Annual Report
2022
We’ll lead you there.
Advisory specialists at scale
Atturra became a public company in
December 2021. We’re headquartered in
Sydney and have over 700 staff across
Australia, New Zealand and Singapore.
As one of Australia’s leading advisory and
IT solutions providers, we offer end-to-end
digital transformation services for our clients.
Partnering with other leading technology
companies, we offer scalable, expert solutions.
Atturra helps clients see exciting possibilities
through technology that works today and into
the future.
Atturra’s Annual Reporting suite includes:
•
2022 Half Year Financial Results
•
2022 Governance Documents
•
2022 Sustainability Report
Business
Overview
Contents
Atturra Limited ABN 34 654 662 638
Do More.
Go Beyond.
Redefine what your future looks
like through technology
Atturra Annual Report 2022
1
Dear Investor,
I’m proud to be sharing our achievements over the last
12 months in Atturra’s first Annual Report.
FY22 milestones
Atturra’s successful listing on the Australian Securities
Exchange is without a doubt our most significant
milestone this year. Through our Initial Public Offering,
we raised approximately $24.8 million. This was in
line with our prospectus, and we have maintained
a substantially above market return since.
The funds raised from the Offer have upheld our
plan to finance an accelerated growth strategy.
In March we acquired Brisbane-based Kettering
Professional Services for $3 million plus up to
$2.25 million in deferred consideration milestones,
calculated annually until FY24.
And, in June we added Perth-based Hayes Information
Systems and Communications for $8.5 million upfront
plus a deferred consideration of up to $7.89 million,
calculated annually against agreed metrics until FY25.
Both these businesses not only expand our capabilities
and geographical presence, but align with our ethos.
It’s always been part of our strategy to make sure the
integrity of the businesses we bring on board remains
intact.
Financials
We generated $98.3 million in revenue and $7.0 million
in underlying EBIT in FY21. This was forecasted to grow by
29% to $126.7 million in FY22. We’re pleased to say we’ve
surpassed this forecast by 6% delivering $134.6 million in
revenue and $13.8 million in underlying EBIT this FY.
Focus on sustainability
We believe in embracing opportunities that come
with building a sustainable future, while monitoring
and managing the complex economic, social and
environmental challenges facing business, community
and our planet, today. Our sustainability initiatives
have been embedded in our culture for some time,
and these have recently been formalised in our
Ethical, Social and Governance (ESG) Framework, and
communicated in the Sustainability Report 2022.
Looking ahead
Our goal over the coming years is to be Australia’s
largest advisory and IT solutions provider, with high
engagement across technology, industries, employees
and clients.
Our industry strategy is to focus on:
•
Industries with a high barrier to entry, aiming
to encourage client retention. For example the
Department of Defence, which requires security
cleared staff.
•
Industries with no clear market leader, providing
us with an opportunity to take this position. This is
the case in Local Government where we grew to
100 local councils in the first half of FY22 and are
rapidly becoming a service provider of choice.
•
Building scale in high-growth industries to develop
sustainable and long-term relationships .
Our technology strategy is to focus on:
•
High-growth technologies so we can grow in
lock-step with them. For example Boomi, Microsoft
and Smartsheet.
•
Specialist technologies such as webMethods
and QAD, to help us become the dominant provider.
We’re just getting started
Thank you for your support and for joining us in a huge
year of positive change for Atturra. We look forward to
continuing to build our exciting future together.
Shan Kanji
Chairman
Atturra Annual Report 2022
2
Letter to shareholders
“Atturra’s successful listing on the Australian
Securities Exchange is without a doubt our
most significant milestone this year.”
— SHAN KANJI
Atturra Annual Report 2022
3
Key industries
Key Acquisitions
March 2022
Kettering Professional Services
June 2022
Hayes Information Systems and
Communications
Awards
Boomi
APJ Partner of the Year 2021
Smartsheet
APAC Partner of the Year 2021
Staff
700+
Major Partnerships
Client Metrics
6%
23%
9%
10%
7%
10%
30%
4%
■ Defence
■ Federal Government
■ State and Local Government
■ Utilities
■ Financial Services
■ Manufacturing
■ Education
■ Other
FY22 Revenue by Industry
Defence
Federal and State Government
Financial Services
Higher Education
Local Government
Manufacturing
Utilities
Atturra Annual Report 2022
4
FY22
highlights
Revenue Growth
33% CAGR
FY20-22
Market Size
$41.5b
Estimated IT services spend in
Australia in 2022.
Government
ICT Budget
$25.4b
Estimated Government
ICT Budget for 2022-2023
Defence ICT Budget
$6.4b
Estimated Defence
ICT Budget for 2022-2023
Atturra Annual Report 2022
5
Atturra Annual Report 2022
6
Client
Showcase
Department of Defence
Atturra collaborated with IBM to streamline and
rationalise up to 500 systems across the Federal
Government’s Department of Defence, supporting
about 85,000 users in Australia and overseas.
Atturra helped Defence connect their highly secure
network to a bespoke, automated Microsoft Azure
platform to modernise Defence’s management of
finances, logistics, HR, engineering, maintenance and
property. The project went smoothly from design to
deployment to support the resilience, security and
performance required now and into the future.
“The Department of Defence is a significant
user of Microsoft Office 365 and Dynamics
365 clouds. We are very proud to have been
selected to provide the cloud foundations for
this nationally important transformation that
will provide a near real-time view of critical
information across Defence to better inform
decision making.”
Steven Worrall
Managing Director, Microsoft Australia
Atturra Annual Report 2022
7
Bundaberg
Family-owned Queensland beverage company
Bundaberg, recently aligned their brewing and sales
process with the globally recognised standard known
as Brand Reputation Compliance Global Standard.
To support this, Atturra upgraded Bundaberg’s
Enterprise Resource Planning (‘ERP’) system using the
QAD software application, which offers the flexibility
that’s important to many manufacturers.
For Bundaberg, a challenging part of the Global
Standard is traceability. If a product needs to be
recalled, they’re required to identify product locations
and ingredient sources within four hours. This is one
example of where the QAD software application hit the
right mark, with an optimal system working at every
stage of the brewing and sales process.
“This application is the backbone of our operations,
doing everything from inventory, sales, finance,
wastage reports, and traceability.”
Belinda Desland
Brewhouse Manager, Bundaberg
WLTH
WLTH (pronounced Wealth) is a Brisbane-based digital
lending and payments fintech, aiming to change the
money experience to a more positive one in Australia.
WLTH was looking for a strategic partner to advise on
and implement best-in-breed integration for the next
phase of their roadmap, which included the launch of a
state-of-the-art payments application WLTH Pay.
Atturra was chosen, thanks to a track record of
delivering multiple successful integration and data
projects, as well as Boomi’s confidence in their
capabilities.
Atturra developed a future-ready platform that can
easily adapt to new technology and compliance
requirements, within a record six months. The Single
Customer Portal ensures customers can access
multiple financial products seamlessly. It was named
financial services project of the year at the Computer
Weekly Innovation Awards, APAC 2022.
“Boomi’s catalogue of big-ticket connectors
is complemented by Atturra’s fit-for-purpose
reference architecture, which has made the handling
of the third-party systems and applications that
power WLTH Pay far easier to manage than we
could have imagined.”
Dave Chapman
Chief Technology Officer, WLTH
Shan Kanji
Non-Executive Chair /
Non-Independent
Shan Kanji is the Non-Executive
Chairman of Atturra. Shan has spent
more than 15 years as a senior
business leader with a proven track
record of running scale diversified and
complex industrial and technology
businesses in Australia and New
Zealand. He has extensive experience
with start-ups in technology, property
development, manufacturing and
other sectors.
Shan was instrumental in the
formation of, and growth in, Atturra
and its predecessor organisations.
Shan is on the board of the Australian
Steel Institute, the nation’s peak
body representing the Australian
manufactured steel supply chain.
Shan holds a Bachelor of Laws and
a Bachelor of Commerce from the
University of NSW and is a practising
lawyer and the Principal of Kanji & Co.
Stephen Kowal
CEO & Executive Director /
Non‑Independent
Stephen Kowal is the CEO and
Executive Director of Atturra. Stephen
has been the CEO since early 2019
and, prior to his appointment, has
held senior executive and non-
executive positions in the IT and
consultancy sectors since 2001. Prior
to joining Atturra, Stephen led sales
for the Australian and New Zealand
division for DXC Technology, a US
multinational business-to-business
IT services provider.
Stephen is highly experienced across
the insurance, banking, government,
and natural resources sectors, holding
several Chief Information Officer roles
within the US, Chile, and Australia.
Stephen holds a Bachelor of
Science from the University of NSW,
a Graduate Diploma in Applied
Finance and Investment from the
Securities Institute of Australia (FINSIA),
and Diploma of Insurance from the
Australian and New Zealand Institute
of Insurance and Finance (ANZIF).
ANZIF awarded Stephen the PC
Wickens award in 2015.
Stephen is a Fellow of the Governance
Institute of Australia (GIA), Fellow of
FINSIA, Senior Associate of ANZIF and a
member of the Australian Institute of
Company Directors (AICD).
Nicole Bowman
Non-Executive Director /
Independent
Nicole is an experienced leader,
non-executive director and lawyer
whose leadership career has spanned
over 21 years across industries as
diverse as mining, finance, sport and
manufacturing, both in Australia and
internationally.
In addition to her executive and
legal experience, Nicole spent a
combined total of seven years as a
non-executive director of ASX-listed
mining and exploration companies
Blackthorn Resources Limited, and
Intrepid Mines Limited. During this
period Nicole chaired each of the
Audit and Risk Committee and the
Nomination and Remuneration
Committee in turn.
Nicole was also a founding director
of Football South Coast Limited and a
member of the former FFA Women’s
Advisory Group.
She is currently a board member of
the charity Dress for Success Sydney
Inc. and the founder of its Illawarra
branch. In 2019 she was appointed
the Australia Day Ambassador for
Wollongong in recognition of her
philanthropic work.
In 2019 Nicole established her own
leadership practice, focused on
coaching and training leaders and
teams to enable them to achieve
exceptional results using readily
implementable and practical tools,
insights and skills.
Nicole holds a Bachelor of Economics
and Bachelor of Laws (Hons) from the
University of Sydney and is a member
of the AICD.
Atturra Annual Report 2022
8
Board of
Directors
Jonathan Rubinsztein
Non-Executive Director /
Independent
Jonathan is the CEO of Nuix. Nuix is an
ASX-listed company and a leading
provider of investigative analytics and
intelligence software with a vision of
“finding truth in the digital age”.
Prior to this, he was the Managing
Director & CEO of Infomedia Ltd, an
ASX300 company providing SaaS
solutions to the parts and service
sector of the global automotive
industry. Jonathan and the team grew
the market capitalisation over 300%
during the five and a half years that
he led the business.
Prior to that, Jonathan was the CEO
and one of the founding shareholders
at Red Rock Consulting, the largest
Oracle Consulting business in ANZ
with eight offices and 600 staff. This
was sold to UXC and then eventually
acquired by DXC and is currently the
Oracle practice within DXC called DXC
Red Rock.
Jonathan was also a Founder and
Director of RockSolid SQL, a company
that built monitoring and automated
data management software.
Jonathan has been on the board of
a number of philanthropic ventures
including Humanitix, the first not-
for-profit ticketing platform that
redistributes profits from booking fees
to various charities. He has also been
on the board of Missionvale, a not-for-
profit organisation that provides love
and care for the destitute and those
with HIV/AIDS in the extremely poor
township of Missionvale, Port Elizabeth,
South Africa.
Richard Shaw
Chief Financial Officer
Richard Shaw is the CFO of Atturra.
He has held CFO roles in the finance,
IT and media sectors for over 20 years.
Richard has extensive experience in
ASX-listed businesses. Prior to joining
Atturra Richard was CFO of Yellow
Brick Road Holdings Limited (YBR), a
diversified financial services provider.
He led the financial operations of that
business for nine years, from pre‑IPO
(with circa 70 brokers), growing to a
national network of over 1,500 advisers.
At YBR, Richard led over $100 million
in capital funding, debt funding and
strategic acquisition transactions.
Richard’s previous CFO roles include
OzEmail Internet, Bluefreeway Limited
and Commsecure Limited.
Richard is a Certified Practicing
Accountant. He holds a Bachelor of
Commerce from the University of
Tasmania and a Master of Business
Administration from the University of
Technology, Sydney.
Kunal Shah
Company Secretary
Kunal Shah is the Company Secretary.
Kunal has over 20 years of financial
experience in the technology,
manufacturing, and construction
industries. Kunal has co-ordinated
and assisted in numerous corporate
transactions including acquisitions,
divestments, and business
restructures.
Kunal holds a Bachelor of Commerce
from Gujarat University and a Master
of Business in Accounting from the
University of Technology, Sydney.
Kunal is an Affiliate member of the
Governance Institute of Australia.
Atturra Annual Report 2022
9
Atturra Annual Report 2022
10
ESG Highlights
Sustainability approach
After substantial growth this year, including the
acquisition of three local businesses, Atturra is working
towards embracing all features of the future – not just
in technology.
Our Ethical, Social and Governance (‘ESG’) position
is key to our planning, because we must compete
at a more sustainable level in order to remain at the
forefront of Australia’s technology industry.
Our sustainability behaviours are aligned to the
following five pillars:
1. Ethics and governance
We embed our corporate values across all areas of
the business through a strong governance structure,
overseen by the Board of Directors. Staff have access
to tools to raise any concerns, and we hold regular
internal audits to ensure adherence.
Atturra is certified in:
•
ISO 9001:2015 – Quality Management Systems
•
ISO 45001:2018 – Occupational Health and
Safety Management Systems
•
ISO 14001:2015 – Environmental Management
Systems
•
ISO 27001: Underway – Information Security
Management. Due to be completed Q2 FY23.
2. People and culture
We strongly believe in investing in our people and
supporting diversity. We listen to our employees and
have built a process of continuous improvement
so we can be sought out as an employer of choice.
We track employee sentiment via a monthly survey
created by Australian software business, Teamgage.
This allows people to provide anonymous feedback
that’s reviewed and actioned by Atturra management.
It’s also used for team collaboration to discuss and
make improvements.
3. Protecting our workplace and clients
Data security is paramount to our operations and we
take it very seriously. Atturra goes above and beyond
industry standards in our security measures, and we
manage to strike a balance between very high levels
of security while providing seamless access to the
right tools to run an effective workplace. For the past
12 months, our daily average for the Microsoft Secure
Score has been over 98%, which is 22% higher than the
industry standard.
4. Community support
Community engagement is a passion at Atturra, with
initiatives supporting both local and national charities.
Atturra runs a fundraiser for the Cancer Council’s
Biggest Morning Tea each year. This is company-
wide, and our largest annual fundraising initiative.
We are in the process of refining and streamlining
our community policy.
5. Environmental accountability
We aim to be a carbon neutral company, committed
to maintaining low emissions across the business
and aim to protect the environment during our
daily operations. We also work in partnership with
organisations to recycle our laptops and other
hardware, including repurposing, recycling or donating
to remote communities.
We have some strong sustainability initiatives across
the company and our goal is to build on these
each year.
Atturra Annual Report 2022
11
General Information
Atturra Annual Report 2022
12
p
y
Incorporation and Company restructure
Atturra Limited (the 'Company') was incorporated on 20 October 2021 and became the parent company of Atturra Holdings
Pty Limited in a restructure where existing shareholders exchanged their shares in Atturra Holdings Pty Limited for shares
in the Company. Prior to the restructure, Atturra Holdings Pty Limited was the parent company of the Group.
The restructure has been accounted for as a capital reorganisation and did not result in a business combination for accounting
purposes. Financial information of the Company has been presented as a continuation of Atturra Holdings Pty Limited.
Accordingly, the assets and liabilities continued to be recorded at their existing values in the Statement of financial position.
In addition, the Statement of financial performance for Atturra Limited is a continuation of the existing Statement of financial
performance for Atturra Holdings Pty Limited.
Prior period financial information within this report represents the consolidated historical financial information for Atturra
Holdings Pty Limited.
Admission to ASX and commencement of official quotation
The Company was admitted to the Official List of ASX Limited ('ASX') on 20 December 2021. Official quotation of the
Company’s ordinary fully paid shares commenced on 22 December 2021.
Atturra Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business are:
Registered office
Principal place of business
Level 33, Aurora Place
Level 2
88 Phillip Street
10 Bond Street
Sydney NSW 2000
Sydney NSW 2000
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which
is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 30 August 2022. The
Directors have the power to amend and reissue the financial statements.
Atturra Annual Report 2022
13
3
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Atturra Limited (referred to hereafter as the 'Company' or 'parent entity' or 'Atturra') and the entities
it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The following persons were Directors of Atturra Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Shan Kanji – Chairman (appointed on 20 October 2021)
Stephen Kowal – Executive Director and Chief Executive Officer (appointed on 20 October 2021)
Nicole Bowman – Independent Non-Executive Director (appointed on 20 October 2021)
Jonathan Rubinsztein – Independent Non-Executive Director (appointed on 4 November 2021)
Principal activities
The Group provides whole-of-organisation technological solutions covering service lines of advisory, business applications,
data & integration, cloud services, change management and managed control solutions.
Dividends
During the year, an interim dividend of $679,000 was paid to the minority shareholder of Noetic Group Pty Ltd, a subsidiary
of the Company, with the remainder being paid to Atturra that was eliminated on consolidation. No other dividend was paid,
recommended, or declared during the current financial year. In the previous financial year, a dividend of 4.75 cents per
ordinary share (total of $6,500,000) was paid to the shareholders of Atturra Holdings Pty Ltd.
Review of operations
The Group is a leading Australian technology services business. It provides expertise across a broad range of specialist
in demand IT areas to deliver solutions to clients. The Group uses transformative and market leading technologies and
business applications that enable digital transformations. The group engages over 550 consultants, IT and support personnel
in Sydney, Melbourne, Brisbane, Canberra, Perth, New Zealand, and Singapore.
The Group's technology strategy is to focus on high growth technologies or technologies where it can have a market dominant
position. The group's industry strategy is to focus on industries in which there is either a high barrier to entry or there is no
clear market leader.
The profit for the Group after providing for income tax and non-controlling interest, net of dividends and decrease in
shareholding amounted to $7,224,000 (30 June 2021: $6,488,000).
Shareholders’ equity attributable to owners of the Company increased by $35,737,000 from 30 June 2021 to $41,670,000
as at 30 June 2022 and the Group had cash on hand of $35,130,000 as at 30 June 2022 (30 June 2021: $17,328,000). The
Company has 200,550,449 shares on issue as at 30 June 2022 (30 June 2021: 145,065,427).
Underlying earnings before interest, and taxation (‘EBIT’) is a financial measure which is not prescribed by the Australian
Accounting Standards (‘AASBs’) and represents the profit under AASBs adjusted for specific items, including the Initial Public
Offering ('IPO') costs, share based payment costs to eligible employees as part of the IPO process, government grants and
revaluation of contingent consideration. The directors consider Underlying EBIT to be one of the key financial measures of
the Group.
Directors’ Report
Atturra Annual Report 2022
14
Directors’ Report
The following table summarises key reconciling items between statutory after tax attributable to the shareholders of the
Company and Underlying EBIT:
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Profit after income tax
8,085
7,564
Add: Interest expense
499
102
Less: Interest income
(10)
(4)
Add: Income tax expense
3,781
1,925
Reported EBIT
12,355
9,587
IPO expense (1)
480
-
Share based payments – IPO (2)
357
-
Government grants (3)
-
(2,631)
Revaluation of contingent consideration (4)
619
-
Underlying EBIT
13,811
6,956
(1)
Expenses related to the IPO of Atturra Limited on the ASX completed in December 2021.
(2)
As part of the IPO process, eligible employees acquired, at no cost, Atturra shares to the value of $1,000 each.
(3)
The Company received government grants during the prior period.
(4)
Relates to the revaluation of the Noetic contingent purchase consideration due to better-than-expected performance
during the earn out period.
Business risks
In summary material business risks that could adversely affect the Groups financial performance and growth potential in
future years include:
Ability to attract and retain clients
The Group may not be able to retain existing clients when contract terms expire, or otherwise retain those clients to use the
Groups service offerings. The Group may not be able to attract new clients at the rate, over time frames or with the pricing
revenues and costs it currently expects or have experienced historically. Atturra ensures regular communications with clients
and the assigned representative regularly connects with clients to ensure satisfaction with services, in addition all the major
businesses have key General Managers that overlook service delivery to ensure satisfaction. In relation to growth, Atturra
runs a centralised process to coordinate sales to ensure that we are actively looking to grow at all times. With the centralised
oversight of sales, Atturra can continually react to market changes in both composition of services but also in prices in the
market.
Competitive market and changes to market trends
The Group operates in a competitive market with a number of other companies that provide similar IT services. There is a
risk that competitors could enter the market who offer more cost-efficient services, develop new software or have significantly
greater resources. Atturra continually monitors the competitive landscape for emerging technologies that may compete with
existing offerings to ensure that Atturra can change the go to market if required. The risks Atturra face are lower than the
general market given the majority of the revenue in Atturra is a result of being a leader in specific specialisations, so the risk
of disruption is minimised as any new market entrant would have significant resourcing challenges.
Reliance on third party technology
The group relies on the success of third-party software for the development. implementation and operation of its service
offerings. The groups operations would be materially impacted if existing third-party suppliers no longer made their software
and technologies available or materially increased their pricing. Although Atturra has exposure to changes in directions of
third part technology providers, this exposure is material, however there would be significant time to react even if the
departure of a key partner would result in significant work for Atturra in helping client change off selected technology stacks. It
is anticipated that any material change to partners would provide Atturra several years to react.
Atturra Annual Report 2022
15
Cyber security and Information Technology (IT) infrastructure
There is a risk that security and technology precaution measures taken by the Group will not be sufficient to prevent
unauthorised access to the Groups networks, systems, and data bases. Atturra monitors it environment on a continuous
basis to ensure security compliance, and in the unlikely event of an attack, Atturra has advanced backup and recovery
solutions.
Significant changes in the state of affairs
Atturra Limited (the 'Company') was incorporated on 20 October 2021 and became the parent company of Atturra Holdings
Pty Limited in a restructure where existing shareholders exchanged their shares in Atturra Holdings Pty Limited for shares in
the Company. Prior to the restructure, Atturra Holdings Pty Limited was the parent company of the Group.
The restructure has been accounted for as a capital reorganisation and did not result in a business combination for accounting
purposes. Financial information of the Company has been presented as a continuation of Atturra Holdings Pty Limited.
Accordingly, the assets and liabilities continued to be recorded at their existing values in the Statement of financial position.
In addition, the Statement of financial performance for Atturra Limited is a continuation of the existing Statement of financial
performance for Atturra Holdings Pty Limited. Prior period financial information within this report represents the consolidated
historical financial information for Atturra Holdings Pty Limited.
On 20 December 2021, Atturra Limited, issued shares exclusively to the existing shareholders of Atturra Holdings Pty Ltd in
exchange for shares in Atturra Holdings. All 151,836,449 shares held by the shareholders of Atturra Holdings Pty Ltd were
transferred to Atturra Limited. Atturra Limited subsequently purchased 1,559,080 shares from a retiring shareholder, reducing
issued capital to 150,277,369 shares. On listing, Atturra Limited issued 49,559,080 ordinary Atturra Limited shares as part
of the initial public offering process and 714,000 shares to eligible employees under the Exempt Employee Share Plan. This
resulted in 200,550,449 shares being on issue. Therefore, these consolidated financial statements combine those of Atturra
Limited and the commonly controlled entities at 30 June 2022.
On 20 December 2021, Atturra Limited ('ATA') was admitted to the Official List of ASX Limited ('ASX'). Official quotation of
ATA’s ordinary fully paid shares commenced on 22 December 2021. ATA raised $24,779,540 before costs pursuant to the
offer under its prospectus dated 17 November 2021 ('Prospectus') as amended by supplementary prospectuses dated 24
November 2021 and 13 December 2021 by the issue of 49,559,080 shares at an issue price of $0.50 per share.
On 31 August 2021, the parent entity, at the time changed its name to Atturra Holdings Pty Ltd (formerly known as Foundation
Technology Holdings Pty Ltd).
On 12 August 2021, FTS Nominees Pty Ltd (a wholly owned subsidiary of the Company) entered into a share sale agreement
to acquire 100% of Mentum Systems Pty Ltd ('Mentum') for $4.1m. Mentum Systems co-design, deploy and integrate
software solutions as part of a consulting led approach to risk management, governance, and assurance. The transaction
was financed by a drawdown of the loan facility with 263 Finance Pty Ltd.
On 21 October 2021, Atturra Holdings Pty Ltd, a wholly owned subsidiary of the Company, entered into a share sale
agreement to acquire a further 25% of Noetic Group Pty Ltd for $2.8m. Post the increase in shareholding, Atturra Holdings
Pty Ltd holds 80% of the shares on issue of Noetic Group Pty Ltd. Noetic is an advisory and consulting business primarily
servicing the government and defence sectors. The acquisition was settled by issuing 5,674,810 Atturra Limited shares at
$0.50 each.
On 17 January 2022, Galaxy 42 Pty Ltd, a wholly owned subsidiary of the Company, entered into a share sale agreement to
acquire 100% of Kettering Professional Services Pty Ltd for $5.25m, which was successfully completed on 1 March 2022.
$3m was settled on completion with earn out consideration of up to $2.25m of cash subject to Kettering achieving
performance hurdles on audited EBIT targets for FY22, FY23 and FY24. Kettering is an enterprise resource planning ('ERP')
solutions provider based in Brisbane, Australia which specialises in the implementation, management, and ongoing support
of ERP solutions in the manufacturing sector. The completion payment was settled from internal cash reserves.
On 7 February 2022, Connexion Pty Ltd, a wholly owned subsidiary of the Company entered into a share sale agreement to
acquire a further 8% of Protegic Pty Ltd for $0.2m. On 6 June 2022, Connexxion Pty Ltd acquired an additional 17% of
Protegic. Both investments were funded from internal cash reserves. As at 30 June 2022 the Company owns 49% of Protegic.
Atturra Annual Report 2022
16
Directors’ Report
On 10 May 2022, Anatas Pty Ltd, a wholly owned subsidiary of the Company entered into a share sale agreement to acquire
100% of Hayes Information Systems and Communications Pty Ltd for $16.4m, which was successfully completed on 1 June
2022. Cash consideration of $8.5m. Post completion earn out consideration of up to $6.9m is payable subject to Hayes
achieving performance hurdles based on audited EBIT results for FY22, FY23 and FY24 and up to an additional $1m based
on achieving certain metrics with respect to key employee retention. Hayes is an award winning OpenText partner which
provides information management consultancy, digital transformation services, and Enterprise Content Management
application support services. The completion payment was settled from internal cash reserves.
On 30 June 2022 Atturra Holdings Pty Ltd, a wholly owned subsidiary of the Company, and MOQ Limited (ASX:MOQ) entered
into a binding Scheme Implementation Deed (SID) under which Atturra Holdings will acquire 100% of the ordinary shares in
MOQ pursuant to a scheme of arrangement (Scheme).The implementation of the Scheme is subject to a number of
customary conditions, including the approval by MOQ shareholders and the Federal Court of Australia, and is not subject to
financing or due diligence conditions.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 16 August 2022, Atturra announced that it has elected not to exercise its matching right under clause 11.4 of the scheme
Implementation deed dated 30 June 2022 (as amended and restated on 11 August 2022) in response to an MOQ Limited
Competing Proposal made by Brennan VDI Pty Limited of $0.075 per MOQ share.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have not been
included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the Group.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on Directors
Name:
Shan Kanji
Title:
Chairman
Qualifications:
Shan holds a Bachelor of Laws and a Bachelor of Commerce from the University of
NSW.
Experience and expertise:
Shan is a practising lawyer and the Principal of Kanji & Co. He has spent more than 15
years as a senior business leader with a proven track record of running scale diversified
and complex industrial and technology businesses in Australia and New Zealand. He
has extensive experience with start-ups in technology, property development,
manufacturing, and other sectors.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
Member of the Audit and Risk Committee and Nominations Committee
Interests in shares:
114,943,712 ordinary shares
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
None
Atturra Annual Report 2022
17
Name:
Stephen Kowal
Title:
Chief Executive Officer and Executive Director
Qualifications:
Stephen holds a Bachelor of Science from the University of NSW, a Graduate Diploma
in Applied Finance and Investment from the Securities Institute of Australia, and
Diploma of Insurance from Australian and New Zealand Institute of Insurance and
Finance (ANZIF).
Experience and expertise:
Prior to his appointment as CEO for Atturra Group, Stephen has held senior executive
and non-executive positions in the IT and the consultancy sectors since 2001. Stephen
is highly experienced across the insurance, banking, government, and natural
resources sectors, holding several Chief Information Officer roles within the United
States, Chile, and Australia.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
CEO and Executive Director
Interests in shares:
6,872,943 ordinary shares
Interests in options:
None
Interests in rights:
750,000
Contractual rights to shares:
None
Name:
Nicole Bowman
Title:
Independent Non-executive Director
Qualifications:
Nicole holds a Bachelor of Economics and Bachelor of Laws (Hons) from the University
of Sydney and is a member of the AICD.
Experience and expertise:
Nicole is an experienced leader, non-executive director and lawyer whose leadership
career has spanned over 21 years across industries as diverse as mining, finance,
sport and manufacturing, both in Australia and internationally.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
Chair of the Audit and Risk Committee
Chair of the Nomination and Remuneration Committee
Interests in shares:
100,000 ordinary shares
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
None
Name:
Jonathan Rubinsztein
Title:
Independent Non-executive Director
Experience and expertise:
Jonathan is the Group Chief Executive at Nuix, Nuix is an ASX Listed Company and a
leading provider of investigative analytics and intelligence software with a vision of
"finding truth in the digital age".
Other current directorships:
Nuix Limited - appointed 6 December 2021
Former directorships (last 3 years):
Infomedia Ltd - appointed 14 March 2016, resigned 29 October 2021
Special responsibilities:
None
Interests in shares:
5,825,055 ordinary shares
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
None
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last three years)' quoted above are directorships held in the last three years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Atturra Annual Report 2022
18
Directors’ Report
Shan Kanji
114,943,712
Stephen Kowal
6,872,943
Nicole Bowman
100,000
Jonathan Rubinsztein
5,825,055
Richard Shaw
400,000
128,141,710
Company secretary
Kunal Shah is the company secretary. Kunal has over 20 years' financial experience in the technology, manufacturing, and
construction industries. Kunal has coordinated and assisted in numerous corporate transactions including acquisitions,
divestments, and business restructures.
Kunal holds a Bachelor of Commerce from Gujarat University and a Master of Business in Accounting from the University of
Technology, Sydney. Kunal is an Affiliate member of the Governance Institute of Australia.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2022, and the number of meetings attended by each Director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Shan Kanji
8
8
1
1
4
4
Stephen Kowal*
8
8
-
-
-
-
Nicole Bowman
8
8
1
1
4
4
Jonathan Rubinsztein
8
8
1
1
4
4
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
Note: The meetings of the Directors above relate to the meetings that took place in Atturra Limited during the year ended 30
June 2022.
* Attended the Nomination and Remuneration Committee and Audit and Risk Committee meetings as a non-member.
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 remuneration report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Atturra Annual Report 2022
19
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; and
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 has 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; and
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; and
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 does not receive any fees.
Non-executive Directors do not receive performance rights, share options or other incentives.
The total aggregate amount provided to all non-executive directors of the Company for their services as directors must not
exceed in any financial year the amount fixed by the Company in general meeting. This amount is fixed by the Company at
$900,000 per annum.
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 has four components:
base pay and non-monetary benefits;
short-term performance incentives;
long term share-based payments performance incentives; and
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.
Atturra Annual Report 2022
20
Directors’ Report
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the Group and provides additional value to the executive.
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 annual targets being achieved for a combination of:
(i)
Consolidated Revenue for the Group,
(ii)
Revenue controlled by the relevant executive, and
(iii)
Profit controlled by relevant executives.
These financial measures have been chosen as they align executive effort to key drivers of entity profitability and growth
which are considered to be drivers of shareholder value. Financial methods of assessing the achievement of performance
conditions have been selected because they are easily measured and establish clear transparent targets.
The long-term incentives ('LTI') include share-based payments. Performance Rights are awarded to executives based on
long-term incentive measures assessed over periods in excess of 12 months.
Consolidated entity Performance and link to performance
Performance rights are issued by the Group to key management personnel and other executives under its long-term incentive
plan at the discretion of the Board. The purpose of this incentive plan is to align the remuneration of executives and senior
management with shareholder value, while retaining key executives. The key metrics that are considered for the creation of
shareholder wealth by key management personnel and other executives are revenue growth, underlying EBIT growth and
share price appreciation of the Atturra Group. Key Metrics for the financial year of listing are:
$000's
Revenue
134,579
Underlying EBIT
13,811
The share price of Atturra on IPO was $0.50 and increased to $0.69 at 30 June 2022.
The long-term incentive plan offers performance rights in Atturra subject to the satisfaction of the relevant performance
milestones, as well as service and other conditions, at the relevant vesting date.
The long-term incentive plan and performance rights in place for key management personnel as at 30 June 2022 are:
Total
Plan
Issued to
Grant date
Vesting
date
Total
Performance
rights
granted
Exercised Forfeited
balance at
the end of
the
financial
year
2022 LTI award KMP - Stephen Kowal
10/11/2021 31/12/2024
375,000
-
-
375,000
2022 LTI award KMP - Stephen Kowal
10/11/2021 31/12/2025
375,000
-
-
375,000
750,000
-
-
750,000
The performance rights may be exercised on or after the vesting date. Once vested, the performance rights do not have an
expiry date. The fair value of the performance rights at grant date was $0.29 each.
Each performance right is issued by the Group and vests into one ordinary share in the Group. Performance rights carry no
dividend or voting rights. For performance rights to vest, the relevant Executive must remain employed or engaged by the
Group at the relevant vesting date and the relevant performance milestones must be satisfied.
No exercise price is payable on vesting of a Performance Right. If the minimum set value for each performance milestone is
not satisfied on a particular vesting date, the relevant Performance Rights will lapse. The performance hurdles were chosen
to align with the Group's strategy and shareholder interests and best reflect the key financial performance metrics of the
Group and strike an appropriate balance between growth and long-term profitability.
Atturra Annual Report 2022
21
The key vesting conditions for the LTI awards for key management personnel are:
Stephen Kowal
For the financial year ended 30 June 2022, the Group must meet or exceed the Prospectus EBIT forecast. This vesting
condition has been met.
As at the date of release of the annual audited results for 30 June 2024, the total shareholder return must be 78% or
greater than the IPO issue price, based on the 30-day volume weighted average price of Atturra Limited ordinary shares
for the 30 days before the date of announcement of the 30 June 2024 financial results.
Mr. Kowal must remain in the employment of Atturra and if the vesting conditions are met, 375,000 Performance Rights
are scheduled to vest in December 2024 and 375,000 Performance Rights are scheduled to vest in December 2025.
Consolidated entity performance and link to remuneration
Remuneration for KMP’s is directly linked to the performance of the Group. A portion of cash bonus and incentive payments
are dependent on performance 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 performance based compensation will assist in
increasing shareholder wealth over the coming years.
Use of remuneration consultants
During the financial year ended 30 June 2022, the Group did not engage a remuneration consultant to advise on the
remuneration package awarded to the directors and KMPs.
Details of remuneration
Prior to the IPO on 20 December 2021, Atturra Limited was not required to prepare a remuneration report in accordance with
Corporations Act 2001. As such, remuneration report is presented only for financial year ended 30 June 2022.
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the Directors of Atturra Limited:
Shan Kanji (Chairman)
Stephen Kowal (Executive Director and Chief Executive Officer)
Nicole Bowman (Non-Executive Director)
Jonathan Rubinsztein (Non-Executive Director)
And:
Richard Shaw (Chief Financial Officer)
Changes since the end of the reporting period:
None.
Atturra Annual Report 2022
22
Directors’ Report
Short-term benefits
Post-
employment
benefits
Long-term benefits
Annual/
Share-
based
payments
Cash salary
Cash
Non-
Super-
Long
service
Equity-
and fees
bonus
monetary
annuation
leave
settled
Total
30 June 2022
$
$
$
$
$
$
$
Non-Executive Directors:
Nicole Bowman(1)
57,955
-
-
5,795
-
-
63,750
Jonathan Rubinsztein(2)
-
-
-
-
-
-
-
Shan Kanji(3)
-
-
-
-
-
-
-
Executive Director:
Stephen Kowal(4)
351,432
375,000
-
23,568
36,157
586,663
1,372,820
Other Key Management
Personnel:
Richard Shaw(5)
199,810
62,250
-
19,265
10,303
-
291,628
609,197
437,250
-
48,628
46,460
586,663
1,728,198
(1)
From 20 October 2021 Nicole Bowman was paid a one-off payment of $10,000 for services provided on the listing
process of Atturra Limited before she became a Director of Atturra Limited
(2)
From 4 November 2021.
(3)
From 20 October 2021.
(4)
Equity settled remuneration includes the value of 1,096,212 shares granted on 21 Oct 2021 ($548,106) and $38,557
related to 750,000 performance rights issued on 10 November 2021. The full value of these rights is $216,501 and will
be recognised over the vesting period.
(5)
From 14 September 2021.
The proportion of remuneration linked to performance and the fixed proportion for the current financial year are as follows:
Fixed
remuneration
At-risk STI
At-risk LTI
Name
%
%
%
Non-Executive Directors:
Nicole Bowman
100.00%
-
-
Jonathan Rubinsztein
-
-
-
Shan Kanji
-
-
-
Executive director:
Stephen Kowal
27.00%
27.00%
46.00%
Other Key Management Personnel:
Richard Shaw
79.00%
21.00%
-
The proportion of the cash bonus paid/payable or forfeited for the current financial year is as follows:
Cash bonus
Cash bonus
paid/payable
forfeited
Name
%
%
Non-Executive Directors
Nicole Bowman
-
-
Jonathan Rubinsztein
-
-
Shan Kanji
-
-
Atturra Annual Report 2022
23
Executive director:
Stephen Kowal
100.00%
-
Other Key Management Personnel:
Richard Shaw
100.00%
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Shan Kanji
Title:
Chairman
Agreement commenced:
20 October 2021
Term of agreement:
Permanent
Details:
Shan does not receive a fee for services as Director and Chairman of Atturra.
Name:
Stephen Kowal
Title:
Chief Executive Officer
Agreement commenced:
20 October 2021
Term of agreement:
Permanent
Details:
Stephen is entitled to receive a remuneration of $375,000 per annum, inclusive of
superannuation and a discretionary STI cash bonus of up to $375,000 per annum
(inclusive of superannuation) to be paid within three months of the end of the relevant
financial year.
6 months termination notice in writing by the Company, 9 months termination notice in
writing by Mr Kowal during the period of 1 July 2021 to 1 July 2023, or 6 months
termination notice in writing after 1 July 2023.
Name:
Nicole Bowman
Title:
Independent, Non-Executive Director
Agreement commenced:
20 October 2021
Term of agreement:
Permanent
Details:
$75,000 per annum (including remuneration as chair of Audit and Risk and Nomination
and Remuneration Committees)
Name:
Jonathan Rubinsztein
Title:
Independent, Non-Executive Director
Agreement commenced:
4 November 2021
Term of agreement:
Permanent
Details:
Jonathan does not receive a fee for services as a Director of Atturra.
Name:
Richard Shaw
Title:
Chief Financial Officer
Agreement commenced:
14 September 2021
Term of agreement:
18 months
Details:
Richard is entitled to a remuneration of $250,000 per annum, exclusive of
superannuation. For the period commencing 7 September 2021 to 30 June 2022, a
target STI of $62,250 per annum (inclusive of superannuation). And for the period
commencing 1 July 2022 to 31 March 2023, a target STI of $56,250 per annum
(inclusive of superannuation).
6 months termination notice in by writing by either party on or before 31 March 2023,
or 3 months termination notice in writing after 31 March 2023.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Atturra Annual Report 2022
24
Directors’ Report
Share-based compensation
Issue of shares
During the financial year, 1,096,212 shares were issued to Stephen Kowal in recognition of performance in FY21. This was
done to align the interests of the Group and Stephen Kowal, and to create an appropriate incentive for future growth and
development of the Group. There were no other share issues to Directors and other key management personnel as part of
compensation during the year ended 30 June 2022.
Performance rights
During the financial year, Stephen Kowal was granted 750,000 performance rights as part of his remuneration. Refer to
Executive Remuneration section above for details of vesting conditions and vesting dates.
Performance rights granted carry no dividend or voting rights.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at
Received
Balance at
the start of
as part of
Disposals/
the end of
the year
remuneration
Additions
other
the year
Ordinary shares
Shan Kanji
114,943,712
-
-
-
114,943,712
Stephen Kowal
5,776,731
1,096,212
-
-
6,872,943
Nicole Bowman
-
-
100,000
-
100,000
Jonathan Rubinsztein
5,825,055
-
-
-
5,825,055
Richard Shaw
-
-
400,000
-
400,000
126,545,498
1,096,212
500,000
-
128,141,710
Option holding
No directors held any options over ordinary shares.
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each Director and
other members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
the year
Granted
Vested
other
the year*
Performance rights over ordinary shares
Stephen Kowal
-
750,000
-
-
750,000
Richard Shaw
-
-
-
-
-
-
750,000
-
-
750,000
*
Performance rights at the end of the year are unvested and unexercisable.
Other transactions with key management personnel and their related parties
The following transactions occurred with parties related to Shan Kanji.
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Sale of goods and services:
Sale of services to other related party
-
99,175
Atturra Annual Report 2022
25
Payment for goods and services:
Payment for services from other related party
96,986
2,632
Loans to key management personnel and their related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Non-current receivables:
Loans to related parties
-
95,052
Current borrowings:
Loan from related party (263 Finance Pty Ltd)
1,000,000
-
Loan from other shareholders
-
231,703
Non-current borrowings:
Loan from related party (263 Finance Pty Ltd)
3,750,000
1,750,000
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
There are no other loans provided to or related party transactions with Key Management Personnel
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of Atturra Limited under option outstanding at the date of this report.
Shares under performance rights
Unissued ordinary shares of Atturra Limited under performance rights at the date of this report are as follows:
Exercise
Number
Grant date
Vesting date
price
under rights
20/12/2021
31/12/2024
$0.00
375,000
20/12/2021
31/12/2025
$0.00
375,000
750,000
In addition, 1,800,000 performance rights were issued to other executives who are not KMPs, refer to note 38 to the financial
statements for further details.
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in
any share issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Atturra Limited issued on the exercise of options during the year ended 30 June 2022 and
up to the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of Atturra Limited issued on the exercise of performance rights during the year ended 30
June 2022 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a Director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
Atturra Annual Report 2022
26
Directors’ Report
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
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
There were no non-audit services provided during the financial year by the auditor.
Officers of the Company who are former partners of PricewaterhouseCoopers
There are no officers of the Company who are former partners of PricewaterhouseCoopers.
Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
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.
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
___________________________
Shan Kanji
Chairman
30 August 2022
Auditor’s independence declaration
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Atturra Limited for the year ended 30 June 2022, I declare that to the
best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Atturra Limited and the entities it controlled during the period.
Paddy Carney
Sydney
Partner
PricewaterhouseCoopers
30 August 2022
Atturra Annual Report 2022
27
Contents
Consolidated statement of profit or loss
and other comprehensive income
27
Consolidated statement of financial position
28
Consolidated statement of changes in equity
29
Consolidated statement of cash flows
30
Notes to the consolidated financial statements
31
Directors’ declaration
73
Independent auditor’s report
74
Shareholder information
76
FY22
Financial
Report
Atturra Annual Report 2022
28
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2022
Atturra Annual Report 2022
29
Consolidated
Note
30 June 2022 30 June 2021
$'000
$'000
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
19
Revenue
Revenue from contracts with customers
4
134,579
98,340
Cost of providing services
(88,210)
(68,773)
Gross profit
46,369
29,567
Share of profits of associates accounted for using the equity method
106
71
Other income
5
6
2,653
Interest revenue calculated using the effective interest method
10
4
Expenses
General and administrative expenses
6
(32,533)
(22,154)
Sales and marketing expenses
(1,147)
(550)
Impairment of receivables
9
(446)
-
Finance costs
6
(499)
(102)
Profit before income tax expense
11,866
9,489
Income tax expense
7
(3,781)
(1,925)
Profit after income tax expense for the year
8,085
7,564
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year
8,085
7,564
Profit for the year is attributable to:
Non-controlling interest
861
1,076
Owners of Atturra Limited
7,224
6,488
8,085
7,564
Total comprehensive income for the year is attributable to:
Non-controlling interest, net of dividends and decrease in shareholding
861
1,076
Owners of Atturra Limited
7,224
6,488
8,085
7,564
Cents
Cents
Basic earnings per share
37
4.12
4.86
Diluted earnings per share
37
4.11
4.86
Consolidated statement of financial position
As at30 June 2022
Atturra Annual Report 2022
30
Consolidated
Note
30 June 2022 30 June 2021
$'000
$'000
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
Assets
Current assets
Cash and cash equivalents
8
35,130
17,328
Trade and other receivables
9
32,840
22,732
Contract assets
10
420
294
Other current assets
11
2,719
469
Total current assets
71,109
40,823
Non-current assets
Trade and other receivables
9
-
103
Investments accounted for using the equity method
12
1,365
497
Property, plant and equipment
141
281
Right-of-use assets
13
5,887
3,275
Intangible assets
14
30,746
8,102
Deferred tax asset
7
6,635
4,033
Total non-current assets
44,774
16,291
Total assets
115,883
57,114
Liabilities
Current liabilities
Trade and other payables
15
35,945
23,466
Contract liabilities
16
5,712
3,353
Borrowings
17
1,000
257
Lease liabilities
18
1,199
711
Income tax payable
7
3,532
3,010
Employee benefits
19
6,339
4,736
Onerous contract provision
20
-
1,416
Other liabilities
21
4,063
1,820
Total current liabilities
57,790
38,769
Non-current liabilities
Borrowings
17
3,750
1,750
Lease liabilities
18
4,947
2,340
Employee benefits
19
766
852
Other liabilities
21
6,226
1,218
Total non-current liabilities
15,689
6,160
Total liabilities
73,479
44,929
Net assets
42,404
12,185
Equity
Issued capital
22
52,312
25,908
Reserves
23
(11,762)
(8,583)
Retained earnings/(accumulated losses)
1,120
(5,927)
Equity attributable to the owners of Atturra Limited
41,670
11,398
Non-controlling interest, net of dividends and decrease in shareholding
734
787
Total equity
42,404
12,185
Consolidated statement of changes in equity
For the year ended 30 June 2022
Atturra Annual Report 2022
31
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
Issued
Accumulated
Non-
controlling
capital
Reserves
losses
interest
Total equity
Consolidated
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2020
21,381
(6,084)
(5,915)
618
10,000
Profit after income tax expense for the year
-
-
6,488
1,076
7,564
Other comprehensive income for the year, net
of tax
-
-
-
-
-
Total comprehensive income for the year
-
-
6,488
1,076
7,564
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 22)
4,527
-
-
-
4,527
Share-based payments (note 38)
-
806
-
-
806
Transactions with non-controlling interests
-
(3,305)
-
(907)
(4,212)
Dividends paid (note 24)
-
-
(6,500)
-
(6,500)
Balance at 30 June 2021
25,908
(8,583)
(5,927)
787
12,185
Issued
Accumulated
Non-
controlling
capital
Reserves
losses
interest
Total equity
Consolidated
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2021
25,908
(8,583)
(5,927)
787
12,185
Profit after income tax expense for the year
-
-
7,224
861
8,085
Other comprehensive income for the year, net
of tax
-
-
-
-
-
Total comprehensive income for the year
-
-
7,224
861
8,085
Transactions with owners in their capacity as
owners:
Issue of shares in share swap acquisition -
Noetic
2,837
-
-
-
2,837
Issue of shares in IPO
24,000
-
-
-
24,000
Share issue costs in IPO, net of tax
(2,144)
-
-
-
(2,144)
Transfer from share-based payment reserve to
share capital (note 23)
806
(806)
-
-
-
Share-based payments - Stephen Kowal (note
38)
548
-
-
-
548
Issue of shares under ESS - share-based
payments (note 38)
357
-
-
-
357
Share-based payments - Long-Term Incentive
Plan (note 38)
-
129
-
-
129
Transactions with non-controlling interests
(note 23)
-
(2,502)
(177)
(235)
(2,914)
Dividends paid
-
-
-
(679)
(679)
Balance at 30 June 2022
52,312
(11,762)
1,120
734
42,404
Consolidated statement of cash flows
For the year ended 30 June 2022
Atturra Annual Report 2022
32
Consolidated
Note
30 June 2022 30 June 2021
$'000
$'000
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
Cash flows from operating activities
Receipts from customers (inclusive of GST)
124,048
105,937
Payments to suppliers and employees (inclusive of GST)
(108,205)
(86,519)
15,843
19,418
Interest received
10
4
Interest and other finance costs paid
(499)
(102)
Income taxes paid
(5,184)
(1,798)
Net cash from operating activities
36
10,170
17,522
Cash flows from investing activities
Payments for purchase of subsidiaries, net of cash acquired
33
(13,658)
(965)
Payments for investments
(762)
-
Payments for property, plant and equipment
(19)
(75)
Payments for intangibles
14
(19)
-
Proceeds from disposal of property, plant and equipment
-
14
Net cash used in investing activities
(14,458)
(1,026)
Cash flows from financing activities
Proceeds from issue of shares, net of costs
20,975
175
Repayments of borrowings
(154)
(1,826)
Proceeds of loans from related parties
3,000
1,750
Proceeds from borrowings from third parties
-
107
Repayments of lease liabilities
(1,052)
(1,505)
Transactions with non-controlling interests
-
(168)
Dividends paid
24
(679)
(6,500)
Net cash from/(used in) financing activities
22,090
(7,967)
Net increase in cash and cash equivalents
17,802
8,529
Cash and cash equivalents at the beginning of the financial year
17,328
8,799
Cash and cash equivalents at the end of the financial year
8
35,130
17,328
Contents
Note 1. Significant accounting policies
34
Note 2. Critical accounting judgements, estimates and assumptions
44
Note 3. Operating segments
45
Note 4. Revenue from contracts with customers
45
Note 5. Other income
46
Note 6. Expenses
47
Note 7. Income tax
48
Note 8. Cash and cash equivalents
49
Note 9. Trade and other receivables
50
Note 10. Contract assets
50
Note 11. Other current assets
51
Note 12. Investments accounted for using the equity method
51
Note 13. Right-of-use assets
51
Note 14. Intangible assets
52
Note 15. Trade and other payables
54
Note 16. Contract liabilities
54
Note 17. Borrowings
54
Note 18. Lease liabilities
55
Note 19. Employee benefits
55
Note 20. Onerous contract provision
56
Note 21. Other liabilities
56
Note 22. Issued capital
57
Note 23. Reserves
58
Note 24. Dividends
58
Note 25. Financial instruments
59
Note 26. Fair value measurement
60
Note 27. Key management personnel disclosures
62
Note 28. Remuneration of auditors
62
Note 29. Contingent liabilities
63
Note 30. Commitments
63
Note 31. Related party transactions
63
Note 32. Parent entity information
64
Note 33. Business combinations
65
Note 34. Interests in subsidiaries
68
Note 35. Interests in associates
70
Note 36. Reconciliation of profit after income tax to net cash from operating activities
71
Note 37. Earnings per share
72
Note 38. Share-based payments
73
Note 39. Events after the reporting period
74
Note 40. General information
74
Notes to the Condolidated Financial Statements
30 June 2022
Atturra Annual Report 2022
33
Atturra Annual Report 2022
34
Notes to the Condolidated Financial Statements
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Atturra Limited (the 'Company') was incorporated on 20 October 2021 and became the parent company of Atturra Holdings
Pty Limited in a restructure where existing shareholders exchanged their shares in Atturra Holdings Pty Limited for shares in
the Company. Prior to the restructure, Atturra Holdings Pty Limited was the parent company of the Group.
The restructure has been accounted for as a capital reorganisation and did not result in a business combination for accounting
purposes. Financial information of the Company has been presented as a continuation of Atturra Holdings Pty Limited.
Accordingly, the assets and liabilities continued to be recorded at their existing values in the Statement of financial position.
In addition, the Statement of financial performance for Atturra Limited is a continuation of the existing Statement of financial
performance for Atturra Holdings Pty Limited. Prior period financial information within this report represents the consolidated
historical financial information for Atturra Holdings Pty Limited.
On 20 December 2021, Atturra Limited, issued shares exclusively to the existing shareholders of Atturra Holdings Pty Ltd.
All 151,836,449 shares held by the shareholders of Atturra Holdings Pty Ltd were transferred to Atturra Limited. Atturra
Limited subsequently purchased 1,559,080 shares from a retiring shareholder, reducing issued capital to 150,277,369
shares. On listing, Atturra Limited issued 49,559,080 ordinary Atturra Limited shares as part of the initial public offering
process and 714,000 shares to eligible employees under the Exempt Employee Share Plan. This resulted in 200,550,449
shares being on issue.
Comparative figures
Comparatives have been realigned where necessary, to be consistent with current year presentation. There was no effect
on profit, net assets, or equity.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other
comprehensive income, investment properties, certain classes of property, plant and equipment, contingent consideration
payable in a business combination, and derivative financial instruments.
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 32.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Atturra Limited ('Company'
or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the year then ended. Atturra Limited and its
subsidiaries together are referred to in these financial statements as the 'Group'.
Atturra Annual Report 2022
35
Note 1. Significant accounting policies (continued)
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest, net of dividends and decrease in shareholding
acquired is recognised directly in equity attributable to the parent.
Non-controlling interest, net of dividends and decrease in shareholding in the results and equity of subsidiaries are shown
separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement
of changes in equity of the Group. Losses incurred by the Group are attributed to the non-controlling interest, net of dividends
and decrease in shareholding in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest, net of dividends and decrease in shareholding in the subsidiary together with any cumulative translation differences
recognised in equity. The Group recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Atturra Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised. The majority of customer payment terms are between 30 and 60 days.
The Group recognises revenue for its major business activities as follows:
Atturra Annual Report 2022
36
Notes to the Condolidated Financial Statements
Note 1. Significant accounting policies (continued)
Project revenue - time and materials agreements
Where the Group provides services charged on the basis of time and materials, revenue is recognised over time when the
services are rendered, and costs are incurred. If services have not been invoiced at reporting date but are billable by the
Group, an amount is recorded as Accounts Receivable.
Project revenue - fixed price agreements
Where the Group provides services under a fixed price agreement the performance obligation is completed over time and
hence an output method based on percentage-of-completion is applied to recognise revenue. When the outcome of a fixed
price agreement can be measured reliably, revenue is recognised over time based on the proportion of work performed to
date relative to the total contract. When the outcome of a fixed price agreement cannot be measured reliably, revenue is
recognised only to the extent the costs incurred under the contract are expected to be recoverable. The Group has adopted
the practical expedient requirements of AASB15 (121(a)), where the performance obligations contained in the project have
an original expected duration of one year or less.
Software licensing
Software licencing revenue includes commission received as an agent for selling software licences of other software
providers. Revenue is recognised at a point in time when the software licence is sold to the customer.
Software maintenance and managed services
Software maintenance and managed services revenue is recognised over time, evenly over the life of the relevant contracts
in line with the delivery of services.
Management fee revenue
One of the Group’s entities, SME Gateway, recognises revenue based on a percentage of amounts billed to the end
customer, rather than the full amount, as SME Gateway is considered to be an agent arranging for the member companies
to provide services to the end customer. As SME Gateway is only entitled to the management fee when an amount is invoiced
to the end customer, this consideration is therefore variable, depending on the invoiced amounts of services delivered.
Revenue is recognised at a point in time to the extent that future reversal is not highly probable, which is usually once the
services have been delivered.
Other revenue
Other revenue mainly includes membership fees, income from security clearance and partner incentive income. Membership
fees are recognised evenly over the life of the relevant contracts in line with delivery of services. Revenue from security
clearances and partner incentive income is recognised at a point in time when the performance obligation is completed and
control passes to the customer.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Government grants
Grants from the government are recognised at their fair value when there is reasonable assurance that the grant will be
received and the Group will comply with all attached conditions. Government grants relating to costs are deferred and
recognised in profit or loss over the periods necessary to match them with the costs that they are intended to compensate.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Atturra Annual Report 2022
37
Note 1. Significant accounting policies (continued)
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, 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 assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
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.
Effective 1 January 2022, Atturra Limited (the 'head entity') and its wholly-owned Australian subsidiaries formed an income
tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group
continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate
taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes 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.
Atturra Annual Report 2022
38
Notes to the Condolidated Financial Statements
Note 1. Significant accounting policies (continued)
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 allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is
yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the
associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in
the Group's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from associates
reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured
long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and recognises
any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained
investment and proceeds from disposal is recognised in profit or loss.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, its carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely payments of principal and interest.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised
cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's
assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly
since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to
obtain.
This page has been left blank intentionally.
Atturra Annual Report 2022
39
Note 1. Significant accounting policies (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is
recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss
allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Leasehold improvements
5 to 7 years
Plant and equipment
3 to 5 years
Fixtures and fittings
4 to 6 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
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.
Intangible assets
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.
Atturra Annual Report 2022
40
Notes to the Condolidated Financial Statements
Note 1. Significant accounting policies (continued)
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Software
Costs associated with maintaining software programmes are recognised as an expense as incurred. Development costs that
are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are
recognised as intangible assets where the following criteria are met:
●
it is technically feasible to complete the software so that it will be available for use;
●
management intends to complete the software and use or sell it;
●
there is an ability to use or sell the software;
●
it can be demonstrated how the software will generate probable future economic benefits;
●
adequate technical, financial and other resources to complete the development and to use or sell the software are
available; and
●
the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate portion of
relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready
for use.
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 5 years.
Software-as-a-Service ('SaaS') arrangements are service contracts providing the Company with the right to access a cloud
provider’s application software over a period of time. Under the IFRIC treatment, SaaS costs are only recognised as intangible
assets if the implementation activities create an intangible asset that the entity controls and the intangible asset meets the
recognition criteria. Costs that do not result in intangible assets are expensed as incurred, unless they are paid to the
suppliers of the SaaS arrangement to significantly customise the cloud-based software for the company, in which case the
costs are recorded as a prepayment for services and amortised over the expected renewable term of the arrangement.
Impairment of non-financial assets
Goodwill is 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. Other non-financial assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's 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.
Trade and other payables
Trade and other payables 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.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Atturra Annual Report 2022
41
Note 1. Significant accounting policies (continued)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
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.
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 that reflects the current market assessments of the
time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is
recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, and annual 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 long service leave not expected to be settled wholly within 12 months of the reporting date are measured at
the present value of expected future payments to be made in respect of services provided by employees up to the reporting
date. 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 high quality corporate bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees. The Long-Term Incentive ('LTI') plan is for
executives and directors and the Exempt Employee Share ('ESS") plan is for all other eligible employees.
Equity-settled transactions are awards of shares, options or performance rights over shares, that are provided to employees
in exchange for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
Atturra Annual Report 2022
42
Notes to the Condolidated Financial Statements
Note 1. Significant accounting policies (continued)
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Fair value measurement
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity. For Group purposes, the share capital after the reorganisation is presented at
the carried forward original parent share capital.
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.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Business combinations
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 is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the Group to former owners of the acquiree and the amount of any non-controlling interest,
net of dividends and decrease in shareholding in the acquiree. For each business combination, the non-controlling interest,
net of dividends and decrease in shareholding in the acquiree is measured at either fair value or at the proportionate share
of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Atturra Annual Report 2022
43
Note 1. Significant accounting policies (continued)
Contingent consideration to be transferred by the Group is recognised at the acquisition-date fair value. Subsequent changes
in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest,
net of dividends and decrease in shareholding in the acquiree and the fair value of the consideration transferred and the fair
value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-
existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the Group,
the difference is recognised as a gain directly in profit or loss by the Group on the acquisition-date, but only after a
reassessment of the identification and measurement of the net assets acquired, the non-controlling interest, net of dividends
and decrease in shareholding in the acquiree, if any, the consideration transferred and the Group's previously held equity
interest in the acquiree.
Business combinations are initially accounted for on a provisional basis. The Group retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the Group receives all the information
possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Atturra Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of additional ordinary shares that would have been outstanding assuming conversion of all dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Atturra Annual Report 2022
44
Notes to the Condolidated Financial Statements
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The accounting estimates and assumptions relating to equity-settled share-
based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting
period but may impact profit or loss and equity.
Principal versus agent considerations - revenue
Management has determined that SME Gateway Pty Limited ('SME') is the agent in respect of transactions with its customers.
This determination has been made on the basis that SME does not bear primary responsibility for service delivery to the
customer. This is a key judgment given it significantly reduces the amount of revenue recognised by the Group.
Software licencing revenue includes commission received as an agent for selling software licences of other software
providers.
Goodwill
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
has suffered any impairment, in accordance with the accounting policy stated in note 1. 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.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the Group's operations; comparison of terms and conditions to
prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs
and disruption to replace the asset. The Group reassesses whether it is reasonably certain to exercise an extension option,
or not exercise a termination option, if there is a significant event or significant change in circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is
based on what the Group estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a
similar value to the right-of-use asset, with similar terms, security and economic environment.
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
Onerous contract provision
An onerous contract is considered to exist where the company has a contract under which the unavoidable cost of meeting
the contractual obligations exceed the economic benefits estimated to be received. Present obligations arising under onerous
contracts are recognised as a provision to the extent that the present obligation exceeds the economic benefits estimated to
be received.
Atturra Annual Report 2022
45
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Business combinations
As discussed in note 1, business combinations are initially accounted for on a provisional basis. The fair value of assets
acquired, liabilities, contingent consideration and contingent liabilities assumed are initially estimated by the Group taking
into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business
combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact
on the assets and liabilities, depreciation and amortisation reported.
Note 3. Operating segments
Identification of reportable operating segments
The Group is organised into one operating and reporting segment based on the market it serves which is Australia. This
operating segment is based on the internal reports that are reviewed and used by the Board (which is identified as the Chief
Operating Decision Maker (‘CODM’)) in assessing performance and in determining the allocation of resources.
Upon becoming a listed entity, the CODM now reviews underlying EBIT (earnings before interest, tax) for the reportable
segment’s measure of profit or loss. In the comparative period the CODM reviewed the reportable segment’s share of
statutory profit or loss before tax. The accounting policies adopted for internal reporting to the CODM are consistent with
those adopted in the financial statements.
The information reported to the CODM is on a monthly basis. Refer to note 4 for revenue from products and services.
Major customers
During the year ended 30 June 2022 and 30 June 2021, no single customer contributed to more than 10% of the Group's
total revenue.
Note 4. Revenue from contracts with customers
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Time and materials agreements
89,583
75,097
Fixed price agreements
38,484
20,222
Software licencing
1,021
926
Software maintenance and managed services
3,922
1,209
Other revenue
1,569
886
Revenue from contracts with customers
134,579
98,340
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Software
maintenance
Time and
materials
Fixed price
Software
licensing
and
managed
services
Management
fee
Others
Total
2022
$'000
$'000
$'000
$'000
$'000
$'000
Timing of revenue
recognition
At a point in time
-
-
1,021
-
2,451
1,569
5,041
Over time
89,583
38,484
-
1,471
-
-
129,538
89,583
38,484
1,021
1,471
2,451
1,569
134,579
Atturra Annual Report 2022
46
Notes to the Condolidated Financial Statements
Note 4. Revenue from contracts with customers (continued)
Software
maintenance
Time and
materials
Fixed price
Software
licensing
and
managed
services
Management
fee
Others
Total
2021
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Timing of revenue
recognition
At a point in time
-
-
329
-
4,565
572
5,466
Over time
71,397
19,357
-
1,806
-
314
92,874
71,397
19,357
329
1,806
4,565
886
98,340
Note 5. Other income
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Net gain on disposal of property, plant and equipment
-
22
Government grants
-
2,631
Other
6
-
Other income
6
2,653
Atturra Annual Report 2022
47
Note 6. Expenses
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
7
24
Plant and equipment
110
158
Fixtures and fittings
42
79
Buildings right-of-use assets
1,135
1,122
Total depreciation
1,294
1,383
Amortisation
Make good
-
100
Software
36
153
Total amortisation
36
253
Total depreciation and amortisation
1,330
1,636
Finance costs
Interest and finance charges paid/payable on borrowings
363
-
Interest and finance charges paid/payable on lease liabilities
136
102
Finance costs expensed
499
102
Net foreign exchange loss
Net foreign exchange loss
4
-
Leases
Short-term lease payments
87
167
Superannuation expense
Defined contribution superannuation expense
1,345
1,022
Share-based payments expense
Share-based payments expense
1,034
806
Employee benefits expense excluding superannuation
Employee benefits expense excluding superannuation
18,713
14,797
Atturra Annual Report 2022
48
Notes to the Condolidated Financial Statements
Note 7. Income tax
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Income tax expense
Current tax
5,500
3,632
Deferred tax - origination and reversal of temporary differences
(1,719)
(1,707)
Aggregate income tax expense
3,781
1,925
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
11,866
9,489
Tax at the statutory tax rate of 30%
3,560
2,847
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
148
35
Share-based payments
310
-
Revaluation of Noetic contingent consideration
239
-
Deductible IPO costs recognised through equity
(169)
-
Prior year over provision and recognition of tax losses not previously recognised
(167)
-
Sundry items
(140)
104
3,781
2,986
Tax losses not recognised as deferred tax assets
-
71
Previously unrecognised tax losses now recouped to reduce current tax expense
-
(1,132)
Income tax expense
3,781
1,925
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Amounts credited directly to equity
Deferred tax assets
(677)
-
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
-
238
Potential tax benefit @ 30%
-
71
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses
can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.
Atturra Annual Report 2022
49
Note 7. Income tax (continued)
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
982
809
Employee benefits
4,139
2,574
Lease liabilities
1,843
915
Accrued expenses
827
347
Other
279
423
Prepayments
-
(84)
Right of use assets
(1,766)
(863)
Accrued income
(346)
(88)
5,958
4,033
Amounts recognised in equity:
Capital raising costs
677
-
Deferred tax asset
6,635
4,033
Amount expected to be recovered within 12 months
2,156
1,375
Amount expected to be recovered after more than 12 months
4,479
2,658
6,635
4,033
Movements:
Opening balance
4,033
2,116
Credited to profit or loss
1,719
882
Credited to equity
677
-
Additions through business combinations
206
1,035
Closing balance
6,635
4,033
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Provision for income tax
Provision for income tax
3,532
3,010
Note 8. Cash and cash equivalents
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current assets
Cash at bank
35,130
17,328
Atturra Annual Report 2022
50
Notes to the Condolidated Financial Statements
Note 9. Trade and other receivables
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current assets
Trade receivables
32,065
22,714
Less: Allowance for expected credit losses
(446)
-
31,619
22,714
Other receivables *
1,221
18
32,840
22,732
Non-current assets
Loans to related parties
-
95
Loans to third parties
-
8
-
103
32,840
22,835
*$1,007,000 of other receivables relates to unbilled receivables for services completed as at 30/06/2022. (30/06/2021: Nil)
Allowance for expected credit losses
The Group has recognised a loss of $ 446,000 (2021: $nil) in profit or loss in respect of the expected credit losses for the
year ended 30 June 2022.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
30 June 2022 30 June 2021 30 June 2022 30 June 2021 30 June 2022 30 June 2021
Consolidated
%
%
$'000
$'000
$'000
$'000
Current
-
-
16,490
12,708
-
-
More than 30 days past due
-
-
11,184
7,451
-
-
More than 60 days past due
-
-
643
451
-
-
More than 90 days past due
-
-
2,232
1,332
-
-
More than 120 days past due
29.00%
-
1,516
772
446
-
32,065
22,714
446
-
The Group considers that the balance of trade receivables, despite some being past-due, relate to customers that have a
good credit history. Accordingly, based on historical default rates, the Group believes no further impairment is required.
Note 10. Contract assets
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current assets
Contract assets
420
294
Atturra Annual Report 2022
51
Consolidated
30 June 2022 30 June 2021
$'000
$'000
1,524
360
671
109
524
-
2,719
469
Consolidated
30 June 2022 30 June 2021
$'000
$'000
1,365
497
497
217
106
280
762
-
1,365
497
Consolidated
30 June 2022 30 June 2021
$'000
$'000
7,903
5,345
Note 11. Other current assets
Current assets
Prepayments
Deposits
Other
Note 12. Investments accounted for using the equity method
Non-current assets
Investment in associate Protegic Pty Ltd
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current and previous
financial year are set out below:
Opening carrying amount
Share of associates earnings
Additions
Closing carrying amount
Refer to note 35 for further information on interests in associates.
Note 13. Right-of-use assets
Non-current assets
Buildings - right-of-use
Less: Accumulated depreciation
(2,016)
(2,070)
5,887
3,275
The Group leases buildings for its offices under agreements between one month and seven years with, in some cases,
options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
The Group leases office equipment under agreements of less than one year. These leases are either short-term or low-value,
so have been expensed as incurred and not capitalised as right-of-use assets.
Atturra Annual Report 2022
52
Notes to the Condolidated Financial Statements
Note 13. Right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Buildings
Consolidated
$'000
Balance at 1 July 2020
4,047
Additions
400
Disposals
(7)
Depreciation expense
(1,165)
Balance at 30 June 2021
3,275
Additions
4,652
Disposals
(905)
Depreciation expense
(1,135)
Balance at 30 June 2022
5,887
For other lease disclosures refer to:
●
note 6 for depreciation on right-of-use assets, interest on lease liabilities and other lease expenses;
●
note 18 for lease liabilities; and
●
statement of cash flows for repayment of lease liabilities.
Note 14. Intangible assets
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Non-current assets
Goodwill - at cost
30,715
8,054
Software - at cost
1,792
1,773
Less: Accumulated amortisation
(1,761)
(1,725)
31
48
30,746
8,102
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Goodwill
Software
Total
Consolidated
$'000
$'000
$'000
Balance at 1 July 2020
2,564
171
2,735
Additions through business combinations (note 33)
5,490
30
5,520
Amortisation expense
-
(153)
(153)
Balance at 30 June 2021
8,054
48
8,102
Additions
-
19
19
Additions through business combinations (note 33)
22,661
-
22,661
Amortisation expense
-
(36)
(36)
Balance at 30 June 2022
30,715
31
30,746
Atturra Annual Report 2022
53
Note 14. Intangible assets (continued)
Impairment testing
A cash-generating unit (CGU) is the smallest identifiable group of assets that generate cash inflows that are largely
independent of the cash inflows from other assets or group of assets. Goodwill acquired through business combinations has
been allocated to the following CGUs:
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Galaxy 42
8,563
3,666
Noetic
4,388
4,388
Mentum
3,903
-
Hayes Information systems
13,861
-
30,715
8,054
At 30 June 2022 management performed impairment testing for each CGU of Atturra where there is goodwill. No impairment
losses were identified at 30 June 2022.
Key assumptions
●
Revenue growth is based on the Board approved budget for the next financial year (FY23) as well as management
assessment over the forecast period (FY24 to FY27). Budget revenue for 2023 is based on management expectations
and the average annual revenue growth thereafter, for the purpose of impairment testing, is assumed to be maintained
at 5% p.a. over the remaining forecast period for all CGUs.
●
EBIT margins are based on the Board approved budget for the next financial year and management assessment over
the forecast period. The EBIT margin ratio shows EBIT as a percentage of net revenue. For the purpose of impairment
testing, this is assumed to be maintained between 8% and 13% over the forecast period.
●
Discount rates represent the current market assessment of the risks specific to the Group, considering the time value
of money and specific risk of the underlying assets that have not been incorporated into the cash flow estimates. The
discount rate is calculated using the weighted average cost of capital (WACC) and reflects management’s estimation
of the time value of money and specific risk estimated for the Group. The WACC considers both debt and equity. The
cost of equity is derived from the expected return on investment by the Group’s investors. It incorporates a beta factor
to reflect the specific risk associated with the industries in which the Group operates. The cost of debt is based on the
interest-bearing borrowings the Group is obliged to service. Management utilised a pre-tax discount rate of 18.57%
(13% post tax) (2021: 16.80% (12% post tax).
●
It is assumed for the purpose of impairment testing that the long-term growth rate (terminal rate) will equate to the long-
term average growth rate of the national economy. Management estimate this to be 2.5% p.a. which is in line with the
long-term expected Australian inflation rate. The sensitivity analysis concluded that changing this rate to reflect possible
lower growth projections would not materially impact the valuations of the individual CGUs.
As disclosed in note 2, the directors have made judgements and estimates in respect of impairment testing of goodwill.
Should these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The sensitivities
are as follows:
●
The EBIT margin would need to decrease by more than 4% for the Mentum CGU before goodwill would need to be
impaired, with all other assumptions remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of the CGUs'
goodwill is based would not cause the cash-generating unit’s carrying amount to exceed its recoverable amount.
Atturra Annual Report 2022
54
Notes to the Condolidated Financial Statements
Note 15. Trade and other payables
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current liabilities
Trade payables
18,055
11,951
Accrued expenses
2,447
1,892
Accrued staff bonuses
6,725
3,620
Payroll tax and PAYG payable
2,429
1,737
GST payable
2,903
2,231
Other payables
3,386
2,035
35,945
23,466
Refer to note 25 for further information on financial instruments.
Note 16. Contract liabilities
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current liabilities
Contract liabilities
5,712
3,353
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below:
Opening balance
3,353
697
Payments received in advance
10,229
9,048
Additions through business combinations (note 33)
2,265
157
Transfer to revenue
(10,135)
(6,549)
Closing balance
5,712
3,353
Note 17. Borrowings
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current liabilities
Loan from third parties
-
25
Loan from other shareholders
-
232
Loan from related party (263 Finance Pty Ltd)
1,000
-
1,000
257
Non-current liabilities
Loan from related party (263 Finance Pty Ltd)
3,750
1,750
4,750
2,007
Refer to note 25 for further information on financial instruments.
Atturra Annual Report 2022
55
Note 17. Borrowings (continued)
* The loan from related party (263 Finance Pty Ltd) has annual repayments of $1,000,000 each year starting in January 2022
with a final repayment date in January 2024 and has an interest of BBSY + 1% Interest + 2.5% Line Fee.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Total facilities
Loan from related party (263 Finance Pty Ltd)
4,750
5,750
Used at the reporting date
Loan from related party (263 Finance Pty Ltd)
4,750
1,750
Unused at the reporting date
Loan from related party (263 Finance Pty Ltd)
-
4,000
Note 18. Lease liabilities
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current liabilities
Lease liability
1,199
711
Non-current liabilities
Lease liability
4,947
2,340
6,146
3,051
Refer to note 25 for the maturity analysis of lease liabilities.
Note 19. Employee benefits
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current liabilities
Annual leave
4,772
3,783
Long service leave
1,567
953
6,339
4,736
Non-current liabilities
Long service leave
766
852
7,105
5,588
Atturra Annual Report 2022
56
Notes to the Condolidated Financial Statements
Note 19. Employee benefits (continued)
Amounts not expected to be settled within the next 12 months
The leave obligations cover the Group's liability for long service leave and annual leave. The current portion of this liability
includes all of the accrued annual leave, the unconditional entitlements to long service leave where employees have
completed the required year of service and also for those employees who are entitled to pro-rata payments in certain
circumstances. The entire amount is presented as current, since the Group does not have an unconditional right to defer
settlement. However, based on past experience, the Group does not expect all employees to take the full amount of accrued
leave or require payment within the next 12 months. Management estimates that 40% (2021: 40%) of the current leave
obligations is considered as to be paid within 12 months and 60% (2021: 60%) to be paid beyond 12 months.
The following amounts reflect leave presented as current but it is not expected to be taken within the next 12 months:
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Employee benefits obligation expected to be settled after 12 months
3,803
2,874
Note 20. Onerous contract provision
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current liabilities
Onerous Contracts
-
1,416
Movements in provisions
Movements in the onerous contract provision during the current year are set out below:
Consolidated - 30 June 2022
$'000
Carrying amount at the start of the year
1,416
Amounts used
(1,416)
Carrying amount at the end of the year
-
Note 21. Other liabilities
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Current liabilities
Contingent consideration
4,063
1,820
Non-current liabilities
Contingent consideration
6,226
1,218
10,289
3,038
Contingent consideration payable relates to the acquisition of subsidiaries. Refer to note 26 and note 33 for further details.
Atturra Annual Report 2022
57
Note 22. Issued capital
Consolidated
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
200,550,449
145,065,427
52,312
25,908
Note: All issued ordinary shares are fully paid.
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance *
1 July 2021
145,065,427
25,908
Transfer from share based-payment reserve to share
capital
1 July 2021
806
Share based payments - Stephen Kowal
13 October 2021
1,096,212
$0.50
548
Issue of shares in share swap acquisition - Noetic
21 October 2021
5,674,810
$0.50
2,837
Share repurchase
17 December 2021
(1,559,080)
$0.50
(780)
Issue of shares in IPO
22 December 2021
49,559,080
$0.50
24,780
Issue of shares under ESS - share-based payments
22 December 2021
714,000
$0.50
357
Share issue costs, net of tax
(2,144)
Balance
30 June 2022
200,550,449
52,312
* For Group purposes, the share capital after the reorganisation is presented at the carried forward original parent share
capital.
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders
should the Company be wound up, in proportions that consider both the number of shares held and the extent to which those
shares are paid up. The fully paid ordinary shares have no par value and the Company does not have a limited amount of
authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 2021 Annual Report.
Atturra Annual Report 2022
58
Notes to the Condolidated Financial Statements
Note 23. Reserves
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Share-based payments reserve
129
806
Transactions with non-controlling interests
(11,891)
(9,389)
(11,762)
(8,583)
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their
remuneration, and other parties as part of their compensation for services. Transfers are made to Share Capital when the
awards have vested and are exercised.
Transactions with non-controlling interests
This reserve is used to record the differences between the amount of the adjustment to non-controlling interests and any
consideration paid or received which may arise as a result of transactions with non-controlling interests that do not result in
a loss of control.
On 21 October 2021, Atturra Holdings Pty Ltd entered into a share sale agreement to acquire a further 25% of Noetic Group
Pty Ltd for $2.8M. Post the increase in shareholding, Atturra Holdings Pty Ltd holds 80.04% of the shares on issue of Noetic
Group Pty Ltd. The acquisition was settled by issuing 5,674,810 Atturra shares at $0.50 each.
Movements in reserves
Movements in each class of reserve during the current financial year are set out below:
Share-based
Transactions
with non-
controlling
payment
interest
Total
Consolidated
$'000
$'000
$'000
Balance at 1 July 2021
806
(9,389)
(8,583)
Share-based payment expense (note 38)
129
-
129
Reclassification to share capital
(806)
-
(806)
Transactions with non-controlling interests
-
(2,502)
(2,502)
Balance at 30 June 2022
129
(11,891)
(11,762)
Note 24. Dividends
During the year, an interim dividend of $679,000 was paid to the minority shareholder of Noetic Group Pty Ltd, a subsidiary
of the Company, with the remainder being paid to Atturra that was eliminated on consolidation. No other dividend was paid,
recommended, or declared during the current financial year. In the previous financial year, a dividend of 4.75 cents per
ordinary share (total of $6,500,000) was paid to the shareholders of Atturra Holdings Pty Ltd.
Franking credits
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
10,125
4,294
Atturra Annual Report 2022
59
Note 24. Dividends (continued)
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
●
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
●
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
●
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Note 25. Financial instruments
Financial risk management objectives
The Group’s risk management is predominantly controlled by a central finance department headed by the Group CFO under
the policies approved by the board of directors. Group's finance team identifies, evaluates and hedges financial risks in close
cooperation with the Group’s operating units
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through
foreign exchange rate fluctuations.
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a
currency that is not the Group's functional currency. The groups foreign currency transactions are predominantly payments
to offshore suppliers for invoiced services. Payment terms are typically less than one month and consequently involve
minimal foreign exchange risk. The company had no material supplier or customer contracts that were denominated in foreign
currencies.
As there is minimal exposure, foreign currency risk is not hedged.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the Group
to interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group maintains
minimal long-term borrowings to manage this risk.
The Group's exposure to interest rate risk arises predominantly from assets bearing variable interest rates. As interest income
does not make up the main source of revenue, the management expects no significant interest rate risk on these balances.
Amounts payable to related parties, trade and sundry payables and trade and other receivables are not impacted by
movements in interest rates.
Management believes that the group's overall exposure to interest rate movements is not material.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit, including obtaining agency credit information, confirming references and setting
appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to
credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of
those assets, as disclosed in the statement of financial position and notes to the financial statements. The Group does not
hold any collateral.
Liquidity risk
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.
The responsibility for liquidity risk management rests with the board, who assess the Group's short, medium and long term
funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves,
borrowing facilities and instruments and by continuously monitoring forecast and actual cash flows
Atturra Annual Report 2022
60
Notes to the Condolidated Financial Statements
Note 25. Financial instruments (continued)
Maturities of financial liabilities
The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturities
for all non-derivative financial liabilities.
The amounts 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.
Contractual maturities
of
Carrying
amount
Less than
6
6 - 12
Between 1
and 2
Between 2
and 5
Over 5
Total
contractual
financial liabilities
months
months
years
years
years
cash flows
at 30 June 2022
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade and other
payables
35,945
35,945
-
-
-
-
35,945
Borrowings
4,750
-
1,000
1,000
2,750
-
4,750
Lease liabilities
6,146
299
900
1,231
3,051
665
6,146
Contingent consideration
10,289
4,063
-
3,377
2,849
-
10,289
Total non-derivatives
57,130
40,307
1,900
5,608
8,650
665
57,130
Contractual maturities
of
Carrying
Less than
6
6-12
Between 1
and 2
Between 2
and 5
Over 5
Total
contractual
financial liabilities
amount
months
months
years
years
years
cash flows
at 30 June 2021
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade and other
payables
23,466
23,466
-
-
-
-
23,466
Borrowings
2,007
283
31
62
1,786
-
2,162
Lease liabilities
3,051
488
310
640
1,809
-
3,247
Contingent consideration
3,038
-
1,820
1,218
-
-
3,038
Total non-derivatives
31,562
24,237
2,161
1,920
3,595
-
31,913
Note 26. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
Level 1
Level 2
Level 3
Total
Consolidated - 30 June 2022
$'000
$'000
$'000
$'000
Liabilities
Contingent consideration
-
-
10,289
10,289
Total liabilities
-
-
10,289
10,289
Atturra Annual Report 2022
61
Note 26. Fair value measurement (continued)
Level 1
Level 2
Level 3
Total
Consolidated - 30 June 2021
$'000
$'000
$'000
$'000
Liabilities
Contingent consideration
-
-
3,038
3,038
Total liabilities
-
-
3,038
3,038
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 3
The contingent consideration payable relates to acquisition of subsidiaries, refer to note 33 for further details. The fair value
of the contingent consideration is estimated by calculating the present value of the future expected cash flows. The valuation
model considers the present value of the expected future payments, discounted using a risk-adjusted discount rate.
Fair value at
Relationship of
30 June 2022 30 June 2021 Significant
unobservable inputs
Subsidiary acquired
$'000
$'000
unobservable inputs
to fair value
Noetic Group Pty Ltd
1,935
3,038
Risk-adjusted discount rate
(30 June 2022 - 9%)
The estimated fair value would
increase (decrease) if the risk-
adjusted discount rate were
lower (higher).
Kettering Professional
Services Pty Ltd
1,942
-
Risk-adjusted discount rate
(30 June 2022 - 5%)
The estimated fair value would
increase (decrease) if the risk-
adjusted discount rate were
lower (higher).
Hayes Information Systems
and Communications Pty Ltd
6,412
-
Risk-adjusted discount rate
(30 June 2022 - 5%)
The estimated fair value would
increase (decrease) if the risk-
adjusted discount rate were
lower (higher).
10,289
3,038
Atturra Annual Report 2022
62
Notes to the Condolidated Financial Statements
Note 26. Fair value measurement (continued)
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Contingent
consideration
Consolidated
$'000
Balance at 1 July 2020
-
Transfers into level 3
-
Transfers out level 3
-
Expense recognised in profit or loss
-
Expense recognised in other comprehensive income
-
Additions
3,038
Disposals
-
Balance at 30 June 2021
3,038
Transfers into level 3
-
Transfers out level 3
-
Expense recognised in profit or loss
797
Expense recognised in other comprehensive income
-
Additions
8,354
Disposals
-
Balance at 30 June 2022
12,189
Applying a discount rate range of 5% to 9% across the each of the contingent consideration payments results in a range of
$250,000 to $350,000 of potential movement in contingent consideration.
Note 27. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Consolidated
30 June 2022 30 June 2021
$
$
Short-term employee benefits
1,046,447
835,540
Post-employment benefits
48,628
40,285
Share-based payments
586,663
749,239
Long-term benefits
46,460
15,405
1,728,198
1,640,469
Note 28. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by PricewaterhouseCoopers, the
auditor of the Company, its network firms, and unrelated firms:
Consolidated
30 June 2022 30 June 2021
$
$
Audit services - PricewaterhouseCoopers
Audit or review of the financial statements
401,130
304,950
Atturra Annual Report 2022
63
Note 29. Contingent liabilities
The Group has given bank guarantees as at 30 June 2022 of $525,000 (30 June 2021: $175,000) to various landlords.
Note 30. Commitments
The Group had no capital purchase commitments at 30 June 2022. (30 June 2021:nil).
Note 31. Related party transactions
Parent entity
Atturra Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 34.
Associates
Interests in associates are set out in note 35.
Key management personnel
Disclosures relating to key management personnel are set out in note 27 and the remuneration report included in the
Directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
30 June 2022 30 June 2021
$
$
Sale of goods and services:
Sale of services to other related party
-
99,175
Payment for goods and services:
Payment for services from other related party
96,986
2,632
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
30 June 2022 30 June 2021
$
$
Non-current receivables:
Loans to related parties
-
95,052
Current borrowings:
Loan from related party (263 Finance Pty Ltd)
1,000,000
-
Loan from other shareholders
-
231,703
Non-current borrowings:
Loan from related party (263 Finance Pty Ltd)
3,750,000
1,750,000
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Atturra Annual Report 2022
64
Notes to the Condolidated Financial Statements
Note 32. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
30 June 2022
$'000
Profit after income tax
87
Total comprehensive income
87
Statement of financial position
Parent
30 June 2022
$'000
Total current assets
-
Total assets
104,419
Total current liabilities
3,571
Total non-current liabilities
-
Total liabilities
3,571
Net assets
100,848
Equity
Issued capital
100,275
Share-based payments reserve
486
Retained earnings
87
Total equity
100,848
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022 and 30 June 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the
following:
●
Investments in subsidiaries are accounted for at the fair value of the shares issued during the IPO process, which was
$0.50 per share, less any impairment, in the parent entity.
●
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Atturra Annual Report 2022
65
Note 33. Business combinations
Mentum Systems Pty Ltd
On 12 August 2021, FTS Nominees Pty Ltd, a wholly owned subsidiary of the Company, acquired 100% of the ordinary
shares of Mentum Systems Pty Ltd for the total consideration transferred of $4,100,000. Mentum Systems co-design, deploy
and integrate software solutions as part of a consulting led approach to risk management, governance and assurance. The
goodwill of $3,903,000 represents the expected synergies from the acquisition. The acquired business contributed revenue
of $5,200,000 and profit after tax of $800,000 to the Group from 12 August 2021 to 30 June 2022. If the acquisition occurred
on 1 July 2021, the full year contributions would have been revenue of $5,700,000 and profit after tax of $700,000
respectively. The values identified in relation to the acquisition of Mentum Systems Pty Ltd are final as at 30 June 2022.
Details of the acquisition are as follows:
Fair value
$'000
Cash and cash equivalents
616
Trade and other receivables
318
Other current assets
67
Equipment
12
Trade and other payables
(97)
Provision for income tax
(102)
Other current liabilities
(617)
Net assets acquired
197
Goodwill
3,903
Acquisition-date fair value of the total consideration transferred
4,100
Representing:
Cash paid or payable to vendor
4,100
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
4,100
Less: cash and cash equivalents
(616)
Net cash used
3,484
Kettering Professional Services Pty Ltd
On 17 January 2022, Galaxy 42 Pty Ltd, a wholly owned subsidiary of the Company, entered into a share sale agreement to
acquire 100% of Kettering Professional Services Pty Ltd for $5,250,000, which was successfully completed on 1 March 2022.
$3,000,000 was settled on completion with an earn out consideration of up to $2,250,000 of cash subject to Kettering
achieving performance hurdles on audited EBIT targets for FY22, FY23 and FY24. Kettering is an enterprise resource
planning ('ERP') solutions provider based in Brisbane, Australia which specialises in the implementation, management, and
ongoing support of ERP solutions in the manufacturing sector. The completion payment was settled from internal cash
reserves.
The acquired business contributed revenue of $1,624,000 and profit after tax of $49,000 to the Group from 1 March 2022 to
30 June 2022. If the acquisition occurred on 1 July 2021, the full year contributions would have been revenue of $3,600,000
and profit after tax of $100,000 respectively. The goodwill of $4,898,000 relates predominantly to the key management,
specialised know-how of the workforce, employee relationships, competitive position and service offerings that do not meet
the recognition criteria as an intangible asset at the date of acquisition. The values identified in relation to the acquisition of
Kettering Professional Services Pty Ltd are provisional as at 30 June 2022 as permitted by AASB 3 Business Combinations.
Any true ups required to fair value of assets and liabilities taken on will be reflected as at 31 December 2022.
Atturra Annual Report 2022
66
Notes to the Condolidated Financial Statements
Note 33. Business combinations (continued)
Details of the acquisition are as follows:
Fair value
$'000
Cash and cash equivalents
427
Trade receivables
218
Other current assets
503
Right-of-use assets
64
Trade payables
(134)
Other liabilities
(969)
Lease liability
(65)
Net assets acquired
44
Goodwill
4,898
Acquisition-date fair value of the total consideration transferred
4,942
Representing:
Cash paid or payable to vendor
3,000
Contingent consideration
1,942
4,942
Acquisition costs expensed to profit or loss
-
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
2,946
Less: cash and cash equivalents
(427)
Net cash used
2,519
As part of the accounting for the acquisition of Kettering Professional Services Pty Ltd, the contingent consideration of
$1,942,000 was estimated by calculating the present value of the future expected cash flows. The present value of the
estimate is based on a discount rate of 5.00% and by applying probabilities to the expected future EBIT performance of
Kettering Professional Services Pty Ltd over the earn out period.
Future developments may require further revisions to the estimate. The maximum undiscounted consideration to be paid is
$2,084,000. The contingent consideration is classified as other liabilities (see note 21).
Atturra Annual Report 2022
67
Note 33. Business combinations (continued)
Hayes Information Systems and Communications Pty Ltd
On 10 May 2022, Anatas Pty Ltd, a wholly owned subsidiary of Atturra, entered into a share sale agreement to acquire 100%
of Hayes Information Systems and Communications Pty Ltd for $15,500,000, which was successfully completed on 1 June
2022. $8,500,000 was settled on completion with an earn out consideration of up to $6,982,000 in cash subject to Hayes
achieving performance hurdles based on audited EBIT results for FY22, FY23 and FY24. An additional retention payment of
$1,000,000 is payable to selected Hayes employees. This will be paid between 30 months and 42 months post completion
of the transaction.
Hayes is an award winning OpenText partner which provides information management consultancy, digital transformation
services, and Enterprise Content Management application support services. The completion payment was settled from
internal cash reserves.
The acquired business contributed revenue of $674,000 and profit after tax of $54,000 to the Group from 1 June 2022 to 30
June 2022. If the acquisition occurred on 1 July 2021, the full year contributions would have been revenue of $8.9m and
profit after tax of $1.5m respectively. The goodwill of $13,861,000 relates predominantly to the key management, specialised
know-how of the workforce, employee relationships, competitive position and service offerings that do not meet the
recognition criteria as an intangible asset at the date of acquisition. The values identified in relation to the acquisition of
Hayes Information Systems and Communications Pty Ltd are provisional as at 30 June 2022 as permitted by AASB 3
Business Combinations. Any true ups required to fair value of assets and liabilities taken on will be reflected as at 31
December 2022.
Details of the acquisition are as follows:
Fair value
$'000
Cash and cash equivalents
845
Trade receivables
1,515
Other current assets
695
Right-of-use assets
276
Trade payables
(355)
Other liabilities
(1,618)
Lease liability
(278)
Provision for income tax
(28)
Net assets acquired
1,052
Goodwill
13,861
Acquisition-date fair value of the total consideration transferred
14,913
Representing:
Cash paid or payable to vendor
8,500
Contingent consideration
6,413
14,913
Acquisition costs expensed to profit or loss
106
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
8,500
Less: cash and cash equivalents
(845)
Net cash used
7,655
Atturra Annual Report 2022
68
Notes to the Condolidated Financial Statements
Note 33. Business combinations (continued)
As part of the accounting for the acquisition of Hayes Information Systems and Communications Pty Ltd, the contingent
consideration of $6,413,000, was estimated by calculating the present value of the future expected cash flows. The present
value of the estimate is based on a discount rate of 5.00% and by applying probabilities to expected future EBIT performance
of Hayes Information Systems and Communications over the earn out period.
Future developments may require further revisions to the estimate. The maximum undiscounted consideration to be paid is
$6,805,000. The contingent consideration is classified as other liabilities (see note 21).
Noetic Group Pty Ltd
On 21 October 2021, the Group acquired an additional 25.04% interest in the voting shares of Noetic Group Pty Ltd,
increasing its ownership to 80.04%. The acquisition was settled by issuing 5,674,810 Atturra shares at $0.50 each resulting
in a purchase price for the additional stake of $2,837,000. Following is a schedule of additional interest acquired in Noetic
Group Pty Ltd.
$'000
Issue of Atturra shares to non-controlling shareholders
2,837
Carrying value of additional interests in Noetic Group Pty Ltd
(335)
Difference recognised in Reserves
2,502
The outstanding contingent consideration relating to the initial purchase of 55% of Noetic in February 2021 requires the group
to pay $1,935,000 for performance years from 2022 to 2023, up to a maximum undiscounted amount of $2,100,000. There
is no minimum amount payable.
The fair value of the contingent consideration of $1,935,000 was estimated by calculating the present value of the future
expected cash flows. The change in contingent consideration was determined by assessment of the actual financial
performance of Noetic for FY22 and budgeted financial performance for FY23.
At 30 June 2022, there was an increase of $797,000 recognised in other gains/losses in profit or loss for the contingent
consideration arrangement. $619,000 relates to an expected change in pay-out and $178,000 relates to discounting of the
contingent consideration at 9% per annum.
Note 34. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiary
in accordance with the accounting policy described in note 1:
Ownership interest
Principal place of business /
30 June 2022 30 June 2021
Name
Country of incorporation
%
%
Atturra Operations Pty Ltd (registered 28/09/2021)
Australia
100.00%
-
Atturra Personnel Pty Ltd (registered 19/07/2021)
Australia
100.00%
-
Atturra Holdings Pty Ltd (formally Foundation
Technology Holdings Pty Ltd)
Australia
100.00%
100.00%
Chartsmart Consulting Pty Ltd
Australia
100.00%
100.00%
Connexxion Pty Ltd
Australia
100.00%
100.00%
ESAM Consultants Pty Ltd
Australia
100.00%
100.00%
Foundation Technology Services Pty Ltd
Australia
100.00%
100.00%
FTS Data & AI Pty Ltd
Australia
100.00%
100.00%
FTS NHC Pty Ltd
Australia
100.00%
100.00%
FTS Nominees Pty Ltd
Australia
100.00%
100.00%
FTS PHC Pty Ltd
Australia
100.00%
100.00%
FTS Resourcing Pty Ltd
Australia
100.00%
100.00%
FTS VHC Pty Ltd
Australia
100.00%
100.00%
FTSG Pty Ltd
Australia
100.00%
100.00%
Galaxy 42 Group Pty Ltd
Australia
100.00%
100.00%
Atturra Annual Report 2022
69
Note 34. Interests in subsidiaries (continued)
Ownership interest
Principal place of business /
30 June 2022 30 June 2021
Name
Country of incorporation
%
%
Galaxy 42 Pty Ltd
Australia
100.00%
100.00%
Hayes Information Systems and Communications Pty
Ltd
Australia
100.00%
-
Hayes Information Systems and Communications Pte
Ltd
Singapore
100.00%
-
Kettering Professional Services Pty Ltd
Australia
100.00%
-
Kobold Group Pty Ltd
Australia
100.00%
100.00%
Mentum Systems Pty Ltd
Australia
100.00%
-
Safety Evolved Pty Ltd
Australia
-
100.00%
SME Gateway Pty Ltd
Australia
100.00%
100.00%
Veritec Pty Ltd
Australia
100.00%
100.00%
Anatas Pte Ltd
Singapore
100.00%
100.00%
Kettering NZ Limited
New Zealand
100.00%
-
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries with non-
controlling interest, net of dividends and decrease in shareholdings in accordance with the accounting policy described in
note 1:
Parent
Non-controlling interest,
net of dividends and
decrease in shareholding
Principal place of
business /
Ownership
interest
Ownership
interest
Ownership
interest
Ownership
interest
Country of
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Name
incorporation
Principal activities
%
%
%
%
Noetic Group Pty
Ltd
Australia
Holding Company
80.04%
55.00%
19.96%
45.00%
Noetic Solutions Pty
Ltd
Australia
Advisory and
Consulting Services
80.04%
55.00%
19.96%
45.00%
Atturra Annual Report 2022
70
Notes to the Condolidated Financial Statements
Note 34. Interests in subsidiaries (continued)
Summarised financial information
Summarised financial information of subsidiaries with non-controlling interest, net of dividends and decrease in shareholdings
that are material to the Group are set out below:
30 June 2022 30 June 2021
$'000
$'000
Summarised statement of financial position
Current assets
8,403
5,976
Non-current assets
773
468
Total assets
9,176
6,444
Current liabilities
5,529
4,286
Total liabilities
5,529
4,286
Net assets
3,647
2,158
Summarised statement of profit or loss and other comprehensive income
Revenue
23,717
8,770
Expenses
(19,179)
(7,339)
Profit before income tax expense
4,538
1,431
Income tax expense
(1,325)
(429)
Profit after income tax expense
3,213
1,002
Other comprehensive income
-
-
Total comprehensive income
3,213
1,002
Other financial information
Loss/(profit) attributable to non-controlling interest, net of dividends and decrease in
shareholdings
(53)
460
Accumulated non-controlling interest, net of dividends and decrease in shareholdings at the
end of reporting period
734
787
Note 35. Interests in associates
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are
material to the Group are set out below:
Ownership interest
Principal place of business /
30 June 2022 30 June 2021
Name
Country of incorporation
%
%
Protegic Pty Ltd
Australia
49.00%
24.42%
Atturra Annual Report 2022
71
Note 35. Interests in associates (continued)
Summarised financial information
30 June 2022 30 June 2021
$'000
$'000
Summarised statement of financial position
Current assets
973
2,219
Non-current assets
2,138
1,033
Total assets
3,111
3,252
Current liabilities
750
1,197
Non-current liabilities
-
22
Total liabilities
750
1,219
Net assets
2,361
2,033
Summarised statement of profit or loss and other comprehensive income
Revenue
7,992
5,916
Expenses
(7,539)
(5,626)
Profit before income tax
453
290
Other comprehensive income
-
-
Total comprehensive income
453
290
Contingent liabilities
There were no contingent liabilities at 30 June 2022 and 30 June 2021.
Note 36. Reconciliation of profit after income tax to net cash from operating activities
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Profit after income tax expense for the year
8,085
7,564
Adjustments for:
Depreciation and amortisation
1,330
1,636
Make good provision
43
-
Share-based payments
1,004
806
Share of profit - associates
(106)
(71)
Net gain on disposal of property, plant and equipment
-
(22)
Reversal of investment in associate previously impaired
-
(209)
Change in operating assets and liabilities:
Increase in trade and other receivables
(12,357)
(4,902)
Increase in deferred tax assets
(1,925)
(1,712)
Decrease/(increase) in work-in-progress
(126)
2,766
Increase in trade and other payables
11,099
2,397
Increase in provision for income tax
522
1,839
Increase in other provisions
2,601
7,430
Net cash from operating activities
10,170
17,522
Atturra Annual Report 2022
72
Note 37. Earnings per share
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Profit after income tax
8,085
7,564
Non-controlling interest
(861)
(1,076)
Profit after income tax attributable to the owners of Atturra Limited
7,224
6,488
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
175,183,372
133,555,651
Adjustments for calculation of diluted earnings per share:
Performance rights over ordinary shares
698,077
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
175,881,449
133,555,651
Cents
Cents
Basic earnings per share
4.12
4.86
Diluted earnings per share
4.11
4.86
Note 38. Share-based payments
The Group has two incentive schemes in place, namely the Long-Term Incentive Plan ('LTIP') and Exempt Employee Share
Plan ('EESP').
Long-Term Incentive Plan
The Company established a Long Term Incentive (LTI) plan to align the interests of eligible employees with shareholders
through the sharing of a personal interest in the future growth and development of the Company. A total of 750,000
Performance Rights have been granted to the CEO (Stephen Kowal) under the LTI Plan. Other executives have been granted
a total of 1,800,000 Performance Rights under the LTI plan. Further details of the valuation methodology are set out in the
significant accounting policies note.
The fair value of the Stephen Kowal's Performance Rights were determined using the Monte Carlo option pricing model.
The fair value of Performance Rights granted to other executives under the LTI Plan has been determined be the share price
at the date of issue. No dividends assumptions have been taken into account during the vesting period due to the future
growth strategy of the Group.
Exempt Employee Share Plan
The Company has also established an Exempt Employee Incentive Plan to align the interests of eligible employees of the
Company (and Associated Companies) with Shareholders (Exempt Employee Incentive Plan or Share Plan). 714,000 shares
have been issued under the Share Plan as at 30 June 2022 as part of the IPO process. A fair value of $0.50 was used to
calculate the share-based payment expense.
Atturra Annual Report 2022
73
Note 38. Share-based payments (continued)
Set out below are summaries of the performance rights granted under the plans:
Long-term incentive plan
Number of
performance
rights
30 June 2022
Outstanding at the beginning of the financial year
-
Granted
2,550,000
Outstanding at the end of the financial year
2,550,000
Exercisable at the end of the financial year
-
30 June 2022
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Vesting date
price
the year
Granted
Exercised
other
the year
20/12/2021
31/12/2024
$0.00
-
375,000
-
-
375,000
20/12/2021
31/12/2025
$0.00
-
375,000
-
-
375,000
29/04/2022
01/11/2024
$0.00
-
1,800,000
-
-
1,800,000
-
2,550,000
-
-
2,550,000
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 2.79
years.
For the 750,000 performance rights granted during the current financial year to Stephen Kowal, the valuation model inputs
used to determine the fair value at the grant date, are as follows:
Share price
Exercise
Expected
Dividend
Risk-free
Fair value
Grant date
Vesting date
at grant date
price
volatility
yield
interest rate
at grant date
20/12/2021
31/12/2024
$0.50
$0.00
55.00%
-
1.19%
$0.291
20/12/2021
31/12/2025
$0.50
$0.00
55.00%
-
1.19%
$0.285
For the 1,800,000 performance rights granted on 29 April 2022 to the Other Executives, as the only vesting condition for the
performance rights to vest is continued employment during the vesting period, the performance rights were fair valued using
the prevailing Atturra share price at grant date of $0.70 and will be expensed on a straight-line basis over the vesting period.
It has been assumed that all Other Executives will remain in the employment of the Atturra group during the vesting period.
Set out below is a summary of the share-based payment expense for the financial year:
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Long-Term Incentive Plan – Key management personnel
38
-
Long-Term Incentive Plan – Other Executives
91
-
Exempt Employee Share Plan
357
806
Long-term incentive share allotment *
548
-
1,034
806
*
In order to align the interests of Group and Stephen Kowal and to create an appropriate incentive for future growth and
development of the Group, 1,096,212 shares were issued to Stephen Kowal and a fair value of $0.50 was used to
calculate the share-based payment expense.
Atturra Annual Report 2022
74
Notes to the Condolidated Financial Statements
Implementation deed dated 30 June 2022 (as amended and restated on 11 August 2022) in response to an MOQ Limited
Competing Proposal made by Brennan VDI Pty Limited of $0.075 per MOQ share.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Note 40. General information
The financial statements cover Atturra Limited as a Group consisting of Atturra Limited and the entities it controlled at the
end of, or during, the year. The financial statements are presented in Australian dollars, which is Atturra Limited's functional
and presentation currency.
Incorporation and Company restructure
Atturra Limited (the 'Company') was incorporated on 20 October 2021 and became the parent company of Atturra Holdings
Pty Limited in a restructure where existing shareholders exchanged their shares in Atturra Holdings Pty Limited for shares in
the Company. Prior to the restructure, Atturra Holdings Pty Limited was the parent company of the Group.
The restructure has been accounted for as a capital reorganisation and did not result in a business combination for accounting
purposes. Financial information of the Company has been presented as a continuation of Atturra Holdings Pty Limited.
Accordingly, the assets and liabilities continued to be recorded at their existing values in the Statement of financial position.
In addition, the Statement of financial performance for Atturra Limited is a continuation of the existing Statement of financial
performance for Atturra Holdings Pty Limited.
Prior period financial information within this report represents the consolidated historical financial information for Atturra
Holdings Pty Limited.
Admission to ASX and commencement of official quotation
The Company was admitted to the Official List of ASX Limited ('ASX') on 20 December 2021. Official quotation of the
Company’s ordinary fully paid shares commenced on 22 December 2021.
Atturra Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business are:
Registered office
Principal place of business
Level 33, Aurora Place
Level 2
88 Phillip Street
10 Bond Street
Sydney NSW 2000
Sydney NSW 2000
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 30 August 2022. The
Directors have the power to amend and reissue the financial statements.
Atturra Annual Report 2022
75
In the Directors' opinion:
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2022 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
___________________________
Shan Kanji
Chairman
30 August 2022
Directors’ Declaration
30 June 2022
Atturra Annual Report 2022
76
Independent Auditor’s Report
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Atturra Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Atturra Limited (the Company) and its controlled entities (together the
Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2022 and of its financial
performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
the consolidated statement of financial position as at 30 June 2022
•
the consolidated statement of changes in equity for the year then ended
•
the consolidated statement of cash flows for the year then ended
•
the consolidated statement of profit or loss and other comprehensive income for the year then ended
•
the notes to the consolidated financial statements, which include significant accounting policies and other
explanatory information
•
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the Corporations
Act 2001 and the ethical requirements of the Accounting Professional & 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.
Independent Auditor’s Report
Atturra Annual Report 2022
77
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial report as a whole, taking into account the geographic and management structure of the Group, its
accounting processes and controls and the industry in which it operates.
Atturra Limited's operations include businesses located in Australia, New Zealand and Singapore with a group
finance function in Sydney responsible for the preparation of the financial report.
Materiality
Audit scope
●
For the purpose of our audit we used overall
Group materiality of $700,000, which represents
approximately 5% of the Group’s adjusted profit
before tax. Profit has been adjusted for various
items which are expected to be infrequently
occurring or non recurring e.g. earn out
adjustments and share award expenses in
relation to the IPO.
•
We applied this threshold, together with
qualitative considerations, to determine the scope
of our audit and the nature, timing and extent of
our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
•
We chose Group profit before tax because, in our
view, it is the benchmark against which the
performance of the Group is most commonly
measured.
•
We utilised a 5% threshold based on our
professional judgement, noting it is within the
range of commonly acceptable thresholds.
•
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
•
Our audit was performed by the Group audit team
in Australia. We aligned our audit to the Group
structure by identifying significant components
and balances to focus our testing on, to obtain
sufficient audit evidence over the financial report
as a whole.
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 for the current period. The key audit 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. Further, any commentary on the outcomes of a particular audit procedure is made in that context.
We communicated the key audit matters to the Audit and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Business Combinations
Refer to note 33
The group acquired three entities during the year:
Kettering Professional Services Pty Ltd (Kettering);
Mentum Systems Pty Ltd (Mentum); and Hayes
Information Systems and Communications Pty Ltd
(Hayes).
The accounting for the acquisition of a business is
complex. Australian Accounting Standards require the
Group to identify all assets, liabilities and contingent
liabilities of the acquired businesses and estimate the
fair values at the date of acquisition.
The acquisitions were a key audit matter because
they are significant transactions to the Group and the
Group made significant judgements when accounting
for the acquisitions, including in the measurement of
contingent consideration.
We performed the following audit procedures,
amongst others:
● developed an understanding of the relevant
purchase agreements.
● assessed the provisional fair values of the
acquired assets and liabilities recognised in light
of the requirements of Australian Accounting
Standards.
● agreed the amount of the purchase consideration
paid and/or payable to the transaction agreement
and bank statements. Where there was
contingent consideration, we assessed the
appropriateness of management’s assumptions in
measuring the fair value of the consideration.
● assessed the reasonableness of the note
disclosures in light of the requirements of
Australian Accounting Standards.
Goodwill ($30.7 million)
Refer to note 14
Goodwill is required by Australian Accounting
Standards to be tested annually for impairment at the
Cash Generating Unit (CGU) level.
The Group performed an impairment assessment
over goodwill by calculating the value in use for each
CGU, using discounted cash flow models.
The impairment assessment was a key audit matter
due to:
● the size of the goodwill balance and;
● the judgement involved in determining the value
in use of each CGU.
Together with PwC valuation experts, we performed
the following audit procedures, amongst others:
●
assessed whether the Group’s identification of
CGUs was consistent with our knowledge of the
operations, internal reporting lines and the level of
integration of the acquired businesses
●
evaluated the cash flow models including
assessing significant assumptions and
judgements and testing of mathematical accuracy
●
compared the cash flow models to Board
approved budgets
●
tested the significant assumptions used by
management including discount rates and growth
rates by comparing to observable market data
and historical performance
● evaluated the reasonableness of the Group’s
disclosures in light of the requirements of
Australian Accounting Standards.
Atturra Annual Report 2022
78
Independent Auditor’s Report
Key audit matter
How our audit addressed the key audit matter
Revenue ($134.6 million)
Refer to note 4
Revenue is significant to the financial statements and
disaggregated across multiple entities with different
systems, controls and processes.
This was a key audit matter given the materiality of
the amount and the judgement involved in revenue
recognition for fixed price agreements that span the
year end.
We performed the following audit procedures,
amongst others:
● understood and evaluated management’s
processes and controls relating to the recording
and recognition of revenue.
● evaluated the Group’s approach to revenue
recognition in light of the requirements of the
Australian Accounting Standards.
●
detailed testing of a sample of revenue
transactions, including fixed price agreements,
comparing transactions to a range of supporting
evidence.
● evaluated the reasonableness of the Group’s
disclosures on revenue in light of the
requirements of Australian Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the information included
in the annual report for the year ended 30 June 2022, but does not include the financial report and our auditor’s
report thereon. Prior to the date of this auditor's report, the other information we obtained included the Appendix
4E, Corporate Directory, Directors' Report and Shareholder Information. We expect the remaining other
information to be made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not express an
opinion or 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 on the other information that we obtained prior to the date of this
auditor’s report, 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.
When we read the other information not yet received, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the directors and use our professional judgement to determine the
appropriate action to take.
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
Atturra Annual Report 2022
79
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: 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
Our opinion on the remuneration report
We have audited the remuneration report included in pages 8 to 15 of the directors’ report for the year ended 30
June 2022.
In our opinion, the remuneration report of Atturra Limited for the year ended 30 June 2022 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.
PricewaterhouseCoopers
Paddy Carney
Sydney
Partner
30 August 2022
Atturra Annual Report 2022
80
Independent Auditor’s Report
The shareholder information set out below was applicable as at 24 August 2022.
Corporate Governance Statement
The Company’s Corporate Governance Statement is located on the Company’s website at
https://investors.atturra.com/governance/
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Options over ordinary
shares
% of total
% of total
Number
shares
Number
shares
of holders
issued
of holders
issued
1 to 1,000
43
0.01
-
-
1,001 to 5,000
188
0.29
-
-
5,001 to 10,000
192
0.78
-
-
10,001 to 100,000
329
4.54
-
-
100,001 and over
48
94.38
-
-
800
100.00
-
-
Holding less than a marketable parcel
18
-
-
-
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
DRIFTWOOD IT PYT LIMITED
81,668,100
40.73
263 FINANCE PTY LIMITED
33,255,612
16.58
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
12,766,190
6.37
NATIONAL NOMINEES LIMITED
10,468,690
5.22
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
7,277,417
3.63
YAZARSKIA PTY LIMITED
5,825,055
2.90
SWK FAMILY PTY LIMITED
5,776,731
2.88
J&B FUND MANAGEMENT PTY LTD
4,677,240
2.33
MERB INVESTMENTS PTY LTD
3,351,936
1.67
MR ANDRIS BALMAKS
2,837,405
1.41
MR PETER MURPHY
2,837,405
1.41
INFOGATE PTY LTD
2,801,130
1.40
CS THIRD NOMINEES PTY LIMITED
1,787,652
0.89
MAYHAM PTY LTD
1,500,987
0.75
MR MARTIN HOLDEN
1,185,428
0.59
MR STEPHEN KOWAL
1,096,212
0.55
VINMAN NOMINEES PTY LTD
900,000
0.45
STUART ALTHAUS RETIREMENT PTY LTD
858,636
0.43
MR AARON LIKELY
691,579
0.34
CITICORP NOMINEES PTY LIMITED
672,710
0.34
182,256,115
90.88
Atturra Annual Report 2022
81
Shareholder information
Unquoted equity securities
There are 4,035,672 unquoted Performance Rights on issue.
There were no holders who hold 20% or more unquoted equity securities.
Restricted Securities
Of the total 200,550,449 Fully Paid Ordinary Shares (shares) on issue:
•
24,498,010 shares are restricted securities to 01 October 2022; and
•
121,102,119 shares are restricted securities 01 October 2023;
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
% of total
shares
Number held
issued
Shan Kanji, combined holdings of Driftwood IT Pty Ltd, 263 Finance Pty Ltd and Shan Kanji 114,923,712
57.31
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities with attaching voting rights.
On-Market Buy-Back
There is no current on-market buy-back.
Use of Funds
Since admission to the ASX on 20 December 2021, the Company has used its cash in a way consistent with its business
objectives.
Atturra Annual Report 2022
82
Shareholder information
Directors
Shan Kanji
Stephen Kowal
Nicole Bowman
Jonathan Rubinsztein
Company secretary
Kunal Shah
Registered office
Level 33
88 Philip Street
Sydney
NSW 2000
Principal place of
business
Level 2
10 Bond street
Sydney
NSW 2000
Share register
Computershare Limited
Level 3
60 Carrington Street
Sydney
NSW 2000
Auditor
PricewaterhouseCoopers
One International Towers Sydney
Watermans Quay
Barangaroo
NSW 2000
Solicitors
HWL Ebsworth
Level 14, Australia Square
264 – 278 George Street
Sydney
NSW 2000
Bankers
Westpac Banking Corporation
Stock exchange
listing
Atturra Limited shares are listed
on the Australian Securities
Exchange
(ASX code: ATA)
Website
https://atturra.com/au-en/
Business objectives
In accordance with Listing Rule 4.10.19 the Company
confirms that the Group has been utilising the cash and
assets in a form readily convertible to cash that it held
at the time of its admission to the Official List of ASX
since its admission to the end of the reporting period in
a way that is consistent with its business objectives.
Corporate Governance Statement
Atturra Limited and the Board of Directors are
committed to achieving and demonstrating the
highest of corporate governance, Atturra Limited
has reviewed its corporate governance practices
against the Corporate Governance Principles and
Recommendations (4th Edition) published by the
ASX Corporate Governance Council.
The Group’s Corporate Governance Statement,
which sets out the corporate governance practices
that were in operation during the financial year and
identifies and explains any Recommendations that
have not been followed and ASX Appendix 4G are
released to the ASX on the same day the Annual
Report is released. The Corporate Governance
Statement and Corporate Governance Compliance
Manual can be found on the Company’s website at
https://investors.atturra.com/governance/.
© Copyright 2022 Atturra Limited ABN 34 654 662 638
The information in this publication does not constitute investment, financial or legal advice and must not be relied on as such. You should obtain
independent professional advice tailored to your specific circumstances and needs prior to making any investment and/or financial decisions.
The information in this document is not, and must not be construed as, an offer or recommendation of securities or other financial products.
Atturra Annual Report 2022
83
Corporate Directory