Aurora Labs Ltd
ABN 44 601 164 505
Annual Financial Report
30 June 2016
CONTENTS
PAGE
Corporate Information
Chairman’s Review
Managing Director’s Review
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional ASX Information
3
4
5
6
21
32
33
34
35
36
37
61
62
64
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CORPORATE INFORMATION
ABN 44 149 970 445
Directors
Mr Paul Kehoe
Mr David Budge
Mr Nathan Henry
Mr David Parker
Mr Hendrikus Herman
Company secretary
Mr David Parker
Registered Address
12A Ambitious Link
Bibra Lake WA 6163
Telephone:
+61 (08) 9434 1934
Principal place of business
12A Ambitious Link
Bibra Lake WA 6163
Telephone:
Email:
+61 (08) 9434 1934
enquiries@auroralabs3d.com
Solicitors
Jackson McDonald
Level 17, 225 St Georges Terrace
Perth WA 6000
Bankers
ANZ Bank
Riseley Centre
1/35 Riseley Street
Booragoon WA 6154
Auditors
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
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CHAIRMANS REVIEW
Dear Shareholders,
It is with great pleasure that I present Aurora Lab’s 2016 Annual Report.
I came in contact with Aurora Labs (‘Aurora’ or ‘the Company’) in December 2015. At the time, they were operating from a
very small warehouse. The team was only three people. They had developed a single small format printer which they
had painstakingly built from the ground up.
In just nine months, Aurora has rapidly moved to being on the cusp of commercial production of the small format printer.
The Company has moved into new premises with extensive production capability. The team has tripled and new
production people are still being employed. Several small format printers have been built and are awaiting shipping (upon
completion of Beta testing, CE mark and US FDA (CDRH) laser compliance). All this was achieved whilst Aurora was
preparing for an Initial Public Offering on the ASX.
This is a testament to the dedication of the Aurora team. It is not unusual for the team to be working late into the night or
on the weekend to complete an assignment. This work ethic together with an ability to think “outside the box” makes the
Aurora team a force to be reckoned with in the 3D metal printing industry.
Aurora’s 3D printing technology is unique in the industry. The small format printer has been designed so that it can be sold for
a price significantly less than competitor machines. Aurora’s small format printer has the same build speed and other
general characteristics as competitor machines but can print in three modes whereas most competitor machines can only
print in up to two different modes.
The medium format printer is currently being developed and will be the precursor to the large format printer. The large format
printer is being designed to print up to one tonne of metal parts in 24 hours, which is believed to be 100 times faster
than existing 3D metal printers currently on the market. Professor Tim Sercombe of the University of Western Australia states:
“When I first started in this field it was very novel, the 3D printing has undergone many changes since then and we are
finally on the cusp of a major breakthrough in large-scale metal printers. Over the last year I’ve worked with a Perth-based
start-up Aurora Labs, who is at the forefront of 3D printing globally,”
Aurora has attracted the interest of some very major global companies as has been reported in the financial press. Now
that Aurora is listed and has production capability, it is likely that interest in Aurora and its printers will continue to grow.
The 2017 year is expected to be a very busy one for the Company. Aurora is in the late stages of preparing the small
format printer for commercialisation. This involves completing the Beta testing, CE mark and US FDA (CDRH) laser
compliance as noted earlier. These steps are likely to be achieved before calendar year end 2016. Once complete, sales of
the small format printer can commence. Aurora is targeting the development of a working prototype of the medium format
printer before the end of calendar year 2016 and a working prototype of the large format printer is intended to follow 6 to
12 months later. In closing I would like to take this opportunity to thank the Board of Directors and all the staff of Aurora for
the superb job they have done in rapidly moving Aurora forward to where it is today.
Paul Kehoe
Chairman
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MANAGING DIRECTORS REVIEW
Dear Shareholders,
It’s been a big year for Aurora Labs. We have expanded significantly, shifted premises, taken out patents on new technology
and listed on the ASX. Since listing, those processes have only sped up. Looking forward we have a very ambitious year
planned with some very large goals to achieve in a relatively short timeframe. However, we have been achieving the
exceptional since the company started so this is nothing new to us.
One of the key things we are building with this company as it grows is a unique corporate culture – consisting of people who
are leaders in their fields, but also fascinated with the technology and enthusiastic to be a part of the team that is making this
into a reality.
This manifests itself in a number of interesting ways, but the simplest is that people work harder and longer at what they do
and tend to enjoy it more, than they would at other jobs. I believe everyone who works here feels fortunate to be a part of the
company and the products we are developing and building right here in Western Australia. I often see people go home on the
weekend with a task half finished (a non-secret one of course) and by the time Monday comes it is miraculously finished. Or I
get called at 10pm at night by someone who has stayed back and is checking some test parameters with me.
So I believe that while the technology and the processes we have in place to manufacture them will make the company great
- it is only the people and the culture that evolves out of this fast paced technological evolution that will make it into a reality.
We are planning on staying significantly ahead of the curve. To that end we have recently taken out patents on novel powder
production and other technologies. As you may be aware metal powders are the feed stock for 3D metal printers in a similar
fashion that ink cartridges feed a desk top ink printer. Being able to produce metal powders in a high quantity and quality and
significantly more competitively than other producers would give us another advantage over any potential competition in the
field.
As a technology company we are continuing to innovate and patent new technologies as we develop them.
I believe that the world is currently on the cusp of a new industrial revolution that will transform manufacturing and production
in a way that hasn’t been seen since the first industrial revolution. I personally believe that 3D printing will be an integral part
of this process and act as a transformative technology decentralising manufacturing and disrupting supply chains and
traditional manufacturers. As the speed of development of key technologies, including our own, increases, this wave could
occur very rapidly and impact manufacturing on a global scale. Currently most industries do not see this coming. With the
expected release of the large format printer in the next 12-18 months there will be a lot of industries around the world that
could be in for a significant surprise. Manufacturers will have to rethink their position in a not too dissimilar fashion as how the
music industry had to redefine itself after the creation of Napster in 1999.
I plan to keep Aurora at the leading edge of the cusp of this wave, through growing innovation and incorporating this as an
integral part of the company culture.
Thank you for being a part of this journey and we look forward to a remarkable year ahead.
David Budge
Managing Director
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DIRECTORS’ REPORT
The Board of Directors of Aurora Labs Ltd present their report on Aurora Labs Ltd (“Company” or “Aurora”) for the year ended
30 June 2016.
DIRECTORS
The names of Directors who held office during or since the end of the financial year are as follows.
Paul Kehoe
Non-Executive Chairman
Appointed 11 April 2016
David Budge
Managing Director
Director since incorporation
Nathan Henry
Executive Director
Appointed 23 November 2015
David Parker
Non-Executive Director & Company Secretary
Appointed 23 November 2015
Hendrikus Herman
Non-Executive Director
Appointed 11 April 2016
CURRENT DIRECTORS AND OFFICERS
Mr Paul Kehoe
Non-Executive Chairman
Qualifications: Bachelor of Business (Acc.) from Monash University; CA; Graduate Diploma of Science (with First
Class Honours) from Monash University.
Mr Kehoe has over 20 years’ experience in corporate finance and restructuring as a Chartered Accountant with firms such as
PricewaterhouseCoopers and Grant Thornton in senior management roles. Mr Kehoe served as the managing director of
Syrah Resources Limited from December 2011 until October 2014. He oversaw the early development of Syrah Resources'
world class graphite project at Balama, Mozambique and was involved in the acquisition of the Tanzanian projects. He has
also performed business development roles with other ASX-listed and unlisted resource exploration companies.
During the three year period to the end of the financial year, Mr Kehoe served as a director of one other listed company being
Syrah Resources Ltd (ASX:SYR) (December 2011 – October 2014).
Mr David Budge
Managing Director
Qualifications: Bachelor of Science (Chemistry) from University of Western Australia
Mr Budge has extensive industry experience in robotics, robotic welding, surfacing engineering, product development and
manufacturing processes. He has become recognised for his experience in solving difficult fabrication and surface
engineering problems for clients. He is the primary inventor of the large majority of Aurora’s inventions that are the subject of
its patent applications.
Mr Budge has experience developing and manufacturing a range of products for Australian and international markets. He has
previously worked for Bossong Engineering running its plasma transferred arc department. He then worked for Score Pacific
managing its thermal spray department and overseeing research and development on special projects. More recently Mr
Budge established and ran Advanced Industrial Manufacturing Pty Ltd, a company that specialised in providing robotic
welding and specialised technology solutions to the mining and oil and gas sectors.
David Budge is a founding director and shareholder in Aurora.
During the three year period to the end of the financial year, Mr Budge has not been a director of any other listed company.
Mr John (Nathan) Henry
Executive Director (Business Development)
Mr Henry has held senior management roles over the last 25 years he has been involved in every level of strategic planning,
divisional financial reporting and senior corporate accountability up to Board level. His roles have covered the full spectrum of
responsibility including process and business model development, new business development, technology implementation
and roll out through distributed networks, market research and writing of business plans. He has experience with ISO
certification, equipment purchases recommendations, workflow planning, skilled employee hires, securing AVL status and
marketing plans. He has previously developed and led sales teams for market leading companies both in Australia and in the
USA.
During the three year period to the end of the financial year, Mr Henry has not been a director of any other listed company.
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DIRECTORS’ REPORT (continued)
CURRENT DIRECTORS AND OFFICERS (Continued)
Mr Henry is responsible for developing the strategy and processes required for branding and marketing the Company’s
products and services. These include, but are not limited to, 3D printers, consumables, services and licensing. He is
responsible for developing advertising materials, overseeing web design and social media campaigns as well as monitoring
metrics for these modes of communication and marketing.
Mr David Parker
Non-Executive Director & Company Secretary
Qualifications: Bachelor of Commerce from Curtin University; Graduate Diploma in Applied Corporate Governance
Mr Parker is an experienced corporate advisor and has served as a director or company secretary of a number of ASX-
listed companies. He is the sole director of Cobblestones Corporate Pty Ltd who provides corporate advisory and company
secretarial services to ASX-listed companies. Mr Parker is also an employee of Alto Capital, a stockbroking and corporate
advisory firm which is licensed to provide financial advice to retail and wholesale investors.
Mr Parker is a Senior Associate (and member since 2001) of the Financial Services Industry of Australian (FINSIA).
During the three year period to the end of the financial year, Mr Parker served as a director of one other listed company being
Syntonic Ltd (previously Pacific Ore Ltd) (ASX:SYT) (November 2009 – July 2016).
Mr Hendrikus (Dick) Herman
Non-Executive Director
Bachelor of Laws from Australian National University; Bachelor of Commerce from Australian National University
Mr Herman is a lawyer providing expert advice on commercial law matters. He is currently a senior associate at Curwoods
Lawyers. He has almost 20 years' experience in legal and commercial roles and has handled matters for companies of all
shapes and sizes, in Australia and overseas.
Mr Herman has a particular interest in franchise operations and their regulation and compliance, having provided advice on
the Franchising Code of Conduct in its various forms since its introduction in 1998. He also has developed and maintained
legal and risk compliance functions for companies, including work health and safety frameworks around their workforces.
Mr Herman draws on his broad understanding of business drivers to provide practical and relevant advice from a different
perspective while being commercially focused.
During the three year period to the end of the financial year, Mr Herman has not been a director of any other listed company.
DIRECTORS INTERESTS
Interests in the shares, options and convertible notes of the Company and related bodies corporate
The following relevant interests in shares and options of the Company or a related body corporate were held by the Directors
as at the date of this report.
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
Total
Number of fully paid
ordinary shares
Number of options over
ordinary shares
Number of performance
shares (Class A, B & C)
2,093,750
23,946,785
982,151
860,000
932,151
28,814,837
1,500,000
750,000
1,693,334
1,000,000
1,693,333
6,636,667
250,000
14,736,483
512,084
267,306
481,325
16,247,198
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DIRECTORS’ REPORT (continued)
DIRECTORS INTERESTS (continued)
Shares under option or issued on exercise of options
At the date of this report unissued ordinary shares or interests of the Company under option are:
Date options granted
(or issued)
23/11/20151
10/05/2016
03/08/20162
Total
Number of shares under
option
Exercise price of option
Expiry date of option
1,500,000
4,250,000
5,500,000
11,250,000
$0.20
$0.20
$0.20
$0.20
31/12/2018
31/12/2018
31/12/2018
31/12/2018
1 Number of options issued on a post consolidation basis.
2 Options were issued pursuant to the Initial Public Offering for $0.01 per option.
There were no shares issued during the year as a result of the exercise of an Option.
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year has been the design and development of 3D metal printers and
associated products and services.
OPERATING AND FINANCIAL REVIEW
Operations
Highlights during the year and since the end of the year were as follows:
Aurora continued to develop its capability as a 3D metal printer manufacturer that aims to enable mass adoption of 3D
metal printing using new technologies that can significantly reduce the price and increase the speed of machines.
Aurora raised $1,281,000 (net of share issue costs) in seed capital throughout the year to progress operations and seek
an ASX listing;
Aurora raised $2,855,000 and listed on the Australian Stock Exchange in August 2016, under code A3D;
Aurora continued to develop innovative metal 3D printing technologies, including:
Small Format Printer (SFP) prototype and Beta Units, as well as initiating SFP pre-production activities;
o
o Medium Format Printer (MFP) and Large Format Printer (LFP) design and development work; and
o
Lodging several patents relating to the company’s printing technologies and associated products and
services.
Principal Activities
Aurora is an Australian-based industrial technology and innovation company based in Perth specialising in the development
of 3D metal printers, printer software and the supply of associated consumable materials.
Aurora has primarily focused on developing innovative 3D metal printing technology to address gaps in the current market for
3D metal printers. Aurora is seeking to meet the market need for affordable small format 3D metal printers, as well as for fast
speed larger format 3D metal printers that can be used in larger-scale industrial manufacturing on a cost effective basis.
During the year the Company continued to develop 3D printing designs, in particular the development of the SFP prototype
and Beta units, as well as concept designs for the LFP. The Company also lodged patents regarding its 3D metal printer
concepts and designs and associated technologies. The Company also made additional pre-sales of the SFP and
commenced Beta testing of the SFP.
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DIRECTORS’ REPORT (continued)
OPERATING AND FINANCIAL REVIEW (continued)
Small Format Printer
During the year the Company continued to develop the SFP prototype, including the production of numerous test prints.
This led into the design and development of the SFP Beta units and pre-production activities in the second half of the
year.
Aurora started the SFP CE-mark process during the year, and is now currently preparing for final CE-mark checking for
the European Union and final checking for US FDA (CDRH) laser compliance.
There was an additional 5 pre-sales recorded which comprised $98,176 in deposits paid, and a large database of
potential customers built.
Medium and Large Format Printers
During the year the company progressed the design and development of the prototype of the MFP and the LFP.
The LFP is being designed to print up to one tonne of metal parts in 24 hours, which is believed to be approximately 100
times faster than existing 3D metal printers currently on the market.
Results of Operations
The comprehensive loss of the Company for the year ended 30 June 2016, after providing for income tax amounted to
$1,118,866 (2015: $249,473).
The loss is primarily due to activities relating to the design and development of the Company’s 3D metal printers and
associated working capital.
Review of financial conditions
The Company had $2,353,226 in cash assets as at 30 June 2016 (2015: $48,133).
At 30 June 2016, the Company had net assets of $54,786 (2015: net liability of $144,848), an increase of $199,634 compared
with the previous period which was primarily due to equity being raised during the year of $1,281,000 (2015: $84,625) less the
effect of the loss of the Company during the year of $1,118,866 (2015: $249,473).
Business Strategy and Prospects for Future Years
The objective of the Company is to create long-term shareholder value through the design and development of metal 3D
printers and associated products and services.
The Company is now focused on the following key developments:
Finalise Beta testing and final pre-production activities of the SFP and bring the SFP into commercial production;
-
- Move the MFP and LFP from the design and development stage into the proof of concept stage through the
-
construction of a working MFP prototype; and
Continue to lodge associated patents and develop associated 3D metal printing products including metal powder
supply and software.
All of these activities are inherently risky and the Board is unable to provide certainty of the expected timing and financial
results of these activities, or that any or all of these likely developments will be achieved. The material business risks faced
by the Company that could have an effect on the Company’s future prospects include:
-
-
-
-
Risks to commercialisation of technologies;
Risks of not achieving targeted speeds or product specifications;
Inability to reach sufficient sales to generate an operating profit; and
A comprehensive set of risks is detailed in the Company prospectus dated 9 June 2016.
Risks are managed in accordance with the Company’s risk management framework.
LOSS PER SHARE
Basic loss per share
2016
$
(0.015)
2015
$
(0.002)
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DIRECTORS’ REPORT (continued)
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has
been made.
EMPLOYEES
The Company had 12 employees as at the 30 June 2016 (2015: 2).
SIGNIFICANT EVENTS DURING THE YEAR
On 3 July 2015, 2,000,000 fully paid ordinary shares were issued at $0.01 to raise $20,000.
On 6 November 2015, 3,382,500 fully paid ordinary shares were issued at $0.0266 to raise $90,000.
On 13 November 2015, 375,833 fully paid ordinary shares were issued at $0.0266 to raise $10,000.
On 23 November 2015, Nathan Henry was appointed as an Executive Director of the Company.
On 23 November 2015, David Parker was appointed as a Non-Executive Director and Company Secretary of the Company,
while David Budge resigned as Company Secretary on 23 November 2015.
On 23 November 2015, 5,657,000 Options exercisable at circa $0.0532 on or before 31 December 2018 were issued for nil
consideration.
On 2 December 2015, 2,818,750 fully paid ordinary shares were issued at $0.0266 to raise $75,000.
On 15 December 2015, 2,818,750 fully paid ordinary shares were issued at $0.0266 to raise $75,000.
On 18 December 2015, the Company held a General Meeting of shareholders. At this General Meeting, there were the
following special resolutions approved by Shareholders.
To change from a proprietary company limited by shares (Aurora Labs Pty Ltd) to a public company limited by
shares (Aurora Labs Ltd).
The Company adopted a new Constitution;
A consolidation of capital;
o
The number of fully paid ordinary shares on issue was reduced from 122,145,833 to 32,500,000 fully paid
ordinary shares, effective 18 December 2015.
Approval to issue 20,000,000 Performance Shares on a pro-rata basis to existing shareholders
o
The issue of 20,000,000 Performance Shares on a pro-rata basis to existing shareholders as per the above
point and recorded in the register on 31 December 2016 as follows:
6,000,000 Class A Performance Shares
6,750,000 Class B Performance Shares
7,250,000 Class C Performance Shares
On 31 December 2015, 2,530,000 (post consolidation) fully paid ordinary shares were issued at $0.16 to raise $404,800.
On 8 March 2016, 2,470,000 (post consolidation) fully paid ordinary shares were issued at $0.16 to raise $395,200.
On 8 March 2016, 2,000,000 (post consolidation) fully paid ordinary shares were issued at $0.10 to raise $200,000.
On 23 March 2016, the Company was converted to a public Company and ASIC changed the Company name to Aurora Labs
Ltd.
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DIRECTORS’ REPORT (continued)
SIGNIFICANT EVENTS DURING THE YEAR (continued)
On 11 April 2016, Messrs Paul Kehoe and Hendrikus Herman were appointed to the Board as Non-Executive Chairman and
Non-Executive Director respectively.
On 10 May 2016, the Company issued the following securities:
-
-
-
4,250,000 Options were issued for nil consideration on the same terms and conditions as existing Options, being
exercisable at $0.20 on or before 31 December 2018.
500,000 Shares issued for nil consideration, to Alto Capital or nominees as per the Alto Capital Mandate Agreement.
1,000,000 Performance Shares issued for nil consideration, to Alto Capital or nominees as per the Alto Capital
Mandate Agreement, split between Class A, B & C Performance Shares as follows:
a.
b.
c.
300,000 Class A Performance Shares;
337,500 Class B Performance Shares; and
362,500 Class C Performance Shares.
On 9 June 2016, the Company lodged a Prospectus to offer 14,000,000 shares for $0.20 to raise $2,800,000 (before costs)
as well as to offer 5,500,000 Options at $0.01 to raise $55,000 (before costs).
SUBSEQUENT EVENTS AFTER THE REPORTING DATE
On 26 July 2016, the Company closed the Share Offer under the Prospectus, and issued 14,000,000 ordinary shares for
$0.20 each to subscribers of the Share Offer.
On 26 July 2016, the Company lodged a Supplementary Prospectus for the extension of the Option Offer and additional
disclosure regarding the Option Offer.
On 29 July 2016, the Company issued 1,000,000 ordinary shares to Alto Capital or their nominees pursuant to the Lead
Manager Mandate Agreement.
On 3 August 2016, the Company closed the Option Offer and issued 5,500,000 Options (exercisable at $0.20 on or before 31
December 2018) at $0.01 to raise $55,000 before costs to subscribers of the Option Offer.
On 12 August 2016, Aurora Labs Ltd (the “Company”) was admitted to the Official List of ASX Limited, with Official quotation
of its securities commencing on 16 August 2016.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Aurora is in the late stages of preparing the SFP for commercialisation. This involves completing the Beta testing, CE mark
and US FDA (CDRH) laser compliance as noted earlier. These steps are likely to be achieved before calendar year end 2016.
Once complete, sales of the SFP can commence. A working prototype of the MFP is expected before calendar year end 2016
and a working prototype of the LFP is intended to follow 6 to 12 months later.
A number of other initiatives are being worked on but as these are at a very early stage of development.
All future activities are subject to various risks and there are no assurances that these targeted milestones will be reached or
that the stated timeframes will be met.
ENVIRONMENTAL LAWS AND REGULATIONS
Aurora’s operations are subject to various environmental laws and regulations. Full compliance with these laws and
regulations is regarded as a minimum standard for all operations to achieve.
Instances of environmental non-compliance by an operation are identified either by internal investigations, external
compliance audits or inspections by relevant government authorities.
There have been no known breaches of environmental laws and regulations by the Company during the financial year.
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DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED)
This report, which forms part of the Directors’ report, outlines the remuneration arrangements in place for the key
management personnel (“KMP”) of Aurora Labs Limited for the financial year ended 30 June 2016. The information provided
in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for KMP who are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including
any Director (whether executive or otherwise) of the Company.
Key Management Personnel
The KMP of the Company during or since the end of the financial year were as follows:
Directors
Mr Paul Kehoe
Mr David Budge
Mr Nathan Henry
Mr David Parker
Mr Hendrikus Herman
*David Budge provided services on a consulting basis prior to his full time employment which started on 1 November 2015.
Position
Non-Executive Chairman
Managing Director
Executive Director
Non-Executive Director and Company Secretary
Non-Executive Director
Period of Employment
11 April 2016
1 November 2015*
1 October 2015
23 November 2015
11 April 2016
Executives
Ms Jessica Snelling
Position
Printer Development Engineer
Period of Employment
Full year
Remuneration Policy
The Company’s remuneration policy for its KMP has been developed by the Board taking into account the size of the
Company, the size of the management team, the nature and stage of development of the Company’s current operations, and
market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.
In addition to considering the above general factors, the Board has also placed emphasis on the following factors in
determining the remuneration policy for KMP:
-
-
-
-
-
Beta testing, pre-production and commercialisation of the SFPs;
Design, development and proof of concept of the MFP and LFP;
Lodgement of associated patents of the Company’s new technologies;
Development of associated products and services such as powders and powder production, and software
development; and
The listing of the Company’s securities.
Remuneration Committee
The Board did not implement a Remuneration Committee during the year. Therefore the Board of Directors of the Company
is responsible for determining and reviewing compensation arrangements for the Managing Director, the Directors and the
executive team.
Remuneration structure
In accordance with best practice corporate governance, the structure of Non-Executive Director and executive remuneration
is separate and distinct.
Non-Executive Director remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to
time by a general meeting. The Constitution states that the Company may pay to the Non-Executive Directors a maximum
total amount of Director's fees, determined by the Company in general meeting, or until so determined, as the Directors
resolve. The Company intends to put to shareholders at the upcoming Annual General Meeting an aggregate remuneration
amount to approve.
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DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
Fees for the Chairman are presently set at $50,000 (2015: nil) per annum plus superannuation and fees for Non-Executive
Directors are presently set at $35,000 (2015: nil) per annum plus superannuation. These fees cover main Board activities
only. Non-Executive Directors may receive additional remuneration for other services provided to the Company.
The Non-Executive Director remuneration is payable from the date of Official Quotation of securities of the Company on the
ASX which was subsequent to the end of the financial year.
There was no Non-Executive Director salary remuneration during the year however there were Company Options issued to
Non-Executive Directors to attract suitable candidates to the position.
Executive Remuneration
The Company’s remuneration policy is to provide a fixed remuneration component and a short and long term performance
based component. The Board believes that this remuneration policy is appropriate given the considerations discussed in the
section above and is appropriate in aligning executives’ objectives with shareholder and business objectives.
Fixed Remuneration
Fixed remuneration consists of base salaries, statutory superannuation contributions and other non-cash benefits. Fixed
remuneration is reviewed annually by the Board. The process consists of a review of company and individual performance,
relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices.
Performance Based Remuneration – Short Term Incentive
The Board intends to implement a system where Executives may be entitled to an annual cash bonus upon achieving various
key performance indicators (“KPI’s”), as set by the Board. Having regard to the operations of the Company, the Board may
determine these KPI’s, including measures such as successful commercialisation of the Company’s products and services.,
production and sales levels, operational cash flows, corporate activities and business development activities.
No bonuses were paid or are payable in relation to the 2016 financial year.
Performance Based Remuneration – Long Term Incentive
Company Options
The Board has previously chosen to issue Company Options (where appropriate) to some executives and employees as a
key component of the incentive portion of their remuneration, in order to attract and retain the services of the executives and
to provide an incentive linked to the performance of the Company.
Employee Incentive Plan
Aurora has implemented an Employee Incentive Plan during the year. Under the Plan, Aurora may grant options to subscribe
for Shares or performance rights entitling the holder to be issued Shares on terms and conditions set by the Board at its
discretion.
The material terms of the Plan are as follows:
(a) The purpose of the Plan is:
(i) to establish a method by which eligible persons can participate in the future growth and profitability of Aurora;
(ii) to provide an incentive and reward for eligible persons for their contribution to Aurora; and
(iii) to attract and retain a high standard of managerial and technical personnel for the benefit of Aurora.
(b) The following persons can participate in the Plan if the Board makes them an offer to do so:
(i) a full-time or part-time employee, including an Executive Director and Non-Executive Director of Aurora or its
related bodies corporate;
(ii) a contractor of Aurora or its related bodies corporate; and
(iii) a casual employee of Aurora or its related bodies corporate where the employee or contractor is, or might
reasonably be expected to be, engaged to work the pro-rata equivalent of 40% or more of a comparable full-time position.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 13
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
(c) Plan Options and Plan Rights (collectively Awards) issued under the Plan are subject to the terms and conditions set out in
the Rules, which include:
(i) Vesting Conditions – which are time-based criteria, requirements or conditions (as specified in the offer and
determined by the Board) which must be met prior to Awards vesting in a participant, which the Board may
throughout the course of the period between the grant of an Award and its vesting, waive or accelerate as the Board
considers reasonably appropriate;
(ii) Performance Conditions – which are conditions relating to the performance of Aurora and its related bodies
corporate (and the manner in which those conditions will be tested) as specified in an offer and determined by the
Board; and
(iii) Exercise Conditions – which are criteria, requirements or conditions, as determined by the Board or under the
Plan, which must be met (notwithstanding the satisfaction of any Vesting Conditions and/or Performance Conditions)
prior to a Participant being entitled to exercise vested Options.
(d) In accordance with ASIC Class Order 14/1000, the total Awards that may be issued under the Plan will not exceed 5% of
the total number of Shares on issue. In calculating this limit, Awards issued to participants under the Plan other than in
reliance upon this Class Order are discounted.
(e) The Board has the unfettered and absolute discretion to administer the Plan.
(f) Awards issued under the Plan are not transferable and will not be quoted on the ASX.
The Rules otherwise contain terms and conditions considered standard for Employee Incentive Plan rules of this nature.
There were no Options or Shares issued under the Employee Incentive Plan during the year.
Executive Director Engagement Deeds
Aurora entered into a Managing Director Engagement Deed with David Budge and an Executive Director Engagement Deed
with Nathan Henry in relation to their employment with Aurora.
The material terms of these deeds are as follows:
(a) Under their respective deed, Mr Budge was appointed Managing Director effective 1 November 2015 and Mr Henry was
appointed Executive Director effective 23 November 2015.
(b) Mr Budge will be paid an annual salary of $160,000 plus superannuation.
(c) Mr Henry will be paid an annual salary of $150,000 plus superannuation.
(d) Mr Budge will be paid (by way of reimbursement) a vehicle allowance comprising business fuel costs, reasonable
servicing costs, comprehensive insurance premiums, registration and third party insurance costs, and finance payments of
between $350 and $400 per month.
(e) Each Director is expected to discharge their duties in accordance with the Constitution, any applicable corporate
governance policies of Aurora, the Corporations Act and the ASX Listing Rules.
(f) Each Director must at all times act diligently, in good faith, in the best interests of Aurora, and in a manner that is
consistent with that of an Executive Director of a company listed on the ASX.
(g) Each Director must make all necessary disclosures to Aurora in relation to all interests and matters which impact their
independence and any matters which may give rise to a conflict of interest.
(h) Each Director assigns to Aurora all future intellectual property rights in all inventions, designs, works and subject matter
created or conceived by the Directors in the performance of their duties as an employee or Director of Aurora.
(i) The employment of each Director may be terminated without cause by the Director or Aurora giving 6 months’ notice.
Aurora may otherwise terminate a Director’s employment immediately for cause (e.g. serious misconduct).
(j) Each Director is subject to a post-employment restraint on engaging in a business of the same or substantially similar
nature to Aurora or soliciting Aurora’s employees, suppliers or clients within the Asia Pacific region for up to 6 months.
The deeds otherwise contain terms and conditions considered standard for deeds of this nature.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 14
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
Relationship between Remuneration of KMP and Shareholder Wealth and Earnings
During the Company’s design, development and commercialisation phases of its business, the Board anticipates that the
Company will retain earnings (if any) and other cash resources for the development of its metal 3D printing and associated
products and services activities. The Company does not currently have a policy with respect to the payment of dividends and
returns of capital however this will be reviewed on an annual basis. Therefore, there was no relationship between the Board’s
policy for determining, or in relation to, the nature and amount of remuneration of KMP and dividends paid and returns of
capital by the Company during the current and previous financial period.
The Company did not have listed securities during the year and no consideration was given to appreciation of the Company’s
shares when setting remuneration.
The Board did issue Company Options to KMP and has implemented an Employee Incentive Plan during the year which will
generally be of value if the Company’s shares appreciate over time. However, it should be noted that all Company Options
issued to KMP have been imposed a two-year escrow (sale) restriction period. This is in line with the Company policy that
Company Options be used as a long-term incentive for KMP.
Remuneration of Key Management Personal
Details of the nature and amount of each element of the emoluments of each of the Key Management Personnel (KMP) of
Aurora Labs Limited are as follows:
2016
Directors
Paul Kehoe1&2
David Budge3
Nathan Henry
David Parker1&4
Hendrikus Herman1
Other KMP
Jessica Snelling
Total
2015
Directors
David Budge5
Other KMP
Jessica Snelling
Total
Short-term benefits
Salary &
fees
$
Super-
annulation
$
Termination
payments
$
Share-
based
payments
$
-
93,538
114,188
-
-
65,615
273,341
-
8,886
10,848
-
-
6,233
25,967
-
-
-
-
-
-
Total
$
5,000
109,924
141,970
-
16,933
5,000
7,500
16,934
-
16,933
2,183
74,031
48,550
347,858
Percentage
performance
related
%
-
-
-
-
-
-
-
Short-term benefits
Salary &
fees
$
Super-
annuation
$
Termination
payments
$
Share-
based
payments
$
-
-
25,000
25,000
2,375
2,375
-
-
-
-
-
-
Percentage
performance
related
%
-
-
-
Total
$
-
27,375
27,375
1 Non-Executive Directors did not receive their salary during the year as payment of Non-Executive Director salary became
effective on the Company gaining Official Quotation of its securities.
2 Paul Kehoe was also issued 93,750 shares and 250,000 Performance shares as consideration for services from Alto Capital
through the Lead Manager mandate agreement during the year.
3 David Budge became a full time employee on 1 November 2015. Prior to this he provided engineering services through a
related entity Advanced Industrial Manufacturing Pty Ltd (AIM). During the year a total of $160,013 was paid to AIM for
engineering services, associated services and reimbursements. An additional payment of $30,753 was made to AIM in
satisfaction of a loan payable to AIM.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 15
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
4 David Parker provided Company Secretarial Services through a controlled entity Cobblestones Corporate Pty Ltd.
Payments for company secretarial services during the year totalled: $8,000. David Parker is also an employee of Alto Capital
who provided Lead Manager and capital raising services to the Company. Alto Capital was paid $140,000 for services during
the year. David Parker was also issued 460,000 ordinary shares and 174,999 performance shares as consideration for
services from Alto Capital through the Lead Manager mandate agreement during the year.
5 David Budge provided engineering services through a related entity Advanced Industrial Manufacturing Pty Ltd (AIM) during
the period. During the period to 30 June 2015 a total of $214,340.10 was invoiced by AIM for engineering services,
associated services and reimbursements. An additional payment of $31,278.55 was made from Aurora to David Budge in the
form of a loan.
No member of KMP appointed during the year received a payment as part of his or her consideration for agreeing to hold the
position (2015: nil).
Cash bonuses granted as compensation for the current financial year.
No cash bonuses were granted during the year ended 2016 (2015: nil)
Company Options
Details of employee share option plans granted as compensation for the current financial year
For details on the valuation of the options, including models and assumptions used, please refer to Note 20. There were no
material alterations to the terms and conditions of options granted as remuneration since their grant date.
During the year KMP were issued Company Options at the discretion of the Board and following shareholder approval where
required. The below table details all Company Options issued during the year, noting some Company Options have been
issued to employees or consultants that are not KMPs. The Employee Incentive Plan was adopted on 3 June 2016, following
the issue of the below Company Options.
Date options granted
Number of shares under
option
Exercise price of option
Expiry date of option
23/11/20151
10/05/2016
Total
1,500,000
4,250,000
5,750,000
$0.20
$0.20
$0.20
31/12/2018
31/12/2018
31/12/2018
1 Number of Company Options issued on a post consolidation basis.
Company Options granted to KMP
During the financial year, Company Options were granted to the following key management personnel of the Company and
the entities it controlled as part of their remuneration.
Directors
Paul Kehoe
David Budge
Nathan Henry1
David Parker
Hendrikus Herman
Executives
Jessica Snelling
Total
Exercise price
Expiry date
Number of options
granted
Total number of shares
under option at the end
of the year
$0.20
$0.20
$0.20
-
$0.20
$0.20
-
31/12/2018
31/12/2018
31/12/2018
-
31/12/2018
31/12/2018
-
500,000
750,000
1,693,334
-
1,693,333
218,333
4,855,000
500,000
750,000
1,693,334
-
1,693,333
218,333
4,855,000
1 Number of Company Options issued on a post consolidation basis.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 16
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
There were no alterations to the terms and conditions of Company Options granted as remuneration since their grant date
other than minor amendments to the term relating to transferability of the Company Options which was approved by
shareholders at a general meeting on 13 June 2016.
Company Options were issued or in relation to the 2016 financial year as follows (all Company Options were under the same
terms and conditions being exercisable at $0.20 on or before 31 December 2018): For details on the valuation of the options,
including models and assumptions used, please refer to Note 20.
There were no shares issued during the year as a result of the exercise of a Company Option. No Company Options lapsed
during the year.
Shares and performance shares issued to KMP
During the financial year, shares and performance shares were issued to the following key management personnel of the
Company and the entities it controlled as part of their remuneration.
Number of shares issued
(pursuant to Alto Capital
Lead Mandate)
Number of performance
shares (Class A, B & C)
(pursuant to Alto Capital
Lead Mandate)
Number of performance
shares (Class A, B & C)
(pursuant to bonus issue
to all shareholders)1
93,750
-
-
96,667
-
-
190,417
250,000
-
-
174,999
-
-
424,999
-
14,736,483
512,084
92,307
481,325
818,693
16,640,892
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
Executives
Jessica Snelling
Total1
1 Performance shares were issued for nil consideration as a bonus issue following shareholder approval.
Loans to and from key management personnel
The Company loaned funds from key management personal (or controlled entities) as well as provided loans to key
management personnel. Loans were on unsecured terms and there were no loans outstanding as at the end of the year.
The loans to and from key management personnel were unsecured.
Aggregate amounts in respect of loans made to key management personnel
Balance at
beginning of
year
Interest
charged
Arm’s length
interest
differential (i)
Allowance for
doubtful
receivables
Balance at end
of year
Number of key
management
personnel
30 June 2016
30 June 2015
(i)
1
1
The amount above refers to the difference between the amount of interest received and receivable in the reporting
period and the amount of interest that would have been charged on an arms-length basis.
-
31,278
31,278
-
-
-
-
-
-
-
Aggregate amounts in respect of loans provided by key management personnel
Balance at
beginning of year
Interest
charged
Arm’s length interest
differential (j)
Balance at end of
year
Number of key
management
personnel
30 June 2016
30 June 2015
(j)
1
1
The amount above refers to the difference between the amount of interest paid and payable in the reporting period and
the amount of interest that would have been charged on an arms-length basis.
-
30,7531
30,7531
-
-
-
-
-
1 This amount refers to amounts owed to Advanced Industrial Manufacturing Pty Ltd, a controlled entity of David Budge.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 17
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
Key management personnel equity holdings
Fully paid ordinary shares
Balance at
beginning of
year
Number
Granted as
compensation
Number
Received
on
exercise
of options
Number
Net change
other
Number*
Balance at
end of year
Number
Balance held
nominally
Number
-
91,500,000
-
-
2,939,583
93,750
-
-
96,667
-
-
-
-
-
-
1,000,000
(67,553,215)
832,151
150,000
(2,157,432)
1,093,750
23,946,785
832,151
246,667
782,151
1,093,750
-
-
150,000
782,151
30 June 2016
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
Executives
Jessica Snelling
-
*Negative amount relates to share consolidation which reduced the number of shares on issue and a transfer of securities to
a related party.
(3,669,663)
5,000,000
1,330,337
-
-
Balance at
beginning
of period
Number
Granted as
compensatio
n
Number
Received on
exercise of
options
Number
Net change
other
Number
Balance at
end of year
Number
Balance held
nominally
Number
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
91,500,000
-
-
2,939,583
-
91,500,000
-
-
2,939,583
-
-
-
-
939,583
5,000,000
5,000,000
-
Balance at
beginning of
year
Number
Granted as
compensation
Number
Exercised
Number
Net change
other
Number
Balance at end of year
Number
-
-
-
-
500,000
750,000
1,693,334*
-
1,693,333
-
-
-
-
-
-
-
-
-
-
-
-
500,000
750,000
1,693,334
-
1,693,333
218,333
Executives
Jessica Snelling
*Number of Company Options issued on a post consolidation basis.
218,333
-
There were no Company Options issued during the period to 30 June 2015.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 18
30 June 2015
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
Executives
Jessica Snelling
Company Options
30 June 2016
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
Company Options (continued)
For details of the Employee Incentive Plan and of Company Options granted during the 2016 financial year, please refer to
Note 20. All Company Options issued to KMP were made in accordance with the provisions of the Employee Incentive Plan.
During the year, no Company Options were exercised or sold. No amounts remain unpaid on the Company Options as at
year end.
Performance Shares Class A
Balance at
beginning
of year
Number
Granted as
compensation for
services
Number
Issued pursuant to
pro-rata bonus
issue
Number
Balance at
end of year
Number
Balance held
nominally
Number
-
-
-
-
-
-
75,000
-
-
52,500
-
-
4,420,945
153,628
15,000
144,397
75,000
4,420,945
153,628
67,500
144,397
-
245,608
245,608
75,000
-
-
67,500
46,154
-
30 June 2016
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
Executives
Jessica Snelling
Performance Shares Class B
Balance at
beginning
of year
Number
Granted as
compensation for
services
Number
Issued pursuant to
pro-rata bonus
issue
Number
Balance at
end of year
Number
Balance held
nominally
Number
-
-
-
-
-
-
84,375
-
-
27,692
-
-
4,973,945
172,832
59,062
162,448
84,375
4,973,945
172,832
86,754
162,448
-
276,309
276,309
84,375
-
-
86,754
51,924
-
30 June 2016
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
Executives
Jessica Snelling
Performance Shares Class C
Balance at
beginning
of year
Number
Granted as
compensation for
services
Number
Issued pursuant to
pro-rata bonus
issue
Number
Balance at
end of year
Number
Balance held
nominally
Number
-
-
-
-
-
-
90,625
-
-
63,437
-
-
5,341,975
185,624
31,154
174,480
90,625
5,341,975
185,624
94,591
174,480
-
296,776
296,776
90,625
-
-
94,591
55,769
-
30 June 2016
Directors
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
Executives
Jessica Snelling
END OF REMUNERATION REPORT
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 19
DIRECTORS’ REPORT (continued)
OFFICER INDEMNITY AND INSURANCE
The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person who is or
has been a Director or Officer of the Company for any liability caused as such a Director or Officer and any legal costs
incurred by a Director or Officer in defending an action for any liability caused as such a Director or Officer.
During or since the end of the financial year, no amounts have been paid by the Company in relation to the above
indemnities.
During the financial year, insurance premiums were paid by the Company were less than $5,000 (2015: $nil) to insure against
a liability incurred by a person who is or has been a Director or officer of the Company.
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 were as follows:
Directors’ meetings
2016
Paul Kehoe
David Budge
Nathan Henry
David Parker
Hendrikus Herman
No. eligible to attend
1
6
6
6
1
No. attended
1
6
6
6
1
In addition to the above meetings, the Board executed 18 circular resolutions during the year.
The Audit Committee was established on 3 June 2016 and no Audit Committee meetings were held during the year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in
Note 21 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services
have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services
undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110: Code of Ethics
for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the Company
with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on
page 32 and forms part of this Directors’ report for the year ended 30 June 2016.
Signed in accordance with a resolution of the Directors.
Mr David Budge
Managing Director
Dated this 29 September 2016
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 20
CORPORATE GOVERANCE STATEMENT
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should disclose:
Yes
Aurora has adopted a Board Charter which discloses the roles
and responsibilities of the Board and senior management.
(a) the
respective
and
responsibilities of its board and
management; and
roles
(b)
those matters expressly reserved
to the board and those delegated
to management.
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks
before appointing a person, or
putting
security
holders a candidate for election,
as a director; and
forward
to
(b) provide security holders with all
material information relevant to a
decision on whether or not to
elect or re-elect a director.
Recommendation 1.3
Yes
A listed entity should have a written
agreement with each director and
senior executive setting out the terms
of their appointment.
Recommendation 1.4
Yes
The company secretary of a listed
entity should be accountable directly
to the board, through the chair, on all
matters
the proper
to do with
functioning of the board.
Under the Board Charter, the Board is responsible for the
overall operation and stewardship of Aurora (and any future
subsidiaries), including charting the direction, strategies and
financial objectives for Aurora, monitoring the implementation
of those policies, strategies and financial objectives, and
monitoring compliance with regulatory requirements and ethical
standards.
The Board Charter is available on Aurora’s website.
Yes
Aurora will conduct background checks of candidates for new
Director positions prior to their appointment or nomination for
election by Shareholders,
to good
character, experience, education, qualifications, criminal history
and bankruptcy.
including checks as
Aurora does not propose to conduct specific checks prior to
nominating an existing Director for re-election by Shareholders
at a general meeting on the basis that this is not considered
necessary given that each Director was required to submit to
the ASX
fame and character’ assessment during
Aurora’s admission to the Official List of ASX.
‘good
As a matter of practice, Aurora will include in its notices of
meeting a brief biography and other material information in
relation to each Director who stands for election or re-election.
The biography will set out (amongst other things) the relevant
qualifications and professional experience of the nominated
Director for consideration by Shareholders.
Aurora engages or employs its Directors and other senior
executives under written agreements setting out key terms and
otherwise governing their engagement or employment by
Aurora.
The Managing Director is employed pursuant to a written
employment agreement with Aurora and each Non-Executive
Director
is engaged under a Non-Executive Director
Engagement Deed.
The Company Secretary reports directly, and is accountable, to
the Board through the Chairperson in relation to all governance
matters.
Company Secretary advises and supports the Board members
on general governance matters,
implements adopted
governance procedures, and coordinates circulation of meeting
agendas and papers.
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which
No
Given Aurora’s size and its stage of development, Aurora has
not adopted a formal diversity policy at this stage. Aurora has
a policy to select the best available officers and staff for each
relevant position in a non-discriminatory manner based on
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 21
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
for
includes requirements
the
board or a relevant committee of
to set measurable
the board
objectives for achieving gender
diversity and to assess annually
the
both
the objectives and
entity’s progress
in achieving
them;
(b) disclose
that policy or a
summary of it; and
(c) disclose as at the end of each
reporting period the measurable
objectives for achieving gender
diversity set by the board or a
relevant committee of the board
in accordance with the entity’s
diversity policy and its progress
towards achieving
them, and
either:
(1) the respective proportions of
the
men and women on
board, in senior executive
the
positions and across
whole
organisation
(including how the entity has
defined “senior executive”
for these purposes); or
under
(2) if the entity is a “relevant
employer”
the
Workplace Gender Equality
Act, the entity’s most recent
“Gender Equality Indicators”,
as defined in and published
under that Act.
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for
the
periodically
performance of the board, its
committees
individual
and
directors; and
evaluating
merit.
Notwithstanding this, the Board respects and values the
benefits that diversity (e.g. gender, age, ethnicity, cultural
background, disability and martial/family status) brings in
relation
thereby
to expanding Aurora’s perspective and
improving corporate performance,
increasing Shareholder
value and maximising the probability of achieving Aurora’s
objectives. The Board is committed to developing a diverse
workplace where appointments or advancements are made on
a fair and equitable basis.
Yes
Aurora has adopted in its Board Charter a process for
evaluation of
individual
its committees and
Directors. This process is conducted by the Board.
the Board,
The Board also performs a commentary function under the
Nomination and Remuneration Policy.
Aurora will disclose if a performance evaluation has been
conducted.
(b) disclose,
in
relation
to each
reporting period, whether a
evaluation was
performance
undertaken
reporting
period in accordance with that
process.
the
in
Recommendation 1.7
A listed entity should:
Yes
The Nomination and Remuneration Policy provides that the
Board will undertake performance evaluation of the Directors
and senior management on at least an annual basis.
(a) have and disclose a process for
the
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
periodically
evaluating
Aurora will disclose if a performance evaluation has been
P a g e | 22
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
performance
executives; and
of
its
senior
conducted.
(b) disclose
in
relation
to each
reporting period, whether a
evaluation was
performance
undertaken
reporting
period in accordance with that
process.
the
in
Principal 2: Structure the Board to add value
Recommendation 2.1
No
The board of a listed entity should:
(a) have a nomination committee
which:
(1) has at least three members,
a majority of whom are
independent directors; and
(2) is
by
chaired
independent director,
an
and disclose:
(3)
(4) the members
the charter of the committee;
the
of
(b)
committee; and
(5) as at
the end of each
reporting period, the number
of times the committee met
throughout the period and
the individual attendances of
the members at
those
meetings; or
it employs
if it does not have a nomination
committee, disclose that fact and
to
the processes
address board succession issues
and to ensure that the board has
the appropriate balance of skills,
experience,
knowledge,
independence and diversity to
enable it to discharge its duties
and responsibilities effectively.
Recommendation 2.2
No
A
listed entity should have and
disclose a board skills matrix setting
out the mix of skills and diversity that
the board currently has or is looking
to achieve in its membership.
Recommendation 2.3
A listed entity should disclose:
(a)
the names of
the directors
considered by the board to be
Aurora does not have a nomination committee at this stage.
The Board considers that, given the current size and scope of
Aurora’s operations, efficiencies or other benefits would not be
gained by establishing a separate nomination committee.
The full Board, which comprises 3 Non-Executive Directors and
2 Executive Directors, considers the matters and issues that
would otherwise be addressed by a nomination committee in
accordance with Aurora’s Nomination and Remuneration
Policy.
Under the Board Charter, candidacy for the Board is based on
merit against objective criteria with a view to maintaining an
appropriate balance of skills and experience. As a matter of
practise, candidates for the office of Director are individually
assessed by the Chairman and the Managing Director before
appointment or nomination to ensure that they possess the
relevant skills, experience or other qualities considered
appropriate and necessary to provide value and assist in
advancement of Aurora’s operations.
The Board intends to reconsider the requirement for, and
benefits of, a separate nomination committee as Aurora’s
operations grow and evolve.
Aurora does not currently have a skills or diversity matrix in
relation to the Board members. The Board considers that such
a matrix is not necessary given the current size and scope of
Aurora’s operations. The Board may adopt such a matrix at a
later time as Aurora’s operations grow and evolve.
Yes
Disclosure of the names of Directors considered by the Board
to be independent will be provided in the annual reports.
At the Prospectus Date, Paul Kehoe and Dick Herman are
considered to be independent Directors.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 23
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
independent directors;
(b)
of
Box
association
if a director has an interest,
position,
or
relationship of the type described
in
the
2.3
Recommendations but the board
is of the opinion that it does not
compromise the independence
of the director, the nature of the
interest, position, association or
relationship in question and an
explanation of why the board is
of that opinion; and
(c)
the length of service of each
director.
Recommendation 2.4
No
A majority of the board of a listed
entity
independent
directors.
should
be
Recommendation 2.5
Yes
The chair of the board of a listed
entity should be an
independent
director and, in particular, should not
be the same person as the CEO of
the entity.
Recommendation 2.6
No
appropriate
A listed entity should have a program
inducting new directors and
for
professional
provide
development
for
directors to develop and maintain the
skills and knowledge needed
to
perform
role as directors
effectively.
opportunities
their
Explanation
Details of the Directors' interests, positions, associations and
relationships are provided in the Directors Report.
The length of service of each Director will be provided in the
annual report and is, at the Prospectus Date, as follows:
Paul Kehoe – since 11 April 2016;
David Budge – since 9 August 2014;
Nathan Henry – since 23 November 2015;
David Parker – since 23 November 2015; and
Dick Herman – since 11 April 2016.
The Board is not comprised of a majority of independent
Directors. There are currently two Directors who satisfy the
criteria
the purposes of ASX
for
Recommendation 2.3, being Paul Kehoe and Dick Herman.
independence
for
However, given the size and scope of Aurora's operations, the
Board considers that it has relevant experience in the industrial
technology sector and is appropriately structured to discharge
its duties in a manner that is in the best interests of Aurora and
its Shareholders
long-term strategic and
operational perspective.
from both a
The Board Charter provides that it is preferable that the
majority of the Board be independent Non-Executive Directors.
Accordingly, the Board intends to appoint further independent
Non-Executive Directors as suitably qualified candidates are
identified and as the size and scale of Aurora’s operations
warrant such appointment.
The Board considers that the Chairman of Aurora, Paul Kehoe,
is an independent Director in accordance with the criteria for
independence outlined in ASX Recommendation 2.3.
Aurora does not currently have a formal induction program for
new Directors nor does
formal professional
development program for existing Directors. The Board does
not consider that a formal induction program is necessary given
the current size and scope of Aurora’s operations.
it have a
have
experience
The Directors have been selected on the basis that collectively
they
technology,
manufacturing, legal services, accounting, geology, finance
and corporate advisory services. Some of the current
Directors are also, or have been, involved in other ASX-listed
companies.
industrial
across
All Directors are generally experienced in company operations,
albeit in different aspects (e.g. operations, finance, corporate
governance etc.), and have listed company experience. Some
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 24
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
Principal 3: Act ethically and responsibly
Recommendation 3.1
Yes
A listed entity should:
(a) have a code of conduct for its
directors, senior executives and
employees; and
(b) disclose that code or a summary
of it.
of the current Directors are also directors of other listed
companies. The Board seeks to ensure that all of its
Shareholders understand Aurora’s operations. Directors also
attend, on behalf of Aurora and otherwise, technical and
commercial seminars and industry conferences which enable
them to maintain their understanding of industry matters and
technical advances.
The Board believes that the success of Aurora has been and
will continue to be enhanced by a strong ethical culture within
the organisation.
Accordingly, Aurora has established a Code of Conduct which
sets out the standards with which the Directors, officers,
managers, employees and consultants of Aurora (and any
future subsidiaries of Aurora) are expected to comply in relation
to the affairs of Aurora's business and when dealing with each
other, Shareholders and the broader community.
The Code also outlines the procedure for reporting any
breaches of the Code and the possible disciplinary action
Aurora may take in respect of any breaches.
In addition to their obligations under the Corporations Act in
relation to inside information, all Directors, employees and
consultants have a duty of confidentiality to Aurora in relation to
confidential information they possess.
In fulfilling their duties, each Director dealing with corporate
governance matters may obtain independent professional
advice at Aurora’s expense, subject to prior approval of the
Managing Director, whose approval will not be unreasonably
withheld.
Aurora’s Code of Conduct is available on Aurora’s website.
Principal 4: Safeguard integrity in corporate reporting
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members,
all of whom are Non-
Executive Directors and a
majority
are
independent directors; and
of whom
(2) is
chaired
an
independent director, who is
not the chair of the board,
by
and disclose:
(3) the charter of the committee;
relevant qualifications
(4) the
and experience of
the
members of the committee;
and
(5) in relation to each reporting
Yes
Aurora has established a separate Audit Committee under its
Audit Committee Charter.
The Audit Committee comprises Paul Kehoe (Non-Executive
(Non-Executive Director and
Chairman), David Parker
Company Secretary) and Dick Herman
(Non-Executive
Director).
The chairperson of the Audit Committee is Dick Herman who is
considered by the Board to be ‘independent’ for the purposes
of the ASX Recommendations.
The Audit Committee comprises a majority of independent
Directors.
Aurora’s Audit Committee Charter sets out the purpose and
functions of the Audit Committee.
The qualifications, experience and attendance record of Audit
Committee members will be disclosed in each year’s annual
report.
The Audit Committee Charter is available on Aurora’s website.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 25
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
period, the number of times
the
met
committee
throughout the period and
the individual attendances of
the members at
those
meetings; or
(b) if it does not have an audit
committee, disclose that fact and
the processes it employs that
and
independently
safeguard
its
corporate reporting, including the
processes for the appointment
and removal of
the external
auditor and the rotation of the
audit engagement partner.
integrity of
verify
the
Recommendation 4.2
Yes
in
that
that,
it approves
The board of a listed entity should,
before
the entity’s
financial statements for a financial
period, receive from its CEO and
CFO a declaration
their
opinion, the financial records of the
entity have been properly maintained
financial statements
and
appropriate
comply
accounting standards and give a true
and fair view of the financial position
and performance of the entity and
that the opinion has been formed on
the basis of a sound system of risk
management and
internal control
which is operating effectively.
the
with
the
As a matter of practice, Aurora obtains declarations from its
Managing Director and Company Secretary before its financial
statements are approved substantially in the form referred to in
ASX Recommendation 4.2.
Recommendation 4.3
Yes
A listed entity that has an AGM
should ensure that its external auditor
attends its AGM and is available to
answer questions
from security
holders relevant to the audit.
Principal 5: Make timely and balanced disclosure
In accordance with Aurora’s Shareholder Communications
Policy, Aurora will request that its external auditor attends each
annual general meeting and be available
to answer
Shareholder questions about the conduct of the audit and the
preparation and content of the auditor’s report.
Recommendation 5.1
A listed entity should:
(a) have a written policy
for
complying with
its continuous
disclosure obligations under the
Listing Rules; and
(b) disclose
that policy or a
summary of it.
Yes
Aurora has adopted a Continuous Disclosure and Market
Communications Policy.
Aurora is a “disclosing entity” pursuant to section 111AR of the
Corporations Act and, as such, will be required to comply with
the continuous disclosure requirements of section 674 of the
Corporations Act and Chapter 3 of the Listing Rules, following
admission to ASX.
Aurora is committed to observing its disclosure obligations
under the Corporations Act and, following admission to ASX, its
obligations under the Listing Rules. All announcements
provided to ASX will be posted on Aurora’s website.
The Continuous Disclosure and Market Communications Policy
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 26
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
is available on Aurora’s website.
Principal 6: Respect the rights of security holders
Recommendation 6.1
Yes
listed entity
A
information about
governance
website.
to
should provide
its
itself and
its
investors via
Recommendation 6.2
Yes
A listed entity should design and
implement an
relations
program to facilitate effective two-way
communication with investors.
investor
Recommendation 6.3
Yes
A listed entity should disclose the
policies and processes it has in place
to
encourage
participation at meetings of security
holders.
facilitate
and
Recommendation 6.4
Yes
A listed entity should give security
receive
holders
communications
from, and send
communications to, the entity and its
the option
to
Information about Aurora and
its corporate governance,
including copies of its various corporate governance policies
and charters, is available on Aurora’s website.
Aurora has adopted a Shareholder Communications Policy, the
purpose of which is to facilitate the effective exercise of
Shareholders’
rights by communicating effectively with
Shareholders, giving Shareholders ready access to balanced
and understandable information about Aurora and its corporate
strategies and making it easy for Shareholders to participate in
general meetings of Aurora.
Aurora communicates with Shareholders as follows:
following admission to ASX, through releases to the
market via the ASX;
through Aurora’s website;
through information provided directly to Shareholders;
and
at general meetings of Aurora.
The Shareholder Communications Policy
Aurora’s website.
is available on
Aurora supports Shareholder participation in general meetings
and seeks to provide appropriate mechanisms for such
participation, including by ensuring that meetings are held at
convenient
to encourage Shareholder
participation.
times and places
In preparing for general meetings of Aurora, Aurora will draft
the notice of meeting and related explanatory information so
that they provide all of the information that is relevant to
Shareholders in making decisions on matters to be voted on by
them at the meeting. This information will be presented clearly
and concisely so that it is easy to understand and not
ambiguous.
Aurora will use general meetings as a tool to effectively
communicate with Shareholders and will allow Shareholders a
reasonable opportunity to ask questions of the Board and to
otherwise participate in the meeting.
for encouraging and
Mechanisms
facilitating Shareholder
participation will be reviewed regularly to encourage the
highest level of Shareholder participation.
Aurora considers that communicating with Shareholders by
electronic means is an efficient way to distribute information in
a timely and convenient manner.
Aurora provides new Shareholders with the option to receive
from Aurora electronically and Aurora
communications
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 27
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
security registry electronically.
encourages them to do so. Existing Shareholders are also
encouraged to request communications electronically.
Following admission to ASX, all Shareholders that have opted
to receive communications electronically will be provided with
notifications by Aurora when an announcement or other
communication (including an annual reports and notice of
meeting) is uploaded to the ASX announcements platform.
Principal 7: Recognise and manage risk
Recommendation 7.1
No
Aurora does not have a separate risk management committee.
The board of a listed entity should:
(a) have a committee or committees
to oversee risk each of which:
(1) has at least three members,
a majority of whom are
independent directors; an
(2) is
by
chaired
independent director,
an
and disclose
(3) the charter of the committee;
(4) the members
the
committee; and
of
(5) as at
the end of each
reporting period, the number
of times the committee met
throughout the period and
the individual attendances of
the members at
those
meetings; or
(b) if
risk
it does not have a
committee or committees
that
satisfy (a) above, disclose that
it
fact and
the
employs
entity’s
management
framework.
for overseeing
risk
the processes
Recommendation 7.2
The board or a committee of the
board should:
(a) review
risk
management framework at least
annually to satisfy itself that it
continues to be sound; and
entity’s
the
is responsible
for supervising management’s
The Board
framework of control and accountability systems to enable risk
to be assessed and managed in accordance with Aurora’s Risk
Management Policy.
The Board considers that, given the current size and scope of
Aurora’s operations and that only two Directors hold executive
positions in Aurora, efficiencies or other benefits would not be
gained by establishing a separate risk management committee
at present.
As Aurora’s operations grow and evolve, the Board will
reconsider the appropriateness of forming a separate risk
management committee.
However, Aurora has adopted a Risk Management Policy for
Aurora which includes the following:
The purpose of the policy is to:
provide a framework for identifying, assessing,
monitoring and managing risk;
communicate the roles and accountabilities of
participants in the risk management system; and
highlight the status of risks to which Aurora is
to
exposed,
Aurora’s risk profile.
including any material changes
The Board is responsible for the following under the
policy:
risk management and oversight of
controls;
internal
establishing procedures which provide assurance
that business risks are identified, consistently
assessed and adequately addressed; and
for the overseeing of such procedures.
The Risk Management Policy is available on Aurora’s website.
Yes
the monitoring of risk
The Board has responsibility
management and will review Aurora’s risk management
framework on an annual basis
to ensure Aurora’s risk
management framework continues to be effective.
for
Disclosure of the outcome of the annual risk management
review will be included in the annual report.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 28
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
(b) disclose,
in
relation
to each
reporting period, whether such a
review has taken place.
Recommendation 7.3
A listed entity should disclose:
(a) if it has an internal audit function,
how the function is structured
and what role it performs; or
(b) if it does not have an internal
audit function, that fact and the
processes
for
it
continually
and
evaluating
improving the effectiveness of its
risk management and internal
control processes.
employs
Recommendation 7.4
A
listed entity should disclose
whether it has any material exposure
to economic, environmental and
social sustainability risks and, if it
does, how it manages or intends to
manage those risks.
No
Aurora does not currently have an internal audit function. This
function is undertaken by relevant staff under the direction of
the full Board.
Aurora has adopted internal control procedures which pursuant
to its Risk Management Policy. Aurora’s internal controls
include the following:
Aurora has authorisation limits in place for expenditure
and payments;
a Director or senior manager must not approve a
payment to themselves or a related party, other than
standard salary/Directors fees in accordance with their
Board approved remuneration;
Aurora prepares cash flow forecasts which include
materiality thresholds and which are regularly reviewed;
and
Aurora regularly reviews its other financial materiality
thresholds.
The Board and senior management are charged with
evaluating and considering improvements to Aurora’s risk
management and internal control processes on an ongoing
basis.
The Board considers that an internal audit function is not
currently necessary given the current size and scope of
Aurora’s operations.
As Aurora’s operations grow and evolve, the Board will
reconsider the appropriateness of adopting an internal audit
function.
Yes
The Board does not consider that Aurora has a material
exposure to environmental and social sustainability risks.
However, Aurora’s primary operation of manufacturing and
supplying 3D metal printers, consumables and accessories is
subject to various economic sustainability risks which may
materially impact Aurora’s ability to operate and to generate
value for Shareholders. These include:
Aurora’s
Technology development risk:
financial
success is primarily dependent upon its ability to further
develop and commercialise its technology. Any new
industrial technology is subject to inherent development
risks which may have a significant adverse effect on
Aurora’s financial position, including technical problems
in development and new competing
innovations or
products.
Intellectual property risks: Aurora has applied for
various patents in relation to aspects of its technology.
Its success will largely depend upon the successful grant
and maintenance of these patent applications. The grant
of patents applications is subject to various legal and
technical matters and there cannot be any assurance that
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 29
CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
Aurora’s applications will be granted or, if granted, that
they will provide the commercial advantage that Aurora
desires.
Commodity price fluctuations: Aurora’s 3D metal
printing machines operate using various metallic
substances and other commodities which Aurora intends
to supply to its customers. Commodity prices are subject
to fluctuation which may affect the cost of procurement
and revenue on the sale of such commodities by Aurora.
The
fluctuations:
revenue and
Exchange rate
expenditure of Aurora is and will be taken into account in
Australian and other currencies (e.g. US dollars, Euros
etc.), exposing Aurora to the fluctuations and volatility of
the rates of exchange between the Australian dollar and
those other currencies as determined in international
markets.
Aurora has adopted the Risk Management Policy and other
procedures to identify, mitigate and manage these risks.
These policies are updated from time to time as the Board
considers appropriate
the
management of Aurora’s risk profile.
circumstances
the
for
in
Principal 8: Remunerate fairly and responsibly
No
Aurora has not established a separate
committee.
remuneration
The role of the remuneration committee is undertaken by the
full Board. The Board considers that, given its current size and
that only one Director holds an executive position in Aurora,
efficiencies or other benefits would not be gained by
establishing a separate remuneration committee.
to ASX, Aurora will set out
the
Following admission
remuneration paid or provided
to Directors and senior
executives annually in the remuneration report contained within
full Board
Aurora’s annual report
determines all compensation arrangements for Directors. It is
also responsible for setting performance criteria, performance
incentive performance
indicators, share option schemes,
schemes,
retirement and
termination entitlements and professional indemnity and liability
insurance cover.
superannuation entitlements,
to Shareholders. The
As Aurora’s operations grow and evolve, the Board will
reconsider
forming a separate
remuneration committee.
the appropriateness of
The Nomination and Remuneration Policy is available on
Aurora’s website.
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee
which:
(1) has at least three members,
a majority of whom are
independent directors; and
(2) is
by
chaired
independent director,
an
and disclose:
(3)
(4) the members
the charter of the committee;
the
of
committee; and
(b)
(5) as at
the end of each
reporting period, the number
of times the committee met
throughout the period and
the individual attendances of
the members at
those
meetings; or
a
if
does
it
committee,
remuneration
disclose
the
processes it employs for setting
the
level and composition of
remuneration for directors and
senior executives and ensuring
that
is
appropriate and not excessive.
remuneration
fact and
have
such
that
not
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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CORPORATE GOVERANCE STATEMENT (continued)
ASX Principle and
Recommendation
Compliance
(Yes/No)
Explanation
Yes
Yes
Recommendation 8.2
A
listed entity should separately
disclose its policies and practices
regarding the remuneration of Non-
Executive
the
Directors
remuneration of Executive Directors
and other senior executives.
and
Recommendation 8.3
A listed entity which has an equity-
based remuneration scheme should:
(a) have a policy on whether
to
participants are permitted
enter into transactions (whether
through the use of derivatives or
otherwise) which
the
economic risk of participating in
the scheme; and
limit
(b) disclose
that policy or a
summary of it.
Following admission to ASX, Aurora’s policies and practices
regarding the remuneration of Executive and Non-Executive
Directors and other senior executives is set out in the
Remuneration Report contained in Aurora’s Annual Report for
each financial year.
Aurora has adopted an Employee
In
accordance with Aurora’s Securities Trading Policy, the plan
does not allow participants to enter transactions that would limit
their economic risk under the scheme.
Incentive Plan.
Aurora’s Securities Trading Policy sets out the circumstances
in which the Directors, executives, employees, contractors,
consultants and advisors (Designated Persons) are prohibited
from dealing in Aurora’s Securities.
The policy provides that where a Designated Person is entitled
to equity-based remuneration arrangements, that Designated
Person must not at any time enter into a transaction (e.g.
writing a call option) that operates or is intended to operate to
limit
the economic risk of holdings of unvested Aurora
Securities or vested Aurora Securities which are subject to a
holding lock.
The Securities Trading Policy is available on Aurora’s website.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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AUDITOR'S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Aurora Labs Limited for the year ended 30 June
2016, I declare that to the best of my knowledge and belief, there have been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
29 September 2016
N G Neill
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
P a g e | 32
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Continuing operations
Other Income
Research and development expenses
Corporate expenses
Employee benefits
Other expenses
Interest expense
Loss before income tax benefit
Income tax benefit
Loss for the year/period
Loss attributable to members of the Company
Other comprehensive income, net of income tax
Notes
Year ended 30
June 2016
$
Period from
9 August 2014
to 30 June 2015
$
3(a)
3(b)
4
495
(280,168)
(216,332)
(512,054)
(197,370)
(5,895)
35
(183,877)
-
(29,270)
(36,361)
-
(1,211,324)
(249,473)
92,458
(1,118,866)
(1,118,866)
-
-
(249,473)
(249,473)
-
Total comprehensive loss for the year/period
(1,118,866)
(249,473)
Basic loss per share
Diluted loss per share
5(d)
5(d)
cents
0.015
0.015
cents
0.002
0.002
The accompanying notes form part of these financial statements.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
IPO prepayments
Inventories
Total Current Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Total Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Deferred revenue
Accrued annual leave
Share subscriptions received
Total Liabilities
Net Assets/(Liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Net Equity (Deficiency)
Notes
30 June 2016
$
30 June 2015
$
7
8
9
10
11
12
13
13
13
13
5(a)
5(c)
2,353,226
90,905
130,801
103,898
2,678,830
12,773
59,947
72,720
2,751,550
254,282
306,743
26,579
2,109,160
2,696,764
54,786
1,365,625
57,500
(1,368,339)
54,786
48,133
48,996
-
-
97,129
783
7,220
8,003
105,132
50,013
199,967
-
-
249,980
(144,848)
84,625
20,000
(249,473)
(144,848)
The accompanying notes form part of these financial statements.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
YEAR ENDED 30 JUNE 2016
Balance at 1 July 2015
Equity issued during the year (net
of share issue costs)
Loss for the year
Other comprehensive income for
the year, net of income tax
Total comprehensive loss for the
year
Balance as at 30 June 2016
PERIOD ENDED 30 JUNE 2015
Balance at incorporation
Equity issued during the year (net
of share issue costs)
Loss for the period
Other comprehensive income for
the period, net of income tax
Total comprehensive loss for the
period
Balance as at 30 June 2015
Issued
Capital
$
84,625
Option
Reserve
$
Allotment
Reserve
$
Accumulated
Losses
$
Total Equity
$
-
20,000
(249,473)
(144,848)
1,281,000
57,500
(20,000)
-
1,318,500
-
-
-
-
-
-
1,365,625
57,500
-
-
-
-
(1,118,866)
(1,118,866)
-
-
(1,118,866)
(1,118,866)
(1,368,339)
54,786
Issued
Capital
$
-
84,625
-
-
-
84,625
Option
Reserve
$
-
Allotment
Reserve
$
-
Accumulated
Losses
$
-
Total Equity
$
-
-
-
-
-
-
20,000
-
104,625
-
-
-
(249,473)
(249,473)
-
-
(249,473)
(249,473)
20,000
(249,473)
(144,848)
The accompanying notes form part of these financial statements.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Cash flows from operating activities
Payments to suppliers and employees
Interest Paid
Interest Received
Income tax benefit
Note
Year ended
30 June 2016
$
Period from
9 August 2014
to 30 June 2015
$
(1,056,680)
(249,321)
(5,895)
495
92,458
(187)
35
-
Net cash (used in) operating activities
7
(969,622)
(249,473)
Cash flows from investing activities
Property, plant and equipment
Payments for intangible assets
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares (net of capital
raising costs)
Proceeds from unissued shares
Payments for initial public offer costs
Proceeds from pre-sold printers
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
(14,382)
(56,337)
(70,719)
1,261,000
2,109,160
(130,801)
106,776
30,577
(31,278)
3,345,434
(783)
(7,220)
(8,003)
104,625
-
-
199,968
31,279
(30,263)
305,609
Net increase in cash held
2,305,093
48,133
Cash and cash equivalents at the beginning of
the year/period
48,133
-
Cash and cash equivalents at the end of
the year/period
7
2,353,226
48,133
The accompanying notes form part of these financial statements.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
(a)
These financial statements are general purpose financial statements, which have been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and comply with other requirements of
the law.
The financial statements comprise the financial statements for the Company. For the purposes of preparing the financial
statements, the Company is a for-profit entity.
The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated.
The financial statements are for Aurora Labs Limited (“Aurora” or the “Company”) which has no subsidiaries.
The financial statements have been prepared on a historical cost basis. Historical cost is based on the fair values of the
consideration given in exchange for goods and services.
The financial statements are presented in Australian dollars. The Company is an entity to which the class order applies.
The Company is a listed public company, incorporated in Australia. The entity’s principal activities are the design,
development and manufacture of 3D printers and associated products and services.
(b)
Adoption of new and revised standards
Standards and Interpretations applicable to 30 June 2016
In the year ended 30 June 2016, the Directors have reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Company and effective for the current annual reporting period.
As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards
and Interpretations on the Company and, therefore, no material change is necessary to Company accounting policies.
Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for
the year ended 30 June 2016. As a result of this review the Directors have determined that the following Standards and
Interpretations may have a material effect on the Company in future reporting periods.
AASB 15 Revenue from contracts with Customers
AASB 16 Leases
AASB 9 Financial Instruments
The Company have elected to not early adopt these Standards and Interpretations and have not quantified the material
effect of application on future periods.
Other than the above, there are no other material impact of the new and revised Standards and Interpretations on the
Company and therefore no change is necessary to Company accounting policies.
(c)
The financial report was authorised for issued in accordance with a resolution of the Directors on 29 September 2016.
Statement of compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to International
Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial
statements and notes thereto, complies with International Financial Reporting Standards (IFRS).
Significant accounting estimates and judgements
(d)
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of
assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in
which the estimate is revised if it affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods.
Impairment of intangibles with indefinite useful lives:
The Company determines whether intangibles with indefinite useful lives are impaired at least on an annual basis. This
requires an estimation of the recoverable amount of the cash generating units to which the intangibles with indefinite useful
lives are allocated.
Share-based payment transactions:
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using internal valuation models in conjunction
with the market price of the share-based payments.
(e)
Going concern
Notwithstanding the fact that the Company has accumulated losses of $1,368,339, the Directors are of the opinion that the
Company is a going concern for the following reasons:
Subsequent to year end the Company completed an ASX listing which included the capital raising of $2,855,000
(before costs) of equity capital via an issue of ordinary shares at $0.20 and options at $0.01. The funds raised will be
used to meet the ongoing working capital requirements of the Company.
The Company is currently targeting commercial sales of the SFP which is anticipated during the 2017 calendar year
and still subject to successful finalisation of the SFP Beta phase, CE mark and US FDA (CDRH) laser compliance.
The Directors anticipate commercial sales of the SFP will generate significant revenue however the timing and level
of sales and any associated positive operating cash flows have material uncertainty.
The Directors will monitor the Company revenues and cash flows and do not anticipate the need to raise further
equity capital in 2017. However, given there is material uncertainty of the SFP sales and cash flows, any requirement
for future equity capital raisings will be reviewed on an ongoing basis.
Segment reporting
(f)
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors of Aurora Labs Limited.
(g)
Both the functional and presentation currency of Aurora Labs Limited is Australian dollars.
Foreign currency translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange ruling at the balance date.
All exchange differences in the financial report are taken to profit or loss with the exception of differences on foreign currency
borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the
disposal of the net investment, at which time they are recognised in profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when
the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the
fair value gain or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition
(h)
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances, rebates and amounts collected on behalf of third parties.
Sale of goods
Revenue is recognised when all the following conditions are satisfied:
the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Company; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company
and the amount of revenue can be reliably measured. Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that assets’ net carrying amount on initial recognition.
Leases
(i)
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability.
The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are
consumed.
Income tax
(j)
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the temporary
difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
(k) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating
cash flows.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
Impairment of tangible and intangible assets other than goodwill
(l)
The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or Company’s of assets and the asset's value in use cannot be estimated to be close to its fair value.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses
relating to continuing operations are recognised in those expense categories consistent with the function of the impaired
asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation
decrease).
An assessment is also made at each balance date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such
reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as
a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(m) Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined
above.
(n) Trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using
the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement
within periods ranging from 15 to 30 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by
reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Company will
not be able to collect all amounts due according to the original contractual terms. Factors considered by the Company in
making this determination include known significant financial difficulties of the debtor, review of financial information and
significant delinquency in making contractual payments to the Company. The impairment allowance is set equal to the
difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at
the original effective interest rate. Where receivables are short-term discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When a
trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is
written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other
expenses in the statement of comprehensive income.
(o) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition is accounted for as follows:
Raw materials – purchase cost on a first-in, first-out basis; and
Finished goods and work-in-progress – cost of direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property, plant and equipment
(p)
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost
includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.
Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment
as a replacement only if it is eligible for capitalisation.
Land and buildings are measured at fair value less accumulated depreciation on buildings and less any impairment losses
recognised after the date of the revaluation.
Depreciation is calculated on diminishing value basis using the following notes:
Small business assets pool
15% to 30%
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount
being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-
generating unit to which the asset belongs, unless the asset's value in use can be estimated to approximate fair value.
An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount.
The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of comprehensive income in the cost of sales
line item. However, because land and buildings are measured at revalued amounts, impairment losses on land and buildings
are treated as a revaluation decrement.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(q)
Intangible assets
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation is
charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is
reviewed at the end of each annual reporting period, with any changes in these accounting estimates being accounted for on
a prospective basis.
Internally generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-
generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as
incurred.
An intangible asset arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the following have been demonstrated:
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probable future economic benefits;
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The availability of adequate technical, financial and other resources to complete development and to use or sell the
intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria listed above.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation
and accumulated impairment losses, on the same basis as intangible assets acquired separately.
The following useful lives are used in the calculation of amortisation:
Patents
20 years from application following grant of patent
Trade and other payables
(r)
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to
the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make
future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months.
Borrowings
(s)
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is
probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and
amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate for an equivalent non-
convertible note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or
maturity of the note. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in
shareholders’ equity, net of income tax effects.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Provisions
(t)
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.
When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the
risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u)
Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave expected
to be settled within 12 months of the balance date are recognised in other payables in respect of employees’ services up to
the balance date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave not
expected to be settled within 12 months of the balance date are recognised in non-current other payables in respect of
employees’ services up to the balance date. They are measured as the present value of the estimated future outflows to be
made by the Company.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the balance date. Consideration is
given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future
payments are discounted using market yields at the balance date on national government bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflows.
Share-based payment transactions
(v)
Equity settled transactions
The Company provides benefits to employees (including senior executives) of the Company in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
The Company has the following plan in place:
the Employee Incentive Plan (EIP), which provides benefits to Directors and senior executives and is governed by the
Employee Incentive Plan Rules.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by internal valuation using a Black-Scholes
model, further details of which are given in Note 20.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the
price of the shares of Company (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the Company’s best estimate of the number of equity instruments that
will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of
these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge
or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a
market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per
share, refer Note 5.
Cash settled transactions:
The Company also provides benefits to employees in the form of cash-settled share-based payments, whereby employees
render services in exchange for cash, the amounts of which are determined by reference to movements in the price of the
shares of Company.
The cost of cash-settled transactions is measured initially at fair value at the grant date using the Black-Scholes formula
taking into account the terms and conditions upon which the instruments were granted, refer Note 20. This fair value is
expensed over the period until vesting with recognition of a corresponding liability. The liability is remeasured to fair value at
each balance date up to and including the settlement date with changes in fair value recognised in profit or loss.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new
shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the purchase
consideration.
Dividends
(w)
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Earnings per share
(x)
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of
servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary
shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 2: SEGMENT REPORTING
The Company only operated in one segment, being design, development and manufacture of metal 3D printers and
associated products and services for the year ended 30 June 2016 and the period ended 30 June 2015.
NOTE 3: REVENUE AND EXPENSES
(a) Other Income
Interest received
Total
(b) Research and Development expenses*
Engineering Services
Consultancy fees
Consumables and Design
Other
Year ended 30 June 2016
$
Period from 9 August
2014 to 30 June 2015
$
495
495
88,364
2,300
122,505
66,999
35
35
159,431
6,448
17,998
-
Total
* Research and Development expenses relate to direct expenses only. It should be noted that a further portion of
Employee Benefits and Other Costs may be considered R&D expenses for tax purposes.
280,168
183,877
NOTE 4: INCOME TAX
(a) Income tax benefit
92,458
Year ended 30 June 2016
$
Period from 9 August
2014 to 30 June 2015
$
-
(b) Numerical reconciliation between tax-benefit and pre-
tax net loss
(Loss) from ordinary activities
Income tax using the Company’s domestic tax rate of 30%
Current period (loss) for which no deferred tax liability was
recognised
Income tax benefit relating to Research and Development
claim
Income tax benefit attributable to entity
(1,211,324)
(363,397)
363,397
92,458
92,458
(249,473)
(74,842)
74,842
-
-
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 4: INCOME TAX (continued)
(c) Unrecognised deferred tax
Tax losses for which no deferred tax asset has been
recognised
Losses available for offset against future taxable income
Total
Potential tax benefits at 30%
Year ended 30 June 2016
$
1,460,797
1,460,797
438,239
Period from 9 August
2014 to 30 June 2015
$
249,473
249,473
74,842
The benefit of deferred tax assets not brought to account will only be brought to account if:
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Company in realising the benefit.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 5: ISSUED CAPITAL
a) Ordinary Shares
Movements in ordinary shares on issue
Balance on incorporation
Shares issued on 9 August 2014
Shares issued on 9 August 2014
Shares issued on 10 October 2014
Shares issued on 10 October 2014
Less share issue costs
Balance at end of period
Year ended
30 June 2016
Year ended
30 June 2016
Period from 9
August 2014 to
30 June 2015
Period from 9
August 2014 to
30 June 2015
Number
$
Number
-
90,000,000
10,000,000
4,250,000
6,500,000
-
$
-
2,000
7,000
10,625
65,000
-
110,750,000
84,625
Balance at beginning of year
110,750,000
Shares issued on 3 July 2015
Shares issued on 6 November 2015
Shares issued on 13 November 2015
Shares issued on 2 December 2015
Shares issued on 15 December 2015
2,000,000
3,382,500
375,833
2,818,750
2,818,750
84,625
20,000
90,000
10,000
75,000
75,000
Sub Total
122,145,833
354,625
Less Share Consolidation effective 18
December 2015
(89,645,833)
Balance following Share Consolidation
32,500,000
Shares issued on 31 December 2015
Shares issued on 9 March 2016
Shares issued on 9 March 2016
Shares issued on 10 May 2016
2,530,000
2,000,000
2,470,000
500,000
-
354,625
404,800
200,000
395,200
80,000
Sub total
Less share issue costs
Balance at end of year
40,000,000
1,434,625
-
(69,000)
40,000,000
1,365,625
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to
the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or proxy, is entitled to one vote, and upon
a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 5: ISSUED CAPITAL (continued)
b) Performance Shares
Movements in performance shares on issue
Balance on incorporation
Balance at end of period to 30 June 2015
Balance at beginning of year
Class A
Number
Class B
Number
Class C
Number
Total
Number
-
-
-
-
-
-
-
-
-
-
-
-
Performance Shares issued on 18 Dec 2015
6,000,000
6,750,000
7,250,000
20,000,000
Performance Shares issued on 10 May 2016
300,000
337,500
362,500
1,000,000
Total at end of year to 30 June 2016
6,300,000
7,087,500
7,612,500
21,000,000
Performance Shares were all issued for nil consideration.
Performance Shares hold no rights over ordinary shares and do not receive any dividends, however convert to Ordinary
Shares based on Company Milestones being achieved:
A Class A Performance Share in the relevant class will convert into one Share upon achievement of Aurora (or an
entity controlled by Aurora) having cumulative revenue of A$1,500,000 before 30 June 2017.
A Class B Performance Share in the relevant class will convert into one Share upon achievement of Aurora (or an
entity controlled by Aurora) having cumulative revenue of A$5,000,000 before 30 June 2018.
A Class C Performance Share in the relevant class will convert into one Share upon achievement of Aurora (or an
entity controlled by Aurora) having cumulative revenue of A$7,250,000 before 30 June 2019.
c) Reserves
Reserves
Balance at beginning of year/period
Option Reserve
Prepayment for application for shares converted to
shares on 3 July 2015
Balance at the end of the year/period
Year ended
30 June 2016
Period from 9 August
2014 until 30 June 2015
$
20,000
57,500
(20,000)
57,500
$
-
20,000
20,000
This reserve is used to record the value of equity benefits provided to employees and Directors as part of their remuneration.
Refer to Note 6 for further details.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 5: ISSUED CAPITAL (continued)
d) Loss per share
Year ended
30 June 2016
Period from 9 August
2014 until 30 June 2015
Total loss from continuing operations
Weighted number of average shares
$1,118,886
73,176,124
$249,473
108,732,308
Loss per share
$0.015
$0.002
e) Dividends
There were no dividends declared or paid in the year to 30 June 2016 or the period to 30 June 2015.
NOTE 6: COMPANY OPTIONS
Year ended
30 June 2016
Year ended
30 June 2016
Period from 9
August 2014 to
30 June 2015
Period from 9
August 2014 to
30 June 2015
Number
$
Number
$
-
-
(a) Company Options
Movements in Company Options on
issue
Balance on incorporation
Balance at end of period
Balance at beginning of year
-
Company Options issued on 23 Nov
2015
Sub Total
Less Option Consolidation effective 18
December 2015
Balance following Share Consolidation
Company Options issued on 10 May
2016
Balance at end of year
5,657,500
5,657,500
15,000
(4,157,500)
1,500,000
4,250,000
5,750,000
-
15,000
42,500
57,500
-
-
-
15,000
Company Options are exercisable at $0.20 on or before 31 December 2018 and are unlisted.
No Company Options were exercised during the year ended 30 June 2016.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at hand and in bank
Cash at hand and in bank - Share subscriptions held on trust1
Total
30 June 2016
$
244,066
2,109,160
2,353,226
30 June 2015
$
48,133
-
48,133
Cash at bank earns interest at floating rates based on daily deposit rates.
The Company did not engage in any non-cash financing activities for the year ended 30 June 2016.
1 Cash at hand and in bank included $2,109,160 which relates to equity application funds held on behalf of investors for
unissued securities. A corresponding current liability was recorded for $2,109,160 as funds owed to investors until such time
as shares had been validly issued under the prospectus dated 9 June 2016.
Reconciliation to the Statement of Cash Flows:
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank and
investments in money market instruments, net of outstanding bank overdrafts.
Cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the statement of
financial position as follows:
Cash and cash equivalents
Total
30 June 2016
$
2,353,226
2,353,226
30 June 2015
$
48,133
48,133
Reconciliation of loss after tax to net cash outflow from operating activities:
Loss for the year/period
Adjustment for non-cash income and expense items
Depreciation
Equity settled share-based payments
Accrued annual leave and wages
Write-down of patent applications
Change in assets and liabilities
Increase in trade and other receivables
Increase in inventories
Increase in trade and other payables
Net cash outflow from operating activities
30 June 2016
$
(1,118,866)
30 June 2015
$
(249,473)
2,392
57,500
33,252
3,610
(39,189)
(103,898)
195,577
(969,622)
-
-
-
-
-
-
-
(249,473)
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 8: TRADE AND OTHER RECEIVABLES
Bank guarantee
GST
Advances to suppliers
Other receivables
Pre-paid expenses
Total
NOTE 9: IPO PREPAYMENTS
Legal fees
ASX fees
Other
Total
30 June 2016
$
25,000
45,497
10,979
-
9,429
90,905
30 June 2015
$
-
17,718
-
31,278
-
48,996
30 June 2016
$
72,362
32,262
26,177
130,801
30 June 2015
$
-
-
-
-
Fees paid during the year as part of the IPO process. The IPO was completed subsequent to the year end and these were
transferred to share issue costs upon issuing of the shares.
NOTE 10: INVENTORIES
Raw materials – Powders at cost
Work in progress – Small Format Printers at cost
Total
30 June 2016
$
3,312
100,586
103,898
30 June 2015
$
-
-
-
Parts used in development were classified as research and development and expensed.
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Balance at the beginning of the year/period
Purchases
Less accumulated depreciation and impairment
Balance at end of year/period
30 June 2016
$
783
14,382
(2,392)
12,773
30 June 2015
$
-
783
-
783
Property, plant and equipment consists of assets in small business pool, consisting of office furniture, workshop tools and
office items.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 12: INTANGIBLES
Intangibles consist of patents lodged by the Company
Balance at the beginning of the year/period
Capitalised payments for patent related costs
Less impairment (for lapsed or forfeited patents)
Balance at end of year/period
30 June 2016
$
7,220
56,337
(3,610)
59,947
30 June 2015
$
-
7,220
-
7,220
Patents that have lapsed or are forfeited and are not rolled into a new patent have been impaired and moved to an expense in
the year/period the patents lapsed/expired.
NOTE 13: FINANCIAL LIABILITIES
Trade and other payables
Accounts Payable
Company Loan - AIM
Other payables
Superannuation Payable
Sub Total
Deferred Revenue - Deposits / pre-payments for Small Format Printers
Share subscriptions received
Accrued annual leave
Total
30 June 2016
$
30 June 2015
$
154,936
-
82,318
17,028
254,282
306,743
2,109,160
26,579
2,696,764
17,940
30,753
-
1,320
50,013
199,967
-
-
249,980
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 14: SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 12 July 2016, the Company formally extended the Closing Date of the Prospectus.
On 26 July 2016, the Company closed the Share Offer under the Prospectus, and issued 14,000,000 ordinary shares for
$0.20 each to subscribers of the Share Offer.
On 26 July 2016, the Company lodged a Supplementary Prospectus for the extension of the Option Offer and additional
disclosure regarding the Option Offer.
On 29 July 2016, the Company issued 1,000,000 ordinary shares to Alto Capital or their nominees pursuant to the Lead
Manager Mandate Agreement.
On 3 August 2016, the Company closed the Option Offer and issued 5,500,000 Company Options (exercisable at $0.20 on or
before 31 December 2018) at $0.01 to raise $55,000 before costs to subscribers of the Option Offer.
On 12 August 2016, the Company was admitted to the Official List of ASX Limited, with Official quotation of securities
commencing on 16 August 2016.
NOTE 15: DIVIDENDS
The Directors of the Company have not declared any dividend for the year ended 30 June 2016 or the period ended 30 June
2015.
NOTE 16: COMMITMENTS
As at the balance date, the Company has the following material commitments relating to Pre-Sold Small Format Printers:
-
-
-
The Company pre-sold 32 Small Format Printers at discount rates to various non-related parties as part of a crowd-
funding initiative during the 2015 period and pre-sales during the 2016 year. In total liability as at 30 June 2016 of
$306,743 (2015:$199,967) has been recognised on the statement of financial position which corresponds to funds
received from these pre-sales. The Company has an obligation to either a) deliver a commercial version of the pre-
sold Small Format Printer for each pre-sold machine or b) if the Company is unable to deliver commercial Small
Format Printers to cover the pre-sold machines then the funds received will have to be returned to the customers.
The Company is currently working through the Beta testing of the SFP.
The Company had ten SFPs in stock (partially completed) as at the reporting date which are intended to be used to
supply to customers who pre-purchased SFPs.
As at the date of this report, the Company has the following material commitments in relation to the Initial Public Offering.
The Company has entered into various material contracts in relation to the proposed Initial Public Offering of the Company
and has incurred commitments as follows:
-
Alto Capital: Lead Manager Capital Raising Mandate
o The Company has engaged Alto Capital to act as the Lead Manager for the proposed IPO. Alto Capital are
entitled to earn the following fees:
$5,000 monthly retainer;
6% stamping fees on all funds raised up to $3,400,000;
$50,000 fee on the successful IPO of the Company;
1,500,000 Shares (500,000 following a successful seed raising and 1,000,000 following a
successful IPO);
1,000,000 Performance Shares (following a successful seed raising); or
A 1% fee on any alternative capital raising to a significant third party.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 16: COMMITMENTS (continued)
-
-
-
Jackson McDonald Engagement
o
The Company has engaged Jackson McDonald to act as the Company solicitors for the proposed IPO.
This engagement is for a fixed fee of $60,000 plus GST for a defined scope of work. Part of this fee has
been included in the IPO Prepayments in the Balance Sheet.
Cobblestones Corporate Pty Ltd
o
The Company engaged Cobblestones Corporate Pty Ltd to provide Company secretarial services.
Company secretarial services are charged at $2,000 per month increasing to $5,000 per month once the
Company gains Official Quotation on the ASX.
Lease Agreement
o
The Company leased a warehouse and office space at 12A Ambitious Link Bibra Lake, Western Australia:
The Company has a 12-month rental agreement for the rent of an office and workshop facilities at 12A
Ambitious Link, Bibra Lake. The rental agreement has an initial 12 month period that can be extended,
there is a payment of $5,916 per month plus standard outgoings.
Lease commitments
Not longer than 1 year
Longer than 1 year and shorter than 5 years
Total
NOTE 17: FINANCIAL INSTRUMENTS
a) Overview
2016
$
65,083
-
65,083
2015
$
-
-
-
The Company's principal financial instruments comprise receivables, payables and cash. The main risks arising from the
Company's financial instruments are credit risk, liquidity risk, interest rate risk and foreign currency risk. This note presents
information about the Company's exposure to each of the above risks, its objectives, policies and processes for measuring and
managing risk, and the management of capital. Other than as disclosed, there have been no significant changes since the
previous financial year to the exposure or management of these risks.
The Company manages its exposure to key financial risks in accordance with the Company's risk management policy. Key
financial risks are identified and reviewed annually and policies are revised as required. The overall objective of the
Company's risk management policy is to recognise and manage risks that affect the Company and to provide a stable financial
platform to enable the Company to operate efficiently.
The Company does not enter into derivative transactions to mitigate the financial risks. In addition, the Company's policy is
that no trading in financial instruments shall be undertaken for the purposes of making speculative gains. As the Company's
operations change, the Directors will review this policy periodically going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The
Board reviews and agrees policies for managing the Company's financial risks as summarised below.
b) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Company only transacts with entities that are rated the equivalent of investment grade and above. This information is
supplied by independent rating agencies where available and, if not available, the Company uses publicly available financial
information and its own trading record to rate its major customers.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 17: FINANCIAL INSTRUMENTS (continued)
The Company does not have any significant credit risk exposure to any single counterparty or any Company of counterparties
having similar characteristics.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. This arises principally from cash and cash equivalents and trade and other receivables.
There are no significant concentrations of credit risk within the Company. The carrying amount of the Company's financial
assets represents the maximum credit risk exposure, as represented below:
Cash and cash equivalents
Trade and other receivables
Total
30 June 2016
30 June 2015
$
2,353,226
90,905
2,444,131
$
48,133
48,996
97,129
Trade and other receivables are comprised primarily of advances to suppliers, bank guarantee, prepayments, interest
receivable and GST refunds due. Where possible the Company trades only with recognised, creditworthy third parties. It is
the Company's policy that all customers who wish to trade on credit terms are subject to credit verification procedures.
With respect to credit risk arising from cash and cash equivalents, the Company's exposure to credit risk arises from default of
the counter party, with a maximum exposure equal to the carrying amount of these instruments.
c) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible, that the Company will always have sufficient liquidity to meet
its liabilities when due by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets and liabilities.
The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There are no
netting arrangements in respect of financial liabilities.
2016
Financial Liabilities
Trade and other payables
Deferred revenue
Accrued annual leave
Share subscriptions received
Total
d) Interest Rate Risk
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
254,282
68,777
26,579
2,109,160
2,458,798
-
237,966
-
-
237,966
-
-
-
-
-
-
-
-
-
-
254,282
306,743
26,579
2,109,160
2,696,764
The Company's exposure to the risk of changes in market interest rates relates primarily to the cash and short-term deposits
with a floating interest rate.
These financial assets with variable rates expose the Company to cash flow interest rate risk. All other financial assets and
liabilities, in the form of receivables and payables are non-interest bearing.
Aurora Labs Limited ANNUAL FINANCIAL REPORT 2016
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 17: FINANCIAL INSTRUMENTS (continued)
At the reporting date, the interest rate profile of the Company's interest-bearing financial instruments was:
Interest-bearing financial instruments
Cash at bank and on hand
Total
2016
$
2,353,226
2,262,226
2015
$
48,133
48,133
The Company's cash at bank and on hand and short term deposits had a weighted average floating interest rate at year end
of 0.01% (2015: 0.01%).
The Company currently does not engage in any hedging or derivative transactions to manage interest rate risk.
Interest rate sensitivity
A sensitivity of 0.1% (10 basis points) has been selected as this is considered reasonable given the current level of both short
term and long term interest rates. A 1% (100 basis points) movement in interest rates at the reporting date would have
increased (decreased) equity and profit and loss by the amounts shown below. This analysis assumes that all other
variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2015.
Profit or loss
100bp Increase
100bp Decrease
2,262
48
(2,262)
(48)
2016
Cash and cash equivalents
2015
Cash and cash equivalents
e) Foreign Exchange Risk
The Company's has an exposure to foreign exchange rates given that the Company purchases parts as part of the
manufacture process of the SFP from international suppliers. A fluctuation in foreign exchange rates may affect the cost base
of the SFP. The Company is actively marketing the SFP to international customers in USD denomination. If foreign
exchange rates change this may make the SFP more or less price competitive with competitor’s metal 3D printers. Given the
Company is not yet in production it is too early to quantify the financial impact of foreign exchange risk.
f) Fair values
The net fair value of financial assets and financial liabilities approximates their carrying value. The methods for estimating fair
value are outlined in the relevant notes to the financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 18: CONTINGENT LIABILITIES / ASSETS
The Company had no contingent liabilities or assets as at the reporting date.
NOTE 19: KEY MANAGEMENT PERSONNEL
a) Key Management Personnel
The KMP of the Group during or since the end of the financial year were as follows:
Directors
Mr Paul Kehoe
Mr David Budge
Mr Nathan Henry
Mr David Parker
Mr Hendrikus Herman
Position
Non-Executive Chairman
Managing Director
Executive Director
Non-Executive Director and Company Secretary
Non-Executive Director
Executives
Ms Jessica Snelling
Position
Printer Development Engineer
a) Key Management Personnel Compensation
Short-term employee benefits
Share-based payments
Total compensation
b) Loans provided to Key Management Personnel
Balance at the beginning of the year/period
Loans advanced
Loan repayment
Interest charged
Interest received
Balance at the end of the year/period
30 June 2016
30 June 2015
$
$
299,308
48,550
347,858
20,425
-
20,425
30 June 2016
30 June 2015
$
31,278
30,577
(61,855)
-
-
-
$
-
31,278
-
-
-
31,278
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 19: KEY MANAGEMENT PERSONNEL (continued)
c) Other Transactions
David Budge became a full time employee on 1 November 2015, prior to this he provided engineering services through a
related entity Advanced Industrial Manufacturing Pty Ltd (AIM). During the year a total of $160,013 was paid to AIM for
engineering services, associated services and reimbursements. An additional payment of $30,753 was made to AIM in
satisfaction of a loan payable to AIM and/or David Budge.
David Parker provided Company Secretarial Services through a controlled entity Cobblestones Corporate Pty Ltd. Payments
for company secretarial services during the year totalled: $8,000. David Parker is also an employee of Alto Capital who
provided Lead Manager and capital raising services to the Company. Alto Capital was paid $140,000 for services during the
year. David Parker was also issued 460,000 ordinary shares and 174,999 performance shares as consideration for services
from Alto Capital through the Lead Manager mandate agreement during the year.
These items have been recognised as expenses in the Statement of Comprehensive Income.
NOTE 20: SHARE-BASED PAYMENTS
a) Recognised Share-based Payment Expense
From time to time, the Company provides incentive options to officers, employees, consultants and other key advisors as part
of remuneration and incentive arrangements. The number of options granted, and the terms of the options granted are
determined by the Board. Shareholder approval is sought where required. During the past two years, the following equity-
settled share-based payments have been recognised:
Expense arising from equity-settled share-based payment transactions
Reversal of expense arising from expiry of options which had not vested
Net share based payment expense/(income) recognised in the profit or loss
57,500
-
57,500
-
-
-
30 June 2016
$
30 June 2015
$
b) Summary of Options Granted as Share-based Payments
During the current and prior years, no incentive options were granted as share-based payments.
The following table illustrates the number and weighted average exercise prices (WAEP) of incentive options granted as
share-based payments at the beginning and end of the financial year:
2016
Number
2016
WAEP
2015
Number
2015
WAEP
-
5,750,000
-
5,750,000
-
$0.20
-
$0.20
-
-
-
-
-
-
-
-
Outstanding at beginning of year
Granted by the Company during the year*
Expired during the year
Outstanding at end of year
*On a post consolidation basis.
c) Remaining Contractual Life
All incentive options outstanding at 30 June 2016 are able to be exercised prior to 31 December 2018, so there is 2.5 years
remaining contractual life on all options as at the balance date (2015: not applicable).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 20: SHARE-BASED PAYMENTS (continued)
c) Range of Exercise Prices
The exercise price of incentive options outstanding at 30 June 2016 is $0.20 (2015: not applicable).
d) Weighted Average Fair Value
The fair value of all options issued during the year was $0.01 per option.
e) Option Pricing Model
The fair value of the equity-settled incentive options granted is estimated as at the date of grant using an internal valuation
methodology taking into account the terms and conditions upon which the options were granted. In conjunction to the internal
valuation model, the Board gave consideration to the market price for options being issued at arm’s length during and since
the end of the reporting date.
The Board determined a price of $0.01 per option to be offered under the IPO prospectus dated 9 June 2016. This price of
$0.01 was considered arm’s length. 5,500,000 options were applied for and issued to parties at arms length under the IPO
prospectus since the end of the reporting date, at a price of $0.01 each.
The Company applied the value of $0.01 to all other options issued as remuneration, as this value reflects the fair market
value of the options.
NOTE 21: AUDITORS REMUNERATION
AUDITORS' REMUNERATION
Amounts received or due and receivable by HLB Mann Judd for:
an audit or review of the financial report of the entity
other services in relation to the entity (i.e. Independent Accountants
Report for IPO)
Total
30 June 2016
30 June 2015
$
29,250
5,000
34,250
$
-
-
-
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DIRECTORS DECLARATION
1.
In the opinion of the Directors of Aurora Labs Limited (“Aurora” or the “Company”):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i.
ii.
giving a true and fair view of the Company’s financial position as at 30 June 2016 and of its performance
for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
b.
c.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2016.
This declaration is signed in accordance with a resolution of the Board of Directors.
David Budge
Managing Director
Dated this 29 day of September 2016
.
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INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR’S REPORT
To the members of Aurora Labs Limited
Report on the Financial Report
We have audited the accompanying financial report of Aurora Labs Limited (“the company”), which comprises the statement of
financial position as at 30 June 2016, the statement of comprehensive income, the statement of changes in equity and the
statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other
explanatory information, and the directors’ declaration, for the company.
Directors’ responsibility 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 Note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial
Statements, the financial statements of Aurora Labs Limited comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement
of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the company’s preparation of the financial report that gives a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the
financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
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INDEPENDENT AUDITOR'S REPORT (continued)
Auditor’s opinion
In our opinion:
(a) the financial report of Aurora Labs Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s financial position as at 30 June 2016 and its performance
for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note
1(c).
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2016.
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.
Auditor’s opinion
In our opinion the Remuneration Report of Aurora Labs Limited for the year ended 30 June 2016 complies
with section 300A of the Corporations Act 2001.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
29 September 2016
N G Neill
Partner
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ASX ADDITIONAL INFORMATION
SHAREHOLDER INFORMATION
The security holder information set out below was applicable as at 26 September 2016.
1) Quoted Securities – Fully Paid Ordinary Shares
There is one class of quoted securities, being fully paid ordinary shares.
a) Distribution of Security Number
Category
(Size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Ordinary Shares
Shareholders
111
226
163
249
56
805
Shares
71,390
649,691
1,437,380
8,426,473
44,415,066
55,000,000
There are 805 holders of ordinary shares. Each shareholder is entitled to one vote per share held.
b) Marketable parcel
There are 15 shareholders with less than a marketable parcel (basis price $1.25), being 1,272 shares.
c) Voting rights
On a show of hands every person present who is a member or a proxy, attorney or representative of a member has one vote
and upon a poll every person present who is a member or a proxy, attorney or representative of a member shall have one
vote for each share held
d) Substantial Shareholders
There was one substantial shareholder listed on the Companies register as at 26 September 2016, being David Budge,
holding 23,946,785 fully paid ordinary shares, being 43.5% of the fully paid ordinary shares on issue.
f) On market buy-back
There is no on-market buy-back scheme in operation for the company’s quoted shares.
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ASX ADDITIONAL INFORMATION (continued)
SHAREHOLDER INFORMATION (continued)
g) Top 20 security holders
The names of the twenty largest holders of each class of quoted equity security, being fully paid ordinary shares, the number
of equity security each holds and the percentage of capital each holds is as follows:
Number
Shareholder Name / Entity
Number of Ordinary Shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
David James Budge
Gasmere Pty Ltd
Peter Anthony
William McKenzie Crisp
Jessica C E Snelling
Citicorp Nom Pty Ltd
Pabasa Pty Ltd
Basapa Pty Ltd
Kacha Pty Ltd
John Nathan Henry
Anna Felicia Belton
David R Parker
Anna Katherine Campbell
Klockmann Inv Pty Ltd
Edward Max Dozak
Martin James Daley
Aileen & Arthur Budge
ACNS Cap Markets Pty Ltd
Lee Miller Inv Pty Ltd
Malcruizer Pty Ltd
23,946,785
2,652,137
1,590,000
1,436,415
1,330,377
1,232,750
1,093,750
1,000,000
932,151
832,151
515,000
460,000
399,113
300,000
275,000
266,074
266,074
262,500
254,314
210,000
% of Issued
Capital
43.54
4.82
2.89
2.66
2.42
2.24
1.99
1.82
1.69
1.51
0.94
0.84
0.73
0.55
0.50
0.48
0.48
0.48
0.46
0.38
Total
39,281,591
71.42
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ASX ADDITIONAL INFORMATION (continued)
SHAREHOLDER INFORMATION (continued)
2) Unquoted Securities – Company Options and Performance Shares
There are two classes of unquoted securities, being Company Options and Performance Shares.
2A) Company Options
a) Distribution of unquoted Option holder numbers
Category
(Size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Ordinary Options
Option holders
-
13
8
27
20
68
Options
-
57,500
80,000
1,030,000
10,082,500
11,250,000
There are 68 holders of Company Options.
b) Voting rights
Unlisted options do not entitle the holder to any voting rights.
c) Holders of more than 20% of unquoted options.
There are no holders, holding more than 20% of the unquoted options on issue.
2B) Performance Shares (Class A, Class B & Class C)
a) Distribution of unquoted Performance Shares (Class A, Class B & Class C)
.
Category
Performance Shares
Class A
Performance Shares
Class B
Performance Shares
Class C
(Size of holding)
Shareholders
Shares
Shareholders
Shares
Shareholders
Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
-
2
20
27
4
53
-
3,692
180,926
1,025,032
5,090,350
6,300,000
-
2
2
44
5
53
-
4,156
16,618
1,229,558
5,837,168
7,087,500
-
2
2
44
5
53
-
4,460
17,844
1,320,646
6,269,550
7,612,500
There are 53 holders of Performance Shares (Class A, B & C).
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ASX ADDITIONAL INFORMATION (continued)
SHAREHOLDER INFORMATION (continued)
b) Voting rights
Unlisted Performance Shares (Class A, Class B & Class C) do not entitle the holder to any voting rights.
d) Holders of more than 20% of unquoted Performance Shares (Class A, Class B & Class C)
-
-
-
Performance Shares Class A: David Budge owns 4,420,945 Performance Shares Class A which is equal to 70.2% of
the Performance Shares Class A on issue.
Performance Shares Class B: David Budge owns 4,973,563 Performance Shares Class A which is equal to 70.2% of
the Performance Shares Class B on issue.
Performance Shares Class A: David Budge owns 5,341,975 Performance Shares Class A which is equal to 70.2% of
the Performance Shares Class A on issue.
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ADDITIONAL ASX INFORMATION (continued)
OTHER ASX INFORMATION
1. Corporate Governance
A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX
Corporate Governance Council during the period is contained within the Director’s Report.
This corporate governance statement is current as at the Company’s reporting date and has been approved by the Board of
the Company.
2. Company Secretary
The name of the company secretary is David Parker.
3. Address and telephone details of the entity’s registered administrative office and principle place of business:
12A Ambitious Link
Bibra Lake WA 6163
Telephone:
Email:
+61 (08) 9434 1934
enquiries@auroralabs3d.com
4. Address and telephone details of the office at which a registry of securities is kept:
Security Transfer Registrars Pty Ltd
770 Canning Highway
APPLECROSS WA 6153
Telephone:
Fax:
(08) 9315 2333
(08) 9315 2233
5. Stock exchange on which the Company’s securities are quoted:
The Company’s listed equity securities are quoted on the Australian Stock Exchange.
6. Review of Operations
A review of operations is contained in the Directors’ Report.
7. Consistency with business objectives - ASX Listing Rule 4.10.19
In accordance with Listing Rule 4.10.19, the Company states that it has used the cash and assets in a form readily convertible
to cash that it had at the time of admission in a way consistent with its business objectives. The business objective is
primarily design, development and manufacture of metal 3D printers and associated products and services.
The Company believes it has used its cash in a consistent manner to which was disclosed under the prospectus dated 9 June
2016.
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ADDITIONAL ASX INFORMATION (continued)
OTHER ASX INFORMATION (continued)
8. Restricted Securities
Class
Number Escrowed
Date Escrow Period Ends
Fully Paid Ordinary Shares (FPOS) comprising:
175,000 FPOS issued on 6/11/2015
50,000 FPOS issued on 13/11/2015
200,000 FPOS issued on 2/12/2015
325,000 FPOS issued on 15/12/2015
32,260,696 FPOS issued on various dates
Total FPOS escrowed
Unquoted Options (all options are exercisable at
$0.20 on or before 31/12/2018) comprising:
1,817,500 options issued on 4/8/2016
9,012,500 options issued on various dates
Total Options escrowed
Performance Shares (PS) comprising:
473,410 PS Class A issued on 31/12/2015
532,587 PS Class B issued on 31/12/2015
572,036 PS Class C issued on 31/12/2015
5,826,590 PS Class A issued on various dates
6,554,913 PS Class B issued on various dates
7,040,464 PS Class C issued on various dates
Total Performance Shares escrowed
175,000
50,000
200,000
325,000
32,260,696
33,010,696
1,817,500
9,012,500
11,250,000
473,410
532,587
572,036
5,826,590
6,554,913
7,040,464
21,000,000
06/11/2016
13/11/2016
02/12/2016
15/12/2016
12/08/2018
n/a
04/08/2017
12/08/2018
n/a
31/12/2016
31/12/2016
31/12/2016
12/08/2018
12/08/2018
12/08/2018
n/a
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