Cirrus
Networks
APPENDIX 4E
30 June 2020
Cirrus Networks Holdings Limited (CNW)
ABN: 98 103 348 947
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Cirrus Staff Profile - Joe Citizen (Commercial in Confidence)
Copyright © 2020 Cirrus Networks Pty Limited
2
Contents
DESCRIPTION
1.
2.
3.
4.
5.
6.
7.
8.
9.
Results for announcement to the market
Net tangible assets per ordinary share
Details of entities over which control has been gained during the year
Details of entities over which control has been lost during the year
Dividends
Details of associates and joint venture entities
Audit qualification or review
Attachments
Signed
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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1. Results for announcement to the market
UP/(DOWN)
(%)
TO
($)
Revenues from ordinary activities
8%
95,136,463
Profit / (Loss) from ordinary activities after tax attributable to
the owners of Cirrus Networks Holdings Limited
269%
2,862,414
The net profit for the Group after providing for income tax amounted to $2,862,414 (30 June 2019 Profit: $776,279).
REVIEW OF OPERATIONS
Another excellent year for the Company in FY20 with revenues from ordinary activities up 8% to $95,136,463 and the
preferred earnings measure of EBTIDA (pre options) up 88% to $3,602,805. The statutory result for the Group after
providing for income tax amounted to a net profit of $2,862,414 (30 June 2019: $776,279).
NORMALISED EBITDA
$3,797,016
$2,187,485
$1,033,825
FY2020
FY2019
FY2018
Adjustments:
Foreign Exchange Impact
($120,889)
($2,058)
($10,872)
Redundancy Cost
Investment in Canberra
Acquisition Costs for due diligence
Voluntary Escrow Payment
($73,322)
($267,510)
($165,345)
-
-
-
-
-
-
($272,003)
($97,943)
($50,000)
EBITDA (PRE-OPTIONS)
$3,602,805
$1,917,917
$437,662
Amortisation and Depreciation
($740,659)
($663,196)
($466,215)
Amortisation – Right-of-use assets
($757,375)
-
-
Interest (Net)
($584,833)
($175,404)
$19,209
Share based options expensed
($398,026)
($303,038)
($226,046)
R&D Tax Offset
-
-
$356,759
NET PROFIT BEFORE DTA RECOGNITION
$1,121,912
$776,279
$121,369
Deferred tax asset recognition
1,740,502
-
$2,709,922
STATUTORY NET PROFIT
$2,862,414
$776,279
$2,831,291
At 30 June 2020, the Group had a cash balance of $6.16m. Cirrus has a positive $5.57m net cash position before leases
(2019: positive $3.6).
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
2
2. Net tangible assets per ordinary share
Net tangible assets per ordinary security*
$0.036
$0.035
REPORTING PERIOD
PREVIOUS PERIOD
* Cirrus has included the Right-of-Use assets in the NTA calculation.
3. Details of entities over which control
has been gained during the year
Gain of control of entities during the year – Nil.
4. Details of entities over which control
has been lost during the year
Loss of control of entities during the year – Nil.
5. Dividends
Current Period
There were no dividends paid, recommended or declared during the current financial year.
6. Details of associates and joint
venture entities
Equity accounted Associates and Joint Venture Entities – Nil.
7. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unqualified opinion has been issued.
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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8. Attachments
Details of attachments (if any):
The Annual Report of Cirrus Networks Holdings Limited for the year ended 30 June 2020 is attached.
9. Signed
Matt Sullivan
Managing Director
Signature:
Date: 18 August 2020
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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Cirrus
Networks
ANNUAL REPORT
30 JUNE 2020
Cirrus Networks Holdings Limited (CNW)
ABN: 98 103 348 947
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Cirrus Staff Profile - Joe Citizen (Commercial in Confidence)
Copyright © 2020 Cirrus Networks Pty Limited
2
Corporate Directory
CURRENT DIRECTORS
AUDITOR
Mr Andrew Milner (Non-Executive Chairman)
Mr Daniel Rohr (Non-Executive Director)
Mr Paul Everingham (Non-Executive Director)
Mr Matthew Sullivan (Managing Director)
COMPANY SECRETARY
Ms Catherine Anderson
Telephone: + 61 8 6180 4222
SHARE REGISTRY*
Automic Group
Level 5, 126 Phillip Street
Sydney NSW 2000
Telephone: +61 8 1300 288 664
BDO Audit (WA) Pty Limited
38 Station Street
Subiaco WA 6008
Telephone: +61 8 6382 4600
ASX Code: CNW
REGISTERED OFFICE
Level 28, 108 St Georges Tce
Perth WA 6000
Telephone: +61 8 6180 4222
Email:
info@cirrusnetworks.com.au
Website: www.cirrusnetworks.com.au
*This entity is included for information purposes only. This entity has not been involved in the preparation of this Annual Report.
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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Contents
DESCRIPTION
Letter from the Chairman
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance
Shareholder Information
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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Letter from the Chairman
Dear Shareholder
Welcome to the Cirrus Networks Limited 2020 Annual Report. I am pleased to report your Company delivered a full year
EBITDA of $3.6m (pre options expense), extending a history of consistent earnings growth (FY18 - $437k, FY19 - $1.9m).
This represents a 47% uplift from FY19 at the EBITDA line after adjusting for the introduction of the AASB 16 standard. Net
cash before leases improved from $3.6m at the end of FY19 to $5.6m, and with the expectation of continued improvement
in trading performance, the remainder of the Company’s deferred tax asset of $1.7m has been brought to account.
Professional Services revenue, while flat in H1 at $7.8m experienced significant growth in H2 of 22% to $9.5m - bringing
the total for FY20 to $17.3m, an increase of 12% from the previous year. Managed Services revenue grew half on half by
17% to $6.3m, finishing the year with a 20% increase on FY19 at $11.8m and improving gross margins. Product revenue in
H2 contracted to $31.5m from $34.5m in H1, mainly as a result of supply chain delays and customer impacts caused
by COVID-19.
This year marks the end of the Cirrus Networks 5 year (FY16 – FY20) strategic plan. During this period the Company, which
now employs around 200 staff in WA, Victoria and the ACT, achieved several significant milestones along its transformative
journey to become Australia’s IT Services provider of choice:
•
•
•
Consolidated revenue increased from $19m to $95m;
Professional and Managed Services combined revenue increased from $8m to $29m, and now represents 50%
of all income at the gross margin line, up from 15%. This rapid growth lifted overall gross margins from 13.1%
to 17.8%;
Successful entry into the strategically crucial Federal Government sector, with these customers now contributing
30% of total revenue.
With over 70% of consolidated revenue currently derived from customers in the Resource, Not For Profit and Federal
Government sectors, the Company has been fairly well insulated from the effects of COVID-19 to date. The completion of
a comprehensive review of costs and organizational structure in Q4 against the backdrop of the pandemic, along with a
significant order backlog and positive sales indicators give the Company confidence it is well positioned to deliver
continued EBITDA growth in FY21. The trading environment remains volatile however, and the Company is ready to
respond to any further pandemic-related impacts.
On behalf of the Board I’d like to thank all stakeholders for their ongoing dedication, resilience and support during this
most uncertain and challenging time.
Andrew Milner
Chairman
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
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Directors’ Report – 30 June 2020
The Directors of Cirrus Networks Holdings Limited present their report on the Consolidated
Entity consisting of Cirrus Networks Holdings Limited ("Company" or "Cirrus") and the entities
it controlled ("Group") at the end of, or during, the year ended 30 June 2020.
DIRECTORS – TERMS OF OFFICE, SKILLS AND EXPERIENCE
The following persons were Directors of Cirrus Networks Holdings Limited during the entire financial year and up to the
date of this report, unless otherwise stated:
• Andrew Milner – Non-Executive Chairman
• Daniel Rohr – Non-Executive Director
• Paul Everingham – Non-Executive Director
• Matthew Sullivan – Managing Director
ANDREW MILNER (Non-Executive Chairman)
Appointed 2 July 2015
Andrew Milner is a veteran of the Australian Information Communications Technology industry and has more than
20 years experience in managing successful high-growth technology businesses.
Founding Wantree Internet (Wantree) in 1995 (which became one of Australia’s first commercial Internet Service
Providers), he was appointed to the iiNet board when Wantree was vended into the iiNet Limited IPO in 1999. Mr Milner
spent 9 years with that company in a variety of executive and non-executive Director roles. iiNet grew to a $1.4 billion
market capitalization with over 2,000 staff and $1 billion in annual revenue, prior to being acquired by TPG Telecom
Limited in 2015.
From 2004, Mr Milner was co-founder and non-executive Chairman of L7 Solutions, one of WA’s fastest growing systems
integrators, with a turnover of $55m at the time of its acquisition by Amcom Telecommunications in 2011.
During the previous 3 years, Mr Milner has not held any other directorships in listed entities.
DANIEL ROHR (Non-Executive Director)
Appointed 2 July 2015
Daniel Rohr is a Chartered Accountant with a Bachelor of Commerce degree and has over 25 years management,
corporate advisory, finance and accounting experience across a range of listed and unlisted companies in Australia
and overseas.
He is currently the CFO of HealthEngine Pty Limited and has acted as a corporate advisor for a number of listed and
non-listed businesses in the IT and mining sectors. Mr Rohr has extensive experience in managing the development of
high growth companies in the digital, mining, real estate and financial services industries.
During the previous 3 years, Mr Rohr has held the role of non-executive director of Velpic Limited.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
9
MATTHEW SULLIVAN (Managing Director)
Appointed 2 July 2015
Matthew Sullivan has more than 20 years’ experience in the Information Technology (“IT”) industry and has held various
executive roles within strong performing and high growth IT organisations in Australia and was CEO and co-founder
(with Mr Milner) of L7 Solutions in 2004 until its 2011 acquisition by Amcom.
During this time the company was awarded numerous industry accolades including:
• 5th fastest growing WA company in 2007 (WA Business News)
• 18th fastest growing Australian company in 2008 (BRW Fast 100)
• 2005 Cisco A/NZ Partner of the Year; and
• 2010 EMC WA partner of the Year.
Mr Sullivan was also a 2005 and 2008 winner of the WA Business News "40 under 40" and Western Region finalist in
the 2010 Ernst & Young Entrepreneur of the Year.
Most recently Mr Sullivan has been Chief Solutions Officer of Amcom and Chief Operations Officer at Comscentre.
During the previous 3 years, Mr Sullivan has not held any other directorships in listed entities.
PAUL EVERINGHAM (Non-Executive Director)
Appointed 23 July 2018
Mr Everingham is Chief Executive Officer of the Chamber of Minerals & Energy of Western Australia.
Prior to joining the Chamber of Minerals & Energy, Paul held numerous senior executive roles in business and government
including; Chief Executive of Marketforce Australia, a leading Australian advertising agency; Founder and Managing
Director of GRA Everingham Advisory, Western Australia's premier government relations advisory business; Executive
Director of the Liberal Party of Australia (WA); and as a Senior Adviser in the Commonwealth Treasury.
Paul has a Bachelor of Commerce from the University of Queensland; a Post Graduate Diploma in Applied Finance &
Investment from the University of NSW; and a Graduate Certificate in Financial Mathematics from Queensland University
of Technology.
During the previous 3 years, Mr Everingham has not held any other directorships in listed entities.
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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DIRECTORS’ INTERESTS IN SHARES AND OPTIONS OF THE COMPANY
The following relevant interests in shares and options of the Company are held by the Directors who hold office as at the
date of this report, with the holdings being as at the date of this report:
DIRECTOR
Andrew Milner
Daniel Rohr
Paul Everingham
Matthew Sullivan
SHARES
OPTIONS
44,323,387
7,678,863
17,880,000
48,273,387
2,500,000
2,500,000
2,500,000
20,000,000
COMPANY SECRETARY - CATHERINE ANDERSON – B JURIS (HONS) LLB (UWA)
Appointed 8 March 2011
Catherine Anderson is a legal practitioner admitted in Western Australia and Victoria and has over 30 years’ experience
in both private practice and in-house legal roles from working in Melbourne and Perth, particularly in the area of capital
raisings and corporate structures. During her career, Ms Anderson has advised on all aspects of corporate and commercial
law and today brings this extensive commercial experience to the Company and oversaw the re-listing of the Company as
Cirrus.
Ms Anderson also has experience in company secretarial roles for other ASX listed resource companies, as well as having
been a director of an ASX listed junior explorer. She currently also provides consultancy services to entities wishing to
proceed to IPO and listing on ASX, and has twice been nominated for the Telstra Business Woman of the Year Award.
MEETINGS OF DIRECTORS
The number of Directors’ meetings and number of committee meetings attended by each of the Directors of the Company
during the financial year or during the period of appointment were:
DIRECTOR
BOARD OF DIRECTORS
AUDIT COMMITTEE
Andrew Milner
Daniel Rohr
Matthew Sullivan
Paul Everingham
A
14
14
13
12
B
14
14
14
14
A
2
2
-
2
B
2
2
-
2
REMUNERATION
COMMITTEE
A
1
1
-
1
B
1
1
-
1
A – Number of meetings attended
B – Number of meetings eligible to attend
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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PRINCIPAL ACTIVITIES
The principal activity of the Group is the provision of information technology services and related third-party product sales.
There were no significant changes in the nature of the activities of the Group during the year.
DIVIDENDS
There were no dividends paid, recommended or declared during the current or previous financial year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group other than those disclosed in other areas of this
annual financial report.
REVIEW OF OPERATIONS
*Non-IFRS Financial Information
Adjustments to reflect movement from underlying performance to statutory consolidated result of the Group:
NORMALISED EBITDA
$3,797,016
$2,187,485
$1,033,825
FY2020
FY2019
FY2018
Adjustments:
Foreign Exchange Impact
($120,889)
($2,058)
($10,872)
Redundancy Cost
Investment in Canberra
Acquisition Costs for due diligence
Voluntary Escrow Payment
($73,322)
($267,510)
($165,345)
-
-
-
-
-
-
($272,003)
($97,943)
($50,000)
EBITDA (PRE-OPTIONS)
$3,602,805
$1,917,917
$437,662
Amortisation and Depreciation
($740,659)
($663,196)
($466,215)
Amortisation – Right-of-use assets
($757,375)
-
-
Interest (Net)
($584,833)
($175,404)
$19,209
Share based options expensed
($398,026)
($303,038)
($226,046)
R&D Tax Offset
-
-
$356,759
NET PROFIT BEFORE DTA RECOGNITION
$1,121,912
$776,279
$121,369
Deferred tax asset recognition
1,740,502
-
$2,709,922
STATUTORY NET PROFIT
$2,862,414
$776,279
$2,831,291
At 30 June 2020, the Group had a cash balance of $6.16m. Cirrus has a positive $5.57m net cash position before leases
(2019: positive $3.6).
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
12
OPTIONS ON ISSUE
The Company has the following classes of options on issue as at the date of this report:
CLASS
NUMBER
2020
2019
EXERCISE
PRICE
EXPIRY DATE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
3,825,000
5,325,000
$0.035
3,825,000
5,325,000
$0.045
-
7,000,000
$0.080
5,462,500
6,287,500
$0.035
5,462,500
6,287,500
$0.045
5,537,500
5,612,500
$0.035
5,537,500
5,612,500
$0.045
5,000,000
5,000,000
$0.045
30/06/2022
30/06/2022
31/12/2019
13/11/2020
13/11/2020
30/06/2021
30/06/2021
30/06/2025
5,000,000
5,000,000
$0.060
5 years from vesting date
5,000,000
5,000,000
$0.045
5,000,000
5,000,000
$0.060
7,500,000
7,500,000
$0.060
7,500,000
7,500,000
$0.045
4,250,000
4,250,000
$0.035
4,250,000
4,250,000
$0.045
1,500,000
1,500,000
6,400,000
6,400,000
1,500,000
1,500,000
1,250,000
1,250,000
3,500,000
3,500,000
29,381,643
29,381,693
-
-
-
-
-
-
-
-
-
-
-
-
$0.035
$0.045
$0.060
$0.080
$0.050
$0.070
$0.070
$0.090
$0.035
$0.045
$0.017
$0.017
18/04/2023
18/10/2024
11/10/2023
11/10/2021
22/11/2021
22/11/2021
30/06/2023
30/06/2023
31/12/2022
31/12/2022
30/06/2023
30/06/2023
11/11/2023
11/11/2023
31/03/2023
31/03/2023
30/06/2021
30/06/2021
TOTAL
160,213,336
84,950,000
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REMUNERATION REPORT (Audited)
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 Key Management Personnel for the year 1 July 2019 – 30 June 2020 were the Directors of the Company:
• Andrew Milner – Non-Executive Chairman
• Daniel Rohr - Non-Executive Director
• Paul Everingham – Non-Executive Director
• Matthew Sullivan – Managing Director
The other Key Management Personnel were:
• Matthew Green – Chief Financial Officer
• Christopher McLaughlin – Chief Operating Officer
The remuneration report is set out under the following main headings:
• Principles used to determine the nature and amount of remuneration
• Key Management Personnel remuneration
• Share-based compensation
• Option holdings of Key Management Personnel
• Share holdings of Key Management Personnel
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good
reward governance practices:
• Competitiveness and reasonableness
• Acceptability to shareholders
• Performance linkage / alignment of executive compensation
• Transparency
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements
for its directors and executives. The performance of the Group depends on the quality of its directors and executives. The
remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel.
The Nomination and Remuneration Committee has structured an executive remuneration framework that is market
competitive and complementary to the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
• Having economic profit as a core component of plan design
• Focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and
delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers
of value
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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REMUNERATION REPORT (Audited) – (Continued)
• Attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives' interests by:
• Rewarding capability and experience
• Reflecting competitive reward for contribution to growth in shareholder wealth
• Providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive Director
remuneration is separate.
Non-Executive Directors’ Remuneration
Fees and payments to Non-Executive Directors reflect the demands and responsibilities of their role. Non-Executive
Directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination
and Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to
ensure non-executive directors' fees and payments are appropriate and in line with the market. The Chairman's fees are
determined independently to the fees of other Non-Executive Directors based on comparative roles in the external
market. The Chairman is not present at any discussions relating to the determination of his own remuneration.
ASX listing rules require the aggregate Non-Executive Directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held on 8 November 2019, where the
shareholders approved a maximum annual aggregate remuneration of $400,000 p.a. for Director fees.
Executive Remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration
which has both fixed and variable components.
The executive remuneration and reward framework have four components:
• base pay and non-monetary benefits
•
•
short-term performance incentives
share-based payments
• other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Nomination and Remuneration Committee based on individual and business unit performance, the overall performance
of the Group and comparable market remunerations.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance
hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance
indicators ('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and
product management.
The long-term incentives ('LTI') include long service leave and share-based payments.
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REMUNERATION REPORT (Audited) – (Continued)
Employment Contracts
Remuneration and other terms of employment for the Managing Director, Matthew Sullivan, as at 30 June 2020,
were formalised in an employment agreement, the terms of which are set out below:
Matthew Sullivan, Managing Director:
• Term of agreement: commenced 2 July 2015.
• Termination notice period: three months.
• Annual Executive Director salary of:
o
o
$270,000 – 1 April 2020 to 30 June 2020
$300,000 – 1 July 2019 to 30 March 2020 (2019: $280,000)
•
STI At-Risk of $120,000 based on the Group’s ability to earn a specified EBITDA. If the EBITDA is not achieved,
no amount will be paid. If the EBITDA is achieved, then the STI amount will be paid based on the following KPI’s:
FY20
EBITDA
Cost Control
Professional Services
Annuity Growth
Options being expensed:
Options - Unlisted
Grant date
Expiry date
Share price at grant date
Exercise price
Vesting Conditions
Fair value at grant date
Number granted
Total fair value
Remuneration expense for FY20
Remuneration expense for FY19
%
25
25
25
25
18-Oct-16
18-Oct-24
$0.03
$0.06
36 months of
service
$0.01
5,000,000
$48,766
$4,063
$16,256
Remuneration and other terms of employment for the Chief Financial Officer, Matthew Green, as at 30 June 2020,
were formalised in an employment agreement, the terms of which are set out below:
Matthew Green, Chief Financial Officer:
• Term of agreement: commenced 10 August 2015.
• Termination notice period: three months.
• Annual Chief Financial Officer salary of:
o
o
$225,000 – 1 April 2020 to 30 June 2020
$250,000 – 1 July 2019 to 30 March 2020 (2019: $240,000)
•
STI At-Risk of $100,000 based on the Group’s ability to earn a specified EBITDA. If the EBITDA is not achieved,
no amount will be paid. If the EBITDA is achieved, then the STI amount will be paid based on the following KPI’s:
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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REMUNERATION REPORT (Audited) – (Continued)
%
25
25
25
25
FY20
EBITDA
Cost Control
Professional Services
Annuity Growth
Options - Unlisted
Grant date
Expiry date
Share price at grant date
Exercise price
Vesting Conditions
Fair value at grant date
Number granted
Total fair value
Remuneration expense for FY20
Remuneration expense for FY19
TIER 1
12/04/2020
30/06/2021
$0.017
$0.017
TIER 2
12/04/2020
30/06/2021
$0.017
$0.017
Vests 30/09/2020
Vests 30/11/2020
$0.0093
477,941
$4,445
$2,222
-
$0.0093
477,941
$4,445
$1,667
-
Remuneration and other terms of employment for the Chief Operating Officer, Christopher McLaughlin, as at 30 June
2020, were formalised in an employment agreement, the terms of which are set out below:
Christopher McLaughlin, Chief Operating Officer:
• Term of agreement: commenced 1 June 2016.
• Termination notice period: three months.
• Annual Chief Operating Officer salary of:
o
o
$234,000 – 1 April 2020 to 30 June 2020
$260,000 – 1 July 2019 to 30 March 2020 (2019: $250,000)
•
STI At-Risk of $100,000 based on the Group’s ability to earn a specified EBITDA. If the EBITDA is not achieved,
no amount will be paid. If the EBITDA is achieved, then the STI amount will be paid based on the following KPI’s:
FY20
EBITDA
Cost Control
Professional Services
Annuity Growth
Options - Unlisted
Grant date
Expiry date
Share price at grant date
Exercise price
Vesting Conditions
Fair value at grant date
Number granted
Total fair value
Remuneration expense for FY20
%
25
25
25
25
TIER 1
08/08/2019
31/12/2022
$ 0.041
$0.06
Vests
31/12/2020
$0.0237
3,000,000
$71,100
$46,005
Remuneration expense for FY19
-
TIER 2
8/8/2019
31/12/2022
$0.041
$0.08
Vests
30/06/2022
$0.0215
3,000,000
$64,500
$17,304
-
TIER 3
12/04/2020
30/06/2021
$0.017
$0.017
Vests
30/09/2020
$0.0093
497,059
$4,623
$2,311
-
TIER 4
12/04/2020
30/06/2021
$0.017
$0.017
Vests
30/11/2020
$0.0093
497,059
$4,623
$1,733
-
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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REMUNERATION REPORT (Audited) – (Continued)
All other Key Management Personnel were appointed as Directors under the Corporations Act, on the following terms:
Andrew Milner, Non-Executive Chairman:
• Term of agreement: commenced 2 July 2015 and subject to re-election as required by the Company’s Constitution.
• Termination as per constitution or breach of the code of conduct.
• Annual Chairman’s fee of: (plus statutory superannuation)
o
o
$100,000 – 23 January 2020 to 30 June 2020
$70,000 – 1 July 2019 to 22 January 2020 (2019: $70,000)
Daniel Rohr, Non-Executive Director:
• Term of agreement: commenced 2 July 2015 and subject to re-election as required by the Company’s Constitution.
• Termination as per constitution or breach of the code of conduct.
• Annual non-executive director’s fee of: (plus statutory superannuation)
o
o
o
$63,000 – 1 April 2020 to 30 June 2020
$70,000 – 23 January to 31 March 2020
$48,402 – 1 July 2019 to 22 January 2020 (2019: $48,402)
Paul Everingham, Non-Executive Director:
• Term of agreement: commenced 23 July 2018 and subject to re-election as required by the Company Constitution.
• Termination as per constitution or breach of the code of conduct
• Annual non-executive director’s fee of: (plus statutory superannuation)
o
o
o
$63,000 – 1 April 2020 to 30 June 2020
$70,000 – 23 January to 31 March 2020
$43,836 – 1 July 2019 to 22 January 2020 (2019: $43,836)
No Director or Executive is entitled to any termination payments apart from payment in lieu of the notice periods
outlined above, remuneration payable up to and including the date of termination and payments due by way of accrued
leave entitlements.
Group performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Group. A portion of cash bonus and
incentive payments are dependent on defined growth targets being met. The remaining portion of the cash bonus and
incentive payments are at the discretion of the Nomination and Remuneration Committee.
The Nomination and Remuneration Committee is of the opinion that the continued improved results can be attributed in
part to the adoption of performance-based compensation and is satisfied that this improvement will continue to increase
shareholder wealth if maintained over the coming years.
Specifically, in relation to options, this effectively links directors’ performance to the share price performance and
therefore to the interests of the shareholders. For this reason, there are no performance conditions prior to grant,
but instead an incentive to increase the value to all shareholders.
The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below:
($) FY2020
($) FY2019
($) FY2018
($) FY2017
($) FY2016
Sales revenue
95,136,463
88,038,326
76,092,829
53,905,392
19,497,757
Normalised EBITDA
3,797,016
2,187,485
1,033,825
861,155
(7,165,466)
Adjusted EBITDA (Pre-option expense)
3,602,805
1,917,917
437,662
(427,019)
(7,293,018)
Net profit / (Loss) after income tax
1,121,912
776,279
2,831,291
400,576
(7,435,386)
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
18
REMUNERATION REPORT (Audited) – (Continued)
The factors that are considered to affect shareholders return are summarised below:
FY2020
FY2019
FY2018
FY2017
FY2016
Share price at finance year end (cents)
Basic earnings per share (cents)
2.0
0.32
4.0
0.09
2.2
0.34
2.3
0.06
2.7
(1.2)
Performance KPI’s for the current and prior year are set out below:
FY2020
EBITDA
Cost Control
Professional Services
Annuity Growth
FY2019
Underlying Profit
Margin
Annuity Growth
Cost Control
Customer Satisfaction
Employee Satisfaction
No Bonus will be paid to KMPs for the FY 2020 year as the EBITDA gate set by the board was not achieved.
Voting and comments made at the Company's 8 November 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 99% of the votes received supported the adoption of the remuneration report for the year ended
30 June 2019. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
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Appendix 4E and Annual Report
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REMUNERATION REPORT (Audited) – (Continued)
KEY MANAGEMENT PERSONNEL REMUNERATION FOR THE YEAR ENDED 30 JUNE 2020
NAME /
POSITION
Andrew Milner
Non-Executive
Chairman
Daniel Rohr
Non-Executive
Director
YEAR
2020
2019
2020
2019
82,231
68,654
55,592
47,471
Paul Everingham
Non-Executive
Director
2020
52,887
2019
40,520
Matthew Sullivan
Managing Director
Matthew Green
Chief Financial
Officer
Christopher
Mclaughlin
Chief Operating
Officer
TOTAL
2020
265,327
2019
273,365
2020
213,788
2019
233,718
2020
227,241
2019
238,526
2020
897,066
2019
902,254
SHORT-TERM EMPLOYEE
BENEFITS
POST-EMPLOYMENT
BENEFITS
EQUITY-SETTLED
SHARE-BASED
Option Expense
TOTAL
$
PERFORM
ANCE
RELATED
Salary
& Fees $
Bonus
$
Other
$
Super
$
7,812
6,522
5,281
4,510
5,024
3,849
-
-
-
-
-
-
10,391
21,003
6,599
24,964
(2,434)
21,002
(1,524)
22,203
5,156
21,002
3,660
22,075
13,113
81,124
8,734
84,123
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
90,043
75,176
60,873
51,981
60,625
118,536
-
44,369
4,063
300,784
-
-
-
-
-
-
-
47,213
352,141
9%
3,889
6,693
236,245
261,090
67,353
320,752
5,847
270,108
135,930
1,127,233
59,753
1,054,865
-
-
-
-
-
-
SHARE BASED COMPENSATION TO KEY MANAGEMENT PERSONNEL DURING THE YEAR ENDED
30 JUNE 2020
There are no performance conditions attached to the Director options issued in prior years. Options issued to Directors
carry no dividends or voting rights and each option is convertible to one share of the company. Options have been valued
using a Black & Scholes model which includes the following inputs.
Matthew Sullivan Options - Unlisted
TIER 1
TIER 2
TIER 3
TIER 4
Grant date
Expiry date
Share price at grant date
Exercise price
Vesting Conditions
Fair value at grant date
Number granted
Total fair value
18-Oct-16
5 years from
vesting
$0.03
$0.05
18-Oct-16
5 years from
vesting
$0.03
$0.06
> $2 million in
EBIT
> $4 million in
EBIT
$0.01
5,000,000
$50,681
$0.01
5,000,000
$48,766
-
18-Oct-16
18-Oct-16
18-Apr-23
18-Oct-24
$0.03
$0.05
18 months’
service
$0.01
5,000,000
$50,681
-
-
$0.03
$0.06
36 months’
service
$0.01
5,000,000
$48,766
$4,064
$16,256
Remuneration expense for FY20
-
Remuneration expense for FY19
$12,670
$18,287
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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REMUNERATION REPORT (Audited) – (Continued)
Mr Sullivan’s share-based payment expense for the 2020 year made up 1.3% (2019: 20.10%) of his total compensation.
Paul Everingham Options - Unlisted
Grant date
Expiry date
Share price at grant date
Exercise price
Vesting Conditions
Fair value at grant date
Number granted
Total fair value
Remuneration expense for FY20
TIER 1
8/11/2019
7/11/2023
$0.042
$0.07
TIER 2
8/11/2019
7/11/2023
$0.042
$0.09
Vests immediately
Vests immediately
$0.0252
1,250,000
$31,500
$31,500
$0.0233
1,250,000
$29,125
$29,125
Mr Everinghams’s share-based payment expense for the 2020 year made up 51.1% (2019: Nil) of his total compensation.
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
30-Jun-20
BALANCE
AT THE
START OF
THE YEAR
BALANCE AT
APPOINTMENT /
(RESIGNATION)
DATE
GRANTED AS
REMUNERATI
ON
NET
CHANGE
BALANCE AT
THE END OF
THE YEAR
VESTED
AND
EXERSIZABLE
Andrew Milner
2,500,000
Daniel Rohr
2,500,000
Paul Everingham
-
Matthew Sullivan
20,000,000
Matthew Green
Christopher
McLaughlin
5,075,000
3,350,000
TOTAL
33,425,000
-
-
-
-
-
-
-
-
-
-
-
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
-
-
20,000,000
15,000,000
955,882
955,882
6,030,882
5,075,000
6,994,118
6,994,118
10,344,118
3,350,000
10,450,000
10,450,000
43,875,000
30,925,000
SHARE HOLDINGS OF KEY MANAGEMENT PERSONNEL
30-Jun
2020
BALANCE AT
THE START
OF THE YEAR
BALANCE AT
APPOINTMENT /
(RESIGNATION)
DATE
GRANTED AS
REMUNERATI
ON
ACQUIRED /
(SOLD) ON
MARKET
NET
CHANGE
BALANCE AT
THE END OF
Andrew Milner
44,323,387
Daniel Rohr
Paul Everingham
Matthew
Sullivan
Matthew Green
Christopher
McLaughlin
TOTAL
7,678,863
4,880,000
48,273,387
27,457,781
-
132,613,418
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44,323,387
7,678,863
13,000,000
13,000,000
17,880,000
-
-
48,273,387
990,941
990,941
28,448,722
121,975
121,975
121,975
14,112,916
14,112,916
146,726,334
This concludes the remuneration report, which has been audited.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
21
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MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Subsequent to period end 2,877,382 options were cancelled and 800,000 options were grated in two equal tranches
with an exercise price of $0.05 and $0.07 respectively expiring on 30 June 2023.
The COVID-19 pandemic has developed rapidly in 2020, with a significant number of cases. Measures taken by various
governments to contain the virus have affected economic activity. The Company has taken several measures to monitor
and mitigate the effects of COVID-19, including safety and health measures for its employees (such as social distancing and
working from home).
At this stage, the impact on the business and its results has not been significant. The Company will continue to follow the
government policies and advice and will focus on continuing our operations in the best and safest way possible without
jeopardising the health of customers and employees.
Other than the above there has been no transaction or event of a material and unusual nature likely, in the opinion of the
directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state
of affairs of the Group, in future financial years.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
NON-AUDIT SERVICES
During the year, BDO, the Group’s auditor, has performed certain other services in addition to the audit and review of the
financial statements.
The Board has considered the non-audit services provided during the year by the auditor and in accordance with written
advice provided by resolution of the audit committee, is satisfied that the provision of those non-audit services during the
year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Group and have been
reviewed by the audit committee to ensure they do not impact the integrity and objectivity of the auditor; and
• The non-audit services provided do not undermine the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the
auditor’s own work, acting in a management or decision-making capacity for the Group, acting as an advocate for
the Group or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the Group, BDO, and its network firms for audit and non-audit services
provided during the year are set out below:
Audit and review of financial statements
Non-audit services:
Taxation compliance services
Assistance with R&D returns
Total non-audit services
TOTAL
67,000
17,300
45,000
62,300
129,300
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
22
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
AUDITOR
BDO Audit (WA) Pty Limited continues in office in accordance with section 327 of the Corporations Act 2001.
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
Matt Sullivan
Managing Director
Signature:
Date: 18 August 2020
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
23
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF CIRRUS NETWORKS
HOLDINGS LIMITED
As lead auditor of Cirrus Networks Holdings Limited for the year ended 30 June 2020, I declare that, to
the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Cirrus Networks Holdings Limited and the entities it controlled during
the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 18 August 2020
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BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
24
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2020
REVENUE
Revenue
Other Income
EXPENSES
Purchase of Goods
Employee and labor related costs
Depreciation & Amortisation
Finance costs
Other Expenses
Foreign exchange losses
Share based compensation – options
Redundancy & Business Restructure
PROFIT BEFORE INCOME TAX
Income tax benefit
PROFIT AFTER INCOME TAX FOR THE YEAR ATTRIBUTABLE TO THE
OWNERS OF CIRRUS NETWORKS HOLDINGS LIMITED
Other comprehensive income
NOTE
CONSOLIDATED
($) 2020
($) 2019
2.2
95,136,463
88,038,326
87,278
125,794
95,223,741
88,164,120
(62,372,787)
(56,805,785)
(25,943,345)
(25,753,011)
(1,498,034)
(584,833)
(663,196)
(223,564)
(3,110,593)
(3,369,679)
(120,889)
(398,026)
(73,322)
(2,058)
(303,038)
(267,510)
(94,101,829)
(87,387,841)
1,121,912
1,740,502
776,279
-
2,862,414
776,279
2.3
Other comprehensive income for the year, net of tax
-
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE
TO THE OWNERS OF CIRRUS NETWORKS HOLDINGS LIMITED
2,862,414
776,279
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
NOTE
CENTS
Basic earnings per share
Diluted earnings per share
2.4
0.324
0.322
CENTS
0.0884
0.0884
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
25
Consolidated Statement of Financial Position
As at 30 June 2020
NOTE
CONSOLIDATED
($) 2020
($) 2019
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ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax asset
Trade and other receivables
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
Lease liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Provisions
Lease liabilities
Trade and other payables
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
4.1
4.2
3.1
3.2
3.3
3.4
2.3
3.5
4.3
5.2
4.4
3.3
5.2
4.4
3.3
3.6
5.1
6.1
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
6,163,432
18,073,958
197,278
24,434,668
518,287
1,869,047
8,305,332
4,450,424
913,960
16,057,050
40,491,718
5,012,769
22,462,417
294,406
27,769,592
559,888
-
8,727,466
2,709,922
-
11,997,276
39,766,868
21,502,289
26,100,021
594,962
896,502
672,023
800,000
695,057
-
23,665,776
27,595,078
-
73,906
1,296,541
890,778
2,261,225
25,927,001
14,564,717
14,200,608
1,435,519
(1,071,410)
14,564,717
600,000
267,513
-
-
867,513
28,462,591
11,304,277
14,200,608
1,037,493
(3,933,824)
11,304,277
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Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
ISSUED
CAPITAL
($)
RESERVES
($)
ACCUMULATED
LOSSES
($)
TOTAL
($)
Balance at 1 July 2018
13,775,608
734,455
(4,504,729)
10,005,334
Retrospective adjustment upon change in
accounting policy (AASB 9)
-
-
(205,374)
(205,374)
Restated total equity at 30 June 2018
13,775,608
734,455
(4,710,103)
9,799,960
Profit after income tax for the year
Other comprehensive income for the year
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
-
-
-
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS
Issue of share capital (note 5.1)
425,000
-
-
-
-
Options vesting (note 6.1)
-
303,038
776,279
776,279
-
-
776,279
776,279
-
-
425,000
303,038
BALANCE AT 30 JUNE 2019
14,200,608
1,037,493
(3,933,824)
11,304,277
ISSUED
CAPITAL
($)
RESERVES
($)
ACCUMULATED
LOSSES
($)
TOTAL
($)
Balance at 1 July 2019
14,200,608
1,037,493
(3,933,824)
11,304,277
Profit after income tax expense for
the year
Other comprehensive income for the year
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
-
-
-
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS
Issue of share capital
Capital raising costs
Options vesting (note 6.1)
-
-
-
-
-
-
-
-
398,026
2,862,414
2,862,414
-
-
2,862,414
2,862,414
-
-
-
-
-
398,026
BALANCE AT 30 JUNE 2020
14,200,608
1,435,519
(1,071,410)
14,564,717
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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Consolidated Statement of Cash Flows
For the year ended 30 June 2020
NOTES
CONSOLIDATED
($) 2020
($) 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
110,432,437
90,827,446
Payments to suppliers and employees (inclusive of GST)
(106,905,459)
(88,492,424)
Net interest (paid) / received
(584,833)
48,159
NET CASH FLOWS FROM OPERATING ACTIVITIES
4.1
2,942,145
2,383,181
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
(276,682)
(400,037)
Deferred consideration of Correct Communications Pty Ltd
-
(2,575,000)
NET CASH FLOWS FROM INVESTING ACTIVITIES
(276,682)
(2,975,037)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal elements of lease payments
Proceeds from borrowings
Repayment of borrowings
Other - Interest paid
(714,800)
-
-
1,250,000
(800,000)
(683,334)
-
(223,564)
NET CASH FLOWS FROM FINANCING ACTIVITIES
(1,514,800)
343,102
Net movement in cash and cash equivalents
1,150,663
(248,754)
Cash and cash equivalents at the beginning of the financial year
5,012,769
5,263,581
Effects of exchange rate changes on cash and cash equivalents
-
(2,058)
CASH AND CASH EQUIVALENTS AT THE END OF FINANCIAL YEAR
6,163,432
5,012,769
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
1
BASIS OF PREPERATION
1.1
GENERAL INFORMATION
Cirrus Networks Holdings Limited ('the Company') is a for-profit- public company domiciled in Australia. The
Company’s registered office is located at Level 28, 108 St Georges Terrace, Perth, WA 6000.
These consolidated financial statements comprise the Company and its controlled entities at the end of, or
during, the year (together referred to as ‘the Group’) and were authorised for issue by the Board of Directors.
Cirrus Networks is a next-generation technology service provider delivering product, professional services
and managed services.
1.2
BASIS OF PREPARATION
These financial statements are general purpose financial statements which:
• have been prepared in accordance with the requirements of the Corporations Act 2001, Australian
Accounting Standards ('AASB’s') and other authoritative pronouncements of the Accounting Standards
Board. The consolidated financial statements comply with International Financial Reporting Standards
('AASB') as issued by the International Accounting Standards Board ('IASB');
• have been prepared on a going concern basis. Based on business forecast associated cash flow and the
Group’s available credit facilities, the Group has sufficient working capital to fund its mandatory
obligations for the period ending 12 months from the date of this report. The Directors have considered
the impact of COVID-19 and based on the current state and financial position of the company the
Directors do not foresee any issues with the company being able to continue as a going concern.
There are no indicators suggesting going concern issues and, therefore, no significant doubt regarding
the entity's ability to continue as a going concern;
• have been prepared on a historical cost basis, except for, where applicable, the revaluation of
available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties, certain classes of property, plant and equipment and derivative financial
instruments. The basis of measurement is discussed further in the individual notes;
• are presented in Australian Dollars ($) unless otherwise stated, being, the Company’s functional currency,
in accordance with ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191;
• adopts all of the new, revised or amended Accounting Standards and Interpretations issued by AASB that
are relevant to the operations of the Group and effective for reporting periods beginning on or after
1 July 2019. Refer to note 1.4 for further details; and
• do not early adopt any Australian Accounting Standards or Interpretations that have been issued or
amended but not yet effective. Refer to note 6.8 for further details.
1.3
BASIS OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of the Group. In preparing the
consolidated financial statements, all intercompany transactions, balances and unrealised gains on transactions
between entities in the Group are eliminated. Subsidiaries are consolidated from the date on which control is
obtained to the date on which control is disposed. The acquisition of subsidiaries is accounted for using the
acquisition method of accounting.
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1.4
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
Adoption of new accounting standards
During the year the Group reviewed all the new and revised Standards and Interpretations issued by the AASB
that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2019.
AASB 16 Leases is a new standard impacting the Group and was adopted from 1 July 2019.
The Group has chosen to adopt the cumulative effect method and as such, the comparative information
throughout these consolidated financial statements has not been restated to reflect the requirements of the
new standards.
In accordance with the transitional provisions of AASB 16, the Group has elected to adopt AASB 16 using the
modified retrospective approach, where the lease liability is measured at the present value of future lease
payments on the initial date of application, being 1 July 2019. In determining the present value, the discount
rate is determined by reference to the group’s incremental borrowing rate on the date of initial application of
the standard (1 July 2019).
On transition to AASB 16 the Group has not reassessed whether contracts are, or contain, leases as at 1 July 2019
but has instead used its previous assessment under AASB 117 and Interpretation 4. On transition to AASB 16 the
Group has a choice (on a lease by lease basis) to measure right of use assets either:
•
•
at the amount of the lease liability, adjusted for any lease prepayments or accruals recognised
under the old leasing standard, AASB 117. The Group has used this method for its plant and
equipment leases
as if AASB 16 had been applied since the commencement of the lease, except that the discount rate
used is the incremental borrowing rate on the date of initial application and certain practical
expedients are available (see below for the practical expedients used by the Group). The Group has
used this method for its leases of property.
On transition to AASB 16 the Group has measured its right of use assets at the amount of the lease liability,
adjusted for any lease prepayments or accruals recognised under the old leasing standard, AASB 117.
In applying the modified retrospective approach, the Group has taken advantage of the following
practical expedients:
•
•
•
A single discount rate has been applied to portfolios of leases with reasonably similar characteristics.
Impairment losses on right-of-use assets as at 1 July 2019 have been measured by reference to the
amount of any onerous lease provision recognised on 30 June 2019.
Leases with a remaining term of 12 months or less from the date of application have been accounted
for as short-term leases (i.e. not recognised on balance sheet) even though the initial term of the
leases from lease commencement date may have been more than 12 months.
The weighted average incremental borrowing rate applied to lease liabilities on 1 July 2019 was 3.3%.
Other new and amended standards and Interpretations issued by the AASB have been determined by the Group
to have no impact, material or otherwise, on its business and therefore no further changes, other than those
mentioned above, are necessary to Group accounting policies. No retrospective change in accounting policy or
material reclassification has occurred requiring the inclusion of a third Statement of Financial Position as at the
beginning of the comparative financial period, as required under AASB 101.
Impact of new accounting standards
The accounting policies of the Group are consistent with those disclosed in the 30 June 2019 financial statements
except for the impact of the new or amended standards and interpretations effective 1 July 2019. The effects of
initially applying the new standards on the Group’s financial statements is that all Right-of-use assets will be
brought on the Balance sheet.
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1.4
Adoption of new accounting standards (Continued)
AASB 16 'Leases' had a significant impact on the current period. The changes at 30 June 2020 were
as follows:
•
•
The current profit before income tax expense was decreased by $99,660. This included an increased
depreciation and amortisation expense of $757,375 and increased finance costs of $57,084, offset by
a reduction in other expenses (reclassification of lease amortisation expenses) of $714,800.
The net current assets were reduced by $672,023 (attributable to current lease liabilities), total non-
current assets increased by $ 1,869,047, total non-current liabilities increased by $1,296,541, and net
assets were reduced by $99,660 (attributable to right-of-use assets and lease liabilities).
The weighted average lease’s incremental borrowing rate applied to the lease liabilities from 1 July 2019
was 3.3%.
Measurement of lease liabilities
Operating lease commitments disclosed as at 30 June 2019
Discounted using the incremental borrowing rate at the date of initial application
Lease liability recognised as at 1 July 2019
Of which are
Current lease liability
Non-current lease liability
Lease liability recognised as at 1 July 2019
1.5
ACCOUNTING JUDGEMENTS AND ESTIMATES
2,439,078
(585,480)
1,853,598
643,578
1,210,020
1,853,598
The preparation of financial statements in conformity with AASB’s requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised and in any future periods affected.
Information about judgements and estimates which are material to the consolidated financial statements are
included in the following notes:
NOTE
2.2 – Revenue
2.2 – Revenue
2.3 – Income tax
2.3 – Income tax
3.4 – Intangible assets
3.4 – Intangible assets
3.4 – Intangible assets
KEY JUDGEMENT AND ESTIMATE
Principal versus agent
Allocation of transaction price
Deferred tax asset
Income tax
Useful life of intangible assets
Impairment of goodwill and other indefinite life intangible assets
Key assumptions used for value-in-use calculations
4.2 – Trade and other receivables
Provision for impairment of receivables
4.4. - Provision
Employee benefits provision
6.1 – Share based payments
Share based payment transactions
6.9 – General
Coronavirus (COVID-19) pandemic
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2
RESULTS FOR THE YEAR
2.1
OPERATING SEGMENTS
The Company has identified its operating segments based on the internal reports that are reviewed and used by
the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation
of resources. The reportable segment is represented by the primary statements forming this financial report,
being one segment, an information technology business in Australia.
2.2
REVENUE
Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount
to which the Group expected to be entitled. If the consideration promised includes a variable amount, the Group
estimates the amount of consideration to which it will be entitled.
The primary geographic market in which the Group generates its revenue is Australia.
The following is a description of the principle activities from which the Group generates its revenue:
• Product sales – The Group generates revenue from the sale of products, which is recognised at a point in
time when the goods are delivered, the legal title has passed and the customer has accepted the goods.
The amount of revenue recognised for goods delivered is adjusted by expected returns. Credit terms for
product sales is 30 days.
• Professional services – Revenue from the provision of professional services is recognised as follows:
o Fixed price contracts: revenue is recognised based on actual services rendered as a proportion of
total services to be provided as the customer receives and uses the benefits simultaneously. Hence
revenue is recognised over time. Customers pay based on monthly payment schedules, if the services
rendered exceed the payment plan, a contract asset is recognised. If the payments exceed the
services rendered, a contract liability is recognised.
o Hourly charge out model: revenue is recognised based on actual services rendered over the agreed
customer term, representing a distinct service, that are substantially the same with the same pattern
of transfer, such that they would be recognised over time. Customers are invoiced on a monthly basis
and consideration is payable when invoiced.
o Bundled professional services: where professional services are bundles with sales of hardware and
software (‘products’), the sale of products is a separate performance obligation and the transaction
price is allocated to the products and the professional services based on the relative stand-alone
prices basis.
• Managed services – Revenue from the provision of managed services is recognised in the period in which
the services are rendered. The performance obligation is the supply of managed services over the
contractual terms. The terms represent distinct contracted services that are substantially the same with
the same pattern of transfer, such that they would be recognised over time.
Key judgements and estimates – principal versus agent
A key judgement made by the directors in the sale of goods is that the entity acts as the principal rather than an
agent. The directors arrived at this conclusion on the basis that:
• The entity has primary responsibility for fulfilling the order from the customer; and
• The entity has latitude in establishing prices.
On this basis the revenue recorded for goods is the gross amount billed.
Key judgements and estimates– allocation of transaction price
Some fixed price contracts include multiple deliveries such as sale of hardware and software, customisation and
installation and ongoing support and maintenance. In such contracts, two or more performance obligations are
identified as distinct and hence the transaction is allocated to the performance obligation on relative stand-alone
selling price basis. The standalone price of product sold is an estimate based on the retail price.
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2.2 REVENUE – (Continued)
DISAGGREGATION OF REVENUE (Geographic Region: Australia)
PRODUCT TYPE
Product sales
Professional services
Managed services
TIMING OF TRANSFER OF GOODS AND SERVICES
Point in time
Over time
CONSOLIDATED
($) 2020
($) 2019
66,094,180
62,800,220
17,265,784
15,439,527
11,776,499
9,798,579
95,136,463
88,038,326
66,094,180
62,800,220
29,042,283
25,238,106
95,136,463
88,038,326
The amount of revenue that will be recognised in future periods for the Company’s significant contracts greater than 12
months, when the remaining performance obligations will be satisfied is as follows:
CONSOLIDATED
($) 2021
4,881,851
($) 2022
($) 2023+
3,893,201
1,776,898
Significant Long-Term Contracts
2.3
INCOME TAX
Income tax expense or benefit comprises current and deferred tax. Current tax assets and liabilities are
measured at the amount expected to be recovered from, or paid to, the taxation authorities. Current tax is based
on the applicable income tax rates enacted or substantially enacted at the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax base used for calculating taxable
profits except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled, and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax balances are disclosed net to the extent that they relate to taxes levied by the same authority and
the Group has the right of set-off. Deferred tax assets and liabilities are always classified as non-current.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the
same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
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2.3
INCOME TAX (Continued)
Key judgements and estimates– deferred tax assets
The group has concluded that a deferred tax asset will be recoverable using the estimated future taxable income
based on the approved business plans and budgets for the group. Losses can be carried forward indefinitely and
have no expiry date.
Key judgements and estimates– 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. 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.
The net deferred tax asset bought to account as at 30 June 2020 is $4,450,424 (2019: $2,709,922)
(A) INCOME TAX EXPENSE/(BENEFIT)
Current tax
Deferred tax
Recoupment of prior year tax losses
TOTAL INCOME TAX EXPENSE/(BENEFIT)
(B) RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE
Profit for the period
Prima facie tax payable at 30%
ADD TAX EFFECT OF:
Non-deductible expenses
Non-assessable income
Current year losses realised
Movement in timing differences not brought to account
Previously unrecognized deferred tax assets brought to account
Deferred tax asset on losses brought to account
INCOME TAX BENEFIT / (EXPENSE)
(C) DEFERRED TAX LIABILITY
Contract asset
Prepaid expenditure
Intangible
Other temporary differences
Offset of deferred tax assets
NET DEFERRED TAX LIABILITY RECOGNISED
CONSOLIDATED
($) 2020
($) 2019
-
(1,740,502)
-
(1,740,502)
-
-
-
-
1,121,912
336,661
776,279
232,884
127,565
111,738
-
-
-
-
-
(344,622)
(464,226)
(1,740,502)
(1,740,502)
-
7,567
243,274
-
-
-
-
-
96
306,452
389
(250,841)
(306,937)
-
-
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2.3
INCOME TAX (Continued)
(D) DEFERRED TAX ASSET
Tax losses
Property, plant and equipment
Expenses taken into equity
Other temporary differences
Offset of deferred tax liabilities
NET DEFERRED TAX ASSETS RECOGNISED
DEFERRED TAX ASSET ON TAX LOSSES NOT BROUGHT TO ACCOUNT
(E) TAX LOSSES CARRIED FORWARD
4,089,405
2,625,476
38,113
13,338
560,409
4,701,265
(250,841)
4,450,424
866,625
2,789
49,806
338,788
3,016,859
(306,937)
2,709,922
2,010,737
As at 30 June 2020, the Company has $866,625 tax losses (2019: 2,010,737) relating to unused tax losses. Net deferred
tax assets of $1,740,502 (2019: $318,378) has been recognised in the consolidated statement of financial position in
respect of the amount of these losses brought to account to the extent that it is probable future taxable profits will be
generated by the Group.
2.4
EARNINGS PER SHARE
Earnings per share (‘EPS’) is the amount of post-tax profit or loss attributable to each share.
The calculation of basic earnings per share at year end has been based on the profit attributable to ordinary
shareholders and weighted average number of ordinary shares outstanding. Diluted EPS takes into account the
dilutive effect of all potential ordinary shares, being share options on issue.
EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS
CONSOLIDATED
2020
2019
BASIC EPS
Profit attributable to the owners of Cirrus Networks Holdings Limited
$2,862,414
$776,279
Weighted average number of ordinary shares
883,384,099
877,988,673
Basic Earnings per share – cents
0.324
0.088
DILUTED EPS
Profit attributable to the owners of Cirrus Networks Holdings Limited
$2,862,414
$776,279
Weighted average number of ordinary shares
889,678,747
877,988,673
Diluted Earnings per share – cents
0.322
0.088
The number of options on issue at 30 June 2020 is 162,290,718 (2019: 84,950,000). At 30 June 2020 63,023,809
(2019: Nil) were considered dilutive as the average market price of the ordinary shares exceeds the exercise
price of the options.
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3
ASSETS AND LIABILITIES
3.1
INVENTORIES
Stock on hand is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery
costs, net of rebates and discounts received or receivable. Net realisable value is the estimated selling price in
the ordinary course of business less the estimated costs of completion and the estimated costs necessary to
make the sale.
INVENTORIES - AT COST
3.2
PROPERTY, PLANT AND EQUIPMENT
Recognition and measurement
CONSOLIDATED
($) 2020
197,278
($) 2019
294,406
The carrying value of property, plant and equipment is measured as the cost of the asset, less depreciation and
impairment. Costs include purchase price, other directly attributable costs and the initial estimate of the costs of
dismantling and restoring the asset, where applicable.
Depreciation
The depreciable amount of all property, plant and equipment is depreciated on a straight-line method from the
date that management determine that the asset is available for use.
Items of plant and equipment are depreciated using the cost model, depreciated on a straight-line basis over
their useful lives. The cost model is where the asset is carried at its cost less any accumulated depreciation and
any impairment losses. The estimated useful lives of plant and equipment held by the Group (office and
computer equipment and hosting infrastructure) is 4 years.
Leasehold improvements are depreciated over the shorter of the term of the lease and the assets useful life. The
estimated useful life of leasehold improvements is 4 years.
Impairment
Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Impairment loss is recognised for the amount by
which the carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an assets fair value less costs of disposal and value-in-use. The value-in-use
is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific
to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows
are grouped together to form a cash-generating unit.
Derecognition
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or
losses are recognised in profit or loss when the item is de-recognised.
Judgements and estimates – Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a
result of technical innovations or some other event. The depreciation and 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.
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3.2 PROPERTY, PLANT AND EQUIPMENT (Continued)
PROPERTY, PLANT AND EQUIPMENT
Computer and office equipment - at cost
Less: Accumulated depreciation
Hosting Infrastructure - at cost
Less: Accumulated depreciation
Leasehold Improvements - at cost
Less: Accumulated depreciation
CONSOLIDATED
($) 2020
580,312
(297,561)
282,751
490,700
(336,860)
153,840
97,930
(16,234)
81,696
518,287
($) 2019
786,814
(509,837)
276,977
591,785
(332,318)
259,467
158,932
(135,488)
23,444
559,888
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
CONSOLIDATED
BALANCE AT 1 JULY 2018
Additions
Depreciation expense
BALANCE AT 30 JUNE 2019
Additions
Depreciation expense
BALANCE AT 30 JUNE 2020
COMPUTER AND
OFFICE
EQUIPMENT ($)
HOSTING
INFRASTRUCTURE
($)
LEASEHOLD
IMPROVEMENT
($)
330,637
51,549
(105,209)
276,977
49,269
(43,495)
282,751
290,303
141,710
(172,546)
259,467
51,990
(157,617)
153,840
32,203
20,000
(28,759)
23,444
60,254
(2,002)
81,696
TOTAL
($)
653,143
213,259
(306,514)
559,888
161,513
(203,114)
518,287
3.3 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing
the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of-use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases
with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
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3.3
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Continued)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease
payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend
on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase
option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they
are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss
if the carrying amount of the right-of-use asset is fully written down.
RIGHT-OF-USE ASSETS
RIGHT-OF-USE ASSETS
Land and buildings - right-of-use assets
Less: Accumulated amortisation
CONSOLIDATED
($) 2020
2,626,707
(757,660)
1,869,047
($) 2019
-
-
-
AASB 16 was adopted in the period. Refer to Note 1.4 for further detail on the transition.
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
CONSOLIDATED
Buildings ($)
BALANCE AT 1 JULY 2019
Additions on adoption of AASB 16
Other Additions
Amortisation expense
BALANCE AT 30 JUNE 2020
-
1,853,598
772,824
(757,375)
1,869,047
Additions to the right-of-use assets during the year were $2,604,415 on adoption of AASB 16 on 1 July 2019.
The Group leases land and buildings for its offices under agreements of between one and five years with,
in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are
renegotiated.
Recoverability of the right-of-use asset was considered as part of our impairment testing. Details of this testing can be
found at note 3.4. No issues around recoverability were identified.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
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3.3
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Continued)
LEASE LIABILITIES
LEASE LIABILITIES
Lease Liabilities – current
Lease Liabilities – non-current
CONSOLIDATED
($) 2020
672,023
1,296,541
1,968,564
($) 2019
-
-
-
AASB 16 was adopted in the period. Refer to Note 1.4 for further detail on the transition.
Lease payments to be made under reasonably certain extensions options are also included in the measurement
of the liability.
Amounts recognised in the consolidated statement of profit or loss
PROFIT OR LOSS
Interest Expense (included in finance cost)
Depreciation charge of right-of-use assets (Buildings)
Cash outflow
The total outflow for leases in 2020 was $714,800.
3.4
INTANGIBLE ASSETS
The Intangible assets
CONSOLIDATED
($) 2020
57,084
757,375
($) 2019
-
-
-
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their
fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment.
Finite life intangible assets are subsequently measured at cost less amortisation and any impairment.
The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured
as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method
and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business and is initially measured at cost. Cost is measured as the cost of
the business combination minus the net fair value of the acquired and identifiable assets, liabilities and
contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment
losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Impairment
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they
might be impaired. Impairment loss is recognised for the amount by which the carrying amount exceeds its
recoverable amount.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
39
3.4
INTANGIBLE ASSETS (Continued)
Recoverable amount is the higher of an assets fair value less costs of disposal and value-in-use. The value-in-use
is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific
to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows
are grouped together to form a cash-generating unit.
Key judgements and estimates – useful life of intangible assets
Intangible assets are stated at their historical cost and amortised on a straight-lined basis over their expected
useful lives. The fair value determination of customer contracts and related relationships is derived from
expected retention rates and cash flows over the customer’s remaining estimated lifetime. Amortisation of
customer relationships is over 5 years. Amortisation of software is over 3 years.
Key judgements and estimates – impairment of goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These calculations
require the use of assumptions, including estimated discount rates based on the current cost of capital and
growth rates of the estimated future cash flows.
Intangible assets
Goodwill - at cost
CONSOLIDATED
($) 2020
985,726
7,319,606
8,305,332
($) 2019
1,407,860
7,319,606
8,727,466
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
CONSOLIDATED
Balance at 1 July 2018
Additions through asset purchase
Accumulated amortisation and impairment
BALANCE AT 30 JUNE 2019
Additions through asset purchase
Accumulated amortisation and impairment
BALANCE AT 30 JUNE 2020
TOTAL ($)
8,792,795
291,354
(356,683)
8,727,466
-
(422,134)
8,305,332
For the purpose of impairment testing, intangibles are allocated to one (2019: one) Cash Generating Unit (‘CGU’)
which are part of one (2019: one) reportable segment. As at 30 June 2020, the business monitors the operating
results of one distinct business unit for the purposes of making decisions about resource allocation and
performance assessment.
The performance of this business unit was primarily evaluated based on Earnings before Interest, Taxes,
Depreciation and Amortisation (EBITDA).
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3.4
INTANGIBLE ASSETS – (Continued)
Key judgements and estimates – key assumptions used for value-in-use calculations
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of
a CGU is determined based on value-in-use calculations which require the use of assumptions. The calculations
use cash flow projections based on financial budgets approved by management covering a five-year period.
Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below.
These growth rates are consistent with forecasts included in industry reports specific to the industry in which
the CGU operates.
The following table sets out the key assumptions for those CGUs that have significant goodwill allocated to them.
DESCRIPTION
Sales growth (% annual growth rate)
Budgeted gross margin (%)
Other operating costs ($’000)
Annual capital expenditure ($’000)
Long term growth rate (%)
Pre-tax discount rate (%)
2020 CGU
2019 CGU
2.5
18.0
14,777
200
2.5
12.0
5.0
20.0
14,256
100
2.5
13.0
Management has determined the values assigned to each of the above key assumptions as follows:
ASSUMPTION
APPROACH USED TO DETERMINE VALUES
Sales growth
Average annual growth rate over the five-year forecast based on past
performance and management’s expectations of market development. A prudent
2.5% was applied in the current year give the uncertainty around Covid 19.
Budgeted gross margin
Based on past performance and management’s expectations for the future.
Other operating costs
Fixed costs of the CGUs, which do not vary significantly with sales growth.
Management forecasts these costs based on the current structure of the business,
adjusting for inflationary increases but not reflecting any future restructurings or
cost saving measures.
Annual capital
expenditure
There is generally limited need for additions or capital improvements therefore
limited capital expenditure assumed in the five-year forecast.
Long-term growth rate
This is the weighted average growth rate used to extrapolate cash flows beyond
the budgeted period.
Post-tax discount rate
Reflect specific risks relating to the relevant segments in which they operate.
Uncertainties around
COVID-19
COVID-19 has been considered in detail through our impairment assessment.
Please refer to note 6.9 and 6.10 for further information. Specific consideration
was applied to cashflow forecasts in relation to the Group’s Victoria operations.
Sensitivity to change in assumptions
The Directors and management have considered and assessed reasonable possible changes to key assumptions
that result in a change to the recoverable amount for each CGU. With regards to the assessment, management
recognises that the actual time value of money and the discount rate used may vary from the estimated.
Management note that there is sufficient headroom in estimates that no significant changes to key assumptions
will result in an impairment, based on expected cash flows of the CGU.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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3.5
TRADE AND OTHER RECEIVABLES (NON-CURRENT)
TRADE AND OTHER RECEIVABLES (NON-CURRENT)
CONSOLIDATED
($) 2020
913,960
($) 2019
-
The above relates to a non-current receivable due on the 15 July 2021. The value is fully recoverable.
3.6
TRADE AND OTHER PAYABLES (NON-CURRENT)
TRADE AND OTHER PAYABLES (NON-CURRENT)
The above relates to a non-current payable due on the 15 July 2021.
CONSOLIDATED
($) 2020
890,778
($) 2019
-
3.7
COMMITMENTS
Operating lease commitments
In the prior year the Group had three significant office leases spanning more than one year which are all non-
cancellable leases.
• One lease has a five-year term, with rent payable monthly in advance. Contingent rental provisions
within this lease agreement require that the minimum lease payments shall be increased by CPI + 1% per
annum. An option exists to renew the lease at the end of the five-year term and the lease allows for
subletting of all lease areas pending the lessor's consent.
• One lease has a five-year term, with rent payable monthly in advance. Contingent rental provisions
within this lease agreement require that the minimum lease payments shall be increased by 3.75% per
annum.
• The other lease has a four year, with rent payable monthly in advance. Contingent rental provisions
within this lease agreement require that the minimum lease payments shall be increased by 3.75% per
annum.
MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE OPERATING LEASES
Within one year
After one year but not more than five years
More than five years
($) 2019
771,188
1,667,890
-
2,439,078
Lease of office premises is now recorded under the new accounting standards as of 30 June 2020
(refer to Note 3.3)
3.8
CONTINGENT LIABILITIES AND ASSETS
The Group maintains bank guarantees for its rental properties. The Group has no known contingent liabilities or
contingent assets.
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Appendix 4E and Annual Report
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4
4.1
WORKING CAPITAL DISCLOSURES
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
RECONCILIATION OF CASH AND CASH EQUIVALENTS
CASH AT BANK
CONSOLIDATED
($) 2020
6,163,432
($) 2019
5,012,769
RECONCILIATION OF THE NET PROFIT AFTER INCOME TAX TO THE
CONSOLIDATED
NET CASH FLOWS USED IN OPERATIONS
PROFIT FOR THE YEAR
($) 2020
2,862,414
Cash flows excluded from profit attributable to operating activities non-cash flows in profit:
Depreciation and amortization
Amortisation from leases
Employee remuneration (options)
Changes in assets and liabilities (net effect):
740,658
757,375
398,026
($) 2019
776,279
663,196
-
303,038
(increase)/decrease in trade and other receivables
3,474,499
(7,724,604)
(increase)/decrease in other assets
(increase)/decrease in deferred tax asset
increase/(decrease) in trade and other payables
increase/(decrease) in employee benefits
97,128
(1,740,502)
(3,655,289)
7,836
84,337
-
8,232,345
48,590
CASH FLOW GENERATED FROM OPERATIONS
2,942,145
2,383,181
Non-cash investing and financing activities
Non-cash investing and financing activities disclosed in other notes are:
Acquisition of right-of-use assets – note 3.3
•
• Options issued to employees under the employee option scheme for no cash consideration – note 6.1
2019: Shares to a value of $425,000 issued as deferred consideration for the acquisition of Correct
Communications.
Net Cash
Cash and cash equivalents
Borrowings
Net cash before leases
Leases - recognised on adoption of AASB 16 (See note 3.3)
Net cash
CONSOLIDATED
($) 2020
6,163,432
(594,962)
5,568,470
(1,968,564)
3,599,906
($) 2019
5,012,769
(1,400,000)
3,612,769
-
3,612,769
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4.2
TRADE AND OTHER RECEIVABLES
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment. Trade receivables are generally due for settlement
within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable
are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised
when there is objective evidence that the Group will not be able to collect all amounts due according to the
original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will
enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days
overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment
allowance is the difference between the asset's carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not
discounted if the effect of discounting is immaterial. Other receivables are recognised at amortised cost, less any
provision for impairment.
Key judgements and estimates– provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The
level of provision is assessed by using the expected credit loss model.
Trade receivables
Contract asset
Other receivables
Contract assets
CONSOLIDATED
($) 2020
($) 2019
15,043,689
20,467,838
1,701,638
1,328,631
71,578
1,923,001
18,073,958
22,462,417
Contract assets relate to professional and managed services work performed at 30 June 2020 but not yet
invoiced.
The increase in contract assets from FY 2019 is due to a combination of timing around invoicing and an increase
in the number of on-going projects.
All services are for a period of one year or less and are generally billed based on time incurred. As permitted by
AASB 15, the transaction price allocated to these unsatisfied contracts is not disclosed.
Receivables past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $1,467,244 as
at 30 June 2020 (2019: $1,626,538).
The Group did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers
based on recent collection practices. The ageing of the past due but not impaired receivables are as follows:
0 to 1 month overdue
1 to 3 months overdue
Over 3 months overdue
CONSOLIDATED
($) 2020
872,138
346,384
248,721
($) 2019
918,649
627,331
80,558
1,467,243
1,626,538
Refer to note 6.5 for further information on credit ratings of all trade receivables.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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4.3
TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Trade payables
Contract liabilities
Accruals
Other payables
Contract liabilities
CONSOLIDATED
($) 2020
($) 2019
19,287,923
24,795,131
584,823
330,182
1,299,361
-
381,320
923,570
21,502,289
26,100,021
Contract liabilities relate to professional and managed services which have been invoiced at 30 June 2020 but
the service not yet completed.
The increase in contract assets from FY 2019 is due to a combination of timing around invoicing and an increase
in the number of on-going projects. An increase in pre-paid professional service hours has also contributed to the
increase
All services are for a period of one year or less and are generally billed based on time incurred. As permitted by
AASB 15, the transaction price allocated to these unsatisfied contracts is not disclosed.
Financial risk management
Refer to note 6.5 for further information on financial risk management.
4.4
PROVISIONS
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past
event, it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking into account the risks and uncertainties
surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-
tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a
finance cost.
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid
when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured as the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on national government bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
45
4.4
PROVISIONS (Continued)
Key Judgements and estimates - Employee benefits provision
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.
CURRENT PROVISIONS
Annual leave
Long service leave
Provision for onerous lease
Lease incentive
NON-CURRENT PROVISIONS
Lease incentive
Long service leave
CONSOLIDATED
($) 2020
819,535
76,967
-
-
896,502
($) 2019
680,230
-
12,847
1,980
695,057
CONSOLIDATED
($) 2020
($) 2019
-
11,880
73,906
73,906
255,633
267,513
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5
EQUITY AND FUNDING
5.1
ISSUED CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
ISSUED AND PAID UP CAPITAL
CONSOLIDATED
2020 (NO.)
2019 (NO.)
2020 ($)
2019 ($)
Share Capital
883,384,099
883,384,099
15,721,584
15,721,584
Capital Raising Costs
-
-
(1,520,976)
(1,520,976)
883,384,099
883,384,099
14,200,608
14,200,608
MOVEMENT RECONCILIATION
Balance at the beginning
of the year
Issue of shares
Less: Capital raising costs
BALANCE AT THE END
OF THE YEAR
CONSOLIDATED
2020 (NO.)
2019 (NO.)
2020 ($)
2019 ($)
883,384,099
861,502,650
14,200,608
13,775,608
-
-
21,881,449
-
-
-
425,000
-
883,384,099
883,384,099
14,200,608
14,200,608
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5.1
ISSUED CAPITAL (Continued)
The Company had the following classes of options on issue as at the reporting date:
CLASS
NUMBER
EXERCISE
PRICE
EXPIRY DATE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
2020
3,825,000
3,825,000
-
5,462,500
5,462,500
5,537,500
5,537,500
5,000,000
5,000,000
5,000,000
5,000,000
7,500,000
7,500,000
4,250,000
4,250,000
1,500,000
1,500,000
6,600,000
6,600,000
1,100,000
1,100,000
1,250,000
1,250,000
3,900,000
3,900,000
30,220,334
30,220,384
2019
5,325,000
5,325,000
7,000,000
6,287,500
6,287,500
5,612,500
5,612,500
5,000,000
5,000,000
5,000,000
5,000,000
7,500,000
7,500,000
4,250,000
4,250,000
-
-
-
-
-
-
-
-
-
-
-
-
$0.035
$0.045
$0.080
$0.035
$0.045
$0.035
$0.045
$0.045
$0.060
$0.045
$0.060
$0.060
$0.045
$0.035
$0.045
$0.035
$0.045
$0.060
$0.080
$0.050
$0.070
$0.070
$0.090
$0.035
$0.045
$0.017
$0.017
30/06/2022
30/06/2022
31/12/2019
13/11/2020
13/11/2020
30/06/2021
30/06/2021
30/06/2025
5 years from vesting date
18/04/2023
18/10/2024
11/10/2023
11/10/2021
22/11/2021
22/11/2021
30/06/2023
30/06/2023
31/12/2022
31/12/2022
30/06/2023
30/06/2023
11/11/2023
11/11/2023
31/03/2023
31/03/2023
30/06/2021
30/06/2021
TOTAL
162,290,718
84,950,000
Movements in the number of options on issue during the current and prior financial years are as follows:
DESCRIPTION
BALANCE AS AT 1 JULY 2018
Options issued during the year – employees
Options cancelled/expired during the year
BALANCE AS AT 30 JUNE 2019
Options issued during the year – employees
Options issued during the year – Directors
Options cancelled/expired during the year
BALANCE AS AT 30 JUNE 2020
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
NO.
112,750,000
3,000,000
(30,800,000)
84,950,000
90,623,809
2,500,000
(15,783,091)
162,290,718
48
5.2
LOANS AND BORROWINGS
This note provides information about the contractual terms of the Group’s interest-bearing loans and
borrowings. For more information about the Group’s exposure to interest rate risk, see note 6.5.
DESCRIPTION
Borrowings-current
Borrowings-non-current
CONSOLIDATED
($) 2020
594,962
-
($) 2019
800,000
600,000
594,962
1,400,000
The Group has a separate unsecured Commercial Advance Facility with Bankwest specifically for Acquisition
Funding. Interest payable at BBSY plus a margin of 3.30% per annum. The loan will be fully repaid on 9 December
2020. As at 30 June 2020, $600,000 has been drawn down under the Commercial Advance Facility.
6
6.1
OTHER DISCLOSURES
SHARE BASED PAYMENTS
Goods or services received or acquired in a share-based payment transaction are recognised as an increase in
equity if the goods or services were received in an equity-settled share-based payment transaction or as a
liability if the goods and services were acquired in a cash settled share-based payment transaction.
Key judgements and estimates - Share-based payment transactions
For equity-settled share-based transactions, goods or services received are measured directly at the fair value of
the goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made the
value of the goods or services is determined indirectly by reference to the fair value of the equity instrument
granted using a Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield and the risk-free interest rate for the term of the option.
Transactions with employees and others providing similar service are measured by reference to the fair value at
grant date of the equity instrument granted using a Black-Scholes option pricing model
RESERVES
Equity Settled Employee Benefits Reserve
CONSOLIDATED
($) 2020
1,435,519
1,435,519
($) 2019
1,037,493
1,037,493
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.1
SHARE BASED PAYMENTS – (Continued)
Share based payment plans for Directors and other Key Management Personnel
The following share-based payment arrangements were in place during the current and prior periods:
NUMBER OF
OPTIONS
GRANT DATE
EXPIRY DATE
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5,462,500
5,537,500
5,537,500
5,000,000
20/11/2015
20/11/2015
05/07/2016
05/07/2016
18/10/2016
5,000,000
18/10/2016
5,000,000
5,000,000
1,762,500
1,762,500
2,062,500
2,062,500
7,500,000
7,500,000
4,250,000
4,250,000
1,500,000
1,500,000
6,600,000
6,600,000
500,000
500,000
1,250,000
1,250,000
600,000
600,000
3,900,000
3,900,000
30,220,334
30,220,384
162,290,718
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18/10/2016
18/10/2016
13/06/2017
13/06/2017
09/07/2017
9/07/2017
11/10/2017
11/10/2017
23/11/2017
23/11/2017
07/01/2019
07/01/2019
08/08/2019
08/08/2019
02/10/2019
02/10/2019
08/11/2019
08/11/2019
20/01/2020
20/01/2020
31/03/2020
31/03/2020
12/04/2020
12/04/2020
2020
EXERCISE
PRICE
SHARE PRICE
AT GRANT
DATE
FAIR VALUE
AT GRANT
DATE
% VESTED
13/11/2020
13/11/2020
30/06/2021
30/06/2021
30/06/2025
5 years from
vesting date
18/04/2023
18/10/2024
30/06/2022
30/06/2022
30/06/2022
30/06/2022
11/10/2021
11/10/2023
22/11/2021
22/11/2021
30/06/2023
30/06/2023
31/12/2022
31/12/2022
30/06/2023
30/06/2023
11/11/2023
11/11/2023
30/06/2023
30/06/2023
31/03/2023
31/03/2023
30/06/2021
30/06/2021
$0.035
$0.045
$0.035
$0.045
$0.045
$0.060
$0.045
$0.060
$0.035
$0.045
$0.035
$0.045
$0.045
$0.060
$0.035
$0.045
$0.035
$0.045
$0.060
$0.080
$0.050
$0.070
$0.070
$0.090
$0.050
$0.070
$0.035
$0.045
$0.017
$0.017
$0.030
$0.030
$0.028
$0.028
$0.028
$0.028
$0.028
$0.028
$0.017
$0.017
$0.017
$0.017
$0.023
$0.023
$0.017
$0.017
$0.017
$0.017
$0.041
$0.041
$0.043
$0.043
$0.042
$0.042
$0.038
$0.038
$0.018
$0.018
$0.020
$0.020
$190,498
$176,490
$72,686
$61,911
$50,681
$48,766
$50,681
$48,766
$6,169
$7,931
$24,956
$23,756
$76,530
$89,822
$41,650
$38,675
$13,650
$12,300
$163,530
$148,350
$14,150
$12,900
$31,500
$29,125
$13,920
$12,480
$42,140
$38,700
$293,060
$293,061
100%
100%
100%
100%
100%
0%
100%
100%
100%
100%
100%
0%
0%
0%
100%
100%
0%
0%
0%
0%
0%
0%
100%
100%
0%
0%
0%
0%
0%
0%
VESTING
DATE
Vested
Vested
Vested
Vested
Vested
When EBIT
>4M
Vested
Vested
Vested
Vested
Vested
9/07/2020
11/10/2020
11/10/2022
Vested
Vested
20/03/2021
20/09/2022
31/12/2020
30/06/2022
1/04/2021
1/10/2022
Vested
Vested
20/07/2021
20/01/2023
15/10/2021
15/04/2023
30/09/2020
30/11/2020
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.1
SHARE BASED PAYMENTS – (Continued)
2019
NUMBER OF
OPTIONS
GRANT DATE
EXPIRY DATE
EXERCISE
PRICE
SHARE PRICE
AT GRANT
DATE
FAIR VALUE
AT GRANT
DATE
% VESTED
7,000,000
6,287,500
6,287,500
5,612,500
5,612,500
2/12/2014
20/11/2015
20/11/2015
5/07/2016
5/07/2016
5,000,000
18/10/2016
5,000,000
18/10/2016
5,000,000
5,000,000
1,762,500
1,762,500
2,062,500
2,062,500
7,500,000
7,500,000
4,250,000
4,250,000
1,500,000
1,500,000
18/10/2016
18/10/2016
13/06/2017
13/06/2017
9/07/2017
9/07/2017
11/10/2017
11/10/2017
23/11/2017
23/11/2017
28/09/2018
28/09/2018
31/12/2019
13/11/2020
13/11/2020
30/06/2021
30/06/2021
5 years from
vesting date
5 years from
vesting date
18/04/2023
18/10/2024
30/06/2022
30/06/2022
30/06/2022
30/06/2022
11/10/2021
11/10/2023
22/11/2021
22/11/2021
30/06/2022
30/06/2022
$0.08
$0.04
$0.05
$0.04
$0.05
$0.05
$0.06
$0.05
$0.06
$0.04
$0.05
$0.04
$0.05
$0.05
$0.06
$0.04
$0.05
$0.04
$0.05
$0.02
$0.03
$0.03
$0.03
$0.03
$0.03
$0.03
$0.03
$0.03
$0.02
$0.02
$0.02
$0.02
$0.02
$0.02
$0.02
$0.02
$0.02
$0.02
$162,400
$190,498
$176,490
$72,686
$61,911
$50,681
$48,766
$50,681
$48,766
$6,169
$7,931
$24,956
$23,756
$76,530
$89,822
$41,650
$38,675
$12,459
$10,855
100%
100%
100%
100%
0%
0%
0%
100%
0%
100%
100%
100%
0%
0%
0%
100%
100%
0%
0%
VESTING
DATE
Vested
Vested
Vested
Vested
20/07/2019
When EBIT
>2M
When EBIT
>4M
Vested
18/10/2019
Vested
Vested
Vested
9/07/2020
11/10/2020
11/10/2022
Vested
Vested
28/03/2020
28/09/2020
84,950,000
The following table illustrates the number and weighted average exercise prices of and movements in share
options issued during the year.
2020
2019
NUMBER
($) WEIGHTED
AVERAGE
EXERCISE PRICE
NUMBER
($) WEIGHTED
AVERAGE
EXERCISE PRICE
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Outstanding at the beginning of year
84,950,000
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of year
Exercisable at the end of the year
93,123,809
(8,783,091)
-
(7,000,000)
162,290,718
53,587,500
0.05
0.03
0.04
-
0.08
0.04
0.04
112,750,000
3,000,000
(10,550,000)
-
(20,250,000)
84,950,000
44,275,000
0.06
0.04
0.04
-
0.1
0.05
0.04
The options outstanding at 30 June 2020 had an exercise price in the range of $0.017 to $0.080. The weighted
average remaining contractual life of options outstanding (excluding EBIT based options) at the end of the year
was 1.8 years.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.1
SHARE BASED PAYMENTS – (Continued)
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year as part of employee
benefit expense were as follows:
($) 2020
($) 2019
Options issued under employee option plan
398,026
303,038
Fair value of options granted
The fair value of the equity-settled share options granted under the option plan is estimated as at the date of
grant using the Black and Scholes model taking into account the terms and conditions upon which the options
were granted.
For the options granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date are as follows:
EMPLOYEE OPTIONS
Grant date
Expiry date
Share price at grant date
Exercise price
Expected volatility
Dividend yield
Risk free interest rate
Fair value at grant date
Number granted
Total fair value
EMPLOYEE OPTIONS
Grant date
Expiry date
Share price at grant date
Exercise price
Expected volatility
Dividend yield
Risk free interest rate
Fair value at grant date
Number granted
Total fair value
2020
DIRECTOR OPTIONS
EMPLOYEE OPTIONS
(including 3m per tranche to COO)
8-Nov-19
11-Nov-23
$0.04
$0.07
99.21%
0.00%
0.98%
$0.03
1,250,000
$31,500
8-Nov-19
11-Nov-23
$0.04
$0.09
99.21%
0.00%
0.98%
$0.02
1,250,000
$29,125
8-Aug-19
31-Dec-22
$0.04
$0.06
102.23%
0.00%
0.72%
$0.02
6,900,000
$163,530
8-Aug-19
31-Dec-22
$0.04
$0.08
102.23%
0.00%
0.72%
$0.02
6,900,000
$148,350
2020
EMPLOYEE OPTIONS
EMPLOYEE OPTIONS
7-Jan-19
30-Jun-23
$0.02
$0.04
88.31%
0.00%
1.94%
$0.01
1,500,000
$13,650
7-Jan-19
30-Jun-23
$0.02
$0.05
88.31%
0.00%
1.94%
$0.01
1,500,000
$12,300
11-Nov-19
30-Jun-23
$0.04
$0.05
102.10%
0.00%
0.97%
$0.03
500,000
$14,150
11-Nov-19
30-Jun-23
$0.04
$0.07
102.10%
0.00%
0.97%
$0.03
500,000
$12,900
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.1
SHARE BASED PAYMENTS – (Continued)
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EMPLOYEE OPTIONS
Grant date
Expiry date
Share price at grant date
Exercise price
Expected volatility
Dividend yield
Risk free interest rate
Fair value at grant date
Number granted
Total fair value
EMPLOYEE OPTIONS
Grant date
Expiry date
Share price at grant date
Exercise price
Expected volatility
Dividend yield
Risk free interest rate
Fair value at grant date
Number granted
Total fair value
2020
EMPLOYEE OPTIONS
EMPLOYEE OPTIONS
20-Jan-20
30-Jun-23
$0.038
$0.050
97.2%
0.00%
0.97%
$0.023
600,000
$13,920
20-Jan-20
30-Jun-23
$0.038
$0.070
97.2%
0.00%
0.97%
$0.021
600,000
$12,480
31-Mar-20
31-Mar-23
$0.018
$0.035
102.23%
0.00%
0.72%
$0.010
4,300,000
$42,140
31-Mar-20
31-Mar-23
$0.018
$0.045
102.23%
0.00%
0.72%
$0.009
4,300,000
$38,700
2020
EMPLOYEE OPTIONS (including 497,059 and 477,941 per tranche
to the COO and CFO respectively)
12-Apr-20
30-Jun-23
$0.020
$0.017
99.07%
0.00%
0.72%
$0.009
31,511,879
$293,060
12-Apr-20
30-Jun-23
$0.020
$0.017
99.07%
0.00%
0.72%
$0.009
31,511,930
$293,061
For the options granted during the 2019 financial year, the valuation model inputs used to determine the fair
value at the grant date are as follows:
EMPLOYEE OPTIONS
Grant date
Expiry date
Share price at grant date
Exercise price
Expected volatility
Dividend yield
Risk free interest rate
Fair value at grant date
Number granted
Total fair value
2019
TIER 1
28-Sep-18
30-Jun-22
$0.02
$0.04
78.95%
0.00%
2.29%
$0.01
1,500,000
$12,450
TIER 2
28-Sep-18
30-Jun-22
$0.02
$0.05
78.95%
0.00%
2.29%
$0.01
1,500,000
$10,855
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future
trends, which may also not necessarily be the actual outcome. No other features of options granted were
incorporated into the measurement of fair value.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.2
REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by BDO Audit (WA) Pty
Limited, the auditor of the Company:
DESCRIPTION
Audit services - BDO Audit (WA) Pty Limited
Audit or review of the financial statements
Other services - BDO Corporate Tax (WA) Pty Limited
Tax advice & return preparation
6.3
RELATED PARTY TRANSACTIONS
CONSOLIDATED
($) 2020
($) 2019
67,000
48,854
62,300
90,818
129,300
139,672
There were no key management personnel, or their related parties, holding positions in other entities during the
financial year that result in them having control or significant influence over the financial or operating policies
of those entities.
For the prior year, the terms and conditions of those transactions were no more favourable than those available,
or which might reasonably be expected to be available, in similar transactions with non-key management
personnel related companies on an arm’s length basis.
The aggregate value of transactions and outstanding balances (excluding reimbursements of expenses incurred
on behalf of the Company) relating to key management personnel and entities over which they have control or
significant influence for the prior year were as follows:
KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits (superannuation)
Long-term benefits
Share-based payments
($) 2020
910,179
81,124
-
135,930
1,127,233
($) 2019
910,989
84,123
-
59,753
1,054,865
6.4
ENTITY ACQUISITIONS
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:
•
•
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
• equity interests issued by the group
•
•
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-
controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.4
ENTITY ACQUISITIONS – (Continued)
The excess of the:
•
consideration transferred,
• amount of any non-controlling interest in the acquired entity,
• and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of
the net identifiable assets acquired is recorded as goodwill.
If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the
difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental
borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier
under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently re-measured to fair value with changes in fair value recognised in profit or loss.
6.5
FINANCIAL INSTRUMENTS
Fair value of financial instruments
Due to their short-term nature, the carrying amount of the current receivables, current payables and current
borrowings is assumed to approximate their fair value. Loans and borrowings are recognised at their fair value of
the consideration received, net of transaction costs.
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or
when the financial asset and substantially all the risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Financial assets are classified according to their business model and the characteristics of their contractual cash
flows and initially measured at fair value adjusted for transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as
hedging instruments, are classified into the following four categories:
• Financial assets at amortised cost
• Financial assets at fair value through profit or loss (FVTPL)
• Debt instruments at fair value through other comprehensive income (FVTOCI)
• Equity instruments at FVTOCI
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Financial assets at amortised cost
Financial assets with contractual cash flows representing solely payments of principal and interest and held
within a business model of ‘hold to collect’ contractual cash flows are accounted for at amortised cost using the
effective interest method. The Group’s trade and most other receivables fall into this category of financial
instruments.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.5
FINANCIAL INSTRUMENTS – (Continued)
Impairment
The Group assessed on a forward-looking basis the expected credit losses associated with its debt instruments
carried at amortised cost and FVOCI.
The impairment methodology applied depends on whether there has been a significant increase in credit risk.
The Group makes use of 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. In using this
practical expedient, the Group uses its historical experience, external indicators and forward-looking information
to calculate the expected credit losses using a provision matrix.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external
information indicates the Group is unlikely to receive the outstanding contractual amounts in full before taking
into account any credit enhancements held by the Group. The Expected Credit Loss is based on historical default
rates and expected future losses.
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Management monitors and manages the financial risks relating to the operations of the Group
through regular reviews of the risks.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while optimising
the return.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations. This risk is considered low for the Group.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
Any movement up or down 100 basis points on the Group's interest rate on borrowings would not have a
significant impact.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from the Group's receivables from customers.
The Group limits its exposure to credit risk from trade receivables through regular review. At the reporting date
there were no significant concentrations of credit risk.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.5
FINANCIAL INSTRUMENTS – (Continued)
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rates.
TRADE RECEIVABLES
Counterparties without external credit ratings*
Group 1
Group 2
Group 3
TOTAL TRADE RECEIVABLES
CONSOLIDATED
($) 2020
315,680
($) 2019
320,164
14,780,118
21,253,012
-
-
15,095,798
21,573,176
*Group 1 – new customers (less than 6 months)
Group 2 – existing customers (more than 6 months) with no defaults in the past
Group 3 – existing customers (more than 6 months) with some defaults in the past. All defaults were fully recovered.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and
payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
If the Directors anticipate a need to raise additional capital in the next 12 months to meet forecasted operational
activities, then the decision on how the Group will raise future capital will depend on market conditions existing
at that time.
Financing Facilities Available
The Group maintains a Multi Option Facility with Bankwest which forms part of the cash management for
general business purposes. This Bankwest Multi Option Facility includes the following facilities drawn at the
company’s discretion across any or all of the facilities and totaling $2,000,000. The facility options are:
•
Commercial Advance Facility with interest payable at the rate of BBSY plus a Margin of
•
•
2.30% per annum;
Bank Guarantee Contingent Instrument Facility and
Business Corporate Transaction Account Facility with interest payable at the rate of the variable
Bankwest Business Variable Overdraft Reference Rate, current 7.32% p.a.
The Group also entered into a separate Commercial Advance Facility with Bankwest specifically for Acquisition
Funding. Interest is payable at BBSY plus a margin of 3.30% per annum. The loan is repayable on 9 December
2020. As at 30 June 2020, $600,000 has been drawdown under the Commercial Advance Facility;
Maturities of financial liabilities
The table below analyses the group’s financial liabilities into relevant maturity groupings based on their
contractual maturities.
The amount disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months
equal their carrying balances as the impact of discounting is not significant. The group does not maintain any
significant derivative instruments.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.5
FINANCIAL INSTRUMENTS – (Continued)
Contractual maturities
of non-derivative
financial liabilities
At 30 June 2020
Less than
1 year $
Between 1
and 2 years $
Between 2
and 5 years $
Over 5
years $
Total
contractual
cash flows $
Carrying
amount $
Trade payables
21,172,107
Borrowings
Lease liabilities
TOTAL
600,000
724,338
22,496,445
-
-
-
-
-
-
21,172,107
21,172,107
600,000
594,962
702,408
702,408
516,736
516,736
199,804
2,143,286
1,968,564
199,804
23,915,393
23,735,633
6.6
PARENT ENTITY DISCLOSURES
a)
Financial Position
DESCRIPTION
ASSETS
Current Assets
Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Non-Current Liabilities
TOTAL LIABILITIES
EQUITY
Issued Capital
Reserves
Accumulated Losses
TOTAL EQUITY
b)
Statement of Profit or Loss and other Comprehensive Income
PROFIT FOR THE YEAR
Profit for the Year after tax
Other Comprehensive Income
($) 2020
($) 2019
31,530
3,950
12,450,423
11,653,108
12,481,953
11,657,058
2,195
94,905
97,100
394,294
137,791
532,085
13,983,308
13,983,308
1,435,520
1,037,493
(3,033,975)
(3,895,828)
12,384,853
11,124,973
($) 2020
861,853
-
($) 2019
392,458
-
TOTAL COMPREHENSIVE INCOME
861,853
392,458
c)
Contingent Liabilities of the Parent Company
The Company has no known contingent liabilities or contingent assets.
d)
Guarantees
The Company has entered into cross guarantees in relation to the debts of its subsidiaries.
e)
Contractual Commitments
At 30 June 2020, the Company had not entered into any contractual commitments for the acquisition of
property, plant or equipment.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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6.7
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
Adoption of AASB 16 and new accounting policy for financial instruments
The Group has adopted all the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of
low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the consolidated
statement of financial position. Straight-line operating lease expense recognition is replaced with a depreciation
charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised lease
liabilities (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease
under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA (Earnings
Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense is now replaced
by interest expense and depreciation in the consolidated statement of profit or loss. For classification within the
consolidated statement of cash flows, the interest portion is disclosed in operating activities and the principal
portion of the lease payments are separately disclosed in financing activities. For lessor accounting, the standard
does not substantially change how a lessor accounts for leases.
The impact on the financial performance and position of the Group from the adoption of AASB 16 is detailed
in note 1.4 and the accounting policy detailed in note 3.3.
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2020 reporting year and have not been early adopted by the group. The only significant new accounting standard
not yet adopted relates to Interpretation 23 ‘Uncertainty over Income Tax Treatments’, however management
do not believe this to have a significant impact on the group’s financial statements.
6.8
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30
June 2020. The Group's assessment of the impact of these new or amended Accounting Standards and
Interpretations, most relevant to the Group, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January
2020 and early adoption is permitted. The Conceptual Framework contains new definition and recognition
criteria as well as new guidance on measurement that affects several Accounting Standards. Where the
consolidated entity has relied on the existing framework in determining its accounting policies for transactions,
events or conditions that are not otherwise dealt with under the Australian Accounting Standards, the
consolidated entity may need to review such policies under the revised framework. At this time, the application
of the Conceptual Framework is not expected to have a material impact on the consolidated entity's financial
statements.
There are no other significant Australian Accounting Standards and Interpretations that were recently issued
or amended but are not yet effective and have not been early adopted by the Group for the year ended
30 June 2020.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
59
6.9
OTHER KEY ESTIMATES
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or
may have, on the company based on known information. This consideration extends to the nature of the
products and services offered, customers, supply chain, staffing and geographic regions in which the company
operates. Other than as addressed in specific notes, there does not currently appear to be either any significant
impact upon the financial statements or any significant uncertainties with respect to events or conditions which
may impact the company unfavorably as at the reporting date or subsequently as a result of the Coronavirus
(COVID-19) pandemic.
6.10
SUBSEQUENT EVENTS
Subsequent to period end 2,877,382 options were cancelled and 800,000 options were grated in two equal
tranches with an exercise price of $0.05 and $0.07 respectively expiring on 30 June 2023.
The COVID-19 pandemic has developed rapidly in 2020, with a significant number of cases. Measures taken by
various governments to contain the virus have affected economic activity. The Company has taken several
measures to monitor and mitigate the effects of COVID-19, including safety and health measures for its
employees (such as social distancing and working from home).
At this stage, the impact on the business and its results has not been significant. The Company will continue to
follow the government policies and advice and will focus on continuing our operations in the best and safest way
possible without jeopardising the health of customers and employees.
Other than the above there has been no transaction or event of a material and unusual nature likely, in the
opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial years.
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
60
Directors’ Declaration
30 June 2020
The Directors of the Company declare that:
•
•
•
•
the attached consolidated 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 consolidated financial statements and notes comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board as described in note 1.2 to the financial statements;
the attached consolidated financial statements and notes give a true and fair view of the Group's financial position
as at 30 June 2020 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.
On behalf of the Directors
Matt Sullivan
Managing Director
Signature:
Date: 18 August 2020
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
61
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
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INDEPENDENT AUDITOR'S REPORT
To the members of Cirrus Networks Holdings Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cirrus Networks Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, including a summary of significant accounting policies
and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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Recoverability of intangible assets
Key audit matter
How the matter was addressed in our audit
Note 3.4 in the financial report discloses the individual
Our procedures included, but were not limited to the
intangible assets and the assumptions used by the
following:
Group in testing these assets for impairment.
(cid:127)
Evaluating the Group’s categorisation of Cash
This was determined to be a key audit matter as
Generating Units (“CGUs”) and the allocation
management’s assessment of the recoverability of the
of goodwill to the carrying value of CGUs
intangible assets is supported by a value in use cash
based on our understanding of the Group’s
flow forecast which requires estimates and judgements
business;
about future performance.
(cid:127)
Challenging key inputs used in the value in
These include judgements and estimates over the
use calculations including the following:
expectation of future revenues, anticipated budgeted
costs, growth rates expected and the discount rate
applied.
o
Assessing the discount rate used by
involving internal valuation experts and
comparing them to market data and
industry research;
o
o
Comparing growth rates with historical
data and economic and industry growth
forecasts ;
Assessing the Group’s forecast cash
flows is consistent with our knowledge
of the business, board approved
budget, incorporating any potential
impact of the COVID-19 pandemic and
corroborating our work with external
information where possible; and
o
Performing sensitivity analysis on the
revenue, growth rates, gross profit
margins, discount rates and impact of
COVID-19.
(cid:127)
Assessing the adequacy of the related
disclosures in the financial report.
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Revenue recognition
Key audit matter
How the matter was addressed in our audit
Revenue recognition was determined to be a key audit
Our procedures included, but were not limited to the
matter as this area involves significant judgements and
following:
estimates made by management including whether
contracts contain multiple performance obligations
which should be accounted for separately and
determine the most appropriate methods of
recognition of revenue for the identified performance
obligations. This comprises allocation of consideration
to the individual performance obligations based on
standalone pricing and whether the performance
obligation is satisfied at a point in time or overtime.
Refer to Note 2.2 in the financial report for disclosures
relating to the Group’s revenue accounting policy and
significant judgements applied in revenue recognition.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Challenging management’s assessment of the
performance obligations promised to
customers within a contract;
Obtaining and reviewing a sample of
contracts, considering the terms and
conditions, performance obligations of these
arrangements, its stand-alone pricing and
assessing the accounting treatment under
AASB 15 Revenue from Contracts with
Customers;
Performing cut-off procedures to ensure that
all revenue was captured in the appropriate
financial year;
Performing detailed analytical procedures to
identify any revenue trends outside our
expectations; and
Assessing the adequacy of the related
disclosures in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
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In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 21 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Cirrus Networks Holdings Limited, for the year ended 30
June 2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 18 August 2020
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Corporate Governance
This statement reports on the Company’s key governance framework, principles and practices at
the date of this report. These principles and practices are reviewed regularly and revised as
appropriate to reflect changes in law and best practice in corporate governance.
ASX PRINCIPLES OF GOOD CORPORATE GOVERNANCE
The Company, as a listed entity, must comply with the Corporations Act 2001 (Cth) (“Corporations Act”), the Australian
Securities Exchange Limited (“ASX”) Listing Rules (“ASX Listing Rules”) and other Australian laws.
To the extent applicable, the Company has adopted the 3rd edition of The Corporate Governance Principles and
Recommendations (“Recommendations”) as published by the ASX Corporate Governance Council.
ASX Listing Rule 4.10.3 requires ASX listed companies to report on the extent to which they have followed the
Recommendations and require the Board to consider carefully the development and adoption of appropriate corporate
governance policies and practices founded on the same.
ACCESS TO INFORMATION ON THE WEBSITE
Further information about the Company's corporate governance practices is set out on the Company's website at
www.cirrusnetworks.com.au. In accordance with the Recommendations, information published on the Company's website
includes charters (for the Board and its Committees), the Company's code of conduct and other policies and procedures
relating to the Board and its responsibilities.
COMPLIANCE WITH ASX PRINCIPLES OF GOOD CORPORATE GOVERNANCE
Commensurate with the spirit of the Recommendations, the Company has followed each recommendation where the
Board has considered it to be an appropriate benchmark for corporate governance practices, taking into account factors
such as the size of the Company and the Board, resources available and the activities of the Company. Where, after due
consideration, the Company's corporate governance practices depart from the Recommendations, the Board has offered
full disclosure of the nature of, and reason for, the adoption of its own practice.
1.
THE BOARD OF DIRECTORS
a)
Board composition and expertise
The Board has an expansive range of relevant industry experience, financial and other skills and expertise to
meet its objectives.
Election of Board members is substantially the province of the Shareholders in general meetings, with the
Company being committed to the following principles:
• The Board is to comprise persons with a blend of skills, experience and attributes appropriate for the
Company and its business; and
• The principal criterion for the appointment of new Directors is their ability to add value to the
Company and its business.
No formal nomination committee or procedures have been adopted for the identification, appointment and
review of the Board’s membership, but an informal assessment process, facilitated in consultation with the
Company’s professional advisors, has been committed to by the Board.
The Board at the end of the Reporting Period comprised of one Managing Director, one Non-Executive
Chairman and two other Non-Executive Directors.
Details on each of the director’s backgrounds including experience, knowledge and skills and their status as an
independent or non-independent director are set out in the directors’ report.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
66
b)
Board role and responsibilities
The roles and responsibilities of the Board are formalised in the Board Charter. The Board Charter defines in
detail the matters that are reserved for the Board and its committees, and those that the Board has delegated
to management. The central role of the Board is to oversee and approve the company’s strategic direction, to
select and appoint a Managing Director (“MD”), to oversee the Company’s management and business activities
and report to Shareholders.
The goals of the corporate governance processes are to:
• Maintain and increase Shareholder value;
• Ensure a prudential and ethical basis for the Company’s conduct and activities; and
• Ensure compliance with the Company’s legal and regulatory objectives.
Consistent with these goals, the Board assumes the following responsibilities:
• Developing initiatives for profit and asset growth;
• Reviewing the corporate, commercial and financial performance of the Company on a regular basis;
• Acting on behalf of, and being accountable to, the Shareholders; and
•
Identifying business risks and implementing actions to manage those risks and corporate systems to
assure quality.
The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate
Directors’ participation in the Board’s discussions on a fully-informed basis.
The Board also recognises its responsibilities to the Company’s personnel, the communities and environments
within which the Company operates and, where relevant, other stakeholders.
Responsibility for management of the Company’s business activities is delegated to the Managing Director who
is accountable to the Board.
c)
Chairman
The Chairman is responsible for leadership of the Board, for the efficient organisation and conduct of the
Board’s function and for the promotion of relations between Board members and between Board and
management that are open, cordial and conducive to productive co-operation.
Mr Andrew Milner was appointed Non-Executive Chairman of the Company on 2 July 2015.
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Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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d)
Director independence
The Board has approved a policy on independence of Directors, a copy of which is available in the corporate
governance section of the Company’s website.
The policy provides that the independence of a Director will be assessed by determining whether the Director
is independent of management and free of any business or other relationship that could materially interfere
with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and
independent judgement.
The test of whether a relationship or business is material is based on the nature of the relationship or business
and on the circumstances and activities of the director. Materiality is considered from the perspective of the
Company, the persons or organisations with which the Director has an affiliation and from the perspective of
the Director. Materiality thresholds are considered by the Board from time to time. The Board considers that:
A supplier is material if the Company accounts for more than 5% of the supplier’s consolidated gross revenue;
• A substantial shareholder of the Company is someone who holds greater than 5% of the voting capital
of the Company; and
• Service on the Board for a period exceeding 10 years is a period which could, or could reasonably be
perceived to, materially interfere with a director’s ability to act in the best interests of the Company.
In the event that one or more of these thresholds is exceeded, the Board then focuses on whether or not in
their view that impacts materially on the independent judgement of the Director.
On appointment, each Director is required to provide information for the Chairman to assess and confirm their
independence as part of their consent to act as a Director.
The Chairman has considered the associations of each of the Non-Executive Directors in office at the date and
considers that all Non-Executive Directors are considered independent.
e)
Directors’ retirement and re-election
The Company’s Constitution states that at each annual general meeting (“AGM”) one of its Directors (excluding
the Managing Director and any director appointed to fill a casual vacancy) and any director who has held office
for three or more years since their last election must retire. At least one non-executive Director must stand for
election at each AGM.
Any Director appointed to fill a casual vacancy since the date of the previous AGM must submit themselves to
shareholders for election at the next AGM. Directors who retire as required may offer themselves for re-
election by shareholders at the next AGM. Re-appointment of Directors retiring by rotation or filling a casual
vacancy is not automatic.
f)
Board succession planning
The Board in conjunction with the Remuneration and Nominations Committee reviews the size and
composition of the Board and the mix of existing and desired competencies across members from time to time.
Criteria considered by the Directors when evaluating prospective candidates are contained in the Board’s
Charter
g)
Board performance evaluation
The Board undertakes ongoing self-assessment and review of performance of the Board, committees and
individual Directors annually. The Chairman of the Board is responsible for determining the process for
evaluating Board performance. The Chairman’s performance is reviewed each year by the other members of
the Board.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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h) Nominations and appointment of new directors
Recommendations for nomination of new Directors are considered by the Remuneration and Nominations
Committee and approved by the Board as a whole.
The Remuneration and Nominations Committee reviews director appointments having regard to the
candidate’s commercial experience, skills and other qualities. External consultants may be used from time to
time to access a wide base of potential Directors. Further information on the Remuneration and Nominations
Committee is set out below.
i)
Professional advice
Subject to the Chairman’s approval (not to be unreasonably withheld), the Directors, at the Company’s
expense, may obtain independent professional advice on issues arising in the course of their duties.
j)
Conflicts of interest
Directors are required to disclose any actual or potential conflict or material personal interests on appointment
as a Director and are required to keep these disclosures up to date.
In the event that there is, or may be, a conflict between the personal or other interests of a Director, then the
Director with an actual or potential conflict of interest in relation to a matter before the Board does not receive
the Board papers relating to that matter. When the matter comes before the Board for discussion, the Director
withdraws from the meeting for the period the matter is considered and takes no part in the discussion or
decision-making process.
k)
Terms of appointment, induction training and continuing education
All new Directors are provided with a formal letter of appointment setting out the key terms and conditions of
the appointment, including duties, rights and responsibilities, the time commitment envisaged and the Board’s
expectations regarding their involvement with committee work. An induction folder is provided to all new
Directors. It includes a copy of the Constitution, board and committee charters and key Company policies.
All Directors are expected to maintain the skills required to discharge their obligations to the Company.
Directors are encouraged to undertake continuing professional education and where this involves industry
seminars and approved education courses, this is paid for by the Company where appropriate. A Directors’
Skills Matrix is contained in the Directors’ Report.
l)
Directors’ remuneration
Details of remuneration paid to Directors (Chairman and non-executive) are set out in the remuneration
report. The remuneration of an executive Director will be decided by the Board, without the affected executive
Director participating in that decision-making process.
The total maximum remuneration of non-executive Directors is initially set by the Constitution and subsequent
variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the
Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’
remuneration within that maximum will be made by the Board having regard to the inputs and value to the
Company of the respective contributions by each non-executive Director. The current amount has been set at
an amount not to exceed $400,000 per annum.
In addition, a Director may be paid fees or other amounts (i.e. subject to any necessary Shareholder approval,
non-cash performance incentives such as options) as the Directors determine where a Director performs
special duties or otherwise performs services outside the scope of the ordinary duties of a Director.
Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred by
them respectively in or about the performance of their duties as Directors.
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The Board will review and approve the remuneration policy to enable the Company to attract and retain
executives and Directors who will create value for Shareholders having consideration to the amount
considered to be commensurate for a company of its size and level of activity as well as the relevant Directors’
time, commitment and responsibility. The Board is also responsible for reviewing any employee incentive and
equity-based plans including the appropriateness of performance hurdles and total payments proposed.
Further information on the Remuneration Committee is set out below.
m) Board meetings
The Chairman sets the agenda for each meeting in conjunction with the executive management and the
Company Secretary. Any Director may request additional matters be added to the agenda. Members of senior
management attend meetings of the Board by invitation and sessions are also held for non-executive Directors
to meet without management present.
Copies of Board papers are circulated in advance of the meetings in either electronic or hard copy form.
Directors are entitled to request additional information where they consider the information is necessary to
support informed decision making.
The Board works to an agenda encompassing periodic reviews of the Company’s operating business units,
recurring statutory obligations, business approvals, strategy and other responsibilities identified in the
Board Charter.
n)
Company Secretary
Responsibilities for the secretarial function include providing advice to directors and executives on corporate
governance and regulatory matters, developing the Company’ corporate governance framework and giving
effect to the Board’s decisions. All directors have access to advice from the Company Secretary.
The Company Secretary is Catherine Anderson. Ms Anderson is a legal practitioner admitted in Western
Australia and Victoria and has over 25 years’ experience in both private practice and in house legal roles from
working in Melbourne and Perth.
Catherine also has experience in company secretarial roles for ASX listed companies, as well as having been a
director of an ASX listed junior explorer. She currently also provides consultancy services to entities wishing to
proceed to IPO and listing on ASX and has twice been nominated for the Telstra Business Woman of the Year
Award for an online retail business she established.
2. BOARD COMMITTEES
a)
Board committees and membership
During the reporting period, the Board had a maximum of five and a minimum of three members but
continued to maintain two committees to assist in the discharge of its responsibilities. These are the:
i.
ii.
Audit and Risk Management Committee; and
Remuneration and Nominations Committee.
As at the date of this Report, the Company has 4 Directors.
The charters of all Board committees detailing the roles and duties of each are available in the corporate
governance section of the Company’s website. All Board committee charters are reviewed at least annually.
During the reporting period and while the relevant person remained a Director of the Company the
membership of each Board committee was as follows:
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AUDIT AND RISK
MANAGEMENT COMMITTEE
REMUNERATION AND
NOMINATIONS COMMITTEE
Andrew Milner
Andrew Milner (Chairman)
Daniel Rohr (Chairman)
Daniel Rohr
Paul Everingham
Paul Everingham
Committee members are chosen for the skills, experience and other qualities they bring to the committees.
The executive management attends, by invitation, board committee meetings. Any papers considered by the
standing committees are available on request to Directors who are not on that committee.
Following each committee meeting, generally at the next Board meeting, the Board is given a verbal update by
the Chair of each committee. In addition, minutes of all committee meetings are provided to all Directors. The
Company Secretary provides secretariat services for each committee.
Other committees are convened to address major transactions or other matters calling for special attention.
This did not occur in this reporting period.
b)
Audit and Risk Management Committee
The role of the Audit and Risk Management Committee is to assist the Board to meet its oversight
responsibilities in relation to the Company’s financial reporting, internal control structure, financial and
operational risk management procedures and the internal and external audit function. In doing so, it is the
Committee’s responsibility to maintain free and open communication between the Committee and the
external auditors and the management of the Company.
The duties of this Committee include but are not limited to, monitoring and reviewing any matters of
significance affecting financial reporting and compliance, the integrity of the financial reporting of the
Company, the Company’s internal financial control system and risk management systems and the external
audit function.
The Audit and Risk Management Committee is required to have a minimum of three members composed of
independent non-executive Directors.
The external auditors and Managing Director attend Committee meetings by invitation.
This Committee met twice during the reporting period.
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c)
Remuneration and Nominations Committee
The role of the Remuneration and Nominations Committee is to assist the Board by reviewing and approving
the Company’s remuneration policies and practices and the appointment of non-executive Directors to the
Board. The Committee’s responsibilities include:
• Assessing the necessary and desirable competencies of Board members;
• Reviewing Board succession plans and Board performance;
• Reviewing the Company’s remuneration framework, which is used to attract, retain and motivate
employees to achieve operational excellence and create value for shareholders;
• Reviewing the remuneration packages and incentive schemes for the Managing Director and senior
executives, to establish rewards, which are fair and responsible, having regard to the financial results of
the group, individual performance and general remuneration conditions;
• Reviewing the performance and succession planning for the Managing Director and senior executives;
• Reviewing the Company’s corporate governance policies and practices.
• The Managing Director attends committee meetings by invitation
This Committee met once during the reporting period.
3. AUDIT GOVERNANCE AND INDEPENDENCE
a)
Approach to audit and governance
The Board is committed to the basic principles that:
• The Company’s financial reports represent a true and fair view;
• The Company’s accounting practices are comprehensive, relevant and comply with applicable
accounting standards and policies; and
• The external auditor is independent and serves shareholder’s interests.
b)
External auditor relationship
The Company’s independent external auditor is BDO Audit (WA) Pty Limited (“BDO”). BDO was appointed by
shareholders at the 2015 Annual General Meeting in accordance with the Corporations Act.
c)
Attendance of auditor at the AGM
The Company’s external auditor attends the AGM and is available to answer questions from shareholders on:
• The conduct of the audit;
• The preparation and content of the auditor’s report;
• The accounting policies adopted by the Company in relation to the preparation of the financial
statements; and
• The independence of the auditor in relation to the conduct of the audit.
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4. CONTROLLING AND MANAGING RISK
a)
Approach to risk management
The Board and senior executives are responsible for overseeing the implementation of the Company’s Risk
Management Policy.
The Company’s approach to risk management is based on the identification, assessment, monitoring and
management of material risks embedded in its business and management systems. This framework is based
on the Australian Standards for Risk Management.
The Company’s management team is responsible for implementation of the Board approved risk management
strategy and developing policies, processes and procedures to identify risks and mitigation strategies in the
Company’s activities.
b) Managing Director and accounting assurance on corporate reporting
The Board receives regular reports about the financial condition and operational results of the Company and
its controlled entities.
The Managing Director and the Company accountants provide, at the end of each six-monthly period, a formal
statement to the Board confirming that the Company’s financial reports present a true and fair view, in all
material respects, and the group’s financial condition and operational results have been prepared accordance
with the relevant accounting standards.
The statement also confirms the integrity of the Company’s financial statements and Notes to the Consolidated
Financial Statements, is founded on a sound system of risk management and internal compliance and control
which implements the policies approved by the Board, and that the Company’s risk management and internal
compliance and control systems, to the extent they relate to financial reporting, are operating efficiently and
effectively in all material respects.
5. PROMOTING ETHICAL AND RESPONSIBLE BEHAVIOUR
a)
Codes of conduct
The Board has approved a Code of Conduct which describes the standards of ethical behaviour that the
Directors and employees are required to maintain.
Compliance with the Code of Conduct by Directors and employees will also assist the Company in effectively
managing its operating risks and meeting its legal and compliance obligations, as well as enhancing the
Company’s corporate reputation.
The Code of Conduct describes requirements on matters such as confidentiality, conflicts of interest, sound
employment practices, compliance with laws and regulations and the protection and proper use of the
Company’s assets.
The Code of Conduct can be viewed on the Company’s website.
b)
Share trading policy
The Company’s Securities Trading Policy (“Policy”) is binding on all Directors and employees. The Policy
provides a summary of the law on insider trading and other relevant laws, sets out the restrictions on dealing
in securities by people who work for, or are associated with, the Company and is intended to assist in
maintaining market confidence in the integrity of dealings in the Company’s securities.
The Policy stipulates that the only appropriate time for a Director or employee to deal in the Company’s
securities is when he or she is not in possession of ‘price sensitive information’ that is not generally available
to the share market.
A Director wishing to deal in the Company’s securities may only do so after first having advised the Chairman
of their intention to do so. A senior executive wishing to deal must first notify the Managing Director.
Confirmation of any dealing must also be given by the director or senior executive within two business days
after the dealing and advised to the Company Secretary.
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In the case of other employees, contractors, consultants and advisers, there is no notification requirement.
Directors and senior executives’ dealings in the Company’s securities are also subject to specified closed
periods, which are set out in the Policy or as otherwise determined by the Board from time to time.
The Policy can be viewed on the Company’s website.
6. CORPORATE RESPONSIBILITY AND SUSTAINABILITY
The Company aims to produce positive outcomes for all stakeholders in managing its business and to maximise
financial, social and environmental value from its activities.
In practice, this means having a commitment to transparency, fair dealing, responsible treatment of employees
and customers and positive links into the community.
Sustainable and responsible business practices within the Company are viewed as an important long-term driver
of performance and Shareholder value. Through such practices, the Company seeks to reduce operational and
reputation risk and enhance operational efficiency while contributing to a more sustainable society.
The Company accepts that the responsibilities on the Board and management, which flow from this approach,
go beyond strict legal and financial obligations. The Board seek to take a practical and broad view of directors’
fiduciary duties, in line with stakeholders’ expectations.
7. CONTINUOUS DISCLOSURE
The Company is committed to maintaining a level of disclosure that meets the highest standards and provides
all investors with timely and equal access to information.
The Company’s Continuous Disclosure Policy reinforces the Company’s commitment to ASX continuous disclosure
requirements and outlines management’s accountabilities and the processes to be followed for ensuring compliance.
The policy also describes the Company’s guiding principles for market communications.
The Company’s Continuous Disclosure Policy can be viewed on the Company’s website.
8.
SHAREHOLDER COMMUNICATIONS AND PARTICIPATION
The Company is committed to giving all Shareholders comprehensive, timely and equal access to information about
its activities so that they can make informed decisions. Similarly, prospective new investors are entitled to be able to
make informed investment decisions when considering the purchase of the Company’s shares.
A wide range of communication approaches are employed including direct communications with Shareholders and
presentations to Shareholders at the company’s Annual General Meeting. Publication of all relevant Company
information, including the Company’s Annual Report is in the “Investors” section of the Company’s website.
Shareholders have the opportunity to receive information in print or electronic format.
The Company strive to communicate effectively with Shareholders and give them ready access to balanced and
understandable information about the Company. The way it does this includes:
•
•
•
•
•
Ensuring that financial reports are prepared in accordance with applicable laws;
Ensuring the disclosure of full and timely information about the Company’s activities in accordance with
the continuous disclosure principles of the ASX Listing Rules and the Corporations Act 2001.
The Chairman and Managing Director being present at the Company’s Annual General Meeting;
Placing all ASX announcements (including financial reports) on the Company’s website as soon as
practicable following release; and
Ensuring that reports, notices of meeting and other Shareholder communications are prepared in a clear
and concise manner.
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9. DIVERSITY POLICY
The Company has in place a Diversity Policy.
The Board is committed to workplace diversity and is responsible for developing measurable objectives and
strategies to meet the Objectives of the Diversity Policy (Measurable Objectives) and monitoring the progress of
the Measurable Objectives through the monitoring, evaluation and reporting mechanisms listed below.
The Board will conduct all Board appointment processes in a manner that promotes gender diversity, including
establishing a structured approach for identifying a pool of candidates, using external experts where necessary.
The Company’s diversity strategies include:
a)
b)
c)
d)
Recruiting from a diverse pool of candidates for all positions, including senior management and the various
subsidiary company boards;
Reviewing succession plans to ensure an appropriate focus on diversity;
Identifying specific factors to take account of in recruitment and selection processes to encourage
diversity;
Developing programs to develop a broader pool of skilled and experienced senior management and board
candidates, including, workplace development programs, mentoring programs and targeted training and
development; and
e)
Developing a culture which takes account of domestic responsibilities of employees.
As at 30 June 2020, the Board consisted of 4 male members and no female members. The Company Secretary
is female.
As at 30 June 2020, the Company has 203 employees of which 164 are male (FY19:115) and 39 are female (FY19:24)
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ASX RECOMMENDATION AND PRINCIPLES COMPLIANCE TABLE
Set out below is a table describing the various ASX Principles and statements as to the Company’s compliance or otherwise
with them.
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Recommendation 1.1
YES
The Company has adopted a Board Charter.
A listed entity should have and disclose a
charter which sets out the respective roles and
responsibilities of the board, the chair and
management; and includes a description of
those matters expressly reserved to the board
and those delegated to management.
Recommendation 1.2
A listed entity should:
(a) Undertake appropriate checks before
appointing a person, or putting forward to
security holders a candidate for election,
as a director; and
Provide security holders with all material
information relevant to a decision on
whether or not to elect or re-elect a
director.
Recommendation 1.3
A listed entity should have a written
agreement with each director and senior
executive setting out the terms of their
appointment.
Recommendation 1.4
The company secretary of a listed entity
should be accountable directly to the board,
through the chair, on all matters to do with
the proper functioning of the board.
YES
YES
YES
The Board Charter sets out the specific responsibilities of
the Board, requirements as to the Boards composition,
the roles and responsibilities of the Chairman and
Company Secretary, the establishment, operation and
management of Board Committees, Directors access to
company records and information, details of the Board’s
relationship with management and details of the Board’s
disclosure policy.
The Managing Director (as a delegate of the board) is
responsible for the effective leadership and day to day
operations and administration of the Company.
A copy of the Company’s Board Charter is available on
the Company’s website.
(a) The Company undertakes checks on any person who
is being considered as a director. These checks may
include character, experience, education and
financial history and background.
(b) All material information relevant to a decision on
whether or not to elect or re-elect a Director will be
provided to security holders in a Notice of Meeting
pursuant to which the resolution to elect or re-elect
a Director will be voted on.
Each senior executive and executive director has a
formal employment contract and the non-executive
directors have a letter of appointment.
The Company Secretary is accountable directly to the
Board, through the Chair, on all matters to do with the
proper functioning of the Board.
The Company Secretary has primary responsibility for
ensuring that Board processes and procedures run
efficiently and effectively.
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Recommendation 1.5
A listed entity should:
(a) Have a diversity policy which includes
requirements for the board:
(i) To set measurable objectives for
achieving gender diversity; and
(ii) To assess annually both the objectives
and the entity’s progress in achieving
them;
(b) Disclose that policy or a summary or it;
and
(c) Disclose as at the end of each reporting
period:
(i) The measurable objectives for
achieving gender diversity set by the
board in accordance with the entity’s
diversity policy and its progress
towards achieving them; and
(ii) Either:
(A) The respective proportions of men
and women on the board, in senior
executive positions and across the
whole organisation (including how
the entity has defined “senior
executive” for these purposes); or
(B) The entity’s “Gender Equality
Indicators”, as defined in the
Workplace Gender Equality
Act 2012.
Recommendation 1.6
A listed entity should:
(a) Have and disclose a process for
periodically evaluating the performance
of the board, its committees and
individual directors; and
(b) Disclose in relation to each reporting
period, whether a performance evaluation
was undertaken in the reporting period in
accordance with that process.
Recommendation 1.7
A listed entity should:
(a) Have and disclose a process for
periodically evaluating the performance
of its senior executives; and
(b) Disclose in relation to each reporting
period, whether a performance evaluation
was undertaken in the reporting period
in accordance with that process.
YES
(a) The Company has adopted a Diversity Policy
(i) The Diversity Policy provides a framework for the
Company to achieve a list of measurable
objectives that encompass gender, age, ethnicity
and cultural equality.
(ii) The Diversity Policy provides for the monitoring
and evaluation of the scope and currency of the
Diversity Policy. The Company is responsible for
implementing, monitoring and reporting on the
measurable objectives.
(b) Information on the Company’s Diversity Policy is set
out in the Annual Report.
(i) The measurable objectives set by the board are
included in the Annual Report. In addition, the
board will review progress against the objectives
in its annual performance assessment.
The Board includes in the Annual Report each year
the measurable objectives, progress against the
objectives, and the proportion of male and female
employees in the whole organisation, at senior
management level and at Board Level.
YES
YES
The Chairman is responsible for evaluating the
performance of the Board, its committees and individual
directors. This is generally done through a meeting with
the Chair.
The review is currently informal but is based on a review
of goals for the Board and individual Directors.
Generally, the goals for the Board are based on corporate
requirements and any areas for improvement that may be
identified. The Chairman will provide each Director with
confidential feedback on his or her performance.
(a) The Remuneration Committee is responsible for
evaluating the performance of senior executives.
The Committee is to arrange an annual performance
evaluation of the senior executives.
(b) The Remuneration Committee is required to disclose
whether or not performance evaluations were
conducted during the relevant reporting period.
Details of the performance evaluations conducted will
be provided in the Company’s Annual Report.
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PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE
Recommendation 2.1
YES
The board of a listed entity should:
(a) Have a nomination committee which:
(i) Has at least three members, a
majority of whom are independent
directors; and
(ii)
Is chaired by an independent
director, and disclose:
(iii) The charter of the committee;
(iv) The members of the committee; and
(v) As at the end of each reporting
period, the number of times the
committee met throughout the
period and the individual
attendances of the members at
those meetings; or
(b) If it does not have a nomination
committee, disclose that fact and the
processes it employs to address board
succession issues and to ensure that the
board has the appropriate balance of
skills, experience, independence and
knowledge of the entity to enable it to
discharge its duties and responsibilities
effectively.
Recommendation 2.2
YES
A listed entity should have and disclose a
board skill matrix setting out the mix of skills
and diversity that the board currently has or is
looking to achieve in its membership.
A nomination committee has been established and the
Company has a Remuneration and Nomination Committee
Charter which is available on the Company’s website. This
Committee comprises a minimum of 3 non-executive
Directors. During the reporting period, this Committee met
once.
The Board reviews capabilities, technical skills and
personal attributes of its directors. It will normally review
the Board’s composition against those attributes and
recommend any changes in Board composition that may
be required. An essential component of this will be the
time availability of Directors. Information about the skills
and expertise of all Board members is contained in the
Annual Report.
The Board believes that it has a diverse mix of experience
and skills which will lead to a better outcome for the
Company and the Shareholders, and the Board is
comfortable with the skills matrix represented by the
current Board.
Recommendation 2.3
A listed entity should disclose:
(a) The names of the directors considered by
the board to be independent directors;
(b) If a director has an interest, position,
association or relationship of the type
described in Box 2.3 of the ASX Corporate
Governance Principles and
Recommendation (3rd Edition), but the
board is of the opinion that it does not
compromise the independence of the
director, the nature of the interest,
position, association or relationship in
YES
(a) Disclosure of the names of Directors, considered by
the board to be independent is provided in the Annual
Report.
(b) Directors’ interests, positions, associations and
relationships are regularly assessed by the Board.
Details of the Directors interests, positions
associations and relationships are provided in the
Annual Report.
(c) The Board Charter provides for the determination of
the Directors’ terms and requires the length of service
of each Director to be disclosed. The length of service
of each Director is provided in the Annual Report.
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question and an explanation of why the
board is of that opinion; and
(c) The length of service of each director
Recommendation 2.4
A majority of the board of a listed entity
should be independent directors.
Recommendation 2.5
The chair of the board of a listed entity should
be an independent director and, in particular,
should not be the same person as the CEO of
the entity.
Recommendation 2.6
A listed entity should have a program for
inducting new directors and providing
appropriate professional development
opportunities for continuing directors to
develop and maintain the skills and knowledge
needed to perform their role as a director
effectively.
YES
YES
YES
The Board Charter requires that an appropriate balance
between independent and non-independent directors is
represented on the Board.
Details of each Director’s independence are provided in
the Annual Report.
This is complied with as at the date of this Report, with
Andrew Milner the non-executive, independent Chairman
from 2 July 2015.
All new Directors are provided with a copy of all Company
Policies and Charters. It is also the responsibility of the
Board to procure appropriate professional development
opportunities for Directors. The Remuneration and
Nominations Committee is responsible for the approval
and review of induction and continuing professional
development programs and procedures for Directors to
ensure that they can effectively discharge their
responsibilities.
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
PRINCIPLE 3: ACT ETHICALLY AND RESPONSIBLY
Recommendation 3.1
A listed entity should:
(a) Have a code of conduct for its directors,
senior executives and employees; and
(b) Disclose that code or a summary of it.
YES
(a) The Company’s Code of Conduct applies to the
Company’s Directors, senior executives and
employees.
(b) The Company’s Code of Conduct is available on the
Company’s website.
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PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
YES
(a) The Audit and Risk Committee Charter states that:
(i) The Audit and Risk Committee shall comprise the
Company’s non-executive directors;
(ii) The Audit and Risk Committee Charter is available
on the Company website;
(iii) The Audit and Risk Committee Charter requires
the Committee in relation to the reporting period
to disclose the number of times that the
Committee met throughout the period, and the
individual attendances of the members at those
Committee meetings. Details of the Committee
meetings will be provided in the Company’s
Annual Report.
This Committee met twice during the reporting period.
Recommendation 4.1
The board of a listed entity should:
(a) Have an audit committee which:
(i) Has at least three members, all of
whom are non-executive directors
and a majority of whom are
independent directors; and
(ii)
Is chaired by an independent
director, who is not the chair of the
board, and disclose:
(iii) The charter of the committee;
(iv) The relevant qualifications and
(v)
experience of the members of the
committee; and
In relation to each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the
members at those meetings; or
(b) If it does not have an audit committee,
disclose that fact and the processes it
employs that independently verify and
safeguard the integrity of its financial
reporting, including the processes for the
appointment and removal of the external
auditor and the rotation of the audit
engagement partner.
Recommendation 4.2
YES
The board of a listed entity should, before it
approves the entity’s financial statements for
a financial period, receive from its CEO and
CFO a declaration that the financial records of
the entity have been properly maintained and
that the financial statements comply with the
appropriate accounting standards and give a
true and fair view of the financial position and
performance of the entity and that the opinion
has been formed on the basis of a sound
system of risk management and internal
control which is operating effectively.
Before the Board approves the entity’s financial
statements for a financial period, the CEO and CFO
declares that in their opinion the financial records of the
entity have been properly maintained and that the
financial statements comply with the appropriate
accounting standards and give a true and fair view of the
financial position and performance of the entity and that
the opinion has been formed on the basis of a sound
system of risk management and internal control which is
operating effectively.
Recommendation 4.3
YES
A listed entity that has an AGM should ensure
that its external auditor attends its AGM and is
available to answer questions from security
holders relevant to the audit.
The Audit and Risk Committee Charter provides that the
Committee must ensure the Company’s external auditor
attends its AGM and is available to answer questions from
security holders relevant to the audit.
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1
A listed entity should:
(a) Have a written policy for complying with
its continuous disclosure obligations under
the Listing Rules; and
(b) Disclose that policy or a summary of it.
YES
(a) The Company has a Continuous Disclosure Policy.
(b) This Policy is available on the Company’s website,
as is all information provided to ASX for release
to the market.
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
PRINCIPLE 6: RESPECT THE RIGHTS OF SECURITY HOLDERS
Recommendation 6.1
A listed entity should provide information
about itself and its governance to investors
via its website.
YES
Information about the Company and its governance is
available in its Corporate Governance Policies which can
be found on the Company’s website.
Recommendation 6.2
YES
A listed entity should design and implement
an investor relations program to facilitate
effective two-way communication
with investors.
Recommendation 6.3
YES
A listed entity should disclose the policies and
processes it has in place to facilitate and
encourage participation at meetings of
security holders.
A link is available on the Company’s website to the
Company’s announcements page on the ASX website,
meaning that all the Company’s ASX announcements are
immediately accessible through the Company’s website.
The Company aims to promote and facilitate effective two-
way communication with investors through the availability
of the MD and the Company Secretary to respond directly
to shareholder queries. A link to directly email the
Company Secretary is available on the Company’s website,
as well as the provision of a general email address
investors@cirrusnetworks.com.au
Shareholders are encouraged to participate at all EGMs
and AGMs of the Company. Upon the dispatch of any
notice of meeting to Shareholders, the Company Secretary
shall send out material with that notice of meeting stating
that all Shareholders are encouraged to participate at the
meeting.
Shareholders who are not able to attend at meetings and
vote in person are able to utilise the share registry’s
electronic voting platform, either online or by
downloading the relevant phone Application. The
introduction of this facility has resulted in a marked
increase in the number of Shareholders voting.
Recommendation 6.4
A listed entity should give security holders the
option to receive communications from, and
send communications to, the entity and its
security registry electronically.
YES
The Company's share registry provides (through its
website) the ability to email the share registry and to
receive documents by email from the share registry.
Shareholders queries should be referred to the Company
Secretary at first instance. Contact details are provided
on the Company’s website.
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COMPLY
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EXPLANATION
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
Recommendation 7.1
YES
The board of a listed entity should:
(a) have a committee or committees to
oversee risk, each of which:
(i)
has at least three members, a
majority of whom are independent
directors; and
(ii)
is chaired by an independent
director, and disclose:
(iii)
the charter of the committee;
The Board has adopted an Audit and Risk Committee
Charter and a Financial Risk Management Policy. These are
available on the Company’s website. There is no other risk
management committee and this role is undertaken by the
Board, however, the overall basis for risk management is
to provide recommendations about:
1. Assessing the internal processes for determining and
managing key risk areas, particularly:
• Non-compliance with laws, regulations, standards
and best practice guidelines, including
environmental and industrial relations laws;
(iv)
the members of the committee; and
• Litigation and claims; and
• Relevant business risks other than those that are
dealt with by other specific Board Committees.
2. Ensuring that the Company has an effective risk
management system and that major risks are reported
at least annually to the Board.
3. Receiving from management reports on all suspected
and actual frauds, thefts and breaches of laws.
4. Evaluating the process, the Company has in place for
assessing and continuously improving internal
controls, particularly those related to areas of
significant risk.
5. Assessing whether management has controls in place
for unusual types of transactions and/or any potential
transactions that may carry more than an acceptable
degree of risk.
6. Meeting periodically with key management, internal
and external auditors and compliance staff to
understand and discuss the Company’s control
environment.
The Board meets on a regular basis to discuss the
Company’s operating activities. As part of this, all risks are
considered including but not limited to strategic,
operational, legal, reputation and financial risks. This is an
on-going process rather than an annual formal review.
As referred to above, the Company has in place a Financial
Risk Management Policy.
(v)
as at the end of each reporting
period, the number of times the
committee met throughout the
period and the individual
attendances of the members at
those meetings; or
(b) if it does not have a risk committee or
committees that satisfy (a) above, disclose
that fact and the process it employs for
overseeing the entity’s risk management
framework.
Recommendation 7.2
YES
The board or a committee of the board
should:
(a) Review the entity’s risk management
framework with management at least
annually to satisfy itself that it continues
to be sound, to determine whether there
have been any changes in the material
business risks the entity faces and to
ensure that they remain within the risk
appetite set by the board; and
(b) Disclose in relation to each reporting
period, whether such a review has taken
place. Recommendation 6.2
A listed entity should design and
implement an investor relations program
to facilitate effective two-way
communication with investors.
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YES
The Company does not have a formal internal audit
function but reviews its risk management and internal
control processes on a regular basis and has in place a
Financial Risk Management Policy as referred to above.
Recommendation 7.3
A listed entity should disclose:
(a) If it has an internal audit function, how the
function is structured and what role it
performs; or
(b) If it does not have an internal audit
function, that fact and the processes it
employs for evaluating and continually
improving the effectiveness of its risk
management and internal control
processes.
Recommendation 7.4
YES
A listed entity should disclose whether, and if
so how, it has regard to economic,
environmental and social sustainability risks
and, if it does, how it manages or intends to
manage those risks.
The Company is of the view that its operations do not
create a material exposure to economic and social
sustainability risks. With respect to past minerals
exploration activities and the environment, the Company
has complied with all rehabilitation requirements of the
relevant legislation.
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
Recommendation 8.1
The board of a listed entity should:
(a) Have a remuneration committee which:
(i) Has at least three members, a
majority of whom are independent
directors; and
(ii)
Is chaired by an independent
director, and disclose:
(iii) The charter of the committee;
(iv) The members of the committee; and
(v) As at the end of each reporting
period, the number of times the
committee met throughout the
period and the individual
attendances of the members at
those meetings; or
(b) If it does not have a remuneration
committee, disclose that fact and the
processes it employs for setting the level
and composition of remuneration for
directors and senior executives and
ensuring that such remuneration is
appropriate and not excessive.
Recommendation 8.2
A listed entity should separately disclose its
policies and practices regarding the
remuneration of non-executive directors and
the remuneration of executive directors and
other senior executives and ensure that the
different roles and responsibilities of non-
executive directors compared to executive
YES
(a) The Remuneration and Nomination Committee
Charter outlines the roles and responsibilities of that
Committee and provides that the Committee
comprises the non-executive members of the Board
but excludes the relevant member of the Board when
their performance is under review;
(b) The Remuneration and Nomination Committee
Charter is available on the Company’s website.
(c) The Remuneration and Nomination Committee
discloses the number of times that the Committee
meets throughout the period, and the individual
attendances of the members at those Committee
meetings. Details of the Committee meetings will be
provided in the Company’s Annual Report. During the
reporting period this Committee met once.
YES
The Company provides disclosure of all Directors’ and
executives’ remuneration in its Annual Report.
Non-executive Directors are remunerated at a fixed fee to
take account of their time, commitment and
responsibilities. Remuneration for non-executive Directors
is not linked to the performance of the Company. There
are no documented agreements providing for termination
or retirement benefits for non-executive Directors. Any
Cirrus Networks Holdings Limited – ABN 98 103 348 947
Appendix 4E and Annual Report
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directors and other senior executives are
reflected in the level and composition of
their remuneration.
Recommendation 8.3
N/A
A listed entity which has an equity-based
remuneration scheme should:
(a) Have a policy on whether participants are
permitted to enter into transactions
(whether through the use of derivatives or
otherwise) which limit the economic risk
of participating in the scheme; and
(b) Disclose that policy or a summary of it.
long-term performance incentives may include options or
shares granted at the discretion of the Board and subject
to obtaining the relevant Shareholder approvals.
Executive Directors and senior executives are offered a
competitive level of base pay at market rates which are
reviewed annually to ensure market competitiveness. Long
term performance incentives may include performance
and sales bonus payments, shares and/or options granted
at the discretion of the Board and subject to obtaining
relevant Shareholder approvals (if required).
The Company does not have an equity based
remuneration scheme which is affected by this
recommendation although it has previously obtained
Shareholder approval to the issue of shares to directors in
lieu of fees; and for the issue of bonus options to
Directors. The Company has in place a “Directors and
Employees Share Option Plan”, under which both
employees and Directors may be offered options (subject
to Shareholder approval in the case of any officer of the
Company).
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Shareholder Information
DISTRIBUTION OF SHAREHOLDERS
At the date of this report there were 1,501 holders of 883,384,099 ordinary fully paid shares in the Company. Analysis of
numbers of equity holders by size of holding:
NUMBER OF SHARES HELD
HOLDERS
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL
55
134
74
637
601
1,501
UNITS
7,022
468,063
599,019
28,023,256
854,286,739
883,384,099
The number of shareholders holding less than a marketable parcel of 17,241 shares: 365
SUBSTANTIAL SHAREHOLDERS
At the date of this report the substantial shareholders in the Company are the following:
NAME OF SHAREHOLDER
NUMBER HELD
PERCENTAGE
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
97,097,122
10.99
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SUBSTANTIAL OPTION HOLDERS
At the date of this report the substantial option holders in the Company are set out below:
NAME OF OPTION HOLDER
NUMBER HELD
PERCENTAGE
JARABA AVENUE PTY LIMITED
20,000,000
MR GLENN MCATEE + MS HEIDI MCATEE
15,000,000
MR CHRISTOPHER MCLAUGHLIN
TOTAL
VOTING RIGHTS
10,344,118
45,344,118
12.48
9.36
6.46
28.30
The voting rights attaching to the ordinary shares are in accordance with the Company’s Constitution being that:
•
•
•
Each Shareholder entitled to vote may vote in person or by proxy, attorney or corporate representative;
On a show of hands, every person present who is a Shareholder or a proxy, attorney or corporate
representative of a Shareholder has one vote; and
On a poll, every person present who is a Shareholder or a proxy, attorney or corporate representative of a
Shareholder shall, in respect of each fully paid share held by them, or in respect of which they are appointed a
proxy, attorney or corporate representative, have one vote for the share, but in respect of partly paid shares,
shall, have such number of votes as bears the proportion which the paid amount (not credited) is of the total
amounts paid and payable (excluding amounts credited).
There are no voting rights attached to options in the Company. Voting rights will be attached to the unissued ordinary
shares when options have been exercised.
STOCK EXCHANGE LISTING
Cirrus Networks Holdings Limited securities are listed on the Australian Securities Exchange (‘ASX’). The Company’s ASX
code is CNW. Prior to the re-admission to ASX as Cirrus on 8 July 2015, the Company was named Liberty Resources Limited
and its ASX code was LBY. The Company has no listed options on the ASX.
Directors’ interests in share capital are disclosed in the Directors’ Report.
There is currently no on-market buy-back in place.
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EQUITY SECURITY HOLDERS
Top 20 ordinary shareholders at the date of this report
NO.
NAME OF ORDINARY SHAREHOLDER
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
JARABA AVENUE PTY LTD
ALCOTRACK PTY LTD
WEIR SUPER FUND PTY LTD
MR MATTHEW GREEN & MRS NATALIE GREEN
MR MARK NEIL BLACKBURNE OLIVER
MR PAUL ALEXANDER EVERINGHAM & MRS ELISSA
JEAN EVERINGHAM
MR GRAHAME GILSON
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
VERTEC IT SOLUTIONS PTY LTD
MR CHRISTOPHER STEVENS
CH GLOBAL PTY LTD
ZERRIN INVESTMENTS PTY LTD
MR GAVIN BRADLEY LEHMANN & MRS MICHELLE
YVETTE LEHMANN
MR MATTHEW CHARLES MILNER
ALET INVESTMENTS PTY LTD
MR DIGBY NEIL GILMOUR
BEARNICK PTY LTD
MR CARRICK DURRANT RYAN
KAMALA HOLDINGS PTY LTD
TOTALS – TOP 20
TOTALS – REMAINING SHAREHOLDERS
NUMBER OF
SHARES HELD
97,097,122
48,273,387
44,323,387
43,851,070
28,448,722
22,000,000
17,880,000
17,466,478
14,195,195
13,672,572
11,779,477
10,000,000
9,500,000
8,340,066
8,227,001
8,000,000
8,000,000
7,678,863
7,000,000
7,000,000
432,733,340
450,650,759
PERCENTAGE
OF SHARES HELD
10.99
5.46
5.02
4.96
3.22
2.49
2.02
1.98
1.61
1.55
1.33
1.13
1.08
0.94
0.93
0.91
0.91
0.87
0.79
0.79
48.99
51.01
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REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS REGISTER OF SECURITIES
Level 28, 108 St Georges Terrance
Perth WA 6000
Telephone: (08) 6180 4222
The register of securities is held at:
Automic Group
Level 5, 126 Phillip Street
Sydney NSW 2000
Telephone: +61 8 1300 288 664
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