Annual Report 2022

CONNECTING THE FUTURE

Built on a bedrock of three generations of accumulated family expertise, today the GenusPlus Group is a leading ASX-listed provider of critical infrastructure services to a blue-chip client base.

We provide an integrated service delivered through key complementary businesses to our clients in the resources, power, utilities, and telecommunications sectors across Australia.

About GenusPlus Group	2
Our Capabilities	4
Highlights	8
Chairman’s Review	10
Managing Director’s Report	12
Sustainability	16
People	17
Financial Report	21
Corporate Directory	100

ANNUAL REPORT 2022 1

About Genus

CONNECTING THE FUTURE

GenusPlus Group (ASX:GNP) is an end to end service provider for essential power and communications infrastructure.

We provide an integrated service delivered through key complementary businesses to our clients in the resources, power, utilities, and telecommunications sectors across Australia.

Built on a bedrock of three generations of accumulated family expertise, today the GenusPlus Group is a leading ASX-listed provider of critical infrastructure services to a blue-chip client base.

2 GENUSPLUS GROUP LTD

DESIGN & ENGINEERING

CONSTRUCTION

FEASIBILITY STUDY

TESTING & COMMISSIONING

DECOMMISSIONING

SHUTDOWNS & MAINTENANCE

CONNECTING THE FUTURE THROUGH INNOVATIVE POWER SOLUTIONS

Our Services

We cover the full project life-cycle, from design and engineering to commissioning and decommissioning of power infrastructure assets. Our expertise crosses multiple sectors and our teams are experienced operators in both brownfield and greenfield sites across Australia.

ANNUAL REPORT 2022

Our team optimises every stage of an asset’s lifecycle, ensuring certainty with the lowest risk and whole-of-life cost. We draw on experience to continually develop advanced solutions which position projects to transition as technology develops.

Our clients include Australia’s largest electricity utilities, infrastructure developers, telecommunications networks and major mining companies. We have delivered projects throughout Australia and across metropolitan, regional & remote areas.

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GENERATING SOURCE

TERMINAL SUBSTATIONS

TRANSMISSION INFRASTRUCTURE

Power Station/ Solar E&I Construction

Wind

Battery Storage/ Hybrid Solutions

Terminal Substations

Overhead Underground Transmission Transmission Infrastructure Infrastructure

4 GENUSPLUS GROUP LTD

4 5

ZONE DISTRIBUTION SUBSTATIONS INFRASTRUCTURE

PRIMARY CUSTOMER CONNECTION

Zone Overhead Underground Primary Customer Substations Distribution Distribution Connection Infrastructure Infrastructure

ANNUAL REPORT 2022

COMMUNICATIONS

Our turnkey communications solutions span the full asset lifecycle from feasibility, engineering design, site acquisition, logistics, procurement, construction and integration through to operations and maintenance.

We focus on improving asset performance and reducing the risk associated with disruption to operations.

NETWORKS: FROM CONCEPT TO CONSTRUCTION

CIVIL & INFRASTRUCTURE CONSTRUCTION

Complete network designs
Line route selection & optimisation
Experienced field delivery capability
Field services from planning & design through to construction & maintenance
Direct ploughing & optic fibre installation
Directional drilling
Trenching
Cable hauling & cable jointing
Pit & pipe installation
Asset installation

6 GENUSPLUS GROUP LTD

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MOBILE & WIRELESS INFRASTRUCTURE

DIGITAL SOLUTIONS

Field services covering site acquisition, engineering & and design (SAED), construction & install
Extending mobile construction capability to grow into mobile blackspots, 5G and beyond
Dedicated Workforce Operations Centre and field management platform (WFM)
Data analytics toolsets
Virtual assessment, technician mobility apps
Proprietary app connecting to customers

ANNUAL REPORT 2022

2022 HIGHLIGHTS

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8 GENUSPLUS GROUP LTD

29%

$451 million

Revenue of $451 million Up 42% on PCP of $318 million

$27.9 million

Cash balance of $27.9 million Net cash of $6.8 million

$35.1 million Normalised EBITDA of $35.1 million Up 8.3% on PCP of $32.4 million

$488 million Orderbook of $304 million in FY2023 and $184 million in FY2024

Normalised ROCE ROCE normalised for PFA acquisition/ Capital raise in February 2022

ANNUAL REPORT 2022 9

A Strong Year In Challenging Times

REVIEW

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Genus produced a strong financial result this year, despite economic, supply chain and Covid-19 headwinds. Our diversification and growth strategy is on track, and with a record order book and pipeline we have a solid base for future organic growth.

Revenue for the year was in line with forecast, rising 42% to $451 million while normalised EBITDA increased by 8% to $35.1 million. This result reflects solid performances across all our business segments and was underpinned by a record order intake.

Pleasingly we grew our market presence on the East Coast with operations in the region now representing a collective portfolio of over $100m, with a revenue contribution of 22% compared to 7% in 2021. This marks the achievement of a number of key strategic goals that we had established for 2022, with this East Coast growth expected to continue.

The acquisitions of Connect Infrastructure (NSW) and select business assets of Tandem Corp have been successfully integrated into existing operations throughout the year, bolstering our power networks and communications offerings respectively. In February we announced the business acquisition of Pole Foundations Australia (PFA). PFA is a strategic transaction for Genus, expanding our capability into a highly specialised service for Tier 1 customers and allowing us to provide a full lifecycle service offering across pole inspection, reinforcement, and replacement.

Genus also acquired a 50% stake in Blue Tongue Energy Pty Ltd (BT Energy) during the year. BT Energy specialises in the design and construction of hybrid power technology and micro-grid energy markets and provides growth opportunities in the stand-alone power market.

CONNECTING THE FUTURE THROUGH INNOVATIVE POWER AND COMMUNICATIONS INFRASTRUCTURE

10 GENUSPLUS GROUP LTD

Think Safe. Work Safe. Home Safe.

We continue with our steadfast commitment to safety and our goal of zero harm to our people and the environment . As we strive to achieve this critical objective, we are actively promoting and encouraging all of our people to take individual responsibility for their safety, as well as the safety of those around them, as they carry out their daily activities.

Our focus on safety and the conduct of safety-awareness initiatives throughout the year have continued to strengthen our safety culture and deliver improvements in our performance. This is demonstrated by our Total Recordable Injury Frequency Rate (“TRIFR”), which reduced in the year from 7.7 to 3.6 at 30 June – surpassing our internal target. The Group’s Lost Time Injury Frequency Rate (“LTIFR”) remains at zero, which is testament to the collective effort of our outstanding operational teams.

A Robust Platform For Growth

We ended the year in a strong financial position with a cash balance of $27.9 million and net cash of $6.8 million, with the Group’s net assets increasing by 61.9% compared to the previous year. The Group has in excess of $47 million available in our performance bond facilities which provides headroom for continued growth.

The continued strength of our balance sheet positions us for organic growth and strategic acquisition opportunities focused on increasing our existing scale, improving our operating margins, further growing our east coast presence and potentially expanding into new markets or geographies.

Continuing To Deliver For Shareholders

On the back of this year’s record financial performance, the Board has again declared a final dividend of 1.8 cents per share fully franked.

Looking Ahead

With a tender pipeline of $848 million; an order book standing at $488 million; budget and opportunity leads in excess of $2 billion; and a workforce approaching 1,000, our growing and diversified company is well placed to capitalise on opportunities in the years to come.

We are confident that our consolidation and growth strategy positions us positively to play a major role in the expanding pipeline of infrastructure opportunities across Australia.

My thanks once again to all of our talented people, whose commitment and dedication forms the foundation of our business and to our executive leadership who ensure we deliver on our vision.

Finally, I would like to thank you, our shareholders, for continuing to be an integral part of the Genus story - and I trust you will continue to share in our future success.

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Simon High Chairman

Our strategic diversification has delivered significant organic and acquisitional growth, as we maintain a focus on east coast expansion and recurring revenue streams.

ANNUAL REPORT 2022 11

Delivering On Our Strategy

REPORT

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POWERING UP AUSTRALIA THROUGH STRONG, EFFECTIVE CLIENT RELATIONSHIPS

For Genus, FY22 has been a solid year. Our ability to meet the challenges of prevailing economic & supply chain issues and deliver another strong financial performance demonstrates that we are on track strategically; and well positioned to capitalise on emerging opportunities across Australia.

Our evolution to a more diversified services model through the introduction of significant communications infrastructure capacity – supplementing our existing power and industrial services capabilities – has seen Genus deliver record revenue of $451 million and normalised EBITDA of $35.1 million.

The Group’s focus on both acquisitive and organic growth along with diversification of recurring revenue streams underpin the benefits we can deliver to clients and our shareholders, predominantly through increased capacity, financial strength and security.

This expansion in capability and access to a greater forward pipeline has driven a strong order book, which is again supplemented by the traditionally robust recurring revenue base that we generate across the business.

Record Revenue, Through Strong Operational Performance

This past year saw us progress to the final stages of the Pilbara Transmission & Iron Bridge Projects for Fortescue; while other major project activity included the Kangaroo Hill D&C Project for Rio Tinto, achievement of key milestones at the landmark 250 MW/h Kwinana Battery Energy Storage System (BESS) Project for Synergy and successful delivery of multiple Underground Power Program (UPP) projects for Western Power. Meanwhile, anticipated recurring works for major utilities across Australia will continue to provide ongoing revenue in the years ahead.

Against this backdrop, the Group was able to deliver a year of significant growth despite the prevailing environment. Record Revenue of $451 million saw an increase of 42% on the prior comparative period, while normalised EBITDA was up 8.3% to $35.1 million. The Group’s net assets also increased by 61.9% compared to the previous year (FY21: 32%), due to the increase in retained earnings and the capital raising conducted to fund the strategic acquisition of Pole Foundations Australia (PFA).

Genus’ growth strategy is on track and we are well placed to capitalise on emerging opportunities across the nation. Our growth aspirations are supported by record revenue, a strong tender pipeline and a robust balance sheet.

12 GENUSPLUS GROUP LTD

EBIT and NPAT were impacted by amortisation of intangible assets acquired from the acquisitions of Tandem and PFA totalling circa $1.6 million before tax. A larger than usual year of capital expenditure used to bolster the fleet of drills employed in drilling the foundations for power poles contributed additional depreciation expense of circa $1.1 million before tax.

	FY2022	FY2021	Change
	$	$	%
Revenue	450,936,669	318,207,504	41.7%
EBITDA1	32,994,800	27,274,044
EBITDA Normalised2	35,109,457	32,405,782	8.3%
EBIT1	21,092,868	19,858,515
EBIT Normalised2	23,207,525	24,992,253	(7.1%)
NPAT	13,556,474	13,348,769
NPAT Normalised2	15,036,735	17,300,033	(13.1%)

1 These are non-IFRS measures that are unaudited but derived from auditor reviewed FY22 Financial Statements. These measures are presented to provide further insight into GenusPlus Group’s performance.
2 FY 2022 Normalised EBITDA / EBIT / NPAT excluding Acquisition costs $1.1 million, ECM Claim Costs $0.3 million and Restructuring costs of $0.8 million. FY 2021 Normalised EBITDA / EBIT / NPAT excluding Listing costs of $2.7 million, ECM Claim costs of $2.2 million, Director & employee share issue costs of $0.7 million and Mark to market revaluation increase of investment of ($0.5) million.

Our People

As always, our success is dependent on the effort, capability and commitment of our people. Their commitment and support enables us to continue to deliver smart, innovative solutions across our diverse sectors, which underpins our strong financial results and growth trajectory.

Our successful apprenticeship program has expanded as we continue to invest in the growth, development, education and training for young graduates, apprentices and trainees. We currently support the career ambitions of 87 apprentices and trainees, which is building a strong foundation of future skilled tradespeople.

Our balance sheet remains strong with very low levels of debt and strong investor and finance support. We are constantly reviewing opportunities for expansion and are well placed for further accretive acquisitional growth.

Significant investment has been allocated to growing our east coast presence, positioning Genus to benefit from the stepchange in power network expansions over the next 10-20 years.

Whilst we continue to derive the majority of earnings from the core business in Western Australia, substantial progress has been made expanding the business into the much larger east coast markets.

Connecting The Future. Together.

With an order book of $488 million, comprising $191 million of contracted revenues secured for FY2023 & FY2024 and recurring revenues currently at $149 million p.a - combined with a tender pipeline of $848 million – Genus has a strong platform for continued growth.

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David Riches Managing Director

ANNUAL REPORT 2022 13

14 GENUSPLUS GROUP LTD

SUSTAINABILITY

INNOVATIVE PEOPLE, DELIVERING RESULTS THROUGH EXPERTISE AND HARD WORK

ANNUAL REPORT 2022 15

SUSTAINABILITY

We will continue to implement health and safety initiatives which provide the foundation for a sustainable safety culture.

SHEQ

With nearly 1,000 people working across Australia, it is essential for Genus to have a robust approach to health, safety and environment.

Our goal is to ensure that those influenced by our work (including employees, subcontractors, and the general public) go home safely, every day. This approach to health and safety is embodied in the Group’s “Think Safe. Work Safe. Home Safe.” message.

We have established and implemented an integrated safety, health, environment, and quality (SHEQ) management system that provides the framework for how these areas are managed.

In the years ahead we will continue to maintain our triple-ISO Management System certification (45001, 14001 & 9001) and to streamline our Group-wide SHEQ management system.

We will also continue to implement health and safety initiatives that will provide the foundation for sustainable safety performance across Genus.

We have established a set of safety non-negotiables, which identify the Group’s most critical risks and control measures. These safety non-negotiables were established to increase awareness and understanding of critical risks and control measures; provide a clear set of standards that are easily understood by all; and ultimately create an awareness to help prevent serious workplace injury and fatality. These safety non-negotiables are communicated at inductions, and regularly referred to during toolboxes, health, and safety communications and during incident investigations.

Community

Genus continues to recognise the importance of building relationships and supporting the communities in which we operate, and we are committed to the development, health, safety and wellbeing of these communities and our people.

During the year we continued to support a variety of local charities, education and sporting programs.

Earlier this year, we were delighted to be able to help Starlight's Western Australia operations through an $80,000 donation which enabled their fantastic team to lease state-ofthe-art office space in the heart of Subiaco, Western Australia. It will also assist them to brighten the hospital experience for 2,000 sick kids in their Starlight Express Room.

This new home will give the team the base they need to keep on helping kids of all ages regardless of disability, injury or illness.

CONNECTING THE FUTURE. TOGETHER.

Milestones achieved during FY22 include:

0 LTIFR at 30 June 2022

3.6 TRIFR at 30 June 2022

(exceeding our internal target)

16 GENUSPLUS GROUP LTD

Employing our own people and trades improves safety, quality and productivity and enables us to deliver smart, innovative solutions across our diverse sectors.

People

The foundation of our success is the effort, capability and commitment of our people.

Our unique culture underpinned by core values of safety, integrity, collaboration and mateship is a crucial piece of the Group’s competitive advantage.

Genus’ business is built on the efforts and capability of its employees and we firmly believe that support and development of our workforce remain a priority in delivering our critical services.

Investing in the future generation of employees is integral to our continued success. Genus believes in realising and developing talent with a structured and supported Apprenticeship Program. We currently support the career ambitions of 87 apprentices and trainees across the business who will form the foundation of our future skilled tradespeople.

The attraction of high calibre employees is an ongoing challenge and there continues to be a very competitive employment market for skilled professionals. Combined with a continued focus on people-related productivity improvements, Genus will continue to invest in the development and retention of key capability and talent to enable the Company to successfully achieve its vision and to maintain this vital competitive advantage.

We remain committed to investing in our employees through generating opportunities to grow on personal and professional levels, through varied learning and development programmes for apprentices, trades, operational, professional and managerial employees. This creates a significant pipeline of talent throughout the Company.

Our diversity policies promote respect and fair treatment for all employees, and we seek to create an all-inclusive workplace where our people are encouraged regardless of age, gender, ethnicity, disability, sexual orientation or religion.

Our commitment to building a diverse workforce is evident in all aspects of employee engagement including recruitment, professional development, promotion and remuneration.

Genus & Maali Group – Sparking Positive Change.

Genus is a key shareholder in Maali Group - a multi-disciplined, Aboriginal-owned & managed construction and maintenance contractor servicing clients across the resources, energy, infrastructure and defence sectors. Through our combined strength and breadth of capability, our partnership aims to facilitate more apprenticeships, traineeships and career opportunities for Aboriginal and Torres Strait Islander people. Together, our vision is to set a new benchmark in Aboriginal career engagement and development. Learn more at maaligroup.com.

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ANNUAL REPORT 2022 17

CONNECTING THE FUTURE THROUGH END-TO-END COMMUNICATIONS INFRASTRUCTURE

18 GENUSPLUS GROUP LTD

ANNUAL REPORT 2022 19

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022

FINANCIAL REPORT 2022

CONNECTING THE FUTURE THROUGH INNOVATIVE POWER SOLUTIONS

20 GENUSPLUS GROUP LTD

Directors’ Report	22
Auditor’s Independence Declaration	33
Corporate Governance Statement	34
Consolidated Statement of Proft or
Loss and Other Comprehensive Income	35
Consolidated Statement of Financial Position	36
Consolidated Statement of Changes in Equity	37
Consolidated Statement of Cash Flows	38
Notes to the Consolidated Financial Statements	39
Independent Auditor’s Report	94

POWERING UP AUSTRALIA - FROM INSPIRATION TO OPERATION

ANNUAL REPORT 2022 21

DIRECTORS’ REPORT

The directors present their report together with the financial statements on the consolidated entity, consisting of GenusPlus Group Ltd and its controlled entities (the Group) for the year ended 30 June 2022.

Directors’ details

The names and details of the Company’s directors in office during the financial year and until the date of this report are set out below. Directors of GenusPlus Group Ltd were in office for the entire period unless otherwise stated.

Mr David Riches

David Riches is the Managing Director and CEO of GenusPlus Group Ltd. David is the founder of Powerlines Plus Pty Ltd and is a third-generation recognised industry expert. David has led the business growth with a successful year on year track record.

During the past three years he has also served as a director of the following listed companies: Nil.

Mr Simon High

Simon High is the Non-Executive Chairman of the Group. Simon is a qualified Civil Engineer, Fellow of the Institute of Engineers Australia and Fellow of the Australian Institute of Company Directors.

Simon has over 45 years’ experience globally in the Oil & Gas, Mining and Industrial Infrastructure industries. Simon held Senior Executive roles with Kvaerner Oil & Gas, United Construction, Clough Ltd, Southern Cross Electrical Engineers and Ausgroup Ltd.

During the past three years he has also served as a director of the following listed companies: Nil.

Mr José Martins

José Martins is a Non-Executive Director and Member of the Audit and Risk Committee and Remuneration and Nominations Committees and brings over 25 years’ experience in the financial management of public and private companies. Jose is the former CFO of ASX listed Ausdrill Ltd and Macmahon Holdings Ltd. José is the current CFO of Alliance Mining Commodities.

During the past three years he has also served as a director of the following listed companies: Nil.

Mr Paul Gavazzi

Paul Gavazzi is a Non-Executive Director and member of the Audit and Risk and Remuneration and Nominations Committees. Paul has over 35 years’ experience in commercial law, specialising in construction, projects and infrastructure. Paul is a senior partner of law firm Sparke Helmore Lawyers. Paul is an associate of the Chartered Institute of Arbitrators (UK), member of the Society of Construction Lawyers and member of the Australian Institute of Company Directors.

During the past three years he has also served as a director of the following listed companies: Nil.

Company Secretary

Damian Wright is the Chief Financial Officer and Company Secretary of GenusPlus Group Ltd. Damian has held senior finance positions including CFO and Company Secretary for private and ASX listed entities. Damian holds a Degree in Commerce, and is a fellow of CPA Australia and a fellow of the Governance Institute of Australia.

Interests in the shares and options of the Company and related bodies corporate

As at the date of this report, the interests of the directors in the shares and options of GenusPlus Group Ltd were:

	Number of	Interest in
Director	ordinary shares	options
David Riches	92,583,947	-
Simon High	304,167	-
José Martins	100,000	-
Paul Gavazzi	204,167	-

22 GENUSPLUS GROUP LTD

DIRECTORS’ REPORT

Principal activities

The principal activities of the Group during the financial year were the installation, construction and maintenance of power and communication systems.

There have been no significant changes in the nature of these activities during the year.

Review of operations and financial results

A review of the operations of the Group during the financial year and the results of those operations saw an increase in contract revenue from $318,207,504 to $450,936,669. The profit of the Group for the financial year after providing for income tax amounted to $13,556,475 (2021: $13,348,769).

FY2022 was a strong year with Genus achieving guidance despite the challenges of Covid-19, extremely wet weather seen across NSW and Queensland particularly in the second half, and supply chain issues seen across the country. The turnaround in communications division has been slowed by the delays in the HyperOne project. The Group improved its capability to deliver to meet customer requirements on larger scale projects across the nation. The 1.56% increase in profit was delivered during a year in which the company completed a number of acquisitions and continued its significant investment in the east coast in setting the company up to capitalize on the significant opportunities as they present over the medium to long term.

The Group’s net assets increased by 61.9% compared to the previous year (FY21: 32%), which is due to the increase in retained earnings and the capital raising undertaken during the reporting period to fund the business acquisition of Pole Foundations Australia.

The acquisitions which have occurred during the year are in line with the Group’s strategy to increase its geographical position to take advantage of significant infrastructure investment in new markets. Refer to Note 35.

A comparison of the Group’s performance from continuing operations is set out below:

	FY2022	FY2021	Change
	$	$	%
Revenue	450,936,669	318,207,504	41.7%
EBITDA1	32,994,800	27,274,044
EBITDA Normalised2	35,109,457	32,405,782	8.3%
EBIT1	21,092,868	19,858,515
EBIT Normalised2	23,207,525	24,992,253	(7.1%)
NPAT	13,556,474	13,348,769
NPAT Normalised2	15,036,735	17,300,033	(13.1%)

1 These are non-IFRS measures that are unaudited but derived from auditor reviewed FY22 Financial Statements. These measures are presented to provide further insight into GenusPlus Group’s performance.

2 FY 2022 Normalised EBITDA / EBIT / NPAT excluding Acquisition costs $1.1 million, ECM Claim Costs $0.3 million and Restructuring costs of $0.8 million. FY 2021 Normalised EBITDA / EBIT / NPAT excluding Listing costs of $2.7 million, ECM Claim costs of $2.2 million, Director & employee share issue costs of $0.7 million and Mark to market revaluation increase of investment of ($0.5) million.

Pipeline

The Group continues to achieve significant growth in its business underpinned by existing contracted work, recurring revenue from regular clients, and anticipated revenue from its existing tender pipeline of works.

In addition to revenue from recurring works including long term customer/panel revenue and revenue from long term supply & maintenance contracts of $149 million, GenusPlus has a project orderbook of $155 million revenue for FY2023 and a further $36 million revenue for FY2024 based on expected revenue from contracts awarded.

GenusPlus has approximately $191 million of contracted revenues secured for FY2023 & FY2024 which, when combined with its history of recurring revenues currently at $149 million per annum and its current $848 million tender pipeline, provides a strong platform for continued growth.

In addition to the tendered pipeline there are further significant budgets and opportunities in progress in excess of $2 billion. Work on initial budgets for clients, which are not yet at formal tender stage, is common in our industry.

Genus is seeing the pipeline for the transition of the east coast transmission network grow substantially. In addition to the major investment in the transmission network around Australia Genus is well positioned to construct connections to the new transmission network from new energy power sources.

ANNUAL REPORT 2022 23

DIRECTORS’ REPORT

Review of operations and financial results (continued)

Outlook

FY2023 is anticipated to be a year of consolidation and integrating recent acquisitions following a number of significant years of growth. Genus expect to return to strong growth in the medium term with a large pipeline of renewables and transmission projects to drive medium to long term growth in the business.

The Group expects to see continued growth from its east coast operations and increase in services revenue with the acquisition of Tandem and PFA during FY2022. The increase focus of the network issues around Australia should see significant opportunities present during the coming 10-20 years as the Australian power network goes through a substantial transition from traditional energy source of coal to generation from new and renewable energy.

We have seen some impact from supply chain issues and we expect them to continue into FY2023.

Genus continues the rebranding and restructuring some of its divisions to make better use of the “Genus” name, branding and logo. This will unify the offering to clients and enable better cross selling of the Group’s services.

Growth Strategy

Significant investment has been put into growing the east coast presence of Genus to be positioned for the substantial investment required to the power network over the next 10-20 years. Whilst the Group continues to derive the majority of earnings from the core business in Western Australia, substantial progress has been made expanding the business into the much larger east coast markets.

During the year the company acquired selected assets of Tandem Corp expanding the Genus services in the east coast and the communications industry and our relationship with Telstra. The foundations of the business are in place to enable the Genus to take advantage of the large ongoing spend in the communications industry. In February Genus announced the business acquisition of Pole Foundations Australia (PFA). PFA is a highly strategic transaction for Genus. This transaction expands Genus’ capability into a highly specialised service for Tier 1 customers, allowing Genus to provide a full lifecycle service offering across pole inspection, reinforcement, and replacement.

Genus acquired a 50% stake in Blue Tongue Energy Pty Ltd (BT Energy) during the year. BT Energy specialises in the design and construction of hybrid power technology and micro-grid energy markets and provides growth opportunities in the stand-alone power market.

The Group is focused on replicating its Western Australian business model into the larger east coast market which is dependent on the Group’s ability to continue to grow the new operations or execute and integrate further strategic bolt-on acquisitions.

Significant changes in the state of affairs

During the year, the following changes occurred within the Group:

On 6 August 2021, GenusPlus Group Ltd through its wholly owned subsidiary Diamond Underground Services Pty Ltd finalised the purchase of selected key contracts, intellectual property, IT systems, plant and equipment and employee contracts of Tandem Corp Pty Ltd (Administrators Appointed). This acquisition greatly extends the capability of the Group’s communications division, and significantly expands the Group’s ongoing relationship with Telstra. For further details refer to the ASX announcement.
On 2 February 2022, GenusPlus Group Ltd acquired 50% of BT Energy. BT Energy is involved in the design and construction of hybrid power technology and micro-grid energy markets, furthering Genus’ offering in this strategic space. The acquisition is subject to further contingent earn out payment due in FY23. The contingent consideration amounts are disclosed under Note 25. Genus has the option to acquire the remaining 50% of the business in FY25 and FY26 with valuation based on BT Energy’s earnings at the time.
On 29 April 2022, GenusPlus Group Ltd acquired 100% of Pole Foundations Australia (PFA) for an upfront consideration of $22.523m (comprised of $16.5m cash and $6.023m in Genus ordinary shares escrowed for 24 months). Under the terms of the agreement, Genus acquired the net assets of PFA comprising property, plant and equipment, inventory and employee liabilities. The acquisition is subject to further contingent earn-out payments in cash subject to PFA’s performance in FY22 to FY24. The performance metric for FY22 was satisfied, with payment due as disclosed under note 25.

Capital structure

Issued shares

The acquisition of Pole Foundations Australia (PFA) was funded by the issue of 16,528,926 Genus ordinary shares with a quoted price of $1.21 per share. Transaction costs of $1,101,377 and share issuance costs of $58,929 were incurred. 4,633,530 shares were issued to the previous owners of Pole Foundations at an effective deeming price of $1.30 per share.

24 GENUSPLUS GROUP LTD

DIRECTORS’ REPORT

Dividends

The Board has resolved to declare a dividend in respect of the year ended 30 June 2022 of 1.8 cents per share fully franked for a total of $3,181,544. (30 June 2021: $2,800,619). The ex-Dividend Date for this dividend will be 27 October 2022, the Record Date is 28 October 2022 and the Payment Date will be 30 November 2022.

Events arising since the end of the reporting period

On 26 August 2022, the Directors declared a final fully franked dividend of 1.8 cents per share with a record date of 28 October 2022 and a payment date of 30 November 2022. The total dividend payable is an aggregate of $3,181,544.

Other than the matter mentioned above, no matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

Likely developments

The Group will continue to seek opportunities to provide its services in installation, construction and maintenance of power and communication systems across Australia.

The Group’s strategy includes:

Continuing to replicate its successful business model to penetrate the large east coast markets, including growing its recent strategic acquisitions in QLD and NSW;
Rebuilding of the ECM business into a scale but sustainable business, utilising the ability to be more selective on projects given the strength of the Genus platform;
Taking advantage of the expected growth in electrical network infrastructure spending by public and private utility companies in Australia;
Taking advantage of the expected growth in resources sector activity and related electrical network infrastructure construction;
Continuing to grow the Diamond business in the large telecommunications sector, which Diamond currently only has a small market share;
Continuing to maintain and develop new customer relationships;
Continuing to maintain Genus’ culture and significant investment into staff training;
Continuing to maintain its diversification between the Government utilities and the private sectors; and
Continuing to maintain and grow its panel contract positions to provide a stable base line of year on year revenue.

Directors’ meetings

The number of meetings of Directors (including meetings of Committees of Directors) held during the year and the number of meetings attended by each Director is as follows:

Board Member	Board Meetings Audit and Risk Committee Remuneration and Nominations Committee
	A B A B A B
David Riches Simon High Paul Gavazzi José Martins	20 20 - - 1 1 20 20 3 3 - - 20 19 3 3 1 1 20 17 3 3 1 1

Where:

Column A: is the number of meetings the Director was entitled to attend Column B: is the number of meetings the Director attended

Options

No options over issued shares or interests in the Group were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

ANNUAL REPORT 2022 25

DIRECTORS’ REPORT

Remuneration Report (audited)

The Directors of GenusPlus Group Ltd (the Group) present the Remuneration Report for Non-Executive Directors, Executive Directors and other Key Management Personnel, prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2001.

The Remuneration Report is set out under the following main headings:

a Principles used to determine the nature and amount of remuneration
b Details of remuneration
c Share-based remuneration; and
d Bonuses included in remuneration
e Shares held by key management
f Other transactions with key management personnel and their related parties

a Principles used to determine the nature and amount of remuneration

The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:

to align rewards to business outcomes that deliver value to shareholders
to drive a high performance culture by setting challenging objectives and rewarding high performing individuals; and
to ensure remuneration is competitive in the relevant employment market place to support the attraction, motivation and retention of executive talent

GenusPlus Group Ltd has structured a remuneration framework that is market competitive and complementary to the reward strategy of the Group.

The Board has established a Nomination and Remuneration Committee which operates in accordance with its charter as approved by the Board and is responsible for determining and reviewing compensation arrangements for the Directors and the Executive Team.

The Committee has engaged independent remuneration consultants to provide any necessary information to assist in the discharge of its responsibilities (refer to the disclosures below).

The remuneration structure that has been adopted by the Group consists of the following components:

fixed remuneration being annual salary; and
short term incentives, being employee share schemes and bonuses.

The Nomination and Remuneration Committee assess the appropriateness of the nature and amount of remuneration on a periodic basis by reference to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and Executive Team.

The payment of bonuses, share options and other incentive payments are reviewed by the Nomination and Remuneration Committee annually as part of the review of executive remuneration and a recommendation is put to the Board for approval. All bonuses, options and incentives must be linked to pre-determined performance criteria.

Short Term Incentive (STI)

GenusPlus Group Ltd performance measures involve the use of annual performance objectives, metrics, performance appraisals and continuing emphasis on living the Company values.

The performance measures are set annually after consultation with the Directors and executives and are specifically tailored to the areas where each executive has a level of control. The measures target areas the Board believes hold the greatest potential for expansion and profit and cover financial and non-financial measures.

26 GENUSPLUS GROUP LTD

DIRECTORS’ REPORT

Remuneration Report (audited) (continued)

a Principles used to determine the nature and amount of remuneration (continued)

The Key Performance Indicators (KPIs) for the Executive Team are summarised as follows:

Performance areas

financial: operating profit and earnings per share; and
non-financial: strategic goals set by each individual business unit based on job descriptions

The STI Program incorporates only cash components for the Executive Team and other employees.

The Board may, at its discretion, award bonuses for exceptional performance in relation to each person’s pre-agreed KPIs.

Voting and comments made at the Company’s last Annual General Meeting

GenusPlus Group Ltd held its Annual General meeting held on 26 November 2021. There were no adverse comments from the vote on the Remuneration Report for the financial year ending 30 June 2021.

Consequences of performance on shareholder wealth

In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following indices in respect of the current financial year and the previous two financial years:

Item	2022	2021	2020
EPS (cents)	8.4	8.6	7.5
Dividends (cents per share)	1.8	1.8	0.88
Net proft ($’000)	13,556	13,349	10,689
Share price ($)	1.27	0.94	n/a

ANNUAL REPORT 2022 27

DIRECTORS’ REPORT

Details of remuneration Details of the nature and amount of each element of the remuneration of each Key Management Personnel (KMP) of GenusPlus Group Ltd are shown in the table below: Director and other Key Management Personnel Short-term employee benefts Post-employment benefts Long-term benefts Performance based % of remuneration Employee Year Cash salary and fees Cash bonus Non-monetary benefts Superannuation Long service leave Termination benefts Share-based payments Total	$ $ $ - - 349,494 - - - 477,039 23.4% - - 112,750 - - 200,000 300,866 -	- -	- -	-
		71,500 160,940	71,500 160,940	605,244
		- 100,000	- 100,000	-
		- -	- -	-
Long service leave	$ (9,380) 8,789 - -	- -	- -	(9,380)

Superannuation	$ 23,568 21,749 10,250 8,751	6,500 5,287	6,500 5,287	46,818

Non-monetary benefts	$ - - - -	- -	- -	-
Cash bonus	$ - 111,600 - -	- -	- -	-
Cash salary and fees	$ 335,306 334,901 102,500 92,115	65,000 55,653	65,000 55,653	567,806
	Executive Directors David Riches1 CEO and Managing Director 2022 2021 Non-executive Directors Simon High Chairman 2022 2021	2022 2021	2022 2021	2022
		José Martins Independent	Paul Gavazzi Independent	2022 Total

28 GENUSPLUS GROUP LTD

DIRECTORS’ REPORT

Details of remuneration (continued) Director and other Key Management Personnel Short-term employee benefts Post-employment benefts Long-term benefts Performance based % of remuneration Employee Year Cash salary and fees Cash bonus Non-monetary benefts Superannuation Long service leave Termination benefts Share-based payments Total	$ $ $ - - 334,861 17.9% - - 335,134 26.5%	18.4% 25.6%	16.3% 26.0%	14.8% 25.1%	16.7%
		326,957 332,921	368,361 398,517	406,030 456,161	1,436,209
		- -	- -	- -	-
		- -	- -	- -	-
Long service leave	$ 4,301 -	8,236 8,408	4,795 -	- -	17,332

Superannuation	$ 23,396 21,250	23,046 23,986	23,568 21,746	26,030 21,694	96,040

Non-monetary benefts	$ - -	- -	- -	- -	-
Cash bonus	$ 60,000 88,830	60,000 85,050	60,000 103,623	60,000 114,467	240,000
Cash salary and fees	$ 247,164 225,054	235,675 215,477	279,998 273,148	320,000 320,000	1,082,837
	sonnel 2022 2021	2022 2021	2022 2021	2022 2021	2022
Employee	Other Key Management Per Damian Wright CFO and Company Secretary	Michael Green EGM Corporate Services	George Lloyd, EGM National Business Development	Hasan Murad EGM Commercial	2022 Total

ANNUAL REPORT 2022 29

DIRECTORS’ REPORT

Remuneration Report (audited) (continued)

b Details of remuneration (continued)

The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

		At risk:
	Fixed	Short Term	At risk:
Employee	remuneration	Incentives (STI)	options
Executive Directors David Riches Other Key Management Personnel	43%	57%	0%
Damian Wright	61%	39%	0%
Michael Green	61%	39%	0%
George Lloyd	61%	39%	0%
Hasan Murad	61%	39%	0%

Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are formalised in a Service Agreement. The major provisions of the agreements relating to remuneration are set out below:

	Base salary
Employee	(incl super)	Term of agreement	Notice period
David Riches	358,874	Unspecifed	Six months
Damian Wright	270,560	Unspecifed	Three months
Michael Green	258,871	Unspecifed	Three months
George Lloyd	303,566	Unspecifed	Six months
Hasan Murad	346,030	Unspecifed	Three months

c Share-based remuneration

No member of the Key Management Personnel has an entitlement to be paid in shares.

d Bonuses included in remuneration

Details of the short-term incentive cash bonuses awarded as remuneration to each key management personnel, the percentage of the available bonus that was paid in the financial year, and the percentage that was forfeited because the person did not meet the service and performance criteria is set out below. No part of the bonus is payable in future years.

	Included in	Percentage	Percentage
	remuneration	vested during	forfeited during
Employee	($)	the year	the year
Executive Directors David Riches1 Other Key Management Personnel	-	-	-
Damian Wright	60,000	37%	63%
Michael Green	60,000	39%	61%
George Lloyd	60,000	33%	67%
Hasan Murad	60,000	29%	71%

1 David Riches has elected not to receive a performance-based incentive in relation to the year ended 30 June 2022.

30 GENUSPLUS GROUP LTD

DIRECTORS’ REPORT

Remuneration Report (audited) (continued)

e Shares held by key management personnel

The number of ordinary shares in the Company during the 2022 reporting period held by each of the Group’s key management personnel, including their related parties, is set out below:

	Balance at	Granted as		Held at the end of
Employee	start of year	remuneration	Other changes	reporting period
Year ended 30 June 2022
David Riches	91,722,947	-	861,000	92,583,947
S. High	304,167	-	-	304,167
J. Martins	100,000	-	-	100,000
P. Gavazzi	204,167	-	-	204,167
Damian Wright	72,917	-	-	72,917
Michael Green	130,208	-	-	130,208
George Lloyd	1,626,042	-	-	1,626,042
Hasan Murad	72,917	-	-	72,917
Simon Higgins	520,833	-	(520,833)	-

None of the shares included in the table above are held nominally by key management personnel.

Loans to key management personnel

The Group allows its employees to take up limited short-term loans to fund merchandise and other purchases through the Group’s business contacts. This facility is also available to the Group’s key management personnel. No member of the key management personnel received a loan during the reporting period.

The Group does not have an allowance account for receivables relating to outstanding loans and has not recognised any expense for impaired receivables during reporting period.

There were no individuals with loans above $100,000 during the financial year.

Other transactions with key management personnel and their related parties

(i) Details and terms and conditions of other transactions with KMP and their related parties:

Purchases

Legal services

During 2022, the Group used the legal services of one Company Director (Mr Paul Gavazzi) and the law firm over which he exercises significant influence. The amounts billed related to this legal service amounted to $9,339 (2021: $1,144,517), based on normal market rates. Nil was unpaid as of the reporting date.

Property leases

During 2022, the Group rented various properties from David Riches and his related parties as part of normal business operations. The amount for which each property was leased was negotiated on commercial terms in accordance with lease agreements verified by the board. During 2022 $1,080,144 was recognised in the operating result for the year in relation to these properties. $30,948 was un-paid as of the reporting date.

Engineering services

During 2022, the Group utilised the engineering services of Partum Engineering Pty Ltd, of which David Riches is also a Director, for design and other work related to FMG sub-station and powerlines. $7,396,206 was recognised as an expense in relation to these services. $775,051 was un-paid as of the reporting date.

Transportation and logistical services

During 2022, Pastoral Plus, of which David Riches is a Director, provided transportation and logistical services to the Group in circumstances where independent commercial transport services were unavailable to meet the business’ requirements. $646,489 was recognised as an expense for these services, of which $87,002 was unpaid as of the reporting date.

Injury management

During 2022, Edge People Management Pty Ltd, in which David Riches holds an interest, provided injury management services to the Group. $41,889 was recognised as an expense in relation to these services. $8,760 was un-paid as of the reporting date.

End of audited Remuneration Report.

ANNUAL REPORT 2022 31

DIRECTORS’ REPORT

Environmental regulations

The Group’s operations are subject to the environmental regulations that apply to our clients.

There have been no significant breaches during the period covered by this report.

Indemnities given to, and insurance premiums paid for, auditors and officers

Insurance of officers

During the year, GenusPlus Group Ltd paid a premium to insure officers of the Group. The officers of the Group covered by the insurance policy include all Directors.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else to cause detriment to the Group.

Details of the amount of the premium paid in respect of insurance policies are not disclosed as such disclosure is prohibited under the terms of the contract.

The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify any current or former officer of the Group against a liability incurred as such by an officer.

Indemnity of auditors

The Group has agreed to indemnify its auditors, Grant Thornton Audit Pty Ltd, to the extent permitted by law, against any claim by a third party arising from the Group’s breach of its agreement. The indemnity requires the Group to meet the full amount of any such liabilities including a reasonable amount of legal costs.

Non-audit services

During the year, Grant Thornton, the Company’s auditors, performed certain other services in addition to their statutory audit duties.

The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written advice provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those non-audit services during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit and Risk Committee to ensure they do not impact upon the impartiality and objectivity of the auditor
the non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants , as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards

Details of the amounts paid to the auditors of the Company, Grant Thornton, and its related practices for audit and non-audit services provided during the year are set out in Note 32 to the financial statements.

Proceedings on behalf of Group

No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings.

The Group was not a party to any such proceedings during the year.

Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 33 and forms part of this Directors’ Report.

Signed in accordance with a resolution of the Board of Directors.

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David Riches Director, 31 August 2022

32 GENUSPLUS GROUP LTD

AUDITOR’S INDEPENDENCE DECLARATION

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Grant Thornton Audit Pty Ltd

Level 43 Central Park 152-158 St Georges Terrace Perth WA 6000 PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000

Auditor’s Independence Declaration

To the Directors of GenusPlus Group Ltd

In accordance with the requirements of section 307C of the Corporations Act 2001 , as lead auditor for the audit of GenusPlus Group Ltd for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the audit.

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GRANT THORNTON AUDIT PTY LTD

Chartered Accountants

==> picture [88 x 42] intentionally omitted <==

L A Stella Partner – Audit & Assurance

Perth, 31 August 2022

www.grantthornton.com.au

ACN-130 913 594

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation.

8033301v1

ANNUAL REPORT 2022 33

CORPORATE GOVERNANCE STATEMENT

The Corporate Governance Statement is available on GenusPlus Group’s website at www.genus.com.au/who-we-are/corporategovernance.

Corporate Governance Principles And Recommendations

The ASX Corporate Governance Council sets out best practice corporate governance recommendations, including practices and suggested disclosures. Listing Rule 4.10.3 requires disclosure for companies on the extent to which they comply with these recommendations, and if not, to give reasons for not following them.

Unless otherwise indicated, the best practice recommendations of the ASX Corporate Governance Council, including corporate governance practices and suggested disclosures, have been adopted by Genus for the year ended 30 June 2022.

Genus expects to lodge its annual Corporate Governance Statement and Appendix 4G with its full Annual Report to shareholders at the end of September 2022.

Corporate Governance

Genus is committed to a governance culture that aims to protect shareholder rights, effectively manage risk, enhance disclosure and transparency (both within the company and to external stakeholders) and facilitate the effective functioning of the board.

We believe that by operating with a strong focus on corporate governance, we will enhance Genus’ sustainable long-term performance and value creation for all stakeholders. The Board of Directors is responsible for Genus’ corporate governance framework, which ensures that the Company’s obligations and responsibilities to its various stakeholders are fulfilled. The Company’s 2022 Corporate Governance Statement, to be released to shareholders towards the end of September 2022, will report on Genus’ governance practices. Genus has in place charters, policies, and procedures (published on our website) which are reviewed and revised as appropriate to reflect changes in law and developments in corporate governance.

The Board’s Risk & Audit Committee is responsible for monitoring the effectiveness of the Group’s risk management framework.

34 GENUSPLUS GROUP LTD

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2022

	Notes	2022 $	2021 $
Revenue Other income Employee expenses Raw materials and consumables expenses Contractors and labour hire expenses Motor vehicle expenses Depreciation expense Other expenses Initial Public Ofering expenses	6 7 26 20 10	450,936,669	318,207,504
		1,962,423	3,006,546

		(137,197,766)	(87,150,489)
		(139,298,892)	(96,660,619)
		(114,602,305)	(87,414,689)
		(16,037,478)	(10,743,266)
		(11,901,931)	(7,413,528)
		(12,771,590)	(9,697,868)
		-	(2,736,076)
Operating proft Share of results of joint ventures Share of results of associates Finance income Other gains and losses Finance costs	8 9 11 11	21,089,130	19,397,515

		63,346	-
		401,393	-

		8,550	3,216
		(461,000)	461,000
		(1,077,105)	(707,343)
Proft before income tax Income tax expense	12	20,024,314	19,154,388
		(6,467,839)	(5,805,619)
Proft for theyear		13,556,475	13,348,769
Other comprehensive income for the year Items that may be reclassifed subsequently to proft or loss: Exchange diferences on monetary items denominated in foreign currency (net of tax)


		160,117	8,275
Total comprehensive income for theyear		13,716,592	13,357,044
Proft for the year attributable to Owners of the company

		13,716,592	13,357,044

Earnings per share Basic earnings per share (cents) Diluted earnings per share (cents)	13 13		8.63 8.63
		8.36
		8.36

This statement should be read in conjunction with the notes to the financial statements.

ANNUAL REPORT 2022 35

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022

	Notes	2022 $	2021 $
Current assets Cash and cash equivalents Trade and other receivables Contract assets Inventories Current tax asset Other assets	14 15 16 18 12 19		34,181,508 57,698,845 20,351,162 2,044,909 1,482,484 3,449,926
		27,882,473
		68,872,911
		45,734,278
		3,728,803
		4,569,537
		1,582,879
Total current assets		152,370,881	119,208,834
Non-current assets Other fnancial assets Interests in joint ventures Investment in associates Property, plant and equipment Right-of-use assets Intangible assets	17 8 9 20 21 22		1,483,000 - 49 15,767,432 13,550,857 5,545,578
		993,833
		3,086,299
		401,442
		17,675,106
		23,283,092
		34,173,243
Total non-current assets		79,613,015	36,346,916
Total assets		231,983,896	155,555,750
Current liabilities Trade and other payables Contract liabilities Other fnancial liabilities Lease liabilities Employee benefts Provisions	23 24 25 21 26 27		64,012,279 5,225,354 1,920,000 4,285,659 6,456,002 50,000

		72,608,068
		12,752,963
		6,869,953
		7,765,884
		6,487,235
		1,221,721
Total current liabilities		107,705,824	81,949,294
Non-current liabilities Other fnancial liabilities Lease liabilities Deferred tax liabilities Employee benefts	25 21 12 26		4,920,000 8,758,718 1,195,098 1,022,430
		3,924,000
		14,232,018
		10,148,438
		2,550,543
Total non-current liabilities		30,854,999	15,896,246
Total liabilities		138,560,823	97,845,540
Net assets		93,423,073	57,710,210
Equity Issued capital Reserves Retained earnings	28 29		28,925,754 (503,559) 29,288,015

		53,789,037
		(343,442)
		39,977,478
Total equity		93,423,073	57,710,210

This statement should be read in conjunction with the notes to the financial statements.

36 GENUSPLUS GROUP LTD

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2022

	Notes	Share capital $	Retained earnings $	Corporate Restructure Reserve $	Foreign currency translation reserve	Total $
Balance at 1 July 2020		27,732,909	15,939,246	(511,834)	-	43,160,321
Proft for the year Other comprehensive income		- -	13,348,769 -	- -	- 8,275	13,348,769 8,275
Total comprehensive income for the year Transactions with owners in their capacity as owners: share issues to Directors share issues as employee compensation share issues pursuant to a business combination cost of share issues	28,37 28,37 28,35 28	- 400,000 300,000 500,000 (7,155)	13,348,769 - - - -	- - - - -	8,275 - - - -	13,357,044 400,000 300,000 500,000 (7,155)
		1,192,845	-	-	-	1,192,845
Sub-total		1,192,845	13,348,769	-	8,275	14,549,889
Balance at 30 June 2021		28,925,754	29,288,015	(511,834)	8,275	57,710,210
Balance at 1 July 2021
		28,925,754	29,288,015	(511,834)	8,275	57,710,210
Proft for the year Other comprehensive income		-	13,556,475	-	-	13,556,475
		-	-	-	160,117	160,117
Total comprehensive income for the year Transactions with owners in their capacity as owners: proceeds from capital raising share issues pursuant to a business combination cost of share issues dividend paid	28 28,35 28 30	-	13,556,475	-	160,117	13,716,592


		20,000,000	-	-	-	20,000,000
		6,023,589	-	-	-	6,023,589
		(1,160,306)	-	-	-	(1,160,306)
		-	(2,800,619)	-	-	(2,800,619)
Changes in ownership interests: disposal of Burton Training & Consultancy Pty Ltd		24,863,283	(2,800,619)	-	-	22,062,664


		-	(66,393)	-	-	(66,393)

Sub-total		24,863,283	10,689,463	-	160,117	35,712,863
Balance at 30 June 2022		53,789,037	39,977,478	(511,834)	168,392	93,423,073

This statement should be read in conjunction with the notes to the financial statements.

ANNUAL REPORT 2022 37

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2022

	Notes	2022 $	2021 $
Operating activities Receipts from customers Payments to suppliers and employees Government grant income received (JobKeeper) Income tax paid			318,433,388 (306,762,419) 2,093,000 (6,776,048)
		465,134,004
		(451,425,418)
		-
		(2,243,853)
Net cash provided by operating activities	31	11,464,733	6,987,921
Investing activities Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Net loans paid by / (loans to) associated and joint venture entities Proceeds from disposal of investments Acquisition of investment in associate Acquisition of subsidiaries (net of cash)	35		1,190,843 (11,294,484) (100,000) - - (2,220,677)

		1,386,650
		(4,870,466)
		28,168
		170,000
		(1,000,000)
		(19,963,360)
Net cash used in investing activities		(24,249,008)	(12,424,318)
Financing activities Proceeds from borrowings Repayments of borrowings Payment of lease liabilities principal Proceeds from issue of share capital Transaction costs for issued share capital Dividends paid Interest received Finance costs	28 28		5,000,000 (1,170,119) (3,314,831) - - - 3,216 (707,343)

		-
		(1,670,000)
		(6,975,397)
		20,000,000
		(1,160,306)
		(2,800,619)
		8,550
		(1,077,105)
Net cash provided by / (used in) fnancing activities		6,325,123	(189,077)
Net change in cash and cash equivalents held Cash and cash equivalents at beginning of fnancial year Efect of exchange rate fuctuations on cash held			(5,625,474) 39,798,707 8,275
		(6,459,152)
		34,181,508
		160,117
Cash and cash equivalents at end of fnancialyear	14	27,882,473	34,181,508

This statement should be read in conjunction with the notes to the financial statements.

38 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

1. Nature of operations

GenusPlus Group Ltd and its subsidiaries’ (the Group) principal activities include the construction and maintenance of transmission and distribution power lines and substations servicing the Western Australian, Queensland and New South Wales power networks as well as providing specialist engineering, testing and commissioning services to the electrical and communications industries.

2. Basis of preparation

The consolidated general purpose financial statements of the Group have been prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standards (“AASBs”) and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). Compliance with Australian Accounting Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). GenusPlus Group Ltd is a for-profit entity for the purpose of preparing the financial statements.

GenusPlus Group Ltd is the Group’s Ultimate Parent Company. GenusPlus Group Ltd is an ASX listed Public Company (ASX Code: GNP) incorporated and domiciled in Australia. The address of its registered office and its principal place of business is Level 1, 63 – 69 Abernethy Road, Belmont, Australia.

The consolidated financial statements for the year ended 30 June 2022 were approved and authorised for issue by the Board of Directors on 31 August 2022.

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

3. Changes in accounting policies

3.1 New standards adopted as at 1 July 2021

Certain new accounting standards and interpretations have been published that are mandatory for 30 June 2022 reporting periods and have not been adopted by the Group. The Group's assessment of the impact of these new standards do not have a material impact on the entity in the current reporting periods.

3.2 Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted early by the Group

The following new accounting standards and interpretations have been published that are not mandatory for 30 June 2022 reporting periods, have not been early adopted by the Group, and are as follows:

i) Amendments to AASB 101: Classification of Liabilities as Current or Non-current

The amendment specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

What is meant by a right to defer settlement
That a right to defer must exist at the end of the reporting period
That classification is unaffected by the likelihood that an entity will exercise its deferral right
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. The Group's assessment of the impact of the new standard is not expected to have a material impact on the entity in future reporting periods.

ANNUAL REPORT 2022 39

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

3. Changes in accounting policies (continued)

3.2 Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted early by the Group (continued)
ii) Amendments to AASB 3 Business Combinations - Reference to the Conceptual Framework

The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.

The Board also added an exception to the recognition principle of AASB 3 to avoid the issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities that would be within the scope of AASB 137 or AASB Interpretation 21 Levies, if incurred separately. At the same time, the Board decided to clarify existing guidance in AASB 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements.

The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively.

iii) Onerous Contracts - Costs of Fulfilling a Contract - Amendments to AASB 137

The amendments to AASB 137 specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making. The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.

The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The Group will apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments.

iv) AASB 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities

The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted. The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.

The amendments are not expected to have a material impact on the Group.

40 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies

Parent entity information

In accordance with the Corporations Act 2001 , these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 41.

Basis of consolidation

The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2022. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests.

Business combination

The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired.

The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.

On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.

Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.

Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.

ANNUAL REPORT 2022 41

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Foreign currency translation

Functional and presentation currency

The consolidated financial statements are presented in Australian Dollars ($AUD), which is also the functional currency of the Parent Company.

Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the respective Group Entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year end exchange rates are recognised in profit or loss.

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the date of the transaction), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

Segment reporting

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

During the year to 30 June 2022, the Groups operating segments were reviewed and reduced in line with the above disclosure. All comparative information has been restated.

Revenue from contracts with customers

The Group recognises revenue when a customer obtains control of the goods or services, in accordance with AASB 15 Revenue from contracts with customers . Revenue is measured at the fair value of the consideration received or receivable. Determining the timing of the transfer of control: either at a point in time or over time requires judgement.

Revenue is recognised over time if one of the following is met:

The customer simultaneously receives and consumes the benefits as the Group performs;
The customer controls the asset as the Group creates or enhances it; or
The Group’s performance does not create an asset for which the Group has an alternative use and there is a right to payment for the performance to date.

To determine whether to recognise revenue, the Group follows the 5-step revenue recognition model introduced by AASB 15 Revenue from contracts with customers :

Identifying the contract(s) with a customer
Identifying the performance obligations in the contract
Determining the transaction price
Allocating the transaction price to the performance obligations in the contract
Recognising revenue when/as performance obligation(s) are satisfied.

The Group often enters into transactions involving a range of the Group’s products and services. In all cases, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected on behalf of third parties.

The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the statement of financial position (see Note 24). Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.

42 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Revenue from contracts with customers (continued)

Construction Contracts

Revenue from construction contracts is recognised when the benefits transfer to the customer as the work is performed and as such revenue is recognised over the duration of the project according to the percentage of costs completed, or input method. Under this method revenue is calculated based on the proportion of the contract costs incurred for work performed to date relative to the estimated total contract costs. Revenue recognised under this method is predominantly derived from projects containing one performance obligation.

Services revenue

Revenue from the provision of services is recognised as the service is provided. Typically, under the performance obligations of a service contract, the customer consumes and receives the benefit of the service as it is provided. As such, service revenue is recognised over time as the services are provided, with each service deemed a separate performance obligation. The transaction price is allocated to each obligation based on contract prices.

Work order revenue generated in the Communications division is recognised at a point in time as the customer is only deemed to have received the benefit once the work has been completed. The transaction price is calculated based on a schedule of rates which define the price of the ticket of work.

Transaction price and contract modifications

The transaction price is the amount of consideration to which the company expects to be entitled to under the customer contract and which is used to value total revenue and is allocated to each performance obligation. The determination of this amount includes “fixed remuneration”, (for example lump sum, schedule of rates or pricing for services) and “variable consideration”.

The main variable consideration elements are claims (contract modifications) and consideration for optional works and provisional sums each of which needs to be assessed. Contract modifications are changes to the contract approved by the parties to the contract.

The Group applies the guidance given in AASB 15 in relation to variable consideration. The estimate of variable consideration can only be recognised to the extent that it is highly probable that there will not be a significant reversal of revenue in the future.

The measurement of additional consideration arising from claims is subject to a high level of uncertainty, both in terms of the amount that customers will pay and the collection times, which usually depend on the outcome of negotiations between the parties or decisions taken by judicial/arbitration bodies. The Group considers all relevant aspects in circumstances such as the contract terms, business in negotiating practices of the sector, the Group’s historical experiences with similar contracts and consideration of those factors that affect the variable consideration that are out of control of the Group or other supporting evidence when making the above decision.

Loss making contracts

A provision is made for the difference between expected cost of fulfilling a contract and expected on and portion of the transaction price whether forecast costs are greater than forecast revenue. The provision is recognised in full in a period in which the loss-making contract is identified under AASB 137 Provisions, Contingent Liabilities and Contingent Assets .

Under AASB 137, the assessment of whether a provision needs to be recognised takes place at the contract level and there are no segmentation criteria to apply. As a result, there are some instances where loss provisions recognised in the past have not been recognised under AASB 15 because the contract as a whole is profitable. In addition, when two or more contracts entered into at or near the same time are required to be combined for accounting purposes, AASB 15 requires the Group to perform the assessment of whether the contract is onerous at the level of the combined contracts. The Group also notes that the amount of loss accrued in respect of a loss contract under AASB 111 takes into account an appropriate allocation of construction overheads. This contrasts with AASB 137 where loss accruals may be lower as they are based on the identification of ‘unavoidable costs’.

Interest and dividend income

Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend income, other than those from investments in associates, are recognised at the time the right to receive payment is established.

Operating Expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.

ANNUAL REPORT 2022 43

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Borrowing costs

Other borrowing costs are expensed in the period in which they are incurred and reported in ‘finance costs’ (see Note 11).

Goodwill

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. See Business Combinations (above) for information on how goodwill is initially determined. Goodwill is carried at cost less accumulated impairment losses. Refer to impairment testing note 22 for a description of impairment testing procedures.

Property, plant and equipment

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the statement of financial position at cost, less any recognised impairment loss.

Properties held for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Freehold land is not depreciated.

Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The depreciation rates used for each class of depreciable assets are:

Class of fxed asset	Depreciation rate
Buildings:	10%
Leasehold improvements:	10% - 33%
Plant and equipment:	10% - 33%
Furniture, fxtures and fttings:	10% - 33%
Tools and low value assets	18.8% - 33%
Software and technology	33%
Motor vehicles	20% - 25%

Depreciation rates and methods shall be reviewed at least annually and, where changed, shall be accounted for as a change in accounting estimate. Where depreciation rates or methods are changed, the net written down value of the asset is depreciated from the date of the change in accordance with the new depreciation rate or method. Depreciation recognised in prior financial years shall not be changed, that is, the change in depreciation rate or method shall be accounted for on a ‘prospective’ basis.

Assets held under leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

44 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Leased assets

The Group as lessee

For any new contracts entered into, the Group considers whether a contract is or contains a lease. A lease is defined as a ‘contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether:

the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract
the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.

Measurement and recognition of leases as a lessee

In respect of leased assets, at lease commencement date the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). All other leased assets are recorded under property, plant and equipment according to the category of asset.

The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.

The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.

The lease liability is presented as a separate line in the consolidated statement of financial position.

ANNUAL REPORT 2022 45

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Impairment testing of goodwill, other intangible assets and property, plant and equipment

For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cashgenerating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management monitors goodwill.

Cash-generating units to which goodwill has been allocated (determined by the Group’s management as equivalent to its operating segments) are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows.

The data used for impairment testing procedures are directly linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect management’s assessment of respective risk profiles, such as market and asset-specific risks factors.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount.

Financial instruments

Recognition and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognized when it is extinguished, discharged, cancelled or expires.

Classification and initial measurement

Financial assets are initially measured at fair value adjusted for transaction costs (where applicable).

Financial assets are classified into the following categories:

amortised cost
fair value through profit or loss (FVTPL)
fair value through other comprehensive income (FVOCI)

In the periods presented, the Group does not have any financial assets categorized as FVOCI.

The classification is determined by both:

the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.

All income and expenses relating to financial assets that are recognized in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.

46 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Financial instruments (continued)

Subsequent measurement of financial assets

Financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):

they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL.

The category also contains an equity investment. The Group accounts for the investment at FVTPL and did not make the irrevocable election to account for the investment in Volt Power Pty Ltd at fair value through other comprehensive income (FVOCI). The fair value was determined in line with the requirements of AASB 9, which does not allow for measurement at cost.

Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.

Impairment of financial assets

AASB 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’. Instruments within scope included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.

Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

In applying this forward-looking approach, a distinction is made between:

financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.

‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category.

Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

ANNUAL REPORT 2022 47

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The results and assets and liabilities of associates or joint ventures are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with AASB 5.

Under the equity method, an investment in an associate or a joint venture is recognised initially in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group’s share of losses of an associate or a joint venture exceeds the Group’s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.

The requirements of AASB 136 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136 as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture. When the Group retains an interest in the former associate or a joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with AASB 9. The difference between the carrying amount of the associate or a joint venture at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate or a joint venture is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the associate or joint venture is disposed of.

When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When a Group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group’s consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.

The Group applies AASB 9, including the impairment requirements, to long-term interests in an associate or joint venture to which the equity method is not applied and which form part of the net investment in the investee. Furthermore, in applying AASB 9 to long-term interests, the Group does not take into account adjustments to their carrying amount required by AASB 128 (i.e. adjustments to the carrying amount of long-term interests arising from the allocation of losses of the investee or assessment of impairment in accordance with AASB 128).

48 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Investments in associates and joint ventures (continued)

Trade and other receivables and contract assets and liabilities

Contract assets

A contract asset is initially recognised for revenue earned from construction and maintenance services when the receipt of consideration is conditional on client acceptance of the successful completion or installation of the underlying contractual obligation. Upon such notification, the amount recognised as contract assets is reclassified as trade receivables.

Trade receivables

A receivable is recognised if an amount of consideration that is unconditional is due from the customer (i.e. only the passage of time is required before payment of the consideration is due).

Contract liabilities

A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract (i.e. transfers control of the related goods or services to the customer.)

Impairment of contract assets and liabilities and trade receivables

The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due. Refer to Note 38 for a detailed analysis of how the impairment requirements of AASB 9 are applied.

Classification and measurement of financial liabilities

The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.

Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss.

Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments).

All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income.

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-in-first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

ANNUAL REPORT 2022 49

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Taxation

Tax consolidation

The Company and its wholly-owned Australian resident entities are members of a tax-consolidated group under Australian tax law. The Company is the head entity within the tax-consolidated group. In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group.

Amounts payable or receivable under the tax-funding arrangement between the Company and the entities in the tax consolidated group are determined using a ‘separate taxpayer within group’ approach to determine the tax contribution amounts payable or receivable by each member of the tax-consolidated group. This approach results in the tax effect of transactions being recognised in the legal entity where that transaction occurred, and does not tax effect transactions that have no tax consequences to the group. The same basis is used for tax allocation within the tax-consolidated group.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Adjustments are made for transactions and events occurring within the tax-consolidated group that do not give rise to a tax consequence for the Company or that have a different tax consequence at the level of the entity.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Adjustments are made for transactions and events occurring within the taxconsolidated group that do not give rise to a tax consequence for the Company or that have a different tax consequence at the level of the entity.

Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Management has applied a risk weighted measurement to the tax treatments used in the Group and has determined that there is no change required under IFRIC 23 Uncertainty over Income Tax Treatments .

50 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Equity, reserves and dividend payments

Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of shares are deducted from share capital, net of any related income tax benefits.

Other components of equity include the following:

Corporate restructure reserve: comprises amounts recognised upon the introduction of a new ultimate parent entity.
Foreign currency translation reserve: comprises amounts recognised upon translation of certain amounts denominated in foreign currencies ($USD) into the presentation currency ($AUD)

Retained earnings include all current and prior period retained profits.

Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been declared by the Board prior to the reporting date.

All transactions with owners of the parent are recorded separately within equity.

Employee benefits

Short-term and long-term employee benefits

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

Share-based payment transactions

The Group provides remuneration to certain employees, including Directors, of the Group in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).

The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they are vested. The fair value is measured using a variation of the binomial option pricing model that takes into account the terms and conditions on which the instruments were granted and the current likelihood of achieving the specified target. Further, the cost of equitysettled transactions is recognised, on the date on which they become fully entitled to the award (‘vesting date’).

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Onerous contracts

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

ANNUAL REPORT 2022 51

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense, or
For receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows.

Government grants

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

Government assistance which does not have conditions attached specifically relating to the operating activities of the Group is recognised in accordance with the accounting policies above.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of GenusPlus Group Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Dividends

Dividends are recognised when declared during the financial year and no longer at the discretion of the company.

Contract liabilities

Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are recognised when a customer pays consideration, or when the consolidated entity recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the consolidated entity has transferred the goods or services to the customer.

52 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

4. Statement of accounting policies (continued)

Significant management judgement in applying accounting policies and estimation uncertainty

When preparing the Group’s consolidated financial statements, management makes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, revenue and expenses.

Critical judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Construction contract revenue

Recognised amounts of construction contract revenues and related receivables reflect management’s best estimate of each contract’s outcome and stage of completion. For more complex contracts in particular, costs to complete and contract profitability are subject to significant estimation uncertainty.

Impairment of non-financial assets and goodwill

In assessing impairment, management estimates the recoverable amount of each asset or cash generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

Calculation of loss allowance

When measuring ECL the Group uses reasonable and supportable forward looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other.

Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from collateral and integral credit enhancements.

Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.

The Group maintains insurance against Domestic Trade Credit defaults and therefore considers the risk of loss to be minimal.

Useful lives of property, plant and equipment

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets.

Fair value measurements and valuation processes

Some of the Group's assets and liabilities are measured at fair value for financial reporting purposes.

In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available.

Business combinations

Management uses valuation techniques in determining the fair values of the various elements of a business combination. Particularly, the fair value of contingent consideration is dependent on the outcome of many variables that affect future profitability.

Leases – estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right of use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

Recognition of Deferred tax assets

The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

ANNUAL REPORT 2022 53

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

Total $	450,936,669 -	450,936,669 (129,015,376) (145,052,560) (115,068,535) (11,381,215) (9,627,555) (19,118,048)	21,673,380	226,035,172 161,590,383
Other / Eliminations $	(326,160) (30,345,788)	(30,671,948) - - 30,345,788 - - -	(326,160)	(13,026,491) (4,783,343)
Total Segments $	451,262,829 30,345,788	481,608,617 (129,015,376) (145,052,560) (145,414,323) (11,381,215) (9,627,555) (19,118,048)	21,999,540	239,061,663 166,373,726
Industrial Services $	60,814,664 15,614,378	76,429,042 (29,382,589) (30,174,671) (15,098,350) (443,815) (629,291) (2,200,320)	(1,499,994)	28,012,837 29,406,393
Communication Services $	55,816,657 -	55,816,657 (17,874,351) (4,545,144) (33,891,854) (577,564) 775,296) (2,262,734)	(4,110,286)	24,897,134 20,461,153
Power Services $	334,631,508 14,731,410	349,362,918 (81,758,436) (110,332,745) (96,424,119) (10,359,836) (8,222,968) (14,654,994)	27,609,820	186,151,692 116,506,180
	Revenues Inter-segment	Segment revenues Employment expenses Consumables and materials used Contractors and labour hire expenses Motor vehicle expenses Depreciation and amortisation expenses Other expenses	Segment Proft before Income Tax	Assets Liabilities

54 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

Year to 30 June 2021 Power Services $ Communication Services $ Industrial Services $ Total Segments $ Other / Eliminations $ Total $	Revenues 284,623,438 6,785,009 26,597,628 318,006,075 201,429 318,207,504 Inter-segment 9,146,728 5,679,849 14,826,577 (14,826,577) -	Segment revenues 293,770,166 6,785,009 32,277,477 332,832,652 (14,625,148) 318,207,504 Employment expenses (59,445,949) (2,540,186) (16,088,965) (78,075,100) - (78,075,100) Consumables and materials used (90,785,925) (718,374) (9,307,953) (100,812,252) - (100,812,252) Contractors and labour hire expenses (95,160,573) (1,803,036) (5,228,085) (102,191,694) 14,826,577 (87,365,117) Motor vehicle expenses (7,204,261) (414,023) (415,428) (8,033,712) - (8,033,712) Depreciation and amortisation expenses (4,901,288) (487,489) (657,543) (6,046,320) - (6,046,320) Other expenses (12,304,043) (110,289) (2,687,349) (15,101,681) - (15,101,681)	Segment Proft before Income Tax 23,968,127 711,612 (2,107,846) 22,571,893 201,429 22,773,322	Assets 121,229,491 13,024,678 18,506,196 152,760,365 (11,947,774) 140,812,591 Liabilities 64,716,559 5,126,694 18,878,209 88,721,462 (3,604,626) 85,116,836

ANNUAL REPORT 2022 55

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

5. Segment Reporting (continued)

The totals presented for the Group’s operating segments reconcile to the key financial figures as presented in its consolidated financial statements as follows:

fnancial statements as follows:
	Note	2022 $	2021 $
Revenues Total reportable segment revenues Other segment revenues Elimination of intersegment revenues			318,207,504 15,049,992 (11,582,446)
		450,936,669
		16,573,612
		(13,589,277)
Group Revenues Proft or loss Total reportable segment operating proft Other segment proft Employment expenses Consumables and materials used Contractors and labour hire expenses Motor vehicle expenses Depreciation and amortisation expenses Other expenses Elimination of intersegment profts		453,921,004	321,675,050 22,773,322 (9,075,389) (319,744) (49,572) (2,709,554) (1,367,208) (5,918,109) 16,063,769


		21,673,380

		(8,182,390)
		(345,306)
		(31,261)
		(4,746,865)
		(2,276,209)
		(7,991,238)
		22,989,019
Group operating proft Share of proft of associates Share of proft of joint ventures Finance costs Other gains / (losses) Finance income		21,089,130	19,397,515 - - (707,343) 461,000 3,216

		63,346
		401,393

		(1,077,105)
		(461,000)
		8,550
Group proft before tax		20,024,314	19,154,388
Assets Total reportable segment assets Other segment assets			140,812,591 14,743,159

		226,035,172
		5,948,724
Group assets		231,983,896	155,555,750
Liabilities Total reportable segment liabilities Other segment liabilities			85,116,836 12,728,704

		161,590,383
		(23,029,560)
Group liabilities		138,560,823	97,845,540

56 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

6. Revenue

The Group’s revenue disaggregated by type is as follows:

The Group’s revenue disaggregated by type is as follows:
		2022	2021
	Note	$	$
Construction		331,450,121	257,514,742
Services		119,486,548	60,692,762
		450,936,669	318,207,504

The Group’s revenue disaggregated by pattern of revenue recognition is as follows:

Note	Construction	Construction		Services
	2022 $ 2021 $		2022 $	2021 $
Products and services Transferred over time Transferred at a point in time	331,450,121 257,414,742 - -			60,692,762 -
			74,416,276
			45,070,272
	331,450,121 257,414,742		119,486,548	60,692,762
		Note		2021 $
			2022 $
Contract balances Trade receivables Contract assets		15 16		57,678,803 20,351,162
			67,729,376
			45,734,278
			113,463,654	78,029,965

Trade receivables are non-interest bearing and are generally on 30 to 90 day terms. In 2022 ($91,983) (2021: $147,530) was recognised as provision for expected credit losses on trade receivables. The increase in trade receivables and contract assets for 2022 is representative of the increase in business volume and revenue for the Group during the period, as well as the timing of recognition of significant claims related to work undertaken.

Contract assets and revenue includes contract modifications recognised in accordance with the Group’s accounting policy for which amounts are not yet finalised with customers.

The following amounts are included in revenue from contracts for the year ended 30 June 2022.

		2022	2021
	Note	$	$
Revenue recognised as a contract liability in prior period		12,454,989	16,922,957

The amounts recognised as revenue from contract liabilities represents work undertaken on significant transmission projects for which advance claims were made for materials or services or which payments were made on a milestone basis.

Unsatisfied performance obligations

Transaction price expected to be recognised in future years for unsatisfied performance obligations at 30 June 2022.

		2022	2021
	Note	$	$
Construction revenue		188,800,000	219,100,000
Services revenue		2,000,000	12,500,000
		190,800,000	231,600,000

ANNUAL REPORT 2022 57

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

7. Other income

	Note	2022 $	2021 $
Net gain on disposal of property, plant and equipment Insurance claims and recoveries Government grant income Apprenticeship training subsidies Scrap metal sales Other income	(A)	279,015	186,258 105,670 2,093,000 445,699 61,366 114,553
		161,363
		-
		851,412
		211,742
		458,891
		1,962,423	3,006,546

(A) As part of economic stimulus measures introduced by the Australian Government related to the COVID19 pandemic, during 2021 Group companies received or were eligible to receive $2,093,000 in ‘JobKeeper’ wage subsidies. No amount was received during 2022.

8. Joint ventures

Acquisition of 50% of share capital of Blue Tongue Energy

On 2 February 2022, GenusPlus Group Ltd acquired 50% of Blue Tongue Energy Pty Ltd (BT Energy) for upfront consideration of $1m cash. Blue Tongue is involved in the design and construction of hybrid power technology and micro-grid energy markets. Blue Tongue is a private entity that is not listed on any public exchange. The acquisition includes a contingent earn out payment due in FY23 as disclosed under Note 27. Genus has the option to acquire the remaining 50% of the business in FY25 and FY26 with valuation based on BT Energy’s earning at the time.

BT Energy contributed $63,000 profit before tax to the consolidated group for the period following the acquisition.

The Group’s interest in Blue Tongue is accounted for using the equity method in the consolidated financial statements. The following table illustrates the summarised financial information of the Group’s investment in Blue Tongue.

		30 Jun 2022	30 Jun 2021
	Note	$	$
Current assets		929,882
Non current assets		2,091,329	-
Current liabilities		(1,706,362)	-
Non-current liabilities		(1,138,872)	-
Equity		175,977	-
Group’s share in equity – 50% (2021: Nil)		87,989	-
Goodwill		2,998,310	-
Group’s carrying amount of the investment		3,086,299	-

No dividends were received from Blue Tongue Energy Pty Ltd during the year ended 30 June 2022.

	30 Jun 2022 $	30 Jun 2021 $
Summarised Financial Information Opening carrying value of investment in Associate Initial investment in associate (a) Investment in associate recognised during the reporting period (b) Share of proft using the equity method		- - - -
	-
	1,000,000
	2,022,953
	63,346
	3,086,299	-

(a) The initial investment in Blue Tongue Energy Pty Ltd was paid in cash on 2 February 2022.

(b) The additional investment in Blue Tongue Energy Pty Ltd during the period represents contingent consideration payable to the previous owners in recognition of the achievement of earn-out targets as notified in the ASX release dated 20 December 2021.

58 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

9. Associates

The Group has a 39% interest in Maali Group JV Pty Ltd (Maali), a joint venture involved in the supply of labour hire services to a broad range of customers in the Mining, Energy and Construction sectors. The Group’s interest in Maali is accounted for using the equity method in the consolidated financial statements. Summarised financial information of the joint venture, based on its IFRS financial statements, and a reconciliation with the carrying amount of the investment in the consolidated financial statements are set out below:

set out below:
		30 Jun 2022	30 Jun 2021
Summarised statement of fnancial position of Maali	Note	$	$
Current assets		8,594,370	-
Non current assets		823,237	-
Current liabilities		(8,388,268)	-
Equity		1,029,339	-
Group’s share in equity – 39% (2021: Nil)		401,442
Goodwill		-
Group’s carrying amount of the investment		401,442	49

		30 Jun 2022	30 Jun 2021
Summarised statement of proft or loss of Maali	Note	$	$
Revenue from contracts with customers		24,786,151	-
Cost of sales		(22,215,897)	-
Administrative expenses, including depreciation		(1,166,455)	-
Finance costs including interest expense		(31,515)	-
Proft before tax		1,372,284	-
Income tax expense at 25%		(343,071)
Proft for the year (continuing operations)		1,029,213	-
Total comprehensive income for the year (continuing operations)		1,029,213	49
Group’s share ofproft for theyear at 39%		401,393	-

		30 Jun 2022	30 Jun 2021
Movement in carry value	Note	$	$
Summarised Financial Information
Opening carrying value of joint venture		49	49
Share of proft using the equity method		401,393	-
		401,442	49

Associates are accounted for using the equity method in these consolidated financial statements as set out in the Group’s accounting policies.

No dividends were received from Maali Group Pty Ltd during the year ended 30 June 2022.

ANNUAL REPORT 2022 59

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

10. Other expenses

		2022	2021
	Note	$	$
Other expenses recognised during the period
Insurance		5,022,260	3,236,339
Consultancy, legal and other professional fees		2,291,264	4,361,527
Computer, and other ICT expenses		1,800,257	949,004
Occupancy costs		879,336	731,762
Other expenses		2,778,473	419,236
Total other expenses		12,771,590	9,697,868

11. Finance costs and finance income

Finance income for the reporting periods consist of the following:

Finance income for the reporting periods consist of the following:
	Note	2022 $	2021 $
Interest income from cash and cash equivalents		8,550	3,216
		8,550	3,216
Finance costs for the reporting periods consist of the following:	Note		2021 $
		2022 $
Interest expenses for borrowings at amortised cost: Bank loans Lease liabilities			46,093 433,865
		142,053
		703,456
Total interest expense		845,509	479,958
Other fnance costs Bank fees and charges Borrowing costs			218,335 9,050

		231,596
		-
Total other fnance costs		231,596	227,385
Total fnance costs		1,077,105	707,343

60 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

12. Income tax expense

The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax rate of GenusPlus Group Ltd at 30% (2021: 30%) and the reported tax expense in profit or loss are as follows:

		2022	2021
Reconciliation between tax expense and pre-tax accounting proft	Note	$	$
Proft before tax		20,024,314	19,154,388
Domestic tax rate for GenusPlus Group Ltd		30%	30%
Expected tax expense		6,007,294	5,746,316
Adjustment for tax-exempt income:		-	-
Other tax-exempt income		-	(30,000)
Adjustment for non-deductible expenses:		202,251	-
Other non-deductible expenses		-	357,647
Adjustments in the current year in relation to the current tax of prior years		258,294	(268,344)
Actual tax expense		6,467,839	5,805,619
Tax expense comprises:
Income tax payable		72,003	5,597,645
Deferred tax (income) / expense:
Origination and reversal of temporary diferences		6,395,836	476,318
(Over) provision in respect of prior years		-	(268,344)
Income tax expense reported in the income statement		6,467,839	5,805,619
The applicable efective tax rates are:		32.3%	30.3%

ANNUAL REPORT 2022 61

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

12. Income tax expense (continued)

(a) Recognised deferred tax assets and liabilities

Deferred income tax balances relate to the following:

	1 July	Recognised in	1 July	Business	Recognised in	30 June
	2020	proft and loss	2021	Combination	proft and loss	2022
	$	$	$		$	$
Deferred tax liabilities
Trade and other	(14,682)	14,682	-	-	(108,811)	(108,811)
receivables
Contract assets	(1,981,392)	(4,123,957)	(6,105,349)	-	(7,712,398)	(13,817,747)
Financial assets	-	(339,625)	(339,625)	-	(1,122)	(340,747)
Property, plant and	(424,442)	410,563	(13,879)	-	(768,048)	(781,927)
equipment
Prepayments	-	-	-	-	(454,926)	(454,926)
Right-of-use assets	(1,210,088)	(78,164)	(1,288,252)	-	(5,696,676)	(6,984,928)
Customer relationships	-	-	-	(2,557,504)	-	(2,557,504)
	(3,630,604)	(4,116,501)	(7,747,105)	(2,557,504)	(14,741,981)	(25,046,590)
Deferred tax assets
Trade and other	-	34,015	34,015	-	(22,640)	11,375
receivables
Other current assets	1,395	(1,395)	-	-	108,812	108,812
Accrued expenses	-	-	-	-	150,000	150,000
Contract liabilities	-	1,567,606	1,567,606	-	2,512,084	4,079,690
Lease liabilities	1,221,776	368,105	1,589,881	-	5,009,490	6,599,371
Statutory liabilities	285,613	158,615	444,228	-	252,201	696,429
Employee benefts	1,226,406	1,016,611	2,243,017	-	468,316	2,711,333
Blackhole expenditure	63,201	531,089	594,290	-	(174,285)	420,005
Capital losses – Australia	61,178	-	61,178	-	(61,178)	-
Transferred tax losses	-	-	-	-	110,235	110,235
Borrowing costs	12,405	5,387	17,792	-	(6,890)	10,902
	2,871,974	3,680,033	6,552,007	-	8,346,145	14,898,152
	(758,629)	(436,468)	(1,195,098)	(2,557,504)	(6,395,836)	(10,148,438)

All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of financial position.

(b) Current Income tax

Current Income tax
		2022	2021
	Note	$	$
Income tax receivable / (payable)		4,569,537	1,482,484

62 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

13. Earnings per share

Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the parent company (GenusPlus Group Ltd) as the numerator, i.e. no adjustments to profits were necessary during the year ended 30 June 2022 and 30 June 2021.

2022 and 30 June 2021.
		2022	2021
	Note	$	$
Proft for the period		13,556,474	13,348,769

The weighted average number of shares for the purpose of calculation of diluted earnings per share can be reconciled to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:

		2022	2021
	Note	No.	No.
Weighted average number of shares used in basic earnings per share		162,218,759	154,742,031
Shares deemed to be issued for no consideration		-	-
Weighted average number of shares used in diluted earningsper share		162,218,759	154,742,031
Earnings per share (basic)		8.36	8.63
Earnings per share (diluted)		8.36	8.63

14. Cash and cash equivalents

		2022	2021
	Note	$	$
Cash at bank and in hand
Australian Dollar ($AUD) – unrestricted		25,804,868	29,345,153
Australian Dollar ($AUD) – held as guarantee1		738,882	611,326
American Dollar ($USD)		1,338,723	4,137,779
Short-term bank deposits		-	87,250
Total cash and cash equivalents		27,882,473	34,181,508

1 In accordance with certain contractual agreements, agreed amounts of cash at bank are held in guarantee to meet ongoing performance obligations.

ANNUAL REPORT 2022 63

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

15. Trade and other receivables

	2022 $	2021 $
Current Trade receivables, gross Allowance for expected credit losses		57,826,333 (147,530)
	67,821,359
	(91,983)
Trade receivables Other receivables	67,729,376	57,678,803 20,042
	1,143,535
Total trade and other receivables	68,872,911	57,698,845

Trade receivables are non-interest bearing and are generally on 30 to 90 day terms. The Group has a policy of only dealing with credit worthy customers and therefore will only recognise an allowance for expected credit losses when some uncertainty as to collection exists. When the Group is reasonably certain that no recovery of the amount owing is possible, the amount is considered irrecoverable and written off against the financial asset directly. Once an item is considered uncollectable, all other amounts relating to the same customer are then also assessed for recoverability. The Group will continue to strongly pursue all debts provided for. Due to their short-term nature, the net carrying value of trade receivables is considered a reasonable approximation of fair value.

Allowance for expected credit losses

The consolidated entity has recognised a loss of Nil (FY21: $20,927) in profit or loss in respect of the expected credit losses for the year ended 30 June 2022.

Note	Expected credit loss rate 2022 % 2021 %	Carrying amount 2022 $ 2021 $	Allowance for expected credit losses
			2022 $ 2021 $
Consolidated Not overdue 0 to 3 months overdue 3 to 6 months overdue Over 6 months overdue	Nil Nil Nil Nil Nil Nil 5.6% 5.9%	57,849,322 51,039,101 5,903,255 3,510,145 2,426,855 777,774 1,641,927 2,499,313	- - - - - - (91,983) (147,530)
		67,821,359 57,826,333	(91,983) (147,530)

The majority of customers of the Group consist of tier 1 miners and industrial services business and government trading entities. Accordingly, the calculation of expected credit losses is maintained at a relatively low level due to the infrequent nature of default by any of these customers.

The movement in the allowance for expected credit losses in respect of Trade receivables during the year was as follows:

	2022 $	2021 $
Movement in provision for expected credit losses Balance at start of year Impairment losses recognised Amounts recognised in acquisition of Connect Engineering Pty Ltd Debts written of during the year		(77,449) (20,927) (49,154) -
	(147,530)
	-
	-
	55,547
Balance at 30 June	(91,983)	(147,530)

64 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

16. Contract assets

		2022	2021
	Note	$	$
Current
Contract assets		45,734,278	20,351,162
Total contract assets		45,734,278	20,351,162

Contract assets represents the unbilled amounts expected to be collected from customers for contract work performed to date. The contract assets are transferred to trade receivables when the rights have become unconditional. This usually occurs when the Group issues an invoice in accordance with contractual terms to the customer. The increase from 2021 is representative of the overall increase in business activity experienced by the Group during the reporting period.

Remaining performance obligations

As of 30 June 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations is $190.8 million (2021: $231.6 million). The Group will recognise this revenue when the performance obligations are satisfied. Approximately 81% of remaining performance obligations are expected to occur within the next 12 months.

The remaining performance obligations balances for both 30 June 2022 and 30 June 2021 presented above relate to the revenue expected to be recognised from ongoing construction type contracts which were not wholly performed at each of those dates.

17. Financial assets and liabilities

Categories of financial assets and liabilities

Note 4 provides a description of each category of financial assets and financial liabilities and the related accounting policies. The carrying amounts of financial assets and financial liabilities in each category are as follows:

30 June 2022	Note	Amortised cost $	FVTPL $	Total $
Financial assets Cash and cash equivalents Trade and other receivables Other fnancial assets (a) Listed equity securities (a)	14 15
		27,882,473	-	27,882,473
		68,872,911	-	68,872,911
		71,833	-	71,833
		-	922,000	922,000
Total fnancial assets		96,827,217	922,000	97,749,217

(a) Other financial assets includes loans to associates and listed equity securities valued at $993,833.

30 June 2022	Note	Other liabilities amortised cost $	Other liabilities FVTPL $	Total $
Financial liabilities Bank borrowings Leases Contingent consideration Trade and other payables Non-current - bank borrowings Non-current - leases Non-current contingent consideration	25 21 25 23 25 21 25
		1,920,000	-	1,920,000
		7,765,884	-	7,765,884
		-	4,949,953	4,949,953
		72,608,068	-	72,608,068
		3,250,000	-	3,250,000
		14,232,018	-	14,232,018
		-	674,000	674,000
Total fnancial liabilities		99,775,972	5,623,953	105,399,923

ANNUAL REPORT 2022 65

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

17. Financial assets and liabilities (continued)

30 June 2021	Note	Amortised cost $	FVTPL $	Total $
Financial assets Cash and cash equivalents Trade and other receivables Other fnancial assets Listed equity securities	14 15 (b) (b)	34,181,508 57,698,845 100,000 -	- - - 1,383,000	34,181,508 57,698,845 100,000 1,383,000
Total fnancial assets		91,980,353	1,383,000	93,363,353

(b) Other financial assets includes loans to joint ventures and listed equity securities valued at $1,483,000.

30 June 2021	Note	Other liabilities amortised cost $	Other liabilities FVTPL $	Total $
Financial liabilities Bank borrowings Leases Trade and other payables Non-current - bank borrowings Non-current - leases	25 21 23 25 21	1,920,000 4,285,659 64,012,279 4,920,000 8,758,718	- - - - -	1,920,000 4,285,659 64,012,279 4,920,000 8,758,718
Total fnancial liabilities		83,896,656	-	83,896,656

A description of the Group’s financial instrument risks, including risk management objectives and policies is given in Note 38.

The methods used to measure financial assets and liabilities reported at fair value are described in Note 39.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets at FVTPL include the equity investment in Volt Power Ltd (VPR). The Group accounts for the investment at FVTPL and did not make the irrevocable election to account for it at FVOCI.

and did not make the irrevocable election to account for it at FVOCI.
	Note	2022 $	2021 $
Listed investment in Volt Power Ltd (VPR)		922,000	1,383,000
		922,000	1,383,000

Borrowings

Borrowings include the following financial liabilities:

Borrowings Borrowings include the following fnancial liabilities:
		Current		Non-current
	2022	2021	2022	2021
	$	$	$	$
At amortised cost Bank borrowings	1,920,000	1,920,000	3,250,000	4,920,000
Total borrowings	1,920,000	1,920,000	3,250,000	4,920,000

Bank borrowings are secured by a floating charge over the assets of the Group (see Note 25). Current interest rates are variable and average 1.58% (2021: 0.07%). The carrying amount of the other bank borrowings is considered to be a reasonable approximation of the fair value.

66 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

17. Financial assets and liabilities (continued)

Other financial instruments

The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of fair value:

trade and other receivables
cash and cash equivalents
trade and other payables.
contingent consideration payable.

18. Inventories

	2022 $	2021 $
Current At cost: Raw materials and stores		2,044,909

	3,728,803
Total inventories	3,728,803	2,044,909

In 2022, a total of $139,298,892 of materials was included in profit and loss as an expense (2021: $96,660,619). This includes an amount of NIL resulting from write down of inventories (2021: $19,219).

19. Other assets

	2022 $	2020 $
Current Prepayments Security deposits		3,371,850 78,076
	1,516,419
	66,460
Total other assets	1,582,879	3,449,926

ANNUAL REPORT 2022 67

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

39,582,812 5,714,352 2,284,278 - (2,891,387) (14,625)	44,675,430	(23,815,380) 1,798,746 - (4,983,690)	(27,000,324)	17,675,106
600,140 43,478 - 61,528 (2,100) -	703,046	(343,765) 878 (20,310) (165,050)	(528,247)	174,799
1,105,746 843,662 800,000 33,052 - -	2,782,460	(404,928) - (49,131) (590,873)	(1,044,932)	1,737,528
466,501 69,903 40,000 13,454 (1,305) (14,625)	573,928	(215,729) 271 (23,475) (119,996)	(358,929)	214,999
20,293,518 4,094,482 1,444,278 172,137 (957,173) -	25,047,242	(13,740,458) 756,111 (327,398) (2,481,556)	(15,793,301)	9,253,941
15,457,978 452,610 - (280,171) (1,431,187) -	14,199,230	(8,822,204) 895,673 420,314 (1,433,037)	(8,939,254)	5,259,976
1,013,259 94,767 - - (499,622) -	608,404	(198,463) 145,813 - (129,557)	(182,207)	426,197
645,670 115,450 - - - -	761,120	(89,833) - - (63,621)	(153,454)	607,666
Gross carrying amount Balance at 1 July 2021 Additions Acquisition through business combinations Re-classifcation Disposals Disposals as part of business disposal	Balance at 30 June 2022	Depreciation and impairment Balance at 1 July 2021 Disposals Re-classifcation Depreciation	Balance at 30 June 2022	Carrying amount 30 June 2022

68 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

For the year ended 30 June 2021 Land and buildings $ Leasehold improvements $ Motor vehicles $ Plant and equipment $ Furniture, fxtures and fttings $ Software and technology $ Tooling and low value assets $ Total $	Gross carrying amount Balance at 1 July 2020 492,820 1,011,022 14,707,385 18,962,252 374,365 573,231 358,354 36,479,429 Additions 120,750 56,732 780,736 2,635,587 73,745 434,499 210,145 4,312,194 Acquisition through business combinations - 5,000 936,000 1,491,150 27,526 152,550 - 2,612,226 Re-classifcation 32,100 - 1,339,157 (1,458,314) - - 87,057 - Re-classifcation as right-of-use assets1 - - (351,750) (648,800) - - - (1,000,550) Disposals - (59,495) (1,953,550) (688,357) (9,135) (54,534) (55,416) (2,820,487)	Balance at 30 June 2021 645,670 1,013,259 15,457,978 20,293,518 466,501 1,105,746 600,140 39,582,812	Depreciation and impairment Balance at 1 July 2020 (16,134) (112,732) (7,474,391) (12,446,256) (135,569) (273,840) (239,539) (20,698,461) Disposals - 45,035 1,043,541 565,754 3,773 49,472 55,416 1,762,991 Re-classifcation (3,210) - (101,206) 125,651 - - (21,235) - Depreciation (70,489) (130,766) (2,290,148) (1,985,607) (83,933) (180,560) (138,407) (4,879,910)	Balance at 30 June 2021 (89,833) (198,463) (8,822,204) (13,740,458) (215,729) (404,928) (343,765) (23,815,380)	Carrying amount 30 June 2021 555,837 814,796 6,635,774 6,553,060 250,772 700,818 256,375 15,767,432	1 Certain items of motor vehicles and plant and equipment were re-classifed to right-of-use assets subsequent to acquisition (Note 21)

ANNUAL REPORT 2022 69

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

20. Property, plant and equipment (continued)

All depreciation and impairment charges are included within depreciation, amortisation and impairment of non-financial assets.

Total depreciation and amortisation recognised during the reporting period:

	Note	2022 $	2021 $
Depreciation Buildings Leasehold improvements Motor vehicles Plant and equipment Furniture, fxtures and fttings Software and technology Tooling and low value assets			70,489 130,766 2,290,148 1,985,607 83,933 180,560 138,407
		63,621
		129,557
		1,433,037
		2,481,556
		119,996
		590,873
		165,050
Total depreciation expense for the year		4,983,690	4,879,910
Depreciation – right of use assets Amortisation – intellectual property and customer contracts	21		2,533,618 -
		5,340,060
		1,578,181
Total depreciation and amortisation		11,901,931	7,413,528

The net assets of the Group have been pledged as security for the Group’s other bank borrowings (see Note 25).

21. Leases

Lease liabilities are presented in the statement of financial position as follows:

Lease liabilities are presented in the statement of fnancial position as follows:
	Note	2022 $	2021 $
Current Non-current		7,765,884	4,285,659 8,758,718
		14,232,018
Total leases		21,997,902	13,044,377

Group as a lessee

The Group has lease contracts for land and buildings and for various items of plant and equipment and motor vehicles used in its operations. Leases of plant and equipment and motor vehicles generally have lease terms between 3 and 5 years after which ownership of the underlying asset passes to the Group. Leases over land and buildings have lease terms of between 1 and 10 years. The Groups obligations under its leases are secured by the lessor title to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased assets.

The Group also has certain leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of lowvalue assets’ recognition exemptions for these leases.

70 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

21. Leases (continued)

Group as a lessee (continued)

Set out below are the carrying amounts of right-of-use assets and the movement during the period:

		2022	2021
	Note	$	$
Right-of-use assets – Land and Buildings
As at 1 July		4,666,285	4,457,451
Additions		3,929,446	283,954
Adjustments related to changes in lease conditions1		91,773	256,001
Acquired under a business combination2	35	-	969,355
Depreciation expense		(2,227,853)	(1,207,731)
De-recognised duringtheperiod3		(270,942)	(92,745)
As at 30 June		6,188,709	4,666,285
Right-of-use assets – Plant and Equipment
As at 1 July		4,236,234	970,233
Additions		5,139,079	3,283,569
Acquired under a business combination2	35	-	170,000
Disposal		(47,199)	-
Re-classifcation from property, plant & equipment5		-	648,800
Depreciation expense		(1,703,882)	(836,368)
As at 30 June		7,624,232	4,236,234
Right-of-use asset – Motor Vehicles
As at 1 July		4,648,338	1,480,367
Additions		6,234,706	2,571,740
Disposals		(4,568)	-
Acquired under a business combination4	35	-	734,000
Re-classifcation from property, plant & equipment5		-	351,750
Depreciation expense		(1,408,325)	(489,519)
As at 30 June		9,470,151	4,648,338

Total Right-Of-Use Assets		23,283,092	13,550,857

1 Increase resulting from a change in the monthly lease payable to the owner.

2 Acquired as part of the acquisition of Connect Engineering Pty Ltd.

3 Leases surrendered during the period.

4 Includes motor vehicles acquired as part of the acquisition of Connect Engineering Pty Ltd.

5 Includes plant and equipment and motor vehicles purchased from Great Southern Electrical Pty Ltd that were financed via a lease arrangement after transfer to the Group.

The following are the amounts recognised in profit or loss:

	2022 $	2021 $
Depreciation of right-of-use assets Interest expense on right-of-use asset lease liabilities Expense relatingto short-term leases	5,340,060	2,533,618 433,865 5,320,931
	703,456
	11,496,147
	17,539,663	8,288,414

The group had total cash outflows for leases of $6,975,397 in 2022 (2021: $3,314,831). The Group also had non-cash additions to right-of-use assets and lease liabilities of $15,516,763 in 2022 (2020: $7,139,813).

ANNUAL REPORT 2022 71

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

21. Lease (continued)

Group as a lessee (continued)

Group as a lessee (continued)
	Note	2022 $	2021 $
Maturity analysis: Less than 1 year Between 1 year and 2 years Between 2 years and 5 years Over 5 years			4,829,670 3,943,431 4,949,197 282,362
		8,484,431
		7,033,025
		7,908,245
		-
Less: interest		23,425,701	14,004,660 (960,283)
		(1,427,799)
		21,997,902	13,044,377

The Group does not face a significant liquidity risk with regards to its lease liabilities. Lease liabilities are monitored within the Group treasury function.

22. Intangible assets

The movements in the net carrying amount of intangible assets is as follows:

The movements in the net carrying amount of intangible assets is as follows:
	Note	2022 $	2021 $
Goodwill Balance 1 July Acquired through business combinations	35		1,613,914 3,891,774
		5,505,688
		14,035,100
Balance 30 June		19,540,788	5,505,688
Accumulated impairment losses Accumulated amortisation		-	- -
		-
Carrying amount at 30 June		19,540,788	5,505,688
Customer contracts Balance 1 July Acquired through business combinations	35		- 39,890
		39,890
		9,004,000
Balance 30 June Accumulated amortisation		9,043,890	39,890 -
		(518,879)
Carrying amount at 30 June		8,525,011	39,890
Other intellectual property Balance 1 July Acquired through business combinations	35		- -
		-
		7,166,746
Balance 30 June Accumulated amortisation		7,166,746	- -
		(1,059,302)
Carrying amount at 30 June		6,107,444	-
Total intangible assets		34,173,243	5,545,578

No adjustments to Goodwill were recognised during the reporting period.

Customer contracts and other intellectual property are amortised over their estimated useful lives, which is on average 11 years (customer contracts) and 9 years (intellectual property).

72 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

22. Intangible assets (continued)

Impairment testing

For the purpose of annual impairment testing, goodwill is allocated to the following cash-generating units, which are the units expected to benefit from the synergies of the business combinations in which the goodwill arises.

	Note	2022 $	2021 $
Powerlines Plus (Qld) Pty Ltd Proton Power Pty Ltd KEC Power Pty Ltd Connect Engineering Pty Ltd Genus PFA Pty Ltd	35	1,179,147	1,179,147 305,395 129,372 3,891,774 -
		305,395
		129,372
		3,891,774
		14,035,100
Goodwill allocation at 30 June		19,540,788	5,505,688

The recoverable amounts of the cash-generating units were determined based on value-in-use calculations, covering a threeyear forecast, followed by an extrapolation of expected cash flows for the units’ remaining useful lives using the growth rates determined by management. The present value of the expected cash flows of each segment is determined by applying a suitable discount rate.

	Growth rates Discount rates
	2022 2021 2022 2021
Powerlines Plus (Qld) Pty Ltd Proton Power Pty Ltd KEC Power Pty Ltd Connect Engineering Pty Ltd Genus PFA Pty Ltd	5% 5% 13% 7% 5% 5% 13% 7% 5% 5% 13% 7% 5% 5% 13% 7% 5% - 13% -

Growth rates

The growth rates reflect the long-term average growth rates for the business of the segments and the markets they operate in.

Sensitivity

As disclosed in note 4, the directors have made judgements and estimates in respect of impairment testing of goodwill. Should these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The sensitivities are as follows:

Gross Margin − Decreased demand and increase costs can lead to a decline in the gross margin and earnings before interest, taxes and depreciation (EBITDA). A decrease in the gross EBITDA margin by 1.0% would result in impairment in the Connect cash generating unit.

Growth rate estimates − Rates are based on published industry research. The effect of whether delays, new entrants to the market could yield a reasonably possible alternative to the estimated long-term growth rate of 5% for the Connect CGU. A reduction by 1% in the long-term growth rate would result in an impairment.

Discount rates

The discount rates reflect appropriate adjustments relating to market risk and specific risk factors of each unit.

Cash flow assumptions

Powerlines Plus (Qld) Pty Ltd, Proton Power Pty Ltd, KEC Power Pty Ltd, Connect Engineering Pty Ltd & Genus PFA Pty Ltd

Management’s key assumptions include stable profit margins, based on past experience in this market. The Group’s management believes that this is the best available input for forecasting this mature market. Cash flow projections reflect stable profit margins achieved immediately before the budget period. No expected efficiency improvements have been taken into account and prices and wages reflect publicly available forecasts of inflation for the industry.

ANNUAL REPORT 2022 73

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

23. Trade and other payables

	2022 $	2021 $
Unsecured liabilities: Trade payables Goods and services tax payable Unpaid wages Sundry payables and accrued expenses		37,462,511 1,545,427 3,041,992 21,962,349
	33,646,539
	2,810,173
	4,413,962
	31,737,394
Total trade and otherpayables	72,608,068	64,012,279

All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable approximation of fair value.

24. Contract liabilities

		2022	2021
	Note	$	$
Short-term advances for materials		885,057	4,357,461
Short-term advances for construction services		11,867,906	867,893
		12,752,963	5,225,354

Advances received for construction contract work represent customer payments received in advance of performance (contract liabilities) that are expected to be recognised as revenue in the next financial year. The amounts recognised in respect of construction contracts will generally be utilised within the next reporting period. The balance relating to advances for materials decreased during the period as the related aspects of the contracts were performed. Advances in relation to construction services increased during the period due to the increase in the Group’s customer base, and the recognition of milestone payments.

25. Other financial liabilities

	Note	2022 $	2021 $
Secured borrowings – at amortised cost Bank loan – secured Current Non-current			1,920,000 4,920,000

		1,920,000
		3,250,000
		5,170,000	6,840,000
	Note		2021 $
		2022 $
Contingent consideration Current Non-current			- -
		4,949,953
		674,000
		5,623,953	-

74 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

25. Other financial liabilities (continued)

The bank debt facility comprises term loans with quarterly principal repayments with maturity dates between two and five years.

The group has an overdraft/trade finance facility with a limit of $10,000,000 with $10,000,000 available at 30 June 2022.

The group has an equipment finance facility with Commonwealth Bank of Australia Pty Ltd (CBA) with a limit of $7,000,000 (FY21 - $4,000,000) with $3,198,984 available at 30 June 2022 (FY21 - $2,840,000).

The group has an equipment finance facility with Mercedes Benz finance with a limit of $2,000,000 (FY21 - $2,000,000) with $1,981,358 available at 30 June 2022 (FY21 - $1,882,500).

The group has an equipment finance facility with Toyota Asset Finance with a limit of $12,000,000 (FY21 - $6,000,000) with $5,809,252 available at 30 June 2022 (FY21 - $594,000).

The group has an equipment finance facility with Australia and New Zealand Banking Group Limited (ANZ) with a limit of $4,000,000 (FY21 - $4,000,000) with $708,365 available at 30 June 2022 (FY21 - $2,481,000).

The group has an equipment finance facility with Westpac Banking Corporation (WBC) with a limit of $2,000,000 (FY21 – N/A) with $1,507,969 available at 30 June 2022 (FY21 - $N/A)

The bank debt is secured by a General Security Agreement of the group. The Group was not in breach of any loan agreements permitting the lender to demand accelerated repayments at year end, nor did any breach occur during the year. The Group was not in default of any loans payable recognised at year end during the year.

Contingent consideration

As part of the agreement to purchase 50% of Blue Tongue Energy Pty Ltd (Blue Tongue) a contingent consideration has been agreed. There will be additional cash payments to the owners of Blue Tongue if the entity generates more than $500,000 profit before interest and tax in the financial reporting period ended 30 June 2022. This target was met with $2,022,953 recognised as contingent consideration to be settled within 12 months.

As part of the purchase agreement with the previous owners of Pole Foundations Australia (Pole Foundations), a contingent consideration has been agreed. There will be additional cash payments to the former owners of Pole Foundations:

i. if the entity generates more than $6.175 million profit before interest, tax, depreciation and amortisation (EBITDA) in the financial reporting period ended 30 June 2022. This target was met with $2,927,000 recognised as contingent consideration that is expected to be settled within 12 months.
ii. if the entity generates EBITDA between of $6.675 million and $9.8 million in the financial reporting period ended 30 June 2023. This target is only expected to be partially met with $674,000 recognised as contingent consideration. If EBITDA of $9.8 million is achieved, $7 million will be payable, with a pro-rata payment for the EBITDA between $6.675 million and $9.8 million.
iii. if the entity generates EBITDA between of $9.8 million and $12.25 million in the financial reporting period ended 30 June 2023. This target is only not expected to be met. No contingent consideration has been recognised. If EBITDA of $12.25 million is achieved, $9 million will be payable, with a pro-rata payment for the EBITDA between $9.8 million and $12.25 million.

ANNUAL REPORT 2022 75

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

26. Employee benefits

Employee benefits expense

Expenses recognised for employee benefits are analysed below:

	Note	2022 $	2021 $
Salaries and wages Superannuation Amounts provided for employee entitlements Short term incentives Share based payments expense Other allowances and expenses	37	114,594,683	69,718,843 5,381,807 4,843,608 1,300,000 700,000 5,206,231
		9,053,499
		6,181,826
		617,884
		-
		6,749,874
Employee benefts expense		137,197,766	87,150,489

During 2021 certain employees and Non-Executive Directors were issued shares in lieu of cash for meeting agreed targets. Inaugurating employees with Genus Renewables received a sign-on bonus and Non-Executive Directors received shares in accordance with their contracts for successful listing of the Group on the ASX. No amounts were issued or expected to be issued as shares for 2022.

Employee benefits

The liabilities recognised for employee benefits consist of the following amounts:

Employee benefts The liabilities recognised for employee benefts consist of the following amounts:
	Note	2022 $	2021 $
Current Annual leave Long service leave Other short term employee benefts			4,756,411 399,591 1,300,000
		5,578,530
		357,056
		551,649
		6,487,235	6,456,002
Non-current Long service leave			1,022,430
		2,550,543

Total employee benefts		9,037,778	7,478,432

The current portion of these liabilities represents the groups obligations to which the employee has a current legal entitlement. These liabilities arise mainly from accrued annual leave entitlement at reporting date and for employees who have satisfied the service eligibility for long service leave – usually 10 years.

27. Provisions

	2022 $	2021 $
Current Amounts recognised in respected of expected losses or write-downs		50,000
	1,221,721
Totalprovisions	1,221,721	50,000

76 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

28. Share capital

The share capital of the Group consists only of fully paid ordinary shares; the shares do not have a par value. Ordinary shares participate in dividends and the proceeds on winding up of the Group in proportion to the number of shares held.

Fully paid ordinary shares

Fully paid ordinary shares
	2022 Shares	2021 Shares	2022 $	2021 $
Beginning of the year Shares issued to Directors1 Shares issued as part of a capital raising2 Shares issued as part of a business combination3,4 Shares issued as employee benefts5 Share issue costs	155,589,964	154,350,877 400,000 - 529,010 310,077 -	28,925,754	27,732,909 400,000 - 500,000 300,000 (7,155)
	-		-
	16,528,926		20,000,000
	4,633,530		6,023,589
	-		-
	-		(1,160,306)
Total contributed equityat 30 June	176,752,420	155,589,964	53,789,037	28,925,754

1 400,000 shares were issued to Directors in accordance with their contracts upon the successful listing of GenusPlus Group Ltd on the ASX. GenusPlus Group Ltd (ASX: GNP) officially listed on the ASX on 14 December 2020.
2 16,528,926 shares were issued as part of a capital raising to fund the acquisition of Pole Foundations Australia as announced to the market 17 February 2022. The share placement was completed on 28 February 2022.
3 4,633,530 shares were issued as part consideration for the acquisition of Pole Foundations Australia on 29 April 2022.
4 529,010 shares were issued as consideration for the acquisition of Connect Engineering Pty Ltd on 4 June 2021
5 310,077 shares were issued as consideration for certain employees entering new employment contracts on 31 March 2021 upon the commencement of Genus Renewables Pty Ltd.

Each share has the same right to receive dividend and the repayment of capital and represents one vote at the Shareholders’ Meeting of GenusPlus Group Ltd.

29. Reserves

	Foreign Currency Translation reserve	Corporate Restructure reserve $	Total $
Balance at 1 July 2020 Movements in asset values measured in foreign currencies that will subsequently be re-classifed to proft or loss	- 8,275	(511,834) -	(511,834) 8,275
Balance at 30 June 2021	8,275	(511,834)	(503,559)
Balance at 1 July 2021 Movements in asset values measured in foreign currencies that will subsequently be re-classifed to proft or loss	8,275 160,117	(511,834) -	(503,559) 160,117
Balance at 30 June 2022	168,392	(511,834)	(343,442)

Corporate restructure reserve

The corporate reconstruction reserve recorded the transaction on the introduction of a new ultimate parent entity.

Foreign currency translation reserve

The foreign currency translation reserve records the un-recognised gains / (losses) incurred on translation of monetary items held in US Dollars ($USD). The balance will be subsequently reported in profit and loss when the underlying value of the monetary item (cash at bank) is utilised.

ANNUAL REPORT 2022 77

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

30. Dividends on equity instruments

	Year ended 30 June 2022 Year ended 30 June 2021
	Cents per share Total $ Cents per share Total $
Recognised amounts Fully paid ordinary shares Final dividend	1.8 3,181,544 1.8 2,800,619

On 28 October 2021, a dividend of 1.8c per share was paid to the holders of fully paid ordinary shares in respect of the financial year ended 30 June 2021.

On 26 August 2022, the directors declared a fully franked dividend of 1.8 cents per share to the holders of fully paid ordinary shares in respect of the financial year ended 30 June 2022. At the time of reporting, the dividend of $3,181,544 was unpaid. The record date is 28 October 2022 and the payment date is 30 November 2022.

Distributions made and proposed

Distributions made and proposed
	2022	2021
	$	$
Franking credit balance
The amount of franking credits available for the subsequent fnancial year are:
Franking account balances as at the end of the fnancial year at 30% (2021: 30%)	16,836,429	20,268,588

31. Reconciliation of cash flows

Reconciliation of cash flows from operating activities

Reconciliation of cash fows from operating activities
	2022 $	2021 $
Cash fows from operating activities Proft after income tax		13,348,769
	13,556,475
Non-cash fows in proft: gain on disposal of plant and equipment gain on disposal of subsidiary depreciation and amortisation increase in value of investments reported at FVTPL share of profts of associates and joint ventures net fnance costs share based payments – net of other costs Changes in assets and liabilities: (increase) in trade and other receivables decrease / (increase) in other assets (increase) / decrease in inventories increase in trade and other payables		(186,258) - 7,413,528 (461,000) - 704,127 692,798 (30,928,713) (1,393,440) 497,003 17,301,107
	(279,015)
	(70,000)
	11,901,931
	461,000
	(464,739)
	1,068,555
	-

	(34,801,667)
	1,867,047
	(1,537,509)
	19,762,655
Net cashprovided byoperatingactivities	11,464,733	6,987,921

78 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

32. Auditor remuneration

During the financial year the following fees were paid or payable for services provided by Grant Thornton, the auditor of the company, its network firms and unrelated firms:

company, its network frms and unrelated frms:
	Note	2022 $	2021 $
Auditing services – Grant Thornton Audit or review of the fnancial statements			162,000
		235,000
Other services – Grant Thornton Investigating Accountant Report Taxation governance review Review of tax return Other non-assurance services			175,000 22,000 - 46,675

		-
		-
		7,400
		25,500
Total auditor’s remuneration		267,900	405,675

33. Related party transactions

The Group’s related parties include its key management personnel, related parties of its key management personnel, and others as described below.

Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash.

Transactions with related parties

As part of normal business operations, the Group undertakes construction work through associated entities, as well as leasing rental properties. A summary of these transactions is included below.

	2022	2021
	$	$
Services provided by related parties
Pastoral Plus (Director D Riches)	646,489	839,903
Testing Plus WA (Director D Riches)	1,229	96,545
Partum Engineering (Director D Riches)	7,396,206	6,673,059
Sparke Helmore Lawyers (Director P. Gavazzi)	9,339	1,144,517
Matt Riches and Dave Riches (Director D Riches)	559,244	572,055
Dave Riches (Director D Riches)	520,900	524,613
Edge People Management (Director D Riches)	41,889	15,662
	2022	2021
	$	$
Services provided to related parties
Partum Engineering (Director D Riches)	-	102,394
Testing Plus WA (Director D Riches)	-	1,980
Pastoral Plus (Director D Riches)	22,757	30,533
Blue Tongue EnergyPtyLtd (Associate)	498,558	-

All services were contracted at arms’ length basis.

ANNUAL REPORT 2022 79

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

33. Related party transactions (continued)

Transactions with related parties (continued)

Transactions with related parties (continued)
2022	2021
$	$
Amounts due to related parties at reporting date Pastoral Plus (Director D Riches) 87,002 Testing Plus WA (Director D Riches) - Partum Engineering (Director D Riches) 775,051 Innotech Services1 (Director D. Riches) - Sparke Helmore Lawyers (Director P. Gavazzi) - Matt Riches Pty Ltd & Dave Riches Pty Ltd (Director D Riches) 21,116 Dave Riches Pty Ltd (Director D Riches) 9,832 Edge People Management (Director D Riches) 8,760	52,345 (1,019) 561,880 1,105,923 87,472 - - -

2022	2021
$	$
Amounts due from related parties at reporting date AUSCON Construction Group (Director D. Riches) - Pastoral Plus (Director D. Riches) 18,445 Blue Tongue EnergyPtyLtd 498,558	11,192 - -

All amounts outstanding at reporting date were included in accounts payable or accounts receivable, and settled in accordance with commercial terms.

Transactions with key management personnel

Key management of the Group are the Non-Executive members of the Group’s Board of Directors, the Group’s Chief Executive Officer and the other members of the Executive team reporting to the Managing Director. Key management personnel remuneration includes the following expenses:

remuneration includes the following expenses:
	2022 $	2021 $
Salaries including bonuses Long service leave Superannuation Termination benefts Share-basedpayment	1,890,643	2,075,571 17,197 129,750 - 400,000
	7,952
	142,858
	-
	-
Total remuneration	2,041,453	2,622,518

During 2022, the Group used the legal services of one Company Director (Mr Paul Gavazzi) a firm over which he exercises significant influence. The amounts billed related to this legal service amounted to $9,339 (2021: $1,144,517), based on normal market rates.

80 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

34. Contingent assets and contingent liabilities

The Group has no contingent assets.

There were no material warranty or legal claims brought against the Group during the year. Unless recognised as a provision, management considers these claims to be unjustified and the probability that they will require settlement at the Group’s expense to be remote.

Further information on these contingencies is omitted so as not to prejudice the Group’s position in the related disputes.

	2022 $	2021 $
Estimates of the potential fnancial efect of contingent liabilities that may become payable: Secured guarantee to company's bankers supported by a foating charge over the Group assets Surety bonds secured by the Group assets		33,129,277 11,372,443
	26,601,326
	26,264,012
	52,865,338	44,501,720

The CBA guarantee facility has a limit of $60,000,000 (FY21 - $35,000,000).

The Surety bond facilities have a limit of $40,000,000 (FY21 - $30,000,000).

35. Acquisitions and disposals

Acquisition of key Tandem Corp assets and contracts

On 6 August 2021, GenusPlus Group Ltd completed the purchase of selected key contracts, intellectual property, IT systems, plant and equipment and employee contracts of Tandem Corp Pty Ltd out of administration for total consideration of $3.463m in cash.

The assets acquired under the purchase were fair valued at $728,000 with the remaining purchase price allocated to intangibles that will be amortised over a three year period.

For the period since the date of acquisition, the contracts acquired contributed revenue of $53m and loss before tax of $4.6m to the consolidated group. This transaction was accounted for as a business combination.

Acquisition of net assets of Pole Foundations Australia

On 29 April 2022, GenusPlus Group Ltd acquired 100% of the Pole Foundations Australia (PFA) business from BJ Fraser Pty Ltd ACN 139 760 071 as trustee for the BJ Fraser Family Trust and CC Rankine Pty Ltd ACN 098 970 300 as trustee for the CC Rankine Family Trust for an upfront consideration of $22.523m comprised of $16.5m cash and $6.023m in Genus shares (4,633,530 shares with a value at date of transfer of $1.21 were issued, escrowed for 24 months).

Under the terms of the agreement, Genus acquired the net assets of PFA comprising property, plant and equipment, inventory and employee liabilities.

The acquisition is subject to further contingent earn-out payments in cash subject to PFA’s performance in FY22 to FY24. The performance metric for FY22 was satisfied, with payment due as disclosed under note 27.

Pole Foundations contributed revenue of $2,658,00 and profit before tax of $805,000 to the consolidated group for the period following the acquisition.

Following the acquisition, a fair value allocation of the purchase price related to the separately identifiable intangible assets was undertaken by an external expert. Subject to the experts valuation, goodwill of $4,660,000 was recognised from the acquisition. None of the goodwill is expected to be deductible of income tax purposes.

In relation to the acquisition of Pole Foundations Australia, the Group has performed a provisional assessment of the fair value of the assets and liabilities as at the date of acquisition as well as the contingent consideration payable for meeting specific earnings guidance over the succeeding two-year period. For the purposes of the balance sheet, the assets and liabilities have been recorded at their provisional fair values. Under Australian Accounting Standards, the Group has up to 12 months from the date of acquisition to complete its initial acquisition accounting. The Group has already commenced this exercise to consider the fair values of intangible assets acquired. As at the date of this report, this assessment is not complete.

This transaction was accounted for as a business combination.

ANNUAL REPORT 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

35. Acquisitions and disposals (continued)

Businesses disposed

The Group disposed of its interest in Burton Training and Consultancy Pty Ltd during the year ended 30 June 2022.

	Tandem Corp $	Pole Foundations Australia $
Consideration transferred / transferrable Cash Shares Adjustment amount Contingent consideration arrangement	3,463,360 - - -	16,500,000 6,023,589 (246,330) 3,601,000
Total	3,463,360	25,878,259
Assets acquired and liabilities assumed at the date of acquisition Plant and equipment Software and technology Deferred tax assets Work in progress Prepayments Inventory Intellectual property Customer relationships Goodwill Deferred tax liability Employee entitlements Liabilities to subcontractors mobilisation costs	40,000 800,000 1,146,459 1,685,758 278,286 - 2,934,387 - - - (1,553,037) (1,868,493)	1,444,278 - - - 146,385 4,232,359 9,004,000 14,035,100 (2,701,200) (282,663) -
Total	3,463,360	25,878,259
Net cash outfow on acquisition of businesses Consideration paid in cash Less: cash and cash equivalent balances acquired	3,463,360 -	16,500,000 -
Total	3,463,360	16,500,000

82 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

36. Interests in subsidiaries

Composition of the Group

Set out below details of the subsidiaries held directly by the Group:

	Country of	Percentage	Ownership
	Incorporation	2022	2021
Parent Entity:
GenusPlus Group Ltd(a)	Aust
Subsidiaries:
Powerlines Plus Pty Ltd(b)	Aust	100%	100%
Diamond Underground Services Pty Ltd(b)	Aust	100%	100%
Proton Power Pty Ltd(b)	Aust	100%	100%
Complete Cabling and Construction Pty Ltd(b)	Aust	100%	100%
Proton Technical Services Pty Ltd(b)	Aust	100%	100%
GPL (WA) Pty Ltd(b)	Aust	100%	100%
Powerlines Plus (Qld) Pty Ltd (Burton Power Pty Ltd)(c)	Aust	100%	100%
Genus Services Pty Ltd	Aust	100%	100%
KEC Power Pty Ltd(d)	Aust	100%	100%
Powerlines Plus (NSW) Pty Ltd(e)	Aust	100%	100%
ECM Consultancy Pty Ltd(f)	Aust	100%	100%
Genus Renewables Pty Ltd(g)	Aust	100%	100%
Connect Engineering Pty Ltd(h)	Aust	100%	100%
Connect Infrastructure Pty Ltd(h)	Aust	100%	100%
Connect Infrastructure Construction Pty Ltd(h)	Aust	100%	100%
Connect Infrastructure Design Pty Ltd(h)	Aust	100%	100%
Connect Design South Coast (NSW) Pty Ltd(h)	Aust	100%	100%
Burton Training & Consultancy Pty Ltd(i)	Aust	-	100%
Genus PFA Pty Ltd(j)	Aust	100%	-

(a) GenusPlus Group Ltd was incorporated on 6 July 2017.

(b) Powerlines Plus Pty Ltd was acquired on 17 May 2018. Powerlines Plus Pty Ltd was the 100% shareholder of Diamond Underground Services Pty Ltd, Proton Power Pty Ltd, Complete Cabling and Construction Pty Ltd, Proton Technical Services Pty Ltd, Proton E&I Pty Ltd and GPL (WA) Pty Ltd.

(d) KEC Power Pty Ltd was incorporated on 4 February 2019.

(e) Powerlines Plus (NSW) Pty Ltd was incorporated on 26 November 2019.

(f) ECM Consultancy was incorporated on 12 December 2019.

(g) Genus Renewables Pty Ltd was incorporated on 3 July 2020.

(h) Connect Engineering Pty Ltd and its subsidiaries were acquired on 1 June 2021.

(i) Burton Training & Consultancy acquisition was completed 15 January 2021 and disposed with effect from 1 July 2021.

(j) Pole Foundations Australia (now Genus PFA Pty Ltd) was acquired on 29 April 2022.

ANNUAL REPORT 2022 83

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

37. Share based payments

Expense recognised in profit or loss.

Share based payments expenses for the year comprises:

Share based payments expenses for the year comprises:
	2022 $	2021 $
Directors fees Other employment expense	-	400,000 300,000
	-
Total	-	700,000

No shares were issued to any member or employee during 2022 by way of payment for service.

During 2021 Non-Executive Directors, in accordance with their contracts, were issued shares in GenusPlus Group Ltd upon its successful listing on the Australian Stock Exchange (ASX: GNP).

Upon the initial business registration of Genus Renewables, certain inaugurating employees received a sign-on bonus in shares.

38. Financial risk management

Risk management objectives and policies

The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and liabilities by category are summarised in Note 17. The main types of risks are market risk, credit risk and liquidity risk.

The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, and focuses on actively securing the Group’s short to medium-term cash flows by minimising the exposure to financial markets. Long-term financial investments are managed to generate lasting returns.

The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Group is exposed are described below.

Market risk analysis

The Group is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risks, which result from both its operating and investing activities.

Foreign currency sensitivity

Most of the Group’s transactions are carried out in Australian Dollars (AUD). Exposures to currency exchange rates arise from the Group’s sales and purchases denominated in US-Dollars (USD). The Group holds a bank account in USD for this purpose.

To mitigate the Group’s exposure to foreign currency risk, non-AUD cash flows are monitored in accordance with the Group’s risk management policies.

Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no hedging activity is undertaken.

Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The amounts shown are those reported to key management translated into AUD at the closing rate:

	2022 Short term exposure USD $	2022 Long term exposure USD $	2021 Short term exposure USD $	2021 Long term exposure USD $
Financial assets Financial liabilities	922,967	-	3,103,646 -	- -
	-	-
Total exposure	922,967	-	3,103,646	-

84 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

38. Financial risk management (continued)

Foreign currency sensitivity (continued)

The following table illustrates the sensitivity of profit and equity in respect of the Group’s financial assets and financial liabilities and the AUD/USD exchange rate ‘all other things being equal’. It assumes a +/- 10% change of the AUD/USD exchange rate for the year ended 30 June 2022 (2021: 10%). The percentage has been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis is based on the Group’s foreign currency financial instruments held at each reporting date. In any respect, the Group would elect not to realise the underlying value of the financial asset were it to result in a loss to the Group. Financial assets subject to currency sensitivity were received on 30 June 2020, and valued at the exchange rate applicable on that date.

If the Australian Dollar (AUD) had strengthened against the US-Dollar (USD) by 10% (2021: 10%) then this would have had the following impact:

			Proft for
			the year	Equity
			AUD	AUD
			$	$
30	June	2022	-	(121,702)
30	June	2021	-	(376,192)

If the AUD had weakened against the USD by 10% (2020: 10%) then this would have had the following impact:

			Proft for
			the year	Equity
			AUD	AUD
			$	$
30	June	2022	-	121,702
30	June	2021	-	376,192

Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group’s exposure to currency risk.

Interest rate sensitivity

The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At 30 June 2022, the Group is exposed to changes in market interest rates through bank borrowings at variable interest rates. Other borrowings are at fixed interest rates. The exposure to interest rates for the Group’s money market funds is considered low due to the current low interest rate setting, and long-term outlook provided by the Reserve Bank of Australia (RBA).

The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of +/- 2.00% (2021: +/- 1%). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

	Proft for the year $ +2% / +1% $ -2% / -1%	Equity
		$ +2% / +1% $ -2% / -1%
30 June 2022	103,400 (103,400)	(103,400) 103,400
30 June 2021	68,400 (68,400)	(68,400) 68,400

ANNUAL REPORT 2022 85

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

38. Financial risk management (continued)

Other price risk sensitivity

The Group is exposed to other price risk in respect of the investment in Volt Power Limited (ASX: VPR).

For the listed investment in Volt Power Limited, an average volatility of 33% has been observed during 2022 (2021: 33%). Volatility at the lower end of this scale is considered a suitable basis for estimating how profit or loss and equity would have been affected by changes in market risk that were reasonably possible at the reporting date due to the relatively low volumes traded. If the quoted stock price for VPR increased or decreased by that amount, profit or loss and equity would have changed by $304,260 (2021: $461,000).

The investment in VPR is considered a long-term, strategic investment. In accordance with the Group’s policies, no specific hedging activities are undertaken in relation to this investment. The investment is continuously monitored and voting rights arising from the equity instrument are utilised in the Group’s favour.

Credit risk analysis

Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to credit risk from financial assets including cash and cash equivalents held at banks, trade and other receivables and contract assets.

The Group’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised below:

as summarised below:
	2022	2021
Classes of fnancial assets	$	$
Carrying amounts: cash and cash equivalents	27,882,473	34,181,508
trade and other receivables	68,872,911	57,698,845
	96,755,384	91,880,353

Credit risk management

The credit risk is managed on a group basis based on the Group’s credit risk management policies and procedures.

Cash and cash equivalents

The Group’s cash and cash equivalents are held with major reputable financial institutions.

Trade receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country in which the customers operate, has less of an influence on credit risk. Geographically, the concentration of credit risk is within Australia and, by industry, the concentration is within the commercial infrastructure and resources industries.

The Group continuously monitors defaults of customers and other counterparties, identified either by individual or group and incorporates this information into its credit risk controls. The Group’s policy is to deal only with creditworthy counterparties. The ongoing credit risk is managed through regular review of ageing analysis, together with credit limits per customer.

The Group does not require collateral in respect of trade receivables and contract assets.

To mitigate the impact of any single credit default, the Group maintains a policy of Trade Credit Insurance that provides protection in the event of default.

The Group’s management considers that all the above financial assets that are not impaired or past due for each of the reporting dates under review are of good credit quality.

86 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

38. Financial risk management (continued)

Credit risk analysis (continued)

Impairment losses

The ageing of the Group’s trade and other receivables at the reporting date was:

	Note	Gross 2022 $	Allowance for Impairment 2022 $	Gross 2021 $	Allowance for Impairment 2021 $
Other receivables – not past due Trade receivables: Current Less than 90 days Greater than 91 days	16	1,143,535	-	3,449,926 51,039,101 3,510,145 3,513,277,087	- - - (147,530)


		57,849,322	-
		5,903,255	-
		4,068,782	(91,983)
	14	67,821,359	(91,983)	57,826,333	(147,530)
		68,964,894	(91,983)	61,276,259	(147,530)

The provision of $91,983 relates to expected credit losses. Impairment provision related to specific debts that are more than one year overdue relating to a small number of customers. The Group continues to strongly pursue all debts provided for. The majority of un-impaired debtors exceeding one year relate to retention claims that are not due. The debtor aging is relative to the date of the original invoice claim against which the retention is held.

The Group has established an allowance for impairment that represents their expected credit losses in respect of trade receivables and contract assets.

The Group recognises a provision for impairment related to expected credit losses (“ECLs”) for trade receivables, and other debt financial assets not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.

For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group uses a provision matrix to calculate the ECLs. The provision matrix is established based on the Group’s historically observed default rates. The Group calibrates the matrix to adjust historical credit loss experience with forward looking factors specific to debtors and the economic environment where appropriate. At every reporting date, historical default rates are updated and changes in the forward-looking estimates are analysed. To date, the Group has not observed or expects to see material decline in its customers’ abilities to pay as a result of the Coronavirus pandemic due in part to the nature of those customers, which mainly includes large private sector corporations and government organisations, meaning the risk of default of receivables is low. Accordingly, no additional expected credit loss allowance pertaining to the Coronavirus pandemic have been included.

The assessment of the correlation between historical observed default rates, forecast of economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecasts in economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.

The Group considers a financial asset’s potential for default when contractual payments are more than 120 days past due, factoring in other qualitative indicators where appropriate. Exception shall apply to financial assets that relate to entities under common controls or covered by letter of credit or credit insurance. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

ANNUAL REPORT 2022 87

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

38. Financial risk management (continued)

Liquidity risk analysis

Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows due in day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180 to 360 day lookout period are identified monthly. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.

The Group’s objective is to maintain cash and marketable securities to meet its liquidity requirements for 30-day periods at a minimum. This objective was met for the reporting periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.

The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its cash resources and trade receivables. The Group’s existing cash resources and trade receivables (see Note 8) significantly exceed the current cash outflow requirements. Cash flows from trade and other receivables are all contractually due within three months.

As at 30 June 2022, the Group’s non-derivative financial liabilities have contractual maturities as summarised below:

		Current 6-12 months $		Non-current
	Within 6 months $		1-5 years $	5+ years $
30 June 2022 Secured borrowings Leases Trade and other payables Contingent consideration payable
	960,000	960,000	3,250,000	-
	3,925,439	3,840,445	14,232,018	-
	72,608,068	-	-	-
	4,949,953	-	674,000	-
Total	82,443,460	4,800,445	18,156,018	-

This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:

	Current Within 6 months $ 6-12 months $	Non-current
		1-5 years $ 5+ years $
30 June 2021 Secured borrowings Leases Trade and other payables	960,000 960,000 2,434,166 2,371,379 63,695,989 316,289	4,920,000 - 7,813,792 425,041 - -
Total	67,090,155 3,647,668	12,733,792 425,041

The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities at the reporting date.

88 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

39. Fair value measurement

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability

The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis at 30 June 2022 and 30 June 2021:

	Level 1	Level 2	Level 3	Total
	$	$	$	$
30 June 2022
Financial assets
Listed securities	922,000	-	-	922,000
Other fnancial assets	-	71,833	-	71,833
Total assets	922,000	71,833	-	71,833
Financial liabilities
Contingent consideration	-	-	(5,623,953)	(5,623,953)
Total liabilities	-	-	(5,623,953)	(5,623,953)
Net fair value	922,000	71,883	(5,623,953)	(4,630,120)
	Level 1	Level 2	Level 3	Total
	$	$	$	$
30 June 2021
Financial assets
Listed securities	1,383,000	-	-	1,383,000
Other fnancial assets	-	100,049	-	100,049
Total assets	1,383,000	100,049	-	1,483,049
Financial liabilities
Total liabilities	-	-	-	-
Net fair value	1,383,000	100,049	-	1,483,049

There were no transfers between Level 1 and Level 2 in 2022 or 2021.

ANNUAL REPORT 2022 89

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

39. Fair value measurement (continued)

Measurement of fair value of financial instruments

The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values, in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance team reports to the Audit Committee. Valuation processes and fair value changes are discussed among the Audit Committee and the valuation team at least every year, in line with the Group’s reporting dates.

The valuation techniques used for instruments categorised in Levels 2 are described below. There were no instruments categorised as Level 3.

Level 3 fair value measurements

Contingent consideration (Level 3)

The fair value of contingent consideration related to the acquisition of Blue Tongue Energy Pty Ltd and Pole Foundations Australia (see Note 35) has been determined through analysis of past profitability against targets agreed in the purchase agreement and estimated future cash-flows. Due to the short time frame associated with assessing achievement of the targets related to the contingent consideration, the impact of discounting of future cash flows was not material in the assessment and the values stated are consistent with fair value.

The following table provides information about the sensitivity of the fair value measurement to changes in the most significant inputs:

Fair value measurement of non-financial assets

The following table shows the levels within the hierarchy of non-financial assets measured at fair value at 30 June 2022 and 30 June 2021:

	Level 1	Level 2	Level 3	Total
	$	$	$	$
30 June 2022
Property, plant and equipment:
Industrial land and buildings acquired under
business combination	-	181,000	-	181,000
	Level 1	Level 2	Level 3	Total
	$	$	$	$
30 June 2021
Property, plant and equipment:
Industrial land and buildings acquired under
business combination	-	181,000	-	181,000

Fair value of the Group’s land assets acquired under business combination through the purchase of KEC Contracting is estimated based on an evaluation of current market price trends and with regards to the initial valuation of the land at the date of acquisition. The fair value is reviewed by the Board of Directors and Audit Committee at each reporting date.

90 GENUSPLUS GROUP LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

40. Capital management policies and procedures

The Group’s capital management objectives are:

to ensure the Group’s ability to continue as a going concern
to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Group monitors capital on the basis of the carrying amount of equity plus its bank loans and other financial liabilities, less cash and cash equivalents as presented on the face of the statement of financial position.

The Group’s goal in capital management is to ensure compliance with the Group’s covenants relating to its commercial financing arrangements. These covenants measure the Group’s Debt Service Cover, Gross Leverage and Liquidity Ratios, as well as requiring maintenance of a minimum Tangible Net Worth. The Group has met all its covenant obligations, since the commercial loan was taken out.

Management assesses the Group’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. The amounts managed as capital by the Group for the reporting periods under review are summarised as follows:

	2022	2021
	$	$
Total equity	93,423,073	57,710,210
Financial liabilities	21,110,359	15,463,682
Cash and cash equivalents	(27,882,473)	(34,181,508)
Capital	86,650,959	38,992,384
Total equity	93,423,073	57,710,210
Borrowings	21,110,359	15,463,682
Overall fnancing	114,533,432	73,173,892
Capital-to-overall fnancing ratio	0.76	0.53

The ratio increase during 2022 is primarily a result of the capital raising undertaken to part-fund the acquisition of Pole Foundations Australia.

41. Parent entity information

Information relating to GenusPlus Group Ltd (the Parent Entity):

Information relating to GenusPlus Group Ltd (the Parent Entity):
	2022 $	2021 $
Statement of fnancial position Current assets		10,365,487
	2,902,789
Total assets	40,761,752	42,407,131
Current liabilities	(1,455,015)	2,608,463
Total liabilities	(11,006,876)	18,141,008
Net assets	51,768,629	24,266,123
Issued capital Retained earnings	53,789,037	28,925,754 (4,659,631)
	(2,020,409)
Total equity	51,768,629	24,266,123
Statement of proft or loss and other comprehensive income
(Loss) for the year	(2,560,158)	(2,389,103)
Total comprehensive income	(2,560,158)	(2,389,103)

The Parent Entity had no capital commitments at year end (2021:$Nil).

ANNUAL REPORT 2022 91

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

42. Events after the reporting date

Other than those mentioned above, no matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

43. Group details

The registered office and principal place of business of the Group is:

GenusPlus Group Ltd

Level 1, 63 – 69 Abernethy Road Belmont WA 6104

92 GENUSPLUS GROUP LTD

DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of GenusPlus Group Limited, I state that:

In the opinion of the directors:

(a) he financial statements and notes of GenusPlus Group Limited for the financial year ended 30 June 2022 are in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for the year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001 ;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration has been made after receiving the declarations required to be made to the directors by the chief executive officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2022.

On behalf of the board

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David Riches Director

Dated the 31[st] day of August 2022

ANNUAL REPORT 2022 93

INDEPENDENT AUDITOR’S REPORT

FOR THE YEAR ENDED 30 JUNE 2022

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Independent Auditor’s Report

Grant Thornton Audit Pty Ltd Level 43 Central Park 152-158 St Georges Terrace Perth WA 6000 PO Box 7757 Perth WA 6850 Cloisters Square T +61 8 9480 2000 ~~Perth WA 6850~~ T +61 8 9480 2000

To the Members of GenusPlus Group Ltd

Report on the audit of the financial report

Opinion

We have audited the financial report of GenusPlus Group Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the year ended on that date; and

b complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

www.grantthornton.com.au ACN-130 913 594

~~Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.~~ ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards L ~~egislation.~~

94 GENUSPLUS GROUP LTD

INDEPENDENT AUDITOR’S REPORT

FOR THE YEAR ENDED 30 JUNE 2022

Key audit matter

How our audit addressed the key audit matter

Revenue recognition of long-term contracts – refer to summary of significant accounting policy Note 4

Our procedures included, amongst others:

As disclosed in note 6, the Group recognised revenue from construction contracts and service • revenue of $331.4 million and $119.4 million respectively, with revenue recorded over time totalling $405.8 million. Revenue for these • contracts recognised revenue with reference to the input method to determine the amount of revenue to be recognised in the period. • In accordance with AASB 15 Revenue from Contracts with Customer , revenues from goods • and services are recognised based on the completion of performance obligations under each contract. Determining the appropriate timing of • revenue recognition for construction contracts requires estimating the inputs (costs) remaining in the contract and the expected margins earned on the contracts, which requires management • judgement. This area is a key audit matter due to the high level of estimation and management judgement required to determine the revenue recognised from each contract. •

Understanding and documenting the design of internal controls over project costings and estimating costs to complete construction projects; Testing the operating effectiveness of project costs designed for determining the revenue recognised over time utilising the percentage of completion method; Testing a sample of costs to ensure appropriate allocation to projects; Testing a sample of project billings to underlying obligations to consider and evaluate the key inputs required to determine revenue recognition; Reviewing management assumptions in determining the stage of completion, total contract price, costs incurred and estimated costs to complete to supporting documentation; Recalculating the stage of completion based on costs to date proportionate to forecasted costs or milestones, including testing a sample of progress billings and contract costs to ensure the allocation to revenue, contract assets and liabilities was appropriate and consistent with the requirements of AASB 15; Assessing estimated costs to complete through discussion with project managers and challenging the key assumptions connected to the stage of completion method, including potential disputes and claims relating to variations to the original contract terms and agreeing to underlying support; and Assessing the adequacy of the Group’s presentation and disclosures in the financial statements.

•

Business combination – Poles Foundations Australia Notes 35

Our procedures included, amongst others:

As disclosed in Note 35, the Group acquired Poles Foundations Australia (“PFA”). The acquisitions • were treated as Business Combinations defined by AASB 3 and accounted for on a provisional basis. •

Obtaining and reviewing the terms and conditions contained in the Sales and Purchase agreements; Obtaining the acquisition trial balance and performing opening balance audit procedures to evaluate the completeness and accuracy of assets acquired and liabilities assumed;

In performing the purchase price allocations for the acquisitions, the Group identified and estimated the fair value of all assets acquired, liabilities assumed, contingent consideration based on • performance hurdles and other intangible assets associated with the acquisition.

Ensuring the total cost of the combinations included all elements of consideration paid and payable with reference to signed purchase agreements; Tracing cash consideration paid to bank statements;

• The purchase price allocation has resulted in • goodwill of $14.0 million, intellectual property of $4.2 million and customer relationships of $9.0 million being recognised. • This area is a key audit matter due to the management estimates and judgments applied in identifying separately identifiable intangible assets • and determining the fair value of any separately identifiable intangible assets and earn-out liabilities. •

Evaluating management’s purchase price allocation documentation and challenging their assessment of separately identifiable intangible assets; Engaging with auditor’s expert to assess the discount rates applied and forecasted future cash flows to determine valuations for other intangible assets; Re-calculating the goodwill balance recognised by deducting the fair value of identifiable net assets acquired, the value of other intangible assets against the total consideration paid; and Ensuring the appropriateness of related financial statement disclosures.

ANNUAL REPORT 2022 95

INDEPENDENT AUDITOR’S REPORT

FOR THE YEAR ENDED 30 JUNE 2022

Goodwill – Note 22

Our procedures included, amongst others:

As disclosed in Note 22, the Group recognised goodwill totalling $19.5 million at 30 June 2022 across five cash-generating units (CGUs). Goodwill is required to be assessed for impairment annually by management as prescribed in AASB 136 Impairment of Assets .

Understanding and documenting management’s process and controls related to the assessment of impairment, including management’s identification of CGUs and the calculation of the recoverable amount for each CGU;
Evaluating the value-in-use models against the requirements of AASB 136, including consultation with our auditor’s valuation expert;

Management performs annual impairment testing per AASB 136 to ensure the CGUs’ recoverable amount is greater than its carrying value, utilising either the greater of fair value less costs to sell or its value in use.

Challenging the appropriateness of management’s revenue and cost forecasts by comparing the forecasted cash flows to actual growth rates achieved historically;

The Group uses the discounted cash flow model for the value-in-use approach to determine the recoverable amount. In doing so, management considers the following key inputs;

Reviewing management’s value-in-use calculations by: o Testing the mathematical accuracy of the calculations;
Evaluating the forecast cash inflows and outflows to be derived by the CGUs assets for reasonableness;

forecasted budgeted financial performance;

estimated growth rates;
Comparing estimates and judgements for growth rates to available market and industry data;
working capital adjustments;
estimated capital expenditure;
Assessing the discount rates applied to forecast future cash flows for reasonableness with assistance from internal valuation specialists;
discount rate; and
terminal value.
Performing sensitivity analysis on the significant inputs and assumptions made by management in preparing its calculation; and

This area is a key audit matter due to the preparing its calculation; and significant balance carried by the Group that • Assessing the adequacy of financial report management has assessed using estimates and disclosures. judgement

Information other than the financial report and auditor’s report thereon

The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors’ for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

96 GENUSPLUS GROUP LTD

INDEPENDENT AUDITOR’S REPORT

FOR THE YEAR ENDED 30 JUNE 2022

Auditor’s responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This description forms part of our auditor’s report.

Report on the remuneration report

Opinion on the remuneration report

We have audited the Remuneration Report included in pages 26 to 31 of the Directors’ report for the year ended 30 June 2022.

In our opinion, the Remuneration Report of GenusPlus Group Ltd, for the year ended 30 June 2022 complies with section 300A of the Corporations Act 2001 .

Responsibilities

The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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L A Stella Partner – Audit & Assurance Perth, 31 August 2022

ANNUAL REPORT 2022 97

ASX ADDITIONAL INFORMATION

AS AT 30 AUGUST 2022

Distribution of equity security holders

Distribution of equity security holders
	Ordinary Shares
Category
1 – 1,000	108,652
1,001 – 5,000	735,863
5,001 – 10,000	1,274,674
10,001 – 100,000	9,301,777
100,001 and over	165,331,454
Total	176,752,420

Twenty largest shareholders

Twenty largest shareholders
	Number of
	ordinary shares	Percentage of
	held	capital held
MR DAVID WILLIAM RICHES	39,461,473	22.33%
DAVID WILLIAM RICHES	39,461,474	22.33%
MATTHEW STEVEN RICHES & DAVID WILLIAM RICHES	12,800,000	7.24%

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	11,547,021	6.53%
NATIONAL NOMINEES LIMITED	10,271,593	5.81%
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED	5,012,068	2.84%
CARJAY INVESTMENTS PTY LTD	4,734,689	2.68%
ARROCHAR PTY LTD	3,850,000	2.18%
CEDARFIELD HOLDINGS PTY LTD	3,041,865	1.72%
NEIL RAE & MELAINE RAE & SIMEON RAE & DOMINIQUE RAE	2,392,344	1.35%
MR KEMPER SHAW	2,376,947	1.34%
CC RANKINE PTY LTD	2,316,765	1.31%
BJ FRASER PTY LTD	2,316,765	1.31%
WILLIAM TAYLOR NOMINEES PTY LTD	2,148,684	1.22%
PATRICK LLOYD PTY LTD PATRICK LLOYD	1,600,000	0.91%
GEORGE LLOYD PTY LTD GEORGE LLOYD	1,600,000	0.91%
MR KENNETH JOSEPH HALL	1,550,000	0.88%
PRECISION OPPORTUNITIES FUND LTD	1,266,357	0.72%
MR WILLIAM JAMES BEAMENT	1,196,172	0.68%
BOTSIS HOLDINGS PTY LTD	1,140,000	0.64%
	150,084,217	84.91%

Substantial shareholders

Substantial shareholders
	Number
The number of shares held by substantial shareholders and their associates are set out below:
David William Riches & Matthew Steven Riches & David William Riches Dave Riches & Matt Riches Unit	92,583,947

98 GENUSPLUS GROUP LTD

www.genus.com.au

ANNUAL REPORT 2022 99

CORPORATE DIRECTORY

Directors

Simon High Chairman Independent Non-Executive Director

David Riches CEO and Managing Director

José Martins Independent Non-Executive Director Paul Gavazzi Independent Non-Executive Director

Company Secretary

Damian Wright

Auditors

Grant Thornton Audit Pty Ltd

Central Park Level 43, 152-158 St Georges Terrace Perth WA 6000

Share Registry Link Market Services Ltd

Level 12, QV1 Building 250 St Georges Terrace Perth WA 6000 T: +61 8 9211 6670

Registered Office

GenusPlus Group Ltd Level 1, 63-69 Abernethy Road Belmont WA 6104

ASX Code: GNP

100 GENUSPLUS GROUP LTD

INNOVATIVE PEOPLE, DELIVERING RESULTS THROUGH EXPERTISE AND HARD WORK

Connecting the Future. Together.

genus.com.au

AI assistant

GENUSPLUS GROUP LTD — Annual Report 2022

65005_rns_2022-10-19_0a3ceea4-03e6-4ab0-ab06-619171b50721.pdf

Annual Report 2022

CONNECTING THE FUTURE

CONTENTS

About Genus

CONNECTING THE FUTURE

CONSTRUCTION

DECOMMISSIONING

CONNECTING THE FUTURE THROUGH INNOVATIVE POWER SOLUTIONS

Our Services

GENERATING SOURCE

TERMINAL SUBSTATIONS

TRANSMISSION INFRASTRUCTURE

ZONE DISTRIBUTION SUBSTATIONS INFRASTRUCTURE

PRIMARY CUSTOMER CONNECTION

COMMUNICATIONS

NETWORKS: FROM CONCEPT TO CONSTRUCTION

CIVIL & INFRASTRUCTURE CONSTRUCTION

MOBILE & WIRELESS INFRASTRUCTURE

DIGITAL SOLUTIONS

2022 HIGHLIGHTS

A Strong Year In Challenging Times

REVIEW

CONNECTING THE FUTURE THROUGH INNOVATIVE POWER AND COMMUNICATIONS INFRASTRUCTURE

Think Safe. Work Safe. Home Safe.

A Robust Platform For Growth

Continuing To Deliver For Shareholders

Looking Ahead

Delivering On Our Strategy

REPORT

POWERING UP AUSTRALIA THROUGH STRONG, EFFECTIVE CLIENT RELATIONSHIPS

Record Revenue, Through Strong Operational Performance

Our People

Connecting The Future. Together.

SUSTAINABILITY

SUSTAINABILITY

SHEQ

Community

0 LTIFR at 30 June 2022

People

Genus & Maali Group – Sparking Positive Change.

CONNECTING THE FUTURE THROUGH END-TO-END COMMUNICATIONS INFRASTRUCTURE

CONTENTS

DIRECTORS’ REPORT

Directors’ details

Mr David Riches

Mr Simon High

Mr José Martins

Mr Paul Gavazzi

Company Secretary

Interests in the shares and options of the Company and related bodies corporate

DIRECTORS’ REPORT

Principal activities

Review of operations and financial results

Pipeline

DIRECTORS’ REPORT

Review of operations and financial results (continued)

Outlook

Growth Strategy

Significant changes in the state of affairs

Capital structure

Issued shares

DIRECTORS’ REPORT

Dividends

Events arising since the end of the reporting period

Likely developments

Directors’ meetings

Options

DIRECTORS’ REPORT

Remuneration Report (audited)

a Principles used to determine the nature and amount of remuneration

Short Term Incentive (STI)

DIRECTORS’ REPORT

Remuneration Report (audited) (continued)

Performance areas

Voting and comments made at the Company’s last Annual General Meeting

Consequences of performance on shareholder wealth

DIRECTORS’ REPORT

GENUSPLUS GROUP LTD Annual Report 2022