Boise Cascade Company
Annual Report 2023

Plain-text annual report

Experience world class satellite solutions 2 0 2 3 A N N U A L R E P O R T Beam Communications Holdings Limited DIRECTORS Mr Simon Lister Wallace Mr Michael Ian Capocchi Mr Mark Allan Chartres CO MPANY SECRETA RY Mr Dennis Frank Payne REGISTERED OFFICE & PR INCIPAL PLACE OF BUSIN ESS Beam Communications Holdings Limited Unit 5/8 Anzed Court Mulgrave, VIC, 3170 Ph: (03) 8561 4200 Email: investor@beamcommunications.com SHARE REGI STER Link Market Services Ltd Locked Bag A14 Sydney South, NSW, 1235 Ph: 1300 554 474 AUDI TO R RSM Australia Partners Level 21, 55 Collins Street Melbourne, VIC, 3000 Ph: (03) 9286 8000 SOLICITORS Thomson Geer Level 23, Rialto South Tower 525 Collins Street Melbourne, VIC, 3000 Ph: (03) 8080 3500 STOCK EXCHANGE LISTIN G Beam Communications Holdings Limited shares are listed on the Australian Securities Exchange (ASX code: BCC) CORPORATE GOVE RNAN CE STATEMENT The Corporate Governance statement can be found on the investors page at https://www.beamcommunications. com/investors/corporate-governance EMAIL investor@beamcommunications.com ASX OFFICE Based in Melbourne ASX CODE BCC As a market leader, Beam excels to meet the emerging needs of our customers in mobile satellite technology, tracking, monitoring and communication for over two decades C O N T E N T S Company Directory Chairman’s Report Directors’ Report Auditor’s Independence Declaration Consolidated Financial Statements Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Auditor’s Report Security Holder Information 1 2 6 21 22 23 24 25 26 51 52 56 W O R L D C L A S S • Satellite Solutions • Innovative Technology • Customer Service 1 BEAM COMMUNICATIONS HOLDINGS LIMITEDC H A I R M A N ' S R E P O R T Dear Shareholders, I am delighted to address you today following a remarkable year of accomplishments for our Company. As Chairman, I am immensely proud to share that we have achieved record-breaking results driven by strong sales and rising recurring revenues across Beam’s key businesses. Our collective efforts have not only propelled us to new financial heights but have also solidified our leadership position in the global Mobile Satellite Services (MSS) industry, thereby putting us at the forefront of a rapidly growing market. The investment in our sector and priorities being demonstrated by large global players is testament to the opportunities that continue to exist in satellite communications. One of the driving forces behind our remarkable performance has been the furtherance of an already impressive reputation for innovation. We have relentlessly invested in research and development to create products and services that not only meet, but exceed, the expectations of our customers. Our ability to anticipate market trends and evolving needs has allowed us to stay ahead of the curve, resulting in products and technologies that are truly cutting-edge. Pleasingly, our success to date is not confined to a single market or offering. We have expanded our global footprint and product range, tapping into new markets and regions. This strategy has not only contributed to our strong financial performance but has also enhanced our brand presence and reputation on a global scale. The full Directors’ Report contains more extensive information on the Group’s performance in the financial year, but I would like to present the following highlights. P R O F I T P E R F O R M A N C E A N D M A J O R I M P A C T S Group revenue increased a significant 67.1% year-on-year (YoY) in FY23 to $39.6 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased to $4.3 million (FY22: $1.5 million) and net profit after tax (NPAT) improved to $2.1 million (FY22: loss of $177 thousand). Beam’s revenue, EBITDA and NPAT are at their highest levels in the Company’s history. On any measure, this has been a remarkable year. One of the key contributors to these objectively impressive results is the successful launch of the next-generation portable satellite hotspot device, Iridium GO! exec®, with orders running well ahead of schedule. Beam secured a US$12 million five-year contract with Iridium Communications Inc (NASDAQ: IRDM) to design, build and supply this world-first innovation, which is sold globally to the enterprise, government and consumer markets. Sales of Beam’s other equipment also contributed to the record results. This includes docking units, satellite terminals, accessories and the original Iridium GO!® hotspot, which was launched in 2014 and continues to enjoy strong market demand. Importantly, Beam’s recurring revenues have increased 39.6% to $1.6 million in FY23. This increase is driven by growth in ZOLEO subscriptions in Australia and New Zealand with the total number of net subscribers increasing by two-thirds compared to over 6,200 as of 30 June 2023. Beam receives a royalty payment for each ANZ subscriber. Recurring revenues are also being bolstered by the recently awarded Telstra subsidiary deal with MTData. Another contributor to Beam’s strong financial performance is the growth of SatPhone Shop, a wholly owned subsidiary of Beam and the largest Telstra satellite equipment provider. The business recorded a 6.7% increase in sales in FY23 compared to the previous year to just over $2.5 million due to strong demand for satellite equipment as Beam benefited from continued strong growth in the mobile satellite services market. 2 3 BEAM COMMUNICATIONS HOLDINGS LIMITED O U T L O O K A N D P R O J E C T S S T A F F A N D B O A R D The momentum from FY23 is anticipated to carry over into the new financial year as Beam is well positioned to benefit from the significant uptick in the MSS market and from associated demand for its range of world-first innovative offerings. In keeping with our tradition of innovation, Beam is developing a further Iridium Certus® offering following the successful launch of the Iridium GO! exec®, and the development of a new Beam branded device that will also generate recurring subscription revenues in addition to hardware sales. Market awareness about the importance and utility of satellite services has recently been bolstered by high-profile brands like Apple and Starlink, which are transforming what was regarded as a niche application into more of a mainstream offering. Beam’s products and services do not compete directly with these companies and will benefit from the expected expansion in the MSS market, which is driven by the increasing demand for reliable and secure connectivity, particularly for data, in remote and hard-to-reach areas where access to terrestrial networks is limited. The sales performance of Iridium GO! exec® and other Beam innovations are symptomatic of this uptrend, which also bodes well for the continued growth of our recurring revenues from ZOLEO subscriptions and satellite airtime sales. Another positive driver for FY24 is the SatPhone Shop business, which is leveraged to the organic growth in the MSS sector and from rising demand for Beam’s solutions. Moreover, the business is strategically important to Beam as it gives it a direct channel to market. The devotion and tenacity of our staff is a major reason behind our success, and I cannot express enough my personal and professional admiration and appreciation to everyone at Beam. The fact that a small company like ours can develop so many world-first innovations over the years from our humble offices at Mulgrave, Victoria, is a testament to the quality of talent and dedication in the team. Even as we hand down record levels of revenue and earnings from the commercial success of our products and services portfolio, our dedicated team is already gearing up to launch new innovations that will provide an important additional tailwind for growth. Beam did not issue new shares during the year but did issue 200,000 sign-on options to director Mark Chartres with an exercisable price of $0.53 and expiring on 1 February 2025. Finally, I would like to end by congratulating everyone in the Beam family for achieving an outstanding full year result and for playing an invaluable part in building a successful and innovative company that punches above its weight in so many respects. I have confidence the value of the company will transition to reflect the recent and forecast performance of the company, providing growth to shareholders and the capital position of the company. Mr Simon Wallace Chairman 30 August 2023 2 0 + Y E A R S • Experience • Expertise • Excellence 4 5 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam's experience fosters and co-develops partnerships to deliver world class business solutions D I R E C T O R ' S R E P O R T The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group' or 'Beam') consisting of Beam Communications or Beam Communications Holdings Limited (referred to hereafter as the 'Company' or 'Parent Entity') and the entities it controlled at the end of, or during, the year ended 30 June 2023. D I R E C T O R S The following persons were directors of Beam Communications Holdings Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr Simon Lister Wallace (Non-executive chairman) Mr Michael Ian Capocchi (Managing director) Mr David Paul James Stewart (Non-executive director, resigned 30 September 2022) Mr Mark Allan Chartres (Non-executive director) C O M P A N Y S E C R E T A R Y Mr Dennis Frank Payne L E A D I N G • Innovation • Communication • Connection S I M O N L I S T E R W A L L A C E Non Executive Chairman M I C H A E L I A N C A P O C C H I Managing Director M A R K A L L A N C H A R T R E S Non Executive Director Age: 49 Age: 52 Age: 44 Mark Chartres was appointed to the Board of Directors as an Independent Non-Executive Director, commencing on 1 February 2022. Mark has spent nearly two decades professionally engaged in financial markets, including with Macquarie Group and presently Shaw and Partners. Mark’s knowledge of our business, financial acumen and investment experience will materially augment the Board’s skills matrix. 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. With extensive legal and commercial proficiency, and particular expertise in the areas of project finance, fundraising and corporate governance, Simon has substantial professional experience in the areas of investment banking, structured and direct equity investments, product formulation and sales. Simon is admitted to practice 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. Since its inception in August 2018, Simon has been a Director of Zoleo Inc. the joint venture entity of which the Group is a 50% partner with Roadpost Inc of Canada. Simon Wallace has been a Director of Beam Communications Holdings Limited since 5 February 2015 and was elected Chairman on 22 December 2016. Michael Capocchi has over 25 years’ experience in the ICT industry and has held several senior management positions. Michael is based in Chicago, USA, which places him closer to the important centres for satellite communications in the USA and UK/Europe. Michael joined Beam Communications Holdings Limited as the General Manager of the subsidiary, Beam Communications Pty Ltd, in 2003 and was appointed as Managing Director of Beam Communications Holdings Limited in March 2008. Prior to joining the Group, Michael was the Regional Sales Director for Iridium Satellite LLC, directly managing the sales, distribution and channel management strategies for the 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. Since its inception in August 2018, Michael has been a Director of Zoleo Inc. the joint venture entity of which the Group is a 50% partner with Roadpost Inc of Canada. Michael Capocchi is an integral part of the Group’s business, including managing the day to day operations of the group which occasions extensive domestic and international travel when possible. B E A M C O M M U N I C A T I O N S H O L D I N G S L I M I T E D 6 7 B E A M C O M M U N I C A T I O N S H O L D I N G S L I M I T E D D I R E C T O R S H I P S O F O T H E R L I S T E D C O M P A N I E S P R O F I T A N D P E R F O R M A N C E C A S H A N D F U N D I N G No 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. P R I N C I P A L A C T I V I T I E S The activities of the Group and its controlled entities during year were the development and marketing of a range of communication products and services, mainly satellite based. D I V I D E N D S There were no dividends paid, recommended or declared during the current financial year. R E V I E W O F O P E R A T I O N S The profit for the Group after providing for income tax amounted to $2,075,148 (30 June 2022: loss of $176,805). A summary of the result for the year is as follows: Revenue Other income Deduct: Cost of goods sold, research & development, administrative marketing and corporate expenses Operating profit before amortisation, depreciation, interest and tax Deduct: Amortisation Depreciation Interest Operating profit Net tax credit/(expense) Net profit/(loss) for year Total comprehensive income/(loss) for year 2023 ($000) 39,552 541 (35,829) 4,264 (1,987) (200) (152) 1,925 150 2,075 2,075 2022 ($000) 23,663 665 (22,851) 1,477 (1,006) (199) (151) 121 (297) (176) (176) The company achieved its third consecutive year of record revenue in the financial year ended 30 June 2023 (FY23) driven by the launch of the Iridium GO! exec® device and growing global demand for its range of mobile satellite solutions. Group operating revenue increased 67.1% in FY23 to $39.6 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased to $4.3 million (FY22: $1.5 million) and net profit after tax (NPAT) improved by $2.3 million to $2.1 million (FY22: loss of $177 thousand). Beam’s revenue, EBITDA and NPAT are at their highest levels in the Company’s history. Beam’s cash holdings at 30 June, 2023, were $5 million and it had a further $1.2 million in available but undrawn debt facilities. The Company posted a positive operating cash flow of $2.4 million in FY23, which was driven by the further unwinding of trade working capital following the successful launch of the Iridium GO! exec® device. Beam capitalised $3.3 million in development costs primarily relating to ZOLEO and Iridium GO! exec®, and received the federal government’s R&D tax credit of $884,437 in the last financial year. One of the key contributors to the solid results is the successful launch of the next-generation portable satellite hotspot device, Iridium GO! exec, with orders running well ahead of schedule. Beam secured a US$12 million five-year contract with Iridium Communications Inc (NASDAQ: IRDM) to design, build and supply this world-first innovation, which is sold globally to the enterprise, government and consumer markets. Sales of Beam’s other equipment also contributed to the record results. This includes docking units, satellite terminals, accessories and the original Iridium GO!® hotspot, which was launched in 2014 and continues to enjoy strong market demand. Importantly, Beam’s recurring revenues have increased 39.6% to $1.6 million in FY23. This increase is driven by growth in ZOLEO subscriptions in Australia and New Zealand with the total number of net subscribers increasing by two-thirds compared to over 6,200 as of 30 June 2023. Beam receives a royalty payment for each ANZ subscriber. Group recurring revenue was also bolstered by the uplift in airtime sales, particularly after Beam secured a contract to provide airtime services to Telstra Group Limited’s (ASX: TLS) subsidiary, Mobile Tracking and Data Pty Ltd, which is worth in excess of $1.2 million over two years (the contract rolls over yearly, unless otherwise ended, after the two-year minimum term). Additionally, the launch of ZOLEO into the European region gained further traction in FY23 as the seamless satellite messaging solution was made available across all 30 countries in the European Economic Area (EEA) compared with just five countries in the region at its initial launch in May last year. Another contributor to Beam’s pleasing financial performance is the growth of SatPhone Shop, a wholly owned subsidiary of Beam and the largest Telstra satellite equipment provider. The business recorded a 6.7% increase in sales in FY23 to just over $2.5 million due to strong demand for satellite equipment as Beam benefited from continued strong growth in the mobile satellite services market. 6 7 8 9 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED O U T L O O K A N D P R O J E C T S M A T E R I A L B U S I N E S S R I S K S T O S T R A T E G Y A N D F I N A N C I A L P E R F O R M A N C E Additionally, sales and subscriptions of the seamless satellite communicator, ZOLEO, continues to grow. Beam believes that royalty payments to the Company will continue to increase year-on-year over the medium-term, if not longer-term. The Company’s positive outlook for ZOLEO stems in part from the recent introduction of the ZOLEO Track service, which will open new opportunities to sell the solution to the global B2B market and increase Average Revenue per User (ARPU). The feature allows organisations to monitor, manage and locate staff in real-time to improve safety and operational efficiency of their staff. Further, ZOLEO Track is likely to increase enterprise and government subscriptions to the Location Share+ value-added service, which is in addition to the monthly ZOLEO subscription plan. This is because when both services are active, customers can also receive automatic location updates, check-ins, SOS events and detailed breadcrumb track points. Meanwhile, Beam is expecting sales and subscriptions of ZOLEO in Europe to rise materially in FY24 as several key retailers in the region have started carrying and promoting the product. The recent availability of German language support will also help ZOLEO gain stronger traction in countries like Germany, Austria and Switzerland. Another positive driver for FY24 is the SatPhone Shop business, which is perfectly placed to benefit from organic growth in the MSS sector and from rising demand for Beam’s solutions. Moreover, the business is strategically important to Beam as it gives it a direct channel to market. With the launch of a new website and a variety of new products, we anticipate further opportunities in the B2B space. The momentum from FY23 is expected to carry over into the new financial year as Beam is well positioned to benefit from the ongoing growth of the Mobile Satellite Services (MSS) market and from associated demand for its range of world-first innovative offerings. The Company is forecasting CAPEX of circa $3 million in FY24, which relates to two new projects that Beam is undertaking – a further Iridium Certus® offering following the successful launch of the Iridium GO! exec®, and the development of a new Beam branded device that will also generate recurring subscription revenues in addition to hardware sales. Market awareness about the importance and utility of satellite services has recently been bolstered by high-profile brands like Apple and Starlink, which are transforming what was regarded as a niche application into more of a mainstream offering. Beam’s products and services do not compete directly with these companies and will benefit from the expected expansion in the MSS market. The global MSS industry is forecast to expand at around 7% compound annual growth rate (CAGR) from 2023 to 2030 to hit US$9.7 billion, according to Grand View Research1. This growth is driven by the increasing demand for reliable and secure connectivity, particularly for data, in remote and hard-to-reach areas where access to terrestrial networks is limited. The sales performance of Iridium GO! exec is symptomatic of this uptrend. Beam completed delivery of the first year’s minimum commitment against its five-year contract in the first six months of the launch of the device. Beam believes that the US$12 million minimum order for the hotspot device will be exceeded before the end of the contract and further anticipates that it will have fulfilled circa 80% of the contract by end of the current financial year. Meanwhile, there are few signs of a slowdown in global demand for the original Iridium GO!® device, even though it was launched nine years ago. This device is aimed at a different user demographic to the Iridium GO! exec®, and the long lifecycle of satellite equipment bolsters our confidence about the sustained growth of these innovations. A C C E S S T O C A P I T A L A N D D E B T Beam’s ability to fund future growth and profitability may be affected by its ability to access funding from equity investors, credit markets and other financial institutions. This access is dependent on several factors, such as the Company’s financial performance, but may also include factors that are outside its control, such as general economic and market conditions. There is a risk that the Company may be unable to access debt or equity funding when required on favourable terms, or at all. R E G U L A T O R Y A N D C O M P L I A N C E R I S K S The telecom and satcom industries are highly regulated in each country. These rules and regulations allowing access to services may change with little warning and can have a positive or negative impact on Beam’s financial performance. Further, Beam has to ensure it receives the necessary approvals and meet required industry standards in all countries before it can sell its hardware in those markets. C Y B E R S E C U R I T Y R I S K S Beam’s IT systems contain sensitive information on its products and technology, along with customer and third-party information. While Beam exercises due care in protecting its data, it is possible that these measures will not be enough to prevent unauthorised access to its systems and technologies. Such a breach may expose the Company to financial loss, reputational damage and legal consequences, including claims for compensation by customers or penalties by telecommunications regulators or other authorities. Beam has identified a number of material risks that may affect the success of the business over the coming periods, including some that are not directly within its control. The Company’s risk management approach involves the ongoing assessment, monitoring and reporting of risks that could impede its progress in delivering its strategic priorities. The key risks are outlined below (not ranked in any order), although it is important to note that as Beam’s business continues to grow and evolve, these risks and the Company’s risk profile may change. F O R E I G N E X C H A N G E R I S K Beam’s equipment and services are sold around the world and most of its revenue is derived in US dollars. This exposes the Company to fluctuations in exchange rates, which are driven by market forces outside its control. A change in the exchange rate to the Australian dollar may have a positive or negative effect on the business. L O S S O F K E Y P E R S O N N E L The Company’s ability to be productive, profitable and competitive, and to implement its growth strategy, depends on the continued employment and performance of senior executives and management. Beam runs a globally complex operation and its performance also depends on its ability to attract and retain skilled workers with the relevant industry and technical experience. The loss of key personnel or the inability to attract additional personnel may have an adverse impact on its financial and operating performance. To mitigate some of this risk, Beam has insurance cover for its Managing Director and Chief Executive Officer, Michael Capocchi. P A R T N E R S H I P R I S K S Beam has established partnerships with most of the world’s largest satellite operators, particularly Iridium Communications. A breakdown of such partnerships is likely to impede on the Company’s ability to offer hardware and services to Beam’s clients and such an outcome may have a material and negative impact on its financial performance. T E C H N O L O G I C A L C H A N G E S A N D C O M P E T I T I O N The industry that Beam operates in is subject to constant technological change. These changes often bring new opportunities and competitive threats. To ensure the continual growth and profitability of the business, Beam must constantly be vigilant of these changes and invest in improving its existing offering and developing new innovations. C H A N N E L P A R T N E R S U P P O R T As Beam’s products and services are sold in Australia and globally, it relies on its network of channel partners. Beam’s ability to acquire and retain these partners will have a material impact on the continued growth in revenue and profitability of the Company. Beam protects its channel network by ensuring these partners can make a reasonable margin and carefully manages sales of its products and services on third-party online marketplaces. 1 https://www.grandviewresearch.com/press-release/global-mobile-satellite-services-market 8 B E A M C O M M U N I C A T I O N S H O L D I N G S L I M I T E D 10 11 BEAM COMMUNICATIONS HOLDINGS LIMITED D I R E C T O R S A N D I N V E S T O R S S I G N I F I C A N T C H A N G E S I N T H E S T A T E O F A F F A I R S There were no changes in the issued capital of the Group during the year. Mr Simon Wallace, a shareholder in the Group, has been a Director for eight years and is currently the Non-Executive Chairman of the Board. Simon has lengthy and detailed expertise in legal and commercial matters and leads the Board and the Group in fund raising activities, strategic and corporate governance advice. Mr David Stewart retired from the Board effective 30 September 2022, after spending nearly five years on the Group’s board. Mr Michael Capocchi is an Executive Director and holds the positions of Managing Director and Chief Executive Officer for all companies in the Group. His base in the USA enables him to easily visit the Middle East and UK/Europe, where many core clients are based, as well as domestically within the US. Michael travels frequently to Australia and retains direct and daily contact with management. Michael is also a significant shareholder in the Group. Mr Mark Chartres, has been a Director for over 12 months and he has spent nearly two decades professionally engaged in financial markets, including with Macquarie Group and Shaw and Partners (presently). He is very familiar with the Group’s operations, aspirations and investment profile, and has in the past assisted in furthering the Group’s funding requirements as well as providing counsel on key investor expectations and priorities. Other than those noted above there were no significant changes in the state of affairs of the Group during the financial year. M A T T E R S S U B S E Q U E N T T O T H E E N D O F T H E F I N A N C I A L Y E A R No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. L I K E L Y D E V E L O P M E N T S A N D E X P E C T E D R E S U L T S O F O P E R A T I O N S The Company will continue the development and marketing of a range of communications devices, mainly satellite based. Further information on likely developments in the operations of the Group and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Group. E N V I R O N M E N T A L R E G U L A T I O N The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law. M E E T I N G S O F D I R E C T O R S The Directors believe the Group is well placed to continue to deliver strong result in FY24 due to the Group’s strong balance sheet and many growth options, including the continued success of the new Iridium GO! exec® device, ongoing geographical expansion of ZOLEO and the strong build in ZOLEO royalty payments. The number of meetings of the Group's Board of Directors ('the Board') and of each Board committee held during the year ended 30 June 2023, and the number of meetings attended by each Director were: Directors Meetings Attended Directors Meetings Maximum Attendable Commitees Commitees Attended Maximum Attendable M Capocchi D Stewart (resigned 30 September 2022) S Wallace M Chartres 18 5 18 17 18 5 18 18 - 1 2 1 - 1 2 1 Maximum Attendable: represents the number of meetings applicable to the director during the time the director held office. R E M U N E R A T I O N R E P O R T ( A U D I T E D ) The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all Directors. The remuneration report is set out under the following main headings: ● Principles used to determine the nature and amount of remuneration ● Details of remuneration ● Share-based compensation P R I N C I P L E S U S E D T O D E T E R M I N E T H E N A T U R E A N D A M O U N T O F R E M U N E R A T I O N This report details the nature and amount of remuneration for each Director and KMP of Beam Communications Holdings Limited. R E M U N E R A T I O N P O L I C Y The Group is committed to remunerating its Executive Directors and senior executives in a manner that is market-competitive, consistent with best practice and which supports the interests of shareholders. The Group aims to align the interests of Executive Directors and senior executives with those of shareholders by remunerating through performance and long-term incentive plans in addition to fixed remuneration. 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 in aggregate must not exceed the maximum annual amount approved by the Group’s shareholders, currently $500,000, as determined at the General Meeting held on 3 August 2007. Senior executives’ remuneration consists of the following elements: ● fixed salary; ● short-term incentive bonus where applicable based on performance; ● long-term incentive share option scheme; and; ● other benefits including superannuation. Fixed salary The salary of senior executives is determined from a review of the market and reflects core performance requirements and expectations. In addition, the Company considers the following: ● The scope of the individual's role; ● The individual's level of skill and experience; ● Legal and industrial obligations; ● Labour market conditions; and ● The complexity of the Company's business. The purpose of a performance bonus is to reward an individual’s actual achievement of performance objectives and for materially improved Group performance. Consequently, performance-based remuneration is paid where a clear contribution to successful outcomes for the Group is demonstrated and the individual attains and excels against pre-agreed key performance indicators during a performance cycle. In assessing the relative performance of the senior executives and the Group as a whole measured against the primary objective of enhancing shareholder value over time, the Board has regard to key financial indicators. In accordance with Section 300A of the Corporations Act 2001 the following table summarises the Group's performance over the last 5 years. 2023 2022 2021 2020 Net profit/(loss) before tax ($’000) 1,925 EBITDA ($’000) Basic earnings per share (cents) Share price at 30 June ($) Market Capitalisation at 30 June ($m) Dividends per share 4,264 2.40 0.18 15.6 Nil 121 1,477 (0.22) 0.20 17.28 Nil 780 (1,518) 1,991 0.76 0.24 17.64 Nil 3,276 (0.31) 0.17 8.99 Nil 2019 722 2,104 0.64 0.27 14.28 Nil The Board believes the above table goes some way to illustrate the positive direction the Group has taken over the past 5 years and is reflective of much, but not all, of the performance of senior executives during that period. Due to the nature of the Groups business, there are often major influences on a particular financial year’s profit result. Confidence in the strategy and growth agenda was clearly demonstrated in FY23 by the increase in revenue, EBITDA and NPAT for the Group. 12 13 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Long-term Incentives Details of remuneration The remuneration for each director and each of the other key management personnel of the Group receiving the highest remuneration during the year was as follows: The Group’s Share Options Incentive Plan, in which Directors and senior executives may participate, was approved by shareholders on 27 October 2017 and authorises the Directors to issue options in respect of up to 10% of the shares on issue at a given time. The Group ensures that the payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders. The key management personnel of the Group consisted of the following directors of Beam Communications Holdings Limited: ● Mr S Wallace - Non-Executive Chairman ● Mr M Capocchi - Executive Managing Director ● Mr D Stewart - Non-Executive Director (resigned 30 September 2022) ● Mr M Chartres - Non-Executive Director As noted in this report, options were issued to a Director during the 2023 financial year, reflecting sign on obligations and achieved incentives. And the following persons: ● Mr W Christie - Chief Technical Officer ● Mr D Sleigh - Chief Financial Officer 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 KMP S Wallace M Capocchi M Chartres W Christie D Sleigh Notice None 9 months (after minimum term of 27 months) Termination Payment Non-Compete Term None None post-employment No fixed term Notice paid in leu None post-employment 36 months from 1 July 2022 None None None post-employment No fixed term 1 month Notice paid in leu 12 months No fixed term 3 months Notice paid in leu None post-employment No fixed term 30 June 2023 Non-Executive Directors: Mr S Wallace Mr M Chartres Mr D Stewart Executive Directors: Mr M Capocchi (c) Other Key Management Personnel: Mr W Christie Mr D Sleigh 30 June 2022 Non-Executive Directors: Mr S Wallace Mr M Chartres Mr D Stewart Executive Directors: Mr M Capocchi (c) Other Key Management Personnel: Mr D Payne Mr W Christie Mr D Sleigh Short-term benefits Post- employment benefits Long-term benefits Share-based payments Cash salary and fees Cash bonus and commission Employee benefits payable (b) Superannuation Employee benefits payable Options (a) $ 70,909 20,833 21,666 $ - - - $ - - - $ 7,445 - - $ - - - $ - 35,412 - Total $ 78,354 56,245 21,666 361,236 266,407 21,635 50,894 13,255 44,531 757,958 243,378 209,999 928,022 - 40,000 306,407 (2,214) 6,478 25,899 25,292 22,050 9,498 873 - 30,549 275,954 309,949 105,681 23,626 110,492 1,500,129 Short-term benefits Cash salary and fees $ Cash bonus and commission $ Employee benefits payable (b) $ Post- employment benefits Superannuation $ Employee benefits payable $ Long-term benefits Share-based payments 68,182 20,833 41,666 - - - - - - 6,818 - - - - - Options (a) $ - 4,245 - Total $ 75,000 25,078 41,666 432,506 52,969 8,319 52,591 7,210 25,865 579,460 89,744 224,034 121,338 998,303 5,000 5,000 26,666 89,635 1,201 12,414 1,615 23,549 9,574 22,403 12,250 3,034 4,928 238 103,636 15,410 - - 15,818 45,928 108,553 268,779 177,925 1,276,461 (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 2023 his remuneration has been converted into AU dollars at the exchange rate on 30 June 2023 of 0.6630 (2020: 0.6889) 14 15 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED The proportion of remuneration linked to performance and the fixed proportion are as follows: Fixed remuneration At risk - STI At risk - LTI Name: 30 June 2023 30 June 2022 30 June 2023 30 June 2022 30 June 2023 30 June 2022 Non-Executive Directors: Mr S Wallace Mr D Stewart Mr M Chartres Executive Directors: 100% 100% 37% 100% 100% 83% - - - - - - - - 63% - - 17% Mr M Capocchi (c) 59% 86% 35% 9% 6% 5% Other Key Management Personnel: Mr W Christie Mr D Sleigh 100% 77% 98% 76% - 13% 2% 15% - 10% - 9% S H A R E - B A S E D C O M P E N S A T I O N 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. Balance 1 July 2022 Received as remuneration Options exercised Placement issue Ceasing to be a KMP Net change other (a) Balance 30 June 2023 Mr D Stewart (c) 10,905,000 Mr M Chartres (b) - 200,000 2,832,099 62,778 18,182 14,018,059 - - - - - - - - - - - - - - - - - - - - - - - - 200,000 292,221 3,124,320 (10,905,000) - - - - - - - - - 62,778 18,182 (10,905,000) 292,221 3,405,280 Net change other refers to shares purchased or sold on-market or off-market at current market prices during the financial year. Mark Chartres was appointed as a director on 1 February 2022. Upon appointment Mr Chartres held no shares in the Group. David Stewart resigned as a director on 30 September 2022. (a) (b) (c) Options 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. 2023 Directors: Mr S Wallace Mr M Capocchi Mr D Stewart Mr M Chartres Other: Mr W Christie Mr D Sleigh 2022 Directors: Mr S Wallace Mr M Capocchi Mr D Stewart Mr M Chartres Other: Mr D Payne Mr W Christie Mr D Sleigh Balance 1 July 2022 Granted as remuneration Issued as equity investment Options exercised Options lapsed Balance 30 June 2023 - 530,798 - - - - 200,000 1,100,000 - 404,546 1,135,344 - - 1,100,000 - - - - - - - - - - - - - - - - - - - - - - 530,798 - 1,300,000 - 404,546 2,235,344 Balance 1 July 2021 Granted as remuneration Issued as equity investment Options exercised Options lapsed Balance 30 June 2022 - - - - - - - - - 530,798 - 200,000 - - 400,000 1,130,798 - - - - - - 4,546 4,546 - - - - - - - - - - - - - - - - - 530,798 - 200,000 - - 404,546 1,135,344 Balance 1 July 2021 Received as remuneration Options exercised Placement issue Ceasing to be a KMP Net change other (a) Balance 30 June 2022 All options held by Directors and key management personnel at 30 June 2023 were currently un-exercisable as at balance date. - - - - - - 18,182 18,182 - - - - (328,570) - - - 200,000 160,202 2,832,099 - - - - - 10,905,000 - - 62,778 18,182 (328,570) 160,202 14,018,059 - - - - - - - - - - - - - - - - 16 17 2023 Directors: Mr S Wallace Mr M Capocchi Other: Mr W Christie Mr D Sleigh 2022 Directors: Mr S Wallace Mr M Capocchi 200,000 2,671,897 Mr D Stewart (c) 10,905,000 Mr M Chartres (b) - Other: Mr D Payne Mr W Christie Mr D Sleigh 328,570 62,778 - 14,168,245 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED  S H A R E S I S S U E D O N E X E R C I S E O F R E M U N E R A T I O N O P T I O N S Details of options granted to and/or vested to key management personnel during the 2023 financial year are outlined below: No shares were issued on exercise of renumeration options during the current period. 2023 V O T I N G A N D C O M M E N T S M A D E A T T H E C O M P A N Y ' S 2 0 2 2 A N N U A L G E N E R A L M E E T I N G ( A G M ) At the Company's most recent AGM, held on 30 November 2022, a resolution to adopt the prior year (2022) remuneration report was put to the vote and more than 25% of votes cast were against the adoption of that report. This constituted a "first strike" under the executive remuneration related provisions of the Corporations Act. O P T I O N S I S S U E D Details of options over ordinary shares granted, vested and lapsed for directors and other key management personnel as part of compensation during the years ended 30 June 2023 and 30 June 2022 are set out below: 2023 Name Grant date Vesting date Number of options granted Value of options granted $ Value of options vested $ Value of options exercised $ Value of options lapsed $ Directors: Mr S Wallace Mr M Capocchi Mr D Stewart - - - - - - - - - - - - Mr M Chartres 02/12/2022 02/12/2023 1,100,000 50,853 - - - - - - - - Other: Mr W Christie Mr D Sleigh 2022 - - - - - - - - - - - - - - - - - - Name Vested No. Granted No. Grant date Value of options granted date Exercise price First exercise date Expiry date Directors: Mr S Wallace Mr M Capocchi Mr D Stewart Mr M Chartres Other: Mr W Christie Mr D Sleigh - - - - - - - - - - - - - - - - - - - - - - - - - - 1,100,000 02/12/2022 0.04623 0.30 02/12/2023 02/12/2024 1,100,000 - - - 1,100,000 - - - - - - - - - - This concludes the remuneration report, which has been audited. S H A R E S U N D E R O P T I O N Unissued ordinary shares of Beam Communications Holdings Limited under option at the date of this report are as follows: Expiry date Exercise price Number under option Grant date 30 November 2021 23 December 2021 23 December 2021 1 February 2022 2 December 2022 31 December 2023 31 August 2026 23 December 2026 1 February 2025 2 December 2024 $1.00 $0.35 $0.35 $0.53 $0.30 3,340,905 530,798 400,000 200,000 1,100,000 5,571,703 Name Grant date Vesting date Number of options granted Value of options granted $ Value of options vested $ Value of options exercised $ Value of options lapsed $ S H A R E S I S S U E D O N T H E E X E R C I S E O F O P T I O N S Directors: Mr S Wallace - - - - Mr M Capocchi 23/12/2021 31/08/2024 530,798 122,614 Mr D Stewart - - - - Mr M Chartres 01/02/2022 01/02/2023 200,000 10,400 Other: Mr D Payne Mr W Christie - - - - - - - - Mr D Sleigh 23/12/2021 23/12/2024 400,000 92,400 - - - - - - - - - - - - - - - - - - 21,916 31,309 - No ordinary shares of Beam Communications Holdings Limited were issued during the year ended 30 June 2023 and up to the date of this report on the exercise of options granted. I N D E M N I T Y A N D I N S U R A N C E O F D I R E C T O R S A N D O F F I C E R S During the year, the Group 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 Group. Further disclosure required under section 300(9) of the Corporations Act is prohibited under the terms of the insurance contract. I N D E M N I T Y A N D I N S U R A N C E O F A U D I T O R The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. 18 19 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED P R O C E E D I N G S O N B E H A L F O F T H E C O M P A N Y G E N E R A L I N F O R M A T I O N No person has applied to the Court under section 237 of the The financial statements cover Beam Communications Holdings Corporations Act 2001 for leave to bring proceedings on behalf of the Limited (the 'Company') as a Group consisting of Beam Communications Company, or to intervene in any proceedings to which the Company Holdings Limited and the entities it controlled at the end of, or during, is a party for the purpose of taking responsibility on behalf of the the year. The financial statements are presented in Australian dollars, Company for all or part of those proceedings. which is Beam Communications Holdings Limited's functional and presentation currency. N O N - A U D I T S E R V I C E S There were no non-audit services provided during the financial year by limited by shares, incorporated and domiciled in Australia. Its registered the auditor. office and principal place of business is: Beam Communications Holdings Limited is a listed public company A U D I T O R ' S I N D E P E N D E N C E D E C L A R A T I O N Unit 5 / 8 Anzed Court Mulgrave, VIC, 3170 A copy of the auditor's independence declaration as required under Australia section 307C of the Corporations Act 2001 is set out immediately after RSM Australia Partners Level 21, 55 Collins Street Melbourne VIC 3000 PO Box 248 Collins Street West VIC 8007 T +61 (0) 3 9286 8000 F +61 (0) 3 9286 8199 www.rsm.com.au this directors' report. A U D I T O R A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial statements. AUDITOR’S INDEPENDENCE DECLARATION RSM Australia Partners continues in office in accordance with section The financial statements were authorised for issue, in accordance with 327 of the Corporations Act 2001. a resolution of directors, on 30 August 2023. The directors have the power to amend and reissue the financial statements. R O U N D I N G O F A M O U N T S The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Mr Simon Wallace Chairman 30 August 2023 As lead auditor for the audit of the financial report of Beam Communications Holdings Limited for the year ended 30 June 2023, 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. RSM AUSTRALIA PARTNERS M PARAMESWARAN Partner Melbourne, VIC Dated: 30 August 2023 20 THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 21 Liability limited by a scheme approved under Professional Standards Legislation BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2023 Beam Communications Holdings Limited STATEMENT OF FINANCIAL POSITION As at 30 June 2023 Consolidated Note 30 June 2023 30 June 2022 $'000 $'000 Consolidated Note 30 June 2023 30 June 2022 $'000 $'000 39,552 23,663 Assets 4 5 6 6 6 7 Revenue Other income Expenses Cost of sales Employment expense Depreciation and amortisation expense Finance costs Administrative expense Legal, insurance and patent Marketing and ICT Share of loss from interest in Joint Venture Other Profit before income tax Income tax benefit/(expense) Profit/(loss) after income tax for the year attributable to the owners of Beam Communications Holdings Limited Other comprehensive income for the year, net of tax Total comprehensive income/(loss) for the year attributable to the owners of Beam Communications Holdings Limited Basic earnings per share Diluted earnings per share 541 665 (28,472) (4,661) (2,187) (166) (494) (487) (822) - (879) 1,925 150 (17,237) (3,445) (1,205) (151) (392) (262) (730) (249) (536) 121 (297) 2,075 (176) - - 2,075 (176) Cents Cents 28 28 2.40 2.40 (0.22) (0.22) Current assets Cash and cash equivalents Trade and other receivables Inventories Total current assets Non-current assets Plant and equipment Right-of-use assets Development costs Deferred tax Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Lease liabilities Provisions Total current liabilities Non-current liabilities Borrowings Lease liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained profits/(accumulated losses) Total equity 8 9 10 13 11 14 15 16 18 19 17 18 19 20 4,951 5,321 7,462 17,734 100 96 8,915 457 9,568 5,775 6,036 4,335 16,146 91 218 7,569 318 8,196 27,302 24,342 7,274 103 1,425 8,802 - 27 53 80 6,047 221 1,200 7,468 486 105 48 639 8,882 8,107 18,420 16,235 17,375 188 857 17,375 163 (1,303) 18,420 16,235 The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes The above statement of financial position should be read in conjunction with the accompanying notes 22 23 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2023 Consolidated Balance at 1 July 2021 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive loss for the year Transactions with owners in their capacity as owners: Shares issued, net of transaction costs Share-based payments Adjustment for broker options issued Adjustment for share options exercised Issued capital $'000 Reserves $'000 Accumulated losses $'000 Total equity $'000 12,703 86 (1,127) 11,662 - - - 4,700 - (32) 3 - - - - 46 32 - (176) - (176) - - - - (176) - (176) 4,700 46 - 3 Balance at 30 June 2022 17,374 164 (1,303) 16,235 Consolidated Balance at 1 July 2022 Profit after income tax benefit for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Share-based payments (note 25) Adjustment for broker options expired Balance at 30 June 2023 17,374 Issued capital $'000 Reserves $'000 Accumulated losses / retained earnings $'000 Total equity $'000 17,374 164 (1,303) 16,235 - - - - - - - - 110 (85) 189 2,075 - 2,075 - 2,075 2,075 - 85 110 - 857 18,420 Beam Communications Holdings Limited STATEMENT OF CASH FLOWS For the year ended 30 June 2023 Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Interest received Interest and finance charges paid Income tax credit Payroll tax refund Consolidated Note 30 June 2023 30 June 2022 $'000 $'000 39,608 (37,156) 12 (149) 10 90 28,176 (27,856) 1 (99) 104 - Net cash from operating activities 23 2,415 326 Cash flows from investing activities Payments for property, plant and equipment Payments for capitalised development costs Proceeds from research and development grant Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares, net of transaction costs Net loan payments Lease liability repayments Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year 13 20 (52) (3,333) 884 (60) (3,061) 713 (2,501) (2,408) - (513) (225) 4,704 (346) (208) (738) 4,150 (824) 5,775 2,068 3,707 Cash and cash equivalents at the end of the financial year 8 4,951 5,775 The above statement of changes in equity should be read in conjunction with the accompanying notes The above statement of cash flows should be read in conjunction with the accompanying notes 22 23 24 25 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 1. Significant accounting policies Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 1. Significant accounting policies (continued) New or amended Accounting Standards and Interpretations adopted The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The impact of these standards did not have a material impact on the Group. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 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. Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 2. Accounting policies The following is a summary of the material accounting policies adopted by the 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 30. (b) Income tax Income tax expense (benefit) for the year comprises current income tax expense (credit) and deferred income tax expense (benefit). A net deferred tax asset has been recognised in the current year reflecting the movements in deferred tax assets and liabilities for the period. Non-cash refundable R&D tax incentives that can be used to offset income tax payable are recognised as deferred tax assets where the carry forward criteria is satisfied. In such cases there will be a reduction in tax expense otherwise charged to the profit and loss. 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 Group re-assesses unrecognised deferred tax assets as to the extent that it has become probable that future tax profit will enable recognition. 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. The current tax liability of each group entity and deferred tax assets arising from tax losses are immediately assumed by the parent entity. (c) Trade and other receivables Other receivables are recognised at amortised cost, less any allowance for expected credit losses. (d) Plant and 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. 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 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 5-10 years 3 years 3 years 26 27 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 1. Significant accounting policies (continued) Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 1. Significant accounting policies (continued) 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. (e) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials and direct labour. (f) 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 or 5 years giving a 25% or a 20% amortisation rate during 2023. (g) 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. 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. (h) 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 21 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. (i) Impairment of assets At each reporting date, the group reviews the carrying values of its 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. (j) 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. (k) Leases 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. When measuring lease liabilities for leases that had been classified as operating leases, the Group discounted lease payments using its incremental borrowing rate at 1 July 2019. The weighted average rate applied was 7.3% to 8%. The lease liability is initially measured at the present value of the lease 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. 28 29 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 1. Significant accounting policies (continued) Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 1. Significant accounting policies (continued) (l) 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. (m) Government grants 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. Non-refundable Research and Development tax incentives are considered offsets to income tax expenses, subject to meeting the carry-forward recognition criteria. There are no unfulfilled conditions or other contingencies attaching to government grants recognised in the financial statements. (n) Interest in joint venture A joint venture represents the contractual sharing of control between parties in a business venture where unanimous decisions about relevant activities are required. (q) Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. (r) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new  shares or options are shown in equity as a deduction, net of tax, from the proceeds. (s) Rounding of amounts The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. (t) New Accounting Standards and Interpretations not yet mandatory or early adopted 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: Applicable to annual reporting periods beginning on or after 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. Accounting Standards and Interpretations 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. (o) 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. (p) 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. AASB 2020-1 Amendments to AASs - Classification of Liabilities as Current or Non-current liabilities as Current or Non-current AASB 2021-2 Amendments to AASs - Disclosure of Accounting Policies and Definition of Accounting Estimates AASB 2021-5 Amendments to AASs - Deferred Tax related to Assets and Liabilities arising from a Single Transaction AASB 2014-10 Sale or contribution of Assets between an Investor and its Associate or Joint Venture 1 Jan 2023 1 Jan 2023 1 Jan 2023 1 Jan 2025 Note 2. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Share-based payment transactions The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Allowance for expected credit losses The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience and historical collection rates. 30 31 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 2. Critical accounting judgements, estimates and assumptions (continued) Note 3. Operating segments Provision for impairment of inventories The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence. Estimation of useful lives of assets The  consolidated group  determines the estimated useful lives and related amortisation charges for its finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Lease liabilities The incremental borrowing rate applied to various lease liabilities recognised under AASB 16 ranges between 7.3% - 8%. Income tax The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group's current understanding of the tax law, if appropriate. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The deferred tax expense reflects the movements in the deferred assets and liabilities. The directors have recognised 100% (2022: 60%) of the deferred tax assets and liabilities relating to carried forward tax losses. The directors have recognised 100% (2022: not applicable) of non-refundable R&D tax credits. The directors expect sufficient future profitability and taxable income to enable the full value of all deferred tax assets to be realised. The amount of unused net deferred tax assets relating to tax losses which have not been brought to account is nil (2022: $762,526) and capital tax losses of $1,681,896 (2022: $1,681,896). The amount of non-refundable R&D investment credits brought to account is $704,970 (2022: nil). 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 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. Employee benefits provision As discussed in Note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. Warranty provision In determining the level of provision required for warranties the Group has made judgements in respect of the expected performance of the products, the number of customers who will actually claim under the warranty and how often, and the costs of fulfilling the conditions of the warranty. The provision is based on estimates made from historical warranty data associated with similar products and services. Identification of reportable operating segments The 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 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. The consolidated statement of financial position discloses the sole operating segment assets and liabilities which are held within Australia. Major customers The Group has a number of customers to whom it provides products and services. The Group supplied a single customer in the U.S. accounting for 39% of revenue (2022: 34%) and the second largest customer, located in Canada, accounted for 21% of revenue (2022: 15%). The next most significant customer accounts for 6% of revenue (2022: 10%). Geographical information The geographical disaggregation of sales has been presented in Note 4. Note 4. Revenue Equipment sales Airtime Other Revenue Disaggregation of revenue The disaggregation of revenue from contracts with customers is as follows: Geographical regions 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 Consolidated 30 June 2023 30 June 2022 $'000 $'000 37,888 845 819 22,423 700 540 39,552 23,663 Consolidated 30 June 2023 30 June 2022 $'000 $'000 6,093 15,774 893 1,466 744 8,861 268 5,453 5,114 4,521 575 1,329 133 9,153 363 2,475 39,552 23,663 37,995 1,557 22,550 1,113 39,552 23,663 32 31 33 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 5. Other income Research and development grant Interest Foreign exchange Other income Note 6. Expenses Profit before income tax includes the following specific expenses: Cost of sales Opening inventories Add: Purchases and other stock adjustments Less: Closing inventories (note 10) Finance costs expense Interest expense on lease liabilities Other financial costs Other expenses Product development costs expensed Operating lease payment Travel expense Consolidated 30 June 2023 30 June 2022 $'000 $'000 466 12 63 541 470 1 194 665 Consolidated Consolidated 2023 $'000 2022 $'000 4,335 31,599 35,934 3,071 18,501 21,572 (7,462) (4,335) 28,472 17,237 17 149 166 236 25 333 32 119 151 249 36 125 Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 7. Income tax expense/(benefit) Income tax expense/(benefit) US tax expense benefit/(credit) Current movement of temporary difference in net deferred tax assets Movement in deferred tax asset associated with carry forward tax losses R&D tax offset Aggregate income tax expense/(benefit) Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate Profit before income tax (expense)/benefit Tax at the statutory tax rate of 25% Tax reconciling items US tax loss/(credit) Deferred tax assets loss Income tax expense/(benefit) Consolidated 30 June 2023 30 June 2022 $'000 $'000 (10) 489 76 (705) (150) 1,925 481 (481) (10) (140) (150) 19 274 4 - 297 121 30 (30) 19 278 297 Income tax expense includes a tax expense of $10,058 (2022: $18,770), incurred by the Group's USA subsidiary, which is unable to be combined with Australian tax losses. There are no franking credits available to equity holders. Note 8. Cash and cash equivalents Current assets Cash at bank and on hand Note 9. Trade and other receivables Current assets Trade receivables Less: Allowance for expected credit losses Other receivables and prepayments Rental & other security deposits Consolidated 30 June 2023 30 June 2022 $'000 $'000 4,951 5,775 Consolidated 30 June 2023 30 June 2022 $'000 $'000 4,342 - 4,342 863 116 979 1,377 - 1,377 4,545 114 4,659 5,321 6,036 34 35 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 9. Trade and other receivables (continued) Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 11. Right-of-use assets (continued) Ageing reconciliation Within trade terms Past due but not impaired (days overdue) 31-60 Past due but not impaired (days overdue) 61-90 Past due but not impaired (days overdue) 90+ Past due & impaired Gross amount 2023 Current Trade receivables Other receivables Rental & other security deposits Expected credit loss rate 2022 Current Trade receivables Other receivables Rental & other security deposits Expected credit loss rate 4,111 863 116 - 1,032 4,545 114 - 93 - - - 345 - - - 117 - - - - - - 21 - - - - - - - - - - - - - - - - 4,342 863 116 - 1,377 4,545 114 - All trade receivables past due terms but not impaired are expected to be received in the normal course of business. Note 10. Inventories Current assets Raw materials - at cost Finished goods - at cost Less: Provision for impairment Note 11. Right-of-use assets Non-current assets Right-of-use assets Less: Accumulated depreciation Consolidated 30 June 2023 30 June 2022 $'000 $'000 1,326 7,639 (1,503) 677 4,058 (400) 7,462 4,335 Consolidated 30 June 2023 30 June 2022 $'000 $'000 1,360 (1,264) 1,330 (1,112) 96 218 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2021 Additions Depreciation expense Balance at 30 June 2022 Additions Depreciation expense Balance at 30 June 2023 Balance $'000 360 18 (160) 218 30 (152) 96 The Group leases several assets, which includes buildings and two forklifts with original lease terms of 9, 5 and 3 years respectively. There are no variable lease payment terms in any lease contracts. There are no extension or termination options on the leases. Amount recognised in profit or loss Depreciation expense on right-of-use assets Interest expense on lease liabilities Expense relating to short-term leases Note 12. Interest in joint venture Non-current assets Investment in joint venture Group's accumulated share of loss from Zoleo Inc. joint venture for the year ended 2023 $'000s 2022 $'000s 152 17 29 160 32 19 Consolidated 30 June 2023 30 June 2022 $'000 $'000 - - - 1,099 (1,099) - 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 2023. The Group's accumulated contribution US$775,100 had been previously recognised as an increase in investment as per the equity accounting method and was written down to nil during the prior financial year as the Group's share of the accumulated losses exceeds the investment total. 36 37 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 12. Interest in joint venture (continued) Summarised financial information: Summarised statement of financial position: 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 Gross profit Expenses Operating staff costs Marketing Professional services Billing & support fees Other expenses Total expenses Gain on FX Non-operating expense Loss for the year Group's share of loss for the year ended Zoleo Inc. Zoleo Inc. 2023 $'000 2022 $'000 5,619 5,619 (6,783) (2,338) (9,121) 7,398 7,398 (7,621) (2,250) (9,871) (3,502) (2,473) - (3,502) - (2,473) (3,502) (2,473) 40,566 (36,080) 4,486 30,387 (27,768) 2,619 (3,691) (345) (74) (408) (789) (5,307) 4 (115) (932) (466) (2,619) (206) (34) (176) (242) (3,277) 1 (72) (729) (364) Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 13. Plant and equipment Non-current assets Office furniture and equipment - at cost Less: Accumulated depreciation Computer and test equipment - at cost Less: Accumulated depreciation Rental equipment - at cost Less: Accumulated depreciation Total plant and equipment Consolidated 30 June 2023 30 June 2022 $'000 $'000 508 (482) 26 499 (436) 63 43 (32) 11 100 498 (473) 25 457 (403) 54 46 (34) 12 91 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2021 Additions Disposals Depreciation expense Balance at 30 June 2022 Additions Disposals Depreciation expense Balance at 30 June 2023 Note 14. Development costs Non-current assets Development costs Less: Accumulated amortisation Office furniture & equipment $'000 Computer & test equipment $'000 Rental equipment $'000 Total $'000 29 7 - (11) 25 10 - (9) 26 32 46 - (24) 54 42 - (33) 63 11 8 (2) (5) 12 5 (1) (5) 11 72 61 (2) (40) 91 57 (1) (47) 100 Consolidated 30 June 2023 30 June 2022 $'000 $'000 13,057 (4,142) 9,386 (1,817) 8,915 7,569 38 39 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 14. Development costs (continued) Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Movement in carrying amount of development costs Consolidated Balance at 1 July 2021 Additions Amortisation expense Balance at 30 June 2022 Additions Amortisation expense Balance at 30 June 2023 $'000 5,500 3,886 (1,817) 7,569 3,333 (1,987) 8,915 The Group has assessed the minimum useful life of products from recent development projects at 4 or 5 years during 2023. In line with the accounting policy detailed in Note 1(i), the carrying value of assets is reviewed to determine whether there is an indication that those assets have been impaired. None of the intangible assets was written off during the financial year. Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 16. Trade and other payables Current liabilities Trade payables and accruals Deferred R&D income Other deferred income Consolidated 30 June 2023 30 June 2022 $'000 $'000 5,725 1,245 304 4,428 826 793 7,274 6,047 The Group initially recognises refundable R&D investment grants as deferred income upon receipt and brings to account the income over the same period as the amortisation of the related completed project cost. $466,183 of R&D grant income was recognised in the statement of profit & loss for the year as shown in Note 5. Refer to Note 21 for further information on financial instruments. Note 17. Borrowings Non-current liabilities Secured loan Consolidated 30 June 2023 30 June 2022 $'000 $'000 - 486 Note 15. Deferred tax Non-current assets Deferred tax asset Deferred tax assets Carrying amount of patents and capital raising costs Accruals Provisions Lease liabilities Tax losses R&D tax offsets Deferred tax liabilities Product development costs Right-of-use assets Other financial liabilities Consolidated 30 June 2023 30 June 2022 $'000 $'000 The Group had 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 distribute the Zoleo product, a satellite based messaging device, including associated airtime contracts. The interest-free Assistance Loan was to assist Beam to establish the business and was repayable at Beam's sole discretion. 457 318 The loan balance $485,756 from the preceding period was fully repaid during the financial year. Balance at Charged to Balance at 1 July 2022 income $'000 30 June 2023 $'000 - 38 258 49 1,144 - 1,489 - 106 507 (16) (76) 705 1,226 - 144 765 33 1,068 705 2,715 (1,135) (33) (3) (1,094) 9 (2) (2,229) (24) (5) 318 139 457 Refer to Note 21 for further information on financial instruments. Banking facilities All bank facilities are secured by first ranking Registered Mortgage Debenture over the Group's assets including uncalled capital and called but unpaid capital. At 30 June 2023, the company had the following unused bank facilities: ● ● ● An Australian dollar overdraft with a limit of $300,000 (2022: $300,000). The overdraft was not utilised at 30 June 2023 or 30 June 2022. A US dollar overdraft with a limit of US$320,000 (2022: US$320,000). The US dollar overdraft was not utilised at 30 June 2023 or 30 June 2022. The Group had a bank guarantee facility of $50,000 at 30 June 2023 (2022: $150,000). It was fully utilised at both 30 June 2023 and 30 June 2022. On 1 July 2020 the NAB granted Beam a 3 year, low interest term loan of $500,000 and a further $500,000 on 10 May 2021 part secured by the Australian government under their Covid19 relief program to assist with funding of Beam’s product development program. The principal outstanding of $972,970 was repaid on 19 May 2021 and, after allowing for amortisation, $400,849 was available to be redrawn at 30 June 2023. 40 41 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 18. Lease liabilities Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 19. Provisions (continued) Consolidated 30 June 2023 30 June 2022 $'000 $'000 Movements in provisions Movements in each class of provision during the current financial year are set out below: Current liabilities Lease liability Non-current liabilities Lease liability 103 221 Consolidated - 30 June 2023 27 130 105 326 Carrying amount at the start of the year Additional provisions recognised Amounts used Carrying amount at the end of the year 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. Note 20. Issued capital Employee benefits $'000 Warranty costs $'000 Other $'000 Total $'000 1,052 496 (261) 1,287 85 126 (20) 191 111 - (111) 1,248 622 (392) - 1,478 Consolidated 30 June 2023 30 June 2022 30 June 2023 30 June 2022 Shares Shares $'000 $'000 Carrying amounts and movements Balance at 1 July 2021 Additional Decrease in liability Balance at 30 June 2022 Additional Decrease in liability Balance at 30 June 2023 Note 19. Provisions Current liabilities Employee benefits Warranty costs Other Non-current liabilities Employee benefits $'000 517 18 (209) 326 29 (225) 130 Consolidated 30 June 2023 30 June 2022 $'000 $'000 1,234 191 - 1,004 85 111 1,425 1,200 53 48 1,478 1,248 Ordinary shares - fully paid 86,421,921 86,421,921 17,375 17,375 Movements in ordinary share capital Details Balance Shares issued, net of transaction costs Shares issued on the exercise of options Date 1 July 2021 Shares Issue price $'000 75,052,952 11,363,636 5,333 $0.44 $0.50 12,703 4,669 3 17,375 17,375 Balance Balance 30 June 2022 86,421,921 30 June 2023 86,421,921 (a) Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. (b) Share buy-back There is no current on-market share buy-back. (c) Capital risk management When managing capital, management's objective is to ensure the 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 2023 financial year. The 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. The capital risk management policy remains unchanged from the 30 June 2022 Annual Report. 42 43 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 21. Financial instruments Financial risk management objectives The Group undertakes transactions in a range of financial instruments including: - cash assets; - receivables; - payables; - deposits Activities undertaken by entities within the Group result in exposure to a number of financial risks, including market risk (including interest rate risk, foreign currency risk, and price risk), credit risk, and liquidity risk. Due to the size of operation conducted by the 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 Group's policies for minimising these risks are detailed below. Market risk management Interest rate risk 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 Group primarily arises from bank funding. Facilities are provided by the 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 in-funds 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 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: 2023 Financial asset Cash assets Receivables Financial liability Payables (excluding deferred income) Lease liabilities Floating interest $'000 Fixed interest $'000 Weighted average interest rate % Non-interest bearing $'000 Total $'000 4,951 - 4,951 - - - 0.00% 0.00% - - - - 131 131 0.00% 7.36% - 5,321 5,321 5,725 - 5,725 4,951 5,321 10,272 5,725 131 5,856 Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 21. Financial instruments (continued) 2022 Cash assets Receivables Payables (excluding deferred income) Lease liabilities Foreign currency risk Floating interest $'000 Fixed interest $'000 Weighted average interest rate % Non-interest bearing $'000 Total $'000 5,775 - 5,775 - - - - - - - 327 327 0.00% 0.00% 0.00% 7.36% - 6,036 6,036 4,914 - 4,914 5,775 6,036 11,811 4,914 327 5,241 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 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 Year ended 30 June 2023 $'000 Year ended 30 June 2022 $'000 Foreign currency movement +/- 10% +/- 10% +/-300 +/-300 +/- 23 +/- 23 The above sensitivity reflects the 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. Price risk Price risk encompasses the potential for adverse effects on an entity’s financial performance due to fluctuations in the prices of purchased goods and services, influenced by varying market conditions. To counter the risk, the Group consistently evaluates purchase prices as a routine operation, strategically determining the best timing and quantity for each acquisition. 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 Group. The credit risk on financial assets of the Group that have been recognised in the statement of financial position is the carrying amount, net of any provision for doubtful debts. The Group minimises credit risk by performing credit assessments on all new customers, and 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. 44 45 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 21. Financial instruments (continued) The Group does not have any credit risk arising from money market instruments, foreign currency contracts, cross currency and interest rate swaps. Liquidity risk management Liquidity risk includes the risk that, as a result of the 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 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 Group's exposure to liquidity risk on classes of financial assets and financial liabilities, is as follows: 2023 Asset/Liability class Cash and cash equivalents Receivables Payables and borrowings (excluding deferred income) Lease liabilities Net maturities 2022 Asset/Liability class Cash and cash equivalents Receivables Payables and borrowings (excluding deferred income) Lease liabilities Net maturities Note 22. Commitments and contingencies Capital expenditure projects Within one year One to five years More than five years Total contractual 1 - 5 years cash flows $'000 $'000 1 year $'000 4,951 5,321 (5,725) (104) 4,443 5,775 5,922 (4,429) (221) 7,047 - - - (27) (27) - 114 (486) (105) (477) 4,951 5,321 (5,725) (131) 4,416 5,775 6,036 (4,915) (326) 6,570 Consolidated 30 June 2023 30 June 2022 $'000 $'000 2,911 - - 3,944 - - 2,911 3,944 Capital commitments relate to product development projects being undertaken by the subsidiary, Beam Communications Pty Ltd. Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 23. Reconciliation of profit/(loss) after income tax to net cash from operating activities Profit/(loss) after income tax (expense)/benefit for the year 2,075 (176) Consolidated 30 June 2023 30 June 2022 $'000 $'000 Adjustments for: Depreciation Amortisation Net loss on disposal of plant and equipment Share of loss in joint venture Unrealised foreign currency net gain Share options expensed Notional interest expense Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Increase in inventories Decrease/(increase) in deferred tax assets Increase in trade and other payables Increase in employee benefits Increase/(decrease) in provision for warranty costs Increase in provision for stock obsolescence 200 1,987 1 - (164) 110 15 798 (4,229) (140) 318 235 106 1,103 199 1,006 2 249 (76) 78 52 (2,821) (1,384) 278 2,813 2 (16) 120 Net cash from operating activities 2,415 326 Note 24. Key management personnel disclosures Compensation The aggregate compensation made to directors and other members of key management personnel of the Group is set out below: Short-term employee benefits Post-employment benefits Long-term benefits Termination benefits Share-based payments Note 25. Share-based payments Share Option Incentive Plan Consolidated 30 June 2023 30 June 2022 $000 $'000 1,260 106 24 - 110 1,111 104 15 - 46 1,500 1,276 Share options under the Share Option Incentive Plan 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. 46 47 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 25. Share-based payments (continued) Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 27. Related party transactions (continued) The following table illustrates the number (No.) and weighted average exercise prices (WAEP) and movements in share options issued under the Share Option Incentive Plan during the year for the Company: Key management personnel Disclosures relating to key management personnel are set out in Note 24 and the remuneration report included in the directors' report. 30 June 2023 No. WAEP 30 June 2022 $ No. WAEP $ Outstanding at the beginning of the financial year Granted during the financial year Lapsed during the financial year Exercised during the financial year Outstanding at the end of the financial year Outstanding at the date of this report - 0.3000 - - 1,130,798 1,100,000 - - 2,230,798 2,230,798 - 0.3818 - - - 1,130,798 - - 1,130,798 1,130,798 The fair value of the options granted to Non-executive Director Mr. Mark Chartres had been determined using the Black- Scholes option value model as detailed below. Grant date Number of options Expiry date Share price at grant date Exercise price Expected volatility Risk-free interest rate Dividend yield Fair value of option at grant date Other share-based payments 2 December 2022 1,100,000 2 December 2024 0.2282 0.3000 50% 2.85% 0% 0.0462 On 31 December 2022, 1,500,000 share options granted to Peak Asset Management Pty Ltd on 30 November 2020 expired. Note 26. Remuneration of auditors During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor of the company: Consolidated 30 June 2023 30 June 2022 $'000 $'000 110 80 Audit services Audit or review of the financial statements Note 27. Related party transactions Parent entity Beam Communications Holdings Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in Note 30. Transactions with related parties There were no transactions with related parties during the current and previous financial year. Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date. Note 28. Earnings per share Consolidated 30 June 2023 30 June 2022 $'000 $'000 Profit/(loss) after income tax attributable to the owners Profit/(loss) after income tax attributable to the owners used in calculating diluted earnings per share 2,075 2,075 (176) (176) Weighted average number of ordinary shares used in calculating basic earnings per share 86,421,921 81,674,718 Weighted average number of ordinary shares used in calculating diluted earnings per share 86,421,921 81,674,718 Options have not been considered in the dilutive earnings per share calculation due to the average market price being less than the exercisable price. Number Number Basic earnings per share Diluted earnings per share Note 29. Parent entity information Statement of profit or loss and other comprehensive income Loss from continuing operations Tax benefit/(expense) Loss for the year attributable to owners of the Company Other comprehensive income Cents Cents 2.40 2.40 (0.22) (0.22) Parent Parent 30 June 2023 30 June 2022 $'000 $'000 (1,414) 140 (1,274) (1,177) (287) (1,464) - - Total loss and other comprehensive income for the year attributable to owners of the Company (1,274) (1,464) 48 49 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2023 Note 29. Parent entity information (continued) Statement of financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Beam Communications Holdings Limited DIRECTORS' DECLARATION 30 June 2023 In the directors' opinion: Parent Parent 30 June 2023 30 June 2022 $ $ 7,332 643 7,975 (4,894) (80) (4,974) 5,149 608 5,757 (1,448) (153) (1,601) ● ● ● ● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in Note 1 to the financial statements; the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. The directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. 3,001 4,156 On behalf of the directors 17,375 188 (14,562) 17,375 163 (13,382) 3,001 4,156 ___________________________ Mr Simon Wallace Chairman 30 August 2023 Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30 June 2022. Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022. Capital commitments The parent entity had no capital commitments as at 30 June 2023 and 30 June 2022. Significant accounting policies The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 1. Note 30. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1: Name Beam Communications Pty Ltd SatPhonerental Pty Ltd SatPhone Shop Pty Ltd Beam Communications USA Inc Pacarc (PNG) Limited (Dormant) Note 31. Events after the reporting period Principal place of business / Country of incorporation Ownership interest 30 June 2023 30 June 2022 % % Australia Australia Australia USA Papua New Guinea 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. 50 51 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITED 52 53 BEAM COMMUNICATIONS HOLDINGS LIMITEDBEAM COMMUNICATIONS HOLDINGS LIMITEDC O N N E C T I N G • Partnerships • Business Teams • Communities 54 BEAM COMMUNICATIONS HOLDINGS LIMITEDS E C U R I T Y H O L D E R I N F O R M A T I O N This section includes information required by ASX Listing Rules, which is not disclosed elsewhere in this Annual Report. As at 7 August 2023: T O P 2 0 S H A R E H O L D E R S D I S T R I B U T I O N O F S H A R E S Number held % of class Ranges Number of holders % of total shares issued 10,905,000 12.62% 2 0 + Y E A R S • Experience • Expertise • Excellence 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over 277 298 159 399 100 22% 24% 13% 32% 8% Total number of holders 1,233 100% V O T I N G R I G H T S There are 86,421,921 ordinary fully paid shares held by 1,233 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 and shall on a poll have one vote for each fully paid share held. The Constitution also authorises the Chairman to adopt any procedure which is in the Chairman's opinion necessary or desirable for the proper and orderly casting or recording of votes at any general meeting of the Company, whether on a show of hands or on a poll. HOLDERS OF EACH CLASS OF EQU ITY SEC UR IT Y The company has issued: A. 86,421,921 ordinary fully paid shares to 1,233 shareholders; and 4,471,703 unlisted options with varying expiry and prices: B. 200,000 Unlisted options @$0.53 each expiring 1 February 2025 C. 3,340,905 Unlisted options @$1.00 each expiring 1 December 2023 D. 400,000 Unlisted options @$0.35 each expiring 23 December 2026 E. 530,798 Unlisted options @$0.35 each expiring 31 August 2026 David Stewart FF Okram Pty Ltd Patrison (Asia) Ltd Bolivianos Group Michael Capocchi HSBC Custody Nominees Dr Malaka Ameratunga Artpreciation Pty Ltd Vincent Galante Catch 88 Pty Ltd BNP Paribas Nominees Hotton Family Snowball Asset Management 8,634,258 5,409,874 4,869,400 3,124,320 3,053,590 2,100,000 1,798,632 1,720,922 1,456,070 1,332,975 1,116,730 1,046,851 Christopher Silvestro 1,000,000 Tom Bekiaris G Chan Pension Pty Ltd Paul Riethmaier Alan Berrick Citicorp Nominees Rapaki Pty Ltd 911,835 849,752 842,591 697,955 633,897 626,473 9.99% 6.26% 5.63% 3.62% 3.53% 2.43% 2.08% 1.99% 1.68% 1.54% 1.29% 1.21% 1.16% 1.06% 0.98% 0.97% 0.81% 0.73% 0.72% Total Top 20 52,131,125 60.32% Total Issued 86,421,921 100.00% S U B S T A N T I A L S H A R E H O L D E R S Number held % of class David Stewart 10,905,000 12.62% No options are held by a substantial shareholder to subscribe to ordinary fully paid shares. U N M A R K E T A B L E P A R C E L S Minimum $500 parcel at $ 0.19 Holders Shares % Total Issued Shares 2,632 416 343,326 0.40% 56 BEAM COMMUNICATIONS HOLDINGS LIMITED Beam Communications Holdings Limited ABN: 39 010 568 804 Beam Communications Pty Ltd ABN: 97 103 107 919 5/8 Anzed Court, Mulgrave, Victoria Australia 3170 5/8 Anzed Court, Mulgrave, Victoria Australia 3170 Phone: +61 3 8561 4200 Email: investor@beamcommunications.com Website: beamcommunications.com Phone: +61 3 8588 4500 Email: info@beamcommunications.com Website: beamcommunications.com Beam Communications USA Inc. Delaware Corporation No. 5228652 C/- Martensen Wright PC One Capitol Mall, Suite 670 Sacramento, CA 95814 USA Phone: +1 800 250 5819 (USA only) Email: info@beamcommunications.com Website: beamcommunications.com SatPhone Shop Pty Ltd ABN: 40 099 121 276 SatPhonerental Pty Ltd ABN: 18 114 959 992 5/8 Anzed Court, Mulgrave, Victoria Australia 3170 5/8 Anzed Court, Mulgrave, Victoria Australia 3170 Phone: 1300 368 611 Email: info@satphoneshop.com Website: satphoneshop.com Phone: 1300 368 611 Email: rentals@satphoneshop.com Website: satphonerentals.com 

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