CHAIRMAN’S REVIEW
Dear Shareholder,
I am pleased to be able to present to you the 2021 Annual Report.
2020-21 has seen A3D make the most significant steps towards achieving our goal of commercialisation of our 3D metal printing
technology.
The Company has delivered on its stated objectives established at the end of the last financial year to meet milestones along the technology
pathway. At the date of writing this report, A3D has successfully delivered on Milestones 1 to 3 and is in advanced stages of delivering the
final milestone 4, on route to Commercial Readiness scheduled for second half 2021.
Our technology team has worked tirelessly and at times through trying conditions in the current COVID environment, to get us in the
strongest position that the technology has been in, building a solid understanding of what our printer technology can do and how it can
outperform already commercialised existing printers.
In October 2020, we announced that we had met Milestone 1 with parameter testing demonstrating +99% density of print jobs at full
power to underpin speed and scale up capability of the RMP-1 Printer.
In February 2021, the team achieved success with the delivery of Milestone 2, the Fume Extraction Upgrade which has facilitated higher
power printing and production rates with significantly less interference from resultant fumes.
In July 2021, maybe our most significant milestone was announced, being the printing at 1.5 kilowatts of laser power on a consistent basis
with high integrity and repeatability- an achievement not evident in known commercialised printers.
We now look forward with great optimism to the delivery of Milestone 4, being achievement of customer specification for print quality,
functionality and production cost. This will involve us printing directly for customers such as our recently announced engagement to
undertake prints for BAE Systems Maritime Australia’s Hunter Class Frigate Program. In addition to this, we continue to work actively in
the AdditiveNow Joint Venture with Worley to establish commercial printing contracts with participants in the Mining and Oil & Gas
industries. We continue to collaborate with groups such as Gränges of Sweden to test and identify their materials suitable for powder bed
fusion printing.
In 2020, our COO Peter Snowsill was formally appointed as our CEO and I would like to commend Peter for the excellent work he and his
team have achieved in not only delivering the milestones but navigating the Company difficult COVID environment as well as relocating
the entire business to our new facilities in Canning Vale, WA, leading to a significant reduction in corporate overheads.
With commercial readiness now clearly in sight, we have commenced the process of actively engaging with groups that may well present
as potential partners for A3D into the future. We look forward to reporting developments in this regard as we move through 2022.
I would like to extend thanks to our loyal shareholders who continue to support our direction and belief in our technology team being able
to deliver a ‘best of class’ rapid manufacturing printer technology . Thanks also to my fellow directors and our outstanding team.
Grant Mooney
Chairman
27 August 2021
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2021
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DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
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 2021. 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
Mel Ashton
Peter Snowsill
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
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
22 January 2018 to current
1 July 2019 to current
The Board has adopted Remuneration and Nomination Policy dated May 2016 (Refer
https://www.auroralabs3d.com/a3d/#/investors/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 Chief Executive Officer and the executive team.
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
20 November 2020 at $350,000 per annum. Total Non–Executive remuneration fees paid during the year ended 30 June 2021 were
$254,350 (including Superannuation contributions) (FY2020: $293,938).
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.
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DIRECTORS’ REPORT
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•
•
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DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
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 2021, 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
27 August 2021
B G McVeigh
Partner
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CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
CONSOLIDATED STATEMENT OF FINANIAL POSITION
AS AT 30 JUNE 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
•
•
•
•
•
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Income tax (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i)
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
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment of tangible and intangible assets other than goodwill (continued)
(k)
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing
operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at
revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may
no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment
loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last
impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased
amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which
case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate
the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
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 an expectation 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.
Investments in Joint Ventures
(n)
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Investments in Joint Ventures (continued)
(n)
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.
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p)
Property, plant and equipment (continued)
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.
Intangible assets
(q)
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a
straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is reviewed at the end of each
annual reporting period, with any changes in these accounting estimates being accounted for on a prospective basis.
Internally generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-generated
intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of
the following have been demonstrated:
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probable future economic benefits;
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
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r) Trade and other payables
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.
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.
(s) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
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
(t)
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u) Share-based payment transactions
Share-based payment transactions
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).
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.
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(v) Earnings per share
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2021
P a g e | 34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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.
(w) 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.
As disclosed in the financial statements, the Group has incurred a net loss after tax for the year ended 30 June 2021 of $4,422,697 (2020:
$8,155,859) and had net cash outflows from operating activities of $1,679,848 (2020: $6,289,349). As at 30 June 2021, the Company has
a net current asset position of $1,633,073 (2020: $1,893,863).
The net current asset position as at 30 June 2021 includes the following:
- cash at bank of $1,372,450 (2020: $1,323,766);
- Income tax benefit receivable $746,215 (2020: $1,243,273);
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.
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
•
•
•
•
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
DIRECTORS DECLARATION
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 2021, the consolidated statement of profit or 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 2021 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 (w) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the entity’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 we have determined the matters described below to be the key audit
matters to be communicated in our report.
P a g e | 55
Key Audit Matter
How our audit addressed the key audit
matter
Carrying Value of Intangible Assets
Refer to Note 13
The Group has impaired carrying value of intangible
assets.
We considered this to be a key audit matter as it is
determined to be important to the users of the financial
statements.
Our procedures included but were not
limited to:
- Ensuring compliance of patents costs for
recognition and continued capitalisation
under AASB 138 Intangible Assets;
- Considered existence of any impairment
indicators under AASB 136 Impairment of
Assets; and
- Determining the appropriateness of the
impairment amount.
Share Based Payments
Refer to Note 23
During the financial year the Company issued unlisted
options to Key Management Personnel, employees and
advisors.
We have considered this to be a key audit matter as
accounting for the transactions required significant
management
involving a degree of
estimation. Furthermore, options included non-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.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2021, 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
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.
P a g e | 56
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.
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 2021.
P a g e | 57
In our opinion, the Remuneration Report of Aurora Labs Limited for the year ended 30 June 2021
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
27 August 2021
B G McVeigh
Partner
P a g e | 58
ADDITIONAL INFORMATION
There are two substantial shareholders, being
of
the fully paid ordinary shares on issue and Mr Matthew James Rolfe , holding 10,059,782 fully paid ordinary shares,
being 6.58% of the fully ordinary shares on issue.
ADDITIONAL INFORMATION
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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BARTHEN BEHEER BV
MR MATTHEW JAMES ROLFE
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TIMSTER PTY LIMITED
MCROD INVESTMENTS PTY LIMITED
GASMERE PTY LTD
LEE MILLER INVESTMENTS PTY LTD
MR JOHN CLIFFORD GRANT & MRS TRACY LYNNE GRANT
ONMELL PTY LTD
MRS JESSICA CATHERINE ELIZABETH SNELLING
MR JOHN NATHAN HENRY
MR ANTHONY PELLEGROM
MR TERRY STEPHEN ROMARO
ZWECS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR CHRISTIAN MATTHEW KONCURAT
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
MARRAH CAPITAL INVESTMENT PTY LTD
Number of
Ordinary
Shares
% of
Issued
Capital
15,588,235
10.20%
10,059,782
4,946,403
3,179,999
3,032,121
2,850,000
1,666,153
1,583,009
1,545,019
1,517,194
1,513,169
1,330,377
1,325,485
1,200,000
1,150,000
1,142,671
1,137,133
1,120,000
1,041,160
1,000,000
6.58%
3.24%
2.08%
1.98%
1.86%
1.09%
1.04%
1.01%
0.99%
0.99%
0.87%
0.87%
0.78%
0.75%
0.75%
0.74%
0.73%
0.68%
0.65%
Total
57,927,910
37.88%
Aurora Labs Ltd ANNUAL FINANCIAL REPORT 2021
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ADDITIONAL INFORMATION
ADDITIONAL INFORMATION
as at the date of this report.