11 September 2020
The Manager
Market Announcements Platform
Australian Securities Exchange
Annual Report for Year Ending 30 June 2020
The Company has great pleasure in releasing its Annual Report for the Year Ending 30 June 2020 including
the Chairman’s Report and the Corporate Governance Statement, as well as the Directors’ Report and the
audited FY2020 Financial Statements and Notes to the Accounts.
Yours faithfully
Dennis Payne
Company Secretary
A N N U A L R E P O R T 2 0 2 0
In novation
Design
Satellite
M2 M
IoT
Bea m Comm unications Holdings Limite d
DIRECTORATE
NON EXECUTIVE CHAIRMAN
Mr Simon Lister Wallace
MANAGING DIRECTOR
Mr Michael Ian Capocchi
NON EXECUTIVE DIRECTORS
Mr Carl Cheung Hung
Mr David Paul James Stewart
COMPANY SECRETARY
Mr Dennis Frank Payne
REGISTERED OFFICE
Beam Communications
Holdings Limited
Unit 5/8 Anzed Court
Mulgrave, VIC, 3170
Ph: (03) 8561 4200
Fax: (03) 9560 9055
Email:
investor@beamcommunications.com
SHARE REGISTER
Link Market Services Ltd
Locked Bag A14
Sydney South, NSW, 1235
Ph: 1300 554 474
Fax: (02) 9287 0303
SOLICITORS TO
THE COMPANY
GrilloHiggins Lawyers
Level 20, 31 Queens Street
Melbourne, VIC, 3000
Ph: (03) 8621 8880
AUDITOR
RSM Australia Partners
Level 21, 55 Collins Street
Melbourne, VIC, 3000
Ph: (03) 9286 8000
Fax: (03) 9286 8199
ASX OFFICE
Based in Melbourne
ASX CODE
BCC
CONTENTS
Directorate
Chairman’s Report
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Consolidated Financial Statements
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
1
2
4
18
20
28
29
30
31
Notes to the Consolidated Financial Statements
32
Directors’ Declaration
Auditor’s Report
Australian Securities Exchange Information
53
55
60
1
ANNUAL REPORT 2016
ANNUAL REPORT 2020CHAIRMAN’S REPORT
I am pleased to provide the following Chairman’s Report on the Beam
This volatile environment prompted Beam to take the prudent measure
of writing down $2 million in capitalised development expenses relating
mostly to Thuraya WE. This one-off item led to a statutory net loss of
$1.6 million for the year.
Communications Holdings Group of companies for the year ended 30
The official launch of our innovative and unique ZOLEO satellite
June 2020. While the full Directors’ Report contains more extensive
messaging solution in late January in North America and Australia was
information, I would like to present the following highlights.
the main highlight of FY2020. Beam received orders of 10,000 units
Profit Performance and Major Impacts
in the second half of the financial year from the joint venture entity it
set up with Roadpost Inc., a further order for 5,000 units in July and
Beam has performed resiliently through what can only be described
yet another order – the largest to date – received in September for
as one of the most challenging periods for the global economy in our
7,750 devices as we service burgeoning demand for this extremely
generation. As directors, we regularly stress-test our operations but
competitive and highly regarded new product.
the onset of COVID19, and the restrictions that followed, were both
unforeseeable and unique, however, we are pleased that we moved as
swiftly and as selflessly as we did to respond to these unprecedented
events. At all times we have sought to insulate the Group’s exposure to
these seismic changes to business activities world-wide.
Most of those devices are earmarked for the North American market
where demand has not been hindered as severely by restrictions on
movement compared to Australia. Having said that, sales of ZOLEO in
Australia have improved appreciably since May through direct sales to
customers (from Satphone Shop, Amazon Australia and eBay Australia)
Despite the severe economic dislocation caused by the COVID-19
and through an expanding network of dealers.
pandemic, it is very reassuring to see that Beam’s core businesses have
continued to perform, the new ZOLEO solution is gaining traction and
our balance sheet remains strong with $3.7 million currently available in
cash and debt funding.
Group earnings before interest, tax, depreciation and amortisation
(EBITDA) increased 43% over the previous year to $3.0 million in
FY2020 even though revenue declined 16% to $14.9 million as the
group cycled from a record high revenue in FY19 that was bolstered by a
large Thuraya WE order and the impact of COVID-19 in FY20.
The improvement in Group EBITDA is largely driven by an increase in
high-margin Airtime revenue, R&D tax refund and prudent cost control.
Beam also received the seventh order for its Iridium GO! device in
FY2020, which is to be delivered in FY2021. This latest order of 5,000
units from NASDAQ-listed Iridium takes the total number of units
ordered to 45,000 over the past six years.
Beam was also the only Australian company, and only one of seven
worldwide, chosen by Iridium to develop the next generation of Iridium
Certus® devices, which have data speeds that are more than 35 times
faster than the previous generation of Iridium transceivers.
Other notable highlights include repeat orders for Beam’s Inmarsat
terminals from reseller partner Station Satcom for India, which is a
new market for Beam, and the signing of a global reseller agreement
Beam also managed to produce a positive underlying net profit before
with Pivotel Satellite Pty Ltd.
tax of $453,130 (FY19: $722,000) and an underlying net profit after
tax of $341,419 (FY19: $339,000) despite difficult trading conditions,
Outlook
particularly in April and May when Australia first went into lockdown to
While no one could have predicted how challenging the last financial
contain the virus and as key overseas markets struggled with escalating
year was going to be, currently the FY2021 outlook is positive for
coronavirus cases. Gross revenues in these two months were around
Beam even as economic conditions remain highly volatile. There are a
30% to 35% below the same period in FY2019.
few reasons for the optimism.
However, sales rebounded in the following month such that the June
Firstly, sales of ZOLEO are expected to continue to grow significantly
quarter revenue numbers were only 15% below those of the same
over the next 12-months. The momentum achieved in the North
period in 2019. What is also heartening is that the second, more severe,
American market provides us confidence that we will experience
lockdown in Victoria has not impacted on Beam as significantly. Yes,
similar traction in the Australian market as social restrictions are ease,
conditions remain highly unpredictable, but we have controlled the
together with demand from other as-yet untapped markets globally.
controllables and can see the underlying business starting to recover.
Other major Australian retailers are also anticipated to join the
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“Despite the severe economic dislocation caused
by the COVID-19 pandemic, it is very reassuring
to see that Beam’s core businesses have continued
to perform, the new ZOLEO solution is gaining
traction and our balance sheet remains strong.”
ZOLEO reseller network, which already includes Cabela’s in Canada.
which will commence in late September, as revenues may not be
Cabela’s is part of BPS Direct, LLC (Bass Pro Shops), which is the
sufficiently below those recorded in the corresponding period in 2019,
world’s largest outdoor equipment retailer with 40,000 employees
which is also a positive.
with an annual turnover of around US$8 billion.
Another growth opportunity for Beam is the development and launch
of its Iridium Certus® devices. The first of these next-gen devices are
anticipated to be launched in FY2022
Directors and Investors
All directors of your Company hold shares in Beam Communications
Holdings Limited. We, like you, have a personal interest in our future
performance. The aggregated remuneration paid to non-executive
Meanwhile, Beam’s base business is also well positioned to grow
directors was also reduced by over 70%, in response to the pandemic.
organically over the next 12 months. Demand for Iridium GO! is
expected to remain robust for the next few years at least, and Beam
You can read more about all members of the board in the Directors’ Report.
is expecting to receive new orders for the device from Iridium in the
No new securities have been issued since September 2017.
current financial year.
The opening of the Indian market to Inmarsat is likely to lead to further
orders for Beam-branded terminals and accessories as these are the
only devices, along with the Inmarsat handset, that are approved for sale
using the Inmarsat GSPS service in India currently.
The continued strength and resilience of Beam’s core business will help
support the growth of ZOLEO and the development for Beam’s Iridium
Certus® devices in FY2021 and beyond.
Staff and Board
In these times, I cannot sufficiently express my admiration and
appreciation for Beam’s Board, senior management, and all our staff,
who have remained focused and productive during this immensely
uncertain and challenging time.
Often the strength of a business can only be properly tested when it’s
put under the greatest commercial tension, and that we have produced
a year of robust underlying net profits and continued to deliver superior
While Beam has written down the entire development cost of Thuraya
products to market with an increasing appetite for them, is to our
WE, we may still receive further orders from Thuraya for additional
collective and immense credit.
units to the 3,000 that were delivered in FY2019 as the Beam device
remains the only dual mode (4G and satellite) hotspot in Thuraya’s
product portfolio.
Cash and Funding
I thank you, as a Shareholder, for your support. The proportion of long-
term owners of Beam shares who have reduced their holdings over this
year has been miniscule, which is both an insight into and a validation of
our strategy and performance.
Beam’s cash holding at 30 June 2020 was $874,000 and had an
I look forward to sharing with you more details of our progress over
additional $2.8 million in undrawn debt facilities. Subsequent to the
this financial year and wish you personal and professional health as we
end of FY2020, the National Australia Bank provided a new $500,000
emerge from a period which none of us will ever forget.
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term debt facility to Beam, giving the Group total available funds of
$4.2 million at 30 June. The new term facility is for three years with an
interest rate of just 4.5%.
Beam also delivered a positive operating cash position in the last three
quarters of FY2020, which is a pleasing result given the disruption
caused by COVID-19 and additional investments in ZOLEO and other
new product development projects.
Mr Simon Wallace
Chairman
The expenditure on major development projects in the financial year
Date: 11 September 2020
amounted to $2.4 million and Beam expects to receive the government’s
R&D tax rebate of $580,000 in October 2020. Beam benefited from the
JobKeeper and BAS relief support packages, amounting to $332,500
in total for FY2020. Beam may not qualify for phase two of JobKeeper,
A NN UA L R EPORT 2020
3
DIRECTORS’ REPORT
Your Directors present their report on the
Company and its controlled entities for the
financial year ended 30 June 2020.
DIRECTORS
The persons who have been a Director of the
Company since the start of the financial year
to the date of this report are:
Simon Lister Wallace
Michael Ian Capocchi
Carl Cheung Hung
David Paul James Stewart
The qualifications, experience and special
responsibilities of each of the directors who
held office during the year are:
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BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Simon Lister Wallace
Non Executive Chairman
Age: 46
Simon Wallace is a corporate lawyer and,
based in Melbourne, having previously
been an equity partner of the largest law
firm in the world, he is now the founder &
Managing Partner of his own boutique
legal practice.
Simon has extensive legal and commercial
proficiency, with particular expertise in
the areas of project finance, fundraising
and corporate governance. He also has
substantial professional experience in the
areas of investment banking, structured
and direct equity investments, product
formulation and sales.
More recently, he was a director of ASX-
listed Hastings Rare Metals Limited (now
known as Hastings Technology
Metals Limited) until November 2014.
Simon is admitted to practise as a barrister
and solicitor of the Supreme Court of
Victoria, the Federal Court of Australia
and the High Court of Australia, and he
holds degrees from the Australian National
University in both Law and Commerce.
Simon has been a Director since 5
February 2015 and was elected Chairman
on 22 December 2016.
Michael Ian Capocchi
Managing Director
Carl Cheung Hung
Non Executive Director
David Paul James Stewart
Non Executive Director
Age: 49
Age: 36
Age: 66
Michael Capocchi has over 25 years’
Carl Hung has a Bachelor of Commerce
David Stewart is an experienced CEO
experience in the ICT industry and has
degree from the University of British
and successful entrepreneur with more
held several senior management positions.
Columbia and an Executive Masters of
than 30 years in management and
Michael is based in Chicago, USA, which
Business Administration from University
business leadership roles. David founded
places him closer to the important centres
of Western Ontario’s (UWO) Richard Ivey
Banksia Technology Pty Limited in 1988
for satellite communications in the USA and
School of Business. He is a Six Sigma Black
and successfully managed the company
UK/Europe.
Belt certified by SGS. He is also a Certified
as a fast growing and highly profitable
Management Accountant.
business. In 1996 he instigated the
Michael joined Beam Communications
Holdings Limited as the General Manager of
Carl is President and CEO of Season
the subsidiary, Beam Communications Pty
Group International Inc, a global
Ltd, in 2003 and was appointed as Managing
Electronic Manufacturing Services
Director of Beam Communications Holdings
provider and full stack IoT solutions
Limited in March 2008.
Prior to joining Beam, Michael was the
provider with a footprint in Hong Kong,
China, Malaysia, Mexico and the UK.
Regional Sales Director for Iridium Satellite
Season Group has been the preferred
LLC, directly managing the sales, distribution
contract manufacturer for Beam
successful takeovers of a number of his
competitors, including NetComm Limited,
which was completed in November
1997. David assumed the role of CEO
and Managing Director until retiring in
December 2016. A year later David was
appointed as a Non-Executive Director of
NetComm Wireless Limited, a position he
held until June 30, 2019 when NetComm
and channel management strategies for the
Communications Pty Ltd for several years
was acquired by US-based Casa Systems.
and has been instrumental in rationalising
Beam’s manufacturing and supply
processes. Carl has been a Director of
Beam Communications Holdings Limited
since 21 February 2013.
Asia-Pacific region.
Michael has held senior management
positions as the Sales and Marketing
Director of Pacific Internet responsible for
establishing the Australian operations of the
company and with Optus Communications
and Myer Stores Limited.
Michael Capocchi is an integral part of
the Beam business, including managing
the day to day operations of the group
which occasions extensive domestic and
international travel.
In June 2016 David was recognised for
his significant and valuable contribution
to the Australian communications
industry with the presentation of the
Communications Ambassador 2016
award. The Australian Communications
Ambassador award is the highest honour
presented by ACOMMS Communications
Alliance and CommsDay each year.
Since retiring, David began working with
a number of tech startups in an advising
and investing capacity. He was announced
as Chairman for Pycom on July 1, 2017
and a Director of Beam Communications
Holdings Limited on November 9, 2017,
following investments in both. The start of
2018 saw David join the board of Lockbox
Technologies and on August 14, 2019 he
was announced as a board member for
MyNetFone Group Limited.
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ANNUAL REPORT 2020
Indemnification of Directors and Officers
During the year, the economic entity has paid
premiums in respect of an insurance contract
to indemnify it’s directors and officers against
liabilities that may arise from their positions.
Directors and officers indemnified include
the Company Secretary, all directors and
all executive officers participating in the
management of the economic entity.
Further disclosure required under section
300(9) of the Corporations Law is prohibited
under the terms of the insurance contract.
Directorships of Other Listed Companies
David Stewart was a non-executive director
of NetComm Wireless Limited until June 30,
2019 and has been a non-executive director
of MyNetFone Group Limited (ASX:MNF)
since August 14, 2019. No other director of
Beam Communications Holdings Limited has
been a director of a listed company in the
three years immediately before the end of the
financial year.
COMPANY SECRETARY
Dennis Frank Payne has held the position of
Company Secretary since 2010. Dennis joined
the Company in 2005 and has also served since
that date as Chief Financial Officer.
Prior to joining Beam Communications
Holdings Limited Dennis held senior financial
and commercial roles at Cadbury Schweppes
and Optus Communications. He has a
Bachelor of Economics and is a qualified CPA.
PRINCIPAL ACTIVITIES
The activities of the company and its
controlled entities during year were the
development and marketing of a range of
communication products and services, mainly
satellite based.
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BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
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“There honestly isn’t anything that
we didn’t like about the ZOLEO
Satellite Communicator.”
ANNUAL REPORT 2020
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OPERATING RESULTS AND
REVIEW OF ACTIVITIES
The Consolidated Group reports a total
comprehensive income (loss) of $(1,629,234)
for the FY2020 year, on total revenue and
other income of $16,841,164 (2019: total
comprehensive income of $339,129 on
revenue and other income of $18,520,528).
A summary of the result for the year is as follows:
Thuraya may still place further orders for
lockdown to contain the virus, and as key
the dual-band hotspot device in the current
overseas markets struggled with escalating
financial year, management decided it was
coronavirus cases. Revenue in these two
prudent in this volatile environment to
months were around 30% to 35% below the
write-down the entire remaining capitalised
same period in FY2019.
development cost for the device.
However, revenue rebounded in the following
This resulted in the Group’s statutory net
month such that the June quarter was only
profit after tax (NPAT) declining to a loss
15% below that derived in the corresponding
of $1.6 million due to the net $1.1 million
period of 2019. What is also heartening
Thuraya WE write-down and a $0.8 million
is that the second more severe lockdown
write off in respect to three discontinued
in Victoria has not impacted on Beam’s
Revenue
Other income
Deduct
Cost of goods sold,
research & development,
administrative, marketing
2020
$000
2019
$000
projects, so that resources and priorities
revenues as significantly as was sustained in
could be focused on major ‘pay-off’ projects:
the June quarter, although conditions remain
ZOLEO product enhancements and
highly unpredictable.
14,923 17,777
development of future Iridium Certus devices.
1,918
744
Excluding these one-off impairments, Beam’s
underlying FY2020 NPAT was $341,419
(FY2019: $339,000).
In spite of the sharp, but temporary impact
from COVID-19, sales of Beam’s base
products (i.e. docking units, fixed terminals
and accessories) in total still managed to
Notwithstanding the Thuraya WE setback,
reach the same levels as FY2019 with many
Beam recorded growth in other areas of
items experiencing growth.
and corporate expenses
13,832 16,417
its business. Some of the year’s highlights
included:
SatPhone Shop, Beam’s 100% owned on-line
retail business and Telstra dealership, also
3,009
2,104
- Delivered and invoiced 6,276 ZOLEO
enjoyed a similar rebound. Revenue from this
units in FY2020, another 16,474 units on
division in FY2020 increased 16% to $1.44
order for shipment this financial year, with
million, its highest on record.
Amortisation and impairment
4,311
1,179
further orders expected.
The Group’s profits were also bolstered
- Delivered and invoiced 5,000 Iridium GO!®
by an increase in airtime revenue and
Depreciation on fixed assets
53
63
units to Iridium under its sixth order,
management’s quick and decisive cost control
Interest excluding notional
163
140
with the seventh order to be delivered
program, which was implemented at the
in FY2021, taking total orders of this
onset of the pandemic.
Profit (loss) before income tax (1,518)
722
ingenious product to 45,000 units. Further
Tax (expense) / benefit
(112)
(383)
Net profit (loss) for the year
(1,629)
339
Total comprehensive income
(loss) for the year
(1,629)
339
orders are expected during FY2021
Cash and Funding
- Increased sales orders for existing Beam
Beam’s cash holdings at 30 June 2020 were
and SatPhone Shop products, driven in
$874,000, supported by an additional $2.8
part by the opening of the Indian market
million in undrawn debt facilities. In the 12
for the first time.
Operating profit (loss)
before amortisation,
depreciation, interest
and tax
Deduct
months to 30 June 2020 the Group generated
$1.3m cash inflow from trading activities net of
all operating costs.
The FY2020 result without the application of
AASB16 is immaterially different to the result shown
The principal activity of the Group during
FY2020 continued to be the manufacture
in the above table.
and global distribution of satellite
Subsequent to the end of FY2020, the
Performance and Profit
handheld phone accessories.
$500,000 term debt facility to Beam, which
communication terminals, docking units and
National Australia Bank provided a new
Beam Communications Holdings Limited’s
results for the year ended 30 June 2020
The launch of ZOLEO in January of this year
is particularly significant for Beam as the
were resilient despite being negatively
solution will generate royalties and recurring
provided the Group with total available funds
of $4.2 million. The new term facility is for
three years with an interest rate of just 4.5%.
impacted in the last quarter by the global
revenues for airtime subscriptions through the
Beam also delivered a positive overall total
COVID-19 pandemic as lockdowns and social
Group’s part ownership of the Zoleo Inc. JV.
cash movement in each of the last three
restrictions across key markets impinged on
demand for Beam’s products.
Demand for ZOLEO in the North American
market is outstanding as the region has
Against this challenging backdrop, Beam
not been hindered by restrictions on
recorded earnings before interest, tax,
movement to the same extent as Australia.
quarters of FY2020, which is a pleasing result
given the disruption caused by COVID-19 and
additional investments for ZOLEO and other
new product developments.
depreciation and amortisation (EBITDA) of
$3.0 million (FY2019: $2.1m) and trading
revenue of $14.9 million (FY19: $17.8m) for
the 2020 financial year ended 30 June.
Sales of ZOLEO in Australia have improved
The expenditure on major development
appreciably since May through direct sales
projects in the financial year amounted to
to customers (from SatPhone Shop, Amazon
$2.43 million and Beam is yet to receive the
Australia and eBay Australia) and through an
government’s R&D grant of approximately
Beam’s FY2019 record revenue was
expanding network of dealers.
$0.5 million, expected in October 2020. While
bolstered by a $3.85 million order for 3,000
The impact of COVID-19 was also felt in
Thuraya WE units. The Group did not receive
other parts of the business, particularly in
a follow-on order in FY2020, and while
April and May when Australia first went into
8
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Beam benefited from the JobKeeper support
package in the amount of $270,000 and the
BAS Cash Flow Boost of $62,500, this financial
assistance was not material to the Group’s
financial performance given the trading
the Group in fund raising activities, strategic
Other than the above, there have been no
difficulties overcome during FY2020. Beam
and corporate governance advice,
significant events since 30 June 2020.
may not qualify for phase two of JobKeeper,
which will commence in late September.
Mr David Stewart joined our board in
November 2017. David has been a keen
DIVIDENDS PROPOSED OR RECOMMENDED
Outlook and Projects
advisor to senior management in the
No dividends were paid or declared
rationalisation of development expenditure,
since the start of the financial year. No
While no one could have predicted how
providing experienced insight into the
recommendation for payment of dividends
challenging the last financial year was
communications industry both in Australia
has been made.
going to be, currently the FY2021 outlook
and overseas. David remains Beam’s major
is positive for Beam even as economic
shareholder, holding 20.62% of the shares and
ENVIRONMENTAL ISSUES
conditions remain highly volatile. There are a
assists the Group to expand in the satellite and
few reasons for the optimism.
non-satellite space.
The Consolidated Group’s operations are not
regulated by any significant environmental
Firstly, sales of ZOLEO are expected to
Beam Director Mr Carl Hung was re-elected
regulation under any Commonwealth, State
continue to grow significantly over the next
as a Director by shareholders at the Annual
or Territory laws.
12-months. The momentum achieved in the
General Meeting of 22 November 2019 and
North American market is an early indication
is also the President and CEO of Season
FUTURE DEVELOPMENTS
that Beam will experience similar traction in
Group, a major trading partner of Beam.
the Australian market as social restrictions
Season provides Beam with a range of sub-
are eased, plus expansion into other new
contract services including manufacturing
markets globally.
Beam is also close to signing new major
retailers to sell ZOLEO, following the
and engineering in China. Carl is Managing
Director of SGV1 Holdings Limited, which
holds 10.23% of the shares in the Company.
JV’s partnership with Cabela’s in Canada.
Mr Michael Capocchi is an Executive Director
Cabela’s is part of BPS Direct, LLC (Bass Pro
and holds the positions of Managing Director
Shops), which is the world’s largest outdoor
and Chief Executive Officer for all companies
equipment retailer with 40,000 employees an
in the Group. His base in the USA enables
annual turnover of around US$8 billion.
him to easily visit the Middle East and UK/
The company will continue the development
of the Satellite Communications Services and
related businesses.
SHARES ISSUED ON THE EXERCISE
OF OPTIONS
No ordinary shares of the Company were
issued during the year ended 30 June 2020
on the exercise of options.
DIRECTORS’ INTERESTS
Another growth opportunity for Beam is the
development and launch of its Iridium Certus®
devices. The first of these next-gen devices is
anticipated to be launched in FY2021.
Europe, where many core clients are based, as
well as domestically within the US. Michael
The relevant interests of the Directors in
travelled to Australia every 4-6 weeks prior to
the securities of the Company are detailed
Australia’s travel restrictions, has seen little
in the Remuneration Report as part of the
interruption to his utility and client access as
Directors’ Report.
Meanwhile, Beam’s base business is also well
a result of COVID-19 and retains direct and
positioned to keep growing organically over
daily contact with management. Michael is
SHARES UNDER OPTION
the next 12 months. Demand for Iridium GO!
also a significant shareholder in the Company.
At the date of this report, the unissued
is expected to remain robust for the next
few years at least, and Beam is expecting
to receive new orders for the device from
Iridium in the current financial year.
The Directors believe the return to a significant
ordinary shares of the Company under option
profit in FY2019 and the underlying trading
are as follows:
profit in FY2020 indicate the Group’s
successful efforts to improve core and new
The opening of the Indian market to Inmarsat
product offerings and sales strategies, as well as
is likely to lead to further orders for Beam-
expanding the business’s scale and investment
branded terminals and accessories as these
capacity via incremental yet sustainable
are the only devices, along with the Inmarsat
revenue and profit expansion while narrowing
Issue
Date of
Exercise
Date
Expiry
Price
Number
Under
Option
24.12.15 31.08.20 $0.1950
789,525
handset, that are approved for sale using the
the focus on future developments to major and
24.12.15 30.11.20 $0.1950
907,500
Inmarsat GSPS service in India currently.
significant projects only.
1,697,025
The continued strength and resilience of
Beam’s core business will help support the
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
growth of ZOLEO and the development for
Other than those noted above there were no
Beam’s Iridium Certus® devices in FY2021
significant changes in the state of affairs of the
and beyond.
Consolidated Group during the financial year.
Directors and Investors
EVENTS AFTER REPORTING DATE
No new securities have been issued since
On 1 July 2020 the Group received a three-
September 2017 and the Board of Directors
has remained the same since November 2017.
year term loan from the National Australia
Bank of $500,000, partially secured by the
Mr Simon Wallace, a shareholder in the
Company, has been a Director for five years
and is currently Chairman of the Board. Simon
has lengthy and detailed expertise in legal and
commercial matters and leads the Board and
Australian government. On 20 August 2020
SGV1 Holdings Limited extended the expiry
date of the US$2m secured loan facility
provided to the Group from 1 January 2021
until 1 April 2022 (refer also Note 13).
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ANNUAL REPORT 2020
DIRECTORS’ MEETINGS
- long-term incentive share option scheme;
Corporations Act 2001 the following table
and
summarises the Group’s performance over
- other benefits including superannuation.
the last 5 years.
During the year ended 30 June 2020 the
Company held 16 meetings of Directors
(including Audit Committee meetings).
Attendances by each Director during the
year were:
Directors
meetings
Commitees
considers the following:
Fixed Salary
The salary of senior executives is
determined from a review of the market and
reflects core performance requirements and
expectations. In addition, the Company
- The scope of the individual’s role;
- The individual’s level of skill and
experience;
- Legal and industrial obligations;
- Labour market conditions; and
- The complexity of the Company’s business.
Performance Bonus
The purpose of the performance bonus is to
reward an individual’s actual achievement of
performance objectives and for materially
improved Company performance.
Consequently, performance-based
remuneration is paid where a clear
contribution to successful outcomes for the
company is demonstrated and the individual
attains and excels against pre-agreed key
performance indicators during a
performance cycle.
0
2
0
2
9
1
0
2
8
1
0
2
7
1
0
2
6
1
0
2
Net profit/
(loss) before
tax ($’000)
(1,517)
772 (1,432)
(423)
417
3,009 2,104 (607)
129 1,363
EBITDA
($’000)
Basic
earnings per
share
(0.31)
0.64 (3.07)
(1.29) 1.12
Share price at
30 June ($)
0.17
0.27
0.16 0.13 0.23
Market
Capitalisation
at 30 June
8.99 14.28
8.46 5.61 9.93
Dividends
per share
Nil
Nil
Nil
Nil
Nil
The Board believes the above table
For FY2020 the Managing Director had a
illustrates the positive, albeit not linear,
performance bonus potential of 15% of the
direction the Group has taken over the past
Group operating profit before interest, tax,
five years and is reflective of the
depreciation and amortisation (EBITDA)
performance of senior executives during
above $1,000,000 for the financial year, plus
that period. Due to the nature of the Group’s
$20,000 and a 1% increase in fixed salary for
business, there are often major influences on
Director
M Capocchi
D Stewart
C Hung
S Wallace
d
e
d
n
e
t
t
A
13
13
13
13
m
u
m
i
x
a
M
d
e
d
n
e
t
t
A
e
l
b
i
s
s
o
P
d
e
d
n
e
t
t
A
m
u
m
i
x
a
M
d
e
d
n
e
t
t
A
e
l
b
i
s
s
o
P
13
13
13
13
0
0
3
3
0
0
3
3
Each Director attended every scheduled
meeting of the Board and of each Committee
of which he is a member.
REMUNERATION REPORT
(Audited)
This report details the nature and amount of
remuneration for each director of Beam
Communications Holdings Limited, and for the
executives receiving the highest remuneration.
Remuneration Policy
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The Company is committed to
FY2021, payable upon the achievement of
a particular financial year’s profit result. In
remunerating its executive directors and
each of 5 KPIs set by the Board at the
FY2020 the decision was made to terminate
senior executives in a manner that is
beginning of the financial year. The Group
three development projects in order to focus
market-competitive, consistent with best
achieved an EBITDA of $3,009,121 and
development efforts on ZOLEO
practice and which supports the interests
therefore the potential performance bonus
improvements and Iridium Certus devices, at
of shareholders. The Company aims to
became payable. In addition, the Managing
a cost of $820,000. In addition, the Group
align the interests of executive directors
Director achieved 1 of the KPIs. Since May
took the conservative approach to the
and senior executives with those of
shareholders by remunerating through
2020 employees have contributed 20% of
Thuraya WE project by writing off the
their salary payments to COVID-19 relief
remainder of that project’s capitalised value
performance and long-term incentive plans
savings and in a similar manner the
at a net cost of $1,105,000. Excluding these
in addition to fixed remuneration.
Managing Director agreed to reduce his
one-off write-downs, the underlying positive
FY2020 bonus by 50%.
NPBT and NPAT recognises the fundamental
The remuneration of Non-executive
Directors is determined by the Board
having regard to the level of fees paid to
non-executive directors by other
Two senior sales executives, who have
contractual performance-based bonus
entitlements and have achieved above their
companies of similar size and stature and in
minimum sales-related target levels in
aggregate must not exceed the maximum
FY2020, have also agreed to reduce their
annual amount approved by the Company’s
bonus entitlements by approximately 50%.
shareholders, currently $500,000, as
No other key management executive has a
determined at the General Meeting held on
contractual performance bonus entitlement.
3 August 2007.
In assessing the relative performance of the
Senior executives’ remuneration consists of
senior executives and the Group as a whole
the following elements:
- fixed salary;
- short-term incentive bonus where
applicable based on performance;
measured against the primary objective of
enhancing shareholder value over time, the
Board has regard to key financial indicators.
In accordance with Section 300A of the
10
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
strength in performance.
Long-term Incentives
The Company’s Share Options Incentive
Plan, in which executive directors and
senior executives may participate, was
approved by shareholders on 27 October
2017 and authorises the Directors to issue
options in respect to up to 10% of the
shares on issue at a given time.
The Company ensures that the payment of
equity-based executive remuneration is
made in accordance with thresholds set in
plans approved by shareholders.
No options were issued to key
management personnel or Directors
during FY2018 – FY2020 while the
Company evaluates the effectiveness of
share options as incentives.
Other Benefits
Senior executives are entitled to statutory
superannuation and other bonus payments
subject to the discretion of the Managing
Director and the Board.
Employment Contracts
Employment Contracts of Senior Executives
An employment contract for the Managing
Director was executed by the Company
and Michael Capocchi on 30 June 2018
under which he continued as Managing
Director and CEO of the Company for a
minimum term of two years. The contract
can be terminated by either the Company
or Mr Capocchi, with a minimum of 9
months’ notice, subject to completion of
the minimum term.
The terms of Mr Capocchi’s contract were
negotiated such that, compared to his
employment terms that applied prior to
that date, his fixed base salary was
reduced and a greater portion of his
remuneration was at risk. The renewal of
Mr Capocchi’s contract is presently being
negotiated.
All other key management personnel are
permanent employees.
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REMUNERATION REPORT (continued)
(a) Names and positions held of consolidated group and parent entity
Key Management Personnel in office at any time during the financial year are:
Directors
Mr S Wallace
Mr M Capocchi
Mr C Hung
Mr D Stewart
Non-Executive Chairman
Executive Managing Director
Non-Executive Director
Non-Executive Director
Other key management personnel
Mr D Payne
Mr W Christie
Chief Financial Officer and Company Secretary
Chief Technical Officer
(b) Details of remuneration for the year
The remuneration for each director and each of the other key management personnel of the consolidated group receiving the highest
remuneration during the year was as follows:
Short-term employee benefits
Post-
employment
benefits
Other long-
term
benefits
Termi-
nation
benefits
Share-
based
payments
2020
Cash
salary &
fees
$
Cash
bonus &
Commissions
$
Motor
vehicle
& other
allowances
$
Employee
benefits
payable
[b]
$
Super-
annuation
$
Employee
benefits
payable
$
Eligible
termi-
nation
benefits
$
Options
[a]
$
Total
$
Performance
related
%
Remuneration
consisting of
options
%
Directors
Mr S Wallace
40,277
Mr M Capocchi [c] 448,645
160,684
4,906
34,220
43,087
9,778
Mr C Hung
31,250
Mr D Stewart
31,250
Other
Mr D Payne
187,420
Mr W Christie
185,386
-
-
-
T
R
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-
-
(2,876)
17,767
(13,155)
12,187
17,574
16,742
Total
924,228
160,684
4,906
43,531
78,428
13,365
-
-
-
-
-
-
-
-
40,277
0.00%
701,320
22.91%
31,250
0.00%
31,250
0.00%
0.00%
0.00%
189,156
0.00%
231,889
0.00%
0.00%
0.00%
1,225,142
Short-term employee benefits
Post-
employ-
ment
benefits
Other
long-
term
benefits
Termi-
nation
benefits
Share-
based
payments
Cash
salary &
fees
$
Cash
bonus &
Commissions
$
Motor
vehicle
& other
allowances
$
Employee
benefits
payable
[b]
$
Super-
annuation
$
Employee
benefits
payable
$
Eligible
termi-
nation
benefits
$
Options
[a]
$
Total
$
Performance
related
%
Remuneration
consisting of
options
%
2019
Directors
Mr S Wallace
41,666
Mr M Capocchi [c]
418,688
215,806
27,335
23,725
41,723
8,297
Mr C Hung
41,666
Mr D Stewart
41,666
Other
Mr D Payne
189,547
Mr W Christie
172,549
-
-
-
-
-
(1,142)
18,007
(8,379)
(8,165)
16,392
4,306
Total
905,782
215,806
27,335
14,418
76,122
4,224
-
-
-
-
-
-
-
-
41,666
0.00%
735,574
29.34%
41,666
41,666
0.00%
0.00%
198,033
185,082
0.00%
0.00%
1,243,687
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
[a] Option based compensation relates to the value of options issued to date and brought to account pro-rata to the time period from the date of granting to the date of
vesting, except where Accounting Standard AASB 2 required expensing to begin from the commencement of service related to those options, notwithstanding that the
issue of those options, in the case of Directors was subject to shareholder approval, and in the case of key management employees, subject to performance review.
[b]
Employee benefits payable represents net increase in benefits payable charged to the consolidated statement of profit or loss and other
comprehensive income in the current year.
[c]
The majority of Mr Capocchi’s remuneration is in US dollars. For 2020 his remuneration has been converted into AU dollars at the exchange rate on 30 June 2020 of 0.6863.
12
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Short-term employee benefits
employment
term
Post-
Other long-
Termi-
nation
Share-
based
benefits
benefits
benefits
payments
2020
Cash
Cash
salary &
bonus &
fees
Commissions
$
$
Motor
vehicle
& other
Employee
benefits
payable
allowances
$
[b]
$
Super-
annuation
$
Employee
benefits
payable
$
Eligible
termi-
nation
benefits
$
Options
Performance
[a]
$
Total
$
related
%
Remuneration
consisting of
options
%
Mr M Capocchi [c] 448,645
160,684
4,906
34,220
43,087
9,778
Directors
Mr S Wallace
40,277
Mr C Hung
31,250
Mr D Stewart
31,250
Other
Mr D Payne
187,420
Mr W Christie
185,386
-
-
-
-
-
(2,876)
17,767
(13,155)
12,187
17,574
16,742
189,156
0.00%
231,889
0.00%
0.00%
0.00%
Total
924,228
160,684
4,906
43,531
78,428
13,365
-
1,225,142
40,277
0.00%
701,320
22.91%
31,250
0.00%
31,250
0.00%
0.00%
0.00%
-
-
-
-
-
-
-
[a] Option based compensation relates to the value of options issued to date and brought to account pro-rata to the time period from the date of granting to the date of
vesting, except where Accounting Standard AASB 2 required expensing to begin from the commencement of service related to those options, notwithstanding that the
issue of those options, in the case of Directors was subject to shareholder approval, and in the case of key management employees, subject to performance review.
[b]
Employee benefits payable represents net increase in benefits payable charged to the consolidated statement of profit or loss and other
comprehensive income in the current year.
[c]
The majority of Mr Capocchi’s remuneration is in US dollars. For 2020 his remuneration has been converted into AU dollars at the exchange rate on 30 June 2020 of 0.6863.
REMUNERATION REPORT (continued)
(c) (i) Options granted as part of remuneration for the year
Granted
number
Value per
option at grant
date
$
Value of
options
granted
during the
year
$
Value of
options
exercised
during year
$
Value of
options lapsed
during year
$
2020
Grant date
Directors
Mr S Wallace
Mr M Capocchi
Mr C Hung
Mr D Stewart
Other
Mr D Payne
Mr W Christie
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
-
-
-
-
-
-
-
-
(21,916)
(31,309)
(21,916)
(31,309)
2019
Grant date
Granted
number
Value per
option at grant
date
$
Value of
options
granted during
the year
$
Value of
options
exercised
during year
$
Value of
options lapsed
during year
$
Total
$
Directors
Mr S Wallace
Mr M Capocchi
Mr C Hung
Mr D Stewart
Other
Mr D Payne
Mr W Christie
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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ANNUAL REPORT 2020
REMUNERATION REPORT (continued)
(c) (ii) Options granted and/or vested during the year
2020
Vested No.
Granted No.
Grant date
Value per
option at
grant date $
Exercise price
$
Expiry date
First
exercise
date
Last exercise
date
Terms & conditions for each grant
Directors
Mr S Wallace
Mr M Capocchi
Mr C Hung
Mr D Stewart
Other
Mr D Payne
Mr W Christie
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
T
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2019
Vested No.
Granted No.
Grant date
option at
Value per
grant date $
Exercise
price $
First
Expiry date
exercise
date
Last exercise
date
Terms & conditions for each grant
Directors
Mr S Wallace
Mr M Capocchi
Mr C Hung
Mr D Stewart
Other
Mr D Payne
Mr W Christie
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
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REMUNERATION REPORT (continued)
(d) Option holdings
The number of options over ordinary shares in the Company held during the financial year by each key management person including their
personally related parties is set out below.
Balance
1.07.19
Granted as
Remuneration
Issued as
Equity
Investment
Options
Exercised
Options
Lapsed
Balance
30.06.20
Total Vested
30.06.20
Exercisable
30.06.20
Unexer-
cisable
30.06.20
2020
Directors
Mr S Wallace
-
Mr M Capocchi
907,500
Mr C Hung
Mr D Stewart
-
-
Other
Mr D Payne
381,150
Mr W Christie
544,500
Total
1,833,150
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
907,500
907,500
907,500
-
-
-
-
-
-
(190,575)
190,575
190,575
190,575
(272,250)
272,250
272,250
272,250
(462,825)
1,370,325
1,370,325
1,370,325
-
-
-
-
-
-
-
Balance
1.07.18
Granted as
Remuneration
Issued as
Equity
Investment
Options
Exercised
Options
Lapsed
Balance
30.06.19
Total
Vested
30.06.19
Exercisable
30.06.19
Unexer-
cisable
30.06.19
2019
Directors
Mr S Wallace
-
Mr M Capocchi
907,500
Mr C Hung
Mr D Stewart
-
-
Other
Mr D Payne
381,150
Mr W Christie
544,500
-
-
-
-
-
-
Total
1,833,150
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
907,500
907,500
907,500
-
-
-
-
-
-
381,150
381,150
381,150
544,500
544,500
544,500
-
-
-
-
-
-
1,833,150
1,833,150
1,833,150
-
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ANNUAL REPORT 2020
REMUNERATION REPORT (continued)
(e) Share Holdings
The number of shares in the Company held during the financial year by each key management person including their personally related parties are set
out below.
2020
Directors
Balance
1.07.19
Received as
Remuneration
Options
Exercised
Placement
Net Change
Issue [b]
Other [a]
Balance
30.06.20
Mr S Wallace
178,600
Mr M Capocchi
1,603,899
Mr C Hung
9,243,207
Mr D Stewart
10,540,000
Other
Mr D Payne
Mr W Christie
328,570
62,778
21,957,054
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,400
-
(3,833,333)
200,000
1,603,899
5,409,874
365,000
10,905,000
-
-
328,570
62,778
3,446,933
18,510,121
T
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Balance
1.07.18
Received as
Remuneration
Options
Exercised
Placement
Net Change
Issue [b]
Other [a]
Balance
30.06.19
2019
Directors
Mr S Wallace
178,600
Mr M Capocchi
1,603,899
Mr C Hung
9,243,207
Mr D Stewart
10,540,000
Other
Mr D Payne
Mr W Christie
328,570
62,778
21,957,054
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
178,600
1,603,899
9,243,207
10,540,000
328,570
62,778
21,957,054
[a] Net Change Other refers to shares purchased or sold on-market or off-market at current market prices during the financial year.
16
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
REMUNERATION REPORT (continued)
(f) Shares issued on exercise of remuneration options
No options were exercised by key management personnel during the financial year ended 30 June 2020 or the comparative year ended 30 June 2019.
(g) Voting and comments made at the Company’s 2019 Annual General Meeting (AGM)
At the Company’s most recent AGM, a resolution to adopt the prior year remuneration report was put to the vote and at least 75% of ‘yes’ votes
were cast for adoption of that report. No comments were made on the remuneration report at the AGM.
AUDITOR
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
NON AUDIT SERVICES
No non audit services were undertaken by the external auditors during the year ended 30 June 2020.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this
directors’ report.
Signed in accordance with a resolution of the Board of Directors dated 27 August 2020.
Mr Simon Wallace
Chairman
Date: 28 August 2020
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[a] Net Change Other refers to shares purchased or sold on-market or off-market at current market prices during the financial year.
ANNUAL REPORT 2020
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Beam Communications Holdings 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:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
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M PARAMESWARAN
Partner
Dated: 28 August 2020
Melbourne, Victoria
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M G 2 0 0 LT E G a t e w a y
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Increased high speed performance
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fast connectivity
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CORPORATE GOVERNANCE
a larger company such as Directors
Chairman’s Appointment and Responsibilities
The Directors of Beam Communications
Holdings Limited (BCC or the Company) are
committed to protecting and enhancing
shareholder value and conducting the company’s
business ethically and in accordance with the
highest standards of corporate governance.
In accordance with the ASX Corporate
Governance Council’s Corporate Governance
Principles and Recommendations: 3rd Edition
(the Principles), this corporate governance
statement reports on the Company’s adoption of
the Principles on an exception basis. This
statement provides specific information
whereby disclosure is required of any
recommendations that have not been adopted
by the Company, together with the reasons why
they have not been adopted. The Company’s
corporate governance principles and policies are
therefore structured with reference to the
Principles, which are as follows:
1. Lay solid foundations for management
and oversight.
2. Structure the Board to add value.
3. Act ethically and responsibly.
Nomination, Risk Management and
The Chairman is appointed by the board from
Remuneration are dealt with by the full Board
the non-executive directors. The Chairman:
as separate and specific agenda items in
accordance with the principles and policies
set down in the Company’s corporate
governance programme.
• provides appropriate leadership to the
board and the Company;
• ensures membership of the board
is balanced and appropriate for the
The Company has adopted a Board Charter which
Company’s needs;
details the functions and responsibilities of the
•
facilitates board discussions to ensure
Board of Directors. A copy of the Board Charter is
the core issues facing the organisation
on the Company’s website. The employment
are addressed;
contract between the Company and the Chief
• maintains a regular dialogue and
Executive Officer and the letter of engagement
mentor relationship with the Chief
for the Chief Financial Officer and senior
Executive Officer;
executives details the terms of employment, job
• monitors board performance; and
specifications and responsibilities.
• guides and promotes the on-going
effectiveness and development of the
The Role of the Board of Directors
board and individual directors.
The BCC is responsible to its shareholders for
the protection and enhancement of long term
Conduct of Board Business
shareholder value.
To fulfil this role the Board is responsible for:
• oversight of the Group, including its
controls, risk management, financial
The Board normally holds monthly formal
Board meetings and will also meet whenever
necessary to carry out its responsibilities.
In the year ended 30 June 2020, the Board
and/or its committees met 16 times. When
structures and accountability systems;
conducting Board business, Directors have a
4. Safeguard integrity in corporate reporting.
• setting strategic direction for
duty to question, request information, raise
5. Make timely and balanced disclosure.
6. Respect the rights of security holders.
7. Recognise and manage risk.
8. Remunerate fairly and responsibly.
management with a view to maximising
any issue of concern, and fully canvas all
shareholder value;
aspects of any issue confronting the Company
•
input into and final approval of
and vote on any resolution according to their
strategic plans and goal and
own judgment. Directors keep confidential,
performance objectives and key
board discussions, deliberations and
1. Lay Solid Foundations for Management and
operational and financial matters;
decisions that are not publicly known.
Oversight
• determining dividend payments;
Recommendation 1.1: The Board and Senior
Management – Roles and Responsibilities
• selecting, appointing and reviewing the
Access to Information
performance of the Chief Executive
Directors are encouraged to access members
Officer (CEO);
of the senior management team at any time to
Board Processes
• ratifying the appointment and, where
request relevant information in accordance
The Board recognises that its responsibilities
appropriate, the removal of the Chief
with protocols adopted by the Board. Where
should accord with the following general
Financial Officer (CFO) and Company
Directors perceive an irregularity in a
principles:
• the Board should be made up of a
majority of Independent Directors;
• the Chairman of the Board should be
an Independent Director;
• the roles of Chairman and Chief
Executive Officer should not be
exercised by the same person;
• the Board should meet on a monthly
basis;
• all available information in connection
with items to be discussed at a meeting
of the Board shall be provided to each
Director prior to that meeting; and
• Directors are entitled to seek
independent professional advice.
To assist in the execution of its
Secretary;
Company related matter, they are entitled to
• approval of annual and half yearly
seek independent advice at the Company’s
financial reports and related Australian
expense. Directors must ensure that the costs
Stock Exchange reports;
• selecting and appointing new
non-executive directors;
• approving major capital expenditure
and acquisitions;
• evaluating the Board’s performance
and that of individual directors;
• reviewing and ratifying systems of
risk management and internal
are reasonable and must inform the Chairman
before the advice is sought. The advice must
be made available to the rest of the Board.
Independent Professional Advice
Each Director has the right to seek
independent legal and other professional
advice at the Company’s expense concerning
any aspect of the Company’s operations or
compliance and control, codes of
undertakings in order to fulfil their duties and
conduct and legal compliance;
• monitoring senior management’s
performance and implementation of
strategy, and ensuring appropriate
resources are available;
responsibilities as directors.
Conflicts of Interest
Directors are required to continually monitor
and disclose any potential conflicts of interest
responsibilities the Board has established an
• dealing with approaches to take over
that may arise. Directors must:
Audit Committee with a formalised charter
the company; and
and operating principles. Activities which
• approving and monitoring financial and
may be conducted by separate committees in
other reporting.
• disclose to the Board any actual or
potential conflicts of interest that may
exist as soon as the situation arises;
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• take necessary and reasonable steps to
Board of a small public company the
to the Board for ensuring compliance with
resolve any conflict of interest within
selection and appointment of Directors is
Board procedures and governance matters.
an appropriate period, if required by
such an important task that it should be the
The Company Secretary is accountable
the Board or deemed appropriate by
responsibility of the entire Board to consider
directly to the Board, through the Chair, on
that director; and
the nominations process. The structure of the
all matters to do with the proper functioning
• comply with the Corporations Act
Board is reviewed annually as to qualifications,
of the Board. The Company Secretary is also
requirements about disclosing
skills, experience and diversity to ensure
responsible for overseeing and co-ordinating
interests and restrictions on voting.
the Board has an appropriate mix. In a
disclosure of information to the ASX as well
Directors should discuss with the Chairman
any other proposed Board or executive
appointments they are considering
undertaking and advise the Company of their
appointments to other companies as soon as
4-member Board the highest requirement is
as communicating with the ASX
for appropriate skill. Where a vacancy exists
or there is a need for particular skills, the
Board will determine the selection criteria and
Recommendation 1.5: Diversity Policy
The Company has taken measures to establish
identify and appoint a suitable candidate.
a corporate culture in which the principles of
possible after the appointment is made.
The Company will undertake appropriate
The same requirement exists for related party
transactions including financial transactions
with the Company. Related party transactions
are reported in writing to the Company
Secretary and where appropriate, raised for
consideration at the next board meeting.
Retirement of Directors
One-third of the Directors are required to
retire by rotation at each Annual General
Meeting (AGM). The Directors to retire at
each AGM are those who have been longest
in office since their last election. Where
Directors have served for equal periods, they
may agree amongst themselves or determine
by lot who will retire. A Director must retire at
the third AGM since last elected or re-elected.
A Director appointed as an additional or
casual director by the Board will hold office
until the next AGM when the Director may be
checks before appointing a person or
putting forward a candidate for election
as a Director and provide shareholders
with this information. Candidates will be
assessed through interviews, meetings and
background reference checks as appropriate.
External advisors may be used in
this process. The Company will provide
shareholders with all material information
diversity are embedded. By promoting and
supporting transparent recruiting processes,
flexible work practices, an enlightened code
of conduct, equal employment opportunity
policies and clear reporting of outcomes, the
Board feels that the objectives of diversity
will be achieved. The results of recruiting
and the composition of staff are reported by
the Chief Executive Officer and reviewed at
monthly Board meetings.
in its possession relevant to the decision
The Board, at this time, has not established
on whether or not to elect (or re-elect) a
an explicit policy on diversity or measurable
Director, either in the notice of the meeting
objectives for achieving gender diversity.
at which the election of the Director is to
Because of the size of the Company (37 staff
be held, or by including in the notice a clear
including Board members, as at the date of
reference to the location on the Company’s
this report), the Board is of the view that the
website, Annual Report or other document
scale and nature of the Company’s operations
lodged with ASX where the information
does not currently lend itself to an effective
can be found. Directors appointed by the
and meaningful application of a targeted
Board must stand for re-election at the next
diversity policy.
meeting of shareholders.
Rather, the Board recognises the positive
re-elected. This re-election will be in addition
Further information regarding Director
benefits for the organisation of increased
to any rotational retirements.
nominations can be found in the Company’s
diversity, especially gender, and has sought to
Election of Directors Policy as posted on the
integrate diversity objectives within the existing
A CEO, if also a Managing Director, is not
subject to retirement by rotation and is not
to be taken into account in determining the
Company’s website.
policies and procedures of the Company. The
Board intends to reconsider the adoption of a
formal diversity policy periodically.
rotation of retirement of Directors.
Recommendation 1.3: Terms of Appointment –
Functions of Senior Executives
Directors and Senior Executives
Each new Non-Executive Director will
At the date of this report the Company has
a total staff excluding Board members of 33
The Chief Executive Officer reports to the
receive a letter formalising their appointment
employees of which 21% ([7 employees) are
Board and is responsible for the operation and
and outlining the material terms of their
women. The Senior Executive team is made
administration of the Company including the
appointment. Non-Executive Directors of the
up of 4 managers including one female. At this
implementation of the Company’s strategies,
Company have not been appointed for fixed
time there are no women on the Board which
plans, policies and control programmes. He
terms. Senior Executives will generally have
comprises 4 positions.
is supported by a management team whose
written employment agreements with the
responsibilities are delineated by formal
Company setting out their duties, obligations
Recommendation 1.6 and 1.7 – Performance
authority delegations. The team meets
and remuneration.
Review and Evaluation
regularly to co-ordinate activities and to
review and monitor performance.
Recommendation 1.2: Board Nominations
Appointment of Directors
The Company has not established a
nomination committee for recommending the
appointment of Directors.
Given the nature and size of the Company,
the Board considers that as a 4-member
The remuneration paid/payable to the
Evaluating the Performance of Directors
Company’s ‘key management personnel’ is
The Board has adopted a self-evaluation
outlined within the Remuneration Report in
process to measure its own performance and
the Company’s latest Annual Report.
the performance of its Committees.
Recommendation 1.4: The Company Secretary
The Company Secretary is appointed by the
Board and is responsible for developing and
maintaining the systems and processes that
are appropriate for the Board to fulfil its
role. The Company Secretary is responsible
On an annual basis, the Chairman facilitates
a discussion and evaluation of the Board’s
performance in accordance with this
process. This includes discussions about
the Board’s role, processes, performance
and other relevant issues. Each Director’s
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performance is reviewed by the Chairman
of disciplines as required for the proper
The names, qualifications and experience of
and Board prior to the Director standing for
management and oversight of the Company’s
each Director of the Company are detailed in
re-election. Performance evaluations will take
operations, as having regard to the scale and
the Directors’ Report in the Annual Report.
place during September at the same time as
nature of its activities.
those for all staff members. A performance
evaluation was undertaken during the
reporting period.
If the contribution of a Non-Executive
Director appears to a majority of Directors
to be less than adequate, they may direct the
Chairman to inform that Director accordingly
and ask that person to consider his or her
position on the Board. If the Director takes no
action in response, a circulated minute signed
by a majority of Directors will authorise
the Company Secretary to inform the
shareholders that the Board will not support
the re-election of the Director at the general
meeting where they are next due to offer for
re-election.
The Board skills matrix set out below describes
the skills, experience and expertise that the
Board would look to maintain and build on:
•
•
•
•
•
capital markets;
corporate finance;
regulatory and compliance;
operations;
legal;
sales;
•
• marketing
•
corporate governance; and
•
financial and business acumen.
Recommendation 2.5: Independent Chairman
The Chairman, Mr Simon Wallace, is the only
independent Non-Executive Director of
the Company at this time. Mr Wallace was
appointed as Chairman of the Company on
22 December 2016, based on his extensive
experience in legal and commercial matters,
project finance and fundraising background
and his experience as a Director including of
an ASX-listed entity.
The Chief Executive Officer of the Company is
Mr Michael Capocchi.
Recommendations 2.3 and 2.4: Independent
Directors
Directors Independence
Recommendation 2.6: Induction of New
Directors
The Company has a program for inducting
new Directors. This includes giving new
Evaluating the Performance of Senior
At the date on which the Directors’ report
Directors a full briefing about the nature of
Executives
is made out, the Company’s Board has 4
the business, current issues, the corporate
Arrangements put in place by the Board to
Directors. The Board currently consists of
strategy and the expectations of the Board
monitor the performance of the Group’s key
three Non-Executive Directors. At this time
concerning the performance of the Directors
executives include:
only one (Mr Simon Wallace) of the three Non-
and access to all employees to gain full
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• regular monthly reporting submitted
to the Board and attendance at all
Board Meetings by the Chief Executive
Officer and Chief Financial Officer;
• a review by the Board of the Group’s
financial performance and revised
forecast results on a monthly and
annual basis at Board meetings at
which reports are presented by the key
executives; and
Executive Directors is considered by the Board
background to the Company’s operations.
to be independent, and as such the Company
Directors are encouraged to attend director
does not comply with Recommendation
training and professional development
2.4 of the Corporate Governance Council,
courses, as may be required to enable them
which recommends that a majority of Board
to develop and maintain the skills and
members should be independent. However, the
knowledge needed to effectively perform
Board considers that both its structure and
their roles as Directors, at the Company’s
composition are appropriate given the size of
expense (as approved by the Chairman and or
the Group and that the interests of shareholders
the Board, as appropriate and applicable).
are well met.
• an evaluation of the detailed
The Board regularly assesses its composition,
3. Act Ethically and Responsibly
presentations made by the Chief
having regard to the nature and size of the
Recommendation 3.1: Act Ethically and
Executive Officer and his direct reports
Company’s operations and the relevant skills,
Responsibly
during business planning / strategy
knowledge, and experience of each Board member.
Code of Conduct and Corporate Ethics
meetings which are at least bi-annual.
A performance evaluation was undertaken
during the reporting period.
2. Structure Board to Add Value
Recommendation 2.1: Nomination Committee
Due to the small size of the Board and the
In the interest of clear disclosure:
As part of the Board’s commitment to the
• Mr Carl Hung, a Non-Executive
Director, is also the President and
CEO of Season Group. The Company
has subcontracted manufacturing on
an arms-length basis to Season Group
and Mr Hung, through SGV1 Holdings
highest standard of personal and corporate
behaviour, the Company adopts a Code of
Conduct to guide executives, management
and employees in carrying out their duties
and responsibilities. The code of conduct
covers such matters as:
Company’s current level of operations,
Limited, holds a relevant interest in
the Company does not have a separate
5,409,874 shares in the Company,
nomination committee. Nominations for
representing 10.23% of the Company’s
positions on the Board are considered by the
issued shares and is thereby a
entire Board.
substantial holder.
• responsibilities to shareholders;
• compliance with laws and regulations;
• relations with customers and suppliers;
• ethical responsibilities including
responsibility for reporting and
Recommendation 2.2: Skills, Knowledge and
Experience
Directors are appointed based on the specific
• Mr David Stewart, a Non-Executive
Director, is not regarded as being
investigating unethical practices;
• employment practices including a
independent, as two companies
fair and open approach to all forms of
associated with and/ or controlled by
diversity; and
business, industry and governance skills and
Mr Stewart in total hold a relevant
• responsibilities to the environment and
experience as required by the Company. The
interest in 10,905,000 shares in the
the community.
Board recognises the need for Directors
Company, representing 20.62% of the
to have a relevant and applicable range of
issued capital of the Company and Mr
skills and personal experience in a range
Stewart is thereby a substantial holder.
The Code of Conduct is available at the
Company’s website.
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In addition to the Code of Conduct, the
The one Independent Director on the Board is a
The Company’s Audit Committee has a formal
Company has established a specific Corporate
member of the Audit Committee. Mr Carl Hung
charter setting out the Committee’s role and
Ethics Policy setting out the Company’s
although not an Independent Director was
responsibilities. The charter is posted on the
behavioural expectations of its employees
appointed Chairman of the Audit Committee
Company’s website.
when conducting business in Australia and
due to his accounting qualifications and
internationally and specifically aims to
commercial experience.
maintain the good standing and reputation
of the Company along with highlighting the
importance of anti-corruption practices to
its employees and directors. The Corporate
Ethics Policy is also available at the website.
The Company’s objective is to maintain and
further develop its business to increase
shareholder value while also adding value for
customers, employees and other stakeholders.
To ensure this occurs, the Group conducts its
business within the ethical responsibilities
documented and outlined in the Company’s
Code of Conduct and Corporate Ethics Policy.
4. Safeguard Integrity in Corporate Reporting
Recommendation 4.1: Audit Committee
The Board has established an Audit
The Audit Committee assists the Board
to discharge its corporate governance
responsibilities, in regard to the business’
relationship with, and the independence of, the
external auditors. It especially:
Recommendation 4.2: Approval of
Financial Statements
The Board receives regular reports about the
financial condition and operational results of
the Company and its controlled entities. The
CEO and CFO periodically provide formal
statements to the Board that, in all material
• recommends appointment of external
aspects, the Company’s financial statements
auditors and fees;
present a true and fair view of the Company’s
• ensures reliability and integrity of
financial condition and operational results.
disclosure in the financial statements
and external related financial
communications, although ultimate
responsibility rests with the full Board;
• reviews compliance with statutory
responsibilities;
• reviews budgets and accounting policy;
• ensures maintenance of an effective
framework of business risk
The CEO and the CFO each provide
declarations to the Board in accordance with
Section 295A of the Corporations Act 2001
confirming that in their opinion, with regard
to risk management and internal compliance
and control systems:
i. the statements made with respect to
the integrity of financial statements
Committee to consider certain issues and
management including compliance and
and notes thereto are founded on a
functions in further detail. The chairman of
internal controls and monitoring of the
sound system of risk management
the Audit Committee reports to the Board
internal audit function;
and internal control systems which,
on any matters of substance at the next full
• reviews adequacy of the Company’s
in all material respects, implement
board meeting. The Audit Committee has
insurance program, including directors’
its own terms of reference, approved by the
and officers’ professional indemnity
Board and reviewed annually, with additional
and other liability insurance cover;
review when appropriate.
The members of the Committee at the date of
this report are Mr Carl Hung and Mr Simon
Wallace. Carl Hung is the current Chairman
of the Audit Committee. Details of the
• promotes and ensures an ethical
financial culture is embedded
throughout the Company; and
• undertakes any special investigations
reporting risks.
required by the Board.
the policies adopted by the Board of
Directors; and
ii. the risk management and internal
control systems are operating
effectively and efficiently in all material
respects in relation to financial
qualifications, experience and attendance
The Audit Committee provides a forum for
at Committee meetings by each Committee
the effective communication between the
Member is included in the Directors’ Report
Board and external auditors. The Committee
in the Annual Report.
reviews:
Auditor independence
Best practice in financial and audit
governance is rapidly evolving and the
independence of the external auditor is
particularly important to shareholders
The ASX Corporate Governance Council has
made recommendations for the composition
• the annual and half-year financial report
prior to their approval by the Board;
and the Board. The Company’s practices
in this area are reviewed regularly by
of the Audit Committee:
• the effectiveness of management
the Board to ensure they are in line with
• the Committee should consist only of
•
•
Non-Executive Directors;
it should have a majority of
Independent Directors;
it should be chaired by an
independent Director who is not
information systems and systems of
emerging practices both domestically and
internal control; and
internationally. The Company’s current
• the efficiency and effectiveness of
approach in relation to independence of its
external audit functions, including
auditor encompasses the following:
reviewing the respective audit plans.
• rotation of the senior audit partner
The Committee invites the CEO, the CFO,
every five years;
Chairman of the Board;
the Company’s remaining Director and
• the Committee should have at least
the external auditors to attend Committee
• annual confirmation by the auditor
that it has satisfied all professional
3 members.
meetings where appropriate. The Committee
regulations relating to auditor
While recognising these recommendations, the
Board is restricted by having currently only
four Board positions. The Board’s small size
is a function of the relatively small scale of the
Company’s operations. The Company may assess
also meets with and receives regular reports
independence;
from the external auditors concerning any
• half yearly reporting on the levels of
matters which arise in connection with
the performance of their respective roles,
including the adequacy of internal controls.
audit and non-audit fees; and
• specific exclusion of the audit firm from
work which may give risk to a conflict.
the composition of the Board from time to time,
The Company’s Audit Committee met 3 times
with a view to considering compliance with the
during the course of the financial year ended
recommendation that the Audit Committee have
30 June 2020.
a majority of Independent Directors.
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Recommendation 4.3: Auditor attendance at AGM
The Company’s external Auditor attends the
Company’s AGMs and is available to answer
shareholder questions about the conduct of
the audit and the preparation and content of
the Auditor’s Report.
5. Make Timely and Balanced Disclosure
Recommendation 5.1: Continuous Disclosure Policy
The Board and senior management are aware
of the continuous disclosure requirements
of the ASX and have written policies and
procedures in place, including a Continuous
Disclosure Policy.
6. Respect the Rights of Security Holders
Recommendation 6.1: Communication to
Shareholders and Investors
The Company is committed to increasing the
transparency and quality of its communication
and to be regarded by our shareholders as an
outstanding corporate citizen. Our approach to
communication with shareholders and financial
markets is set out in the Company’s Shareholder
Communication Policy document.
Recommendation 6.2 Investor Relations Program
Two-way communication between the
Company and its shareholders is facilitated
primarily via the Company’s AGM. The Board
encourages shareholder participation at
the AGM and other general meetings of the
shareholders. The Chairman encourages
questions and comments from shareholders
and seeks to ensure that shareholders are
given ample opportunity to participate.
Shareholders who are unable to attend
Information is communicated to shareholders
the AGM or a general meeting may submit
through the distribution of the Company’s
questions and comments before the meeting
Annual Report and other communications.
to the Company and/or to the Auditor (in the
All significant information is posted on the
case of the AGM).
The guiding principle of this policy is that the
Company’s website as soon as it is disclosed
Company must immediately notify the market
to the ASX. All investors will have equal and
Recommendation 6.3: Shareholders
via an announcement to the ASX of any
timely access to information on the Company’s
information concerning the Company that a
financial position, performance, ownership and
Participation at General Meetings
All shareholders are encouraged to attend
reasonable person would expect to have a
governance. Shareholders who wish to send
and participate in shareholder meetings. All
‘material’ effect on the price or value of the
and receive communications with the Company
Directors, senior managers, Auditors and the
Company’s securities.
electronically should contact the Company
Company Secretary attend these meetings
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The Board must ensure that Company
announcements:
• are made in a timely manner;
• are factual;
• do not omit material information; and
• are expressed in a clear and objective
manner that allows investors to assess
the impact of the information when
making investment decisions.
Where that information, however, is
incomplete or confidential, or its disclosure is
illegal, no disclosure is required. The Directors
and senior management of the Company
ensure that the Company Secretary is aware
of all information to be presented at briefings
with analysts, stockbrokers, shareholders, the
media and the public. Prior to being presented,
information that has not already been the
subject of disclosure to the market and is
not generally available to the market is the
subject of disclosure to the ASX. Only when
confirmation of receipt of the disclosure and
release to the market by the ASX is received
may the information be presented.
If the Company becomes aware of market-
sensitive information which ought to be
disclosed, but the Company is not in a position
to issue an announcement promptly and
without delay, the Company may request
that the ASX grant a trading halt or suspend
the Company’s securities from quotation.
Management of the Company may consult
external professional advisers and the ASX
in relation to whether a trading halt or
suspension is required.
The Company’s Continuous Disclosure Policy
Secretary, Mr Dennis Payne.
and respond to shareholder questions in
The Company ensures that shareholders are
informed of all major developments affecting
the Group promptly through the issue of
ASX announcements and commentary on
operations in quarterly reports. All ASX
announcements and quarterly reports are
posted on the ASX website for the Company
and on the Company’s website.
relation to specific agenda items and general
business. In light of the Covid-19 pandemic
and restrictions on in-person gatherings
and travel which may be in place at the time
of the Company’s 2020 Annual General
Meeting, the Company will consider available
methods of facilitating virtual attendance
by shareholders at the Annual General
Meeting. Further details regarding the
All shareholders receive copies of
nature of the Annual General Meeting and
shareholders notices by email or post and a
how shareholders may ask questions about
copy of the annual report is distributed to
agenda items will be contained in the notice
all shareholders who elect to receive one
of meeting. The Annual General Meeting
(hardcopy in the mail or electronically). The
features an address by the Chairman and an
Company’s most recent annual report is also
extensive presentation by the CEO which is
available on the Company’s website.
also released as an ASX announcement for
Website Information
The Company has established a website at
www.beamcommunications.com, where
shareholders can access information about the
Company’s corporate governance policies and
practices. Information lodged on this website in
a specific corporate governance section includes:
• Board Charter;
• Audit Committee Charter;
• Risk Management Policy;
• Remuneration Policy;
• Securities Trading Policy;
• CEO and CFO Declarations;
• Whistle Blower Policy;
• Code of Conduct;
• Election of Directors Policy;
• Disclosure Policy;
• Shareholder Communication Policy;
• Health and Safety Policy;
• Environmental and Community
shareholders who cannot attend the meeting.
A description of the arrangements the
Company has to promote communications
with shareholders is detailed in the
Shareholder Communication Policy, available
at the Company’s website.
Recommendation 6.4: Electronic Communication
Shareholders may elect to send
communication to and receive
communications from the Company and its
Share Registry electronically. The contact
email address for the Company is
info@beamcommunications.com and
shareholders may submit electronic queries
to the Company’s Share Registry via its
website www.linkmarketservices.com.au.
7. Recognise and Manage Risk
Recommendation 7.1: Risk Committee
Due to the size of the Company and the
nature of the Company’s operations, a formal
Risk Committee has not been established.
is available on the Company’s website.
Relations Policy;
• Corporate Ethics Policy; and
• Related Parties and Conflicts Policy.
24
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
The Board is responsible for ensuring
parameters and compliance information are
Risk Management Policy, available at the
appropriate measures are in place in order to
reported monthly to the Board by the CEO
Company’s website.
manage risk in line with the Company’s risk
and CFO.
strategy. An external consultant has assisted
the Board in this process.
The Board has required management to
implement internal control systems to
manage the Company’s material business
risks and to report on whether risks are being
effectively managed.
Arrangements put in place by the Board to
monitor risk include:
The Board has adopted reporting procedures
which allow it to:
• monitor the Company’s compliance with
the continuous disclosure requirements
of the ASX; and
Recommendation 7.4: Exposure to Risks
The Company regularly undertakes reviews
of risks that may be material to its business.
The review examines the processes and
procedures that the Company must initiate
to control and/or mitigate these risks from
• assess the effectiveness of its risk
impacting upon the performance of the
management and control framework.
Company. The key risk categories to which
The Company recognises, in particular,
the environmental and social risks to
• review of risk areas at monthly Board
which it may be exposed. The Company
meetings;
considers environmental risk to be the
• regular monthly reporting to the Board
ability to continue its undertakings without
in respect of operations, the financial
compromising the health of the ecosystems
position of the Company and new
in which it operates. The Company views
contracts;
social sustainability as the ability to continue
• reports by the Chairman of the Audit
operations in a manner that is acceptable to
Committee;
social norms.
the Company is exposed, and how it manages
or intends to manage those risks, are set
out in the Risk Management Policy on the
Company’s website.
8. Remunerate Fairly and Responsibly
Recommendation 8.1: Remuneration
Committee
The Board considers that, due to its
small size, and the current level of the
Company’s operations, all members of the
Board should be involved in determining
remuneration levels. Accordingly, it has
not established a separate remuneration
committee. Instead time is set aside at two
Board meetings each year specifically to
address the matters usually considered
by a remuneration committee. Executive
Directors absent themselves during
discussion of their remuneration.
The Board does not consider that the
Company currently has any material
exposure to environmental or social
sustainability risk. Since the beginning of
the ongoing Covid-19 pandemic, the Board
has continued to monitor the impact of the
pandemic on the Company’s operations,
compliance obligations and finances, and
risks to the Company resulting from the
pandemic associated with macroeconomic
factors such as reduced merchant and
At these two meetings the Board reviews
customer activity and growth. The Company
the following:
has provided and intends to continue to
provide updates to the market on the impact
of Covid-19 on the Company periodically.
• the Company’s remuneration,
recruitment, retention and termination
policies and procedures for senior
The Board intends to manage risks related to
executives;
Covid-19 and other social and environmental
• senior executive remuneration and
risks in accordance with the Company’s Risk
incentives;
Management Policy, if such risks should be
• superannuation arrangements;
identified in the future.
• remuneration framework for Directors;
• attendance and reports by the
Managing Director, CFO and the
Company’s management team at Board
Meetings; and
• any Director may request that
operational and project audits be
undertaken either internally or be
external consultants.
Recommendation 7.2: Risk Management
Framework
The Company has implemented a risk
management program that enables the
business to identify and assess risks, respond
appropriately and monitor risks and controls.
The Company is exposed to risk from operations
(employee health and safety, environmental,
insurance, litigation, disaster, business
continuity), compliance issues and financial
risks (interest rate, foreign currency, credit and
liquidity). To mitigate these risks, the Company
has established risk and assurance policies and
The Company reviews its risk management
procedures, which aim to:
• assist management to discharge its
corporate and legal responsibilities;
and
framework on at least an annual basis. Such a
review took place in the 2019-2020 financial
year with input from external consultants.
The Company’s Risk Management Policy is
• assure management and the Board that
available on the Company’s website.
the framework is effective.
Responsibility for control and risk
management is delegated to the appropriate
levels of management within the Company
and the CEO has ultimate responsibility to
the Board for risk management and control.
Areas of significant business risk to the
Company are detailed in the Business Plan
presented to the Board by the CEO at the
start of each financial year. The Board reviews
and approves the parameters under which
significant business risks will be managed
before adopting the Business Plan. Risk
Recommendation 7.3: Internal Audit Function
The Audit Committee assists the Board in
fulfilling its responsibilities in this regard
by reviewing the financial and reporting
aspects of the Group’s risk management
and control framework.
The Audit Committee meets regularly to
ensure, amongst other things, that the risk
management internal control structures
and
• whether there is any gender or other
inappropriate bias in remuneration for
directors, senior executives or other
employees.
Recommendation 8.2: Remuneration of
Executive and Non-Executive Directors
The remuneration structure of Non-
Executive Directors and executives is
disclosed in the Remuneration Report
within the Directors’ Report in the Annual
Report. The remuneration of Non-Executive
Directors is determined by the Board having
regard to the level of fees paid to Non-
Executive Directors by other companies of
similar size and stature.
and compliance with laws and regulations
The aggregate amount payable to the
are operating effectively. Details of the
Audit Committee are also set out in the
Company’s Non-Executive Directors must
not exceed the maximum annual amount
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ANNUAL REPORT 2020
approved by the Company’s shareholders,
currently $500,000 as determined at the
Long-Term Incentives
The Company has a share options scheme
Company Secretary be required to discuss the
proposed trading intentions with the Chairman.
General Meeting held on 3 August 2007.
which is discussed further below which is
The Board recognises that it is the individual
The Company is committed to remunerating
its Executive Directors and senior executives
in a manner that motivates them to pursue
the long-term growth and success of the
Company and is consistent with best practice.
The Company aims to align the interests of
Executive Directors and senior executives
with those of shareholders through short-
term and long-term incentive plans which
demonstrate a clear relationship between
designed to provide long-term incentives to
responsibility of each Director to comply with
senior executives.
Termination Payments
Senior executives may be entitled to a
this policy. Breaches of this policy may lead
to disciplinary action being taken, including
dismissal in serious cases. The Company’s
payment upon termination of employment
Securities Trading Policy is available on the
from the Company. Where so entitled, the
Company’s website.
termination payment has been agreed in the
senior executive’s contract of employment
and it is not payable where termination of
employment is for misconduct.
The Corporations Act prohibits the key
management personnel of an ASX listed
company established in Australia, or a closely
related party of such personnel, from entering
performance and remuneration.
Further details in relation to the Company’s
into an arrangement that would have the effect
Consequently, Executive Directors and
senior executives’ remuneration consists of
the following elements:
remuneration policies are contained in the
of limiting their exposure to risk relating to an
Remuneration Report within the Directors’
element of their remuneration that either has
Report in the Annual Report. The Company’s
not vested or has vested but remains subject to
Remuneration Policy is available on the
a holding lock.
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• fixed salary;
• short-term incentive bonus based on
Company’s website.
performance;
Recommendation 8.3: Equity Based
•
long-term incentive share/option
scheme; and
• other benefits including
superannuation.
Fixed Salary
Remuneration
Long-Term Incentives
The Company has a share option scheme in
which senior executives may be invited to
participate. The Share Option Incentive Plan
was approved by shareholders on 27 October
The salary of Executive Directors and
2017 and authorises the Directors to issue
senior executives is determined from
options up to 10% of the shares issued by the
a review of the market and reflects
Company. The number of shares and options
core performance requirements and
issued under the scheme is reasonable in
expectations. In addition, the Company
relation to the existing capitalisation of the
considers the following:
• the scope of the individual’s role;
• the individual’s level of skill and
experience;
• the Company’s legal and industrial
Company and all payments under the scheme
are made in accordance with thresholds set
in plans approved by shareholders. Any issue
of options to Executive and Non-Executive
Directors must be approved by Shareholders.
obligations;
The Company has a Securities Trading Policy
•
labour market conditions; and
which aims to:
• the size and complexity of the
Company’s business.
• protect stakeholders’ interests at all
times;
Performance Bonus
• ensure that directors and employees do
The purpose of the performance bonus is to
reward actual achievement by the individual
of performance objectives and for materially
improved Company performance.
Consequently, performance-based
remuneration is paid where a clear contribution
to successful outcomes for the Company is
not use any information they possess
for their personal advantage or the
Company’s detriment; and
• ensure that Directors and employees
comply with insider trading legislation
of the various jurisdictions in which
transactions may take place.
demonstrated and the individual attains and
Purchase or sale of the Company’s shares
excels against pre-agreed key performance
and/or options over such shares by Directors,
indicators during a performance cycle.
executives and staff of the Company should
Other Benefits
Senior executives are entitled to statutory
superannuation and may also receive other
bonus payments subject to the discretion of
the Board.
only occur in circumstances where the market
is considered to be fully informed of the
Company’s activities. This policy requires
that the relevant person notify the Company
Secretary of their intention to trade in the
Company’s shares and/or options over such
shares prior to the transaction and that the
26
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
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27
ANNUAL REPORT 2020 BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue
Other income
Year ended
30 June 2020
30 June 2019
$
$
14,923,300
17,776,666
1,917,865
743,863
Note
2(a)
2(b)
Changes in inventories of raw materials, finished goods and work in progress
839,059
(1,421,131)
Raw materials, consumables and other costs of sale
2(c)
(9,192,850)
(9,307,401)
Employee benefits expense
Depreciation expense
Amortisation expense
Impairment expense
Finance costs expense
Auditor remuneration expense
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N
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Accounting, share registry and secretarial expense
Consultancy and contractor expense
Legal, insurance and patent expense
Marketing and ICT expense
Share of loss from interest in Joint Venture
Other expenses
Profit (loss) before income tax
Tax expense
Profit (loss) for the year
Other comprehensive income
8(a)
11(a)
11(a)
2(d)
22
7
2(e)
(2,665,464)
(3,329,910)
(211,015)
(63,233)
(1,520,080)
(1,178,889)
(2,791,218)
(33,910)
(271,516)
(139,587)
(75,800)
(68,000)
(103,423)
(88,194)
(486,783)
(298,981)
(182,413)
(175,364)
(405,785)
(362,563)
(389,617)
(327,692)
(901,782)
(1,003,677)
(1,517,523)
721,997
3(a)
(111,711)
(382,867)
(1,629,234)
339,129
-
-
Total comprehensive income (loss) for the year
(1,629,234)
339,129
Net Profit (loss) and total comprehensive loss are both fully attributable to owners of the Company
Earnings per share (cents)
Diluted earnings per share (cents)
24
24
(0.31)
(0.31)
(0.64)
(0.64)
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
28
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Current assets
Cash and cash equivalents
Inventories
Trade and other receivables
Total current assets
Non-current assets
Interest in joint venture
Plant and equipment
Right-of-use assets
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Other financial liabilities
Lease liabilties
Provisions
Total current liabilities
Non-current liabilities
Other financial liabilities
Lease liabilties
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
30 June 2020
30 June 2019
Note
$
$
4
5
6
7
8
9
10
11
12
13
14
15
13
14
15
873,960
2,532,285
3,576,082
2,737,022
2,337,993
2,189,620
6,788,035
7,458,927
404,918
93,811
519,068
100,227
102,957
-
1,015,413
863,745
3,803,161
5,580,260
5,836,371
6,647,190
12,624,406
14,106,117
2,785,037
3,502,547
971,392
182,930
950,615
-
1,294,111
1,190,085
5,233,471
5,643,247
818,737
514,606
47,120
641,665
-
32,713
1,380,463
674,378
6,613,934
6,317,625
6,010,472
7,788,492
16
7,646,641
7,646,641
320,394
411,189
(1,956,563)
(269,338)
6,010,472
7,788,492
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
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ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Balance at 1 July 2018
Profit for the year
Other comprehensive income for the year, net of income tax
Issued
capital
$
Reserves
$
Retained
earnings
$
Total
equity
$
7,646,641
411,189
(608,467)
7,449,363
-
-
-
-
339,129
339,129
-
-
Balance at 30 June 2019
7,646,641
411,189
(269,338)
7,788,492
Balance at 1 July 2019
7,646,641
411,189
(269,338)
7,788,492
Effect of initial application of AASB 16 - (Note 1)
Deferred tax effect of initial application of AASB 16 (Note 1)
-
-
-
-
(178,190)
(178,190)
29,403
29,403
Balance at 1 July 2019 - As restated
7,646,641
411,189
(418,125)
7,639,705
Profit for the year
Other comprehensive income for the year, net of income tax
Transactions with owners in their capacity as owners:
- Adjustment for employee share options lapsed
-
-
-
(1,629,234)
(1,629,234)
-
-
-
-
-
(90,795)
90,795
Balance at 30 June 2020
7,646,641
320,394
(1,956,563)
6,010,472
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The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
30
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and finance charges paid
Income tax paid
COVID-19 relief
Note
Year ended
30 June 2020
30 June 2019
$
$
15,393,052
17,919,076
(13,614,662)
(15,705,440)
717
3,192
(220,743)
(139,587)
(233,977)
(17,755)
230,000
-
Net cash (used in)/ provided by operating activities
19(a)
1,554,387
2,059,485
Cash flow from investing activities
Purchases of plant and equipment
8(a)
(56,595)
(44,341)
Development costs capitalised
Research and development grant
Interest in joint venture
Net cash used in investing activities
Cash flow from financing activities
Net loan payments
Lease liability repayments
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
(2,534,199)
(1,957,551)
-
831,603
(689,997)
(436,443)
(3,280,791)
(1,606,732)
220,978
1,550,607
(152,900)
-
68,078
1,550,607
(1,658,326)
2,003,360
2,532,285
528,925
Cash and cash equivalents at end of financial year
19(b)
873,960
2,532,285
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
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ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1. Summary of significant accounting policies
(i) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001 and comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are
presented below and have been consistently applied unless stated otherwise.
Reporting Basis and Conventions
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified,
where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
(ii) New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by AASB that are mandatory for the
current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
AASB 16 Leases
AASB 16 Leases became mandatorily effective on 1 July 2019. Therefore this standard has been applied for the first time in this set of
financial statements. The transition approach and impact of this standard have been described below.
AASB 16 ‘Leases’ replaces AASB 117 ‘Leases’. The new Standard has been applied using the modified retrospective approach, with the
cumulative effect of adopting AASB 16 being recognised in equity as an adjustment to the opening balance of retained earnings for the
current period. Prior periods have not been restated.
The transition impact upon initial adoption of AASB 16 on statement of financial position (increase/ (decrease)) is as follows:
Right-of-use assets
Deferred tax assets
Lease liabilities
Retained earnings
Operating lease commitments disclosed under AASB 117 as at 30 June 2019
New lease commitments as at 1 July 2019
Low value leases not recognised as a right-of-use asset
Adjustment in relation to variable lease payments
Operating lease liabilities before discounting
Discounted using incremental borrowing rate
Lease liability recognised under AASB 16 as at 1 July 2019
Right-of-use asset recognised under AASB 16 as at 1 July 2019
Reduction in opening retained earnings as at 1 July 2019
Deferred tax effect of initial application of AASB 16 as at 1 July 2019
1 July 2019
$
677,829
29,403
(856,019)
(148,787)
1 July 2019
$
963,508
32,916
-
9,700
1,006,124
(150,105)
856,019
677,829
(148,787)
29,403
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When measuring lease liabilities for lease that were classified as operating leases, the Group discounted lease payments using its incremental
borrowing rate at 1 July 2019. The weighted average rate applied is 7.3% to 8%.
Leases accounting policy
The Group assesses whether a contract is or contains a lease, at inception of the contract. The entity recognises a right-of-use asset and a
corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases
with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased assets are consumed.
32
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1. Summary of significant accounting policies (continued)
(ii) New or amended Accounting Standards and Interpretations adopted (continued)
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the rate implicit in the lease. If this rate cannot be readily determined, the entity uses its incremental borrowing rate. The lease liability
is subsequently 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 right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received, any initial direct costs and an estimate of any costs to dismantle and remove the asset
at the end of the lease. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets
are depreciated over the shorter period of lease term and useful life of the underlying asset. They are subject to impairment or adjusted for
remeasurement.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of AASB
112. It does not apply to taxes or levies outside the scope of AASB 112, nor does it include specific requirements relating to interest and
penalties associated with uncertain tax treatments. The interpretation specifically addresses the following:
The assumptions an entity makes about the examination of tax treatments by taxation authorities
• Whether an entity considers uncertain tax treatments separately or collectively
•
•
•
How an entity considers changes in facts and circumstances
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credit credits and tax rates
Upon adoption of the interpretation, the Group considered whether it has any uncertain tax positions, particular those relating to transfer
pricing. The Company’s and the subsidiaries’ tax fillings in different jurisdictions include deductions related to transfer pricing and the
taxation authorities may challenge those tax treatments. The Group determined, based on its tax compliance and transfer pricing study,that
it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities. The interpretation did
not have an impact on the consolidated financial statements of the Group.
(iii) Accounting policies
The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the financial report.
The accounting policies have been consistently applied to all years presented, unless otherwise stated. When required by Accounting
Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
(a) Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (Beam Communications Holdings
Limited) and all of the subsidiaries which are entities the parent controls. A list of the subsidiaries is provided in Note 27.
(b) Income tax
Income tax expense (benefit) for the year comprises current income tax expense and deferred income tax expense (benefit).
A net deferred tax expense has been recognised in the current year reflecting the movements in deferred tax assets and liabilities for the
period.
Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred
tax is credited in the statement of profit or loss and other comprehensive income except where it relates to items that may be credited
directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible
temporary differences can be utilised. At each reporting date, the consolidated group re-assesses unrecognised deferred tax assets as to the
extent that it has become probable that future tax profit will enable recognition.
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33
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1. Summary of significant accounting policies (continued)
(iii) Accounting policies (continued)
(b) Income tax (continued)
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A
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I
F
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a)
a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities
are expected to be recovered or settled.
Beam Communications Holdings Limited and its wholly owned Australian subsidiaries have formed a tax consolidated group under the tax
consolidation regime. Each entity in the group recognises its own tax expense and deferred tax. The current tax liability of each group entity
and deferred tax assets arising from tax losses are immediately assumed by the parent entity.
(c) Plant & equipment
Plant and equipment is carried at cost less any accumulated depreciation and impairment losses, where applicable.
The carrying amount of plant and equipment is reviewed at each reporting date by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the
assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
Repairs and maintenance to plant and equipment is charged to the statement of profit or loss and other comprehensive income during the
financial period in which it is incurred.
The depreciable amount of plant and equipment is depreciated on a straight line basis over their useful lives to the consolidated group
commencing from the time the asset is held ready for use.
The straight line depreciation rates for plant and equipment were:
Office furniture and equipment
Computer and test equipment
Rental equipment
10% - 20%
33%
20% - 33%
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. An asset’s carrying amount is
written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the
statement of profit or loss and other comprehensive income.
(d) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials and direct labour.
(e) Intangible assets – development costs
Development costs are capitalised only when it is probable that the expected future economic benefits would flow to the company and
can be measured reliably. Development costs have a finite life and are amortised on a systematic basis matched to future production.
Expenditure not related to the creation of a new product is recognised as an expense when incurred.
The amortisation rate for capitalised development costs is dependent on an assessment of the minimum useful life of each project. Recent
projects/products have been assessed at 4 years giving a 25% amortisation rate during 2020.
(f) Employee benefits
Short-term employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than
termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which
the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the
undiscounted amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of current trade and
other payables in the statement of financial position. The Group’s obligations for employees’ annual leave and long service leave entitlements
are recognised as provisions in the statement of financial position.
34
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1. Summary of significant accounting policies (continued)
(iii) Accounting policies (continued)
(f) Employee benefits (continued)
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months after
the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured
at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future
wage and salary levels, durations of service and employee departures and are discounted at rates determined by reference to market yields
at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Any re-
measurements for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods
in which the changes occur.
Option based compensation relates to the value of options issued to date and brought to account pro-rata to the time period from the date
of issue to the date of vesting, except in the case of Director’s where Accounting Standard AASB 2 requires expensing to begin from the
commencement of service related to those options, notwithstanding that the issue of those options is subject to shareholder approval.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position,
except where the Group does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period,
in which case the obligations are presented as current provisions.
(g) Financial instruments
Financial instruments in the form of trade receivables, trade payables and other financial assets and liabilities are initially measured at
fair value adjusted by transactions costs on trade date when the related contractual rights or obligations arise. Realised and unrealised
gains or losses arising from changes in the fair value of these assets or liabilities are included in the statement of profit or loss and other
comprehensive income in the period in which they arise. At each reporting date, the group assesses whether there is objective evidence
that a financial instrument has been impaired. Impairment losses are recognised in the statement of profit or loss and other comprehensive
income. Refer Note 17 for a detailed review of the group’s financial instruments.
The Group does not designate any interests in subsidiaries as being subject to the requirements of Financial Instruments accounting
standards.
(h) Impairment of assets
At each reporting date, the group reviews the carrying values of its tangible assets to determine whether there is an indication that those
assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the assets carrying value over its recoverable amount is
expensed to the statement of profit or loss and other comprehensive income. Where it is not possible to estimate the recoverable amount of
an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The group uses an Expected Credit Loss model in assessing impairment of trade and other receivables or loans and other instruments
that fall within the scope AASB 9 impairment requirements. The model includes a simplified approach in accounting for trade and other
receivables as well as contract assets, and records the loss allowance at the amount equal to the expected lifetime credit losses. Under this
simplified approach, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected
credit losses.
(i) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original
maturities of three months or less, and bank overdrafts. Where applicable, bank overdrafts are disclosed within other financial liabilities in
current liabilities on the statement of financial position.
(j) Revenue recognition
Revenue from the sale of goods or services is brought to account upon fulfilment of the relevant performance obligations of the contract with
the customer. Performance obligations are fulfilled upon delivery of the goods or services to the customer at which point the transaction
price is brought to account as revenue. The transaction price is the amount of consideration to which the group expects to be entitled in
exchange for transferring promised goods or services to a customer.
Interest revenue and rental income are recognised when they become receivable. Other revenue is recognised when the right to receive the
revenue has been established.
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35
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1. Summary of significant accounting policies (continued)
(iii) Accounting policies (continued)
(k) Government grants
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Government grants in the form of refundable Research and Development Tax Offsets received in respect of capitalised Development Costs
are initially recognised as deferred income upon receipt, and brought to account as income on a systematic basis over the useful life of the
related Development Cost assets.
Export market development grants are brought to account in the statement of profit or loss and other comprehensive income in the
period received.
There are no unfulfilled conditions or other contingencies attaching to government grants recognised in the financial statements.
(l) Interest in joint venture
A joint venture represents the contractual sharing if control between parties in a business venture where unanimous decisions about
relevant activities are required.
Where the Group is a party to a joint venture, the Group recognises its interests in the joint venture using the equity method whereby the
investment in the joint venture is carried in the statement of financial position at cost plus post acquisition changes in the Group’s share of
net assets of the joint venture.
The statement of profit or loss and other comprehensive income reflects the Group’s share of the results of operations of the joint venture.
Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest
in the joint venture.
(m) Foreign currency transactions and balances
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.
The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that
entity operates.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction.
Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to
be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate
at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other
comprehensive income.
(n) Goods and Services Tax (GST)
Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST is not recoverable from the
Australian Taxation Office. In these circumstances the GST is recognised as part of the asset or expense cost. Receivables and Payables are
shown in the statement of financial position as inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities
which are disclosed as operating cash flows.
(o) Critical accounting estimates, judgments and assumptions
The preparation of the Group’s consolidated financial statement requires management to make judgements, estimates and assumptions.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
assets or liabilities affected in future periods.
Information about areas of estimation uncertainty and critical assumptions are described in the following notes:
• Note 3 Deferred tax asset - tax losses
• Note 11 Impairment of intangible assets
• Note 14 Lease liabilities - Estimating the incremental borrowing rate
• Note 21 Share-based payment - Determination of valuation model and assumptions about incentive plan
36
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1. Summary of significant accounting policies (continued)
(iii) Accounting policies (continued)
(p) New accounting standards for application in future periods
The below are Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group, with an
assessment of the potential impact of such pronouncements on the Group when adopted in future periods:
Accounting Standards and Interpretations
• AASB 2019-1 Conceptual Framework for Financial Reporting Amendments to Australian Accounting Standards -
Reference to conceptual framework
• AASB 2018-6 Amendments to AASs Definition of a Business
• AASB 2018-7 Amendments to AASs Definition of Material
• AASB 2019-3 Amendments to AASs Interest Rate Benchmark Reform Business
• AASB 2019-5 Amendments to AASs Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia Business
• AASB 2020-1 Amendments to AASs Classification of Liabilities as Current or Non-current Business
• AASB 2014-10 Amendments to AASs – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Applicable to
annual reporting
periods beginning
on or after
1 July 2020
1 July 2020
1 July 2020
1 July 2020
1 July 2020
1 July 2022
1 July 2022
The Group is in the process of reviewing these amended standards and interpretations however it is not expected that this will have a
significant impact on the Group’s consolidated financial statements.
F
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37
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2 Profit (loss) before income tax
(a) Disaggregation of revenue:
Type of goods or services
- Equipment sales
- Airtime
- Other
Geographical markets
- Australia
- United States of America
- United Arab Emirates
- United Kingdom
- China
- Canada
- Japan
- Other foreign countries
Timing of revenue recognition
- Goods and services transferred at a point in time
- Goods and services transferred over time
(b) Other income
- Research and Development grant
- Interest
- COVID-19 relief
- Other
The Research and Development grant $1,414,549 includes $865,394 brought to account upon full amortisation of the capitalised Thuraya WE
terminal, in accordance with the accounting policy detailed in Note 1 (iii) (k). (See also Note 11 (a).) The interest income includes interest-free
benefit of $163,470 recognised on a U$600,000 loan from Roadpost. (See also Note 13 (b).) The Group was eligible to receive a JobKeeper
allowance of $270,000 and a Cash Flow Boost payment of $62,500 from the Australian government. (See also Note 28.)
(c) Cost of sales
Opening inventories
Add: Purchases and other stock adjustments
Closing inventories (Note 5)
(d) Finance costs expense
Interest expense on financial liabilities
Interest expense on lease liabilities
(e) Other expenses include:
- Product development costs expensed
- Operating lease payments
3 Income tax
(a) The components of tax expense comprise:
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Current tax
- Current tax expense (d)
- Current movement of temporary difference in net deferred tax assets
- Movement in deferred tax asset associated with carry forward tax losses
- Deferred tax effect of initial application of AASB 16 (Note 1)
Income tax expense transferred to statement of profit or loss and other comprehensive income
(b) Reconciliation of income tax expense and tax at statutory rate:
Profit (loss) from ordinary activities
Income tax expense (benefit) at statutory rate of 27.5% (2019: 27.5%)
Add / (Less):
Tax effect of:
- Tax reconciling items
- Current year tax loss
- Deferred tax assets (gain) / loss
- Deferred tax effect of initial application of AASB 16 (Note 1)
Income tax expense attributable to the Consolidated Group
38
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Year ended
30 June 2020
$
30 June 2019
$
13,023,662
1,514,365
385,273
14,923,300
17,179,648
526,060
70,958
17,776,666
3,115,480
4,045,000
1,048,492
1,321,229
284,976
2,168,610
450,198
2,489,314
14,923,299
3,976,465
4,504,112
3,960,465
1,253,935
783,920
783,134
488,406
2,026,228
17,776,666
13,023,662
1,899,638
14,923,300
17,179,648
597,018
17,776,666
1,414,549
164,187
332,500
6,629
1,917,865
740,671
3,192
-
-
743,863
2,737,022
9,192,850
11,929,872
(3,576,082)
8,353,790
4,158,153
9,307,401
13,465,554
(2,737,022)
10,728,532
213,864
57,652
271,516
273,796
47,005
139,587
-
139,587
311,516
232,125
233,977
(368,234)
216,565
29,403
111,711
17,755
(7,550)
372,662
-
382,867
(1,517,523)
(417,319)
721,997
198,549
446,721
233,977
(122,266)
(29,403)
111,711
(198,549)
17,755
365,112
-
382,867
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
3 Income tax (continued)
(c) The deferred tax expense reflects the movements in the deferred assets and liabilities. The directors have maintained a conservative
approach and have recognised 60% (2019: 60%) of the deferred tax assets and liabilities inclusive of carried forward tax losses.
Although the Directors expect sufficient future profitability to enable the full value of all deferred tax assets to be utilized, the decision has
been taken not to increase the proportion taken up at this time, with longer demonstration of the Group’s return to profitability required
before the Board would consider doing so.
The amount of unused net deferred tax assets relating to tax losses which have not been brought to account (being the 40% portion) is
$837,632 (2019: $982,008); and capital tax losses of $1,850,085 (2019: $1,850,085).
The amount of net deferred tax assets which may be realised in the future is dependent on the assumption that no adverse change will occur
in income taxation legislation and the anticipation that the Consolidated Group will derive sufficient future assessable income to enable the
benefit to be realised and comply with the conditions of deductibility imposed by the law.
(d) Income tax expense includes current year tax of $233,977 incurred by the Group’s USA subsidiary which is unable to be claimed against Australian tax losses.
(e) There are no franking credits available to equity holders.
4 Cash and cash equivalents
Cash at bank and on hand
5 Inventories
Raw materials
Finished goods
Less: Provision for stock obsolescence
6 Trade and other receivables
(a) Current
Trade receivables
Less: Provision for expected credit losses
Other receivables and prepayments
Rental & other security deposits
Year ended
30 June 2020
30 June 2019
$
$
873,960
2,532,285
795,681
829,686
3,025,401
2,102,336
(245,000)
(195,000)
3,576,082
2,737,022
1,342,615
1,207,740
-
881,854
113,523
-
867,517
114,363
2,337,993
2,189,620
(b) Ageing reconciliation
Gross amount
Within trade
Past due but not impaired (days overdue)
terms
31 - 60 61 - 90 90+
Past due &
impaired
2020
Current
Trade receivables
Other receivables
Rental and other security deposits
Expected credit loss rate
2019
Current
Trade receivables
Other receivables
Rental & other security deposits
Expected credit loss rate
1,342,615
1,135,181
202,932
881,854
113,523
0%
881,854
113,523
0%
-
-
0%
66
-
-
0%
4,436
-
-
0%
1,207,740
867,517
114,363
0%
572,116
867,517
114,363
0%
462,159
4,993
168,472
-
-
0%
-
-
0%
-
-
0%
-
-
-
0%
-
-
-
0%
All trade receivables past due terms but not impaired are expected to be received in the normal course of business.
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39
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
7 Interest in joint venture
Investment in joint venture
Group’s accumulated share of loss from Zoleo Inc joint venture
The Group has a 50% share in a joint venture company, Zoleo Inc , which was incorporated in Canada in
August, 2018.
Zoleo Inc had no contingent liabilities or capital commitments as at 30 June 2020.
The Group contributed U$475,000 to the joint venture during the year, which was recognised as an
increase in investment as per the equity accounting method.
Summarised financial information:
Summarised statement of financial position:
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Current Assets
Total Assets
Current Liabilities
Non -current Liabilities
Total Liabilities
Net Asset Deficiency
Share Capital
Accumulated Losses
Net Equity
Summarised statement of profit or loss and other comprehensive income:
Revenue
Cost of goods sold
Expenses:
Operating Expenses
Marketing
Professional services
Other Expenses
Total Expenses
Loss for the year
Group’s share of loss for the year ended
40
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Year ended
30 June 2020
30 June 2019
$
$
1,117,717
427,919
(712,799)
(327,692)
404,918
100,227
Zoleo Inc
30 June 2020 30 June 2019
1,430,190
1,430,190
530,756
530,756
620,365
2,258,488
330,301
855,554
2,878,853
1,185,855
(1,448,663)
(655,099)
291
285
(1,448,954)
(655,384)
(1,448,663)
(655,099)
2,174,203
2,196,968
-
-
572,107
427,777
21,626
59,190
103,545
756,468
81,388
100,162
46,057
655,384
(779,233)
(655,384)
(389,617)
(327,692)
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
8 Plant and equipment
Office furniture and equipment - at cost
Less: Accumulated depreciation and impairment
Computer and test equipment - at cost
Less: Accumulated depreciation and impairment
Rental equipment - at cost
Less: Accumulated depreciation and impairment
Total plant and equipment
(a) Movements in carrying amounts
Movements in the carrying amounts of each class of plant and equipment between the beginning and the
end of the current financial year
Year ended
30 June 2020
$
30 June 2019
$
491,431
481,592
(448,980)
(428,195)
42,451
53,398
390,971
370,110
(356,412)
(331,187)
34,559
38,923
44,458
(27,657)
16,801
36,199
(25,562)
10,637
93,811
102,957
Balance at 1 July 2018
Additions
Disposals
Depreciation expense
Balance at 30 June 2019
Additions
Disposals
Depreciation expense
Balance at 30 June 2020
9 Right-of-use assets
Balance recognised at the beginning of the year
Additions
Disposals
Balance at the end of year
Accumulated depreciation
Balance recognised at the beginning of the year
Charge for the year
Disposals
Balance at the end of year
Carrying amount
Office Furniture &
Equipment
Computer & Test
Equipment
Rental
Equipment
50,262
23,332
-
(20,196)
53,398
9,839
-
(20,785)
42,452
63,930
12,797
-
(37,805)
38,922
20,861
-
(25,225)
34,558
8,806
8,212
(1,148)
(5,233)
10,637
25,895
(13,486)
(6,245)
16,801
Total
122,998
44,341
(1,148)
(63,234)
102,957
56,595
(13,486)
(52,255)
93,811
Year ended
30 June 2020
$
30 June 2019
$
F
I
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A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
41
-
-
-
-
-
-
-
-
-
677,829
-
-
677,829
-
(158,761)
-
(158,761)
519,068
158,761
57,652
1,200
22,558
The Group leases several assets which includes building, forklift and printers and the lease term of these assets are 9 years, 3
years and 5 years respectively. However the lease term left at the end of current reporting period is less then 4 years. There
are no variable lease payment terms in any lease contracts.
There are no extension or termination options on the leases.
The Group received a rental relief for the office buildings in light of COVID-19. 15% of May and June rents were deferred for
24 months and another 15% waived. The deferred amount of $4,934 will be paid in split amounts in May and June 2022.
Amount recognised in profit or loss
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases
Expense relating to leases of low value assets
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
10 Tax
Non-current
Deferred tax assets
Deferred tax assets:
Carrying amount of patents and capital raising costs
Accruals
Provisions
Lease Liabilities
Tax losses
Deferred tax liability:
Product development costs
Right-of-Use Assets
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
11 Intangible assets
Development costs capitalised - at cost
Accumulated amortisation and impairment
(a) Movements in carrying amounts
Balance at the beginning of the year
Additional costs capitalised
Amortisation expense
Impairment expense
Balance at the end of the year
Balance at
Charged to
Balance at
1 July2019
Income
30 June 2020
235
73,070
238,171
(91)
18,736
26,919
-
115,093
144
91,806
265,090
115,093
1,473,012
(216,565)
1,256,447
1,784,488
(55,908)
1,728,580
(920,743)
293,222
(627,521)
-
(85,646)
(85,646)
863,745
151,668
1,015,413
Year ended
30 June 2020
30 June 2019
$
$
16,623,642
14,089,443
(12,820,481)
(8,509,183)
3,803,161
5,580,260
5,580,260
4,835,509
2,534,199
1,957,550
(1,520,080)
(1,178,889)
(2,791,218)
(33,910)
3,803,161
5,580,260
The Group has assessed the minimum useful life of products from recent development projects at 4 years
giving a 25% amortisation rate on completed projects during FY2020.
In line with the accounting policy detailed in Note 1 (iii) (h) the carrying value of assets is reviewed to determine
whether there is an indication that those assets have been impaired. At 30 June 2020 the Group decided
that three projects should have their carrying value reduced to zero at a cost of $820,565 as they had been
terminated. In addition in the absence of further orders after the initial contractual quantity was delivered in
November 2018, the Group has decided to reduce the partially amortised carrying value of the Thuraya WE
terminal at a cost of $1,970,653. Also in line with accounting policy the remaining relevant deferred R&D grant
received has been brought to account giving an offsetting credit of $865,394. (See also Note 2 (b)).
12 Trade and other payables
Current
Trade payables and accruals
Deferred income
Included in Deferred Income at 30 June 2020 is $257,307 of deferred R&D grant income (2019: $ $1,671,857).
The Group brings to account the R&D grant income over the same period as the amortisation of the related
completed project cost. This resulted in $1,414,549 of R&D grant income being recognised in the statement of
profit & loss for the year as shown in Note 2 (b).
42
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
2,258,898
1,310,299
526,139
2,785,037
2,192,248
3,502,547
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
13 Other financial liabilities
Secured loan (a)
Non Current
Secured loan (b)
Unsecured loan (c)
Secured loans
(a) The Group has a secured loan finance facility with SGV1 Holdings Limited for US$2,000,000. As at 30 June 2020,
US$666,666 (A$971,392) has been drawn down. The security is a general security interest over the group’s assets and
undertakings, ranking second behind the bank facilities. It has been utilized mainly for the purposes of funding product
development projects. On 20 August 2020, SGV1 Holdings Limited extended the U$2mil secured loan facility from 1
January 2021 out until 1 April 2022.
Year ended
distribute the Zoleo product, a satellite based messaging device, including associated airtime contracts.
(b) In addition the Company has a secured loan facility with Roadpost Inc. of up to US$600,000. Roadpost is a
Canadian company and a joint venture partner with Beam Communications Pty Ltd to develop, market and
The interest-free Assistance Loan is to assist Beam to establish the business and is repayable at Beam’s sole
discretion. The interest-free benefit was recognised at $163,470. (See also Note 2 (b).) As at 30 June 2020,
US$600,000 (A$758,703) has been drawn down. The total loan balance of A$758,703 represents the fair
value of the loan at 30 June 2020. The loan is secured by Beam’s pledge of shares in Zoleo Inc, an entity
established with Roadpost to manage the Zoleo business.
(c) The Group has an unsecured loan facility with supplier DEK Technologies Pty. Ltd. for A$400,000 to fund
the GO2 development costs. Beam pays 50% of each invoice by the due date and the remaining 50% is
taken to the loan facility. The unsecured loan facility is for a 24 months term from the first invoice payable
date, unless Beam repays the loan in full prior to the expiration of the 24 month period.
30 June 2020
30 June 2019
$
$
16,623,642
14,089,443
(12,820,481)
(8,509,183)
3,803,161
5,580,260
5,580,260
4,835,509
2,534,199
1,957,550
(1,520,080)
(1,178,889)
(2,791,218)
(33,910)
3,803,161
5,580,260
14 Lease liabilities
(a) Carrying amounts and movements:
At beginning of the year
Additional
Decrease in liability
At the end of the year
Disclosed as:
Current
Non-current
2,258,898
1,310,299
526,139
2,785,037
2,192,248
3,502,547
The entity does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are
monitored within the Group’s treasury function.
The incremental borrowing rate applied to various lease liabilities recognised under AASB 16 ranges
between 7.30% - 8%.
The maturity analysis of lease liabillities are disclosed in Note 17(d).
11 Intangible assets
Development costs capitalised - at cost
Accumulated amortisation and impairment
(a) Movements in carrying amounts
Balance at the beginning of the year
Additional costs capitalised
Amortisation expense
Impairment expense
Balance at the end of the year
The Group has assessed the minimum useful life of products from recent development projects at 4 years
giving a 25% amortisation rate on completed projects during FY2020.
In line with the accounting policy detailed in Note 1 (iii) (h) the carrying value of assets is reviewed to determine
whether there is an indication that those assets have been impaired. At 30 June 2020 the Group decided
that three projects should have their carrying value reduced to zero at a cost of $820,565 as they had been
terminated. In addition in the absence of further orders after the initial contractual quantity was delivered in
November 2018, the Group has decided to reduce the partially amortised carrying value of the Thuraya WE
terminal at a cost of $1,970,653. Also in line with accounting policy the remaining relevant deferred R&D grant
received has been brought to account giving an offsetting credit of $865,394. (See also Note 2 (b)).
12 Trade and other payables
Current
Trade payables and accruals
Deferred income
Included in Deferred Income at 30 June 2020 is $257,307 of deferred R&D grant income (2019: $ $1,671,857).
The Group brings to account the R&D grant income over the same period as the amortisation of the related
completed project cost. This resulted in $1,414,549 of R&D grant income being recognised in the statement of
profit & loss for the year as shown in Note 2 (b).
Year ended
30 June 2020
30 June 2019
$
$
971,392
950,615
758,703
641,665
60,034
-
818,737
641,665
Year ended
30 June 2020
30 June 2019
$
856,019
-
(158,483)
697,536
182,930
514,606
697,536
$
-
-
-
-
-
-
-
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
43
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
15 Provisions
Current
Employee benefits
Warranty costs
Non current
Employee benefits
(a) Movements in provisions
Balance at the beginning of the year
Additional provisions
Amounts used
Balance at the end of the year
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
16 Issued capital
Issued and paid up capital:
Ordinary fully paid shares
The Company has 52,873,452 ordinary shares on issue at 30 June 2020 (2019: 52,873,452).
Balance at 30 June 2019
Shares Issued
Balance at 30 June 2020
(a) Options over issued capital
The total number of potential ordinary shares attributable to options outstanding as at
30 June 2020 is 1,697,025 (2019: 2,486,550), of which 789,525 (2019: 1,579,050) were
issued to employees under the Company’s Share Option Incentive Plan and 907,500
(2019: 907,500) were issued to Directors following shareholder approval. Refer Note
21: Share Based Payments, for details of options issued, exercised and lapsed during the
financial year and the options outstanding at year end.
Year ended
30 June 2020
30 June 2019
$
$
1,082,979
211,132
998,925
191,160
1,294,111
1,190,085
47,120
32,713
Employee
Warranty
benefits
costs
Total
1,031,638
191,160
1,222,798
516,827
34,076
550,904
(418,366)
(14,104)
(432,471)
1,130,099
211,132
1,341,231
Year ended
30 June 2020
$
30 June 2019
$
7,646,641
7,646,641
Number of
shares
$
52,873,452
7,646,641
-
-
52,873,452
7,646,641
44
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
16 Issued capital (continued)
(b) Capital management
When managing capital, management’s objective is to ensure the Consolidated Group continues as a going concern as well as to maintain
optimal returns to shareholders and benefits for other stakeholders.
No dividends have been paid or declared in respect of ordinary shares for the 2020 or prior years.
The Consolidated Group effectively manages its capital by assessing the financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt levels, distributions to shareholders, share issues, or convertible note
issues.
17 Financial instruments
The Consolidated Group undertakes transactions in a range of financial instruments including:
- cash assets;
- receivables;
- payables;
- deposits;
Activities undertaken by entities within the Consolidated Group result in exposure to a number of financial risks, including market risk
interest rate risk, foreign currency risk, credit risk and liquidity risk.
Due to the size of operation conducted by the Consolidated Group, risk management is monitored directly by the Board of Directors of the
parent company with the aim of mitigation of the above risks and reduction of the volatility on the financial performance of the Group.
The risks associated with material financial instruments and the Consolidated Group’s policies for minimising these risks are detailed below.
(a) Interest rate risk management
Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to
changes in market interest rates.
Interest rate risk for the Consolidated Group primarily arises from:
- Bank Funding - Facilities are provided by the Consolidated Group’s bankers and if drawn upon are at variable interest rates based upon
Business Overdraft Prime Indicator rates plus a risk margin. The group diligently manages the facilities and its accompanying rate risk in its
daily operations by keeping the net debt portfolio at a minimum level or in an infunds position.
These risk exposures related to the financial instruments are not considered material and therefore no sensitivity analysis has been
provided.
Financial Instrument Composition and Maturity:
The Consolidated Group’s exposure to interest rate risk, and the effective weighted average interest rates on classes of financial assets and
financial liabilities, is as follows:
2020
Financial asset
Cash assets
Receivables
TOTAL
Financial liability
Payables (excluding deferred income)
Lease liabilities
TOTAL
2019
Financial asset
Cash assets
Receivables
TOTAL
Floating Interest
Fixed Interest Weighted Average
Interest Rate
Non-Interest
bearing
TOTAL
873,960
-
873,960
-
-
-
-
-
-
1,031,426
697,536
1,728,962
0.00%
0.00%
10.00%
7.36%
-
873,960
2,337,993
2,337,993
2,337,993
3,211,953
3,017,601
4,049,027
-
697,536
3,017,601
4,746,563
2,532,285
-
2,532,285
-
-
-
0.02%
0.00%
-
2,532,285
2,189,620
2,189,620
2,189,620
4,721,905
Financial liability
Payables (excluding deferred income)
TOTAL
-
-
905,615
905,615
10.00%
1,996,964
1,996,964
2,902,579
2,902,579
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
45
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
17 Financial instruments (continued)
(b) Foreign currency risk management
Foreign currency risk refers to the risk that the value of a financial commitment, recognised asset or liability will fluctuate due to changes in foreign
currency rates. The Consolidated Group conducts the majority of its receivable and payable transactions in foreign currency, primarily in US Dollars.
The Group’s foreign currency exchange risk arises from the holding of foreign currency deposits and transactions in normal trading operations resulting
in trade receivables and payables being held at balance date.
Foreign currency risk sensitivity:
If foreign exchange rates were to increase/decrease by 10% from rates used to determine values as at reporting date then the impacts on profit and
equity due to unrealised foreign currency exchange gains or losses on foreign currency deposits and trade receivables and payables are as follows:
Impact on profit after tax
Impact on equity
Foreign
currency movement
Year ended
30 June 2020
$
30 June 2019
$
+/- 10%
+/- 10%
+/-68,382
+/-68,382
+/-76,142
+/-76,142
The above sensitivity reflects the low net holding of foreign currency financial instruments at balance date. Whilst foreign currency payables and
receivables are largely offsetting during the year, the Group monitors and manages the associated currency risks in order to reduce the impact of
market risk volatility, therefore no further sensitivity analysis has been provided.
(c) Credit risk management
Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and cause a financial loss to the Consolidated Group.
The credit risk on financial assets of the Consolidated Group that have been recognised in the statement of financial position is the carrying amount, net of
any provision for doubtful debts. The Consolidated Group minimises credit risk by performing credit assessments on all new customers, continuing major
customers, and where necessary, obtaining advance payments.
Ongoing credit evaluation is performed on the financial condition of customers and, where appropriate, an allowance for doubtful debts is raised.
The Consolidated Group does not have any credit risk arising from money market instruments foreign currency contracts, cross currency and interest rate swaps.
(d) Liquidity risk management
Liquidity risk includes the risk that, as a result of the Consolidated Group’s operational liquidity requirements, the Group:
- will not have sufficient funds to settle a transaction on the due date;
- will be forced to sell financial assets at a value which is less than what they are worth;
- may be unable to settle or recover a financial asset at all.
To help reduce these risks the Consolidated Group:
- has a liquidity policy which targets a minimum and average level of cash and cash equivalents to be maintained; and
- monitors forecast cash flows and endeavours to ensure that adequate borrowing facilities are maintained and/or maturity dates are managed appropriately.
The Consolidated Group’s exposure to liquidity risk on classes of financial assets and financial liabilities, is as follows:
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
2020
Asset class
Cash and cash equivalents
Receivables
< 1 Year
1 - 5 Years
Total contractual
cash flows
Carrying
amount
873,960
2,224,471
-
873,960
873,960
113,522
2,337,993
2,337,993
Payables (excluding deferred income)
(3,230,290)
(818,737)
(4,049,027)
(4,049,027)
Lease liabilities
Net maturities
2019
Asset class
Cash and cash equivalents
Receivables
(182,930)
(514,606)
(697,536)
(697,536)
(314,789)
(1,219,821)
(1,534,610)
(1,534,610)
2,532,285
2,075,256
-
2,532,285
2,532,285
114,364
2,189,620
2,189,620
Payables (excluding deferred income)
(2,260,914)
(641,665)
(2,902,579)
(2,902,579)
Net maturities
2,346,627
(527,301)
1,819,326
1,819,326
(e) Net fair values of financial assets and liabilities
Secured loan with Roadpost lnc. was measured at fair value under AASB 13 and classified as Level 3 in the fair value hierarchy. The Group received a
financing benefit, being non-cash consideration, in the form of an interest free loan. The Group has used discount rate of 6% to calculate its interest
free benefit. This assumption is not directly observable. The increase in the discount rate would decrease the fair value of the loan.
46
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
18 Capital expenditure commitments
Capital expenditure commitments
Capital expenditure projects
Not longer than one year
Longer than one year and not longer than five years
Longer than five years
Capital commitments relate to product development projects being undertaken by the subsidiary, Beam
Communications Pty Ltd.
Superannuation commitments
Beam Communications Holdings Limited makes superannuation contributions to prescribed superannuation
funds on behalf of employees and executive directors, as required by the Superannuation Guarantee legislation.
The principal types of benefits are death, permanent disability and superannuation benefits upon retirement.
19 Notes to the statement of cash flows
(a) Reconciliation of Profit / (loss) after income tax benefit to net cash flow from operating activities
Profit / (loss) after tax
Adjustments for
Depreciation
Amortisation
Impairment
Net loss on disposal of plant and equipment
Share of loss in joint venture
Unrealised foreign currency net losses
Interest free benefit
Notional interest expense
Changes in assets and liabilities:
Increase in trade and other receivables
(Increase) / Decrease in inventory
(Increase) / Decrease in deferred tax assets
Decrease in trade and other payables
Increase in employee provisions
Increase in provision for warranty costs
Increase in provision for stock obsolescence
Net cash (used in)/ provided by operating activities
Year ended
30 June 2020
30 June 2019
$
$
2,707,924
2,628,784
295,754
727,127
-
-
3,003,678
3,355,911
(1,629,234)
339,129
211,015
63,233
1,520,080
1,178,889
2,791,218
13,486
389,617
158,113
(163,470)
50,773
33,910
1,148
327,692
54,605
-
-
(281,325)
(446,617)
(889,059)
1,351,131
(122,266)
365,112
(662,993)
(1,776,922)
98,461
19,972
50,000
441,993
56,180
70,000
1,554,387
2,059,485
F
I
N
A
N
C
I
A
L
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A
T
E
M
E
N
T
S
47
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Year ended
30 June 2020
30 June 2019
$
$
19 Notes to the statement of cash flows (continued)
(b) Reconciliation of cash
Cash at the end of the financial year as shown in the consolidated statement of cash flows is reconciled to
items in the consolidated statement of financial position as follows:
Cash and cash equivalents (Note 4)
873,960
2,532,285
(c) Non cash financing and investing activities
Non cash financing and investing activities undertaken by the Consolidated Group during the year are
disclosed in Note 21.
(d) Facilities
All bank facilities are secured by first ranking Registered Mortgage Debenture over the Consolidated
Group’s assets including uncalled capital and called but unpaid capital. At 30 June 2020, the company had
the following unused bank facilities:
- an Australian dollar overdraft with a limit of $300,000. The overdraft was not utilised at 30 June 2020.
- a US dollar overdraft with a limit of US$320,000. The US dollar overdraft was not utilised at 30 June 2020.
Bank guarantee facilities of the Consolidated Group total $150,000 of which $100,000 has been
allocated to a subsidiary company and $50,000 to the parent. Both were fully utilised at 30 June 2020.
The Consolidated Group’s banking facilities are subject to the Group satisfying quarterly covenants set
by the bank. The Group did not meet all covenants during the year ended 30 June 2020, due mainly to
the timing of major sales orders, however the bank reconfirmed the banking facilities as continuing on
18 August 2020.
The Consolidated Group had partly unused secured loan facilities with SGV1 Holdings Limited and
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Roadpost Inc. Refer to Note 13 for details.
20 Key management personnel disclosures
Compensation by category
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
Post-employee benefits
Other long-term benefits
Termination benefits
Share-based payments
1,133,349
1,163,341
78,428
13,365
76,122
4,224
-
-
-
-
1,225,142
1,107,281
48
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
21 Share based payments
Share options are granted at the discretion of the directors based on terms and conditions set out in the Company’s Share Option
Incentive Plan. The directors may at any time and from time to time determine eligible persons for the purposes of the option plan and
select amongst those eligible persons participants who will be invited to participate in the option plan.
Options issued to directors pursuant to the option plan will be subject to approval of shareholders in general meeting, in compliance
with the Listing Rules.
(a) The following share based payment arrangements existed at 30 June 2020:
(i) 884,813 options were granted on 31 March 2015 to key employees with an expiry date of 31 March 2020 on the terms and conditions set
out in the Company’s Share Option Incentive Plan. These options were exercisable from 30 June 2015 at $0.195 per share (Issue WRR55).
884,813 of these options lapsed or were cancelled in the periods prior to 30 June 2020.
None of these options are outstanding as at 30 June 2020.
(ii) 884,813 options were granted on 24 December 2015 to key employees with an expiry date of 31 August 2020 on the terms and conditions
set out in the Company’s Share Option Incentive Plan. These options were exercisable from 30 June 2016 at $0.195 per share (Issue WRR56).
95,288 of these options lapsed or were cancelled in the periods prior to 30 June 2020.
789,525 of these options are outstanding as at 30 June 2020.
(iii) 907,500 options were granted on 24 December 2015 to a director with an expiry date of 30 November 2020 on the terms and conditions set
out in the Company’s Share Option Incentive Plan. These options were exercisable from 30 June 2016 at $0.195 per share (Issue WRR57).
907,500 of these options are outstanding as at 30 June 2020.
(b) The following table illustrates the number (No.) and weighted average exercise prices (WAEP) and movements in share options issued during
the year for the Company:
Outstanding at the beginning of the financial year
2,486,550
0.1950
3,086,550
0.2834
30 June 2020
30 June 2019
No. WAEP $
No. WAEP $
Granted during the financial year
Lapsed during the financial year
Cancelled during the financial year
Exercised during the financial year
Expired during the financial year
-
-
-
-
(789,525)
-
-
-
-
-
-
-
-
-
-
-
-
-
(600,000)
0.6500
Outstanding at the end of the financial year
1,697,025
0.1950
2,486,550
0.1950
Exercisable at the end of the financial year
1,697,025
0.1950
2,486,550
0.1950
(c) Notes to Share Based Payments
The weighted average remaining contractual life for the share options outstanding as at 30 June 2020 is 0.30 years (2019: 1.12 years).
The exercise price for options outstanding at the end of the year was $0.195 (2019: $0.195).
The weighted average fair value of options granted during the year was $0 (none granted) (2019: $0 (none granted)).
The fair value of equity-settled share options granted under the Company’s Share Option Incentive Plan is estimated as at grant date
using the Binomial Option Valuation model, with Black Scholes crosscheck, taking into account the terms and conditions upon which
the options were granted.
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
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S
49
ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
22 Remuneration of auditors
Remuneration of the Auditor for auditing or reviewing financial reports of the Consolidated Group
75,800
68,000
23 Related party transactions
Related party transactions with the Seasons Group and SGV1 Holdings Limited, which are related to Mr C
Year ended
30 June 2020
30 June 2019
$
$
Hung, a director of the company.
Transactions with the Seasons Group
- Purchases
- Sales
Amounts outstanding with the Seasons Group
- Receivables
- Payables
Transactions with SGV1 Holdings Limited
- Secured Loan Payable
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Mr C Hung is a director of the company, and is also the president and a director of Season Group. During
the year ended 30 June 2020 the company subcontracted manufacturing on an arms length basis to Season
Group, in accordance with a contract signed prior to his appointment as director. Transactions between the
company and Season Group are on normal commercial terms and conditions no more favourable than those
available to other parties.
On 19 October 2016 the Group entered into a secured finance facility with a major shareholder, SGV1
Holdings Limited, a company associated with Mr Carl Hung. In July 2018 US$333,333 was drawn on the
facility and a further US$333,333 was drawn in September 2018. Refer to Note 13 (a) for more details.
24 Earnings per share
Overall operations
Basic earnings (loss) per share
Diluted earnings (loss) per share
2,450,879
3,764,783
(87,978)
(124,323)
16,854
9,316
(45,893)
(47,187)
971,392
950,615
¢
(0.31)
(0.31)
No.
¢
0.64
0.64
No.
Weighted average number of ordinary shares used in the calculation of Basic Earnings Per Share
52,873,452
52,873,452
Weighted average number of dilutive options on issue
-
-
Weighted average number of ordinary shares and potential ordinary shares used in the calculation of
Dilutive Earnings Per Share
Anti-dilutive options on issue not used in dilutive EPS calculation
52,873,452
52,873,452
1,697,025
2,486,550
Anti-dilutive options have not been considered in the dilutive earnings per share calculation due to the
average market price being less than the exercisable price.
Earnings:
Earnings (loss) used in the calculation of Basic Earnings Per Share
Earnings (loss) used in the calculation of Dilutive Earnings Per Share
$
$
(1,629,234)
(1,629,234)
339,129
339,129
50
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Year ended
30 June 2020
30 June 2019
$
$
2,450,879
3,764,783
(87,978)
(124,323)
16,854
9,316
(45,893)
(47,187)
971,392
950,615
¢
(0.31)
(0.31)
No.
¢
0.64
0.64
No.
22 Remuneration of auditors
23 Related party transactions
Hung, a director of the company.
Transactions with the Seasons Group
- Purchases
- Sales
- Receivables
- Payables
Amounts outstanding with the Seasons Group
Transactions with SGV1 Holdings Limited
- Secured Loan Payable
Mr C Hung is a director of the company, and is also the president and a director of Season Group. During
the year ended 30 June 2020 the company subcontracted manufacturing on an arms length basis to Season
Group, in accordance with a contract signed prior to his appointment as director. Transactions between the
company and Season Group are on normal commercial terms and conditions no more favourable than those
available to other parties.
On 19 October 2016 the Group entered into a secured finance facility with a major shareholder, SGV1
Holdings Limited, a company associated with Mr Carl Hung. In July 2018 US$333,333 was drawn on the
facility and a further US$333,333 was drawn in September 2018. Refer to Note 13 (a) for more details.
24 Earnings per share
Overall operations
Basic earnings (loss) per share
Diluted earnings (loss) per share
Weighted average number of ordinary shares used in the calculation of Basic Earnings Per Share
52,873,452
52,873,452
Weighted average number of dilutive options on issue
-
-
Weighted average number of ordinary shares and potential ordinary shares used in the calculation of
Dilutive Earnings Per Share
Anti-dilutive options on issue not used in dilutive EPS calculation
52,873,452
52,873,452
1,697,025
2,486,550
Anti-dilutive options have not been considered in the dilutive earnings per share calculation due to the
average market price being less than the exercisable price.
Earnings:
Earnings (loss) used in the calculation of Basic Earnings Per Share
Earnings (loss) used in the calculation of Dilutive Earnings Per Share
$
$
(1,629,234)
(1,629,234)
339,129
339,129
Remuneration of the Auditor for auditing or reviewing financial reports of the Consolidated Group
75,800
68,000
threshold for separate disclosure, the company considers its aggregate segment as it sole segment. Accordingly, revenue and results are fully
disclosed in the consolidated statement of profit or loss and other comprehensive income for this aggregated sole operating segment.
Revenue and results are fully disclosed in the consolidated statement of profit or loss and other comprehensive income for the aggregated
Related party transactions with the Seasons Group and SGV1 Holdings Limited, which are related to Mr C
sole operating segment.
The Consolidated Group has identified operating segments based upon internal reports that are reviewed and used by the Directors in
assessing performance and determining the allocation of resources in respect of its satellite communications products services and online
sales. As the online sales segment operated by SatPhone Shop Pty Ltd, a wholly owned subsidiary company, does not meet the quantitative
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
25 Segment reporting
(a) Sole operating segment
The consolidated statement of financial position discloses the sole operating segment assets and liabilities which are held within Australia.
(b) Major customers
The Consolidated Group has a number of customers to whom it provides products and services. The Consolidated Group supplied a single
customer in the United States accounting for 19% of external revenue (2019: the largest customer was in the United Arab Emirates, 20%)
and the second largest customer, located in Canada, accounted for 7% of external revenue (2019: second largest customer was in the United
States, 18%). The next most significant customer also accounts for 6% of external revenue (2019: 8%).
26 Parent company disclosures
Set out below is the supplementary information about the parent entity.
(a) Statement of profit or loss and other comprehensive income
Loss from continuing operations
Tax expense
Loss for the year attributable to owners of the Company
Other comprehensive income
Year ended
30 June 2020
30 June 2019
$
$
(694,156)
(1,276,759)
122,266
(365,112)
(571,890)
(1,641,871)
-
-
Total loss and other comprehensive income for the year attributable to owners of the Company
(571,890)
(1,641,871)
(b) Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Deficiency of net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
412,459
1,144,869
1,611,491
956,065
2,023,950
2,100,934
4,750,545
4,467,017
561,726
32,713
5,312,271
4,499,730
(3,288,321)
(2,398,796)
7,646,641
7,646,641
320,394
411,189
(11,255,356)
(10,456,626)
(3,288,321)
(2,398,796)
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ANNUAL REPORT 2020
BEAM COMMUNICATIONS HOLDINGS LIMITED
ABN 39 010 568 804
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
26 Parent company disclosures (continued)
(c) Guarantees
The parent company has no contractual guarantees in place.
(d) Contractual commitments
The parent entity has no capital expenditure commitments.
(e) Significant accounting policies of the parent are the same as those for the consolidated entity.
27 Controlled entities
Investments in unquoted corporations being controlled entities:
Beam Communications Pty Ltd
SatPhonerental Pty Ltd
SatPhone Shop Pty Ltd
Beam Communications USA Inc
Pacarc (PNG) Limited (Dormant)
28 COVID-19 outbreak
Incorporated
Share class
Holding
Australia
Ordinary
Australia
Ordinary
Australia
Ordinary
USA
Ordinary
Papua New Guinea
Ordinary
2020
2019
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Conditions created by the COVID-19 pandemic remain highly fluid and are constantly evolving in Australia and world-wide. However,
Beam is cautiously optimistic as sales have largely rebounded from the initial and continuing COVID-19 lockdowns internationally. Beam’s
operations of sales, warehousing and distribution, based out of Australia, have continued to operate without significant impact and overseas
production resumed quickly in China and also in Malaysia although under restictions there.
While gross revenues in April and May were 30-35% lower than the same months last year, June recovered significantly such that June
quarter was approximately 15% lower than in 2019 and only the April month produced a negative Group operating result.
The Australian government announced the implementation of measures to mitigate the impact of COVID-19 and Beam qualified to receive a
JobKeeper allowance of $90,000 per month starting in April. Additionally, the Group received a 3 year term loan from the National Australia
Bank of $500,000 partially secured by the Australian government immediately after the Reporting period.
The impact of COVID-19 has not thus far been as severe as revised modelling had contemplated. Since the start of June, Beam has observed
a notable improvement in world-wide interest from consumers for ZOLEO and the inclination for consumers to pursue leisure activities in
countries which are not in strict lockdowns such as USA and Canada. This bodes well for the outlook for satellite communication devices
however the duration and future direction of the COVID-19 crisis cannot be predicted.
29 Events after the reporting period
The Group received a 3 year term loan from the National Australia Bank of $500,000 partially secured by the Australian government on 1
July 2020. On 20 August 2020, SGV1 Holdings Limited extended the US$2m secured loan facility provided to the Group from 1 January
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2021 out until 1 April 2022 (Refer also Note 13).
Other than the above, there have been no significant events since 30 June 2020.
30 Company details and principal place of business
Beam Communications Holdings Limited is a limited company incorporated in Australia.
The principal activities of the Company and subsidiaries are outlined in the Director’s Report.
The address of its registered office and principal place of business is:
5 / 8 Anzed Court
Mulgrave, VIC, 3170
Australia
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BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
DIRECTORS’ DECLARATION
The directors of Beam Communications Holdings Limited declare that:
1. The financial statements and notes as set out in pages 28 to 52 are in accordance with the Corporations Act 2001 and:
(a) comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements, constitutes
compliance with International Financial Reporting Standards;
(b) give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on that date of the company
and consolidated group; and
(c) any other matters that are prescribed by the regulations for the purposes of this declaration in relation to the financial statements and the
notes for the financial year are also satisfied.
2. In the director’s opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
This declaration has been made after receiving the declarations required to be made by the Chief Executive Officer and Chief Financial
Officer to the directors in accordance with sections 295A of the Corporations Act 2001 for the financial year ending 30 June 2020.
This declaration is made in accordance with a resolution of the Board of Directors on 27 August 2020.
Mr Simon Wallace
Chairman
Date: 28 August 2020
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ANNUAL REPORT 2020
Keeping everyone
connected and safe —
wherever work takes them.
Iridium GO!
voice calls
sos alert
sms two-way
gps tracking
54
BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
INDEPENDENT AUDITOR’S REPORT
To the Members of Beam Communications Holdings Limited
Opinion
We have audited the financial report of Beam Communications Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020,
the consolidated statement of 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:
I.
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
II.
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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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ANNUAL REPORT 2020
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.
Key Audit Matter
How our audit addressed this matter
Impairment of Intangible Assets
Refer to Note 11 in the financial statements
The Group has intangible assets of $3.8m, being
capitalised development costs relating
the
Marconi and GO! SFX projects.
to
The Marconi asset was available for use from 29
January 2020, and
amortisation
commenced during FY20. The GO! SFX project was
not available for use as at 30 June 2020.
therefore
Further, management have determined that an
impairment of $2.79m was required on three other
projects, including the Thuraya asset.
Management have performed an
impairment
assessment for all other material project assets
in use calculation, which
based on a value
impairment had
determined
occurred.
that no
further
required
judgement
We identified this area as a Key Audit Matter due to
the size of the intangible assets balance, the
management
to assess
whether any indicators of impairment exist, and
where any
impairment existed,
management judgement involved in determining the
value in use of the relevant assets based on the
estimated future cash flows generated.
Fair Value of Interest Free Loan
indicators of
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Our audit procedures in relation to intangible assets
included:
•
Assessing management’s
indicators of impairment;
review
for any
• Where
existed,
indicators
assessing
management’s
impairment assessment by
checking the mathematical accuracy of the cash
flow model, and reconciling
to
supporting evidence, such as approved budgets
and considering the reasonableness of these
budgets;
input data
•
•
•
the
reasonableness
Challenging
key
assumptions, including the cash flow and revenue
projections, revenue growth rate, exchange rates,
discount rates, and any sensitivities used; and
of
Confirming our understanding of the nature of the
intangible assets, the strategic purpose of the
projects and its ability to generate future revenues
through discussions with management.
Reviewing the adequacy of disclosures against
the requirements of AASB 136.
Refer to Note 13 in the financial statements
The group received a $0.87m loan that bears no
interest.
Our audit procedures in relation to the accounting for
interest free loans included:
Given the nature of the loan, the determination of
the fair value of the loan can be complex and
requires significant management estimate and
judgement. Further,
the correct accounting
treatment between the fair value of the loans and
the face value of the loans can be complex. For the
reasons noted above, accounting for the above loan
was considered a key audit matter.
•
•
•
•
Reviewing loan agreement to verify loan amount,
interest rate and maturity date;
Obtaining confirmation from the lender verifying
he loan balance at balance date;
in
Assessing management’s
determining the fair value of the loan, including
the discount rate/market interest rate used; and
Reviewing the accounting treatment for the
difference between fair value of the loan and the
face value of the loan.
assumptions
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BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Other Information
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 2020, but does not include the financial report and the
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.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description
forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Beam Communications Holdings Limited., for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
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ANNUAL REPORT 2020
Report on the Remuneration Report (continued)
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.
RSM AUSTRALIA PARTNERS
M PARAMESWARAN
Partner
Dated: 28 August 2020
Melbourne, Victoria
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Designed & built in Australia for
Australian conditions.
4G
59
4G LTE
durable
weatherproof
vibration & shock
resistant
ANNUAL REPORT 2020
AUSTRALIAN SECURITIES EXCHANGE
INFORMATION
SUBSTANTIAL SHAREHOLDERS
Number of
Shares % of Class
DAVID STEWART/GLENAYR P/L
10,905,000
20.62%
FF OKRAM PTY LTD
SGV1 HOLDINGS LIMITED
8,634,258
16.33%
5,409,874
10.23%
- These shareholders do not hold any options to subscribe for ordinary shares.
DISTRIBUTION OF SHARES
Size of Holdings
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Number of
Number of
Holders
252
210
102
235
Shares
72,369
634,715
823,181
%
0.14%
1.20%
1.56%
8,661,201
16.38%
50
42,681,986
80.72%
TOTAL
849
52,873,452
100.00%
HOLDERS OF LESS THAN A MARKETABLE PARCEL OF QUOTED
ORDINARY SHARES
Number of
% of Total
Number of
% of Total
Holders
Holders
Shares
Quoted Shares
316
37.22%
181,951
0.34%
As at 31 August 2020.
This section includes information required by ASX Listing Rules
which is not disclosed elsewhere in this Annual Report.
TWENTY LARGEST SHAREHOLDERS
Number
% of Class
DAVID STEWART/GLENAYR P/L
10,905,000
FF OKRAM PTY LTD
SGV1 HOLDINGS LIMITED
ARTPRECIATION PTY LTD
8,634,258
5,409,874
1,798,632
WASHINGTON SOUL PATTINSON
1,636,144
CAPOCCHI SUPER PTY LTD
VINCENT GALANTE
RAPAKI PTY LTD
HOTTON FAMILY
EVERCITY PTY LTD
TOM BEKIARIS
HSBC CUSTODY NOMINEES
CITICORP NOMINEES PTY LTD
ROBERT MANSFIELD NIALL
G CHAN PENSION PTY LTD
TWARTZ FAMILY
ANTHONY FRANK MASON
RICHARD ANTONY PRESS
INVIA CUSTODIAN PTY LTD
PAUL RIETHMAIER
1,603,899
1,111,146
1,076,473
832,052
780,000
731,835
608,590
529,977
527,200
499,988
416,666
400,000
391,000
348,731
326,565
20.62%
16.33%
10.23%
3.40%
3.09%
3.03%
2.10%
2.04%
1.57%
1.48%
1.38%
1.15%
1.00%
1.00%
0.95%
0.79%
0.76%
0.74%
0.66%
0.62%
TOTAL TOP 20:
38,568,030
72.94%
TOTAL ISSUED:
52,873,452
100.00%
HOLDERS OF EACH CLASS OF EQUITY SECURITY
The company has issued:
- 52,873,452 ordinary fully paid shares to 849 shareholders.
- 1,697,025 options to subscribe for ordinary shares to 7 option
holders.
VOTING RIGHTS
There are 52,873,452 ordinary fully paid shares held by 849
members and these are the only class of share currently issued.
The Company’s Constitution provides that every member present
in person, by proxy or by corporate representative or by appointed
attorney shall on the show of hands have one vote.
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BEA M COM MU NIC ATI O NS HOLD ING S LIM ITE D
Beam Communications Holdings Limited
ABN 39 010 568 804
5/8 Anzed Court,
Mulgrave, VIC,
Australia 3170
+61 3 8561 4200
+61 3 9560 9055
investor@beamcommunications.com
www.beamcommunications.com
Beam Communications Pty Ltd
SatPhone Shop Pty Ltd
SatPhonerental Pty Ltd
Beam Communications USA Inc.
ABN 97 103 107 919
ABN 40 099 121 276
ABN 18 114 959 992
Delaware Corporation No. 5228652
5/8 Anzed Court,
Mulgrave, VIC,
Australia 3170
+61 3 8588 4500
+61 3 9560 9055
5/8 Anzed Court,
Mulgrave, VIC,
Australia 3170
5/8 Anzed Court,
Mulgrave, VIC,
Australia 3170
C/- Martensen Wright PC
One Capitol Mall, Suite 670
Sacramento, CA 95814 USA
+61 1 300 368 611
+61 3 8669 4424
+61 1 300 368 611
+61 3 8669 4424
+1 800 250 5819 (USA only)
info@beamcommunications.com
info@beamcommunications.com
info@satphoneshop.com
rentals@satphoneshop.com
www.beamcommunications.com
www.beamcommunications.com
www.satphoneshop.com
www.satphonerentals.com.au