.
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.
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.
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.
INDEPENDENT AUDITOR’S REPORT
Key Audit Matters
The Key Audit Matters we identified are:
Key Audit Matters
• Goodwill and intangible assets value.
• Recognition of revenue and WIP.
The Key Audit Matters we identified are:
• Goodwill and intangible assets value.
• Recognition of revenue and WIP.
Goodwill and intangible assets value ($19.2m)
Refer to Note 15 to the Financial Report
Goodwill and intangible assets value ($19.2m)
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.
Key Audit Matters are those matters that, in our
These matters were addressed in the context of our
professional judgement, were of most significance in
audit of the Financial Report as a whole, and in
our audit of the Financial Report of the current period.
forming our opinion thereon, and we do not provide a
separate opinion on these 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.
The key audit matter
How the matter was addressed in our audit
Refer to Note 15 to the Financial Report
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
3
•
The key audit matter
The Group’s consideration of impairment indicators
and testing of goodwill (annually or where an
impairment indicator exists) and intangible assets
was a key audit matter, given the size of the balance.
The Group’s consideration of impairment indicators
We focused on the significant forward looking
and testing of goodwill (annually or where an
assumptions of the Group applied in their value in use
impairment indicator exists) and intangible assets
models, specifically Veris Australia and Elton
was a key audit matter, given the size of the balance.
Consulting CGUs, including:
We focused on the significant forward looking
assumptions of the Group applied in their value in use
models, specifically Veris Australia and Elton
Consulting CGUs, including:
Forecast cash flows – The estimation by the
Group of industry conditions and operating costs,
including labour, lead to greater audit effort to
gather evidence about forecast market activity and
cost assumptions.
Forecast cash flows – The estimation by the
Group of industry conditions and operating costs,
including labour, lead to greater audit effort to
Forecast growth rates and terminal growth rates –
gather evidence about forecast market activity and
the Group’s models are sensitive to small changes
cost assumptions.
in these assumptions. This drives additional audit
effort specific to their feasibility and consistency
with observable macro economic assumptions.
Forecast growth rates and terminal growth rates –
the Group’s models are sensitive to small changes
in these assumptions. This drives additional audit
effort specific to their feasibility and consistency
varies according to the conditions and
with observable macro economic assumptions.
environments that the specific CGUs are subject
to from time to time.
• Discount rate – it is complicated in nature and
• Discount rate – it is complicated in nature and
•
•
•
varies according to the conditions and
The carrying amount of the net assets of the Group
environments that the specific CGUs are subject
exceeded the Group’s market capitalisation at year
to from time to time.
end, increasing the possibility of goodwill and
intangibles being impaired. This further increased our
The carrying amount of the net assets of the Group
audit effort in this key audit area.
exceeded the Group’s market capitalisation at year
end, increasing the possibility of goodwill and
In the current year, the Group recorded an
intangibles being impaired. This further increased our
impairment charge of $34.4 million against goodwill,
audit effort in this key audit area.
resulting from below budget performance of the Veris
Australia CGU, increasing the sensitivity of the model
In the current year, the Group recorded an
to small changes in assumptions. This further
impairment charge of $34.4 million against goodwill,
increased our audit effort in this key area.
resulting from below budget performance of the Veris
Australia CGU, increasing the sensitivity of the model
to small changes in assumptions. This further
increased our audit effort in this key area.
Our procedures included:
Our procedures included:
How the matter was addressed in our audit
• We considered the appropriateness of the value in
use method applied by the Group to perform the
annual test of goodwill for impairment and the
assessment of the carrying value of intangible
• We considered the appropriateness of the value in
assets, given impairment indicators, against the
use method applied by the Group to perform the
requirements of the accounting standards.
annual test of goodwill for impairment and the
assessment of the carrying value of intangible
• We assessed the accuracy of previous forecast
assets, given impairment indicators, against the
cash flows by comparing to actuals to challenge
requirements of the accounting standards.
the ability of the Group to estimate future cash
flows.
• We assessed the accuracy of previous forecast
cash flows by comparing to actuals to challenge
• We assessed management’s analysis of group net
the ability of the Group to estimate future cash
flows.
assets exceeding market capitalisation.
• We recalculated the impairment charge against
• We assessed management’s analysis of group net
the recorded amount disclosed.
assets exceeding market capitalisation.
• Working with our valuation specialists, we used
• We recalculated the impairment charge against
our knowledge of the Group and their industry, to
challenge the value in use model and key
assumptions, including:
the recorded amount disclosed.
• Working with our valuation specialists, we used
our knowledge of the Group and their industry, to
Comparing forecast cash flows to the Group’s
challenge the value in use model and key
board approved budget and challenging these
assumptions, including:
by analysing the forecast pipeline of work and
industry drivers of this growth.
-
Comparing forecast cash flows to the Group’s
board approved budget and challenging these
Comparing the Group’s growth assumptions to
by analysing the forecast pipeline of work and
historical averages and relevant external data
industry drivers of this growth.
of industry trends.
Analysing the discount rate against publicly
available data of a group of comparable
companies.
Comparing the Group’s growth assumptions to
historical averages and relevant external data
of industry trends.
Analysing the discount rate against publicly
available data of a group of comparable
companies.
-
-
-
-
-
INDEPENDENT AUDITOR’S REPORT
In assessing this key audit matter, we involved
senior audit team members, including valuation
specialists, who understand the Group’s business,
In assessing this key audit matter, we involved
industry and the economic environments it
senior audit team members, including valuation
operates in.
specialists, who understand the Group’s business,
industry and the economic environments it
operates in.
-
-
We assessed the Group’s underlying
methodology and documentation for the
allocation of corporate costs, to the
We assessed the Group’s underlying
forecast cash flows contained in the value
methodology and documentation for the
in use model. We assessed for
allocation of corporate costs, to the
consistency with our understanding of the
forecast cash flows contained in the value
business and the criteria in the accounting
in use model. We assessed for
standards.
consistency with our understanding of the
We considered the sensitivity of the models by
business and the criteria in the accounting
varying key assumptions such as forecast operating
standards.
expenses, forecast growth rates, terminal growth
We considered the sensitivity of the models by
rate and discount rate, within a reasonably possible
varying key assumptions such as forecast operating
range, to identify those assumptions at higher risk
expenses, forecast growth rates, terminal growth
of bias or inconsistency in application and to focus
rate and discount rate, within a reasonably possible
our further procedures.
range, to identify those assumptions at higher risk
of bias or inconsistency in application and to focus
our further procedures.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
4
Recognition of Revenue and Work In Progress (WIP) (Revenue $125.9m, WIP $8.3m)
Refer to Note 30 to the Financial Report
Recognition of Revenue and Work In Progress (WIP) (Revenue $125.9m, WIP $8.3m)
The key audit matter
Refer to Note 30 to the Financial Report
How the matter was addressed in our audit
Recognition of revenue is a Key Audit Matter due
to the:
The key audit matter
Our procedures included:
How the matter was addressed in our audit
• We assessed the Group’s estimation in
•
•
•
Recognition of revenue is a Key Audit Matter due
to the:
Significance of revenue to the financial
statements, including a large number of
contracts with customers, and the degree of
estimation and judgement involved in revenue
recognition.
Significance of revenue to the financial
statements, including a large number of
contracts with customers, and the degree of
First time transition adjustment arising from the
estimation and judgement involved in revenue
adoption of AASB 15 Revenue from Contracts
recognition.
with Customers resulting in additional audit
focus. This effort is due to the complex nature
of the changes to the accounting standard
requiring senior team involvement.
First time transition adjustment arising from the
adoption of AASB 15 Revenue from Contracts
with Customers resulting in additional audit
focus. This effort is due to the complex nature
We focused on the Group’s assessment of the
of the changes to the accounting standard
following elements of revenue recognition:
requiring senior team involvement.
•
•
•
•
The Group’s determination of the amount of
We focused on the Group’s assessment of the
revenue recognised from variable consideration
following elements of revenue recognition:
being highly probable of not reversing. The
The Group’s determination of the amount of
Group’s determination of an amount that is
revenue recognised from variable consideration
highly probable requires a degree of estimation
being highly probable of not reversing. The
and judgement. This increased the audit effort
Group’s determination of an amount that is
we applied to gather sufficient appropriate audit
highly probable requires a degree of estimation
evidence that the variable consideration is
and judgement. This increased the audit effort
highly probable.
we applied to gather sufficient appropriate audit
evidence that the variable consideration is
highly probable.
The Group’s determination of contractual
entitlement to Work In Progress balances
including assessment of performance
obligations.
The Group’s determination of contractual
entitlement to Work In Progress balances
including assessment of performance
obligations.
•
Our procedures included:
recognising revenue to the extent it is highly
probable that a significant reversal will not
• We assessed the Group’s estimation in
occur, through corroborating to underlying
recognising revenue to the extent it is highly
evidence including project spend and
probable that a significant reversal will not
correspondence with customers accepting
occur, through corroborating to underlying
contract terms.
evidence including project spend and
• We assessed management’s line-by-line WIP
correspondence with customers accepting
analysis to corroborate the findings of our
contract terms.
detailed testing of WIP balances, to support
• We assessed management’s line-by-line WIP
that the recognition criteria in AASB 15 had
analysis to corroborate the findings of our
been met. This included obtaining evidence of
detailed testing of WIP balances, to support
an enforceable right and achievement of
that the recognition criteria in AASB 15 had
performance obligations.
been met. This included obtaining evidence of
• We assessed the basis for management’s WIP
an enforceable right and achievement of
provision against the findings of our testing,
performance obligations.
and evaluated the conclusions reached by the
• We assessed the basis for management’s WIP
Group using our understanding of the contracts
provision against the findings of our testing,
obtained in the procedures noted above, in the
and evaluated the conclusions reached by the
context of the requirements of AASB 15.
Group using our understanding of the contracts
• We assessed management’s assumptions
obtained in the procedures noted above, in the
used in calculating the transition adjustment
context of the requirements of AASB 15.
arising from the adoption of AASB 15.
• We assessed management’s assumptions
• We evaluated the related disclosure of the
used in calculating the transition adjustment
impact of adoption of AASB 15 in the financial
arising from the adoption of AASB 15.
statements for appropriateness.
• We evaluated the related disclosure of the
impact of adoption of AASB 15 in the financial
statements for appropriateness.
INDEPENDENT AUDITOR’S REPORT
Other Information
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
5
Other Information
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 Other
Information.
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 Other
Information.
The Other Information we obtained prior to the date of this Auditor’s Report was Directors’ Report,
Remuneration Report, Corporate Governance Statement and Shareholder Information. The Chairman’s Report,
Managing Director’s Report and Overview of operations are expected to be made available to us after the date
of the Auditor's Report.
The Other Information we obtained prior to the date of this Auditor’s Report was Directors’ Report,
Remuneration Report, Corporate Governance Statement and Shareholder Information. The Chairman’s Report,
Managing Director’s Report and Overview of operations are expected to be made available to us after the date
of the Auditor's Report.
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.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing
not express an audit opinion or any form of assurance conclusion thereon, with the exception of the
so, we consider whether the Other Information is materially inconsistent with the Financial Report or our
Remuneration Report and our related assurance opinion.
knowledge obtained in the audit, or otherwise appears to be materially misstated.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing
We are required to report if we conclude that there is a material misstatement of this Other Information, and
so, we consider whether the Other Information is materially inconsistent with the Financial Report or our
based on the work we have performed on the Other Information that we obtained prior to the date of this
knowledge obtained in the audit, or otherwise appears to be materially misstated.
Auditor’s Report we have nothing to report.
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.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
Responsibilities of the Directors for the Financial Report
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
The Directors are responsible for:
Standards and the Corporations Act 2001.
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
fair view and is free from material misstatement, whether due to fraud or error.
Standards and the Corporations Act 2001.
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
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and
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
• assessing the Group and Company's ability to continue as a going concern and whether the use of the going
Company or to cease operations, or have no realistic alternative but to do so.
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.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
Auditor’s responsibilities for the audit of the Financial Report
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material
Our objective is:
misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
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.
• to issue an Auditor’s Report that includes our opinion.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Financial Report.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This
Financial Report.
description forms part of our Auditor’s Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This
description forms part of our Auditor’s Report.
INDEPENDENT AUDITOR’S REPORT
Report on the Remuneration Report
Opinion
Report on the Remuneration Report
Directors’ responsibilities
In our opinion, the Remuneration Report of Veris
Limited for the year ended 30 June 2019, complies
with Section 300A of the Corporations Act 2001.
Opinion
In our opinion, the Remuneration Report of Veris
Limited for the year ended 30 June 2019, complies
with Section 300A of the Corporations Act 2001.
KPMG
KPMG
Directors’ responsibilities
The Directors of the Company are responsible for
the preparation and presentation of the
Remuneration Report in accordance with Section
300A of the Corporations Act 2001.
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
We have audited the Remuneration Report
included on pages 0 to 22 of the Directors’ report
for the year ended 30 June 2019.
Our responsibilities
We have audited the Remuneration Report
included on pages 0 to 22 of the Directors’ report
21
for the year ended 30 June 2019.
Our responsibility is to express an opinion on the
9
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
6
Jane Bailey
Partner
Perth
Jane Bailey
Partner
30 August 2019
Perth
30 August 2019
Lead Auditor’s Independence Declaration under
LEAD AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001
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
financial year ended 30 June 2019 there have been:
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii.
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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
7
To the Directors of Veris Limited
KPMG
Jane Bailey
Partner
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 2019 there have been:
Perth
30 August 2019
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Jane Bailey
Partner
Perth
30 August 2019
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.
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.
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
8
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
ADDITIONAL INFORMATION
The Group’s Corporate Governance Statement can be found at:
https://www.veris.com.au/media/2781/corporate-governance-statement-2019-final-final.pdf
Shareholder Information as at 26 August 2019
Top 20 Shareholders of Quoted Securities
Rank
Name
Shares
% of
Issued
Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
16
18
19
20
NATIONAL NOMINEES LIMITED
56,502,792
15.14
OCEAN TO OUTBACK ELECTRICAL PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED
MR CRAIG GRAEME CHAPMAN
CONCEPT WEST COMMUNICATIONS PTY LTD
MR BRIAN ELTON
CARRIER INTERNATIONAL PTY LIMITED
BERTOLI CONTRACTING PTY LTD
44,844,315
12.01
26,765,922
25,078,591
16,000,000
11,508,540
10,558,035
7,500,000
7.17
6.72
4.29
3.08
2.83
2.01
6,303,597
1.69
MR BRIAN FRANCIS MANGANO
5,993,240
1.61
MR THOMAS BRIAN LAWRENCE
ICON HOLDINGS PTY LTD
MR PETER HOWELLS
SILCHESTER INVESTMENTS PTY LTD
ELTON PROPERTY PTY LTD
MRS JASMINE KRKLJES
INSIDE-OUT CARPENTRY SERVICES PTY LTD
EVANS FAMILY NOMINEES PTY LTD
MR SIMON PAUL CLODE
TELDAR CORPORATION PTY LIMITED
5,690,153
4,435,820
4,300,000
4,286,625
4,277,698
3,875,415
1.52
1.19
1.15
1.15
1.15
1.04
3,200,000
0.86
2,994,792
0.80
2,755,147
2,500,000
0.74
0.67
Total
249,370,682
66.80
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
7
9
ADDITIONAL INFORMATION
Substantial Holders of 5% or more of fully paid ordinary shares
Shareholder
IOOF HOLDINGS LIMITED
OCEAN TO OUTBACK ELECTRICAL
MITSUBISHI UFJ FINANCIAL GROUP, INC
PARADICE INVESTMENT MGT
CRAIG GRAEME CHAPMAN
Number
Shares
51,082,305
51,082,305
Voting
Power
13.68%
45,841,815
45,841,815
12.28%
26,260,962
26,260,962
21,281,655
21,281,655
19,800,000
19,800,000
7.07%
6.56%
5.33%
Distribution of Shareholders
Spread of Holdings
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 –
Total on Register
Ordinary Shares
Performance
Rights
37
106
126
479
280
1,028
-
-
-
1
3
4
Non-Marketable Parcels
Number of shareholders holding less than a marketable parcel is 207.
Voting Rights
Ordinary Shares
Voting rights on a show of hands every member present at a meeting in person or by proxy shall have one
vote and upon a poll each share shall have one vote.
Performance Rights
There are no voting rights attached to Performance Rights
Restricted Securities
Number of Securities
Type of Securities
Escrow Type
Date Escrow Ends
15,625,000
Ordinary Shares
Voluntary
29-Mar-20
Unquoted Equity Securities
There are 1,085,327 unquoted Performance Rights on issue with 4 holders.
Securities Exchange
The Group is listed on the Australian Securities Exchange. The Home exchange is Perth. The ticker code
is VRS
CORPORATE INFORMATION
The registered office of the company is:
Veris Limited
Level 12, 3 Hasler Road
Osborne Park WA 6017
Company Secretary:
Lisa Wynne
The principal place of business is:
Veris Limited
Level 12, 3 Hasler Road
Osborne Park WA 6017
Telephone: (08) 9317 0600
Share Registry:
Computershare
Level 11, 172 St Georges Terrace
Perth WA 6000
Telephone: (08) 9323 2005
2
0
1
9
A
n
n
u
a
l
R
e
p
o
r
t
|
p
a
g
e
8
0
HEAD OFFICE
PERTH
Level 12, 3 Hasler Road
Locked Bag 9
Osborne Park WA 6017
T 08 9317 0600
F 08 9317 0611
veris@veris.com.au