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2020
ANNUAL REPORT
HEAD OFFICE
PERTH
Level 12, 3 Hasler Road
Locked Bag 9
Osborne Park WA 6017
T 08 9317 0600
E veris@veris.com.au
www.veris.com.au
Cover image by Fanjianhua-Freepik
1
Contents
Chairman’s Report
Message from the CEO of Veris Australia
Message from the CEO of Aqura Technologies
Health, Safety, Environment and Quality
Financial Reports
2
6
10
14
16
Chairman’s Report
Throughout this
unprecedented period, the
Leadership Team of Veris
remained committed to the
safety of our people, clients
and the communities in
which we operate.
22
Veris Limited - Annual Report 2020
Veris Limited - Annual Report 2020 Karl Paganin
Non-Executive Chairman
3
It is with pleasure that I provide shareholders with my first report
as Chairman of Veris Limited.
The 2020 financial year has certainly presented some significant
challenges for Veris Limited, nonetheless I have been buoyed by
the significant progress made by Veris and the commitment of our
Leadership Team and staff amidst the unprecedented events of the
year to ensure we are well positioned to deliver greater value to
shareholders and clients in the coming years.
We could not have predicted the catastrophic bushfires and a global pandemic
that would play out in the second half of the year and the impact they have had
on our business and business conditions generally in Australia. The bushfires
in New South Wales and Victoria had a significant impact on the ability of Veris
to carry out its normal business. These events were quickly followed by the
impact of the COVID-19 pandemic which required the business to be flexible
and adaptive to continue to operate in a constricted business environment.
Veris has demonstrated resilience and a capacity to respond nimbly. The
Board and Leadership Team acted prudently to implement a range of structural
and operating enhancements across the Group. Some of the key initiatives
included:
- a 50% and 25% respective reduction in Board fees and Leadership Team
remuneration which commenced at the onset of the COVID-19 pandemic;
-
reviewing operating structures and adopting innovative work practices to
ensure remote working opportunities were leveraged thereby enabling
project work to continue;
- analysis and review of project management practices to enhance WIP
management and billing;
-
increased focus on the cash management cycle and discretionary
expenditures; and
- continued management and strengthening of relationships with key
financing stakeholders.
These and other initiatives were designed to reposition the Group with a flatter
operating structure and more efficient business support functions and have
delivered positive impacts to the operating results of Veris in the fourth quarter.
During the year we have made some key national leadership appointments
across the Group. In October, we welcomed Michael Shirley as Veris Australia’s
new Chief Executive Officer. In addition, Steven Harding was appointed
as Chief Financial Officer of Veris Limited, taking over from Lisa Wynne
who completed the interim role as Chief Financial Officer and resumed
her role as Company Secretary and Head of Commercial. With these and
other appointments throughout the business, I am confident we have an
experienced Leadership Team required to lead the development and execution
of our strategy into the future.
Chairman’s Report continued
In April, Adam Lamond transitioned out of the role of Managing Director of
Veris Limited into a new role as Executive Director – Corporate and Strategy
on a part time basis. Adam will continue in this role until November this year
when he will transition to a Non-Executive Director on the Veris Board. On
behalf of the Board, we would like to sincerely thank Adam for his contribution
to Veris in an executive capacity over a long period of time.
We continued our process of Board renewal during the year. I assumed the
role of Chairman in November, taking the reins from Derek La Ferla, who
retired from the Board after almost a decade of service. During his tenure as
Chairman, Derek oversaw the emergence of Veris as a truly national surveying
and spatial group. On behalf of the Board I would like to thank Derek for his
outstanding contribution over many years. We look to continue this process of
board renewal over the coming year and hope to be in a position to announce
additional changes to the Board in the coming months.
Another significant outcome during the year was the sale of professional and
advisory services business, Elton Consulting. After a strategic review, the
Board made the difficult decision to sell the business in a move to strengthen
the balance sheet and allow Veris to focus on growth opportunities within core
business lines Veris Australia and Aqura Technologies.
Elton Consulting played an important role in the success of the Group, however
the timing of the sale was right to drive further focus on our core service
offerings. Thanks to Brian Elton and the team at Elton Consulting for their
valuable contribution to Veris. Brian remains a Non -Executive Director of Veris
Limited.
Throughout this unprecedented period, the Leadership Team of Veris remained
committed to the safety of our people, clients and the communities in which
we operate. Our people demonstrated an unparalleled commitment to adapt to
new ways of remote working and strict hygiene and social distancing protocols
on site to ensure we continued delivering our services safely for our clients.
As a listed company, Veris acknowledges that we have a responsibility to
our stakeholders to act in a socially and environmentally responsible manner.
Following the launch of our Corporate Social Responsibility strategy last year,
we continued to progress and deliver on a number of priority areas, albeit in a
somewhat restricted capacity as a result of COVID-19.
During the year, Veris also officially marked the launch of its first Reconciliation
Action Plan (RAP), Veris Reflect. Veris Reflect was developed in partnership
with Reconciliation Australia and provides clear guidance on how Veris can
work respectfully with Aboriginal and Torres Strait Islander organisations and
people. The Board strongly believes that Veris Reflect is an important initiative
for the company.
Although we have been impacted by the challenging operating environment
and market conditions as a result of COVID-19, it has been encouraging to see
our national footprint, diverse geographic client base, and market sectors, have
allowed Veris to manage the impact of market conditions. We believe this has
positioned Veris with a solid platform for future growth.
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Veris Limited - Annual Report 2020 5
Our sectoral spread across infrastructure, mining,
property, defence and utilities sees us well positioned
to grow our project pipeline, especially as many of these
sectors are vital to Australia’s economic recovery.
On behalf of the Board, I thank our shareholders, clients,
employees, suppliers and the communities in which we
operate for their support during an unprecedented and
challenging financial year.
In addition, as a result of key contract wins during FY20
aligned to strategy, both the Veris Australia and Aqura
Technologies business lines have demonstrated capacity
to execute on our strategy to grow revenue in the Group
profitably in the coming year.
Karl Paganin
Non-Executive Chairman
Metro Tunnel Project, Melbourne
Message from the CEO
of Veris Australia
We will partner with
our clients, in a relationship
based on value, providing
positive solutions for their
business.
66
Veris Limited - Annual Report 2020
Veris Limited - Annual Report 2020 Michael Shirley
Chief Executive Officer - Veris Australia
7
Viewed through any lens, FY20 has been difficult for Veris
Australia with catastrophic bushfires and a global pandemic
dominating the year. That being said, I’ve been extremely proud
of the way the business has not only responded to the challenges
associated with these unprecedented events, but also pushed on
with a number of important structural changes to provide a solid
platform for sustainable, profitable growth.
The catastrophic bushfires, which impacted vast areas of the eastern seaboard
of Australia in late 2019 and early 2020, meant our capacity to deliver project
work in some regions was limited due to issues such as site access and poor
air quality. In addition, our Eden office came perilously close to being burnt
down as bushfires raged close to that community and many of our staff were
forced to evacuate from their homes. Thankfully, all Eden office staff and their
families were kept safe during the emergency, however the rebuilding of the
community will be ongoing for some time.
Following the bushfires, the COVID-19 pandemic began to present as an
issue in Australia in February, and escalated during March resulting in the
introduction of border closures along with a range of other social distancing
and isolation measures. Our Business Resilience Team (BRT) started
formulating the business response to the pandemic early to ensure the
sustainability of our operations, implementing a range of safety measures
based on the advice of Government and health agencies. Through the
leadership of the BRT and the commitment and flexibility of our people,
we were able to continue to deliver safely for our clients, although in some
pockets of the market, uncertainty and other factors as a result of COVID-19
impacted demand for our services.
During this challenging period, it was extremely pleasing to see Veris Australia
demonstrate its resilience as a business. Not only adapting to new ways of
working safely, but also demonstrating the benefits of our national footprint
and diverse customer base, which contributed to a softening of the effects
experienced in some geographic segments of the business.
In addition, in anticipation of the market uncertainty resulting from COVID-19,
the Leadership team acted early to implement a prudent plan to ensure
financial sustainability, including a number of structural changes within our
operating platform and cost base to reposition the business with a more
efficient and less costly overhead structure. These changes have already
started to have a positive impact on our performance.
Financial Performance
The financial performance delivered by Veris Australia in FY20 can only be
described as disappointing. Veris Australia’s financial results reflect the severe
impact of the catastrophic bushfires and subsequent severe weather events of
hail and flooding rainstorms which were quickly followed by the onset of the
COVID-19 pandemic.
Message from the CEO of Veris Australia continued
The dramatic impact of these events on the business’ revenue base provided
the Board and new Leadership Team an opportunity to reassess the operating
and management structures within the business, identify areas of weakness
and inefficiency, and take swift action to reshape the platform on which our
services and expertise are delivered within our regions and markets.
These changes have had immediate impact but will be most evident as FY21
unfolds. They are designed to drive both visibility of, and accountability for,
profitable project delivery at our regional and section leadership levels. They
are also designed to encourage cross-regional integration and collaboration in
the delivery of our projects for our clients in order to harness the true benefits
of the national platform that has evolved via the acquisition strategy Veris
Limited has undertaken over the last nine years.
Health and Safety
We all want to do our jobs and return home safely at the end of each day. As a
business, we are committed to protecting the health and safety of our people,
clients, contractors, visitors and the communities that are impacted by our
activities. As already mentioned, COVID-19 required the business to adapt to
new ways of working safely, and it was pleasing to see a range of measures
successfully implemented in the field, as well as the flexibility of people to
work remotely to minimise the potential spread of the virus.
Across the year we also implemented a renewed focus on vehicle safety, an
area which has been identified as a key risk to many of our employees who
are out in the field everyday in company vehicles whilst doing their job. Our
In Vehicle Monitoring Systems (IVMS) deployed in our fleet are enabling us
to utilise data to track key risk factors such as speed and encourage positive
driving behaviours.
People and Culture
Our people are the cornerstone of our organisational success and our ability to
attract and retain the best people gives us our leading-edge capability. Within
our business we already have some of the pre-eminent professionals within
the industry and a highly skilled multi-disciplinary team. By delivering a great
employee experience, we retain our best people. In addition, the best talent
will aspire to work at Veris as they will be provided with career growth in a
supportive, collaborative environment, working on Australia’s best projects.
Throughout the year we have been reviewing our people and culture strategy
and developing a framework to deliver a great employee experience. The
framework includes key initiatives in the areas of attraction and on-boarding,
reward and recognition, diversity and inclusion, benefits and working
arrangements, communication and engagement, and performance and career
management. Many of these strategic initiatives are now being rolled out and I
look forward to seeing their impact.
Operating Structure
We also transitioned the business to a new operating structure during the year
to focus on the core fundamentals of delivering externally for our clients and
8
Veris Limited - Annual Report 2020 9
to leverage our property survey and planning capabilities
to support renewed development activity particularly in
the residential market.
We continue to service the resources sector through our
national footprint which enables us to have a strong local
presence in the Pilbara region of Western Australia and
regional Queensland. We see significant opportunities to
consolidate and grow our multi-disciplinary service offering
to blue chip mining operators and Tier 1 contractors
working on significant scopes of work in both states.
The defence sector is also part of our growth strategy as
we look to diversify our client base and capture a share
of the record $270 billion to be injected by the Australian
Government into new and upgraded defence capabilities
over the coming decade. We have already demonstrated
progress in the execution of this strategy, recently
winning a number of defence related projects in three
different states. We see our national footprint and diverse
geographic locations, particularly our close proximity to
defence agencies in Canberra as a key differentiator in this
market.
Our digital and spatial business line has significant growth
potential to provide our clients with better outcomes,
more efficient delivery and additional value. The digital
engineering requirements for new construction projects
and the thriving digital twin marketplace provide significant
opportunities to cross-sell these services as part of the
Veris Australia multi-disciplinary servicing offering.
In closing, I would like to thank the Leadership Team and
our people for their commitment and hard work over the
last 12 months. Although Veris Australia has experienced
some unprecedented challenges during the year, we are
well positioned to deliver an improved performance in
FY21 and create a sustainable and profitable business
with strong future growth prospects.
Michael Shirley
Chief Executive Officer - Veris Australia
simplifying our operations internally. The new structure
allows for operations to be managed at the regional level,
and technical business lines and service lines developed
at the national level.
These business lines and corresponding service lines
will be offered across our regions in alignment with our
strategy to grow the business nationally and offer multi-
disciplinary solutions to our clients. I am confident these
changes will enable a more collaborative approach that
leverages our strengths and simplifies our operations.
Strategy
The Leadership Team worked diligently during the year
to develop a refreshed business strategy which has
been approved by the Board. The strategy is focussed on
delivering on our purpose of being a national surveying,
digital and spatial and planning business, partnering with
clients to deliver solutions to our communities.
To do this we will leverage our national brand and
geographic footprint across Australia, providing the
connection and resources of a national business with
significant local client relationships. We will partner with
our clients, in a relationship based on value, providing
positive solutions for their business.
Outlook
Through the hard work and commitment of our people,
the business is in good shape to capitalise on the
opportunities presented in FY21 and beyond. We operate
in many of the sectors that will be key to economic
recovery, and we are already starting to deliver on our
strategy and position the business to win.
The infrastructure sector is experiencing record levels of
investment in a pipeline of projects across the country,
with many fast-tracked as part of the COVID-19 recovery
strategy. We are particularly well positioned in this market
with a track record of delivery and existing relationships
with some of Australia’s large engineering and Tier 1
contractors. We intend to ride the wave of investment
in the construction sector and secure our share of the
significant opportunities coming to the market.
The property sector has been the recipient of targeted
Government stimulus which has already had an impact
on activity in the sector. Given our strong market position
particularly in the large urban centres of Melbourne and
Sydney, combined with our relationships with some of
Australia’s premium property groups, we are well placed
Message from the CEO
of Aqura Technologies
There is renewed energy within
the business that comes from a group
of highly motivated people who have
supported each other during a time of
great challenge.
1010
Veris Limited - Annual Report 2020
Veris Limited - Annual Report 2020 Travis Young
Chief Executive Officer -
Aqura Technologies
11
Entering the new financial year with energy, Aqura Technologies was eager
to embark upon the next phase of a Board-supported multi-year strategy to
become a leading provider of communications solutions for a larger spectrum
of organisations looking to leverage technology to drive digital transformation.
The Aqura team moved forward at pace to create the pillars on which the
future growth of the business would be based. These pillars focussed on
geographical expansion, expanding customer diversity, developing product
capability, enhanced financial governance, and growing and developing our
people to be best equipped to capitalise upon new revenue and market
opportunities.
The year commenced with many achievements. Operationally, we successfully
closed out the significant multi-year, content access upgrade for BHP’s
accommodation villages and finalised the sixth major private LTE network to
deliver autonomous haulage and drilling programs for another major Tier 1
miner in the Pilbara region.
The response of the Aqura team to the devastating effects of COVID-19 in the
second half of the financial year saw many challenges overcome to provide
minimal operational impact. Even with the great challenges presented, the
focus of the business on the safety of each team member and preservation of
the long-term viability of Aqura is commended.
A platform for growth
The first half of the year saw the Executive Leadership Team make an active
transition from day-to-day operations to focussing on the strategic deliverables
of the three-year growth program. The wider organisation was restructured to
create clear accountabilities across each business unit to ensure continued
customer focus and excellence in delivery.
Aqura established two new east-coast offices in Melbourne and Brisbane to
support expansion of services and products to new customer segments. The
investment in these new locations rapidly delivered a number of new customer
signings and sizable pipelines developed within a short space of time. The
quality of new prospects being generated from our east-coast operations will
be further bolstered and broadened with new products geared to markets such
as aged care and utilities.
Growing our breadth of offering
Aqura’s product development capacity was bolstered with a new Products
Team to further drive the development of our new product suites. This
capability leverages our traditional project delivery approach and augments it
with new offerings to create long-term annuity revenue opportunities across a
range of markets.
Whilst Aqura continued with the successful delivery of many programs of work
in its traditional project delivery business, the organisation has scoped and
delivered a number of supporting elements which will support the delivery of
OPEX driven, as-a-service products in FY21.
Message from the CEO of Aqura Technologies
continued
The transition to this model of commercial acquisition is a key aspect of
Aqura’s growth strategy. The addition of annuity revenue to our traditional
capital project approach will enable smaller operations that do not have capital
to more easily access and consume our solutions.
Innovation in our DNA
Aqura continued to deliver commercial innovation with a focus on developing
value creation solutions to overcome customer’s challenges.
Recognition of this approach was realised when our integrated LTE and
Satellite Autonomous Rapid Communications (ARC) platform was recognised
with national Incite Technology Innovation and Australian Computer Society
Disruptor Awards.
The team has since gone on to finalise a number of innovations which include
the full validation of Mission-Critical Push to Talk (MCPTT), a next generation
radio communications platform that fully leverages the performance and reach
of our private LTE networks.
Additionally, the team has completed what we believe to be the first
integration of NB-IOT devices across private LTE in Australia. Narrow-Band
IoT presents a significant market opportunity as it leverages LTE networks to
deliver one of the lowest costs to connect the myriad of industrial sensors
which are utilised by industry to enable real-time performance analysis and
decision-making.
Adapting to the unknown
With the impact of the global COVID-19 pandemic starting to realise early in
the second half, Aqura’s focus shifted to immediately managing the personal
safety of all staff and adapting to the changes that presented each day.
Site teams were demobilised across the country and each staff member
moved to remote working, enabling an earlier investment in upgrading Aqura’s
information technology platforms to cloud first with collaboration tools
company-wide. Thanks to the commitment and perseverance of the Aqura
team, the business was able to regroup and refocus their activity to identify
areas where value could be provided to customers which in turn led to revenue
being sustained and costs managed. The Executive and Senior Leadership
Teams took salary reductions, with the wider Aqura business committing to a
salary reduction in working hours to further contribute to the resilience of the
business.
Our broader engineering and project management teams geared activity to
support our customers with desktop design, engineering and remote support
in preparation for fast-ramp ups when site restrictions started to lift.
Adapting to a ‘new normal’
Like all businesses, the effects of COVID-19 saw dramatic and immediate
effects on Aqura. However, prudent and decisive financial restraint, along with
a pivot to remote working, minimised the impact on supporting customers and
the Aqura business.
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Veris Limited - Annual Report 2020 13
As Aqura broadens its depth of solutions, the organisation
is also growing a network of partner organisations to
support new business introductions. Positive engagements
with a number of telco partners have resulted in sizeable
opportunities being presented. Our engagement with vendor
partners is also expanding in line with the broadening of our
solution offerings. Whilst these relationships are still in the
formative stages, they have already resulted in opportunities
in new market segments. Our market reach was also
extended with a partnership formalised with Comms
International /TecWise as their partner for LTE design and
consulting in the Latin American region.
Executing well and at pace
Safety remains a primary tenet for all Aqura employees and
our track record is a point of differentiation in the market.
The business closed the year with an outstanding safety
record which is extraordinary and must be recognised,
particularly in the context of many works being undertaken
in high-risk areas of customer operations. Our safety record
remains enviable and one which we protect with vigour.
Aqura remains well positioned with solutions which
are sought after by the mining sector on both the east
and west coasts of Australia. These solutions also have
relevance in the defence sector, which is looking to
implement secure, high-performance networks to support
their activity.
Our Content Access solutions are also fit for purpose to
support the aged care sector which is undergoing its own
digital transformation to support the delivery of enhanced
care standards. Development of our Industrial IoT solutions
continues to generate interest in the oil and gas and utilities
sectors as operators look to exploit the performance
insights their connected operations can bring them.
Whilst the effects of COVID-19 still continue to create
unknowns in the wider global context, Aqura approaches
FY21 with a level of optimism. It is an optimism not just
based on knowing our strategy is appropriate to meet
the demands of our customers. There is renewed energy
within the business that comes from a group of highly
motivated people who have supported each other during
a time of great challenge. These shared experiences have
created a culture of absolute commitment to realise the
potential of our strategy and vision.
Travis Young
Chief Executive Officer - Aqura Technologies
Even with a large volume of field work suspended and
major projects deferred, Aqura was able to still deliver
a large volume of work and adapt to regional travel
restrictions. One highlight was a site inspection carried
out on a customer site in Queensland via video link to
engineers in Western Australia.
A number of large projects were deferred with the onset
of COVID-19, however with site access slowly re-opened
in early FY21, site operations and engineering teams were
prepared to re-mobilise to complete the large volume of
deferred works.
During the second half of the financial year, our Solution
Architect and Sales Teams responded to a large volume
of requests for proposals and tenders from existing
customers, and new prospects despite the impacts of
COVID-19. This has created a very robust pipeline which
positions the business well in FY21. Of note was the
successful signing of Cubic, a Queensland-based leader
in training for defence organisations. Not only is this the
first customer in the defence segment, it is also Aqura’s
first delivery of a private LTE, 5G enabled solution which
will commence as 4G and then be upgraded to 5G once
spectrum is made available.
Aqura’s strategy to augment traditional capital projects
with recurring revenue customers received a positive
start with a number of new customer additions including
ATCO Gas who signed a multi-year agreement for
Aqura’s Unified Communications solution to support their
important work in the community.
Health, Safety,
Environment and Quality
Our company culture is
continuously being evaluated and
initiatives put in place to assist
in strengthening our approach to
HSEQ at all levels of Veris.
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Veris Limited - Annual Report 2020
Veris Limited - Annual Report 2020 15
Health, Safety, Environment and Quality (HSEQ) are essential components of
how we operate at Veris. We want our people to embrace a culture of HSEQ as
an everyday part of how we work. Our company culture is continuously being
evaluated and initiatives put in place to assist in strengthening our approach to
HSEQ at all levels of Veris
The COVID-19 pandemic in the second half of the year saw us focus on the
health and wellbeing of our people and the clients and communities we
interact with. Response plans were developed and implemented across the
business with all staff provided various opportunities to contribute and provide
feedback. This contributed to no incidents of Veris employees contracting the
virus during the financial year, whilst at the same time still being able to deliver
a high level of service safely to our clients.
Whilst reviewing how we operate due to the challenging environment
presented by COVID-19, we took the opportunity to focus on streamlining our
internal HSEQ systems to allow for more clarity of what is required by our
people and allow for better employee engagement going forward.
The Veris Access Portal (VAP) which is a digital platform, is now fully
embedded within Veris operations and the information that is being collected
from the platform is the focus of HSEQ reporting back to the business. The
reporting has been key in allowing all employees to be part of the decision-
making process and will allow for better employee engagement going forward.
Driving remains one of the highest health and safety risks to Veris. A concerted
effort to move the vehicle fleet across to newer vehicles, which have higher
safety standards and capability, has meant that the average age of the fleet
is now below three years. All new vehicles are configured with inbuilt vehicle
monitoring systems to assist the way we operate by increasing awareness of
driving habits across Veris. The intended effect will be to reduce the number of
vehicle incidents that are occurring in the day to day operations.
HSEQ Performance
1.1 million hours completed lost time injury free in FY20.
FY20 Total Recordable Injury Frequency Rate (TRIFR) –7.31.
FY20 All Injury Frequency Rate (AIFR) – 25.60.
Continuous Improvement Initiatives
Online tool boxes.
Process Improvement Working Group.
Weekly reporting of VAP statistics to the business.
Online feedback initiatives.
Certifications
Accreditation to the following standards:
ISO 9001:2015.
ISO14001:2015.
AS/NZS 4801:2001.
ISO 45001:2018.
Financial Reports
Directors Report
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
Additional Information
Corporate Information
Corporate Directory
17
42
43
44
45
46
85
86
91
93
94
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Veris Limited - Annual Report 2020
Veris Limited - Annual Report 2020 Directors Report
For the year ended 30 June 2020
17
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 2020.
Information on Directors
Directors of the Company during the financial year ended 30 June 2020 and up to the date of this report are as follows:
Name
Period of Directorship
Karl Paganin
Independent Non-Executive Chairman
Independent Non-Executive Director
Derek La Ferla
Independent Non-Executive Chairman
Tom Lawrence
Independent Non-Executive Director
Brian Elton
Executive Director
Non-Executive Director
Adam Lamond
Executive Director
Appointed 25 November 2019
Appointed 19 October 2015
Retired 25 November 2019
Appointed 13 October 2011
Appointed 29 March 2018 (Ceased 21 November 2019)
Appointed 21 November 2019
Appointed 13 October 2011
(Managing Director from 29 March 2017 to 2 April 2020)
The experience, other directorships or special responsibilities of the directors in office at the date of this report are as
follows:
Karl Paganin - Independent Non-Executive Chairman
Experience
Mr Karl 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 practised with major national law firms and was then appointed as Senior Legal Counsel at the newly formed
family company of the Holmes a Court family, Heytesbury Holdings, where he spent 11 years. His roles varied from
Senior Legal Counsel to Director of Major Projects, a role which involved having conduct of all major transactions within
the Group.
Subsequent to Heytesbury, Mr Paganin spent 15 years as a senior investment banker in Perth. In 2002, he joined the
Perth based Euroz Securities and established its Corporate Finance department. Then, in 2010, he established and was
Managing Director of GMP Australia Pty Ltd, an affiliate of a Canadian resource specialist investment bank.
Mr Paganin is currently Non-Executive Director of ASX listed Southern Cross Electrical Engineering Limited.
Mr Paganin holds degrees in Law (B.Juris, LLB) and Arts (BA) from the University of Western Australia.
Special Responsibilities
Chairman of the Remuneration and Nomination Committee (until 24 June 2020).
Member of the Audit and Risk Committee.
Other Listed Company Directorships in last 3 years
Southern Cross Electrical Engineering Ltd (June 2015 – Current).
Poseidon Nickel Limited (1 October 2018 – 30 June 2020).
Interests in Shares of Veris
13,189,350 fully paid ordinary shares.
18
Directors Report
For the year ended 30 June 2020
Information on Directors (continued)
Tom Lawrence - Independent Non-Executive Director
Experience
Mr Tom Lawrence holds a Bachelor of Laws, Bachelor of Business (Accounting and Information Systems) and a Masters
Degree in Taxation. Mr Lawrence was a principal and founder of Lawrence Business Management, providing tax and
management advice to a large range of businesses across a diverse range of industries including professional services,
hospitality, marine, construction, property and mining services. Over his 15 years’ working in Lawrence Business
Management, Mr Lawrence gained a wealth of knowledge as he grew the business via acquisition and organic growth
and provided sound forward-thinking strategies.
In 2010, Mr Lawrence sold Lawrence Business Management and went on to secure his current position with Capital
Legal. As Director of Capital Legal, Mr Lawrence advises clients on a broad range of business related transactions,
including business sales and acquisitions, commercial litigation, dispute resolution and a variety of other commercial
matters.
Special Responsibilities
Chairman of the Audit and Risk Committee.
Member of the Nomination and Remuneration Committee.
Interests in Shares of Veris
13,136,093 fully paid ordinary shares.
Brian Elton – Non-Executive Director
Experience
Mr Brian Elton is the founder of Elton Consulting, and joined the Veris Board as Executive Director in March 2018 when
this business was acquired by Veris. Subsequent to the sale of Elton Consulting in November 2019, Mr Elton became a
Non-Executive Director. He has extensive experience in growing a highly commercially successful professional services
business, and in-depth knowledge of east coast development and infrastructure sectors. He has an extensive network of
contacts and clients in government, the not-for-profit sector and Tier 1 private sector organisations, and is well regarded
and trusted by clients.
Mr Elton has over 40 years of experience in urban and regional planning in the UK and Australia focusing on urban
strategy, urban policy and governance and the delivery of major projects. He founded Elton Consulting 30 years ago,
maintaining a profitable and growing business every year since.
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.
Special Responsibilities
Chairman of the Remuneration and Nomination Committee (appointed 24 June 2020).
Member of the Audit and Risk Committee.
Member of the HSEQ Committee.
Interests in Shares of Veris
33,308,150 fully paid ordinary shares.
Veris Limited - Annual Report 2020 19
Directors Report
For the year ended 30 June 2020
Information on Directors (continued)
Adam Lamond - Executive Director
Experience
Adam Lamond has over 20 years’ commercial experience with particular expertise in construction and infrastructure
activities across Australia.
Mr Lamond founded Ocean to Outback Electrical (OTOE) in 2003, a WA-based contracting business servicing the mining
industry and the forerunner to Veris Limited. Mr Lamond engineered a reverse takeover of ASX listed company Emerson
Stewart Group in 2011 resulting in the listing of Ocean to Outback Contracting (OTOC) Limited.
Mr Lamond held the position of Chief Executive Officer of OTOC Limited from 2011 to 2014. Mr Lamond then held the
position of Executive Director - Business Development from 2014 to 2017, after which time he was appointed Managing
Director of the newly branded Veris Limited.
Mr Lamond has overseen the implementation of a national operating model which has involved transitioning and
integrating all businesses into one entity and continues to build a cohesive brand and culture.
Special Responsibilities
Member of the HSEQ Committee.
Interests in Shares of Veris
48,591,815 fully paid ordinary shares.
Derek La Ferla - Independent Non-Executive Chairman – Retired 25th November 2019
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 Remuneration and Nomination 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 – August 2019).
Poseidon Nickel Limited (December 2019 – Current).
Interests in Shares of Veris
598,417 fully paid ordinary shares (at date of retirement).
20
Directors Report
For the year ended 30 June 2020
Information on Company Secretary
Lisa Wynne - Company Secretary
Experience
Ms Lisa Wynne is a Chartered Accountant and Chartered Secretary with significant experience across the commercial
sector with particular experience in the finance, accounting, corporate services, urban planning and resources industries
across ASX 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 held the role of Interim Chief Financial Officer of Veris Limited from 26
June 2019 to 2 April 2020.
Directors Meetings
The number of directors meetings and number of meetings attended by each of the directors of the Group during the
financial year are:
Director
Board Meetings
Audit & Risk
Committee
Remuneration
& Nomination
Committee
Health, Safety,
Environment
& Quality
Committee
Derek La Ferla
Adam Lamond
Tom Lawrence
Karl Paganin
Brian Elton
A
8
23
23
23
21
B
9
23
23
23
23
A
1
*
2
2
2
B
1
*
2
2
2
A
-
*
1
1
1
B
-
*
1
1
1
A
*
1
*
*
1
B
*
1
*
*
1
= Number of Meetings attended
A
B = Number of meetings held during the time the director held office during the year
*
= Not a member of the relevant committee.
Dividends
There were no dividends paid or declared by the Company during the financial year.
Principal Activities
Veris is a professional services business delivering surveying, digital and spatial, planning and technology services to the
following sectors throughout Australia:
infrastructure;
land and property;
energy;
mining and resources;
defence;
utilities; and
government.
Veris Limited had three operating segments in the 2020 financial year namely Veris Australia, Elton Consulting and Aqura
Technologies. Veris Limited disposed of Elton Consulting part way through the 2020 financial year. Veris Limited is the
Group’s holding Company that is listed on the ASX under the code VRS.
Veris Limited - Annual Report 2020 21
Directors Report
For the year ended 30 June 2020
Principal Activities (continued)
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’s markets include infrastructure, land and property, resources and defence.
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.
Elton Consulting
Elton Consulting 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. Elton Consulting was divested in November 2019.
Significant Changes
The following significant changes in the nature of the activities of the Group occurred during the year:
Appointment of Dr Michael Shirley in November 2019 as Chief Executive Officer of Veris Australia.
Appointment of Mr Steven Harding as Chief Financial Officer in April 2020.
Continued support for the Group from our primary lender, Commonwealth Bank of Australia. CBA demonstrated
strong support for the Group during the onset of the COVID-19 pandemic and subsequent to 30 June 2020 have
provided Veris with a credit approved terms sheet to extend Veris’ existing banking facilities through to 30 September
2021.
Securing and continuing to work on long term east coast projects such as Melbourne Metro, Westgate Tunnel, North
Connex, Inland Rail, M4 Smart Motorway Project, Sydney Metro, and West Connect. Significant project works were
also performed for major resource sector clients in the Western Australian market (including BHP and Rio Tinto).
Continued growth of Aqura Technologies’ service offering and revenue base, delivering high impact projects for its Tier
1 client base such as BHP, Rio Tinto, Oz Minerals, Bunnings and ATCO.
A non-cash impairment charge of $3.1 million to the carrying value of customer related intangibles of the Veris
Australia segment was recognised during the year.
A $2.1 million expense in Veris Australia associated with the acceleration of depreciation associated with certain items
of Property, Plant and Equipment.
$1.0 million of additional provisions in Veris Australia recognised against the WIP and debtors’ balances.
Sale of 100% interest in Elton Consulting in November 2019 for $13 million, with proceeds utilised to reduce long
term debt. The sale resulted in a recognised loss on disposal of $3.6 million.
Organisational Review and Restructure
FY20 saw Veris Australia continue to refine the process of operating as one Company and enhancing the integration of
its regional presence to solidify our national platform.
Veris Australia continued to leverage its national presence and broad service offerings to strengthen relationships with
large national and multi-national customers across a range of sectors including the major engineering contractors, Tier 1
property developers (both broadacre greenfield developers and built form constructors), key resources companies, and
various Commonwealth, State and local government bodies.
22
Directors Report
For the year ended 30 June 2020
Organisational Review and Restructure (continued)
The impact to the Veris Australia financial results from the bushfires and subsequent extreme weather events across
the nation in the November 2019 to February 2020 period followed by the onset of the COVID-19 pandemic has had
a significant impact on revenue during the financial year. This was compounded by the identification of poor project
management practices within a number of legacy projects in New South Wales. The New South Wales operations have
now been restructured to address this issue.
Following the appointment of Dr Michael Shirley as Chief Executive Officer of Veris Australia in November 2019, and
based on a combination of these events, management undertook an overall review of Veris Australia’s business operating
model. The new management team, with the support of the Board, implemented a range of measures to refine Veris
Australia’s operating structure and model to ensure the business is optimally positioned to withstand the continued
impact of a softened economic environment induced by the COVID-19 pandemic and then provide leverage to a post-
pandemic recovery. A significant number of measures have been undertaken to increase efficiency and improve margins,
particularly across the Veris Australia business.
The review focussed on the restructure of the internal operating model of Veris Australia, the rationalisation and
streamlining of the historic corporate structure and a review of existing project and client relationships. The review has
resulted in:
Streamlining of the management structure to foster greater cross-regional collaboration and service delivery. This has
resulted in a reduction in middle management roles from over 45 to 24 Section Leaders and given a strong focus to
local delivery within the context of a renewed national collaboration. Against this backdrop, a focus on clients and
markets has added new key clients nationally to further build larger project work and deliver work across multiple
states.
Operational savings have been identified at both local regional levels and at the central functional level. At the regional
level, cost savings have focussed on operating costs associated with recruitment, internal management, vehicles,
leases and support staff. At a Group functional level, cost savings have been targeted at achieving a 20% minimum
saving across functional teams.
Enhancing visibility of operational and financial results derived from our internal management reporting processes
across the Group. The management reporting systems and formats have been revised to provide clarity and hence
accountability for overhead expenditure and project performance at a regional level.
Enhanced project management systems and process to ensure more timely management of revenue recognition,
work in progress management and project performance. Operational teams are now more able to link project
performance with financial metrics used to monitor the business.
Operating and Financial Review
Veris Australia’s range of services and the markets in which it operates are expected to be particularly leveraged to
a post-COVID-19 pandemic recovery as governments at both Commonwealth and State levels have indicated their
willingness to stimulate economic activity via infrastructure and property related project expenditure. Similarly, the
continued strength in the commodity markets underpins the ongoing level of capital and maintenance activity by key
resources sector customers.
The Veris Australia strategy is now focussed on consolidating our position in the property and engineering survey sectors
where we are strong across Australia. The post COVID-19 economic recovery will be focussed in these infrastructure
sectors and Veris Australia is positioned for this investment. Increased effort will continue to build the relationships and
revenue with the key clients nationally. The digital and spatial growth will be leveraged from the strong survey basis
of the business. Moving Veris Australia to a more digital and data driven organisation is a key strategic initiative for the
business over the coming year. This will increase the value creation and revenue generating capacity of the business.
Continued investment in both key personnel and procuring key technical equipment will further underpin the growth of
our presence in the geospatial market in FY21.
Veris Limited - Annual Report 2020 Directors Report
For the year ended 30 June 2020
23
Operating and Financial Review (continued)
Aqura continued its growth in 2020, delivering revenue growth of 32%. This growth was driven by the continued
expansion in the delivery of services to key Tier 1 clients in the resources, utilities, defence, industrial and commercial
sectors. Revenue growth was underpinned by the award 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
with clients such as BHP, Rio Tinto, ATCO, Bunnings, and Cubic signify the demand for Aqura’s diverse range of service
capabilities across Australia and New Zealand. Aqura has invested internally in the ongoing development of a number
of internally generated technology products designed to transition Aqura’s earnings base to capture a more recurring
revenue model to complement Aqura’s traditional project based income. These products are expected to be released to
market throughout the course of FY21.
For the year ended 30 June 2020 the Group reported a profit of earnings before interest, tax, depreciation and
amortisation (EBITDA) of $1,860,000 - down from $4,100,000 in 2019 (2019 numbers restated due to Discontinued
Operation).
Key points to assist in understanding Veris’ results are as below:
Key Item
Revenue (iii)
FY2020
$000
94,105
FY2019
$000
Comments
107,558 Veris recorded a decline in revenue recognised from continuing
operations in the Group during the year to $94.1m (FY2019:
$107.6m). Whilst Aqura Technologies achieved strong revenue
growth of 32% to $19.3 million, this was offset by a decline
in revenue within Veris Australia, decreasing 20% to $74.8
million. Revenue in Veris Australia impacted by the catastrophic
bushfires and severe weather events on the eastern seaboard
and subsequently the economic slowdown caused by the onset
of the COVID-19 pandemic.
EBITDA (i) (iii)
1,860
4,100 EBITDA from continuing operations decreased year on year
primarily as a result of the following impacts arising in the Veris
Australia segment:
decline in project-related work resulting from the bushfires
occurring from November 2019 to January 2020;
subsequent extreme weather events (rain floods and hail);
onset of the COVID-19 pandemic and the resultant period of
widespread economic slowdown and subsequent impacts to
work practices;
significant losses arising from poor project management
practices within legacy projects (these have now been
written off at 30 June 2020);
operational costs incurred as a result of the review and
realignment of Veris’ operating model; and
Aqura Technologies also suffered a decline in EBITDA
margins as a result of Veris’ decision to invest in the ongoing
development of Aqura’s internally generated product suite.
This required additional personnel and expenditure to be
incurred in FY20.
Restructuring Costs
1,323
3,294 In FY19 Veris Australia incurred significant restructuring costs
associated with an operational review.
Impairment of Goodwill
and Intangibles
3,133
34,431 Impairment of the intangible assets connected with customer
relationships in Veris Australia, refer Note 15 Intangible Assets.
24
Directors Report
For the year ended 30 June 2020
Operating and Financial Review (continued)
Key Item
Net Assets
FY2020
$000
1,256
FY2019
$000
Comments
27,094 Net assets decreased on prior year as a result of the impact of
the sale of the Elton Consulting business resulting in reduction
of net assets of $19.8 million (see Note 2), the non-cash
impairment of customer relationships intangibles balance of $3.1
million, and the net operating loss generated from continuing
operations.
Working Capital (ii)
(10,709)
5,483 The decline in working capital from FY19 resulted from:
reduction in working capital balances associated with the sale
of the Elton Consulting business (see Note 2);
introduction of AASB16 and the recognition of current
liabilities associated with right of use assets; and
reduction in other working capital balances resulting from
the lower level of general activity in the Group’s continuing
operations as noted above.
Key points to assist in understanding Veris’ results are as below:
(i)
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.
(ii) Working capital is defined as current assets less current liabilities.
(iii) Comparative information has been restated due to Discontinued Operation with the exception of Net Assets and Working Capital.
EBIT and EBITDA is a non-IFRS measure that in the opinion of Veris provides useful information to assess the financial
performance of the Group. A reconciliation between statutory results and underlying results is provided below. The non-
IFRS measure is unaudited:
Statutory loss after tax
Add back:
Tax expense / (benefit)
Net finance expense
Restructuring costs
Share-based payment
Impairment of Goodwill and Intangibles
EBIT loss
Depreciation and amortisation
Discontinued operations
EBITDA
FY2020
$000
(26,493)
4,587
2,072
1,323
113
3,133
(15,410)
13,842
3,286
1,860
FY2019
$000
Restated*
(40,089)
(2,797)
1,324
3,294
586
34,431
(3,251)
7,905
(554)
4,100
* Comparative information has been restated due to Discontinued Operation.
The Veris financial results reflect the impact to the Group of several significant events that occurred during FY20, namely:
the sale of the Elton Consulting business in November 2019 and the resulting loss on sale (Note 2);
impact to the activity levels and consequently the financial results of Veris Australia arising from the severe impact of
the catastrophic bushfires and subsequent severe weather events of hail and flooding rainstorms which were quickly
followed by the onset of the COVID-19 pandemic; and
the continued investment in the growth of the Aqura Technologies business to position it to leverage larger project
opportunities with its Tier 1 client base and transition its revenue mix through the development of a product offering
that will generate recurring revenue streams to complement the existing project-driven earnings model.
Veris Limited - Annual Report 2020
Directors Report
For the year ended 30 June 2020
25
Operating and Financial Review (continued)
The dramatic impact of these events on the business’ revenue base provided the Board and Veris Australia’s new
management team an opportunity to reassess the operating and management structures within the business, identify
areas of weakness and inefficiency, and take swift action to reshape the platform on which Veris’ services and expertise
are delivered within our regions and key markets.
These changes will be most evident as FY21 unfolds. They are designed to drive both visibility of, and accountability for,
profitable project delivery at regional and section leadership levels. They are also designed to encourage cross-regional
integration and collaboration in the delivery of projects for clients in order to harness the true benefits of the national
platform that has evolved via the acquisition strategy Veris Limited has undertaken over the last nine years.
Impact to the Group from the COVID-19 pandemic
Veris, via both Veris Australia and Aqura Technologies, provides essential infrastructure services to the engineering
construction, property development, resources, infrastructure and utilities sectors. To date, these industries have in the
large part been allowed to continue operations under various lock-down and social distancing restrictions imposed to
manage the pandemic.
Although there have been a range of negative impacts to the Group’s operations from the pandemic, demand for Veris’
services has continued, albeit at a more subdued level than prior to the onset of the pandemic.
To date, within Veris Australia, restrictions on people movement has had some small impact on the Group’s field-based
operations, management oversight and executing project work. The Group has implemented appropriate safety and
hygiene protocols and procedures designed to minimise the risk of any spread of the COVID-19 virus. The majority of
our office-based staff transitioned to working from home arrangements effectively with the Group’s IT infrastructure
and other support networks capable of supporting these arrangements. Within Aqura Technologies, the Group has
experienced some mobility issues with its workforce, in particular labour moving between South Australia and Western
Australia. In a small number of cases, the Company has asked employees and subcontractors to remain in the State that
they work, at additional cost to the Company, due to the COVID-19 quarantine restrictions that have been in place.
The Group’s balance sheet, cash flow and liquidity have been carefully monitored during the pandemic. The business
has continued to pay suppliers and contractors as and when due, and has not entered into any factoring arrangement
of its working capital. The nature of the Group’s customers, which includes government enterprises and large private
sector corporations, is such that the risk of default of receivables is considered low. Veris has heightened the focus on
managing its collections cycle during the pandemic. Due to the uncertainty at the time, Veris did seek payment deferral
on a number of leasehold rental agreements at the onset of the pandemic with some of the concessions expected
to be remedied by 31 December 2020. The Group also sought and received deferral of a $1.0 million amount of GST
payable from the Australian Taxation Office as part of its initial response to managing potential risks from the COVID-19
pandemic. This amount is progressively being paid to the ATO with the total liability expected to be extinguished in the
year ended 30 June 2021.
The impacts to earnings to date are described below:
increased costs to support specific safety-related protocols across business operations. This includes additional
expenditure on protective equipment and hygiene;
the participation of both Veris Australia and Aqura Technologies in the Commonwealth Government’s JobKeeper
Program. The Group recognised $3.03 million of JobKeeper payments in the period to 30 June 2020;
reduced residential land development activity (new housing estates) across the eastern states;
deferral of some projects due to travel and access restrictions across remote locations;
delays in projects due to availability of client-supplied free-issue materials; and
deferral of proactive maintenance activities by asset owners.
26
Directors Report
For the year ended 30 June 2020
Risks
There are specific risks associated with the activities of the Group and general risks, some within and some 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:
COVID-19 Pandemic
The COVID-19 pandemic has created an unprecedented level of uncertainty. Although impact to the Group’s operations
to date have been varied, the evolution of the pandemic and any escalation of the government’s response, including but
not limited to, increased restriction of workforce movements, increased safety protocols, and reduction in demand from
the Group’s customers may further negatively impact the Group’s operations.
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.
Working with Potential Safety Hazards Risk
In undertaking work and delivering projects for its customers, Veris Limited’s employees and subcontractors can operate
in potential hazardous environments and perform potentially hazardous tasks.
Management and the Board remain alert to the safety risks posed to employees and subcontractors, devote significant
time to monitoring the effectiveness of the Group’s safety framework, and have implemented a wide range of
controls and proactive programs to increase awareness of significant hazards and prevent injuries to employees and
subcontractors.
During the year, the Group maintained its Lost Time Injury Frequency Rate (LTIFR) and Total Reportable Incident
Frequency Rate (TRIFR) within target levels.
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 program 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 four years Veris has integrated nine 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.
Veris Limited - Annual Report 2020 27
Directors Report
For the year ended 30 June 2020
Risks (continued)
Retention of Key Personnel and Sourcing of Subcontractors Risk
The talents of a growing, yet relatively small number of key personnel contribute significantly to the Group’s operational
effectiveness. Management and the Board have implemented strategies to retain those personnel, including
participation in appropriate incentive arrangements and participation in the Group’s employee development and
succession programs.
Access to an appropriately skilled and resourced pool of employees and subcontractors across Australia is also critical to
Group’s ability to successfully secure and complete field-based work for its customers.
Growth Risk
The ability to fund growth opportunities may be compromised if the Group does not meet covenant requirements within
external financing facilities, internally established performance targets or adequately manage market expectations. Veris
has a defined strategy which is supported by the Board and senior management as well as external financiers 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 during the year, the Group completed a project to
address shortfalls in legacy systems and processes. This project was designed to ensure appropriate cyber security and
risk mitigation protocols are in place, facilitate organisational efficiency, improve disaster recovery protocols and ensure
secure business continuity protocols 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.
JobKeeper Payment
As part of its response to the COVID-19 pandemic, in March 2020 the Australian Government announced various
stimulus measures resulting from the economic fallout from the coronavirus lockdown. One such stimulus measure
was the payment of subsidies to qualifying employers under the JobKeeper Payment Scheme (“JobKeeper”). The initial
JobKeeper payments were a wage subsidy whereby employers who qualify for the stimulus receive $1,500 per fortnight
for each eligible employee who was employed by the Company during the period April 2020 to September 2020.
The Group determined that it was eligible to receive the initial JobKeeper payments, which totalled $3.03 million in the
period to 30 June 2020.
On 21 July 2020 the Australian Government announced an extension of the JobKeeper Payment Scheme to 28 March
2021 at lower rates. Qualification for the extension scheme is dependent on future events, therefore the Group is unable
to determine whether it will qualify for any or all of the payments beyond 27 September 2020.
28
Directors Report
For the year ended 30 June 2020
Significant Changes in State of Affairs
The operations of the Group have been impacted, and continue to be impacted by the COVID-19 pandemic. The
COVID-19 outbreak was declared a pandemic by the World Health Organisation in March 2020. The responses of
governments (both the Commonwealth Government and various State Governments) have impacted business activity
levels in markets where the Group operates. The Group took actions to minimise the negative impacts on its operations
and financial position including:
50% and 25% respective reduction in Board and Leadership Team fees and remuneration which commenced at the
onset of the COVID-19 pandemic;
review and rationalisation of under-utilised fleet of equipment and vehicles;
review of operating structures and adoption of innovative work practices to ensure remote working opportunities
were leveraged thereby enabling project work to continue;
analysis and review of project management practices to enhance Work in Progress management and revenue
recognition;
increased focus on the cash management cycle and discretionary expenditure;
continued management and strengthening of relationships with key financing stakeholders;
implementation of a targeted, national approach to project opportunity identification and client management
initiatives; and
implementation of a Group-wide employee engagement program to enhance the Veris employee experience to ensure
the business attracts and retains the highest calibre people.
In preparing the consolidated financial statements in conformity with Australian Accounting Standards, due consideration
has been given to the judgements, estimates and assumptions that affect the application of accounting policies and
reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent
from other sources. The ongoing COVID-19 pandemic has increased estimation uncertainty in the preparation of the
consolidated financial statements. At 30 June 2020, the Group has reassessed all significant judgements, assumptions
and critical estimates included in the consolidated financial statements, including but not limited to, provisions against
trade debtors and work in progress and impairment of non-current assets. Actual results may differ from these estimates
and are subject to achievement of forecasts and the extension of the Group’s existing financing facilities. Details of the
main judgements, estimates and assumptions applied are set out in the notes to the consolidated financial statements.
For the period to 30 June 2020, the most material impacts to the financial position of the Group arising from the
significant judgement assumptions include:
$3.1 million impairment of intangibles associated with customer relationships in Veris Australia;
$2.1 million expense associated with the acceleration of depreciation associated with certain items of Property, Plant
and Equipment; and
$1.0 million of additional provisions recognised against the WIP and debtors’ balances.
Significant Events After Period End
The Company continues to monitor issues related to COVID-19 pandemic. Changes have been made to operations
across the Company in order to minimise the spread including following advice on social distancing. As the pandemic
develops we will continue to monitor operations and activities to ensure we remain as vigilant as possible.
On 28 August 2020, the Company received a credit approved term sheet from CBA in relation to the extension of the
Group’s existing financing facilities extending the term through to 30 September 2021. The extension of the facilities will
require the Group to amortise a minimum of $2.3 million of the outstanding Term Loan by 30 June 2021. Veris expects
that the documentation pertaining to these extensions will be executed in September 2020.
Veris Limited - Annual Report 2020 Directors Report
For the year ended 30 June 2020
29
Likely Developments
Whist the Board and management remain vigilant in monitoring the evolution of the COVID-19 pandemic and its impact
on the core markets in which Veris operates, we expect opportunities to continue to present themselves over FY21
and beyond via the significant capital and infrastructure related works programs flagged by Commonwealth and State
Governments across Australia to support economic activity and lay a platform for recovery. Whilst the Victorian market
remains challenging due to the impacts and restrictions imposed in response to recent outbreaks of COVID-19, Veris
Australia is well positioned to benefit from any increased or accelerated infrastructure spend and enters FY21 with
approximately $30 million of work in hand and a strong tender pipeline. Similarly, Aqura Technologies is well positioned
to leverage the continued opportunities arising from the COVID-19 pandemic within its target market as large customers
within the resources, industrials, utilities and defence sectors seek to continue expanding their usage and reliance on
communications networks. This is expected to continue as the accelerated adoption of remote working practices and
coupled with smart devices with embedded Internet of Things functionalities becomes more widespread.
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.
Remuneration Report – Audited
The Directors are pleased to present the Company’s 2020 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) Voting and Comments made at the Company’s 2019 Annual General Meeting
(g) Contractual Arrangements
(h) Details of Remuneration
(i) Analysis of Bonuses Included in Remuneration
(j) Equity Instrument Disclosure Relating to Key Management Personnel
(k) Other Transactions with Key Management Personnel
30
Directors Report
For the year ended 30 June 2020
Remuneration Report – Audited (continued)
a) Director and Executive Disclosures
The details of Directors and key management personnel disclosed in this report are outlined below.
Non-Executive Directors
Karl Paganin
Chairman
Tom Lawrence
Non-Executive Director
(Independent)
(Independent)
Derek La Ferla
Non-Executive Director
(Independent, retired 25 November 2019)
Brian Elton
Non-Executive Director
(Non-Independent, appointed 21 November
2019)
Executive KMP
Adam Lamond
Executive Director
(Managing Director – until 2 April 2020)
Brian Elton
Executive Director
(Ceased as Executive Director 21 November
2019)
Michael Shirley
Chief Executive Officer – Veris Australia
(Appointed 29 October 2019)
Travis Young
Chief Executive Officer – Aqura Technologies
(Appointed 1 July 2019)
Steven Harding
Chief Financial Officer
(Appointed CFO 2 April 2020)
Lisa Wynne
Company Secretary and
Interim Chief Financial Officer
(Interim CFO 21 June 2019 - 2 April 2020)
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 CEO, and (in consultation
with the CEO) other senior executive officers;
monitoring the implementation by the Group of such remuneration policies; and
recommending the Group’s remuneration policy so as to:
_ motivate directors and management to pursue the long-term growth and success of the Group within an
appropriate control framework; and
_ demonstrate a clear relationship between key executive performance and remuneration.
Non-Executive Director Remuneration Policy
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall
be determined from time-to-time by a general meeting. The Constitution was amended by special resolution of the
members on 23 November 2016 with the aggregate remuneration increasing from $250,000 to $500,000 per annum,
which is to be apportioned amongst Non-Executive Directors.
The Company has entered into service agreements with its current Non-Executive Directors; refer details of the
contractual arrangements on page 34 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 Director's 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.
Veris Limited - Annual Report 2020
Directors Report
For the year ended 30 June 2020
31
Remuneration Report – Audited (continued)
Executive Remuneration Policy
The Company’s remuneration policy is to ensure the remuneration package appropriately reflects the person’s duties
and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest
quality. The Company aims to reward executives with a level of remuneration commensurate with their position and
responsibilities within the Company so as to attract and retain Executives of the highest calibre, whilst incurring a cost
that is acceptable to shareholders.
The overall Executive Team and remuneration framework has been overhauled and a revised remuneration structure
has been designed post the reporting period to link reward more directly to the strategy and drivers of Veris creating
long term shareholder value. Previously Veris had a combined LTI and STI structure 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 three year
period. Veris has now simplified its incentive structures so that the Incentive Plan is fit for purpose for the phase of the
Company’s life cycle.
FY2020 Incentive Plan
There was no formal 2020 incentive structure implemented during the reporting period, however there was a
discretionary offer post the end of the reporting period of Performance Rights to a number of Key Personnel based on
behaviours and the individual’s contribution to the FY20 financial year. These Performance Rights were issued post the
reporting period. The Performance Rights will vest into fully paid ordinary shares subject to the individuals continued
employment as at 30 June 2021 (one year retention).
FY2021 Incentive Plan
Veris has a National footprint and over 550 staff. Veris has implemented a new operating model which is crucial to ensure
success of the Company. Post the reporting period, Veris implemented a new Incentive Plan for the period ending 30
June 2021. The primary objectives of the new Incentive Plan are to reflect the new operating model implemented where
all personnel are accountable for strategy execution and daily operational performance and improvement and to reward
Executives for achievement of the stated objectives in line with the Veris strategy.
The new FY21 Plan allows for a payment equal to up to 30-50% of TEC (Total Employment Cost) based on the
achievement of a behavioural element and a minimum performance of budget at the Profit Before Tax line payable
in 50% cash and 50% equity. The equity will be issued by way of performance rights, which will vest depending on
continued employment for one year post issue.
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.
d) Performance Linked Compensation
The following table shows key performance indicators for the Group over the last five years.
Financial Year Ended 30 June
LTI
Closing Share Price ($)
EPS (cents)
STI
Profit / (Loss) from Continuing
Operations ($’000)
EBITDA
Average % of Maximum STI awarded to
Executives (i) (%)
Dividends paid ($’000)
2020
0.036
(6.14)
2019 (ii)
0.047
(11.29)
(23,210)
(40,643)
4,100
-
1,860
-
-
2018
0.24
(0.39)
(1,056)
11,189
29%
2017
0.15
0.02
48
5,704
25%
2016
0.023
7.4
19,698
16,176
92%
1,770
1,636
1,368
-
(i)
Represents STI payable/paid as a percentage of the maximum STI payable.
(ii) Comparative information has been restated in FY19 due to Discontinued Operation, prior periods not restated.
32
Directors Report
For the year ended 30 June 2020
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
1,000,000 Performance Rights were granted to a key management personnel during the reporting period. Subsequent to
the reporting period, 941,131 Performance Rights were issued to key management personnel as a discretionary bonus
in recognition of their contribution to the ongoing success of the Veris group and in particular their extraordinary personal
performance during the reporting period.
(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 on cessation of employment of a previous KMP:
Key Management Personnel
Number of Shares
Amount paid $/share
Brian Mangano
1,183,240
-
(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/
lapsed in
year
#
forfeited
/lapsed
in year
Financial
years in
which
grant
vests
Face
value
of
vested
rights
Michael Shirley
Performance
rights
Travis Young
Performance
rights
Steven Harding
Lisa Wynne
Performance
rights
Performance
rights
29
October
2019
5 August
2020
12 April
2020
5 August
2020
5 August
2020
5 August
2020
1,000,000
323,353
307,480
296,407
90,943
230,428
2,248,611
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2022
2021
2021
2021
2021
2021
-
-
-
-
-
(v) Vesting and Exercise of Performance Rights Granted as Remuneration
FY20 Veris Incentive Plan (VIP) Performance Outcomes
There were no incentives issued under the Veris Incentive Plan during the reporting period, however there was a
discretionary offer post the end of the reporting period of Performance Rights to a number of key personnel based on
behaviours and the individual’s contribution to the FY20 financial year. These Performance Rights were issued post the
reporting period. The Performance Rights will vest into fully paid ordinary shares subject to the individuals continued
employment as at 30 June 2021 (one year retention).
Veris Limited - Annual Report 2020 Directors Report
For the year ended 30 June 2020
33
Remuneration Report – Audited (continued)
e) Details of share-based compensation and bonuses (continued)
(v) Vesting and Exercise of Performance Rights Granted as Remuneration (continued)
FY19 Veris Incentive Plan (VIP) Performance Outcomes
During the previous period, under the VIP (a four year plan with 50/50 cash/equity split) to be paid/issued at the end of
FY19 following the achievement of KPIs outlined in the below balanced scorecard:
Balanced Scorecard and Weightings
Financial
Market
Individual
Values
Budgeted EBITDA
(14%)
Absolute EPS
(19%)
KPI’s
(20%)
Behaviours
(5%)
s
P
M
K
&
D
M
On the basis that the balanced scorecard was achieved, 50% was to 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 three year absolute TSR hurdle and 40% will
vest in a future period in time, depending on continued employment for four years post issue (33% year two; 33% year
three, 33% year four). The absolute TSR hurdle is outlined in the below table:
*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.
During the reporting period, no Performance Rights were issued to KMPs under the 2019 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.
f) Voting and Comments made at the Company’s 2019 Annual General Meeting
The adoption of the Remuneration Report for the financial year ended 30 June 2019 was put to the shareholders of the
Company at the Annual General Meeting held 25 November 2019. The Company received 75.12% of votes, of those
shareholders who exercised their right to vote, in favour of the remuneration report for the 2019 financial year. The
resolution was passed without amendment on a poll.
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.
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.
34
Directors Report
For the year ended 30 June 2020
Remuneration Report – Audited (continued)
Remuneration and other terms of employment for the Board members, 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 retired on 25
$125,744
November 2019
Adam Lamond
(A) (B) (C) (F) & (I)
Until validly terminated in
accordance with the terms of the
Agreement.
$222,283
Tom Lawrence
(I)
$77,305
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.
Karl Paganin (I) Mr Paganin will hold office until
$125,744
the next Annual General Meeting
of the Company where he may
be subject to retirement by
rotation under the Company’s
Constitution.
Mr Elton 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.
Until validly terminated in
accordance with the terms of the
Agreement.
Brian Elton (I)
Michael Shirley
(A) (B) (C) (G) & (I)
$394,200
Steven Harding
(A) (B) (C) (H) (I)
Until validly terminated in
accordance with the terms of the
Agreement.
$295,650
In accordance with the Company’s
Constitution and the Corporations Act 2001
(Cth).
Termination by Company with reason – 1
months’ notice
Termination by Company without reason – 3
months’ notice (or payment of the equivalent
of 5 months’ salary to dispense of the notice
period)
In accordance with the Company’s
constitution and the Corporations Act 2001
(Cth).
In accordance with the Company’s
constitution and the Corporations Act 2001
(Cth).
Termination by Company with reason – 1
months’ notice
Termination by Company without reason – 3
months’ notice.
Termination by Company with reason – 1
months’ notice
Termination by Company without reason – 3
months’ notice. In the event of termination
of employment occurring within 12 months
following a Change of Control event, the
employee is entitled to a payment upon
termination equal to 12 months base salary
plus superannuation.
$77,305
In accordance with the Company’s
constitution and the Corporations Act 2001
(Cth).
Veris Limited - Annual Report 2020 Directors Report
For the year ended 30 June 2020
35
Remuneration Report – Audited (continued)
Name
Term of agreement
Travis Young (A)
(B) (C) & (I)
Until validly terminated in
accordance with the terms of the
Agreement.
Base Salary
including
superannuation
$240,900
Lisa Wynne (A) (B)
(C) (E) & (I)
Until validly terminated in
accordance with the terms of the
Agreement.
$233,235
Termination
Termination by the Company with reason
without notice
Termination by the Company without reason
– five weeks’ notice.
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)
(A) 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.
(B) Key management personnel’s contracts allow for participation in the Company’s Incentive Plan (subject to Board and shareholder approval, if
applicable).
(C) 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.
(D) Brian Mangano held the role of Chief Financial Officer until 21 June 2019.
(E)
Lisa Wynne assumed the role of Interim Chief Financial Officer from 21 June 2019 to 2 April 2020. Lisa holds the roles of Company Secretary and
Head of Commercial, at the date of this report.
(F) Base salary plus super was effective 1 May 2020. Adam Lamond held the role of Managing Director until 2 April 2020 where he received a base
salary plus super of $444,567 per annum until 30 April 2020.
(G) Michael Shirley was appointed on 29 October 2019.
(H) Steven Harding was appointed on 2 April 2020.
(I)
In April 2020 as a result of COVID-19, all Directors and KMP’s agreed to reduce their remuneration by 50% and 25% respectively.
36
Directors Report
For the year ended 30 June 2020
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-
employment
benefits
Termination
Benefits
Share-based
Payments
Salary
& fees
$(A)
Incentive
Cash bonus
$(B)
Non-
monetary
$
Super-
annuation
$
Cash
$
Performance
Rights
$(D)
Accounting
Value
(at risk)
Performance
Rights
$(E), (F)
Total
$
Proportion of
remuneration
performance
related
Directors
Non-Executive Directors
Karl Paganin
(Chairperson)
2020
2019
Tom Lawrence 2020
2019
101,131
77,305
67,671
77,305
Derek La Ferla
(Retired 25
November
2019)
2020
56,101
2019
125,744
Brian Elton (H)
2020
2019
39,915
-
Executive Directors
Adam Lamond
Exec Director
Brian Elton (H)
2020
2019
2020
2019
419,013
415,286
107,033
319,638
Total
Directors’
Remuneration
2020
790,864
2019
1,015,278
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,706
-
21,002
20,531
-
-
-
-
-
-
-
-
-
-
10,168
162,247
30,365
37,876 162,247
50,896
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
101,131
77,305
67,671
77,305
56,101
125,744
46,621
-
440,015
435,817
279,448
350,003
-
990,987
- 1,066,174
-
-
-
-
-
-
-
-
-
-
-
-
Veris Limited - Annual Report 2020 Directors Report
For the year ended 30 June 2020
37
Remuneration Report – Audited (continued)
h) Remuneration of Directors and Key Management Personnel of the Group for the Current and Previous
Financial Year (continued)
Short-term employee benefits
Termination Benefits
Post-
employ-
ment
benefits
Share-
based
Payments
Accounting
Value
(at risk)
Salary
& fees
$ (A)
Incentive
Cash
bonus
$ (B)
Non-
monetary
$
Super-
annuation
$
Cash
$
Per-
formance
Rights
$ (D)
Per-
formance
Rights
$ (E) , (F)
Total
$
Proportion of
remuneration
performance
related
29,119
245,381
12%
Other Executives
Michael Shirley
(CEO – Veris
Australia) (G) (J)
Travis Young
(CEO – Aqura
Technologies) (I)
Steven Harding
(CFO) (K)
Brian Mangano
(CFO – ceased
1 July 2019)
Lisa Wynne
(Company
Secretary) (C)
2020
201,670
2019
2020
2019
2020
2019
2020
2019
-
205,113
-
44,366
-
-
311,640
2020
246,254
2019
158,322
Total Executives’
Remuneration
Total Directors’
and Executives’
Remuneration
2020
697,403
2019
469,962
2020
1,488,267
2019
1,485,240
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,592
-
24,204
-
4,215
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
32,629
363,385
18,874
19,771
16,225
62,782
-
-
-
-
-
-
-
-
12,848
242,165
-
673
-
-
-
4,263
2,377
-
49,254
-
-
726,528
270,288
176,924
46,903
807,088
48,854
363,385
18,874
2,377
903,452
100,658
162,247
-
46,903
1,798,075
99,750
363,385
18,874
2,377
1,969,626
-
5%
-
1%
-
-
-
2%
1%
6%
-
3%
-
Notes in relation to the table of Directors’ and Executive Officers’ remuneration:
(A) Salary and Fees includes annual leave and long service leave.
(B) Short-term incentive bonus is for the achievement of KPIs within their individual roles for the financial year ended 30 June 2020. The performance
evaluation in respect of the year ended 30 June 2020 has taken place and no short-term incentive bonuses will be paid.
(C) Based on full time equivalent annual salary of $213,786.
(D) The value of the Performance Rights granted in the prior 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. The fair value of the Performance Rights has been measured using Monte
Carlo simulation model.
(E)
(F)
941,131 Performance Rights were granted post period end, however the pro-rata valuation over the vesting period has been accrued in this reporting
period. The value of the Performance Rights is calculated at grant date (effective grant date – letter of offer) based on the share price at grant date.
The value of the Performance Rights granted in the prior 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 2019 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.
(G) 1,000,000 Performance Rights were granted during the period. The value of the Performance Rights is calculated at grant date (effective grant date –
letter of offer) based on the share price at grant date.
(H) Brian Elton was appointed Executive Director on 29 March 2019. He held this role until 20 November 2019, at which time he became a Non-Executive
Director.
(I)
Travis Young was appointed as CEO on 1 July 2019, therefore remuneration paid in the prior year is not disclosed in this note.
(J) Michael Shirley was appointed on 29 October 2019.
(K) Steven Harding was appointed on 2 April 2020.
38
Directors Report
For the year ended 30 June 2020
Remuneration Report – Audited (continued)
i) Analysis of Bonuses Included in Remuneration
No short-term or long term incentives were awarded as remuneration to key management personnel during the period.
Subsequent to the period end, there was an issue of 941,131 Performance Rights to KMPs as a discretionary bonus,
based on behaviours and the individual’s contribution to the FY20.
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 2019
Granted in
year (C)
Grant Value Grant Face
Value
Number
Vested in
year
Number
forfeited /
lapsed in
year
Number
held at 30
June 2020
Adam
Lamond
Michael
Shirley (A)
Steven
Harding
Travis Young
Lisa Wynne
Brian
Mangano (B)
-
-
-
-
-
-
1,323,353
$48,964
$48,964
90,943
$3,365
$3,365
307,480
-
296,407
230,428
$10,967
$8,526
$10,967
$8,526
-
-
-
-
-
1,183,240
-
$12,876
$43,780
1,183,240
-
-
-
-
-
-
-
1,323,353
90,943
603,887
230,428
-
(A) 1,000,000 Performance Rights were issued during the period on commencement of employment.
(B) 1,183,240 Performance Rights held by former CFO, Brian Mangano vested on cessation of employment on 1 July 2019.
(C) 941,131 Performance Rights were issued to KMP subsequent to the reporting period.
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 30/06/2019
Movement
Balance at 30/06/2020
Directors
Karl Paganin
Derek La Ferla
Adam Lamond
Tom Lawrence
Brian Elton
KMP’s
Michael Shirley
Travis Young
Lisa Wynne
Steven Harding
Total
8,125,170
598,417
46,041,815
8,136,093
14,835,733
-
12,616,789
856,857
-
91,210,874
5,064,180
-
2,550,000
5,000,000
18,472,417
2,500,000
1,000,000
(200,000)
750,000
35,136,597
13,189,350
598,417 (A)
48,591,815
13,136,093
33,308,150
2,500,000
13,616,789
656,857
750,000
126,347,471
(A) KMP shareholding at retirement as Chairman on 25 November 2019.
Veris Limited - Annual Report 2020 Directors Report
For the year ended 30 June 2020
39
Remuneration Report – Audited (continued)
k) Other Transactions with Key Management Personnel
The Company rented office space from Elton Property, a company controlled by Director, Brian Elton. Amounts paid
during the year of $104,261.76 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
40
Directors Report
For the year ended 30 June 2020
Shares Under Option
As at 30 June 2020 there are no shares under option.
Indemnification and Insurance of Officers
During the financial year the Group paid insurance premiums of $58,500 (2019: $43,500) 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 auditors performed no other services in addition to its statutory duties.
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 (Integration)
Consolidated
2020
$000
250
2019
$000
226
-
9
250
235
Environmental Regulations and Performance
It is the Group’s policy to comply with all environmental regulations applicable to it. The Company confirms, for the
purposes of section 299(1)(f) of the Corporations Act 2001 that it is not aware of any breaches by the Group of any
environmental regulations under the laws of the Commonwealth of Australia, or of a State of Territory of Australia.
In the majority of the Veris’ business situations, Veris is not the owner or operator of plant and equipment requiring
environmental licences. Veris typically assists its clients with the management of their environmental responsibilities,
rather than holding those responsibilities directly.
The Group is not aware of any breaches by Veris of any environmental regulations under the laws of the Commonwealth
of Australia, or of a State or Territory.
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.
Veris Limited - Annual Report 2020
Directors Report
For the year ended 30 June 2020
41
Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 90 and forms part of the Directors’ report for the year
ended 30 June 2020.
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/2893/veris-limited-corporate-governance-charter.pdf
Signed in accordance with a resolution of the Directors:
Karl Paganin
Chairman
Dated at Perth 31 August 2020
42
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2020
CONTINUING OPERATIONS
Revenue
Operating expenses
Depreciation
Amortisation
Restructuring costs
Share-based payment
Impairment of Intangibles
Note
2020
$000
2019
$000
Restated*
3
13
14
94,105
107,558
(92,245)
(103,458)
1,860
4,100
(11,507)
(2,335)
(1,323)
(113)
(4,997)
(2,908)
(3,294)
(586)
14 (3,133)
(34,431)
Results from operating activities
(16,551)
(42,116)
Finance costs
Net finance costs
(2,072)
(1,324)
(2,072)
(1,324)
Loss before income tax
(18,623)
(43,440)
Income tax (expense) / benefit
15 (4,587)
2,797
Loss from continuing operations
(23,210)
(40,643)
DISCONTINUED OPERATION
Profit / (loss) from discontinued operations, net of tax
2 (3,283)
554
Loss for the period
(26,493)
(40,089)
Total comprehensive loss for the year
(26,493)
(40,089)
Earnings / loss per share
Basic loss cents per share
Diluted loss cents per share
Earnings / loss per share – Continuing operations
Basic loss cents per share
Diluted loss cents per share
4 (7.02)
(11.13)
4 (7.02)
(11.13)
4 (6.14)
(11.29)
4 (6.14)
(11.29)
The accompanying notes form an integral part of these consolidated financial statements.
* Comparative information has been re-presented due to Discontinued Operation, refer to Note 2.
Veris Limited - Annual Report 2020
Consolidated Statement of Financial Position
At 30 June 2020
43
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Other current assets
Total current assets
Non-current assets
Property, 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
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share based payment reserve
(Accumulated losses)
Total equity
Note
30 Jun 2020
30 Jun 2019
$000
$000
17
10
7
13
14
1,939
13,178
5,836
3,685
25,864
8,280
4,115 3,039
25,068 40,868
25,600
-
13,551
19,190
16 4,481 8,913
30,081 41,654
55,149 82,522
11
7
19
12
19
12
20
20
13,835
-
13,219
8,189
18,765
3,554
3,356
9,176
534 534
35,777 35,385
16,364
1,027
18,403
1,640
725 -
18,116 20,043
53,893 55,428
1,256 27,094
44,127
2,528
43,051
2,949
20 (45,399)
(18,906)
1,256
27,094
The accompanying notes form an integral part of these consolidated financial statements.
44
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
Note
Share
Capital
Share
Based
Payment
Reserve
Retained
Earnings
Total
Equity
$000
$000
$000
$000
Balance at 1 July 2019
43,051 2,949
(18,906)
27,094
Total comprehensive income for the year
Loss for the year
-
-
(26,493)
(26,493)
Total comprehensive loss for the year
-
-
(26,493)
(26,493)
Transactions with owners of the Company,
recognised directly in equity
Issue of ordinary shares (net of costs)
20
1,076
-
-
1,076
Share-based payment transactions
-
(421)
-
(421)
Total transactions with owners of the Company
1,076
(421)
-
655
Balance at 30 June 2020
44,127 2,528 (45,399)
1,256
Note
Share
Capital
Share
Based
Payment
Reserve
Retained
Earnings
Total
Equity
Balance at 1 July 2018
40,887 2,349 24,967 68,203
Adjustment on initial application of AASB 9
Adjustment on initial application of AASB 15
(721)
(721)
(1,293)
(1,293)
Adjusted balance at 1 July 2018
40,887 2,349
22,953 66,189
Total comprehensive income for the year
Loss for the year
-
-
(40,089)
(40,089)
Total comprehensive loss for the year
-
-
(40,089)
(40,089)
Transactions with owners of the Company,
recognised directly in equity
Issue of ordinary shares (net of costs)
Dividends paid
20
20
2,164
-
-
-
-
(1,770)
2,164
(1,770)
Share-based payment transactions
-
600 -
600
Total transactions with owners of the Company
2,164 600 (1,770)
994
Balance at 30 June 2019
43,051 2,949 (18,906)
27,094
The accompanying notes form an integral part of these consolidated financial statements.
Veris Limited - Annual Report 2020
Consolidated Statement of Cash Flow
For the year ended 30 June 2020
45
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Cash generated from operations
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
Disposal of subsidiaries net of costs
Net cash (used in) investing activities
Cash flows from financing activities
Repayment of borrowings and lease liabilities
Proceeds from loans
Net cash (used in) from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Note
2020
$000
2019
$000
121,614
143,784
(113,641)
(136,212)
7,973
7,572
(2,072)
(1,330)
2 3
18 5,903 6,245
328
(4,928)
(2,488)
-
1,769
(1,858)
(2,140)
266
12,761 -
5,673 (1,963)
(16,064)
(6,185)
2,742 -
(13,322)
(6,185)
(1,746)
(1,903)
3,685 5,588
17 1,939 3,685
The accompanying notes form an integral part of these consolidated financial statements.
46
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 2020 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 and resource; defence; agribusiness; tourism; leisure and government sectors
throughout Australia.
COVID-19 IMPACT
The social, health and economic consequences of the COVID-19 pandemic continue to evolve and have major impacts
across the world. Since its declaration as a pandemic in March 2020, COVID-19 and the associated government,
business and consumer response has had a significant impact on the operations and financial performance of the Group.
Despite these challenges, the Group has been focussed on supporting and keeping its employees, clients and the
community safe by:
instituting remote working arrangements for its employees;
implementing cost-savings initiatives across its businesses;
staff rotations and shifts to minimise any potential spread of the virus;
regular communications regarding the latest health advice including personal hygiene, physical distancing, self-
isolation and testing; and
provision of additional hand sanitisers and PPE as required, and additional cleaning of offices and shared services.
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 31 August 2020.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
47
NOTE INDEX
GROUP PERFORMANCE
NET DEBT
Cash and cash equivalents………………......…
17
Operating Segments……………………………
Discontinued Operations……………………….
Revenue………………………………………….
Earnings per share……………………………...
Subsequent events……………………………..
RISK MANAGEMENT
Critical accounting estimates and
judgements………………………………………
Financial instruments……………………….......
Commitments………………….………….…..…
Contingent liabilities……………………………..
WORKING CAPITAL
Trade and other receivables…………….......….
Trade and other payables………………….........
1
2
3
4
5
6
7
8
9
10
11
CAPITAL EMPLOYED
Employee benefits…………………………..…..
12
Reconciliations of operating profit after
income tax to net cash inflow from Operating
activities………………………….…...................
Loans and borrowings………………………......
EQUITY
Share capital……………………………………...
Dividends……………………………………...….
Share-based payments…………………....…....
OTHER INFORMATION
Related party transactions…………………...…
Remuneration of auditors………………...…….
GROUP STRUCTURE
Subsidiaries………………………………………
Deed of cross guarantee………………….....…
Parent entity financial information………......…
Property, plant and equipment and
impairment……………………………………….
Intangible assets……………………………..….
TAXATION
Income tax.…………………………………....…
Deferred tax assets / liabilities……………....…
13
14
15
16
ACCOUNTING POLICIES
Basis of preparation………………………..……
Summary of significant accounting policies.....
New standards and interpretations not yet
effective………………………………………….
Determination of fair values…………………....
18
19
20
21
22
23
24
25
26
27
28
29
30
31
48
Notes to the Consolidated Financial Statements
GROUP PERFORMANCE
1. OPERATING SEGMENTS
The Group had three reportable segments that were being managed separately by the service provided. In 2020 the
segments include Veris Australia and Aqura Technologies.
The 2020 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. Elton Consulting was
disposed of in November 2019.
Information regarding the results of each reporting segment is detailed below for the year ended 30 June 2020.
Veris Australia
Aqura Technologies
Total*
2020
$000
2019
$000
2020
$000
2019
$000
2020
$000
2019
$000
Revenues
74,849
93,058
19,336
14,710
94,185
107,768
Inter-segment revenues
(42)
(111)
(38)
(99)
(80)
(210)
External revenues
74,807
92,947
19,298
14,611
94,105
107,558
Costs
(71,102)
(87,279)
(18,294)
(12,846)
(89,396)
(100,125)
Inter-segment costs
42 111 38 99 80 210
External costs
(71,060)
(87,168)
(18,256)
(12,747)
(89,316)
(99,915)
EBITDA**
3,747
5,779
1,042
1,864
4,789
7,643
Depreciation
Amortisation
(10,547)
(4,811)
(295)
(171)
(10,842)
(4,982)
(2,335)
(2,908)
-
-
(2,335)
(2,908)
EBIT*** for reportable segments
(9,135)
(1,940)
747
1,693
(8,388)
(247)
Segment assets
Segment liabilities
40,823
45,648
(35,437)
(29,093)
5,200
(5,118)
6,605
(7,380)
46,023
52,253
(40,555)
(36,473)
* Prior period amounts have been re-presented to exclude discontinued operations, refer note 2
** 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 (2019: none).
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
49
GROUP PERFORMANCE (continued)
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)
Restructuring costs
Impairment of Intangibles** (Note 14)
Net finance expense
Consolidated 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
* Comparative information has been re-presented due to Discontinued Operation, refer to Note 2.
** Relates to Veris Australia.
2020
$000
2019
$000
Restated*
94,185
107,768
(80)
(210)
94,105
107,558
89,396
100,125
(80)
(210)
2,929 3,543
92,245
103,458
(8,388)
(3,707)
(1,323)
(3,133)
(247)
(4,129)
(3,294)
(34,431)
(2,072)
(1,339)
(18,623)
(43,440)
2020
$000
46,023
2019
$000
52,253
9,126 9,073
55,149 61,326
40,555
36,473
13,338 16,620
53,893
53,093
50
Notes to the Consolidated Financial Statements
GROUP PERFORMANCE (continued)
2. DISCONTINUED OPERATIONS
On 21 November 2019, the Group sold Elton Consulting Pty Ltd for $13,000,000. The business was not previously
classified as held-for-sale or as a discontinued operation.
The sale of Elton Consulting resulted in a significant reduction in net debt allowing the Company to focus on growth
opportunities within its core business Veris Australia. The sale resulted in a loss of $3,636,000.
Revenue
Expenses
Depreciation
Amortisation
Share-based payment
Net finance costs
Profit / (loss) from operating activities
Income tax (expense) / benefit
Profit / (loss) from discontinued operations, net of tax
Loss on sale of discontinued operation
Profit / (loss) from discontinued operations for the period, net of tax
Earnings per share
Basic earnings / (loss) cents per share
Diluted earnings / (loss) 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
2020
$000
2019
$000
7,876
(6,884)
18,396
(16,094)
992 2,302
(37)
(330)
(365)
(89)
(990)
-
2 (15)
262
1,208
91 (654)
353 554
(3,636)
-
(3,283)
554
(0.87)
(0.87)
2020
$000
515
-
0.16
0.16
2019
$000
2,737
(108)
(1,801)
(1,866)
(1,286)
763
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
51
GROUP PERFORMANCE (continued)
2. DISCONTINUED OPERATIONS (continued)
Effect of disposal on the financial position of the Group
Property, plant and equipment
WIP
Trade and other receivables
Cash and cash equivalents
Goodwill
Customer relationships
Brands
Deferred tax liabilities
Trade and other payables
Employee benefits
Net assets and liabilities
Cash consideration
Less related costs of sale
Loss on sale of subsidiary (pre-tax)
Cash consideration
Cash and cash equivalents disposed of
3. REVENUE
Revenue from contracts with customers
4. EARNINGS / LOSS PER SHARE
Earnings / (losses) used to calculate basic EPS ($000)
Weighted average number of ordinary shares outstanding during the year
used in calculating basic EPS (number of shares)
2020
$000
(510)
(2,190)
(3,682)
(24)
(11,172)
(2,052)
(168)
64
1,930
1,383
(16,421)
13,000
(215)
(3,636)
13,000
(24)
2020
$000
2019
$000
94,105
107,558
94,105
107,558
2020
(26,493)
2019
(40,089)
377,640,126
360,068,213
Basic earnings / (losses) per share (cents per share)
(7.02)
(11.13)
CONTINUING OPERATIONS
Earnings / (losses) used to calculate basic EPS ($000)
(23,210)
(40,643)
2020
2019
Weighted average number of ordinary shares outstanding during the year
used in calculating basic EPS (number of shares)
377,640,126
360,068,213
Basic earnings / (losses) per share (cents per share)
(6.14)
(11.29)
52
Notes to the Consolidated Financial Statements
GROUP PERFORMANCE (continued)
4. EARNINGS / LOSS PER SHARE (continued)
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 22). There is no material impact on basic EPS arising from dilutive potential shares due to loss
in 2020.
5. SUBSEQUENT EVENTS
In the interval between the end of the financial year and the date of this report, the Group executed a renegotiation and
extension to its primary banking facilities with the Commonwealth Bank of Australia extending the existing facilities to 30
September 2021. On 28 August 2020, the Company received a credit approved term sheet from CBA in relation to the
extension of the Group’s existing financing facilities extending the term through to 30 September 2021. The extension of
the facilities will require the Group to amortise a minimum of $2.3 million of the outstanding Term Loan by 30 June 2021.
Veris expects that the documentation pertaining to these extensions will be executed in September 2020.
Additionally, on 2 August 2020, the Victorian Government announced significant restrictions within the Melbourne
metropolitan area and surrounding regions. The Victorian market is a key market for the Group’s services. Whilst the
Victorian market remains challenging due to the impacts and restrictions imposed in response to recent outbreaks of
COVID-19 pandemic, Veris is adapting its work practices to comply with these restrictions and work with clients to
ensure projects can continue under revised operating protocols aimed at ensuring the health and wellbeing of staff,
clients and the community is paramount. Veris remains well positioned to benefit from any increased or accelerated
infrastructure spend within the Victorian market.
Veris enters FY21 with approximately $30,000,000 of work in hand and a strong tender pipeline.
Other than noted 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.
RISK MANAGEMENT
6. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
In preparing the consolidated financial statements in conformity with Australian Accounting Standards, due consideration
has been given to the judgements, estimates and assumptions that affect the application of accounting policies and
reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent
from other sources. The ongoing COVID-19 pandemic has increased estimation uncertainty in the preparation of the
consolidated financial statements. At 30 June 2020, the Group has reassessed all significant judgements, assumptions
and critical estimates included in the consolidated financial statements, including but not limited to, provisions against
trade debtors and work in progress and impairment of non-current assets. Actual results may differ from these estimates
and are subject to achievement of forecasts and the extension of the Group’s existing financing facilities.
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 assets, deferred vendor payments, contingent consideration
and impairment of assets such as goodwill (refer Note 14). 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.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
53
RISK MANAGEMENT (continued)
6. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
Going Concern
For the year ended 30 June 2020, the Group recorded a loss from continuing operations of $18,623,000 (before tax),
which included an impairment of intangible assets of $3,133,000 and equipment assets of $2,016,000. The Group’s net
cash outflow from operating activities was $7,973,000, including $1,515,000 of JobKeeper receipts. In accordance with
AASB 16 Leases, $9,800,000 of lease payments primarily pertaining to property leases are presented within financing
activities.
Cash advance facilities (the 'facilities') were utilised at 30 June 2020 to $6,948,000, with $4,552,000 of undrawn cash
advance facilities and overdraft facilities available subject to ongoing covenant compliance. The Group has commenced
negotiations with the Group’s primary external lender CBA (the 'lender') to extend the term of the facilities. On 28
August 2020 CBA confirmed that credit terms have been agreed and approved subject to finalisation of standard loan
documentation, extending the tenure to 30 September 2021. Facility terms, including covenant requirements are
materially consistent with those under existing facilities, including quarterly EBITDA calculations, measured against FY21
forecasts as agreed with the lender.
Management forecasts include conversion of engagement pipeline of work, factoring in some growth in project
activity assuming recovered rates materially consistent with existing contracts and execution of ongoing cost reduction
programs have taken into consideration the experience to date of the impact of COVID-19 pandemic on market activity
levels, including government stimulus activities, cost management strategies, and receipt of JobKeeper funding under
phase 1 of the program and consider these to be appropriate based on available information.
The going concern assessment is based on the achievement of these forecasts. Given the uncertainty associated
with forecasts and current economic conditions, should it be required, the Group may pursue alternatives available
to it, including further cost reduction measures, asset or business sales, or equity funding 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 Contract Assets
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 Tax Assets Relating to Tax Losses
The Group recognises a deferred tax asset relating to tax losses incurred, as detailed in Note 16. 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.
54
Notes to the Consolidated Financial Statements
RISK MANAGEMENT (continued)
7. 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:
2020
2019
Carrying
Amount
Fair Values
Carrying
Amount
Fair Values
$000
$000
$000
$000
Lease liabilities (2019: Hire purchase liabilities)
(22,635)
(22,635)
(10,349)
(10,349)
Cash advance facility
(6,948)
(6,948)
(11,410)
(11,410)
The carrying amounts of the financial instruments are a reasonable approximation of their fair values, on account of their
short maturity cycle.
Measurement at Fair Values
i. Level 3 fair values
Movements in the value of Deferred Vendor Payments
Opening
Balance
Acquired in
the year
Paid in
the year
(cash)
Paid in
the year
(shares)
Adjusted in
the year
Closing
Balance
$000
$000
$000
$000
$000
$000
491
3,063
-
-
(250)
-
(241)
(2,238)
(942)
117
-
-
3,554 -
(2,488)
(942)
(124)
-
LANDdata
Elton Consulting
Landdata
Deferred Vendor Payment Provision at 30 June 2019 was based on Earnout Period 2 which ran from 31 July 2018 to
30 July 2019. Earn-out was 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% was paid at the end of Earnout Period 2 as gross margin was
greater than $4,400,000.
Veris Limited - Annual Report 2020
Notes to the Consolidated Financial Statements
55
RISK MANAGEMENT (continued)
7. FINANCIAL INSTRUMENTS (continued)
Elton
Deferred Vendor Payment Provision at 30 June 2019 was based on Earn-out Period 2 for $1,000,000 which ran from
30 March 2019 to 29 March 2020 and was paid 50% in cash and 50% in shares. Earn-out required EBITDA to be over
$2,600,000 and was capped at $3,100,000. In addition, there was an additional deferred payment of $2,000,000 paid
50% in cash and 50% in shares and was 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 of surveying businesses, and
thus mitigated the risk of dependence on key customers. Credit risk is kept continually under review and managed to
reduce the incidence of material losses being incurred by the non-receipt of monies due.
Credit risk is managed through monitoring and follow-up of accounts receivable on a regular basis, and follow up on
overdue customer balances. Bad debts are written off in the year in which they are identified. Specific provisions are
made against identified doubtful debts. There has been no change in the above policy since the prior year.
The Group’s maximum exposure to credit risk is:
Cash and cash equivalents
Trade and other receivables
Contract assets
2020
$000
1,939
2019
$000
3,685
13,178
5,836
25,864
8,280
20,953 37,829
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
2020
$000
8,879
3,227
1,178
210
309
2019
$000
14,289
7,441
2,046
816
2,092
(625)
(820)
13,178 25,864
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.
56
Notes to the Consolidated Financial Statements
RISK MANAGEMENT (continued)
7. FINANCIAL INSTRUMENTS (continued)
The Group’s maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region
was $13,178,000 (2019: $25,864,000) for Australia. The allowance for impairment for 2020 amounted to ($625,000) (2019:
$820,000). 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 AASB 9
Impairment loss reversed
Impairment loss provided
Total
2020
$000
820
(444)
2019
$000
928
(203)
249 95
625 820
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:
2020
Non-derivative
financial liabilities
Lease liabilities*
Trade and other
payables
Cash advance facility
Carrying
Amount
$000
Contractual
Cash Flows
$000
6 Months
or less
$000
22,635
13,835
24,914
13,835
3,621
13,835
6 – 12
Months
$000
3,599
-
1 – 2
Years
$000
7,177
-
2 – 5
Years
$000
9,367
-
>5
Years
$000
1,150
-
6,948 6,948 142 6,806 -
-
-
43,418 45,697 17,598 10,405 7,177 9,367 1,150
* 2020 balances include lease liabilities in accordance with AASB 16.
2019
Non-derivative
financial liabilities
Hire purchase
liabilities
Trade and other
payables
Deferred vendor
Payments
Carrying
Amount
$000
Contractual
Cash Flows
$000
6 Months
or less
$000
10,349
11,131
1,752
6 – 12
Months
$000
1,751
18,765
18,765
18,765
-
3,554
3,681
491
3,190
1 – 2
Years
$000
3,447
-
-
2 – 5
Years
$000
4,181
-
-
>5
Years
$000
-
-
-
Cash advance facility
11,410 13,405 287 287 3,359 8,737 735
44,078 46,982 21,295 5,228 6,806 12,918 735
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
Veris Limited - Annual Report 2020
Notes to the Consolidated Financial Statements
57
RISK MANAGEMENT (continued)
7. FINANCIAL INSTRUMENTS (continued)
Market Risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group’s
income. The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
Interest Rate Rsk
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 2.9% for loans and borrowings (2019: 4.42%) detailed in note 19. Interest sensitivity is calculated for a
1% change below:
Consolidated Group
Cash and cash equivalents
Loans and borrowings
2020
+1%
$000
-1%
$000
2019
+1%
$000
-1%
$000
19
(19)
37
(37)
296 (296)
218 (218)
315 (315)
255
(255)
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 19). 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.
8. COMMITMENTS
Operating Leases
Commitments in relation to future minimum lease payments under non-cancellable operating leases:
Not later than one year
Later than one year but not later than five years
Later than five years
Total commitments not recognised in financial statements
2020
$000
-
-
2019
$000
4,206
8,676
-
1,597
-
14,479
2020 balances have been included as part of Note 7 (financial instruments) in accordance with AASB 16.
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
2020.
58
Notes to the Consolidated Financial Statements
RISK MANAGEMENT (continued)
9. 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 2020 no individually significant matters exist where the Group estimates a more than
remote likelihood of economic outflow.
WORKING CAPITAL
10. TRADE AND OTHER RECEIVABLES
Trade receivables
JobKeeper receivable
2020
$000
2019
$000
11,663
25,864
1,515 -
13,178 25,864
The Group’s exposure to credit and currency risk is disclosed in Note 7. Payment terms are typically 30 days.
11. TRADE AND OTHER PAYABLES
Trade and other payables
CAPITAL EMPLOYED
12. EMPLOYEE BENEFITS
Current
Annual leave
Long service leave
Superannuation
Other employee provisions
Non-current
Long service leave
2020
$000
2019
$000
13,835 18,765
13,835
18,765
2020
$000
3,980
2,612
1,424
2019
$000
4,396
2,697
1,693
173
390
8,189
9,176
1,027
1,640
1,027
1,640
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
59
CAPITAL EMPLOYED (continued)
13. PROPERTY, 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
Property at cost
Less: accumulated depreciation
Total written down value
2020
$000
1,132
2019
$000
1,669
(648)
(627)
484
1,042
23,727
22,998
(17,048)
(13,598)
6,679
9,400
7,111
5,402
(3,274)
(2,293)
3,837
3,109
17,789
-
(3,189)
-
14,600
-
25,600
13,551
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:
2020
Carrying amount at 1 July 2019
Additions at cost
Disposals at carrying value
Depreciation
Leasehold
Improvements
$000
Plant &
Equi pment
$000
Motor
Vehicles
$000
1,042
37
(337)
9,400
3,148
(187)
3,109
63
(640)
Total
$000
13,551
3,248
(1,164)
(258)
(5,868)
(808)
(6,934)
Carrying amount at 30 June 2020
484 6,493
1,724
8,701
Right-of-use assets
Carrying amount at 1 July 2019
Additions at cost
Depreciation
Property
$000
Plant &
Equipment
$000
Motor
Vehicles
$000
17,379
494
292
-
2,121
1,186
Total
$000
19,792
1,680
(3,273)
(106)
(1,194)
(4,573)
Carrying amount at 30 June 2020 (note 29)
14,600 186
2,113
16,899
60
Notes to the Consolidated Financial Statements
CAPITAL EMPLOYED (continued)
13. PROPERTY, PLANT AND EQUIPMENT (continued)
2019
Carrying amount at 1 July 2018
Additions at cost
Disposals at carrying value
Depreciation
Leasehold
Improvements
$000
Plant &
Equipment
$000
932
319
-
(209)
10,136
2,975
(23)
(3,688)
Motor
Vehicles
$000
4,174
480
(355)
(1,190)
Total
$000
15,242
3,774
(378)
(5,087)
Carrying amount at 30 June 2019
1,042 9,400 3,109 13,551
Impairment Loss
The Group assesses whether there are indicators that property, plant and equipment may be impaired at each reporting
date. There was a $2,100,000 impairment present in 2020 (2019: none) relating to property, plant and equipment.
Veris Limited - Annual Report 2020
Notes to the Consolidated Financial Statements
61
CAPITAL EMPLOYED (continued)
14. INTANGIBLE ASSETS
Carrying amount at 1 July 2018
Veris Australia
Elton Consulting
Movements during the year
Amortisation:
Veris Australia
Elton Consulting
Adjustments:
Elton Consulting
Impairment:
Veris Australia
Carrying value 1 July 2019
Veris Australia
Elton Consulting
Movements during the year
Amortisation:
Veris Australia
Elton Consulting
Disposed of:
Elton Consulting
Impairment:
Veris Australia
Carrying amount at 30 June 2020
Veris Australia
Elton Consulting
Goodwill
$000
Customer
Relationships
$000
Brands
$000
Total
$000
34,431
8,376
-
42,807
12,251
3,268
272 15,791
46,682
11,644
272
58,598
-
-
(2,908)
(912)
-
(78)
(1,079)
-
(34,431)
-
-
5,468
-
-
(2,908)
(990)
(1,079)
(34,431)
5,468
11,172 2,356 194 13,722
11,172
7,824
194
19,190
-
-
(2,335)
(304)
-
(26)
(2,335)
(330)
(11,172)
(2,052)
(168)
(13,392)
-
(3,133)
-
(3,133)
-
-
-
-
-
-
-
-
-
-
-
-
Impairment Assessment
As a result of changes in customer base and office closure an impairment loss of $3,133,000 was recognised in Veris
Australia for the current reporting period.
62
Notes to the Consolidated Financial Statements
TAXATION
15. INCOME TAX
Current tax - Australia
Deferred tax
Adjustment for prior periods
Adjustment - other
Non-recognition of current year deferred taxes
Income tax expense / (benefit) reported in income statement
2020
$000
-
2019
$000
-
(5,590)
(2,130)
(264)
(668)
(13)
-
11,018
-
4,496 (2,143)
The prima facie tax on the result from ordinary activities before income tax is reconciled to the income tax as follows:
Reconciliation of Effective Tax Rate
(Loss) / Profit before income tax – continuing operations
Income tax at 30% (2019: 30%)
Add (less) tax effect of:
Other non-allowable / assessable items
Research and development offset
Adjustment for prior periods
Adjustment - other
Non-recognition of current year deferred taxes
Income tax expense / (benefit) – continuing operations
(Loss) / Profit before income tax – discontinued operations
Income tax at 30% (2019: 30%)
Add (less) tax effect of:
Other non-allowable / assessable items
Adjustment for prior periods
Adjustments – disposal of Elton
Non-recognition of current year deferred taxes
2020
$000
2019
$000
(18,623)
(5,587)
(43,440)
(13,032)
1,635
-
(264)
(1)
10,248
-
4
(17)
8,804
-
4,587
(2,797)
(3,375)
(1,012)
(626)
-
(667)
2,214
1,207
362
292
-
-
-
Income tax expense / (benefit) – discontinued operations
(91)
654
Veris Limited - Annual Report 2020
Notes to the Consolidated Financial Statements
63
TAXATION (continued)
16. DEFERRED TAX ASSETS / LIABILITIES
Deferred tax
Assets
Liabilities
2020
$000
2019
$000
-
-
-
-
2,748
1,451
-
4,834
8,452
74
-
-
-
-
3,182
747
-
8,453
916
145
2020
$000
(1,751)
(9)
(5,070)
5,284
-
-
-
-
-
2019
$000
(1,524)
(526)
-
-
-
-
(2,425)
-
-
Net
2020
$000
2019
$000
(1,751)
(1,524)
(9)
(5,070)
5,284
2,748
1,451
-
4,834
8,452
(526)
-
-
3,182
747
(2,425)
8,453
916
90
(560)
(55)
(486)
Contract assets
Plant & Equipment
Right of use asset
Right of use liability
Employee Benefits
Provisions
Intangibles
Carried forward R&D offset
available
Carried forward tax losses
available
Other
Total
17,559 13,443 (2,106)
(4,530)
15,453 8,913
Less: derecognised*
(10,972)
-
-
-
(10,972)
-
Tax assets / (liabilities)
6,588 13,443 (2,106)
(4,530)
4,481 8,913
Movement in deferred tax balances
Opening balance
Prior year adjustments
Other adjustments - disposal of Elton
Charge to profit or loss – continuing operations
Charge to profit or loss – discontinued operations
Derecognised*
Closing deferred tax asset
2020
$000
2019
$000
8,913
6,276
264
688
3,951
1,637
490
17
2,130
-
(10,972)
4,481 8,913
* Veris Limited tax consolidated group has significant carried forward tax losses available as at 30 June 2020. Following the sale of subsidiary Elton
Consulting Pty Ltd, management have performed a review based on current management forecasts and determined that it is not probable that future
taxable profit over the forecast period will be sufficient to utilise all carried forward tax losses and have derecognised $10,972,000 of deferred tax assets
($6,855,000 that had previously been recognised plus $4,117,000 of income and capital losses that arose in the current period). This derecognition does not
impact the future availability of such tax losses. Management will continue to reassess the recoverability of deferred tax assets at future reporting dates.
64
Notes to the Consolidated Financial Statements
NET DEBT
17. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
2020
$000
2019
$000
1,939
3,685
Cash and cash equivalents in the statement of cash flows
1,939 3,685
The Group’s exposure to interest rate risk and a sensitivity analysis for the financial assets and liabilities disclosed in Note 7.
18. 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 13)
Amortisation of intangible assets (Note 14)
Impairment of intangible assets
Profit on sale of fixed assets
Loss on sale of Elton Consulting
Other
Share based payment
Income tax expense / (benefit) from all operations
Change in trade and other receivables
Change in other assets
Change in contract assets
Change in trade payables
Change in provisions and employee benefits
Change in provisions – AASB 16
2020
$000
2019
$000
(26,493)
(40,089)
11,544
2,665
3,133
(280)
3,636
574
421
5,087
3,898
34,431
(1,391)
-
24
586
4,496 (2,143)
(304)
403
9,426
(701)
821
(3,924)
(141)
726
4,347
(1,208)
965
1,219
519
-
Net cash used in operating activities
5,903 6,245
Movements in Borrowings
Opening balance 1 July 2019
Movements:
AASB 16 Transition adjustment
Additional borrowings on adoption of AASB 16
Proceeds from borrowings
Repayments of borrowings and lease liabilities
Closing balance 30 June 2020
$000
21,759
19,792
1,354
2,742
(16,064)
29,583
Veris Limited - Annual Report 2020
Notes to the Consolidated Financial Statements
65
NET DEBT (continued)
19. LOANS AND BORROWINGS
Current liabilities
Lease liabilities (2019: Hire purchase liabilities)
Cash advance facility
Non-current liabilities
Lease liabilities (2019: Hire purchase liabilities)
Cash advance facility
2020
$000
2019
$000
6,271
3,356
6,948
-
13,219
3,356
16,364
6,993
-
11,410
16,364
18,403
TERMS AND DEBT REPAYMENT SCHEDULE
Terms and conditions of outstanding loans were as follows:
Nominal
interest rate%
Year of
maturity
Carrying
Amount
Carrying
Amount
2020
$000
2019
$000
Lease liabilities (2019: Hire purchase liabilities)
3.32 – 5.50
2020 – 2025
22,635
10,349
Cash advance facility
2.9 – 3.1
2020 – 2021 6,948
11,410
29,583
21,759
The weighted average incremental borrowing rate is applied to lease liabilities. The cash advance facility has a variable
interest rate. All loans and borrowings are denominated in Australian Dollars.
Cash advance facility (a)
Insurance Bonds
Other (b)
Facility
Available
2020
$000
Used
2020
$000
8,000
(6,948)
-
-
Unused
2020
$000
1,052
-
Facility
Available
2019
$000
17,000
5,000
Used
2019
$000
(11,410)
(56)
Unused
2019
$000
5,590
4,944
7,450 (1,247)
6,203 8,500 (433)
8,067
Total financing facilities
15,450 (8,195)
7,255 30,500
(11,899)
18,601
a) The carrying amount of this facility was $6.9 million as at 30 June 2020 (2019: $11.4 million). The funds are available
for business acquisitions. The facility is repayable in tranches. 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 $4.5 million bank overdraft, $2.5 million contingent instrument facility and $450,000 credit
card facility.
c) Lease liabilities are effectively secured as the rights to leased assets revert to the lessor in the event of default.
66
Notes to the Consolidated Financial Statements
NET DEBT (continued)
19. LOANS AND BORROWINGS (continued)
Lease liabilities (2019: Hire purchase liabilities) of the Group are payable as follows:
Interest
Future
minimum
lease
payments
2020
$000
7,220
2020
$000
(949)
Present
value of
minimum
lease
payments
2020
$000
6,271
Interest
Future
minimum
HP
payments
2019
$000
3,802
2019
$000
(448)
Present
value of
minimum
HP
payments
2019
$000
3,354
Less than 1 year
Between 1 & 5 years
17,694 (1,330)
16,364
7,329 (334)
6,995
24,914 (2,279)
22,635
11,131 (782)
10,349
Financing is arranged for major leasehold improvements, plant and equipment, and motor vehicle additions.
EQUITY
20. CAPITAL AND RESERVES
Share capital
Balance at the beginning of the year
Issued via Dividend Reinvestment Plan
Conversion of Performance Rights
Issued as consideration for business combinations
Deferred consideration
Balance at the end of the year
Issues of ordinary shares
2020
$000
2019
$000
2020
No. of
Shares
2019
No. of
Shares
43,051
40,887
370,014,589
345,358,386
-
-
134
1,696
-
468
-
8,428,718
1,183,240
9,249,495
2,456,141
6,977,990
942
-
31,597,316
44,127
43,051 405,251,286
370,014,589
On 2 July 2019, 828,848 ordinary shares were issued for $nil consideration on vesting of Performance Rights to a key
executive under the Veris FY17 Employee Incentive Scheme.
On 2 July 2019, 354,392 ordinary shares were issued for $nil consideration on vesting of Performance Rights to a key
executive under the Veris FY19 Employee Incentive Scheme.
On 14 August 2019, 2,105,264 ordinary shares were issued as an incentive for continued employment to key
personnel following the acquisition of Landdata in July 2017. The shares were issued for nil cash consideration with a
fair value of $0.057 per share.
On 2 October 2019, 350,877 ordinary shares were issued as an incentive for continued employment to key personnel
following the acquisition of Landdata in July 2017. The shares were issued for nil cash consideration with a fair value of
$0.057 per share.
On 29 April 2020, 31,597,316 ordinary shares were issued as deferred consideration pursuant to the sale of Elton
Consulting Group during the year. The shares were issued for nil cash consideration with a fair value of $0.0298 per
share.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
67
EQUITY (continued)
20. CAPITAL AND RESERVES (continued)
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.
The Group does not have authorised capital or par value in respect of its issued shares.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at meetings of the Group. All shares rank equally with regard to the Group’s residual assets.
Reserves
2020
2019
2020
2019
$000
Share Based
Payments
$000
Share Based
Payments
Balance at the beginning of the year
2,949
2,349
Profit / (loss) for the year
Dividends paid
Adoption of new standards
-
-
-
-
-
-
$000
Retained
Earnings/
(Accumulated
Losses)
$000
Retained
Earnings
(Accumulated
Losses)
(18,906)
(26,493)
-
-
24,967
(40,089)
(1,770)
(2,014)
Share based payment transactions
(421)
600 -
-
Balance at the end of the year
2,528
2,949 (45,399)
(18,906)
The retained earnings reserve represents profits of entities within the Group. Such profits are available to enable
payment of franked dividends in future years. No dividends were distributed during the year (2019: $1.8 million).
21. DIVIDENDS
There was no dividends paid or declared by the Company during the financial year, the dividend declared in the 2019
financial year amounted to $1,770,000.
Franking Credit Balance
The amount of franking credits available for the subsequent financial year are:
2020
$
2019
$
Franking account balance as at the end of financial year at 30% (2019: 30%)
5,535,898 5,535,898
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.
68
Notes to the Consolidated Financial Statements
EQUITY (continued)
22. SHARE-BASED PAYMENTS
(a) Share – Based Payment Arrangements
As at 30 June 2020, the Group had the following share-based payment arrangements.
(i) 2017 Performance Rights Plan
On 5 June 2017, the Group granted 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
828,848
1 July 2019
828,848
Vested
during the
Period (B)
828,848
Vesting Hurdles
50% TSR (C)
50% 3 Year Absolute EPS
Pooling (D)
<100%
Nil
< 6 c
Nil
100% <
180%
Pro-rata
vesting
between
25% and
100%
>6- <6.5 c
pro rata
vesting
between
25%-100%
828,848
180%
100%
6.5 c >
100%
-
-
(A) On vesting, Performance Rights will automatically convert to ordinary shares on a one for one basis. Performance Rights that do not vest will lapse.
An unvested Performance Right will lapse upon the earlier to occur of:
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.
i.
ii.
iii.
iv.
v.
vi.
(B) During the period, 828,848 Performance Rights vested on cessation of employment.
(C) Performance of management measured against an absolute shareholder return target of VRS.
(D) Performance management measured against a normalised EPS pooled approach setting an aggregate value of dollars of EPS that must be achieved
over the three years (i.e. a pool consisting of year 1 EPS plus year 2 EPS plus year 3 EPS.
(ii) 2019 Performance Rights Plan
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:
Balanced Scorecard and Weightings
Financial
Budgeted EBITDA
(14%)
Market
Absolute EPS
(19%)
Individual
KPI’s
(20%)
Values
Behaviours
(5%)
Veris Limited - Annual Report 2020
Notes to the Consolidated Financial Statements
69
EQUITY (continued)
22. SHARE-BASED PAYMENTS (continued)
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
354,392
1 July 2019
354,392
-
-
Vested
during the
Period (B)
354,392
Vesting Hurdles*
60% TSR (C)
40% 3 Year Retention (D)
<75%
Nil
Yr 2
75% <
120%
Pro-rata
vesting
between
25% and
100%
Yr 3
1/3
1/3
1/3
354,392
120%
100%
Yr 4
* 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.
(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:
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.
i.
ii.
iii.
iv.
v.
vi.
(B) Vested on cessation of employment.
(C) Performance of management measured against an absolute shareholder return target of VRS.
(D) Based on continued employment and disposal restrictions.
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.
Number of
Performance Rights
Granted
Vesting Date (A)
Lapsed
Vested
Vesting Hurdle (B)
1,085,327
30 June 2021
-
-
2 Year Retention
(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:
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.
i.
ii.
iii.
iv.
v.
vi.
(B) Based on continued employment for two years to 30 June 2021.
70
Notes to the Consolidated Financial Statements
EQUITY (continued)
22. SHARE-BASED PAYMENTS (continued)
(iii) 2020 Performance Rights Plan
On 29 October 2019 the Group granted 1,000,000 Performance Rights to the CEO of Veris Australia on commencement
of his employment will vest subject to his continued employment over a two year period and subject to achievement of
an increase in Veris Australia’s EBITDA margin by 40% or greater.
Number of
Performance Rights
Granted
Vesting Date (A)
Lapsed
Vested
Vesting Hurdle (B)
1,000,000
29 October 2021
-
-
2 Year Retention and
increase in EBITDA
margin by 40%
(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:
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.
i.
ii.
iii.
iv.
v.
vi.
(B) Based on continued employment for two years to 29 October 2021.
(b) Measurement of Fair Values of Share-Based Payments
During the period, 1,000,000 Performance Rights were issued to a member of the key management personnel
(2019: 3,717,145). The Performance Rights will vest into fully paid ordinary shares subject to the individuals continued
employment as at 29 October 2021 (2 year retention) and the achievement of an increase in Veris Australia’s EBITDA
margin by 40% or greater. The measurement of the Fair Values of the Share-Based Payments is the Veris Share Price at
the effective Grant date.
Subsequent to the period end 3,371,334 Performance Rights were issued to key management personnel and senior
management as a discretionary bonus based on behaviours and the individual’s contribution to the FY20 financial
year. These Performance Rights were issued post the reporting period. The Performance Rights will vest into fully
paid ordinary shares subject to the individuals continued employment as at 30 June 2021 (1 year retention). The
measurement of the Fair Values of the Share-Based Payments is the Veris Share Price at the effective Grant date.
(c) Unvested Unlisted Performance Rights
1,085,327 Performance Rights issued in April 2019 to senior management remain unvested at 30 June 2020 (2019: Nil).
1,000,000 Performance Rights issued in October 2019 to a member of the key management personnel remain unvested
at 30 June 2020 (2019: Nil). 3,371,334 Performance Rights issued in August 2020 to Senior Management remain
unvested at 30 June 2020 (2019: Nil).
Veris Limited - Annual Report 2020
Notes to the Consolidated Financial Statements
71
OTHER INFORMATION
23. RELATED PARTIES
Key management personnel compensation
The key management personnel compensation included in ‘employee benefits’ is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payment
Termination benefit - Cash
Termination benefit – Share-based
2020
2019
$
$
1,488,267
1,485,240
100,658
46,903
162,247
99,750
2,377
363,385
-
18,874
1,798,075 1,969,626
During the year, the Company did not have or repay any loans from related parties (2019: $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 29 to 39.
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
Balance outstanding
as at 30 June
2020
$
2019
$
2020
$
2019
$
104,261 372,514 -
104,261 372,514
(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.
24. AUDITOR’S REMUNERATION
Audit and review services
KPMG
Audit and review of financial reports
Integration
2020
$
2019
$
250,000
226,448
-
8,724
250,000 235,172
72
Notes to the Consolidated Financial Statements
GROUP STRUCTURE
25. 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
26. DEED OF CROSS GUARANTEE
Country of
Incorporation
Ownership Interest
2020
%
2019
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Pursuant to ASIC Corporation (wholly-owned companies) Instrument 2016/785, all the wholly-owned subsidiaries of
Veris Limited are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial
reports, and Directors’ report.
It is a condition of the Instrument that the Company and each of the subsidiaries (referenced in Note 25) 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 2020, after eliminating all transactions
between parties to the Deed of Cross Guarantee, as of and for the year ended 30 June 2020 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 2020.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
73
GROUP STRUCTURE (continued)
27. PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ended 30 June 2020 the parent Company of the Group was Veris Limited.
Results for the Year
(Loss) / Profit for the year
Other comprehensive income
2020
$000
2019
$000
(23,344)
(35,000)
-
-
Total comprehensive profit / (loss) for the year
(23,344)
(35,000)
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
ACCOUNTING POLICIES
28. BASIS OF PREPARATION
2020
$000
9,299
19,117
(7,259)
(17,974)
2019
$000
8,504
48,847
(14,774)
(26,273)
44,127
43,051
(42,984)
(20,477)
1,143 22,574
(a) Presentation Currency
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.
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.
74
Notes to the Consolidated Financial Statements
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(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.
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.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
75
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Financial Instruments (continued)
(i) Non-derivative financial assets (continued)
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.
Expected credit loss
From 1 July 2019, the Group assesses on a forward looking basis the expected credit losses associated with its financial
assets measured at amortised cost, contract assets and debt instruments at Fair Value through Other Comprehensive
Income (FVOCI) but not to investments in equity instruments. The Group applies the simplified approach permitted by
AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the 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.
76
Notes to the Consolidated Financial Statements
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognised in profit or loss.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be
measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of
property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is recognised in profit or loss on either a straight-line or diminishing value basis over the estimated useful
lives of each part of an item of property, plant and equipment. Items of property, plant and equipment are depreciated
from the date that they are installed and are ready for use.
The depreciation rates for the current and comparative periods are as follows:
Plant and equipment
Motor vehicles
Leasehold Improvements
Property
14-33%
14-33%
20%
8-20%
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.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
77
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Intangible Assets and Goodwill (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.
78
Notes to the Consolidated Financial Statements
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
Impairment (continued)
(ii) Non-financial assets (continued)
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the
carrying amount of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in
prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on a
pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and employee benefit
assets, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial
classification as held for sale and subsequent gains of losses on re-measurement are recognised in profit or loss. Gains
are not recognised in excess of any cumulative impairment loss.
Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or
depreciated.
(f) Employee Benefits
(i) Other long-term employee benefits
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees
have earned in return for their service in the current and prior periods plus related on-costs. That benefit is discounted to
determine its present value.
(ii) Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
(iii) Share-based payment transactions
The grant date fair value of rights granted to employees is recognised as an employee expense, with a corresponding
increase in equity, over the period that the employees become unconditionally entitled to the options. The amount
recognised as an expense is adjusted to reflect the actual number of performance rights for which the related service
and non-market vesting conditions are met.
Provisions
(g)
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.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
79
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h) Revenue
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. Construction
contract revenue is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting
date. The stage of completion is assessed by reference to surveys of work performed.
Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and
incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As
soon as the outcome of a 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) Contract Assets
Contract assets 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) 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.
(k) 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.
80
Notes to the Consolidated Financial Statements
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k) Income Tax (continued)
(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.
(iii) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from,
or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash flows are included in the
statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing
activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(l) 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.
(m) Segment Reporting
The Group determines and presents operating segments based on the information that internally is provided to the
CEO’s, 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.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
81
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Government Grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be received. As a result of the ongoing COVID-19 pandemic, the
Group received government assistance in the form of wage subsidies under the Australian JobKeeper program.
Government grants are recognised in the statement of profit and loss on a systematic basis over the periods in which
the Group recognises as expenses the related costs for which the grants are intended to compensate.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of
giving immediate financial support to the Group with no future related costs are recognised in the statement of profit or
loss in the period in which they become receivable.
(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 2019.
AASB 16 Leases
AASB 16 Leases specifies how to recognise, measure and disclose leases and applies to annual reporting periods
beginning on or after 1 July 2019. Previously, under AASB 117, the Group classified leases as operating or finance
leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to
ownership of the underlying asset to the Group. The new AASB 16 standard replaces AASB 117 Leases, and the related
interpretations, and provides a single lessee accounting model, requiring lessees to recognise right-of-use assets and
lease liabilities for almost all leases but will have the option not to recognise ‘short-term’ leases and leases of ‘low-value’
assets.
The Group recognised all lease liabilities and corresponding right of use assets, with the exception of short-term (12
months or fewer), low value leases and practical expedients allowed under the standard, on the balance sheet. Right
of use assets are measured at either their carrying amount as if AASB 16 had been applied since their commencement
date, discounted using the Group’s incremental borrowing rate at the date of initial application or an amount equal to the
lease liability, adjusted by the amount of any prepaid or accrued lease payments.
Lease liabilities are recorded at the present value of: fixed payments; variable lease payments that depend on an index
or rate; amounts paid under residual value guarantees; and extension options expected to be exercised. Where a lease
contains an extension option which the Group can exercise without negotiation, lease payments for the extension period
are included in the liability if the Group is reasonably certain that it will exercise the option.
Variable lease payments not dependent on an index of rate are excluded from the calculation of the lease liabilities.
Payments are discounted at the incremental borrowing rate of the lessee, unless the interest rate implicit in the lease
can be readily determined. For lease agreements relating to properties, certain non-lease components are excluded
from the projection of future lease payments and are recorded separately within operating costs. The right of use asset,
resulting from a lease arrangement, at initial recognition reflects the lease liability, initial direct costs and any lease
payments made before the commencement date of the lease less any lease incentives.
The Group recognises depreciation of right of use assets and interest on lease liabilities in the income statement over
the lease term. Right of use assets are included in the review for impairment of property, plant and equipment and
intangible assets with finite lives, if there is an indication that the carrying amount of the cash generating unit may not
be recoverable.
82
Notes to the Consolidated Financial Statements
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 16 Leases (continued)
The nature of the Group’s leasing activities includes leasing of office space, leasing of IT equipment and leasing of motor
vehicles.
Impact of transition to AASB 16 ‘Leases’
The Group implemented the standard as at 1 July 2019 using the modified retrospective approach. Accordingly, the
comparative information presented for FY19 is not restated.
The impact of transition to AASB 16 on the Group’s 1 July 2019 balance sheet is an increase in lease liabilities (debt) of
$19,792,000, an increase in right of use assets of $19,792,000.
The weighted average incremental borrowing rate applied to the Group’s lease liabilities recognised in the balance sheet
at 1 July 2019 is 4.55%.
Discounted operating lease commitments using incremental borrowing rate at 1 July 2019
Finance lease liabilities recognised as at 30 June 2019
Additional lease liabilities from adopting AASB 16
Lease liabilities recognised at 1 July 2019
Comprising:
Current
Non-current
The newly recognised right-of-use assets relate to the following type of assets:
Property
Motor Vehicles
Plant and Equipment
30 June
2020
$000
1 July
2019
$000
14,479
10,349
5,313
30,141
6,271
7,122
16,364
23,019
22,635
30,141
June 2020
July 2019
$000
14,600
2,113
$000
17,379
2,121
186
292
16,899
19,792
The change in accounting policy affected the following items on the statement of comprehensive income during the
period:
-
Interest expense on lease liabilities – increase by $798,000.
- Depreciation expense – increase by $4,573,000.
The change in accounting policy affected the following items in the statement of cash flows during the period:
- Decrease in operating cash outflows $4,675,000.
-
Increase in financing cash outflows $4,675,000.
- Effect on cash and cash equivalents $nil.
Veris Limited - Annual Report 2020 Notes to the Consolidated Financial Statements
83
ACCOUNTING POLICIES (continued)
29. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In applying AASB 16 for the first time, the Group has used the following practical expedients permitted by the standard:
- The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
- The accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-
term leases.
- The exclusion of low-value assets.
- The exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application.
- The use of hindsight in determining the lease term where the contract contains options to extend or terminate the
lease.
30. NEW STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE
A number of new standards are effective for annual periods beginning after 1 January 2020 and earlier adoption is
permitted, however, the Group has not elected early adoption of the new or amended standards in preparing these
consolidated financial statements.
The following amended standards and interpretations have not yet been assessed by the Group but are not expected to
have a significant impact on the Group’s consolidated financial statements:
- Amendments to References to Conceptual Framework in AASB standards.
- Definition of a Business (Amendments to AASB 3).
- Definition of Material (Amendments to AASB 101).
31. 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
84
Notes to the Consolidated Financial Statements
ACCOUNTING POLICIES (continued)
31. DETERMINATION OF FAIR VALUES (continued)
(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.
Veris Limited - Annual Report 2020 Directors’ Declaration
85
1.
In the opinion of the Directors of Veris Limited (“the Company”):
(a)
the consolidated financial statements and notes set out on pages 42 to 84 and the Remuneration report on
pages 29 to 39 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 2020 and of its performance for
the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2. There are reasonable grounds to believe that the Company and the Group entities identified in Note 25 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.
3. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and the Chief FinancialOfficer for the financial year ended 30 June 2020.
4. The Directors draw attention to page 46 to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Karl Paganin
Chairman
Dated at Perth 31 August 2020
86
Independent Auditor’s Report
Veris Limited - Annual Report 2020 Independent Auditor’s Report
87
88
Independent Auditor’s Report
Veris Limited - Annual Report 2020 Independent Auditor’s Report
89
90
Independent Auditor’s Report
Veris Limited - Annual Report 2020 Additional Information
91
Additional Information per ASX Listing Rules - Unaudited
Additional information requires by ASX Listing Rules and not disclosed elsewhere in this report is set out below.
Corporate Governance Statement
The Group’s Corporate Governance Statement can be found at:
https://www.veris.com.au/media/2900/corporate-governance-statement-2020.pdf
Shareholder Information as at 24 August 2020
Top 20 Shareholders of Quoted Securities
Rank Name
Shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
OCEAN TO OUTBACK ELECTRICAL PTY LTD
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