Aurora Labs Limited
ABN 44 601 164 505
Annual Financial Report
30 June 2020
CONTENTS
Corporate Directory
Chairman’s Review
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional ASX Information
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Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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CORPORATE DIRECTORY
ABN 44 601 164 505
Directors
Grant Mooney
Terry Stinson
Ashley Zimpel
Mel Ashton
Company secretary
Grant Mooney
Registered Address and Principal
Place of business
Unit 2, 79 Bushland Ridge
Bibra Lake WA 6163
Telephone: +61 (08) 9434 1934
Email:
enquiries@auroralabs3d.com
Solicitors
Blackwall Legal LLP
Level 26, 140 St Georges Terrace
Perth WA 6000
Patent Attorneys
Lord & Company
4 Douro Place
West Perth WA 6005
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
Share Registry
Automic Group
Level 5, 126 Phillip Street,
Sydney NSW 2000
Securities Exchange
Listed on Australian Securities Exchange
The home exchange is Perth, Western Australia
ASX Code
A3D
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CHAIRMAN’S REVIEW
Dear Shareholder,
I am pleased to be able to present to you the 2020 Annual Report.
The past 12 months have covered a critical period in A3D’s journey to commercialisation of its 3D metal printing technology. After 4 years
of technology development, active business and product marketing and printing demands, your Company has taken the opportunity
provided to us under the current COVID-19 crisis, to refocus our attention on getting our technology ready for commercialisation, without
the distractions which are inevitably thrown at an emerging company with leading technology.
In March of this year, the then Board of Directors took the initiative of refreshing the Board with new directors and restructuring the
management team. At Board level, Terry Stinson, Ashley Zimpel and myself replaced Paul Kristensen, David Budge and Nathan Henry,
while management and staff were restructured and headcount reduced to align with the change in economic conditions. Changes such
as this are often difficult to undertake and result in upsetting the equilibrium. However, these measures have had the positive impact of
reducing overheads, resetting strategic objectives and bringing together a reduced and reinvigorated technical team ably led by our newly
appointed and well credentialed CEO Peter Snowsill. This significant strategic realignment has one common goal; to advance the RMP-1
printer to be commercially ready over the coming 12 months. Once we have achieved our goal of delivering the RMP-1 Printer to
commercial readiness, we will continue to further MCP Printing technology and its application in large format printing. This sequential
process is essential, as the MCP Printing technology requires completion of activities necessary to achieve commercial readiness in order
to progress it and places significantly higher demands on our time and resources, potentially compromising our ability to deliver the RMP-
1 on time.
In order to deliver on this commercialisation readiness target, it has been necessary for the Board, management and team to reconstruct
the technology development pathway into a cogent delivery schedule with well mapped out technology milestones. These milestones are
now the sole focus of the technology team, where the main obstacles to commercialisation are identified as priority work packages in
order to ensure that a continuous ‘lily pad’ approach of stepping from one milestone to the next is achieved. An example of one of these
potential challenges is the fume extraction challenge, required to be resolved if a ramp up in speed and volume is going to be achieved.
The team are currently advancing towards this milestone and we hope to achieve this in coming months.
Our technology collaborations and partnerships have been, and will continue to be, an important part of progressing the technology and
establishing commercial opportunities as the technology matures. We enjoy a productive working relationship with Advisian (Worley
Parsons Group member) under the AdditiveNow Joint Venture and we continue to produce test parts for a number of major mining and
oil and gas players. Our proposed RMP-1 Printer lease agreement with AdditiveNow executed in 2019 was mutually terminated in April,
allowing A3D to focus its attention on delivery of the technology over a more realistic timetable. In addition, we continue to work with
Leading Aluminium Manufacturer, Gränges of Sweden, utilising their by-products to manufacture aluminium parts with our printers. This
work has the potential to create a large value add for A3D in the metal powders sector of 3D printing.
Heading into FY21, the Board will continue to proactively manage the Company’s capital requirements in order to progress these
technology collaborations and partnerships. We are confident that expanding our 3rd party commercial opportunities in conjunction with
lowering our cost base will forge a pathway for us to achieve commercial success.
On behalf of my fellow directors, I would like to thank the former Chairman Paul Kristensen and former directors and founder David Budge
and Nathan Henry for their service as directors over recent years. While David continues as the Company’s Chief Technology Officer, we
wish Nathan well in his future endeavours. I would also like to take this opportunity to thank the staff that were made redundant earlier
this year, enabling us to preserve funds and streamline the business. These decisions are never easy and we thank you for your excellent
service, understanding and wish you every success.
In closing, I would like to thank our loyal shareholders who have stayed with us, in the belief we have a leading technology that is ripe for
commercialisation. We will take every opportunity over the coming 12 months to deliver the outcomes that take us to the ultimate goal
of commercial success.
Grant Mooney
Chairman
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DIRECTORS’ REPORT
The Board of Directors of Aurora Labs Ltd (“Aurora“ or “the Company”) and its subsidiaries (the “Group”) present their report together
with the financial report on the Company for the financial year ended 30 June 2020 (FY 2020) and the independent auditor’s report
thereon.
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year included the design and development of 3D metal printers, digital parts and their
associated intellectual property.
OPERATING RESULTS AND REVIEW OF OPERATIONS FOR THE YEAR
Operating Results and Financial Position
Aurora reported a statutory after- tax loss for the year ended 30 June 2020 of $8,155,859 (2019: $7,643,073). At the end of the financial
year the Company had net assets of $3,500,547 (2019: $5,735,996) and $1,323,766 in cash and cash equivalents (2019: $3,604,293).
Review of Operations
Aurora is an Australian-based industrial technology and innovation Company based in Perth that specialises in the development and
commercialisation of 3D metal printers, digital parts and their associated intellectual property. During the year the Company made
significant progress on the development of its proprietary 3D printers in pursuit of Aurora’s aim to lead industrial innovation and disruption
through additive manufacturing.
Highlights during and since the year in review were as follows:
•
•
•
COVID-19 the catalyst for the implementation of a major cost control programme and personnel restructure with the Company
on target to achieve $6 million in annualised savings
Exhaustive revision of technologies and establishment of 12-month technology pathway under the guidance of a refreshed Board
of Directors and newly appointed CEO (former COO Peter Snowsill)
Strategic shift from ‘manufacture and distribute’ RMP-1 printers to ‘partnership, license and royalty’ business model. Ongoing
engagement with global manufacturers including the execution of research project contract with Gränges AB, setting the tone
for the Company’s revised customer-centric and partnership focused commercial strategy.
• Major steps towards Multi-layer Concurrent Printing (MCP) printing process validation and ongoing development of the suite of
technologies
The COVID-19 pandemic presented financial and logistical challenges during FY20 that Aurora proactively responded to, underpinned by
swift and decisive cost reductions, as part of the implementation of a broader comprehensive review of the business.
The comprehensive review resulted in the creation of a revitalised long-term strategy that centres on a more operationally efficient and
agile Aurora enhancing its focus on developing the flagship RMP-1 technology for commercial readiness and securing strategic partners
for this technology.
As part of this long-term strategy, we have refreshed our Board and Executive team, who subsequently recalibrated the company to
develop a more pragmatic pathway to progress our innovative technology to commercial readiness.
They are supported by newly appointed CEO Peter Snowsill and an experienced team of 3D printing experts to execute this technology
pathway.
As a result, we now have targeted technology pathway with a customer-centric approach that is led by experienced and highly capable
Board and Management team, which will drive long-term growth in shareholder value.
The Company’s commercial strategy has been refined to a partnership, licence and royalty model. Aurora has cultivated and continues to
develop partnerships and joint ventures with Original Equipment Manufacturers and industrial giants. This is demonstrated by the ongoing
relationship and contract with Gränges AB and its significance to the customer-centric approach the technology pathway takes.
Printer development and customer printing is ongoing and aligned with the renewed technology pathway. Various client focused and test
sample prints were completed on the RMP-1 Beta and Alpha-2 machines throughout the year. The mutually agreed termination of the
Beta lease agreement with Aurora’s 50% owned JV AdditiveNow has increased Aurora’s access to the printer for parameter testing. In
February, Aurora made a major step towards the MCP process validation, through third party metallurgical test demonstrating compliance
with ASTM A479/276 and f1384-16.
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During the period, Aurora completed a $4 million capital raising and a $1.8 million strategic placement to bolster its balance sheet and
provide working capital.
COVID-19: Impact and Response
The Company undertook a review of business operations involving prudent cost reduction measures in light of COVID-19. Aurora’s goal is
on target to reduce monthly cash burn to $0.25 million. Measures implemented during the period include Executive salary cuts and up a
60% reduction in Aurora’s staffing numbers.
Aurora’s operations practices and business continuity measures have developed over the course of pandemic with adherence to
Government health advice. The Company has implemented its cost-saving programme and continues to conduct customer, partner, and
investor relations communications using video conferencing and other forms of communication. A3D is capable of reverting to lockdown
status with minimal impact on its day to day business should it be required.
The Company is monitoring international trade and shipping lead times, however influence on program timing could be a consequence of
unavoidable Covid-19 related delays.
A Revised Focus: 12-month Technology Pathway
At the end of the period, A3D announced it had completed a thorough technology review resulting in a focused 12-month plan to achieve
commercial readiness and a broader renewed commercial strategy. The review included analysis of A3D’s competitive advantages, the
current status of the technology, obstacles impairing development, and the specific steps required to achieving a commercially proven
RMP-1 printer.
The A3D Technology Pathway adopts a ‘Lily Pad’ approach, splitting the 12-month period into quarterly milestones, each milestone
representing a key performance achievement or technical deliverable. The customer-centric approach is based on demonstrating
performance on specific customer printing projects, primarily in stainless steel, with key benchmarks for success determined by achieving
specified material quality, functional requirements and cost of production targets for industrial parts. The Company is deliberately focusing
on difficult parts to print, with the goal of accelerating the development of A3D’s unique offering in the metal 3D printing space.
Diagram 1: A3D Technology Pathway Milestones
The review process included a shift of the Company’s RMP-1 commercial strategy. Previously based on the manufacture and distribution
of printers, the new model is strongly targeted at securing partnerships with Original Equipment Manufacturers and major industry players,
licensing of technologies and the associated royalties. This avenue allows A3D to reduce a large part of its operational cost base and seeks
to share those responsibilities with potential partners who are in the market, or interested in entering the market, through mutually
beneficial, long-term, interlocking collaborations.
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Board and Executive Refreshed and Peter Snowsill Appointed CEO
In March, Aurora announced the finalisation of its Board Refresh Strategy. The changes are aimed at enhancing the Company’s capability
to deliver the final stages of commercialisation of Aurora’s 3D metal printing technology under the 12-month technology pathway plan
and include a reduction and reorganisation of the Executive team in order to focus skills and strengthen current and new expertise toward
successful commercialisation.
Summary of changes;
CHIEF EXECUTIVE OFFICER (CEO)
The Company has appointed Peter Snowsill as CEO. Foundational CEO David Budge has taken up the new role of Chief Technology Officer
to focus his technical and innovation expertise on the continuing development of Aurora’s unique 3D printing technology. Peter Snowsill,
previously Chief Operating Officer (COO), is an experienced business manager with specific experience in technology and joint venture
projects and engineering management.
RETIREMENTS
Non-Executive Chairman Paul Kristensen, Executive Directors David Budge and Nathan Henry and Non-Executive Director and Company
Secretary Mathew Whyte agreed to retire from the Board to support the Board Refresh Strategy and ensure the appropriate Board makeup
for a Company of Aurora’s size and stage of development. The refreshed Aurora Board is non-executive in makeup and in keeping with
best practice for ASX-listed companies. Mr Budge remains an Executive in the business focused on delivering on key technical initiatives
and achievement of technical milestones. Mr Henry has accepted a redundancy and will serve out his 6-month notice period working
closely with Peter Snowsill and the Board on special projects.
REFRESHED NON-EXECUTIVE BOARD
Three new non-executives joined the Board in February and March - Grant Mooney as Non-Executive Chairman, and Terry Stinson and
Ashley Zimpel as Non-Executive Directors. Together with Non-Executive Director Mel Ashton, the refreshed Board comprises a variety of
specialised skills in extensive global commercialisation, raising capital, corporate compliance administration, strategic planning, sales and
marketing, technology development and international collaborations.
Mr Mooney assumed the role of Company Secretary, effective 1 May 2020.
Strategic and Industry Partners
AdditiveNowTM
The Company and Additive Now mutually agreed to not proceed with the proposed lease agreement for RMP-1 Beta which enables the
Company to fully utilise the RMP-1 Beta for printer development activities including internal testing and customer specified printing. The
Company has continued to print parts for confidential AdditiveNow clients and is actively managing these print requirements within the
Technology Pathway.
Gränges AB
A binding contract with Gränges AB for a Non-Recurring Engineering Research Project (NRE-1) was executed at the end of the second
quarter. The research project explores the material properties the parties can develop using their combined expertise in Aluminium alloys
and Additive Manufacturing, with a particular focus on alloys for the automotive sector. The project has a maximum value of USD $250,000.
Aurora has received the machinery required for the NRE-1 project that been held up overseas due to the ongoing COVID-19. The arrival of
the equipment will allow A3D’s technical team to formally kickstart the NRE-1 project within the technology pathway plan.
MCP Process Validation
A series of independent tests were carried out on samples printed in Stainless Steel 316L, using Aurora’s patented MCP™ technology. The
tests delivered results exceeding ASTM Standard A479/276 and f3184-16 in Ultimate Tensile Strength and Yield Strength. This clearly
demonstrates that the process meets or exceeds the relevant engineering standards.
Unlike traditional laser bed fusion printers, the MCP technology prints multiple layers in a single pass which increases the production
speeds. The very positive test results play a critical role in highlighting to customers that the MCP technology is a viable method of metal
3D printing.
Our technology development pathway incorporates the development of our suite of technologies which will enable us to achieve
commercial readiness of RMP-1 without the MCP feature and will form the foundation for ongoing development of MCP technology.
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Finance and Cash Position
On 30 October 2019, Aurora announced that it has successfully completed a bookbuild for a placement of 15,384,616 shares at an issue
price of $0.26 per share to professional and sophisticated investors to raise $4 million before costs.
In February 2020, the Company successfully completed a $1.82 million Placement through the issue of 13,000,000 shares at an issue price
of $0.14 per share to a new unrelated cornerstone investor, Dutch entrepreneur Mr Tjeerd Barthen.
In May 2020, Aurora received an advance payment of $723,167 from Radium Capital (Radium) against future research and development
(R&D) tax incentive funds. The advance from Radium representing up to 80% per cent of anticipated R&D Refund resulting from
expenditure on R&D programs during the current financial year. The Company will repay the funds advanced once received from the
Australian Government.
Prior to the end of the financial year, the Company made significant progress with its applications for both the R&D tax claim and Export
Market Development Grant (EDMG). Claims have since been submitted and Aurora is expecting the first instalment of the EMDG during
the month of September 2020.
Aurora continues to assess the market for any further grants it may be eligible for and will update the market should any financially material
applications be successful.
As at 30 June 2020, cash at bank and on deposit was approximately $1.3 million.
FUTURE DEVELOPMENTS AND EXPECTED RESULTS
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 activities outlined in the Review of Operations 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. 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.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than reported above in the Review of Results and Operations, there were no significant changes in the state of affairs of the
Company during the reporting period.
LOSS PER SHARE
Basic loss per share
DIVIDENDS OR DISTRIBUTIONS
2020
cents
7.85
2019
cents
10.02
No dividends were paid during the financial year and the Directors do not recommend the payment of a dividend.
EMPLOYEES
The Company had 19 employees as at the 30 June 2020 (2019: 40).
SUBSEQUENT EVENTS AFTER THE REPORTING DATE
There have been no matters or circumstances which have arisen since 30 June 2020 that have significantly affected or may significantly
affect:
a) Group operations in future financial years; or
b) The results of those operations in future financial years; or
c) Group state of affairs in future financial years.
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ENVIRONMENTAL LAWS AND REGULATIONS
Aurora Labs operations are subject to various environmental laws and regulations under the relevant government's legislation. The
Company adheres to these laws and regulations. There have been no known breaches of environmental laws and regulations by the
Company during the financial year.
INFORMATION ON THE DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are as follows.
Grant Mooney
Non-Executive Chairman
Appointed 25 March 2020
Company Secretary
Appointed 1 May 2020
Terry Stinson
Non-Executive Director
Appointed 26 February 2020
Ashley Zimpel
Non-Executive Director
Appointed 25 March 2020
David Budge
Managing Director
Director since incorporation, resigned 25 March 2020
Nathan Henry
Executive Director
Appointed 23 November 2015, resigned 25 March 2020
Mathew Whyte
Non-Executive Director and
Appointed 26 July 2017, resigned 26 February 2020
Company Secretary
Appointed 13 October 2016, resigned 11 March 2020
Paul Kristensen
Non-Executive Chairman
Appointed 22 January 2018, resigned 25 March 2020
Mel Ashton
Non-Executive Director
Appointed 22 January 2018
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Company Secretary
Steven Wood
Company Secretary
Appointed 11 March 2020, resigned 1 May 2020
CURRENT DIRECTORS AND OFFICERS
Grant Mooney
Independent Non-Executive Chairman
Qualifications: Member of the Institute of Chartered Accountants in Australia
Term of office: Since 25 March 2020
Mr Mooney is the principal of Perth-based corporate advisory firm Mooney & Partners, specialising in corporate compliance administration
to public companies.
Mr Mooney has gained extensive experience in the areas of corporate and project management since commencing Mooney & Partners in
1999. His experience extends to advice on capital raisings, mergers and acquisitions and corporate governance.
Currently, Mr Mooney serves as a Director to several ASX listed companies across a variety of industries including technology and resources
including Carnegie Clean Energy Limited, Talga Resources Limited, Barra Resources Limited, Gibb River Diamonds Limited, Accelerate
Resources Limited and Riedel Resources Limited.
Mr Mooney is also a member of the Chartered Accountants Australia and New Zealand.
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Terry Stinson
Independent Non-Executive Director
Qualifications: Fellow of the Australian Institute of Company Directors
Term of office: Since 26 February 2020
Mr Stinson has over 35 years of international experience in engineering and technology commercialisation and management across the
automotive, aerospace, defence, maritime, industrial products, mining and manufacturing sectors. Previous roles include Vice-President
and General Manager Siemens VDO, former CEO and Board Member Synerject LLC and Vice-President Manufacturing for Outboard Marine.
Mr Stinson has a Bachelor of Business Administration, majoring in Operations Management from Marian University in Wisconsin, US and
is a former National Young Manufacturing Engineer of the Year for the North American-based Society of Manufacturing Engineers. He is a
Fellow of the Australian Institute of Company Directors and currently serves as Non-Executive Chairman of Talga Resources Ltd and
Carnegie Clean Energy Ltd.
Ashley Zimpel
Independent Non-Executive Director
Qualifications: Bachelor of Arts from the University of Western Australia
Term of office: Since 25 March 2020
Mr Zimpel is a Perth based investment banker with broad financial markets and corporate experience.
Mr Zimpel has a strong record of capital raising in both equity, debt and structured financial products for start-ups, SMEs, ASX listed public
companies and government agencies both in Australia and internationally.
His extensive stockbroking and investment banking experience spans over 30 years across capital markets, corporate finance and public
company businesses, including partner at stockbroker Hattersley Maxwell Noall, Executive Director at Australian Gilt Securities, Senior
Banker at Bankers Trust and Macquarie Bank, co-founding partner of Rand Merchant Bank Australia, and Executive Chairman of Marine
Produce Australia. Mr Zimpel has had no listed company directorships in the last three years.
Mel Ashton
Independent Non-Executive Director
Qualifications: Bachelor of Commerce from the University of Western Australia, Fellow of Chartered Accountants Australia and New
Zealand.
Term of office: Since 22 January 2018
Mr Ashton has over 40 years' experience as a Chartered Accountant and leverages his strategic approach and business network in his role
as a specialist in Corporate Restructuring and Finance and as a Professional Company Director
During the three- year period to the end of the financial year Mr Ashton in respect to ASX listed companies served as Chairman of the
Board of Venture Minerals Ltd (May 2006 to Current), Credit Intelligence Ltd (May 2018 to May 2020), and Donaco International Ltd
(December 2019 to Current.
DIRECTORS’ INTERESTS
As at the date of this report the relevant interests of each of the Directors, held either directly or indirectly through their associates, in the
securities of Aurora are as follows:
Directors
Grant Mooney
Terry Stinson
Ashley Zimpel
Mel Ashton
Total
Number of fully paid
ordinary shares
-
166,644
300,000
736,323
1,202,967
Number of unquoted
options over ordinary
shares
2,000,0004
2,000,0003
2,000,0004
100,0001
6,100,000
Number of unquoted
performance rights5
-
-
-
50,0002
50,000
1 Unquoted options 100,000 Ex $1.08/Exp 31 January 2021
2 Unquoted performance rights Exp 31 January 2023 (Refer Note 6)
3 Unquoted options: 2,000,000 Ex $0.14 / Exp 30 April 2023
4 Unquoted options: 4,000,000 Ex $0.14 / Exp 25 March 2023
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MEETINGS OF DIRECTORS
The following table sets out the number of meetings of Directors held during the year ended 30 June 2020 and the number of meetings
attended by each Director. There was a total of 11 Directors’ meetings for the financial year.
Directors’ meetings
Audit Committee meetings
Directors’
meetings held
while a
director
2
3
2
10
10
7
10
11
2020
Grant Mooney
Terry Stinson
Ashley Zimpel
David Budge
Nathan Henry
Mathew Whyte
Paul Kristensen
Mel Ashton
Number
attended
Audit meetings
held
Audit meetings
attended
2
3
2
10
10
7
10
11
2
2
2
2
2
2
2
2
Not a member
Not a member
-
Not a member
Not a member
2
2
2
Remuneration
Committee meetings
Remuneration
meetings
held
Remuneration
meetings
attended
1
1
1
1
1
1
1
1
Not a member
Not a member
Not a member
Not a member
Not a member
1
1
1
REMUNERATION REPORT (AUDITED)
This remuneration report, which forms part of the Directors’ report, outlines the remuneration arrangements in place for the key
management personnel (“KMP”) of Aurora for the financial year ended 30 June 2020. The information provided in this remuneration report
has been audited as required by Section 308(3C) of the Corporations Act 2001.
(a)
Key Management Personnel
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) of the Company 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.
The KMP of the Company during or since the end of the financial year were as follows:
KMP
Grant Mooney
Terry Stinson
Ashley Zimpel
David Budge
Nathan Henry
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Managing Director
Executive Director
Mathew Whyte
Company Secretary ; and
Paul Kristensen
Mel Ashton
Peter Snowsil
Non-Executive Director
Non-Executive Chairman
Non-Executive Director
Chief Executive Officer
(b)
Remuneration Philosophy and Policy
Period of Employment
25 March 2020 to current
26 February 2020 to current
25 March 2020 to current
1 November 2015 to 25 March 2020
23 November 2015 to 25 March 2020
13 October 2016 to 26 February 2020
26 July 2017 to 11 March 2020
22 January 2018 to 25 March 2020
22 January 2018 to current
1 July 2019 to current
The Board has adopted Remuneration and Nomination Policy dated May 2016 (Refer http://auroralabs3d.com/corporate-compliance/ ).
The Company’s remuneration policy for its KMP’s is administered 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.
During the year, the company established a Remuneration Committee, with the company’s three non-executive directors being the initial
members. Consequently, the independent non-executive members of the Board are responsible for determining and reviewing
compensation arrangements for the Managing Director and the executive team.
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Use of Remuneration Consultants:
Independent external advice is sought from remuneration consultants when required. During the year the Company engaged Guerdon
Associates to provide a review of executive director remuneration and an executive remuneration framework.
As at the date of this report no recommendations received from Guerdons have been implemented. The Board is satisfied that the draft
recommendations were made free from undue influence from any members of Key Management Personnel.
In addition, all matters of remuneration will continue to be in accordance with the Corporations Act requirements, especially with regard
to related party transactions. That is, none of the directors participate in any deliberations regarding their own remuneration or related
issues.
The Corporate Governance Statement provides further information on the Company’s remuneration governance.
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive remuneration is separate
and distinct.
(c) Non-Executive Director remuneration
On appointment to the Board, all Non-Executive Directors enter into service agreements with the Company in the form of a Non- Executive
deed of Engagement. The Deed of Engagement summarises the Board policies and terms of engagement including remuneration relevant
to the office of director.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors was set by shareholders at General Meeting held on
8 June 2016 at $250,000 per annum. Total Non–Executive remuneration fees paid during the year ended 30 June 2020 were $293,938
(including Superannuation contributions) (FY2019: $217,802). The Non-Executive remuneration fees has exceeded the amount set by
shareholders at General Meeting held on 8 June 2016. The services rendered were mainly for services relating to A3D promotion to
potential investors and customers domestically and internationally. They were approved by the board and will not be recurring for at least
during Covid affected times.
The Board considers that the aggregate remuneration available for payment will provide the ability to attract and retain Directors of the
highest calibre to meet the Company’s growth in market capitalisation and complexity, at a cost that is acceptable to shareholders.
Within that maximum aggregate the Board seeks to remunerate Non-Executive Directors at commercial market rates for comparable
companies for their time, commitment and responsibilities. Fees may also be paid to Non-Executive Directors for additional consulting
services provided to the Company.
Fees for Non-Executive Directors are not linked to the performance of the Company. Non-Executive Directors’ remuneration may also
include an incentive portion consisting of options or performance rights, subject to shareholder approval. Non-Executive Directors are
considered Eligible Employees for the purposes of participation in the Company’s Employee Incentive Plan.
(d)
Executive Director Remuneration
In determining Executive Director remuneration, the Board aims to ensure that remuneration practices are:
• Competitive and reasonable, enabling the Company to attract and retain key talent;
• Aligned to the Company’s strategic and business objectives and the creation of shareholder value;
• Transparent and easily understood; and
• Acceptable to shareholders.
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 in accordance with the Remuneration and Nomination Policy.
Performance Based Remuneration – Short Term Incentive
No Short-Term Incentives were paid or are payable in relation to FY 2020 or FY 2019.
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.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 12
Performance Based Remuneration – Long Term Incentive
The Board seeks to align the interests of its Directors and Employees with those of its shareholders and accordingly has adopted an
Employee Incentive Share Plan (“Plan”) which provides for the issue of Options or Performance Rights (Awards) as a key component of the
Long-Term Incentive portion of remuneration. Awards under the Plan are based on the following three categories:
1. Package Awards – As part of their employment package with Aurora Labs to attract and retain quality Executives and Employees.
2. Performance Awards – As a reward for Executives and Employees exceeding Company deliverables.
3. Innovation Awards – As a reward for Executives and Employees who have come up with innovative ideas that are deemed to be
beneficial to Aurora and its business operations, usually by reference to whether the idea is likely to be patented or otherwise, form
the basis for potentially valuable proprietary technology of Aurora.
On 26 July 2018, the Company amended its Plan to provide that any Performance Rights issued under the Plan in the future will be
exercisable Awards and will therefore only be converted into fully paid ordinary shares in the Company (Shares) upon receipt by the
Company of a notice of exercise from the holder of the Performance Rights. Prior to these amendments, any Performance Rights issued
under the Plan were required to be immediately converted into Shares by the Company upon vesting. The purpose of these amendments
is to allow participants in the Plan to defer the taxing point applicable to the issue of Shares upon the conversion of performance rights,
and therefore make the issue of Performance Rights to participants under the Plan more efficient.
A copy of the Plan is available on the Company’s Website.
During the financial year ended 30 June 2020 the Company granted a total of 1,160,634 Performance Rights (2019: 867,159).
(e)
Relationship between Remuneration of KMP and the Company’s Performance
Director’s remuneration is set by reference to payments made by other companies of similar size and industry, and by reference to the
skills and experience of Directors. Fees paid to Directors are not currently linked to the performance of the Company. This policy may
change once the Company’s design, development and commercialisation phases of its business is complete and the Company is generating
revenue and profits. 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. During the current and previous financial period the Company’s
remuneration policy is not impacted by the Company’s performance including earnings and changes in shareholder wealth (dividends,
changes in share price or returns of capital to shareholders), however this will be reviewed on an annual basis.
(f)
Voting and comments made at the Company’s 2019 Annual General Meeting
Aurora received 39.99% of “Yes“ votes on its remuneration report for the 2020 financial year. The outcome constitutes a “first strike”
under section 250U of the Corporations Act.
(g)
Executive Director Engagement Deeds
Remuneration and other terms of employment for KMP are formalised in Engagement Deeds which specify the components of
remuneration, benefits and notice period.
David Budge
Mr Budge was remunerated to the date of resignation 25 March 2020 pursuant to the terms and conditions of his Engagement Deed dated
3 May 2016, as varied on 10 January 2017.
Mr Budge was paid an annual salary of $320,000 plus superannuation. Mr Budge is also 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 $Nil.
Nathan Henry
Mr Henry was remunerated to the date of resignation 25 March 2020 pursuant to the terms and conditions of his Engagement Deed dated
4 May 2016, as varied on 15 March 2017.
Mr Henry was paid an annual salary of $230,000 plus superannuation.
The material terms of both the Deeds for the Executive Directors are as follows:
(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).
(ii) 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 Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 13
(h)
Additional disclosures
The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below:
2020
2019
$
$
2018
$
2017
$
2016
$
Financial year ended
Sales revenue
EBITDA
EBIT
Loss after tax
414,860
(8,787,592)
841,620
(9,327,129)
329,970
(6,905,075)
237,995
(4,774,497)
-
(1,203,037)
(9,175,064)
(9,503,253)
(7,063,974)
(4,802,916)
(1,205,429)
(8,045,540)
(7,643,073)
(5,531,257)
(3,398,989)
(1,118,866)
The factors that are considered to affect total shareholder return (‘TSR’) are summarised below:
2020
2019
2018
2017
2016
Financial year ended
Share price at financial year end ($)
Total dividends declared (cents per share)
Basic Loss per share (cents per share)
0.06
-
7.85
0.32
-
10.02
0.50
-
9.13
1.07
-
6.30
Not listed
-
1.5
Remuneration of KMP
Details of the nature and amount of each element of the emoluments of each of the KMP of Aurora during the financial year were as
follows:
Short-term benefits
Post-
employment
benefits
Share-based
payments
Salary &
fees
$
Motor vehicle
payments
$
Options1 and
Performance
Rights5
$
Total
$
Superannuation
$
Percentage
performance
related
%
21,306
17,308
12,500
312,845
234,423
120,246
57,488
154,633
286,442
1,217,191
-
-
-
-
-
-
-
-
-
-
-
1,644
-
29,720
22,270
3,215
-
-
27,212
84,061
17,633
19,302
17,633
-
-
-
-
-
38,939
38,254
30,133
342,565
256,693
123,461
57,488
154,633
9,810
64,378
323,464
1,365,630
-
-
-
-
-
-
-
-
-
-
FY 2020
Directors
Grant Mooney1&3
Terry Stinson2
Ashley Zimpel1
David Budge
Nathan Henry
Mathew Whyte4
Paul Kristensen
Mel Ashton
Other KMP
Peter Snowsil5
Total
1 The KMP detailed above were granted 2,000,000 Options each, as approved by shareholders at General Meeting held on 13
December 2019 which were value at $0.03 each. Vesting conditions are detailed in Note 6.
2 The KMP detailed above were granted 2,000,000 Options, as approved by shareholders at General Meeting held on 13 December
2019 which were value at $0.05 each. Vesting conditions are detailed in Note 6.
3 Grant Mooney’s fees comprised company secretarial services totalling: $8,000 and non-executive director’s fee of $13,306.
4 Mathew Whyte provided company secretarial services through his controlled entity WhyPro Corporate Services ABN 53 844 654
790. Payments for company secretarial services during FY 2020 totalled: $86,400. Mr Whyte also received a non-executive fee of
$33,846 (plus superannuation of $3,215).
5 Peter Snowsill was granted 30,000 Performance Rights 11 July 2019.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 14
FY 2019: Performance Rights were issued pursuant to the Employee Share Plan and with shareholder approval where required. The table
below details all performance rights issued during FY 2019, noting some performance rights have been issued to employees or consultants
that are not KMPs.
For details on the valuation of the Performance Rights, including models and assumptions used, please refer to Note 6. There were no
material alterations to the terms and conditions of Performance Rights granted as remuneration since their grant date.
Short-term benefits
Share-
based
payments
Post- employment
benefits
Salary &
fees
$
Motor vehicle
payments
Superannuation
Options
$
$
Percentage
performance
related
Total
$
%
250,000
230,000
163,758
76,650
88,100
808,508
3,000
-
-
-
-
3,000
23,750
21,850
4,494
-
-
50,094
24,150
24,150
24,150
24,150
24,150
120,750
300,900
276,000
192,402
100,800
112,250
982,352
-
-
-
-
-
-
FY 2019
Directors
David Budge1
Nathan Henry1
Mathew Whyte1&2
Paul Kristensen1
Mel Ashton1
Total
1 All KMP detailed above were granted 50,000 Performance Rights each, as approved by shareholders at General Meeting held on 30
November 2018 which were value at $0.483 each.
Performance Rights were issued free of charge. Each Performance Right entitles the holder to subscribe for one (1) fully paid ordinary
share in the Company based on achieving vesting conditions at a nil exercise price. The terms and conditions including the service and
performance criteria that must be met are as follows:
(a) Subject to the below paragraph (b) each Performance Right will only vest and become exercisable when the 10 day volume
weighed average market price (as defined in the ASX Listing Rules) of the Company’s quoted Shares first exceeds $0.90 per Share
(Vesting Condition).
(b) Maintain a minimum of 12 months continuous service with the Company.
(c) Each Performance Right will automatically be cancelled and will be redeemed by the Company for nil consideration if
employment with the Company is terminated for any reason before the Vesting Condition is met.
2 Mathew Whyte provided company secretarial services through his controlled entity WhyPro Corporate Services ABN 53 844 654 790.
Payments for company secretarial services during FY 2019 totalled: $115,000 (excluding superannuation). Mr Whyte also received a non-
executive fee of $48,758 (plus superannuation of $4,494).
Cash bonuses granted as compensation for the current financial year
No cash bonuses were granted during the year ended 2020 (2019: nil).
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 15
Performance Rights and Options
Details of Performance rights and Options granted as compensation pursuant to the Aurora Employee Incentive Plan for the current
financial year
FY 2020: Performance Rights were issued pursuant to the Employee Share Plan and with shareholder approval where required. The table
below details all performance rights issued during FY 2020, noting some performance rights have been issued to employees or consultants
During FY2020 30,000 Performance Rights were granted to Peter Snowsil, a KMP’s, or the entities they controlled.
For details on the valuation of the Performance Rights, including models and assumptions used, please refer to Note 6. There were no
material alterations to the terms and conditions of Performance Rights granted as remuneration since their grant date.
FY 2020
Date Performance
Rights granted
11 Jul 19
Total
FY 2019
Date Performance
Rights granted
30 Aug 18
30 Nov 18
Total
Number
Granted
1,160,634
1,160,634
Number
Granted
617,159
250,000
867,159
Vesting
Price
$
Expiry date
0.47
11 Jul 24
Vesting
Price
$
0.90
0.90
Expiry date
31 Jan 23
31 Jan 23
Fair Value of
Performance
Right at
grant date
$
0.327
Fair Value of
Performance
Right at
grant date
$
0.233
0.483
FY 2020: Unquoted Options were issued pursuant to the Employee Share Plan and with shareholder approval where required. The table
below details all Unquoted Options issued during FY 2020.
For details on the valuation of the Unquoted Options, including models and assumptions used, please refer to Note 6. There were no
material alterations to the terms and conditions of Unquoted Options granted as remuneration since their grant date.
FY 2020
Date options granted
25 Mar 20
23 Apr 20
Number of
Options
4,000,000
2,000,000
Exercise price of
option
$
Expiry date of
option
Fair Value of Options
at grant date
$
0.14
0.14
25 Mar 23
30 Apr 23
35,266
19,302
Total
6,000,000
No Unquoted options were issued FY2019.
Company Performance Rights and Options granted to KMP
During FY2020 30,000 Performance Rights were granted to KMP’s, or the entities they controlled.
PERFORMANCE RIGHTS
FY 2020
Other KPMs
Peter Snowsill
$
0.47
Vesting price
Expiry date
Number
Granted during
year
Total number of shares
under Performance Rights
at the end of the year
31 Jan 23
30,000
30,000
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 16
PERFORMANCE RIGHTS
FY 2019
Directors
David Budge
Nathan Henry
Mathew Whyte
Paul Kristensen
Mel Ashton
Total
$
0.90
0.90
0.90
0.90
0.90
Vesting price
Expiry date
Number
Granted during
year
Total number of shares
under Performance Rights
at the end of the year
31 Jan 23
31 Jan 23
31 Jan 23
31 Jan 23
31 Jan 23
50,000
50,000
50,000
50,000
50,000
250,000
50,000
50,000
50,000
50,000
50,000
250,000
OPTIONS
During the financial year 2020 the following Options were granted to the following KMP or the entities they controlled pursuant to
the Employee Incentive Plan as part of their renumeration.
Exercise price
Expiry date
Number of options
granted during
year
Total number of shares
under option at the end of
the year
FY 2020
Directors
Grant Mooney
Ashley Zimpel
Terry Stinson
Total
$
0.14
0.14
0.14
25 Mar 23
25 Mar 23
30 Apr 23
2,000,000
2,000,000
2,000,000
6,000,000
2,000,000
2,000,000
2,000,000
6,000,000
During the financial year 2019 no Options were granted to KMP’s or the entities they controlled pursuant to the Employee Incentive
Plan.
There were no alterations to the terms and conditions of Performance Rights or Options granted as remuneration since their grant
date, other than minor amendments to the term relating to transferability of the Options which was approved by shareholders at a
general
meeting on 13 June 2016.
On 24 December 2018 Options (Ex $0.20/EXP 31/12/2018) held by KMP were exercised for cash and 993,334 Shares were issued. (Refer
ASX Appendix 3Y 24 December 2018)
Other than the above there were no shares issued during FY 2020 or FY 2019 as a result of the exercise of a Performance Rights or
Options by KMP.
FY 2020 5,137,000 Options lapsed (Refer Note 19 for grant date)
FY2019 5,000 Options expired. These Options were granted 10 May 2018.
Shares and performance shares issued to KMP
During FY 2020 or FY 2019 no shares or performance shares were issued to KMP as part of their remuneration.
Loans to and from KMP
There were no loans made to or from KMP during FY 2020 or FY 2019 and there are no loans outstanding from KMP at the date of this
report.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 17
KMP 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
Number1
-
-
-
23,946,785
1,975,485
70,000
170,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000
300,000
(8,000,000)
(1,825,485)
-
375,000
-
-
30,000
300,000
15,946,7852
150,0002
260,0002
545,000
-
-
-
300,000
-
150,000
260,000
545,000
-
-
-
-
FY 2020
Directors
Grant Mooney
Terry Stinson
Ashley Zimpel
David Budge
Nathan Henry
Paul Kristensen
Mel Ashton
Mathew Whyte
Other KMPs
Peter Snowsil
1 Shares held nominally by the Director are included in the Balance at the end of the year.
2 Balance held at date of resignation 25 March 2020.
Fully paid ordinary shares
Balance at
beginning of
period
Number
Granted as
compensation
Number3
Received on
exercise of
options
Number
Net change
other
Number2
Balance at
end of year
Number
Balance held
nominally
Number1
23,946,785
982,151
-
-
-
-
-
-
-
-
-
993,334
-
-
-
-
-
70,000
170,000
-
23,946,785
1,975,485
70,000
170,000
-
-
150,000
70,000
170,000
-
FY 2019
Directors
David Budge
Nathan Henry
Paul Kristensen
Mel Ashton
Mathew Whyte
1 Shares held nominally by the Director are included in the Balance at the end of the year.
Options
Balance at
beginning of
year
Number
Granted as
compensation
Number
Exercised
Number
Net change
other
Number
Balance at end of year
Number
-
-
-
295,000
280,000
165,000
100,000
100,000
2,000,0001
2,000,0002
2,000,0001
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
280,000
265,000
-
-
-
2,000,000
2,000,000
2,000,000
15,0003
15,0003
165,0004
100,000
100,000
FY 2020
Directors
Grant Mooney
Terry Stinson
Ashley Zimpel
David Budge
Nathan Henry
Mathew Whyte
Paul Kristensen
Mel Ashton
1 Options (Ex $0.14/ Exp 25 March 23)
2 Options (Ex $0.14/EXP 30 April 23)
3 Balance held at date of resignation 25 March 20
4 Balance held at date of resignation 29 February 20
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 18
Options
FY 2019
Directors
David Budge
Nathan Henry
Mathew Whyte
Paul Kristensen
Mel Ashton
Balance at
beginning of
year
Number
1,020,000
1,973,334
165,000
100,000
100,000
Granted as
compensation
Number
Exercised
Number
Net change
other
Number2
Balance at end of year
Number
-
-
-
-
-
-
(993,334)2
-
-
-
(725,000)1
(700,000)1
-
-
-
295,000
280,000
165,000
100,000
100,000
1 Options (Ex $0.20/ Exp 31/12/2018) were transferred off- market @ $0.30 per Option (Refer ASX Release Appendix 3Y
12/12/2018).
2 Options (Ex $0.20/EXP 31/12/2018) were exercised for cash on 24/12/2018 and 993,334 Shares were issued. (Refer ASX Appendix 3Y 24
December 2018)
All Company Options issued to KMP were made in accordance with the provisions of the Employee Incentive Plan. During the year, no
options were exercised or sold. No amounts remain unpaid on the options during the financial year at year end.
Performance Rights
FY 2020
Directors
David Budge
Nathan Henry
Mathew Whyte
Paul Kristensen
Mel Ashton
Other KPM,s
Peter Snowsil
Balance at
beginning of
year
Number
50,000
50,000
50,000
50,000
50,000
-
Granted as
compensation
Number
Exercised
/Cancelled
Number
Net change
other
Number
Balance at end of year
Number
-
-
-
-
-
-
-
50,000
50,000
-
-
-
-
-
-
30,000
50,0001
50,0001
-
-
50,000
30,000
1 Balance held at date of resignation 25 March 2020.
Balance at
beginning of
year
Number
Granted as
compensation
Number
Exercised
Number
Net change
other
Number
Balance at end of year
Number
-
-
-
-
-
50,000
50,000
50,000
50,000
50,000
-
-
-
-
-
-
-
-
-
-
50,000
50,000
50,000
50,000
50,000
FY 2019
Directors
David Budge
Nathan Henry
Mathew Whyte
Paul Kristensen
Mel Ashton
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 19
Performance Shares Class B
Balance at
beginning
of year
Number
Granted as
compensation for
services
Number
Issued pursuant to
pro-rata bonus
issue
Number
Redeemed
and
cancelled
Balance at end
of year
Number
Balance
held
nominally
Number
4,973,945
172,832
-
-
-
-
-
-
-
-
-
-
-
-
-
4,973,945
172,832
-
-
-
-
-
-
-
-
-
-
FY 2019
Directors
David Budge1
Nathan Henry1
Mathew Whyte
Paul Kristensen
Mel Ashton
1 On 12 July 2018 all Class B Performance shares were redeemed and cancelled.
Performance Shares Class C1
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
5,341,975
185,624
-
-
-
-
-
-
-
-
-
-
-
-
-
5,341,975
185,624
-
-
-
-
-
-
-
-
FY 2019
Directors
David Budge1
Nathan Henry1
Mathew Whyte
Paul Kristensen
Mel Ashton
1 Subsequent to the end of the year, 11 July 2019 all Class C Performance shares were redeemed and cancelled.
END OF AUDITED REMUNERATION REPORT
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 20
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. The Company
was not a party to any such proceedings during the year.
INDEMNITIES GIVEN AND INSURANCE PREMIUMS PAID TO OFFICERS AND AUDITORS
The Company has entered into Deeds of Indemnity, Insurance and Access with each Director.
Under these deeds, the Company has undertaken, subject to restrictions in the Corporations Act, to:
a)
b) Maintain directors’ and officers’ insurance cover (if available) in favour of each Director whilst that person maintains such office and
Indemnify each Director from certain liabilities incurred from acting in that position under specified circumstances;
for seven years after the Director has ceased to be a Director;
c) Provide access to any Company records which are relevant to the Director’s holding of office with the Company, for a period of seven
years after the Director has ceased to be a director.
During the year, the Company paid a premium to insure officers of the Company. The officers of the Company covered by the insurance
policy include all directors and the company secretary.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be bought against the
officers in their capacity as officers of the Company, and any payments arising from liabilities incurred by the officers in connection with
such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper
use by the officers of their position or of information to gain advantage for themselves or someone else to cause detriment to the
Company.
Details of the amount of the premium paid in respect of the insurance policies is not disclosed as such disclosure is prohibited under the
terms of the contract.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed
to indemnify any current or former officer or auditor of the Company against any liability as such by an officer or auditor.
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 27
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 22 and forms
part of this Directors’ report for the year ended 30 June 2020.
Signed in accordance with a resolution of the Directors.
Mr Grant Mooney
Chairman
Dated this 31 August 2020
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 21
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Aurora Labs Limited for the year
ended 30 June 2020, 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
31 August 2020
B G McVeigh
Partner
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 22
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Continuing operations
Revenue
Cost of sales
Other income
Advertising
Consolidated
Consolidated
Notes
30 June 20
30 June 19
$
$
3(a)
3(c)
414,860
(241,840)
198,074
(295,478)
841,620
(340,326)
145,917
(483,268)
Research and development expenses
3(d)
(1,255,816)
(2,297,536)
Rent
Corporate expenses
Depreciation
Employee benefits
Employee share based payments (non-cash)
Finance expenses
Other expenses
(126,136)
(397,194)
(1,436,487)
(1,137,887)
3(f)
(387,472)
(176,124)
(4,594,032)
(4,001,911)
(303,029)
(113,910)
(297,448)
(2,813)
3(e)
(1,258,027)
(1,359,096)
Loss before income tax benefit
(9,399,293)
(9,506,066)
Income tax benefit
Loss for the year
4
1,243,434
1,862,993
(8,155,859)
(7,643,073)
Loss attributable to members of the Company
(8,155,859)
(7,643,073)
Other comprehensive income, net of income tax
-
-
Total comprehensive loss for the year
(8,155,859)
(7,643,073)
Basic loss per share
Diluted loss per share
5(d)
5(d)
cents
7.85
7.85
cents
10.02
10.02
The accompanying notes form part of these financial statements.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Investments accounted for using the equity
method
Property, plant and equipment
Right-of-Use lease assets
Intangible assets
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Lease liabilities
Borrowings
Other liabilities
Accrued annual leave
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Net Equity
Consolidated
Consolidated
Notes
30 June 20
30 June 19
$
$
7
8
9
10
11
12
13
14
15
16
14
14
1,323,766
1,762,590
458,103
3,544,459
-
720,916
242,013
533,436
1,496,365
5,040,824
440,075
269,238
724,167
44,905
172,211
1,650,596
3,390,228
3,604,293
2,370,804
648,642
6,623,739
195,310
472,633
-
733,265
1,401,208
8,024,947
686,101
-
1,350,000
52,534
200,316
2,288,951
5,735,996
5(a)
5(c)
27,218,305
2,269,440
21,793,469
1,884,185
(26,097,517)
(17,941,658)
3,390,228
5,735,996
The accompanying notes form part of these financial statements.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated
Issued
Capital
$
Option Reserve
$
Accumulated
Losses
$
Total Equity
$
Balance at 1 July 2019
21,793,469
1,884,185
(17,941,658)
5,735,996
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
5,424,836
385,255
-
5,810,091
-
-
-
-
-
-
(8,155,859)
(8,155,859)
-
-
(8,155,859)
(8,155,859)
Balance as at 30 June 2020
27,218,305
2,269,440
(26,097,517)
3,390,228
Consolidated
Issued
Capital
Option Reserve
$
$
Accumulated
Losses
$
Total Equity
$
Balance at 1 July 2018
15,232,021
1,513,206
(10,298,585)
6,446,642
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
6,561,448
370,979
-
6,932,427
-
-
-
-
-
-
(7,643,073)
(7,643,073)
-
-
(7,643,073)
(7,643,073)
Balance as at 30 June 2019
21,793,469
1,884,185
(17,941,658)
5,735,996
The accompanying notes form part of these financial statements.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated
Consolidated
30 June 20
30 June 19
Note
$
$
Cash flows from operating activities
Payments to suppliers and employees
(8,936,969)
(9,989,245)
Receipts from customers
Interest received
Interest and other costs of finance paid
Receipts from export development grant
Income tax benefit
Receipts from cash flow boost
522,134
17,371
(63,712)
150,000
731,017
43,832
-
67,057
1,971,827
1,384,270
50,000
-
Net cash (used in) operating activities
7
(6,289,349)
(7,763,069)
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 borrowings
Repayment of lease liabilities
Repayment of borrowings
Proceeds from issue of shares (net of capital raising
costs)
Net cash provided by financing activities
(368,259)
(226,355)
(594,614)
724,167
(263,468)
(1,350,000)
5,503,753
4,614,452
(163,906)
(257,326)
(421,232)
1,350,000
-
-
6,650,833
8,000,833
Net decrease in cash held
(2,269,511)
(183,468)
Cash and cash equivalents at the beginning of the
year
Exchange rate adjustments
3,604,293
3,790,081
(11,016)
(2,320)
Cash and cash equivalents at the end of the year
7
1,323,766
3,604,293
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 consolidated financial statements comprise the financial statements for the Group. For the purposes of preparing the financial
statements, the Group 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”) and its subsidiaries (the “Group”).
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 principal activities of the Group during the year included the design and development of 3D metal printers, powders, digital parts
and their associated intellectual property.
(b)
Adoption of new and revised standards
Standards and Interpretations applicable to 30 June 2020
In the year ended 30 June 2020, 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.
AASB 16 Leases
AASB 16 replaces AASB 117 Leases. AASB 16 removes the classification of leases as either operating leases of finance leases-for the lessee
– effectively treating all leases as finance leases.
The Group has applied AASB 16 retrospectively with the effect of initially applying this standard recognised at the date of initial application,
being 1 July 2019 and has elected not to restate comparative information. Accordingly, the information presented for 30 June 2019 has
not been restated.
The impact on the financial performance and position of the Group from the adoption of this Accounting Standards is detailed in note 19.
Other than the above, there is no material impact of the new and revised Standards and Interpretations on the Company and therefore,
no material change is necessary to Group accounting policies.
Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all Standards and Interpretations issued but not yet adopted for the year ended 30 June 2020. As a result
of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted
on the Group and, therefore, no change is necessary to Group accounting policies.
Statement of compliance
(c)
The financial report was authorised for issue in accordance with a resolution of the Directors on 31 August 2020.
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 Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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.
Share-based payment transactions:
The Group 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.
Segment reporting
(e)
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.
The Group operating segment disclosure has been determined with reference to the monthly management accounts used by the chief
operating decision maker to make decisions regarding the Company operations and allocation of working capital.
Based on the quantitative thresholds included in AASB 8, there is only one reportable segment, being the design, development and
manufacture of 3D metal printers and associated products and services for the year ended 30 June 2019 and the year ended 30 June
2018.
The revenues and results of this segment are those of the Group as set out in the statement of comprehensive income and the assets
and liabilities of the Group are set out in the statement of financial position.
Foreign currency translation
(f)
Both the functional and presentation currency of Aurora Labs Limited is Australian dollars.
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.
(g)
Revenue from Contracts with Customers
Revenue arises mainly from the sale of 3D metal printers. The Group generates revenue largely in the USA, through distributors or directly
with customers.
To determine whether to recognise revenue, the Group follows a 5-step process:
Identifying the contract with a customer
Identifying the performance obligations
1.
2.
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied.
The revenue and profits recognised in any period are based on the delivery of performance obligations and an assessment of when
control is transferred to the customer.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In determining the amount of revenue and profits to record, and related statement of financial position items (such as contract fulfilment
assets, capitalisation of costs to obtain a contract, trade receivables, accrued income and deferred income) to recognise in the period,
management is required to form a number of key judgements and assumptions. This includes an assessment of the costs the Group incurs
to deliver the contractual commitments and whether such costs should be expensed as incurred or capitalised.
Revenue is recognised either when the performance obligation in the contract has been performed, so 'point in time' recognition or 'over
time' as control of the performance obligation is transferred to the customer.
For contracts with multiple components to be delivered such as 3D metal printers, powder and the installation of 3D metal printers
management applies judgement to consider whether those promised goods and services are (i) distinct - to be accounted for as separate
performance obligations; (ii) not distinct - to be combined with other promised goods or services until a bundle is identified that is distinct
or (iii) part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer.
Transaction price
At contract inception the total transaction price is estimated, being the amount to which the Group expects to be entitled and has rights
to under the present contract.
The transaction price does not include estimates of consideration resulting from change orders for additional goods and services unless
these are agreed.
Once the total transaction price is determined, the Group allocates this to the identified performance obligations in proportion to their
relative stand-alone selling prices and recognises revenue when (or as) those performance obligations are satisfied. For each performance
obligation, the Group determines if revenue will be recognised over time or at a point in time. Where the Group recognises revenue over
time for long term contracts, this is in general due to the Group performing and the customer simultaneously receiving and consuming
the benefits provided over the life of the contract.
For each performance obligation to be recognised over time, the Group applies a revenue recognition method that faithfully depicts the
Group’s performance in transferring control of the goods or services to the customer. This decision requires assessment of the real nature
of the goods or services that the Group has promised to transfer to the customer. The Group applies the relevant output or input method
consistently to similar performance obligations in other contracts.
When using the output method the Group recognises revenue on the basis of direct measurements of the value to the customer of the
goods and services transferred to date relative to the remaining goods and services under the contract. Where the output method is
used, in particular for long term service contracts where the series guidance is applied, the Group often uses a method of time elapsed
which requires minimal estimation. Certain long term contracts use output methods based upon estimation of number of users, level of
service activity or fees collected.
If performance obligations in a contract do not meet the over time criteria, the Group recognises revenue at a point in time. This may be
at the point of physical delivery of goods and acceptance by a customer or when the customer obtains control of an asset or service in a
contract with customer-specified acceptance criteria.
Disaggregation of revenue
The Group disaggregates revenue from contracts with customers by contract type, which includes (i) Directly to customers and (ii) through
distributers as management believe this best depicts how the nature, amount, timing and uncertainty of the Group’s revenue and cash
flows.
Performance obligations
The nature of contracts or performance obligations categorised within this revenue type includes (i) delivery of printers and (ii) installation
and training.
The service contracts in this category include contracts with either a single or multiple performance obligations.
The Group considers that the services provided meet the definition of a series of distinct goods and services as they are (i) substantially
the same and (ii) have the same pattern of transfer (as the series constitutes services provided in distinct time increments (e.g., monthly
or annual services)) and therefore treats the series as one performance obligation.
(i) Sale of printers
Revenues are recognised when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods . This
occurs upon pick up of printers by transport company from Aurora warehouse.
(ii) Training and Installation
Revenues are recognised as training and installation has been completed.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Contract assets and contract liabilities
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these
amounts as other liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it
receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial position, depending
on whether something other than the passage of time is required before the consideration is due.
As a result of the contracts which the Group enters into with its customers, a number of different assets and liabilities are recognised on
the Group’s balance sheet. These include but are not limited to:
•
•
•
Trade receivables*
Accrued income*
Deferred income*
* No change in the accounting policies for these assets as a result of the adoption of AASB 15
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.
(h)
Leases
The Group has adopted AASB 16 from 1 July 2019 which has resulted in changes classification, measurement and recognition leases. All
leases where the Company is the lessee are recognised on the Condensed Statement of Financial Position and removes the former
distinction between ‘operating and ‘finance leases’. The new standard requires recognition of a right-of-use asset (the leased item) and a
financial liability (to pay rentals). The exceptions are short-term, and low value leases. (Refer Note 19)
Income tax
(i)
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:
•
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
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
•
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.
Other taxes
(j)
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
(k)
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 companies of assets and the
asset's value in use cannot be estimated to be close to its fair value.
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
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
Cash and cash equivalents
(l)
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.
(m) 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.
(n)
Investments in Joint Ventures
Interests in joint arrangements – Joint Venture
A joint venture is an arrangement where the parties have joint control of the arrangement have rights to the net assets of the joint
arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require unanimous consent of the parties sharing control.
Recognition
The results and assets and liabilities of associates and joint ventures are incorporated in these consolidated financial statements using
the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is
accounted for in accordance with AASB 5. Under the equity method, an investment in an associate or a joint venture is initially recognised
in the consolidated statement of financial position and adjusted thereafter to recognise the Group’s share of the profit or loss in other
comprehensive income of the associate if joint venture. When the Group’s share of losses of an associate or a joint venture exceeds the
Group’s interest the joint venture (which includes any long-term interests that, in substance, form part of the Group’s net investment in
associate or joint venture, the Group discontinues to recognising its share of further losses. Additional losses are recognised only to the
extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
An investment in the joint venture is accounted for using the equity method from the date on which the investee becomes an associate
or a joint venture. On acquisition of the investment in the joint venture, any excess of the cost of the investment over the Group’s share
of the net fair value of the identifiable assets and liabilities is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group’s share of net fair value of the identifiable assets and liabilities over the cost of the investment, after
reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.
The requirements of ASSB 139 are applied to determine whether it is necessary to recognise any impairment loss with respect to the
Group’s investment in the joint venture. When necessary, the entire carrying amount if the investment (including goodwill) is tested for
impairment in accordance with AASB 136 ‘Impairment of Assets’ as a single asset by comparing its recoverable amount (higher of value
in use less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment.
Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the
investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be a joint venture, or when the
investment is classified as held for sale. When the group retains an interest in the former joint venture and the retained interest is a
financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial
recognition in accordance with AASB 139. The difference between the carrying amount of the joint venture at the date the equity method
was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the joint venture is
included in the determination of the gains or loss on disposal of the joint venture. In addition, the Group accounts for all amounts
previously recognised other comprehensive income in relation to that joint venture on the same basis as would be required if that joint
venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss recognised in other comprehensive income by
that joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain
or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an
investment in a joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes in
ownership interests.
When the Group reduces its ownership interest in a joint venture but the Group continues to use the equity method, the Group
reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating
to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or
liabilities.
When a Group entity transacts with a joint venture of the Group, profits and loss resulting from the transactions with the joint venture
are recognised in the Group’s consolidated financial statements only to the extent of interests in the joint venture that are not related to
the Group.
Inventories
(o)
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 2020
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.
Depreciation is calculated on diminishing value basis using the following notes:
•
•
Plant and equipment 10% to 30%
Leasehold Improvements Over the term of the lease
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.
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P a g e | 34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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;
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 Group
prior to the end of the financial year that are unpaid and arise when the Group 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.
(s)
Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset
and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in
accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Provisions
(t)
Provisions are recognised when the Group 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 Group 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.
Employee leave benefits
(u)
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 Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby
employees render services in exchange for shares or rights over shares (equity-settled transactions).
The Group 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 for Options is determined by internal valuation using a Black-Scholes model. The fair value
for Performance Rights is determined by using a barrier up and in option pricing model. Further details are given in Note 6.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the
shares of Group (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).
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 Group 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.
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 Group 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.
Earnings per share
(w)
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.
(x)
Going Concern
The financial report has been prepared on a going concern basis which is based on the realisation of the future potential of the Company’s
assets and discharge of its liabilities in the normal course of business.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
As disclosed in the financial statements, the Group has incurred a net loss after tax for the year ended 30 June 2020 of $8,155,859 (2019:
$7,643,073) and had net cash outflows from operating activities of $6,289,349 (2019: $7,763,069). As at 30 June 2020, the Company has
a net current asset position of $1,893,863 (2019: $4,334,788).
The net current asset position as at 30 June 2020 includes the following:
- cash at bank of $1,323,766 (2019: $3,604,293);
- Income tax benefit receivable $1,243,273 (2019: $1,862,993);
- inventories of $458,103 (2019: $648,642)
- short term borrowings of $724,167 (2019: $1,350,000)
The Directors consider that the Group is a going concern however current cash flow forecasts indicate that the Company will need to
generate sufficient revenue from its operations or other sources, including equity capital, to continue as a going concern. As the Group
is in the formative stages of its business model there exists circumstances that give rise to a material uncertainty in relation to going
concern.
Should the Group be unsuccessful in generating sufficient revenue from operations or additional sources of funding, there is a material
uncertainty that may cast significant doubt as to whether the company will able to continue as a going concern and be able to realise its
assets and extinguish its liabilities in the normal course of business.
Notwithstanding the above, the Directors believe there are reasonable grounds to believe that the Group will be able to continue as a
going concern after consideration of the following factors:
- The Directors remain committed to the long-term business plan that is contributing to improved results as the business progresses; and
- The Directors and the business have a successful track record of capital raising and have the option of seeking further funding to support
working capital and the R& D activities of the Group by way of equity capital.
The Directors are of the opinion that these factors will allow the Group to focus on growth areas and on improving profitability. The
Directors continue to monitor the situation closely and are focused on taking all measures necessary to optimise the Group’s
performance.
The Directors believe that the above indicators demonstrate that the Group will be able to pay its debts as and when they become due
and payable and to continue as a going concern and be in a position to realise its assets and settle its liabilities and commitments in the
normal course of business and at the amounts stated in the financial report. Accordingly, the Directors also believe that it is appropriate
to adopt the going concern basis in the preparation of the financial statements.
No adjustments have been made to the recoverability and classification of recorded asset values and the amount and classification of
liabilities that might be necessary should the company not continue as a going concern.
NOTE 2: SEGMENT REPORTING
The Company only operated in one segment, being design, development and manufacture of 3D metal printers and associated products
and services for the year ended 30 June 2020 and the year ended 30 June 2019.
Geographical segment
Australia
Europe
Canada
South America
USA
East Asia
Total
Consolidated
30 June 20
$
40,000
31,790
112,455
97,006
124,853
8,756
414,860
Consolidated
30 June 19
$
76,957
308,844
-
-
365,837
89,982
841,620
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 3: REVENUE AND EXPENSES
(a) Revenue from contracts with customers
Sales at a point in time
Directly to customers
Through distributors
Total
(b) Revenue by product line
Printers
Powder
Printer installations
Other
Total
(c) Other Income
Interest received
Profit / (Loss) from joint venture
Insurance claim
Cash flow boost
Payroll tax rebate
Export marketing development grant
Other
Total
(d) Research and Development expenses*
Consultancy fees
Consumables, design and engineering services (1)
Total
(e) Other Expenses
Freight and courier
Insurance
Software
Travel
Bad debts written off
Payroll Tax
Other
Total
(f) Depreciation
Depreciation – Right-of-use- leased assets
Depreciation – Property, Plant and Equipment
Consolidated
30 June 20
$
Consolidated
30 June 19
$
414,860
-
414,860
263,822
26,004
66,466
58,568
414,860
16,330
(195,310)
-
100,000
17,500
240,000
19,554
198,074
14,800
1,241,016
1,255,816
143,251
277,000
93,449
258,296
6,412
165,670
313,949
1,258,027
118,952
268,520
638,381
203,239
841,620
639,299
35,297
68,169
98,855
841,620
46,696
5,310
33,911
-
-
60,000
-
145,917
111,922
2,185,614
2,297,536
254,465
193,955
85,388
363,477
-
189,771
252,219
1,359,096
-
176,124
Total
* Research and Development expenses relate to direct expenses only. It should be noted that a significant portion of
Employee Benefits and Other Costs is considered eligible expenses for R&D tax claim purposes.
387,472
176,124
(1) Includes $455,819 of patents lapsed and written off.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 4: INCOME TAX
(a) Income tax benefit
(b) Numerical reconciliation between tax-benefit and pre-tax net
loss
(Loss) from ordinary activities
Income tax using the Company’s tax rate of 27.5% (27.5% 2019)
Current period (loss) for which no deferred tax asset was recognised
Income tax benefit relating to Research and Development claim
Income tax benefit attributable to entity
(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 of 27.5% (27.5% 2019)
Consolidated
30 June 20
$
1,243,434
Consolidated
30 June 19
$
1,862,993
(9,399,293)
(2,584,806)
2,584,806
1,243,434
1,243,434
(9,506,066)
(2,614,168)
2,614,168
1,862,993
1,862,993
Consolidated
Consolidated
30 June 20
$
26,189,975
26,189,975
7,202,243
30 June 19
$
18,034,116
18,034,116
4,975,050
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.
Progressive changes to the company tax rate is likely to result in a tax rate of 26% for the year ended 30 June 2021.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5: ISSUED CAPITAL
a) Ordinary Shares
Movements in ordinary shares on issue
Balance at beginning of the year
Placement
Advisor shares
Options exercised
Sub total
Less share issue costs
Balance at end of year
Consolidated
Consolidated
Consolidated
Consolidated
30 June 20
30 June 20
30 June 19
30 June 19
Number
$
Number
$
88,635,091
28,074,616
570,000
21,793,469
5,739,400
117,000
-
-
117,279,707
27,649,869
-
(431,564)
65,599,271
13,157,895
25,000
9,852,925
88,635,091
-
15,232,021
5,000,000
9,375
1,970,585
22,211,981
(418,512)
117,279,707
27,218,305
88,635,091
21,793,469
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.
b) Performance Shares
2020
Movements in performance shares on issue
Balance at beginning of year
Performance Shares redeemed and cancelled
Total at end of year to 30 June 2020
Class B
Number
Class C
Number
Total
Number
-
-
-
7,612,500
7,612,500
(7,612,500)
(7,612,500)
-
-
2019
Class B
Number
Class C
Number
Total
Number
Balance at beginning of year
7,087,500
7,612,500
14,700,000
Performance Shares redeemed and cancelled
(7,087,500)
-
(7,087,500)
Total at end of year to 30 June 2019
-
7,612,500
7,612,500
Performance Shares were all issued for nil consideration.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5: ISSUED CAPITAL (continued)
Performance Shares hold no rights over ordinary shares and do not receive any dividends, however were to convert to Ordinary Shares
based on Company Milestones being achieved:
•
A Class C Performance Share in the relevant class were to 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. On 11 July 2019, 7,612,500 Class C
Performance Shares were automatically redeemed and cancelled as the relevant milestone for their conversion was not satisfied
by 30 June 2019. Refer Aurora’s announcement to ASX dated 12 July 2019 (‘Changes to Company Securities and Appendix 3Y’).
c) Reserves
Reserves
Balance at beginning of year
Option reserve 1
Performance rights reserve 1
Balance at the end of the year
Consolidated
Consolidated
30 June 20
$
1,884,185
136,794
248,461
2,269,440
30 June 19
$
1,513,206
106,431
264,548
1,884,185
1 These reserves are 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.
d) Loss per share
Total loss from continuing operations
Weighted number of average shares
Loss per share
e) Dividends
Consolidated
Consolidated
30 June 20
30 June 19
8,155,859
103,890,135
Cents
7.85
7,643,073
76,256,018
Cents
10.02
There were no dividends declared or paid in the year to 30 June 2020 or the period to 30 June 2019.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6: COMPANY OPTIONS AND PERFORMANCE RIGHTS
Company Options
Balance at the beginning of the year
Options issued
Options expired
Options exercised
Consolidated
Consolidated
Consolidated
Consolidated
30 June 20
30 June 20
30 June 19
30 June 19
Number
$
Number
$
6,566,107
7,000,000
(5,137,000)
-
1,619,637
295,683
-
-
15,806,925
617,107
(5,000)
(9,852,925)
1,513,206
106,431
-
-
Balance at the end of year
8,429,107
1,810,295
6,566,107
1,619,637
At the date of this report the unissued ordinary shares of the Company under option are as follows:
Grant Date
22 Nov 161
14 Mar 171
12 Jun 172
12 Jun 172
12 Jul 171
17 Apr 185
29 Aug 171
27 Sep 171
29 Nov 173
29 Nov 173
17 Apr 184
30 Aug 186
14 Feb 197
13 Dec 198
25 Mar 209
23 Apr 2010
TOTAL
Date of
Expiry
30 Nov 19
31 Mar 20
30 Nov 19
31 Mar 20
30 Jun 20
17 Apr 20
31 Aug 20
30 Sep 20
31 Aug 20
31 Jul 20
31 Jan 21
31 Dec 20
15 Feb 22
13 Dec 22
25 Mar 23
30 Apr 23
Exercise Price
$
2.23
3.00
2.23
3.00
1.17
1.00
0.79
0.72
0.79
0.95
1.08
0.50
0.57
0.39
0.14
0.14
Outstanding at
1 July 19
225,000
641,000
255,000
290,000
40,000
3,686,000
417,000
50,000
45,000
100,000
200,000
250,000
367,107
-
-
-
Lapsed/
Cancelled or
Exercised
(225,000)
(641,000)
(255,000)
(290,000)
(40,000)
(3,686,000)
-
-
-
-
-
-
-
-
-
-
Outstanding at
30 June 20
-
-
-
-
-
-
417,000
50,000
45,000
100,000
200,000
250,000
367,107
1,000,000
4,000,000
2,000,000
6,566,107
(5,137,000)
8,429,107
1 Unquoted (ULO) Options issued to eligible non- related parties pursuant to Aurora Employee Incentive Plan.
2 ULO issued to eligible related parties pursuant to Aurora Employee Incentive Plan approved at General Meeting on 12 June 2017.
3 ULO issued to eligible related parties pursuant to Aurora Employee Incentive Plan approved at General Meeting on 29 Nov 2017.
4 ULO issued to eligible related parties pursuant to Aurora Employee Incentive Plan approved at General Meeting on 17 April 2018.
5 Quoted Options issued pursuant to Placement and SPP for $0.01 per option.
6 ULO issued to corporate Advisor and ratified by shareholders at AGM on 30 November 2018.
7 ULO issued pursuant to Placement and ratified by shareholders at EGM on 17 June 2019.
8 ULO issued pursuant to Placement and ratified by shareholders at AGM on 13 December 2019.
9 ULO issued pursuant to its issuing capacity under Listing Rule 7.1 and ratified by shareholders at AGM on 23 April 2020.
10 ULO issued to eligible related parties pursuant to Aurora Employee Incentive Plan approved at AGM on 23 April 2020.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6: COMPANY OPTIONS AND PERFORMANCE RIGHTS (continued)
Company Performance Rights
Balance at the beginning of the year
Performance Rights Issued
Performance Rights Earnt
Performance Rights Cancelled
Balance at the end of year
Consolidated
Consolidated
Consolidated
Consolidated
30 June 20
30 June 20
30 June 19
30 June 19
Number
$
Number
$
755,826
1,160,634
-
(945,723)
970,737
264,548
379,527
126,906
(257,972)
513,009
-
867,159
-
(111,333)
755,826
-
264,548
-
-
264,548
The following options and performance rights were in place during the current and prior periods:
Number
Grant date
Expiry date
Exercise
price
Fair value
Vesting date
at grant date
Employee Incentive Plan
225,000
22 Nov 16
30 Nov 19
Employee Incentive Plan
641,000
14 Mar 17
31 Mar 20
Employee Incentive Plan
255,000
12 Jun 17
30 Nov 19
Employee Incentive Plan
290,000
12 Jun 17
31 Mar 20
Employee Incentive Plan
40,000
12 Jul 17
30 Jun 20
Employee Incentive Plan
432,000
29 Aug 17
31 Aug 20
Employee Incentive Plan
50,000
27 Sep 17
30 Sep 20
Employee Incentive Plan
100,000
29 Nov 17
31 Jul 20
Employee Incentive Plan
45,000
29 Nov 17
31 Aug 20
Employee Incentive Plan
200,000
17 Apr 18
500,000
17 Apr 18
3,686,000
17 Apr 18
250,000
30 Aug 18
367,107
14 Feb 19
617,159
30 Aug 18
250,000
30 Nov 18
1,160,634
11 Jul 19
31 Jan 21
17 Apr 20
17 Apr 20
31 Dec 20
15 Feb 22
31 Jan 23
31 Jan 23
11 Jul 19
Placement
Placement
Options issued to
corporate advisor
Placement
Performance Rights1
Performance Rights1
Performance Rights1
Placement
Placement
1,000,000
13 Dec 19
13 Dec 22
4,000,000
25 Mar 20
25 Mar 23
Employee Incentive Plan
2,000,000
30 Apr 20
30 Apr 23
$
$2.23
$3.00
$2.23
$3.00
$1.17
$0.79
$0.72
$0.95
$0.79
$1.08
$1.00
$1.00
$0.50
$0.57
$0.90
$0.90
$0.47
$0.39
$0.14
$0.14
$
$0.29
$1.17
$0.29
$0.28
$0.26
$0.30
$0.23
$0.48
$0.45
$0.24
-
-
$0.13
$0.20
$0.23
$0.48
$0.33
$0.26
$0.03
$0.05
22 Nov 16
14 Mar 17
12 Jun 17
12 Jun 17
12 Jul 17
29 Aug 17
03 Oct 17
29 Nov 17
29 Nov 17
17 Apr 18
17 Apr 18
17 Apr 18
30 Aug 18
14 Feb 19
30 Aug 18
30 Nov 18
-
13 Dec 19
25 Mar 20
30 Apr 20
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 44
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6: COMPANY OPTIONS AND PERFORMANCE RIGHTS (continued)
1 Performance Rights were issued under the Employee Incentive Plan. The fair value of the equity-settled performance rights granted is
estimated as at the date of grant using a barrier up and in option pricing model taking into account the terms and conditions upon which
the performance rights were granted.
The fair value of the equity-settled share options granted is estimated as at the date of grant using the Black-Scholes model taking into
account the terms and conditions upon which the options were granted. Share options issued prior to listing on the ASX have not been
valued using the Black Scholes model.
No options were exercised during FY2020.
The following options were exercised during FY2019:
30 June 19
Exercised
Number
Exercise
date
Share price at
exercise date
Employee options
50,000
29 Aug 18
Employee options
278,000
28 Sep 18
Employee options
1,830,500
8 Oct 18
Employee options
660,000
29 Oct 18
Employee options
Employee options
Employee options
Options issued under IPO
prospectus
Employee options
Employee options
Employee options
220,000
283,333
45,000
31 Oct 18
27 Nov 18
3 Dec 18
5,000,000
12 Dec 18
474,167
369,500
142,425
9,852,925
27 Dec 18
28 Dec 18
31 Dec 18
$
$0.42
$0.90
$0.87
$0.70
$0.68
$0.56
$0.61
$0.52
$0.52
$0.50
$0.48
During FY2020 5,137,000 options expired (FY2019 5,000).
During FY2020 945,723 performance rights were cancelled (FY2019 111,333)
No performance rights were exercised during the year or FY2019.
The following share-based payment arrangements were entered into during the period
Options
Number
Grant
date
Expiry
date
Exercise
price
Fair value at
grant date
Vesting
date
Corporate advisory fees Series 1
1,000,000
13 Dec 19
13 Dec 22
0.39
82,226
13 Dec 19
Director options Series 4
4,000,000
25 Mar 20
25 Mar 23
0.14
35,266
25 Mar 20
Director options Series 3
2,000,000
23 Apr 20 30 Apr 23
0.14
19,302
30 Apr 23
7,000,000
136,794
$
$
Performance Rights
Employee Incentive plan Series 2
1,160,634
11 Jul 19
11 Jul 24
0.47
379,527
-
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 45
1,160,634
379,527
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6: COMPANY OPTIONS AND PERFORMANCE RIGHTS (continued)
Performance Rights were issued free of charge. Each Performance Right entitles the holder to subscribe for one (1) fully paid ordinary
share in the Company based on achieving vesting conditions at a nil exercise price. The terms and conditions including the service and
performance criteria that must be met are as follows:
(d) Subject to the below paragraph (b) each Performance Right will only vest and become exercisable when the 10 day volume
weighed average market price (as defined in the ASX Listing Rules) of the Company’s quoted Shares first exceeds $0.47 per Share
(Vesting Condition).
(e)
(f)
in respect of 50% of the Awards, that you have been employed or engaged (as applicable) by the Company or any other of its
related bodies corporate for continuous period of at least 12 months; and
in respect of 50% of the Awards, that you continue to be employed or engaged (as applicable) by the Company or any other of its
related bodies corporate for at least 12 months from the date that the Awards are granted or the satisfaction of the other Vesting
Condition under (b) above, whichever is the later in time.
(g) These conditions must be satisfied in order for the Awards to vest, unless the Board waives such conditions (or either of them), at
its absolute discretion.
(h) Each Performance Right will automatically be cancelled and will be redeemed by the Company for nil consideration if
employment with the Company is terminated for any reason before the Vesting Condition is met.
The fair value of the equity-settled share options granted is estimated as at the date of grant using the Black and Scholes model taking
into account the terms and conditions upon which the options were granted.
The fair value of the equity-settled performance rights granted is estimated as at the date of grant using a barrier up and in option
pricing model taking into account the terms and conditions upon which the performance rights were granted.
Series 3 and 4
Three directors received 2,000,000 options each with the following vesting conditions:
500,000 Options will vest if the Director is in office for at least 6 months from date of grant;
500,000 Options will vest if the Director is in office for at least 12 months from date of grant; and
1,000,000 Options will vest if the Director is in office for at least 24 months from date of grant.
Equity series
Dividend yield (%)
Expected volatility (%)
1
-
71%
2
-
45%
Risk-free interest rate (%)
0.85%
1.01%
Expected life of option (years)
3
Exercise price (cents)
Grant date share price
VWAP barrier (cents)
0.39
0.29
-
5
Nil
0.365
0.47
3
-
100%
0.26%
3
0.14
0.096
-
4
-
100%
0.32%
3
0.14
0.070
-
The expected life of the options and performance shares is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also
not necessarily be the actual outcome. No other features of options and performance rights granted were incorporated into the
measurement of fair value.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 46
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at hand and in bank
Term Deposits
Total
Consolidated
Consolidated
30 June 20
$
1,323,766
-
1,323,766
30 June 19
$
3,604,293
-
3,604,293
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 2020.
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
Reconciliation of loss after tax to net cash outflow from operating activities:
Loss for the year
Adjustment for non-cash income and expense items
Depreciation
Equity settled share-based payments
Lapsed patents
Share of joint venture loss
Bad debt expenses
Change in assets and liabilities
(Increase) / decrease in trade and other receivables
Increase / (decrease) in annual leave accrual
(Increase) / decrease in inventories
Decrease in trade and other payables
Net cash outflow from operating activities
Consolidated
Consolidated
30 June 20
$
1,323,766
1,323,766
30 June 19
$
3,604,293
3,604,293
Consolidated
Consolidated
30 June 20
$
(8,155,859)
387,472
303,029
492,799
195,310
6,412
565,080
(28,105)
190,539
(246,026)
(6,289,349)
30 June 19
$
(7,643,073)
176,124
297,448
-
-
-
(748,115)
15,835
7,795
130,917
(7,763,069)
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 47
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 7: CASH AND CASH EQUIVALENTS (Continued)
Cash Flows from Financing activities
On 1 May 2020 Aurora Labs borrowed $724,167 secured against the R&D claim for the year ended 30 June 2020.
The term of the loan is up to 31 October 2020 with an annual interest rate of 14%. The loan will be repaid with the receipt of the expected
R&D income tax claim. Refer note 4.
On 25 June 19 Aurora Labs borrowed $1,350,000 secured against the R&D claim for the year ended 30 June 2019.
The term of the loan is up to 31 October 2019 with an annual interest rate of 15%. The loan will be repaid with the receipt of the expected
R&D income tax claim. Refer note 4.
Changes in liabilities arising from financing activities
2020
Opening balance
Repayment of R&D funding
R&D funding
Lease liabilities
Commercial
Loan
$
1,350,000
(1,350,000)
724,167
Lease Liability
$
Total
$
-
-
-
508,350
1,350,000
(1,350,000)
724,167
508,350
Principal and interest repayments
(239,112)
(239,112)
Closing balance
724,167
269,238
993,405
2019
Opening balance
R&D funding
Closing balance
Commercial
Loan
$
-
1,350,000
1,350,000
Lease Liability
$
-
-
-
Total
$
-
1,350,000
1,350,000
NOTE 8: TRADE AND OTHER RECEIVABLES
Bank guarantee
Accounts Receivable
GST
Advances to suppliers
Interest receivable
Other receivables
Income tax benefit receivable
Pre-paid expenses
Total
Expected credit losses
Consolidated
30 June 20
$
92,959
121,214
21,647
-
16
273,775
1,243,273
9,706
1,762,590
Consolidated
30 June 19
$
92,959
121,215
30,737
15,203
1,058
62,016
1,971,666
75,950
2,370,804
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not
have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk
characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 48
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 8: TRADE AND OTHER RECEIVABLES (Continued)
The expected loss rates are based on the payment profile for sales over the past 48 months before 30 June 2020 and 30 June 2019
respectively as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and
forwarding looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding.
There are no expected credit losses for trade receivables FY2020 or FY2019.
NOTE 9: INVENTORIES
Stock on Hand
Raw materials – Powders at cost
Work in progress – Small Format Printers at cost
Total
Consolidated
Consolidated
30 June 2020
$
168,505
138,470
151,128
458,103
30 June 2019
$
234,165
167,278
247,199
648,642
Parts used in research and development were classified as research and development and expensed.
NOTE 10: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investment in Joint venture
Details of the Group’s material joint venture at the end of the reporting period is as follows:
Principal
Activity
Country of
incorporation
Ownership
interest
Ownership
interest
Published
fair value
Published
fair value
2020
2019
2020
2019
AdditiveNow Pty Ltd
Sale of 3D
printers
Australia
50%
%
%
50%
$
-
$
195,310
Material joint venture
Statement of Profit or Loss and other comprehensive income
Revenue
Profit (Loss) for the year
-
Continuing operations
Other comprehensive income for the year
Dividends received during the year
30 June 2020
$
204,128
(386,569)
-
-
30 June 2019
$
185,138
10,620
-
-
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 49
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 10: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (Continued)
Statement of financial position
Current Assets
Non-Current Assets
Current Liabilities
Non-Current Liabilities
Net Assets
30 June 2020
$
771,158
-
767,106
-
4,052
Reconciliation of summarised financial information to the carrying amount of the interest in joint venture
Net assets of the joint venture
Portion of the Group’s ownership interest in the joint venture
30 June 2020
$
4,052
50%
Carrying value of the Group’s interest in the joint venture
-
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
(i)Carrying value
30 June 2019
$
565,138
-
174,518
-
390,620
30 June 2019
$
390,620
50%
-
195,310
Cost
Accumulated depreciation and
impairment
Plant and
Equipment
$
430,339
(89,939)
Computers and
Cameras
$
307,632
(163,567)
Office
Equipment
$
Leasehold
Improvements
$
Total
$
254,657
(36,371)
213,100
(194,935)
1,205,728
(484,812)
Carrying value as at 30 June 2020
340,400
144,065
218,286
18,165
720,916
Cost
Accumulated depreciation and
impairment
331,923
(53,656)
245,021
(108,492)
75,821
(17,984)
185,692
(92,845)
838,457
(365,824)
Carrying value as at 30 June 2019
278,267
136,529
57,837
-
472,633
(ii)Reconciliation
Carrying value as at 1 July 2019
Additions
Depreciation expense
Balance at end of year
Carrying value as at 1 July 2018
Cost
Depreciation expense
Balance at end of year
Plant and
Equipment
$
278,267
98,390
(36,257)
340,400
179,985
125,802
(27,520)
278,267
Computers and
Cameras
$
136,529
62,606
(55,070)
144,065
141,742
42,328
(47,541)
136,529
Leasehold
Improvements
Total
Office
Equipment
$
57,837
$
-
178,832
27,407
(18,383)
(9,242)
(118,952)
218,286
18,165
472,633
367,235
720,916
475,162
173,595
92,847
-
(92,847)
(176,124)
-
472,633
60,588
5,465
(8,216)
57,837
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 50
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12: RIGHT-OF-USE LEASED ASSETS
Cost
Accumulated depreciation
Carrying value as at 30 June 2020
Reconciliation
Recognised on 1 Jul 2019 on adoption of AASB 16
Depreciation expense
Carrying value as at 30 June 2020
AASB 16 has been adopted during the period, refer note 19 for details.
NOTE 13: INTANGIBLES
(i) Carrying amount
Intangibles consist of patents lodged by the Group
Cost
Impairment (for lapsed or forfeited patents) (1)
Balance at end of year
(ii) Reconciliation
Intangibles consist of patents lodged by the Group
Balance at the beginning of the year
Capitalised payments for patent related costs
Less impairment (for lapsed or forfeited patents) (1)
Balance at end of year
Carrying Value
Consolidated
30 June 20
$
510,533
(268,520)
242,013
510,533
(268,520)
242,013
Consolidated
30 June 20
$
989,255
(455,819)
533,436
Consolidated
30 June 20
$
733,265
255,990
(455,019)
533,436
Consolidated
30 June 19
$
735,965
(2,700)
733,265
Consolidated
30 June 19
$
510,137
225,828
(2,700)
733,265
(1)Patents that have lapsed or are forfeited and are not rolled into a new patents have been impaired and moved to an expense in the
year the patents lapsed/expired.
NOTE 14: TRADE AND OTHER PAYABLES
Trade and other payables
Accounts Payable
Other payables
Sub Total
Deferred Revenue - Deposits / pre-payments for small format printers
Accrued annual leave
Total
Consolidated
30 June 20
$
Consolidated
30 June 19
$
47,729
392,346
440,075
44,905
172,211
657,191
218,122
467,979
686,101
52,534
200,316
938,951
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 51
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15: LEASE LIABILITIES
Fair Value
Current liabilities
Non-current liabilities
Consolidated
30 June 20
$
269,238
-
269,238
Reconciliation
Recognised on 1 Jul 2019 on adoption of AASB 16
Less Principal repayments
Less Interest repayments
508,350
202,282
36,830
Closing balance
AASB 16 has been adopted during the period, refer note 19 for details.
Underlying assets serve as security for the related lease liabilities. A maturity analysis of future minimum lease payments is presented
below:
269,238
30 June 20
Lease payments
Interest
Net present values
NOTE 16: BORROWINGS
Current
Secured
Other Loans
Sub Total
<1 year
$
282,567
(13,329)
269,238
1-2 years
$
-
-
-
Total
$
282,567
(13,329)
269,238
Consolidated
30 June 20
$
Consolidated
30 June 19
$
724,167
724,167
1,350,000
1,350,000
On 1 May 2020 Aurora Labs borrowed $724,167 secured against the R&D claim for the year ended 30 June 2020.
The term of the loan is up to 31 October 2020 with an annual interest rate of 14%. The loan will be repaid with the receipt of the
expected R&D income tax claim. Refer note 4.
NOTE 17: SIGNIFICANT EVENTS AFTER THE BALANCE DATE
There have been no matters or circumstances which has arisen since 30 June 2020 that has significantly affected or may significantly affect:
a) Group operations in future financial years; or
b) The results of those operations in future financial years; or
c) Group state of affairs in future financial years.
NOTE 18: DIVIDENDS
The Directors of the Group have not declared any dividend for the year ended 30 June 2020 or the period ended 30 June 2019.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 52
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19: NEW STANDARDS ADOPTED
AASB 16 Leases
Impact on operating leases
AASB 16 Leases supersedes AASB 117 Leases. The Group has adopted AASB 16 from 1 July 2019 which has resulted in changes
classification, measurement and recognition leases. The changes result in almost all leases where the Company is the lessee being
recognised on the Condensed Statement of Financial Position and removes the former distinction between ‘operating and ‘finance leases’.
The new standard requires recognition of a right-of-use asset (the leased item) and a financial liability (to pay rentals). The exceptions are
short-term, and low value leases.
The Group has adopted AASB 16 using the modified retrospective approach under which the reclassifications and the adjustments arising
from the new leasing rules are recognised in the opening Condensed Statement of Financial Position on 1 July 2019. There is no initial
Impact on retained earnings under this approach. The Group has not restated comparatives for the 2019 reporting period.
As at 30 June 2019, the Group had non-cancellable operating lease commitments of $565,404. Refer note 17.
The Group leases premises as at 30 June 2019 these leases were classified as operating leases. Payments made under operating leases
were charged to profit or loss on a straight-line basis over the period of the lease.
From 1 July 2019, where the Company is a lessee, the Group recognised a right-of-use asset and a corresponding liability at the date which
the lease asset is available for use by the Group. Each lease payment is allocated between the liability and the finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a consistent period rate of interest on the remaining balance of the
liability for each period.
The lease liability is initially recognised at the present value of the lease payments that are not paid at commencement date, discounted
using an interest rate implicit in the lease, If that rate cannot be determined, the Company’s incremental borrowing rate is used, being the
rate the lessee would have to pay to borrow funds necessary to obtain an asset of similar value in a similar economic environment with
similar terms and conditions.
A extension option is included in the property leases. In determining the lease term, management considers all facts and circumstances
that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is
reasonably certain to be extended.
Subsequent to initial recognition, the lease liability is measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The lease liability is
remeasured (with a corresponding adjustment to the right-of-use asset) whenever there us a change in the lease term (including
assessments relating to extension and termination options), lease payments due to changes in an index or rate, or expected payments
under guaranteed residual values
Right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before
commencement date, less any lease incentives received and any initial direct costs. These right-of-use assets are subsequently measured
at cost less accumulated depreciation and impairment losses.
Where the terms of a lease require the Group to restore the underlying asset, or the Group has an obligation to dismantle and remove a
leased asset, a provision is recognised and measured in accordance with AASB 137. To the extent that the costs relate to a right-of-use
asset, the costs are included in the related right-of-use asset.
Right-of-use assets are depreciated on a straight-line basis over the term of the lease (or the useful life of the leased asset if this is shorter).
Depreciation starts on commencement date of the lease.
Where leases have a term of less than 12 months or relate to low value assets, the Group has applied the optional exemptions to not
capitalise these leases and instead account for the lease expense on a straight-line basis over the lease term.
Impact on adoption of AASB 16
On adoption of AASB 16, the Group recognised lease liabilities in relation to leases which had previously been classified as operating leases
under the principles of AASB 117. These liabilities were measured at the present value of the remaining lease payments, discounted using
the lessee's incremental borrowing rate as of 1 July 2019. The incremental borrowing rate applied to lease liabilities on 1 July 2019 was
10%.
On initial application right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised ln the Statement of Financial Position as at 30 June 2019.
In the Condensed Statement of Cash Flows, the Group has recognised cash payments for the principal portion of the lease liability within
financing activities, cash payments for the interest portion of the lease liability as interest paid within operating activities and short-term
lease payments and payments for lease of low-value assets within operating activities.
The adoption of AASB 16 resulted in the recognition of right-of-use assets of $508,350 and lease liabilities of $508,350 in respect of all
operating leases, other than short-term leases and leases of low-value assets.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
P a g e | 53
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19: NEW STANDARDS ADOPTED (Continued)
The net impact on accumulated losses on 1 July 2019 was $nil.
Operating lease commitments disclosed as at 30 June 2019
Discounted using the lessee’s incremental borrowing rate at the date of initial application
Lease liability as at 1 July 2019
Right-of-use asset
The recognised right-of-use asset relate to the following types of assets:
Property leases
Lease liability
Current lease liabilities
Non-current lease liabilities
Impact
Consolidated
1 Jul 19
$
565,404
(57,054)
508,350
30 June 19
$
508,350
508,350
30 June 19
$
257,579
250,771
508,350
The change in accounting policy resulted in an increase of a right-of-use asset of $508,350 and a corresponding lease liability of $508,350
in respect of all these leases, other than short-term leases and leases of low-value assets.
The net impact on retained earnings on 1 July 2019 was $nil.
Practical expedients applied
In applying AASB 16 for the first time, the Aggregated Group has used the following practical expedients permitted by the standard:
The accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term leases, with no
right-of-use asset nor lease liability recognised; and
The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
Impact on finance leases
Based on an analysis of the Aggregated Group’s finance leases as at 30 June 2019 on the basis of the facts and circumstances that exist at
that date, the directors of the Company have assessed that the impact of this change will not have an impact on the amounts recognised
in the Aggregated Group’s interim financial statements.
Impact on lessor accounting
Based on an analysis of the Aggregated Group’s leases as at 30 June 2019 on the basis of the facts and circumstances that exist at that
date, the directors of the Company have assessed that the impact of this change will not have an impact on the amounts recognised in the
Aggregated Group’s interim interim financial statements.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20: COMMITMENTS
As at the balance date, the Group has a total of 6 Small Format Printers that were pre-sold at discount rates to various non-related parties
as part of a crowd-funding initiative called “kickstarter”. A liability of $44,905 is recognised on the statement of financial position which
corresponds to funds received from these pre-sales.
The Group 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 Group 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. This arrangement is now reflected under right of use asset in Note 12. There are no other lease commitments
in the current year.
Lease Agreement
The Company leased a warehouse and office space at Unit 2, 79 Bushland Ridge Bibra Lake, Western Australia: The rental agreement
commenced 1 June 2017 with an initial 24-month period. That period was extended for a further 24 months to 31 May 2021 of $24,583
per month plus standard outgoings.
Lease commitments
Not longer than 1 year
Longer than 1 year and shorter than 5 years
Total
NOTE 21: FINANCIAL INSTRUMENTS
a) Overview
Consolidated
Consolidated
30 June 20
30 June 19
$
-
-
-
$
294,994
270,410
565,404
The Group principal financial instruments comprise receivables, payables and cash. The main risks arising from the Group financial
instruments are credit risk, liquidity risk, interest rate risk and foreign currency risk. This note presents information about the Group
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 Group manages its exposure to key financial risks in accordance with the Group risk management policy. Key financial risks are
identified and reviewed annually, and policies are revised as required. The overall objective of the Group risk management policy is to
recognise and manage risks that affect the Group and to provide a stable financial platform to enable the Group to operate efficiently.
The Group does not enter into derivative transactions to mitigate the financial risks. In addition, the Group policy is that no trading in
financial instruments shall be undertaken for the purposes of making speculative gains. As the Group 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 Group 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 Group. The Group
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 Group 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 Group uses publicly available financial information and its own trading
record to rate its major customers.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21: FINANCIAL INSTRUMENTS (continued)
The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar
characteristics.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. This arises principally from cash and cash equivalents and trade and other receivables.
There are no significant concentrations of credit risk within the Group. The carrying amount of the Group financial assets represents the
maximum credit risk exposure, as represented below:
Cash and cash equivalents
Trade and other receivables
Total
Consolidated
Consolidated
30 June 20
$
1,323,766
1,762,590
3,086,356
30 June 19
$
3,604,293
2,370,804
5,975,097
Trade and other receivables are comprised primarily of advances to suppliers, bank guarantee, prepayments, interest receivable and GST
refunds due. Where possible the Group trades only with recognised, creditworthy third parties. It is the Group 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 Group 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 Group 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 Group 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.
2020
Financial Liabilities
Trade and other payables
Deferred revenue
Borrowings
Accrued annual leave
Total
2019
Financial Liabilities
Trade and other payables
Deferred revenue
Borrowings
Accrued annual leave
Total
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
440,075
44,905
724,167
172,211
1,381,358
-
-
-
-
-
-
-
-
-
-
-
-
-
-
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
686,101
52,534
1,350,000
200,316
2,288,951
-
-
-
-
-
-
-
-
-
-
-
-
440,075
44,905
724,167
172,211
1,381,358
Total
$
686,101
52,534
1,350,000
200,316
2,288,951
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21: FINANCIAL INSTRUMENTS (continued)
d) Interest Rate Risk
The Groups 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 Group to cash flow interest rate risk. All other financial assets and liabilities, in the
form of receivables and payables are non-interest bearing.
At the reporting date, the interest rate profile of the Group interest-bearing financial instruments was:
Interest-bearing financial instruments
Cash at bank and on hand
Term Deposits
Borrowings
Total
Consolidated
Consolidated
30 June 20
30 June 19
$
$
1,323,766
-
(724,167)
599,599
3,604,293
-
(1,350,000)
2,254,293
The Group's cash at bank and on hand and short-term deposits had a weighted average floating interest rate at year end of 0.26% (2019:
0.96%).
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
Interest rate sensitivity
The Group considers that a 1% movement in interest rates would result in an immaterial impact on equity and the profit and loss.
e) Foreign Exchange Risk
The Group has an exposure to foreign exchange rates given that the Group 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 Group is actively marketing
the SFP to international customers in USD. If foreign exchange rates change this may make the SFP more or less price competitive with
competitor’s metal 3D printers. Given the Group 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 CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 22: CONTINGENT LIABILITIES / ASSETS
The Company had no contingent liabilities or assets as at the reporting date.
NOTE 23: KEY MANAGEMENT PERSONNEL
a) Key Management Personnel
The KMP of the Company during or since the end of the financial year were as follows:
Directors
Position
KMP
Grant Mooney
Terry Stinson
Ashley Zimpel
David Budge
Nathan Henry
Mathew Whyte
Paul Kristensen
Mel Ashton
Peter Snowsil
Position
Non-Executive Chairman; and Company Secretary
Non-Executive Director
Non-Executive Director
Chief Technical Officer
Marketing Manager
Company Secretary ; and Non-Executive Director
Non-Executive Chairman
Non-Executive Director
Chief Executive Officer
b) Key Management Personnel Compensation
Short-term employee benefits
Post- employment benefits
Share-based payments
Total compensation
c) Other Transactions
Consolidated
Consolidated
30 June 20
30 June 19
$
$
1,217,191
84,061
64,378
1,365,630
811,508
50,094
120,750
982,352
Grant Mooney has provided company secretarial services during the year which totalled: $8,000 (2019: $Nil)
Mathew Whyte provided company secretarial services through a controlled entity Whypro Corporate Services. Payments for company
secretarial services during the year totalled: $86,400 (2019: $115,200).
These amounts are included in the table above.
These items have been recognised as expenses in the Statement of Profit or Loss and Other Comprehensive Income.
d) Key Management Personal Payables
There were no amounts payable to KMP’s as at 30 June 2020.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 24: TRANSATIONS WITH SUBSIDIARIES
The consolidated financial statements include the financial statements of Aurora Labs Limited and its subsidiaries listed in the following
table.
Country of incorporation
Equity Interest
A3D Operations Pty Ltd
A3D Holdings Pty Ltd
Aurora Labs 3D (US) LLC
Australia
Australia
USA
30 June 20
%
100
100
100
30 June 19
%
100
100
100
Aurora Labs Limited is the ultimate Australian parent entity and ultimate parent of the Group.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated
on consolidation.
NOTE 25: SHARE-BASED PAYMENTS
a) Recognised Share-based Payment Expense
From time to time, the Company provides incentive options and performance rights to officers, employees, consultants and other key
advisors as part of remuneration and incentive arrangements. The number of options and performance rights granted, and the terms of
the options and performance rights 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 in the Statement of Profit or Loss and Other
Comprehensive Income.
Expense arising from equity-settled share-based payment
transactions
Net share based payment expense/(income) recognised
in the profit or loss
Consolidated
Consolidated
Consolidated
Consolidated
30 June 20
Number
30 June 20
30 June 19
30 June 19
$
Number
$
7,160,634
303,029
1,117,159
297,448
7,160,634
303,029
1,117,159
297,448
During FY2020. 1,000,000 options were issued to settle share issue costs $82,226. (2019: 367,107 options were issued to settle share issue
costs $73,506).
b) Remaining Contractual Life
All Incentive Options and Performance rights outstanding at 30 June 2020 are able to be exercised prior to 11 July 2024, so there is 4.0
years remaining contractual life on all options and Performance shares as at the balance date (2019: 4.5 years).
c) Range of Exercise Prices
The exercise price of Incentive Options outstanding at 30 June 2020 are detailed in Note 6.
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 Company 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.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 26: Parent entity
Statement of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Equity
Issued capital
Option reserve
Retained earnings
Total equity
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive loss
30 June 20
$
2,201,754
2,137,944
949,470
-
3,390,228
27,218,305
2,269,439
(26,097,516)
3,390,228
30 June 20
$
8,095,858
-
8,095,858
30 June 19
$
5,153,260
2,113,194
1,530,458
-
5,735,996
21,793,469
1,884,185
(18,001,658)
5,735,996
30 June 19
$
1,464,174
-
1,464,174
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
As at 30 June 2020, Aurora Labs Limited has not entered into any deed of cross guarantee with its three of its wholly-owned subsidiaries,
A3D Operations Pty Ltd, A3D Holdings Pty Ltd and Aurora Labs 3D (US) LLC.
Contingent liabilities of the parent entity
As at 30 June 2020 Aurora Labs Limited has no contingent liabilities (2019: $Nil)
NOTE 27: 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 – Export Marketing Development Grant preparation and
lodgement
Total
Consolidated
Consolidated
30 June 20
30 June 19
$
$
30,725
5,250
35,975
29,000
4,250
33,250
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DIRECTORS DECLARATION
1.
In the opinion of the Directors of Aurora Labs Limited (“Aurora” or the “Group”):
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 Group’s financial position as at 30 June 2020 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.
b.
c.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the
International Accounting Standards Board.
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 2020.
This declaration is signed in accordance with a resolution of the Board of Directors.
______________________________
Grant Mooney
Chairman
Dated this 31 August 2020
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INDEPENDENT AUDITOR’S REPORT
To the members of Aurora Labs Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Aurora Labs Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of profit and loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which indicates that a material uncertainty exists
that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
uncertainty Related to going concern, we have determined the matters described below to be the
key audit matters to be communicated in our report.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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Key Audit Matter
Share Based Payments
Refer to Note 21
How our audit addressed the key audit
matter
During the financial year the Company issued unlisted
options to performance rights to Key Management
Personnel and employees.
We have considered this to be a key audit matter as
accounting for the transactions required significant
management
involving a degree of
estimation. Furthermore, external valuer was engaged
to undertake valuation of performance rights which
included market based vesting conditions.
judgement
Our procedures included but were not
limited to:
- Ensured that the accounting treatment of
the share-based payment arrangements
by the Company were consistent with the
requirements of AASB 2 Share-based
payment; and
- Testing the inputs used in the calculation
of the value of options and performance
rights.
Intangible assets
Refer to Note 13
The Group has a significant intangible asset balance
which relates to patents in relation to 3D printing
technology.
Our procedures included but were not
limited to:
- Obtaining external confirmation of patent
We considered this to be a key audit matter as it is
determined to be important to the users of the financial
statements and
from external
required
consultants.
input
it
status;
- Agreeing
expenditure
incurred
to
supporting documentation;
- Ensuring compliance of patents costs for
recognition and continued capitalisation
under AASB 138 Intangible Assets; and
- Considered existence of any impairment
indicators under AASB 136 Impairment of
Assets.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual financial report the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of Aurora Labs Limited for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
31 August 2020
B G McVeigh
Partner
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2020
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ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report.
COMPANY SECURITIES
The following information is based on share registry information processed up to 21 August 2020.
Quoted Securities
There is one class of quoted securities, being:
1.
Fully paid ordinary shares (ASX: A3D);
1) Fully Paid Ordinary Shares
a) Distribution and spread of Ordinary shares
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
361
552
360
769
172
2,214
Shares
187,337
1,590,292
2,890,508
27,891,834
84,719,736
117,279,707
b) Marketable parcel
There are 1,000 shareholders with less than a marketable parcel (basis price $0.08).
c) Voting rights
All ordinary shares carry one vote per share without restriction. Options and Performance Shares do not carry any voting rights.
d) Substantial Shareholders
There are two substantial shareholder, being Mr David Budge, holding 15,946,785 fully paid ordinary shares, being 13.60% of the fully paid
ordinary shares on issue and Bartheer Beheer BV, holding 13,000,000 fully paid ordinary shares, being 11.08% of the fully ordinary shares
on issue.
e) 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)
f) 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
MR DAVID JAMES BUDGE
BARTHEN BEHEER BV
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
MR JOHN NATHAN HENRY
MCROD INVESTMENTS PTY LIMITED
GASMERE PTY LTD
MRS JESSICA C E SNELLING
LEE MILLER INVESTMENTS PTY LTD
MR TERRY STEPHEN ROMARO
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
ZWECS PTY LTD
MR ANTHONY PELLEGROM
MR PETER WAYNE ROGERS
MR RODNEY ALAN BRACK
ONMELL PTY LTD
MARRAHCAPITAL INVESTMENT PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MR WAYNE JOHN HOGAN & MRS ANGELA PATRICE HOGAN
700,000
DR THEODORE LIONEL CHATZ
MR JOHN CLIFFORD GRANT & MRS TRACY LYNNE GRANT
Total
700,000
600,800
52,035,40
7
Number
of
Ordinary
Shares
15,946,78
5
13,000,00
0
2,721,842
2,263,855
1,825,485
1,666,153
1,583,009
1,330,377
1,327,500
1,250,000
1,236,280
1,142,671
1,050,000
841,062
775,096
763,169
750,000
% of Issued
Capital
13.60%
11.08%
2.32%
1.93%
1.56%
1.42%
1.35%
1.13%
1.13%
1.07%
1.05%
0.97%
0.90%
0.72%
0.66%
0.65%
0.64%
0.60%
0.60%
0.51%
44.37%
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ASX ADDITIONAL INFORMATION (continued)
Unquoted Securities – Company Options and Performance Shares
There are three classes of unquoted securities, being:
1. Company Options:
2. Company Performance Rights
1a) Company Options – Exercisable $0.79/ Expiry 31 August 2020
Distribution & Spread of unquoted Options holder numbers
Ordinary Options
Ordinary Options
Category
(Size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Holders
-
-
1
22
-
23
1b) Company Options – Exercisable $0.72/ Expiry 30 September 2020
Distribution & Spread of unquoted Options 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
Holders
-
-
1
-
1
Number
-
-
7,000
455,000
-
462,000
Number
-
-
-
50,000
-
50,000
1c) Company Options – Exercisable $0.95/ Expiry 31 September 2020
Distribution & Spread of unquoted Options 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
Holders
Number
-
-
1
-
1
-
-
-
100,000
-
100,000
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ASX ADDITIONAL INFORMATION (continued)
1d) Company Options – Exercisable $0.50/ Expiry 31 December 2020
Distribution & Spread of unquoted Options 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
Holders
Number
-
-
-
-
1
1
-
-
-
-
250,000
250,000
1e) Company Options – Exercisable $1.08/ Expiry 31 January 2021
Distribution & Spread of unquoted Options 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
Holders
Number
-
-
2
-
2
-
-
-
200,000
-
200,000
1f) Company Options – Exercisable $0.57/ Expiry 15 February 2022
Distribution & Spread of unquoted Options 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
Holders
Number
-
-
-
-
1
1
-
-
-
-
367,107
367,107
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ASX ADDITIONAL INFORMATION (continued)
1g) Company Options – Exercisable $0.39/ Expiry 13 January 2022
Distribution & Spread of unquoted Options 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
Holders
Number
-
-
-
-
2
2
-
-
-
-
1,000,000
1,000,000
1h) Company Options – Exercisable $0.14/ Expiry 25 March 2023
Distribution & Spread of unquoted Options 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
1i) Company Options – Exercisable $0.14/ Expiry 30 April 2023
Distribution & Spread of unquoted Options 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
Holders
Number
-
-
-
-
2
2
-
-
-
-
4,000,000
4,000,000
Ordinary Options
Holders
Number
-
-
-
-
1
1
-
-
-
-
2,000,000
2,000,000
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ASX ADDITIONAL INFORMATION (continued)
1j) Company Options – Exercisable $0.14/ Expiry 14 August 2022
Distribution & Spread of unquoted Options 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
-
-
-
-
1
1
Ordinary Options
Holders
Number
2a) Company Performance Rights – Exercisable $0.90/ Expiry 31 January 2023
Distribution & Spread of unquoted Performance Rights 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
Performance Rights
Holders
-
-
2
12
-
14
-
-
-
-
3,000,000
3,000,000
Number
-
-
17,500
401,055
-
418,555
2b) Company Performance Rights – Exercisable $0.47/ Expiry 11 July 2024
Distribution & Spread of unquoted Performance Rights 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
Performance Rights
Holders
Number
-
-
-
17
-
17
-
-
-
552,182
-
552,182
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ASX ADDITIONAL INFORMATION (continued)
OTHER ASX INFORMATION
1. Corporate Governance
The Company’s Corporate Governance Statement as at 30 June 2020 as approved by the Board can be viewed at
https://www.auroralabs3d.com/a3d/#/investors/corporate-compliance
2. Company Secretary
The name of the Company Secretary is Grant Mooney.
3. Address and telephone details of the entity’s registered administrative office and principle place of business:
Unit 2/ 79 Bushland Ridge
Bibra Lake WA 6163
Telephone:
+61 (08) 9434 1934
Email:
enquiries@auroralabs3d.com
4. Address and telephone details of the office at which a registry of securities is kept:
Automic Group
Level 5, 126 Phillip Street,
Sydney NSW 2000
Telephone: +61 2 8072 1400
5. Stock exchange on which the Company’s securities are quoted:
The Company’s listed equity securities are quoted on the Australian Securities Exchange under the code (ASX: A3D).
6. Review of Operations
A review of operations is contained in the Directors’ Report.
7. Restricted Securities
The Company has no restricted securities as at the date of this report.
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