Annual
Report
2023
Acknowledgement of Country
Atturra acknowledges the Traditional Custodians of Country throughout Australia and their connections to Land,
Sea and Community. We pay our respects to Elders past and present and extend that respect to all First Nations
Peoples across Australia and the Torres Strait Islands.
Contents
Letter to Shareholders
2
Business Overview
4
Client Showcase
6
Board of Directors and Key Management
8
ESG Highlights
10
General Information
12
Directors’ Report
13
Auditor’s Independence Declaration
28
Financial Report
29
Notes to the Consolidated Financial Statements
34
Directors’ Declaration
75
Independent Auditor’s Report
76
Shareholder Information
81
Corporate Directory
83
Atturra Limited ABN 34 654 662 638
We’ll lead
you there.
Redefine what your
future looks like
through technology.
Atturra Annual Report 2023
1
I’m proud to share our achievements over the last
12 months in Atturra’s Annual Report.
Financial Year 2023 Milestones
One of Atturra’s key growth areas is to expand our
service offerings and industry position through
acquisitions. We have been working firmly toward
this over the last 12 months. Atturra completed the
acquisition of Hammond Street Developments Pty Ltd
(HSD) in February 2023 and The Somerville Group Pty Ltd
(Somerville) in April 2023.
Somerville brings significant value to our existing portfolio
and provides Atturra with a broad-based managed
services capability to facilitate large end-to-end projects,
further strengthening our position in the education sector
and contributing to Atturra’s vision.
The HSD team specialises in Microsoft services and has
a notable portfolio of Australian government clients,
enhancing Atturra’s solid public sector portfolio and
Microsoft services client base.
Financials
We generated $134.6 million in revenue and $12.4 million
in EBIT in FY22. This was forecast to grow by 20-25% to
$160‑167 million in FY23. We’re pleased to say we’ve
surpassed this forecast by 11%+ delivering $178.3 million
in revenue and $16.6 million in EBIT this FY.
Our business strategy is to target 20-25% revenue growth
per annum with a mix of approximately 50% organic
and 50% acquisitive growth and to return approximately
10.5%+ underlying EBITDA.
In November 2022, Atturra successfully conducted a
$25 million capital raise for acquisition funding to support
our industry and technology strategies.
Focus on People
As we invest in our sovereign capability, bringing together
new and different teams across Australia, Atturra has
formalised its employee value proposition. It centers on
engaging staff and building a cohesive and inclusive
team of change-makers and problem-solvers. Our total
employee base is now more than 800 team members.
Letter to Shareholders
Atturra Annual Report 2023
2
Looking ahead
We remain steadfast—to become Australia’s leading
advisory and IT solutions provider, with high engagement
across technology, industries, employees and clients.
Our industry strategy is to focus on:
• Expanding into industries with a high barrier to entry,
for example, Defence, requiring security clearances,
and driving client retention.
• Industries without a clear market leader so that Atturra
can become a service provider of choice. Specifically,
Education, Manufacturing and Local Government,
where we rapidly grew to 130 local councils in H1 FY23.
• Building scale through 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 lockstep
with them. For example, we are now market leaders in
Microsoft, Boomi, and Smartsheet.
• Becoming the dominant provider of specialist
technologies such as webMethods and QAD.
We’re just getting started
Thank you for your support and for joining us in another
year of positive change for Atturra. We look forward to
continuing to build our exciting future together.
Shan Kanji
Non-Executive Chairman
“ We remain steadfast – to become Australia’s
leading advisory and IT solutions provider,
with high engagement across technology,
industries, employees and clients.”
Shan Kanji
Non-Executive Chairman
Atturra Annual Report 2023
3
Business Overview
Key Industries
Key Acquisitions
February 2023
Hammond Street Developments Pty Ltd
April 2023
The Somerville Group Pty Ltd
A Selection of Our Awards
2022 CRN Australia Impact Award
for Platform Innovation
Smartsheet 2022 APAC Partner of the Year
Nuix New Partner of the Year Award for APAC
QAD Global Partner Awards - Growth
Advisory specialists at scale
Atturra is an Australian, ASX-listed advisory and
IT solutions business. We’re headquartered in Sydney and
have over 800 employees across Australia, New Zealand,
Singapore and Hong Kong.
We offer end-to-end digital transformation services
for our clients. Partnering with other leading global
technology providers, we offer scalable, expert solutions.
Atturra helps clients see exciting possibilities through
technologies that work today and into the future.
Atturra’s Annual Reporting suite includes:
• 2023 full-year financial results
• Governance documents
• 2023 Sustainability Report
2022-23 Highlights
Defence
Federal & State
Government
Financial Services
Education
Local Government
Manufacturing
Utilities
Atturra Annual Report 2023
4
■ Defence and Federal Government
■ State and Local Government
■ Utilities
■ Financial Services
■ Manufacturing
■ Education
■ Other
9%
41%
12%
10%
7%
15%
6%
Staff
800+Employees
Client Metrics
Client Metrics FY23 Revenue by Industry
Revenue Growth
35% CAGR
FY21-FY23
Major Partnerships
Market Size
$51 billion
Estimated IT services spend
in Australia in 2023
Security Clearance
250+
Number of security cleared staff
New Clients
70+
New clients during FY23
Atturra Annual Report 2023
5
Client Showcase
Atturra helped Victoria University streamline operations
and improve compliance and user experience. We
achieved this by successfully migrating 20 years of
historical and current data, business processes and
custom apps to TechnologyOne.
Seamlessly collaborating with VU’s project team,
Atturra provided technical proficiency and knowledge
of large-scale application integrations and functional
and technical expertise. This enabled the university to
overcome technical complexities and successfully go live
in August 2022, with a solution that covers the full student
lifecycle and is fit for purpose now and into the future.
Victoria University (VU)
“ Overall, Atturra’s engagement with the
Student One Consolidation Project at
Victoria University was a great success. Their
dedication and knowledge were instrumental
in helping to make it a success, and their
collaborative approach and willingness to
adapt solutions made them an invaluable
part of the team.”
Grant Fink
Technical Project Manager, Victoria University
The NDSS is a government initiative administered by
Diabetes Australia that helps people with diabetes self-
manage their condition by providing access to services,
support, and diabetes products.
Atturra worked with the Department of Health and
Diabetes Australia to reduce manual processing and
streamline access to NDSS products and services through
a portal for health professionals.
Using Microsoft Dynamics 365 Customer Engagement
and Dynamics PowerApps, the new portal supports
a database of more than 1.4 million registrants. It has
reduced the registration time from two weeks to two
minutes for the 100,000 annual new registrations.
National Diabetes
Services Scheme (NDSS)
“ On the first release day, about 550 health
professionals created a log-on and were
validated. More than 500 applications for
continuous glucose monitoring subsidies
were started that same day. This was a
great result for a brand-new portal.”
Tony Wynd
Department of Health and Aged Care
Atturra Annual Report 2023
6
A Mongolian beverages giant established in 1924 –
with over 310 products including renowned brands
like Heineken and Tiger, and over 11,000 customers.
For APU to become a data-driven organisation,
a new approach to integration was needed to
simplify and reduce risk. As a result, they started
the new initiative of enterprise-wide “API-fication”
as the solution-enabler to rapidly connect APU
applications and data via reusable APIs.
Atturra engaged with APU and leveraged Boomi
to integrate key systems and deliver the following
business outcomes with our Australian-based
consulting team:
• APU can now manage all integrations, and the
implementation time for a new integration is
down to hours. This gives more opportunities
and bandwidth to the business in today’s rapidly
changing environment.
• All external stakeholders and their systems can
now seamlessly work with APU. This includes
banks, suppliers, socials, government systems,
other open systems, and customers.
APU Company
“ Working with Atturra on APU ‘API-fication’
has helped us fast-track our maturity
from ad hoc API integrations to a
structured iPaaS-led environment. All our
key systems are now connected using
Boomi which enables us to significantly
improve partner experience, furthering our
philosophy of win together.”
Munkhbat Luvsanbyamba
Project Manager at APU
Atturra Annual Report 2023
7
Board of Directors
and Key Management
Shan Kanji
Non-Executive Chairman /
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 former
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.
Nicole was a board member of the
charity Dress for Success Sydney
Inc. from 2017 to 2022. In 2019, she
was appointed the Australia Day
Ambassador for Wollongong in
recognition of her philanthropic work.
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 2023
8
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.
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
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.
Herb To
Chief Financial Officer
Herb To is the CFO of Atturra. He has
held CFO roles in the IT, Telecoms,
professional services and media
industries for over 25 years across
Australia, North America and the
South Pacific.
Over his career, Herb has been
the CFO of ASX-listed companies
and held divisional executive
positions with global multinational
corporations. As CFO at Kantar ANZ,
Herb oversaw the successful merger
of Kantar with the WPP AUNZ Data
Investment Management Group.
Herb is a Chartered Accountant, a
Chartered Professional Accountant,
and a Chartered Business Valuator.
He holds a Bachelor of Accounting
and Finance (Hons) from the
University of Waterloo and a
Graduate Diploma in Applied Finance
and Investment from the Securities
Institute of Australia (FINSIA).
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 2023
9
ESG Highlights
Over the last 12 months, Atturra has continued on
its growth trajectory through both organic growth
and acquisitions of companies aligned to our
business strategy.
An important part of this process includes incorporating
newly acquired businesses into our ESG planning. This
will enable us to remain sustainably competitive, which
is essential if we want 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 have further embedded our values across all
business areas, and these define and clarify expected
behaviours. The way we conduct business is supported
by a robust Corporate Governance structure overseen
by the Board of Directors. Staff can access tools to raise
any concerns, and we hold regular internal audits to
ensure adherence.
2. People and culture
As we continue to grow our business through acquisition,
our focus is on One Atturra, where cross-collaboration
for our common cause is prioritised. Our Employee
Value Proposition has been designed to foster an
environment of possibility and growth for our people.
It is helping us to retain key talent and create an
inclusive and diverse culture.
3. Protecting our workplace and clients
Data security is critical to our operations for both
our clients and our organisation. We’ve focused
on minimising risk by implementing Zero Trust and
upgrading our employee lifecycle systems, consolidating
and migrating key employee data. We are ISO 27001:2013
Cyber Security Framework Information Security
Management Systems certified.
4. Community support
Community engagement and support have grown as we
integrate more businesses into the Atturra family. In the
last year, our staff have raised over $50,000 for local and
national charities close to our hearts, including those that
focus on cancer research and mental health.
5. Environmental accountability
We continue working towards being a carbon neutral
company and have introduced new processes and
policies that help us maintain low emissions across the
business and protect the environment during our daily
operations. These include carbon offsetting, repurposing
assets and having recycling targets for our offices.
Sustainability approach
Atturra Annual Report 2023
10
Atturra Annual Report 2023
11
General Information
Atturra Annual Report 2023
12
The financial statements cover Atturra Limited and the entities it controlled at the end of, or during, the financial year
(Atturra Group). The financial statements are presented in Australian dollars, which is Atturra Limited's functional and
presentation currency.
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 Atturra 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 31 August 2023. The
Directors have the power to amend and reissue the financial statements.
Atturra Annual Report 2023
13
The Directors present their report, together with the financial statements, on Atturra Group at the end of, or during, the year
ended 30 June 2023.
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 – Non-Executive Chairman
Stephen Kowal – Executive Director and Chief Executive Officer
Nicole Bowman – Independent Non-Executive Director
Jonathan Rubinsztein – Independent Non-Executive Director
Principal activities
The Group provides whole-of-organisation technology solutions covering service lines of advisory, business applications,
data & integration, cloud services, change management, managed control solutions, industry engagement and managed
services.
Dividends
No dividends were paid, recommended, or declared during the current financial year to Atturra Limited shareholders. During
the current financial year, a dividend of $513,000 (2022: $679,000) was paid to the minority shareholders of Noetic Group
Pty Ltd, a partly owned subsidiary of Atturra Limited, with the remainder being paid to Atturra Holdings Pty Ltd and FTS NHC
Pty Ltd that was eliminated on consolidation.
Review of operations
Atturra Group is a leading Australian technology solutions business. It provides expertise across a broad range of specialist
in‑demand IT areas to deliver solutions to clients. Atturra Group uses transformative, market leading technologies and
business applications that enable digital transformations. Atturra Group engages over 800 consultants, IT and support
personnel in Australia, New Zealand, Singapore and Hong Kong.
Atturra Group has two strategies, a technology strategy, and an industry strategy. The technology strategy is to focus on
high growth technologies or technologies where it can have a market dominant position. The 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 Atturra Group after providing for income tax and non-controlling interest was $10,241,000 (30 June 2022:
$7,224,000).
Shareholders’ equity attributable to owners of Atturra Limited increased by $36,768,000 from 30 June 2022 to $78,438,000
as at 30 June 2023 and Atturra Group had cash on hand of $44,250,000 as at 30 June 2023 (2022: $35,130,000). Atturra
Limited has 232,524,941 shares on issue as at 30 June 2023 (2022: 200,550,449).
Underlying earnings before interest, taxation, depreciation, and amortisation and other adjustments as disclosed
(Underlying EBITDA) 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 capital raising and initial public offering (IPO) costs,
share based payments, merger and acquisition (M&A) transaction costs and M&A related retentions. The Directors consider
Underlying EBITDA to be one of the key financial measures of Atturra Group.
Directors’ Report
Directors’ Report
Atturra Annual Report 2023
14
30 Ju e
0 3
The following table summarises key reconciling items between statutory profit after-tax and Underlying EBITDA:
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Profit after income tax
10,643
8,085
Add: Interest expense
1,110
499
Add: Income tax expense
5,308
3,781
Less: Interest income
(490)
(10)
Reported EBIT
16,571
12,355
IPO expense
-
480
Share-based payments
1,155
357
Revaluation of contingent consideration
-
619
M&A transaction and Capital raising costs
570
-
M&A related retentions
399
-
Underlying EBIT
18,695
13,811
Depreciation
1,846
1,330
Amortisation
208
-
Depreciation included in cost of sales
260
-
Underlying EBITDA
21,009
15,141
Business risks
A summary of material business risks that could adversely affect Atturra Group’s financial performance and growth potential
in future years include:
Ability to attract and retain clients
Atturra Group may not be able to retain existing clients when contract terms expire, or otherwise retain those clients to use
Atturra Group’s service offerings. Atturra 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 Group 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 Executive General Managers that overlook service delivery to ensure
satisfaction. In relation to growth, Atturra Group 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 Group 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
Atturra 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 Group 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 Group
faces are lower than the general market given the majority of the revenue in Atturra Group is a result of being a leader in
certain specialisations, so the risk of disruption is minimised as any new market entrant would have significant resourcing
challenges.
Reliance on third party technology
Atturra Group relies on the success of third-party software for the development, implementation and operation of its service
offerings. Atturra Group's 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 Group has exposure to changes
in directions of third party technology providers, and this exposure is material, it is likely any such change would provide us
with a long lead time to react and find an alternative partner/product and it is likely that we would be well positioned to assist
the client to transition to a new technology stack.
Atturra Annual Report 2023
15
Cyber security and Information technology infrastructure
There is a risk that security and technology precaution measures taken by Atturra Group will not be sufficient to prevent
unauthorised access to the Atturra Group’s networks, systems, and data bases. Atturra Group monitors its environment on
a continuous basis to ensure security compliance, and in the event of an attack, Atturra has advanced backup and recovery
solutions.
Significant changes in the state of affairs of Atturra Group during the current financial year
On 30 June 2022, Atturra Holdings Pty Ltd and MOQ Limited entered into a binding Scheme Implementation Deed (SID)
under which Atturra Holdings Pty Ltd would acquire 100% of the ordinary shares in MOQ pursuant to a scheme of
arrangement. On 16 August 2022, Atturra Limited announced to the ASX that it had elected not to exercise its matching right
under clause 11.4 of the SID 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.
On 28 November 2022, Atturra Limited announced an underwritten capital raising of approximately $25 million (Capital
Raising) at an issue price of $0.85 per Atturra Limited share comprising:
●
a 1 for 7.5 non-renounceable pro-rata entitlement offer to raise approximately $22.7 million before costs (Entitlement
Offer); and
●
an institutional placement to raise approximately $2.3 million before costs (Placement).
The Placement and the Entitlement Offer resulted in 29,412,079 fully paid ordinary shares in Atturra Limited (New Shares)
being issued. The New Shares ranked equally with existing Atturra Limited shares on completion of the Capital Raising. The
Entitlement Offer was completed on 5 December 2022 and the Placement was completed on 22 December 2022. Post
transaction costs, approximately $24.25 million was raised from the Capital Raising.
On 22 December 2022, Atturra Limited announced to the ASX that it had established a new $25.8 million secured debt facility
with Westpac Banking Corporation (Facility). The Facility was used to refinance a related party loan and provide future
flexibility as Atturra Group continues its growth plans.
The Facility includes:
●
a $5 million term loan facility for repayment of a related party loan, which matures five years from financial close (Facility
A);
●
a total of $15 million term loan facilities for funding permitted future acquisitions ($9 million) and deferred consideration
relating to prior acquisitions ($6 million); each of which mature five years from financial close (Facility B and C);
●
a $5 million overdraft facility for working capital requirements, which is repayable on demand (Facility D);
●
a $0.3 million revolving bank guarantee facility for securing lease obligations of Atturra Group, which is repayable on
demand (Facility E); and
●
a $0.5 million corporate credit card facility for day-to-day general corporate purposes of Atturra Group, which is
repayable on demand (Facility F).
Atturra Group used part of Facility A to repay a related party loan including accrued interest on 27 January 2023, and will
implement Facility F over the next six to 12 months. $4.6 million of Facility A was utilised as at 30 June 2023, and the
remainder of the Facilities have not been utilised as at 30 June 2023.
On 27 January 2023, Atturra Group settled a related party loan from 263 Finance Pty Ltd of $4.9 million, utilising Facility A
($4.6 million) and internal cash reserves ($0.3 million).
On 25 January 2023, Atturra Limited announced to the ASX that a wholly owned subsidiary, Veritec Pty Ltd, had entered into
a binding sale and purchase agreement to acquire Hammond Street Developments Pty Ltd (HSD), a specialist Microsoft
services provider to the government sector including the Victorian public sector, based in Melbourne. The maximum purchase
consideration is $7,800,000. $5,498,000 was settled on completion in cash with a working capital adjustment of $229,000
resulting in a net cash payment of $5,269,000, $500,000 of Atturra Limited shares were issued to the HSD vendors (541,126
shares at an issue price $0.92) and there is additional earn out consideration of up to $2,000,000 ($500,000 relates to FY23
performance and $1,500,000 relates to FY24 performance) in cash subject to HSD achieving performance hurdles based on
audited EBIT results for FY23 and FY24. The purchase consideration was funded from internal cash reserves. No contingent
consideration has been recognised as the performance hurdles are not expected to be met. The transaction was completed
on 28 February 2023.
Directors’ Report
Atturra Annual Report 2023
16
On 15 February 2023, Atturra Limited issued 371,239 shares to qualifying staff under the Atturra Limited Exempt Employee
Share Plan (EESP). The market value of each share on the issue date was the five day volume weighted average price of
Atturra Limited’s shares on 14 February 2023 which was $1.01.
On 9 March 2023, Atturra Limited announced to the ASX that a wholly owned subsidiary, Atturra Holdings Pty Ltd, had
entered into a binding sale and purchase agreement to acquire The Somerville Group Pty Ltd (Somerville), a leading
managed services provider to the corporate and education sectors. The maximum total purchase consideration is
$19,100,000. $15,000,000 was settled on completion in cash, $1,498,825 of Atturra Limited shares were issued to the
Somerville vendors (1,647,060 shares at an issue price $0.91) and there is additional earn out consideration of up to
$2,600,000 ($500,000 relates to FY23 performance and $2,100,000 relates to FY24 performance) in cash subject to
Somerville achieving performance hurdles based on audited EBIT results for FY23 and FY24. The purchase consideration
was funded from the proceeds of the Capital Raising. No contingent consideration has been recognised for the FY23
performance hurdle as the performance hurdle has not been met. Contingent consideration has been recognised for the
FY24 performance hurdles and has been discounted at a rate of 5% resulting in contingent consideration of $1,910,000
being recognised on acquisition. The transaction was completed on 31 March 2023.
Matters subsequent to the end of the financial year
On 20 July 2023, Atturra Limited announced to the ASX that a wholly owned subsidiary, Galaxy 42 Pty Ltd, had entered into
a binding sale and purchase agreement to acquire the business and certain assets of Silverdrop Education Pty Ltd, a
specialist HR and payroll consulting firm. The maximum total purchase consideration is $3.3 million, with $2.7 million payable
upfront ($2.2 million in cash and $0.5 million of Atturra Limited shares), with an earn out consideration of up to $0.6 million
of cash, subject to Silverdrop achieving performance hurdles for FY24. The purchase consideration will be funded from
internal cash reserves. The transaction is scheduled to complete on or around 31 August 2023.
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect
Atturra Group's operations, the results of those operations, or Atturra Group's state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of Atturra 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 Atturra Group.
Environmental regulation
Atturra Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on Directors
Name:
Shan Kanji
Title:
Non-Executive Chairman
Qualifications:
Shan holds a Bachelor of Laws and a Bachelor of Commerce from the University of
NSW.
Experience and expertise:
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 is a
practising lawyer and the Principal of Kanji & Co.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Committee and Nominations and Remuneration
Committee
Interests in shares:
130,049,595 ordinary shares
Interests in options:
None
Interests in performance rights:
None
Contractual rights to shares:
None
Atturra Annual Report 2023
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:
7,072,943 ordinary shares
Interests in options:
None
Interests in performance rights:
1,372,614
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 former 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:
113,333 ordinary shares
Interests in options:
None
Interests in performance 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, which 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:
Member of the Audit and Risk Committee and Nomination and Remuneration
Committee
Interests in shares:
6,075,055 ordinary shares
Interests in options:
None
Interests in performance 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.
Directors’ Report
Atturra Annual Report 2023
18
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 Atturra Limited's Board of Directors (Board) and of each Board committee held during the year
ended 30 June 2023, 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
11
11
3
3
8
8
Stephen Kowal*
11
11
-
-
3
8
Nicole Bowman
11
11
3
3
8
8
Jonathan Rubinsztein
11
11
3
3
7
8
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 during the year ended 30 June 2023.
* Attended the Audit and Risk Committee meetings as a non-member.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for Atturra 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 (KMPs).
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 KMPs
Principles used to determine the nature and amount of remuneration
The objective of Atturra 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 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 Atturra 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 Atturra Group.
Atturra Annual Report 2023
19
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, except in relation to Shan Kanji
and Jonathan Rubinsztein who were not paid any Directors fees in the current or previous financial year. 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. Non-executive Directors do not
receive performance rights, share options or other incentives.
The total aggregate amount provided to all non-executive Directors of Atturra Limited for their services as Directors must not
exceed in any financial year the amount fixed by Atturra Limited in a general meeting. This amount is fixed at $900,000 per
annum.
Executive remuneration
Atturra 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
Atturra Group and comparable market remunerations.
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 Atturra 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 Atturra Group,
(ii) Revenue controlled by the relevant executive,
(iii) Consolidated EBIT for Atturra Group, and
(iv) EBIT controlled by the relevant executive.
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.
Directors’ Report
Atturra Annual Report 2023
20
Consolidated entity performance and link to performance
Performance rights are issued by Atturra Group to KMPs 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 KMPs and other executives are revenue growth,
Underlying EBIT growth and total shareholder return of Atturra Group. Key metrics for the financial years since Atturra have
been listed are set out below:
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Revenue
178,331
134,579
Underlying EBIT
18,695
13,811
Underlying EBITDA
21,009
15,141
The share price of Atturra Limited on IPO was $0.50 and increased to $0.89 at 30 June 2023.
The long-term incentive plan offers performance rights in Atturra Limited subject to the satisfaction of the relevant
performance milestones, as well as service and other conditions, at the relevant vesting date.
The performance rights in place for KMPs as at 30 June 2023 are set out below:
Total
Plan
Issued to
Grant date
Date of
record
Total
performance
rights
granted
Converted
Forfeited
balance at
the end of
the
financial
year
2022 LTI award KMP - Stephen Kowal
22/12/2021 31/12/2024
375,000
-
-
375,000
2022 LTI award KMP - Stephen Kowal
22/12/2021 31/12/2025
375,000
-
-
375,000
2023 LTI award KMP - Stephen Kowal
07/10/2022 31/12/2025
311,307
-
-
311,307
2023 LTI award KMP - Stephen Kowal
07/10/2022 31/12/2026
311,307
-
-
311,307
1,372,614
-
- 1,372,614
2022 LTI award: The average fair value of the performance rights at grant date was $0.29 each.
2023 LTI award: The average fair value of the performance rights at grant date was $0.38 each.
Each performance right is issued by Atturra Group and converts into one ordinary share in Atturra Limited. If the employment
and performance criteria are satisfied, the relevant Executive will be allocated shares on the date of record. Performance
rights carry no dividend or voting rights. For performance rights to convert, the relevant Executive must remain employed or
engaged by Atturra Group at the relevant date of record and the relevant performance milestones must be satisfied.
No price is payable on conversion of performance rights. If the minimum set value for each performance milestone is not
satisfied on a particular date of record, the relevant performance rights will lapse. The performance hurdles were chosen to
align with Atturra Group’s strategy and shareholder interests and best reflect the key financial performance metrics of Atturra
Group and strike an appropriate balance between growth and long-term profitability.
Atturra Annual Report 2023
21
The key vesting conditions for the LTI awards for KMPs are:
Stephen Kowal
2022 LTI award
●
For the financial year ended 30 June 2022, Atturra 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 (dividends plus or
minus increase in share price) 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 Group and if the vesting conditions are met, 375,000 shares are
scheduled to be issued in December 2024 and 375,000 shares are scheduled to be issued in December 2025.
2023 LTI award
The number of performance rights has been calculated by dividing $400,000 (being Mr Kowal's on target long term incentive
plan remuneration per annum) by 64.2453 cents, being the rounded volume weighted average (VWAP) price of Atturra’s
shares on 16 August 2022, being the date of preparation of the agreement relating to Mr Kowal's long term incentive.
The percentage (if any) of the 622,614 performance rights that will vest is to be determined in accordance with the total
shareholder return post 16 August 2022 (Reference Date) taking into account:
(a) any dividends paid per Share since the Reference Date; plus or minus
(b) any increase or decrease in the Atturra Limited share price from:
i. 64.2 cents per Share (being an agreed VWAP calculation as at the Reference Date); to
ii. Atturra Limited closing share price on the 5th trading day after the date of announcement of the 2025 annual results.
Shareholder return
Percentage of the 622,614 performance rights that will
vest
≥ 33% - 42.3%
40%
≥ 42.4% - 52.0%
60%
≥ 52.1% - 62.1 %
80%
≥ 62.2%
100%
If the performance criteria are satisfied and Stephen Kowal is otherwise entitled to be allocated shares, Atturra Limited will
allocate:
●
311,307 shares by no later than 31 December 2025; and
●
311,307 shares by no later than 31 December 2026.
Consolidated entity performance and link to remuneration
Remuneration for KMP’s is directly linked to the performance of Atturra 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 2023, Atturra Group did not engage a remuneration consultant to advise on the
remuneration package awarded to the Directors and KMPs.
Directors’ Report
Atturra Annual Report 2023
22
Details of remuneration
Amounts of remuneration
Details of the remuneration of KMPs of Atturra Group are set out in the following tables.
The KMPs of Atturra Group consisted of the Directors of Atturra Limited:
●
Shan Kanji (Non-Executive Chairman)
●
Stephen Kowal (Executive Director and Chief Executive Officer)
●
Nicole Bowman (Non-Executive Director)
●
Jonathan Rubinsztein (Non-Executive Director)
And:
●
Herbert To (Chief Financial Officer)
Changes since the end of the reporting period:
None.
Short-term benefits
Post-
employment
benefits
Long-term benefits
Annual /
Long
Share-
based
payments
Cash salary
Cash
Non-
Super-
service
Equity-
and fees
bonus
monetary
annuation
leave
settled
Total
30 June 2023
$
$
$
$
$
$
$
Non-Executive Directors:
Nicole Bowman
68,182
-
-
7,159
-
-
75,341
Jonathan Rubinsztein
-
-
-
-
-
-
-
Shan Kanji
-
-
-
-
-
-
-
Executive Director:
Stephen Kowal
371,587
400,000
-
25,292
7,701
108,417
912,997
Other Key Management
Personnel:
Richard Shaw(1)
190,565
-
-
12,646
-
-
203,211
Herbert To(2)
187,281
33,000
-
18,969
13,708
-
252,958
817,615
433,000
-
64,066
21,409
108,417
1,444,507
(1) Richard Shaw departed during the financial year on 14 September 2022, he was previously Chief Financial Officer.
(2) Herbert To joined on 3rd October 2022 as Chief Financial Officer.
Atturra Annual Report 2023
23
Short-term benefits
Post-
employment
benefits
Long-term benefits
Annual /
Long
Share-
based
payments
Cash salary
Cash
Non-
Super-
service
Equity-
and fees
bonus
monetary
annuation
leave
settled
Total
30 June 2022
$
$
$
$
$
$
$
Non-Executive Directors:
Nicole Bowman
57,955
-
-
5,795
-
-
63,750
Executive Director:
Stephen Kowal
351,432
375,000
-
23,568
36,157
586,663
1,372,820
Other Key Management
Personnel:
Richard Shaw
199,810
62,250
-
19,265
10,303
-
291,628
609,197
437,250
-
48,628
46,460
586,663
1,728,198
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
30 June 2023 30 June 2022 30 June 2023 30 June 2022 30 June 2023 30 June 2022
Non-Executive Directors:
Nicole Bowman
100%
100%
-
-
-
-
Jonathan Rubinsztein
-
-
-
-
-
-
Shan Kanji
-
-
-
-
-
-
Executive Director:
Stephen Kowal
44%
27%
44%
27%
12%
46%
Other Key Management
Personnel:
Richard Shaw
100%
79%
-
21%
-
-
Herbert To
87%
-
13%
-
-
-
The proportion of the cash bonus paid/payable or forfeited for the current financial year is as follows:
Cash bonus paid/payable
Cash bonus forfeited
Name
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Non-Executive Directors:
Nicole Bowman
-
-
-
-
Jonathan Rubinsztein
-
-
-
-
Shan Kanji
-
-
-
-
Executive Director:
Stephen Kowal
100%
100%
-
-
Other Key Management Personnel:
Richard Shaw
-
100%
-
-
Herbert To
100%
-
-
-
Directors’ Report
Atturra Annual Report 2023
24
Service agreements
Remuneration and other terms of employment for KMPs are formalised in service agreements. Details of these agreements
are as follows:
Name:
Shan Kanji
Title:
Non-Executive Chairman
Agreement commenced:
20 October 2021
Term of agreement:
Permanent
Details:
Shan does not receive a fee for services as Director and Non-Executive Chairman of
Atturra Limited.
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 $400,000 per annum, inclusive of
superannuation and a discretionary STI cash bonus of up to $400,000 per annum
(inclusive of superannuation) to be paid within three months of the end of the relevant
financial year. Stephen may be issued an LTI subject to shareholders approving it at
the AGM.
6 months termination notice in writing.
Name:
Nicole Bowman
Title:
Independent, Non-Executive Director
Agreement commenced:
20 October 2021
Term of agreement:
Permanent
Details:
$75,341 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 did not receive a fee for services as a Director of Atturra Limited.
Name:
Herbert To
Title:
Chief Financial Officer
Agreement commenced:
3 October 2022
Term of agreement:
Permanent
Details:
Herbert is entitled to receive a remuneration of $275,000 per annum, inclusive of
superannuation. For the period commencing 3 October 2022 to 30 June 2023, Herbert
is entitled to a target STI of $33,000 per annum (inclusive of superannuation) and for
the period commencing 1 July 2023 to 30 June 2024, a target STI of $50,000 per
annum (inclusive of superannuation).
6 months termination notice in writing by either party on or before 3 October 2023, or 3
months termination notice in writing after 3 October 2023.
KMPs have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no ordinary shares of Atturra Limited issued on the exercise of performance rights during the year ended 30
June 2023 and up to the date of this report.
Performance rights
During the year ended 30 June 2023, 622,614 performance rights were issued to Stephen Kowal (30 June 2022: 750,000
performance rights). The fair value of the performance rights at grant date was $0.38 each (2022: $0.29 each).
Atturra Annual Report 2023
25
Performance rights granted carry no dividend or voting rights.
Additional disclosures relating to KMPs
Shareholding
The number of shares in Atturra Limited held during the financial year by each Director and KMPs of Atturra 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
-
15,105,883
-
130,049,595
Stephen Kowal
6,872,943
-
200,000
-
7,072,943
Nicole Bowman
100,000
-
13,333
-
113,333
Jonathan Rubinsztein
5,825,055
-
250,000
-
6,075,055
Richard Shaw*
400,000
-
-
(400,000)
-
Herbert To
-
-
-
-
-
128,141,710
-
15,569,216
(400,000)
143,310,926
*
Richard Shaw departed during the financial year on 14 September 2022.
Option holding
No Directors held any options over ordinary shares.
Performance Rights holding
The number of performance rights over ordinary shares in Atturra Limited held during the financial year by each Director and
KMPs of Atturra 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
622,614
-
-
1,372,614
Richard Shaw
-
-
-
-
-
Herbert To
-
-
-
-
-
750,000
622,614
-
-
1,372,614
*
Performance rights at the end of the year are unvested and not exercisable.
Other transactions with key management personnel and their related parties
The following transactions occurred with parties related to Shan Kanji.
Consolidated
30 June 2023 30 June 2022
$
$
Sale of goods and services:
Sale of services to other related party
360,628
-
Payment for goods and services:
Payment for services from other related party
41,068
96,986
Directors’ Report
Atturra Annual Report 2023
26
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 2023 30 June 2022
$
$
Current receivables:
Trade receivables from Kanji Group Pty Ltd
15,950
-
Current borrowings:
Loan from related party (263 Finance Pty Ltd)
-
1,000,000
Non-current borrowings:
Loan from related party (263 Finance Pty Ltd)
-
3,750,000
There are no other loans provided to or related party transactions with KMPs.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
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
Date of record
price
under rights
22/12/2021
31/12/2024
$0.00
375,000
22/12/2021
31/12/2025
$0.00
375,000
29/04/2022
01/11/2024
$0.00
1,691,000
28/07/2022
01/11/2024
$0.00
182,910
29/07/2022
01/11/2024
$0.00
1,302,762
07/10/2022
31/12/2025
$0.00
311,307
07/10/2022
31/12/2026
$0.00
311,307
13/04/2023
31/12/2025
$0.00
60,000
4,609,286
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 Atturra Limited 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 2023 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 2023 and up to the date of this report.
Indemnity and insurance of officers
Atturra Limited has indemnified the Directors and executives of Atturra Limited 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.
During the financial year, Atturra Limited paid a premium in respect of a contract to insure the Directors and executives of
Atturra Limited 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
Atturra Limited has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of Atturra
Limited or any related entity against a liability incurred by the auditor.
During the financial year, Atturra Limited has not paid a premium in respect of a contract to insure the auditor of Atturra
Limited or any related entity.
Proceedings on behalf of Atturra Limited
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of Atturra Limited, or to intervene in any proceedings to which Atturra Limited is a party for the purpose of taking responsibility
on behalf of Atturra Limited 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 Atturra Limited who are former partners of Crowe Audit Australia
There are no officers of Atturra Limited who are former partners of Crowe Audit Australia.
Rounding of amounts
Atturra Limited 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
Non-Executive Chairman
31 August 2023
Atturra Annual Report 2023
27
Auditor’s Independence Declaration
Crowe Audit Australia
ABN 13 969 921 386
Level 24, 1 O’Connell Street
Sydney NSW 2000
Main +61 (02) 9262 2155
Fax +61 (02) 9262 2190
www.crowe.com.au
Some of the Crowe personnel involved in preparing this document may be members of a professional scheme approved under Professional
Standards Legislation such that their occupational liability is limited under that Legislation. To the extent that applies, the following disclaimer
applies to them. If you have any questions about the applicability of Professional Standards Legislation Crowe’s personnel involved in preparing
this document, please speak to your Crowe adviser.
Liability limited by a scheme approved under Professional Standards Legislation.
The title ‘Partner’ conveys that the person is a senior member within their respective division, and is among the group of persons who hold an
equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership
is external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional services offered by
Findex Group Limited are conducted by a privately owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Audit Australia, an affiliate of Findex (Aust) Pty Ltd.
© 2023 Findex (Aust) Pty Ltd
31 August 2023
The Board of Directors
Atturra Limited
Level 2, 10 Bond Street
Sydney NSW 2000
Dear Board Members
Atturra Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the Directors of Atturra Limited.
As lead audit partner for the audit of the financial report of Atturra Limited for the financial period
ended 30 June 2023, I declare that to the best of my knowledge and belief, that there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit
Yours sincerely,
Crowe Audit Australia
Ash Pather
Senior Partner
Atturra Annual Report 2023
28
FY23
Financial
Report
Contents
Consolidated statement of profit or loss
and other comprehensive income
30
Consolidated statement of financial position
31
Consolidated statement of changes in equity
32
Consolidated statement of cash flows
33
Notes to the consolidated financial statements
34
Directors’ declaration
75
Independent auditor’s report
76
Atturra Annual Report 2023
29
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2023
Atturra Annual Report 2023
30
Consolidated
Note 30 June 2023 30 June 2022
$'000
$'000
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
Revenue
Revenue from contracts with customers
4
178,331
134,579
Cost of providing services
(124,223)
(88,210)
Gross margin
54,108
46,369
Share of profits of associates accounted for using the equity method
72
106
Other income
1,301
6
Interest revenue calculated using the effective interest method
490
10
Expenses
Depreciation and amortisation expense
5
(2,054)
(1,330)
General and administrative expenses
(35,680)
(31,203)
Sales and marketing expenses
(1,190)
(1,147)
Impairment of receivables
8
(8)
(446)
Finance costs
5
(1,088)
(499)
Profit before income tax expense
15,951
11,866
Income tax expense
6
(5,308)
(3,781)
Profit after income tax expense for the year
10,643
8,085
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year
10,643
8,085
Profit for the year is attributable to:
Non-controlling interest
402
861
Owners of Atturra Limited
23
10,241
7,224
10,643
8,085
Total comprehensive income for the year is attributable to:
Non-controlling interest
402
861
Owners of Atturra Limited
10,241
7,224
10,643
8,085
Cents
Cents
Basic earnings per share
37
4.71
4.12
Diluted earnings per share
37
4.61
4.11
Consolidated statement of financial position
As at 30 June 2023
Atturra Annual Report 2023
31
Consolidated
Note 30 June 2023 30 June 2022
$'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
7
44,250
35,130
Trade and other receivables
8
39,627
32,840
Contract assets
9
422
420
Inventories
10
755
-
Other current assets
11
2,356
2,719
Total current assets
87,410
71,109
Non-current assets
Investments accounted for using the equity method
12
1,191
1,365
Property, plant and equipment
1,410
141
Right-of-use assets
13
9,951
5,887
Intangible assets
14
56,539
30,746
Deferred tax asset
6
5,869
6,635
Total non-current assets
74,960
44,774
Total assets
162,370
115,883
Liabilities
Current liabilities
Trade and other payables
15
41,339
35,945
Contract liabilities
16
7,616
5,712
Borrowings
17
-
1,000
Lease liabilities
18
2,797
1,199
Income tax payable
6
906
3,532
Employee benefits
19
7,670
6,339
Other liabilities
20
3,592
4,063
Total current liabilities
63,920
57,790
Non-current liabilities
Borrowings
17
5,352
3,750
Lease liabilities
18
7,399
4,947
Employee benefits
19
1,446
766
Other liabilities
20
5,192
6,226
Total non-current liabilities
19,389
15,689
Total liabilities
83,309
73,479
Net assets
79,061
42,404
Equity
Issued capital
21
77,958
52,312
Reserves
22
(10,983)
(11,762)
Retained earnings
23
11,463
1,120
Equity attributable to the owners of Atturra Limited
78,438
41,670
Non-controlling interest
34
623
734
Total equity
79,061
42,404
Consolidated statement of changes in equity
For the year ended 30 June 2023
Atturra Annual Report 2023
32
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
Issued
(Accumulated
losses) /
retained
Non-
controlling
Total equity
capital
Reserves
earnings
interest
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 IPO
24,000
-
-
-
24,000
Share issue costs in IPO, net of tax
(2,144)
-
-
-
(2,144)
Issue of shares in share swap acquisition -
Noetic
2,837
-
-
-
2,837
Transfer from share-based payment reserve to
share capital (note 22)
806
(806)
-
-
-
Share-based payments - Stephen Kowal (note
38)
548
-
-
-
548
Issue of shares under Employee share
scheme - share-based payments (note 38)
357
-
-
-
357
Share-based payments - Long-term incentive
Plan (note 38)
-
129
-
-
129
Transactions with non-controlling interests
(note 22)
-
(2,502)
(177)
(235)
(2,914)
Dividends paid
-
-
-
(679)
(679)
Balance at 30 June 2022
52,312
(11,762)
1,120
734
42,404
Issued
Retained
Non-
controlling
Total equity
capital
Reserves
earnings
interest
Consolidated
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2022
52,312
(11,762)
1,120
734
42,404
Profit after income tax expense for the year
-
-
10,241
402
10,643
Other comprehensive income for the year, net
of tax
-
-
-
-
-
Total comprehensive income for the year
-
-
10,241
402
10,643
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction
costs (note 21)
26,396
-
-
-
26,396
Other
-
-
102
-
102
Issue of shares under Employee share
scheme - share-based payments (note 38)
376
-
-
-
376
Share-based payments (note 38)
-
779
-
-
779
Treasury shares
(1,126)
-
-
-
(1,126)
Dividends paid
-
-
-
(513)
(513)
Balance at 30 June 2023
77,958
(10,983)
11,463
623
79,061
Consolidated statement of cash flows
For the year ended 30 June 2023
Atturra Annual Report 2023
33
Consolidated
Note 30 June 2023 30 June 2022
$'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)
192,426
124,048
Payments to suppliers and employees (inclusive of GST)
(175,611)
(108,205)
16,815
15,843
Interest received
490
10
Interest and other finance costs paid
(622)
(499)
Income taxes paid
(6,214)
(5,184)
Net cash from operating activities
36
10,469
10,170
Cash flows from investing activities
Payments for purchase of subsidiaries, net of cash acquired
33
(18,365)
(13,658)
Payments for deferred consideration for purchase of subsidiaries
(3,800)
-
Payments for property, plant and equipment
-
(19)
Payments for intangibles
14
(281)
(19)
Proceeds from disposal of property, plant and equipment
97
-
Proceeds/(payments) for investments
664
(762)
Net cash used in investing activities
(21,685)
(14,458)
Cash flows from financing activities
Proceeds from issue of shares, net of costs
24,254
20,975
Repayments of borrowings
-
(154)
(Repayment)/proceeds of loans from related parties
(4,750)
3,000
Proceeds from borrowings from third parties
4,600
-
Repayments of lease liabilities
(2,129)
(1,052)
Payments for share buy-backs
(1,126)
-
Dividends paid
24
(513)
(679)
Net cash from financing activities
20,336
22,090
Net increase in cash and cash equivalents
9,120
17,802
Cash and cash equivalents at the beginning of the financial year
35,130
17,328
Cash and cash equivalents at the end of the financial year
7
44,250
35,130
Notes to the consolidated financial statements
Contents
Note 1. Significant accounting policies
35
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
47
Note 6. Expenses
48
Note 7. Income tax
49
Note 8. Cash and cash equivalents
50
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
55
Note 17. Borrowings
55
Note 18. Lease liabilities
56
Note 19. Employee benefits
57
Note 20. Onerous contract provision
57
Note 21. Other liabilities
58
Note 22. Issued capital
59
Note 23. Reserves
59
Note 24. Dividends
60
Note 25. Financial instruments
60
Note 26. Fair value measurement
62
Note 27. Key management personnel disclosures
64
Note 28. Remuneration of auditors
64
Note 29. Contingent liabilities
64
Note 30. Commitments
64
Note 31. Related party transactions
64
Note 32. Parent entity information
65
Note 33. Business combinations
66
Note 34. Interests in subsidiaries
69
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
72
Note 39. Events after the reporting period
74
Atturra Annual Report 2023
34
Atturra Annual Report 2023
35
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
Atturra Group has adopted all the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting
Standards and Interpretations did not have any significant impact on the financial performance or position of Atturra Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the 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).
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.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of Atturra 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 as at 30 June
2023 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 Atturra Group.
Subsidiaries are all those entities over which Atturra Group has control. Atturra Group controls an entity when Atturra 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 Atturra Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in Atturra 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
Atturra 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 acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest 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 Atturra Group. Losses
incurred by Atturra Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Notes to the consolidated financial statements
Atturra Annual Report 2023
36
Note 1. Significant accounting policies (continued)
Where Atturra Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. Atturra 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 Atturra Limited's functional currency 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 Atturra Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, Atturra 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.
Atturra Group recognises revenue for its major business activities as follows:
Project revenue - time and materials agreements
Where Atturra 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
Atturra Group, an amount is recorded as Accounts Receivable.
Project revenue - fixed price agreements
Where Atturra 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. Atturra Group has adopted
the practical expedient requirements of AASB 15 (121(a)), where the performance obligations contained in the project have
an original expected duration of one year or less.
Atturra Annual Report 2023
37
Note 1. Significant accounting policies (continued)
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 Atturra Group’s entities, SME Gateway Pty Ltd (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 over 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, 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.
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.
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.
Atturra Limited (the 'head entity') and its wholly owned Australian subsidiaries is 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.
Notes to the consolidated financial statements
Atturra Annual Report 2023
38
Note 1. Significant accounting policies (continued)
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 Atturra
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 Atturra 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.
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.
Atturra 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 Atturra Group has transferred goods or services to the customer but where Atturra
Group is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes.
Inventories
Stock on hand is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Atturra Annual Report 2023
39
Note 1. Significant accounting policies (continued)
Associates
Associates are entities over which Atturra 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
Atturra 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 Atturra Group's share of losses in an associate equal or exceeds its interest in the associate, including any unsecured
long-term receivables, Atturra Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associate.
Atturra 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.
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
Atturra 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 Atturra 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.
Atturra 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.
Notes to the consolidated financial statements
Atturra Annual Report 2023
40
Note 1. Significant accounting policies (continued)
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.
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.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 years.
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 Atturra 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.
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 Atturra Limited 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 Atturra Limited, 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.
Atturra Annual Report 2023
41
Note 1. Significant accounting policies (continued)
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to Atturra 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 Atturra Group's obligation to transfer goods or services to a customer and are recognised when
a customer pays consideration, or when Atturra Group recognises a receivable to reflect its unconditional right to
consideration (whichever is earlier) before Atturra 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.
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, Atturra 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 Atturra Group has a present (legal or constructive) obligation as a result of a past event, it
is probable Atturra 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.
Notes to the consolidated financial statements
Atturra Annual Report 2023
42
Note 1. Significant accounting policies (continued)
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 Plan (LTIP) is for
executives and Directors and the Exempt Employee Share Plan (ESSP) 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 date of record. 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.
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 Atturra Group or employee, the failure to satisfy the condition is treated as
a cancellation. If the condition is not within the control of Atturra 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 Atturra 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 Atturra Limited.
Atturra Annual Report 2023
43
Note 1. Significant accounting policies (continued)
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 Atturra Group to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest 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, Atturra Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, Atturra Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, Atturra 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.
Contingent consideration to be transferred by Atturra 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
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 Atturra Group, the difference is recognised as a gain
directly in profit or loss by Atturra Group on the acquisition-date, but only after a reassessment of the identification and
measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and Atturra Group's previously held equity interest in the acquiree.
Business combinations are initially accounted for on a provisional basis. Atturra 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 Atturra 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.
Notes to the consolidated financial statements
Atturra Annual Report 2023
44
Note 1. Significant accounting policies (continued)
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
Atturra Limited 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.
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
Atturra 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 is the agent in respect of transactions with its customers. This determination
has been made on the basis that SME Gateway 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 Atturra Group.
Software licencing revenue includes commission received as an agent for selling software licences of other software
providers.
Goodwill
Atturra 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 Atturra 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. Atturra 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.
Atturra Annual Report 2023
45
Note 2. Critical accounting judgements, estimates and assumptions (continued)
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 Atturra 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.
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 Atturra 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
Atturra Group is organised into only one operating and reporting segment based on the market it serves which is Information
Technology (IT) Solutions in Australia. This operating segment is based on the internal reports that are reviewed and used
regularly by the Board (who 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 EBITDA (earnings before interest, tax, depreciation, and
amortisation, and other adjustments as disclosed) for the reportable segment’s measure of profit or loss. 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 2023 and 30 June 2022, no single customer contributed more than 10% of Atturra Group's
total revenue.
Note 4. Revenue from contracts with customers
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Time and materials agreements
114,592
83,640
Fixed price agreements
34,209
38,072
Software licencing
2,124
1,021
Software maintenance and managed services
16,661
3,922
Management fee revenue
7,974
6,354
Other revenue
2,771
1,570
Revenue from contracts with customers
178,331
134,579
Notes to the consolidated financial statements
Atturra Annual Report 2023
46
Note 4. Revenue from contracts with customers (continued)
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
2023
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Timing of revenue
recognition
At a point in time
-
34,209
2,124
-
-
2,771
39,104
Over time
114,592
-
-
16,661
7,974
-
139,227
114,592
34,209
2,124
16,661
7,974
2,771
178,331
Software
maintenance
Time and
materials
Fixed price
Software
licensing
and
managed
services
Management
fee
Others
Total
2022
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Timing of revenue
recognition
At a point in time
-
38,072
1,021
-
-
1,570
40,663
Over time
83,640
-
-
3,922
6,354
-
93,916
83,640
38,072
1,021
3,922
6,354
1,570
134,579
Atturra Annual Report 2023
47
Note 5. Expenses
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Profit before income tax includes the following specific expenses:
Depreciation
Plant and equipment
16
110
Fixtures and fittings
31
42
Buildings right-of-use assets
1,762
1,142
Equipment right-of-use assets
37
-
Total depreciation
1,846
1,294
Amortisation
Software
53
36
Client relationships
155
-
Total amortisation
208
36
Total depreciation and amortisation
2,054
1,330
Finance costs
Interest and finance charges paid/payable on borrowings
332
185
Interest and finance charges paid/payable on lease liabilities
466
136
Interest and finance charges paid/payable on deferred consideration
290
178
Finance costs expensed
1,088
499
Net foreign exchange loss
Net foreign exchange loss
41
4
Leases
Short-term lease payments
-
87
Superannuation expense
Defined contribution superannuation expense
1,739
1,345
Share-based payments expense
Share-based payments expense
1,155
1,034
Employee benefits expense excluding superannuation
Employee benefits expense excluding superannuation
23,550
18,713
Notes to the consolidated financial statements
Atturra Annual Report 2023
48
Note 6. Income tax
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Income tax expense
Current tax
4,605
5,500
Deferred tax - origination and reversal of temporary differences
703
(1,719)
Aggregate income tax expense
5,308
3,781
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
15,951
11,866
Tax at the statutory tax rate of 30%
4,785
3,560
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
198
148
Share-based payments
346
310
Revaluation of Noetic contingent consideration
-
239
Deductible IPO costs recognised through equity
(212)
(169)
Over/(under) provision and recognition of tax losses not previously recognised
205
(167)
Sundry items
(14)
(140)
Income tax expense
5,308
3,781
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Amounts credited directly to equity
Deferred tax assets
(2)
(677)
Atturra Annual Report 2023
49
Note 6. Income tax (continued)
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
901
982
Employee benefits
4,318
4,139
Lease liabilities
2,635
1,843
Accrued expenses
1,560
827
Other
356
279
Right of use assets
(2,501)
(1,766)
Accrued income
(715)
(346)
Intangibles
(1,364)
-
5,190
5,958
Amounts recognised in equity:
Capital raising costs
679
677
Deferred tax asset
5,869
6,635
Amount expected to be recovered within 12 months
-
2,156
Amount expected to be recovered after more than 12 months
5,869
4,479
5,869
6,635
Movements:
Opening balance
6,635
4,033
Credited/(charged) to profit or loss
(703)
1,719
Credited to equity
2
677
Additions through business combinations
(65)
206
Closing balance
5,869
6,635
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Provision for income tax
Provision for income tax
906
3,532
Note 7. Cash and cash equivalents
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current assets
Cash at bank
44,250
35,130
Notes to the consolidated financial statements
Atturra Annual Report 2023
50
Note 8. Trade and other receivables
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current assets
Trade receivables
38,100
32,065
Less: Allowance for expected credit losses
(531)
(446)
37,569
31,619
Other receivables
2,058
1,221
39,627
32,840
Allowance for expected credit losses
Atturra Group has recognised a loss of $8,000 related to a movement in the allowance for expected credit losses and bad
debts (2022: $446,000) in profit or loss in respect of the expected credit losses for the year ended 30 June 2023.
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 2023 30 June 2022 30 June 2023 30 June 2022 30 June 2023 30 June 2022
Consolidated
%
%
$'000
$'000
$'000
$'000
Current
-
-
25,608
16,490
-
-
More than 30 days past due
-
-
9,494
11,184
-
-
More than 60 days past due
-
-
919
643
-
-
More than 90 days past due
-
-
1,114
2,232
-
-
More than 120 days past due
55.00
29.00
965
1,516
531
446
38,100
32,065
531
446
Atturra 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, Atturra Group believes no further impairment is required.
Note 9. Contract assets
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current assets
Contract assets
422
420
Note 10. Inventories
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current assets
Stock on hand - at cost
805
-
Less: Provision for impairment
(50)
-
755
-
Atturra Annual Report 2023
51
Note 11. Other current assets
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current assets
Prepayments
1,728
1,524
Deposits
628
671
Other
-
524
2,356
2,719
Note 12. Investments accounted for using the equity method
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Non-current assets
Investment in associate - Protegic Pty Ltd
1,191
1,365
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
1,365
497
Share of associates earnings
72
106
Additions
-
762
Share buy-back*
(246)
-
Closing carrying amount
1,191
1,365
Refer to note 35 for further information on interests in associates.
*This relates to a share buy back by Protegic which resulted in Atturra receiving $246,000 of proceeds during the year ended
30 June 2023, Atturra’s shareholding of 49% in Protegic has not changed from 30 June 2022 to 30 June 2023.
Note 13. Right-of-use assets
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Non-current assets
Buildings - right-of-use
12,752
7,903
Less: Accumulated depreciation
(3,766)
(2,016)
8,986
5,887
Equipment - right-of-use
1,905
-
Less: Accumulated depreciation
(940)
-
965
-
9,951
5,887
Atturra 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.
Notes to the consolidated financial statements
Atturra Annual Report 2023
52
Note 13. Right-of-use assets (continued)
Atturra Group leases office equipment under agreements of less than one year. For these leases that are either short-term
or low-value, they have been expensed as incurred and not capitalised as right-of-use assets.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Buildings
Equipment
Total
Consolidated
$'000
$'000
$'000
Balance at 1 July 2021
3,275
-
3,275
Additions
4,652
-
4,652
Disposals
(905)
-
(905)
Depreciation expense
(1,135)
-
(1,135)
Balance at 30 June 2022
5,887
-
5,887
Additions
3,665
-
3,665
Additions through business combinations (note 33)
1,402
1,002
2,404
Disposals
(206)
-
(206)
Depreciation expense
(1,762)
(37)
(1,799)
Balance at 30 June 2023
8,986
965
9,951
For other lease disclosures refer to:
●
note 5 for depreciation on right-of-use assets, interest on lease liabilities and other lease expenses;
●
note 18 for lease liabilities;
●
note 25 for undiscounted future lease commitments; and
●
consolidated statement of cash flows for repayment of lease liabilities.
Note 14. Intangible assets
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Non-current assets
Goodwill - at cost
51,154
30,715
Customer relationships - at cost
4,661
-
Less: Accumulated amortisation
(155)
-
4,506
-
Software - at cost
2,246
1,792
Less: Accumulated amortisation
(1,367)
(1,761)
879
31
56,539
30,746
Atturra Annual Report 2023
53
Note 14. Intangible 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:
Goodwill
Customer
relationships
Software
Total
Consolidated
$'000
$'000
$'000
$'000
Balance at 1 July 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
Additions
-
-
281
281
Additions through business combinations (note 33)
20,439
4,661
620
25,720
Amortisation expense
-
(155)
(53)
(208)
Balance at 30 June 2023
51,154
4,506
879
56,539
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 2023 30 June 2022
$'000
$'000
Galaxy 42, ESAM and Chartsmart
3,665
3,665
Noetic
4,388
4,388
Mentum
3,903
3,903
Kettering
4,898
4,898
Hayes Information Systems
13,861
13,861
Hammond Street Developments
4,233
-
The Somerville Group
16,206
-
51,154
30,715
At 30 June 2023 management performed impairment testing for each CGU of Atturra where there is goodwill. No impairment
losses were identified at 30 June 2023.
Notes to the consolidated financial statements
Atturra Annual Report 2023
54
Note 14. Intangible assets (continued)
Key assumptions
●
Revenue growth is based on the Board approved budget for the next financial year (FY24) as well as management
assessment over the forecast period (FY25 to FY28). Budgeted revenue for 2024 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. The forecast revenue assumption has been assumed to be
the same for all the CGU’s due to the risk profile and the composition of the client base being similar historically and
this is expected to continue over the forecast period.
●
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 Atturra 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 Atturra Group. The WACC considers both debt
and equity. The cost of equity is derived from the expected return on investment by Atturra Group’s investors. It
incorporates a beta factor to reflect the specific risk associated with the industries in which Atturra Group operates. The
cost of debt is based on the interest-bearing borrowings Atturra Group is obliged to service. Management utilised a pre-
tax discount rate of 18.57% (13.00% post tax) (2022: 18.57% (13.00% 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:
●
Revenue would need to increase by less than 3% for the Somerville CGU for the forecast period before goodwill would
need to be impaired, with all other assumptions remaining constant.
●
The EBIT margin would need to decrease by more than 4% for the Mentum and HSD CGU for the forecast period 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.
Note 15. Trade and other payables
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current liabilities
Trade payables
28,195
18,055
Accrued expenses
1,408
2,447
Accrued staff bonuses
5,625
6,725
Payroll tax and PAYG payable
2,438
2,429
GST payable
2,089
2,903
Other payables
1,584
3,386
41,339
35,945
Refer to note 25 for further information on financial instruments.
Atturra Annual Report 2023
55
Note 16. Contract liabilities
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current liabilities
Contract liabilities
7,616
5,712
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
5,712
3,353
Payments received in advance
19,148
10,229
Additions through business combinations (note 33)
3,319
2,265
Transfer to revenue
(20,563)
(10,135)
Closing balance
7,616
5,712
Note 17. Borrowings
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current liabilities
Loan from related party (263 Finance Pty Ltd)
-
1,000
Non-current liabilities
Bank loans
4,600
-
Loan from related party (263 Finance Pty Ltd)
-
3,750
Chattel mortgages and loans
752
-
5,352
3,750
5,352
4,750
Refer to note 25 for further information on financial instruments.
Notes to the consolidated financial statements
Atturra Annual Report 2023
56
Note 17. Borrowings (continued)
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Total facilities
Bank loans – Westpac Banking Corporation
25,800
-
Loan from related party (263 Finance Pty Ltd)
-
4,750
Chattel mortgages and loans
752
-
26,552
4,750
Used at the reporting date
Bank loans – Westpac Banking Corporation*
5,000
-
Loan from related party (263 Finance Pty Ltd)
-
4,750
Chattel mortgages and loans
752
-
5,752
4,750
Unused at the reporting date
Bank loans – Westpac Banking Corporation
20,800
-
Loan from related party (263 Finance Pty Ltd)
-
-
Chattel mortgages and loans
-
-
20,800
-
*$4.6 million of the $5 million for Facility A was drawn down, the remainder of $0.4 million is inaccessible as the limit is
reduced.
The total facility is $25.8 million and includes:
●
a $5 million term loan facility for the repayment of the related party loan which took place on 27 January 2023. It is non-
revolving and has a maturity date of 5 years, the interest rate is the Australian Bank Bill Swap Reference Rate + 2.04%
+0.5% Line Fee per annum (Facility A);
●
a total of $15 million term loan facilities for funding permitted future acquisitions ($9 million) and deferred consideration
relating to prior acquisitions ($6 million); each of which mature five years from financial close (Facility B and C);
●
a $5 million overdraft facility for working capital requirements, which is repayable on demand (Facility D);
●
a $0.3 million revolving bank guarantee facility for securing lease obligations of Atturra Group, which is repayable on
demand (Facility E); and
●
a $0.5 million corporate credit card facility for day-to-day general corporate purposes of Atturra Group, which is
repayable on demand (Facility F).
Note 18. Lease liabilities
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current liabilities
Lease liability
2,797
1,199
Non-current liabilities
Lease liability
7,399
4,947
10,196
6,146
Refer to note 25 for the maturity analysis of lease liabilities.
Atturra Annual Report 2023
57
Note 19. Employee benefits
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current liabilities
Annual leave
5,927
4,772
Long service leave
1,743
1,567
7,670
6,339
Non-current liabilities
Long service leave
1,446
766
9,116
7,105
Amounts not expected to be settled within the next 12 months
The leave obligations cover Atturra 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 Atturra Group does not have an unconditional right to defer
settlement. However, based on past experience, Atturra 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% (2022: 40%) of the current
leave obligations is considered as to be paid within 12 months and 60% (2022: 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 2023 30 June 2022
$'000
$'000
Employee benefits obligation expected to be settled after 12 months
4,602
3,803
Note 20. Other liabilities
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Current liabilities
Contingent consideration
3,592
4,063
Non-current liabilities
Contingent consideration
5,192
6,226
8,784
10,289
Contingent consideration payable relates to the acquisition of subsidiaries. Refer to note 26 for further information.
Notes to the consolidated financial statements
Atturra Annual Report 2023
58
Note 21. Issued capital
Consolidated
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
232,524,941
200,550,449
79,084
52,312
Treasury shares
(1,252,672)
-
(1,126)
-
231,272,269
200,550,449
77,958
52,312
Note: All issued ordinary shares are fully paid.
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
1 July 2022
200,550,449
52,312
Issue of shares - Entitlement Offer
5 December 2022
25,935,800
$0.85
22,045
Issue of shares - Placement
22 December 2022
3,476,279
$0.85
2,955
Share issue costs, net of tax
22 December 2022
(603)
Issue of shares under ESS - share-based payments
15 February 2023
371,239
$1.01
373
Issue of shares
28 February 2023
541,126
$0.92
500
Issue of shares
31 March 2023
1,647,060
$0.91
1,499
Issue of shares under ESS - share-based payments
13 April 2023
2,988
$0.87
3
Balance
30 June 2023
232,524,941
79,084
Movements in treasury shares
During the year, 1,252,672 fully paid ordinary shares at an average price per security of $0.90 were purchased on-market
under for the purpose of an employee incentive scheme or to satisfy the entitlements of the holders of performance rights
when they are expected to vest between 2024 and 2026.
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders
should Atturra Limited 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 Atturra Limited 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
Atturra 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, Atturra Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
Atturra 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 2022 Annual Report.
Atturra Annual Report 2023
59
Note 22. Reserves
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Share-based payments reserve
908
129
Consolidation reserve
(11,891)
(11,891)
(10,983)
(11,762)
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.
Consolidation reserve
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.
Movements in reserves
Movements in each class of reserve during the current financial year are set out below:
Share-based Consolidation
payment
reserve
Total
Consolidated
$'000
$'000
$'000
Balance at 1 July 2022
129
(11,891)
(11,762)
Share-based payment expense (note 38)
779
-
779
Balance at 30 June 2023
908
(11,891)
(10,983)
Note 23. Retained earnings
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Retained earnings/(accumulated losses) at the beginning of the financial year
1,120
(5,927)
Profit after income tax expense for the year
10,241
7,224
Transfer from other reserves
-
(177)
Other
102
-
Retained earnings at the end of the financial year
11,463
1,120
Notes to the consolidated financial statements
Atturra Annual Report 2023
60
Note 24. Dividends
Dividends
No dividends were paid, recommended, or declared during the current financial year to Atturra Limited shareholders. During
the current financial year, a dividend of $513,000 (2022: $679,000) was paid to the minority shareholders of Noetic Group
Pty Ltd, a partly owned subsidiary of Atturra Limited, with the remainder being paid to Atturra Holdings Pty Ltd and FTS NHC
Pty Ltd that was eliminated on consolidation.
Franking credits
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
15,865
10,125
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
Atturra Group’s risk management is predominantly controlled by a central finance department headed by the Group CFO
under the policies approved by the Board. Atturra Group's finance team identifies, evaluates and hedges financial risks in
close cooperation with Atturra Group’s operating units. Atturra Group uses a variety of methods to measure different types
of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and
other price risks and ageing analysis for credit risk.
Market risk
Foreign currency risk
Atturra 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 Atturra Group's functional currency. Atturra Group's 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. Atturra Group 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
Atturra Group is not exposed to any significant price risk.
Interest rate risk
Atturra Group's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose Atturra
Group to interest rate risk. Borrowings obtained at fixed rates expose Atturra Group to fair value interest rate risk. Atturra
Group maintains minimal long-term borrowings to manage this risk.
Atturra 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 Atturra Group's overall exposure to interest rate movements is not material.
Atturra Annual Report 2023
61
Note 25. Financial instruments (continued)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to Atturra
Group. Atturra Group has a strict code of credit, including obtaining agency credit information, confirming references and
setting appropriate credit limits. 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. Atturra Group does not hold any collateral.
Liquidity risk
Atturra 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 Atturra Group's short, medium and long
term funding and liquidity management requirements. Atturra Group manages liquidity risk by maintaining adequate reserves,
borrowing facilities and instruments and by continuously monitoring forecast and actual cash flows.
Maturities of financial liabilities
The tables below analyse Atturra 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
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 2023
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade and other
payables
41,339
41,339
-
-
-
-
41,339
Borrowings
5,352
-
-
-
5,352
-
5,352
Lease liabilities
10,196
1,475
1,445
2,651
4,949
849
11,369
Contingent consideration
8,784
3,592
-
5,445
395
-
9,432
Total non-derivatives
65,671
46,406
1,445
8,096
10,696
849
67,492
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 2022
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade and other
payables
35,945
35,945
-
-
-
-
35,945
Borrowings - Related
party loan
4,750
-
1,000
1,000
2,750
-
4,750
Lease liabilities
6,146
700
691
1,379
2,967
692
6,429
Contingent consideration
10,289
4,195
-
2,992
3,345
-
10,532
Total non-derivatives
57,130
40,840
1,691
5,371
9,062
692
57,656
Notes to the consolidated financial statements
Atturra Annual Report 2023
62
Note 26. Fair value measurement
Fair value hierarchy
The following tables detail Atturra 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 2023
$'000
$'000
$'000
$'000
Other liabilities
Contingent consideration
-
-
8,784
8,784
Total liabilities
-
-
8,784
8,784
Level 1
Level 2
Level 3
Total
Consolidated - 30 June 2022
$'000
$'000
$'000
$'000
Other liabilities
Contingent consideration
-
-
10,289
10,289
Total liabilities
-
-
10,289
10,289
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. The
contingent consideration is measured on a bi-annual basis to determine the fair value.
Atturra Annual Report 2023
63
Note 26. Fair value measurement (continued)
Fair value at
Relationship of
30 June 2023 30 June 2022 Significant
unobservable inputs
Subsidiary acquired
$'000
$'000
unobservable inputs
to fair value
Noetic Group Pty Ltd
600
1,935
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
2,055
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
4,219
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).
The Somerville Group Pty Ltd
1,910
-
Risk-adjusted discount rate
(30 June 2022 - 5%)
The estimated fair value would
increase (decrease) if the risk-
adjusted discount rate were
lower (higher).
Total
8,784
10,289
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 2021
3,038
Expense recognised in profit or loss
797
Additions
6,454
Balance at 30 June 2022
10,289
Expense recognised in profit or loss
385
Additions
1,910
Settlement
(3,800)
Balance at 30 June 2023
8,784
Applying a discount rate range of 5% across the each of the contingent consideration payments results in a range of $100,000
to $200,000 of potential movement in contingent consideration.
Notes to the consolidated financial statements
Atturra Annual Report 2023
64
Note 27. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and KMPs of Atturra Group is set out below:
Consolidated
30 June 2023 30 June 2022
$
$
Short-term employee benefits
1,250,615
1,046,447
Post-employment benefits
64,066
48,628
Share-based payments
108,417
586,663
Long-term benefits
21,409
46,460
1,444,507
1,728,198
Note 28. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Crowe Audit Australia, the auditor
of Atturra Limited, its network firms, and unrelated firms:
Consolidated
30 June 2023 30 June 2022
$
$
Audit services - Crowe Audit Australia (30 June 2022: PricewaterhouseCoopers)
Audit or review of the financial statements
250,000
401,130
Note 29. Contingent liabilities
Atturra Group has given bank guarantees as at 30 June 2023 of $945,000 (30 June 2022: $525,000) to various landlords.
Note 30. Commitments
Atturra Group had no capital purchase commitments at 30 June 2023. (30 June 2022: 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 KMPs are set out in note 27 and the remuneration report included in the Directors' report.
Atturra Annual Report 2023
65
Note 31. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
30 June 2023 30 June 2022
$
$
Sale of goods and services:
Sale of goods to other related party
360,628
-
Payment for goods and services:
Payment for services from other related party
41,068
96,986
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
30 June 2023 30 June 2022
$
$
Current receivables:
Trade receivables from Kanji Group Pty Ltd
15,950
-
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
30 June 2023 30 June 2022
$
$
Current borrowings:
Loan from related party (263 Finance Pty Ltd)
-
1,000,000
Non-current borrowings:
Loan from related party (263 Finance Pty Ltd)
-
3,750,000
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
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 2023 30 June 2022
$'000
$'000
Profit after income tax
456
87
Total comprehensive income
456
87
Notes to the consolidated financial statements
Atturra Annual Report 2023
66
Note 32. Parent entity information (continued)
Statement of financial position
Parent
30 June 2023 30 June 2022
$'000
$'000
Total current assets
350
-
Total assets
127,741
104,419
Total current liabilities
-
3,571
Total liabilities
-
3,571
Net assets
127,741
100,848
Equity
Issued capital
125,922
100,275
Share-based payments reserve
1,265
486
Retained earnings
554
87
Total equity
127,741
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 2023 and 30 June 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of Atturra 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.
Note 33. Business combinations
Hammond Street Developments Pty Ltd
On 25 January 2023, Veritec Pty Ltd, a wholly owned subsidiary of Atturra Limited, entered into a share sale agreement to
acquire 100% of the ordinary shares of Hammond Street Developments Pty Ltd (HSD) for a maximum purchase
consideration of $7,800,000. $5,498,000 was settled on completion in cash with a working capital adjustment of $229,000
resulting in a net cash payment of $5,269,000, $500,000 of Atturra Limited shares were issued to the HSD vendors (541,126
shares at an issue price $0.92) and an earn out consideration of up to $2,000,000 ($500,000 relates to FY23 performance
and $1,500,000 relates to FY24 performance) in cash subject to HSD achieving performance hurdles based on audited EBIT
results for FY23 and FY24. No contingent consideration has been recognised as the performance hurdles are not expected
to be met. The transaction completed on 28 February 2023.
The acquired business contributed revenue of $3,433,000 and profit after tax of $215,000 to Atturra Group from 1 March
2023 to 30 June 2023. If the acquisition occurred on 1 July 2022, the full year contributions would have been revenue of
$8,625,000 and a loss after tax of $394,000 respectively. The goodwill of $4,233,000 relates predominantly to customer
relationships, software, 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.
Atturra Annual Report 2023
67
Note 33. Business combinations (continued)
The values identified in relation to the acquisition of HSD are provisional as at 30 June 2023 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 2023.
Details of the acquisition are as follows:
Fair value
$'000
Cash and cash equivalents
183
Trade and other receivables
316
Income tax refund due
40
Equipment
24
Right-of-use assets
200
Customer relationships
1,471
Software
620
Trade and other payables
(183)
Deferred tax liability
(133)
Employee benefits
(490)
Lease liabilities
(200)
Other current liabilities
(312)
Net assets acquired
1,536
Goodwill
4,233
Acquisition-date fair value of the total consideration transferred
5,769
Representing:
Cash paid or payable to vendor
5,269
Atturra Limited shares issued to vendor
500
Contingent consideration
-
5,769
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
5,269
Less: cash and cash equivalents
(183)
Net cash used
5,086
The Somerville Group Pty Ltd
On 8 March 2023, Atturra Holdings Pty Ltd, a wholly owned subsidiary of Atturra Limited, entered into a share sale agreement
to acquire 100% of the ordinary shares of The Somerville Group Pty Ltd (Somerville) for a maximum purchase consideration
of $19,100,000. $15,000,000 was settled on completion in cash, $1,498,825 of Atturra Limited shares were issued to the
Somerville vendors (1,647,060 shares at an issue price $0.91) and an earn out consideration of up to $2,600,000 ($500,000
relates to FY23 performance and $2,100,000 relates to FY24 performance) in cash subject to Somerville achieving
performance hurdles based on audited EBIT results for FY23 and FY24.
An additional retention payment of $1,000,000 is payable to selected Somerville employees. This will be paid between 30
months and 42 months post completion of the transaction. No contingent consideration has been recognised for the FY23
performance hurdle as the performance hurdle has not been met. Contingent consideration has been recognised for the
FY24 performance hurdles and has been discounted at 5% resulting in contingent consideration of $1,910,000 being
recognised on acquisition. The transaction completed on 31 March 2023.
Notes to the consolidated financial statements
Atturra Annual Report 2023
68
Note 33. Business combinations (continued)
The acquired business contributed revenue of $5,313,000 and profit after tax of $1,479,000 to Atturra Group from 1 April
2023 to 30 June 2023. If the acquisition occurred on 1 July 2022, the full year contributions would have been revenue of
$33,237,000 and profit after tax of $1,371,000 respectively. The goodwill of $16,206,000 relates predominantly to customer
relationships, 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 Somerville are provisional as at 30 June 2023 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 2023.
Fair value
$'000
Cash and cash equivalents
1,721
Trade and other receivables
3,596
Inventories
914
Prepayments
173
Deposits
29
Other current assets
131
Equipment
1,388
Right-of-use assets
2,204
Customer relationships
3,190
Trade and other payables
(2,605)
Deferred tax asset
254
Other current liabilities
(423)
Accruals and provisions
(3,972)
Employee benefits
(1,264)
Lease liabilities
(810)
Loans
(1,263)
Financial liabilities
(968)
Other non-current liabilities
(92)
Net assets acquired
2,203
Goodwill
16,206
Acquisition-date fair value of the total consideration transferred
18,409
Representing:
Cash paid or payable to vendor
15,000
Atturra Limited shares issued to vendor
1,499
Contingent consideration
1,910
18,409
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
15,000
Less: cash and cash equivalents
(1,721)
Net cash used
13,279
Atturra Annual Report 2023
69
Note 34. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance
with the accounting policy described in note 1:
Ownership interest
Principal place
of business /
30 June 2023 30 June 2022
Name
Country of
incorporation
%
%
Anatas Pty Ltd
Australia
100.00
100.00
Atturra Operations Pty Ltd
Australia
100.00
100.00
Atturra Personnel Pty Ltd
Australia
100.00
100.00
Atturra Holdings Pty Ltd
Australia
100.00
100.00
Cubic Consulting 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
Galaxy 42 Pty Ltd
Australia
100.00
100.00
Hammond Street Developments Pty Ltd
Australia
100.00
-
Hayes Information Systems and Communications Pty Ltd
Australia
100.00
100.00
Kettering Professional Services Pty Ltd
Australia
100.00
100.00
Kobold Group Pty Ltd
Australia
100.00
100.00
Mentum Systems Pty Ltd
Australia
100.00
100.00
SME Gateway Pty Ltd
Australia
100.00
100.00
The Somerville Group Pty Ltd
Australia
100.00
-
Veritec Pty Ltd
Australia
100.00
100.00
Anatas Pte Ltd
Singapore
100.00
100.00
Hayes Information Systems and Communications Pte Ltd
Singapore
-
100.00
Anatas Pty Ltd
New Zealand
100.00
100.00
Kettering NZ Limited
New Zealand
100.00
100.00
Cubic Consulting Pty Ltd
New Zealand
100.00
100.00
Parent
Non-controlling interest
Principal place of
business /
Ownership
interest
30 June 2023
Ownership
interest
30 June 2022
Ownership
interest
30 June 2023
Ownership
interest 30
June 2022
Name
Country of
incorporation
Principal activities
%
%
%
%
Noetic Group Pty
Ltd
Australia
Holding Company
80.04
80.04
19.96
19.96
Noetic Solutions Pty
Ltd
Australia
Advisory and
Consulting Services
80.04
80.04
19.96
19.96
Notes to the consolidated financial statements
Atturra Annual Report 2023
70
Note 34. Interests in subsidiaries (continued)
Summarised financial information
Summarised financial information of the subsidiary with non-controlling interests that are material to Atturra Group are set
out below:
30 June 2023 30 June 2022
$'000
$'000
Summarised statement of financial position
Current assets
4,617
8,403
Non-current assets
2,521
773
Total assets
7,138
9,176
Current liabilities
2,238
5,529
Non-current liabilities
1,777
-
Total liabilities
4,015
5,529
Net assets
3,123
3,647
Summarised statement of profit or loss and other comprehensive income
Revenue
22,571
23,717
Expenses
(19,914)
(19,179)
Profit before income tax expense
2,657
4,538
Income tax expense
(641)
(1,325)
Profit after income tax expense
2,016
3,213
Other comprehensive income
-
-
Total comprehensive income
2,016
3,213
Other financial information
Profit attributable to non-controlling interests
402
861
Accumulated non-controlling interests at the end of reporting period
623
734
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 Atturra Group are set out below:
Ownership interest
Principal place of business /
30 June 2023 30 June 2022
Name
Country of incorporation
%
%
Protegic Pty Ltd
Australia
49.00
49.00
Atturra Annual Report 2023
71
Note 35. Interests in associates (continued)
Summarised financial information
30 June 2023 30 June 2022
$'000
$'000
Summarised statement of financial position
Current assets
1,543
973
Non-current assets
1,118
2,138
Total assets
2,661
3,111
Current liabilities
219
750
Total liabilities
219
750
Net assets
2,442
2,361
Summarised statement of profit or loss and other comprehensive income
Revenue
7,580
7,992
Expenses
(7,460)
(7,539)
Profit before income tax
120
453
Other comprehensive income
-
-
Total comprehensive income
120
453
Contingent liabilities
There were no contingent liabilities at 30 June 2023 and 30 June 2022.
Note 36. Reconciliation of profit after income tax to net cash from operating activities
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Profit after income tax expense for the year
10,643
8,085
Adjustments for:
Depreciation and amortisation
2,282
1,330
Make good provision
-
43
Share-based payments
1,155
1,004
Share of profit - associates
(72)
(106)
Change in operating assets and liabilities:
Increase in trade and other receivables
(6,424)
(12,357)
Increase in inventories
(755)
-
Decrease/(increase) in deferred tax assets
887
(1,925)
Increase in work-in-progress
(3)
(126)
Increase in trade and other payables
1,306
11,099
Increase in provision for income tax
3,589
522
Increase/(decrease) in other provisions
(2,139)
2,601
Net cash from operating activities
10,469
10,170
Notes to the consolidated financial statements
Atturra Annual Report 2023
72
Note 37. Earnings per share
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Profit after income tax
10,643
8,085
Non-controlling interest
(402)
(861)
Profit after income tax attributable to the owners of Atturra Limited
10,241
7,224
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
217,557,863
175,183,372
Adjustments for calculation of diluted earnings per share:
Performance rights over ordinary shares
4,609,286
698,077
Weighted average number of ordinary shares used in calculating diluted earnings per share 222,167,149
175,881,449
Cents
Cents
Basic earnings per share
4.71
4.12
Diluted earnings per share
4.61
4.11
Note 38. Share-based payments
Atturra Group has two incentive schemes in place, namely the LTIP and EESP.
Long-Term Incentive Plan
Atturra Limited established a LTIP to align the interests of eligible employees with shareholders through the sharing of a
personal interest in the future growth and development of the Atturra Limited. A total of 1,372,614 performance rights have
been granted to the CEO (Stephen Kowal) under the LTIP. Other executives have been granted a total of 3,236,672
performance rights under the LTIP. 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 was determined using the Monte Carlo option pricing model.
The fair value of performance rights granted to other executives under the LTIP has been determined be the Atturra Limited
share price at the date of issue. No dividends assumptions have been taken into account during the date of record due to
the future growth strategy of Atturra Group.
Exempt Employee Share Plan
Atturra Limited has also established an EESP to align the interests of eligible employees of Atturra Group with shareholders.
374,227 shares have been issued under the Share Plan as at 30 June 2023. A fair value of $1.00 was used to calculate the
share-based payment expense.
Atturra Annual Report 2023
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 2023
Outstanding at the beginning of the financial year
2,550,000
Additions during the financial year
2,168,286
Expired/forfeited during the financial year
(109,000)
Outstanding at the end of the financial year
4,609,286
Exercisable at the end of the financial year
-
30 June 2023
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Date of record
price
the year
Granted
Exercised
other
the year
22/12/2021
31/12/2024
$0.00
375,000
-
-
-
375,000
22/12/2021
31/12/2025
$0.00
375,000
-
-
-
375,000
29/04/2022
01/11/2024
$0.00
1,800,000
-
-
(109,000)
1,691,000
28/07/2022
01/11/2024
$0.00
-
182,910
-
-
182,910
29/07/2022
01/11/2024
$0.00
-
1,302,762
-
-
1,302,762
07/12/2022
31/12/2025
$0.00
-
311,307
-
-
311,307
07/12/2022
31/12/2026
$0.00
-
311,307
-
-
311,307
13/04/2023
31/12/2025
$0.00
-
60,000
-
-
60,000
2,550,000
2,168,286
-
(109,000)
4,609,286
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 3.00
years.
30 June 2022
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Date of record
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 622,614 performance rights granted during the current financial year to Stephen Kowal (two tranches of 311,307
shares), 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
Date of record
at grant date
price
volatility
yield
interest rate at grant date
07/12/2022
31/12/2025
$0.90
$0.00
55.00%
-
3.48%
$0.398
07/12/2022
31/12/2026
$0.90
$0.00
55.00%
-
3.48%
$0.360
Notes to the consolidated financial statements
Atturra Annual Report 2023
74
Note 38. Share-based payments (continued)
Set out below is a summary of the share-based payment expense for the financial year:
Consolidated
30 June 2023 30 June 2022
$'000
$'000
Long-Term Incentive Plan – Key management personnel
108
38
Long-Term Incentive Plan – Other Executives
671
91
Exempt Employee Share Plan
376
357
Long-term incentive share allotment
-
548
1,155
1,034
Note 39. Events after the reporting period
On 20 July 2023, Atturra Limited announced to the ASX that a wholly owned subsidiary, Galaxy 42 Pty Ltd, had entered into
a binding sale and purchase agreement to acquire the business and certain assets of Silverdrop Education Pty Ltd, a
specialist HR and payroll consulting firm. The maximum total purchase consideration is $3.3 million, with $2.7 million payable
upfront ($2.2 million in cash and $0.5 million of Atturra Limited shares), with an earn out consideration of up to $0.6 million
of cash, subject to Silverdrop achieving performance hurdles for FY24. The purchase consideration will be funded from
internal cash reserves. The transaction is scheduled to complete on or around 31 August 2023.
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect
Atturra Group's operations, the results of those operations, or Atturra Group's state of affairs in future financial years.
Atturra Annual Report 2023
75
Directors’ Declaration
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 Atturra Group's financial position as at 30 June
2023 and of its performance for the financial year ended on that date; and
●
there are reasonable grounds to believe that Atturra Limited 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
Non-Executive Chairman
31 August 2023
Crowe Audit Australia
ABN 13 969 921 386
Level 24, 1 O’Connell Street
Sydney NSW 2000
Main +61 (02) 9262 2155
Fax +61 (02) 9262 2190
www.crowe.com.au
Some of the Crowe personnel involved in preparing this document may be members of a professional scheme approved under Professional
Standards Legislation such that their occupational liability is limited under that Legislation. To the extent that applies, the following disclaimer
applies to them. If you have any questions about the applicability of Professional Standards Legislation Crowe’s personnel involved in preparing
this document, please speak to your Crowe adviser.
Liability limited by a scheme approved under Professional Standards Legislation.
The title ‘Partner’ conveys that the person is a senior member within their respective division, and is among the group of persons who hold an
equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership
is external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional services offered by
Findex Group Limited are conducted by a privately owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Audit Australia, an affiliate of Findex (Aust) Pty Ltd.
© 2023 Findex (Aust) Pty Ltd
Independent Auditor’s Report to the Members of
Atturra Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Atturra Ltd (the Company and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year then ended;
(b) and complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (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.
Atturra Annual Report 2023
76
Independent Auditor’s Report
Independent Auditor’s Report
Atturra Limited
© 2023 Findex (Aust) Pty Ltd
www.crowe.com.au
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter
How we addressed the Key Audit Matter
Business Combinations – Note 33
The group acquired two entities during the year:
Hammond Street Developments Pty Limited (HSD);
and The Somerville Group Pty Limited (Somerville).
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 value 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 the
measurement of separately identifiable intangible
assets and the measurement of contingent
consideration.
We critically analysed the Group’s business
combination workings to ensure its
appropriateness with AASB 3 Business
Combinations, including performing the following
procedures:
a)
developed an understanding of the relevant
purchase agreements.
b)
obtained the purchase price allocation
prepared by an independent valuer and,
together with our Corporate Finance
experts, evaluated the reasonability of
estimates and judgements used within the
fair value assessment.
c)
agreed the amount of the purchase
consideration paid and/or payable to the
transaction agreement, bank statements
and ASX notices. Where there were
contingent considerations, we assessed the
appropriateness of management’s
assumptions in measuring the fair value of
the consideration.
d)
assessed the reasonableness of the note
disclosures in light of the requirements of
the Australian Accounting Standards.
Goodwill – 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 of
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.
We critically analysed management’s workings,
including performing the following procedures:
a)
assessed whether the Group’s identification
of CGUs was consistent with our knowledge
of the operations, internal reporting lines
and level of integration of the acquired
businesses
b)
discussed and evaluated management’s
basis for using the significant assumptions
and inputs used in the value in use model,
and challenged its appropriateness.
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c)
tested the significant assumptions used by
management including discount rates and
growth rates by comparing to observable
market data, having components reviewed
by our internal Corporate Finance experts
and reviewing performance against
approved budgets.
d)
interrogated the value in use model using
different inputs as a means to perform
sensitivity analysis.
e)
evaluated the reasonableness of the note
disclosures in light of the requirements of
Australian Accounting Standards.
Revenue – Note 4
Revenue is significant to the financial statements
and disaggregated across multiple entities.
This was a key audit matter given the materiality of
the amount, high volume of transactions, as well it
being a prescribed risk under the Australian
Auditing Standards.
We performed the following audit procedures
amongst others:
a)
understood and evaluated management’s
processes and controls relating to the
recording and recognition of revenue.
b)
evaluated the Group’s approach to revenue
recognition in light of the requirements of
the Australian Accounting Standards.
c)
testing of a sample of revenue transactions,
including fixed price agreements, comparing
transactions to a range of supporting
evidence.
d)
evaluated the reasonableness of the
Group’s disclosure 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 Group’s Annual Report for the year ended 30 June 2023, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
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Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the group financial report. The
auditor is responsible for the direction, supervision and performance of the group audit. The
auditor remains solely responsible for the audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during the audit.
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We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in the auditor’s report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the remuneration report included in pages 18 to 26 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the remuneration report of Atturra Limited, for the year ended 30 June 2023,
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.
Crowe Audit Australia
Ash Pather
Senior Partner
31 August 2023
Sydney
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The shareholder information set out below was applicable as at 22 August 2023.
Corporate Governance
The Company’s Corporate Governance Statement can be viewed at https://investors.atturra.com/governance/
Distribution of equitable securities
Analysis of number of quoted and unquoted equitable security holders by size of holding:
Performance rights
Ordinary shares
Number
% of total
Number
% of total
of holders
Units
Shares
issued
of holders
Units
Shares
issued
1 – 1,000
-
-
-
77
47,481
0.02
1,001 – 5,000
-
-
-
230
653,711
0.28
5,001 – 10,000
-
-
-
190
1,421,803
0.61
10,001 – 100,000
19
1,305,130
28%
349
8,646,924
3.72
100,001 and over
12
3,304,156
72%
49
221,755,022
95.37
Total
31
4,609,286
100%
895
232,524,941
100.00
Holding less than a marketable parcel
30
7,988
0.00
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
Number held
% of total
shares issued
DRIFTWOOD IT PTY LIMITED
92,579,847
39.82
263 FINANCE PTY LIMITED
37,469,748
16.11
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
21,137,586
9.09
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
14,241,294
6.12
NATIONAL NOMINEES LIMITED
10,268,208
4.42
YAZARSKIA PTY LIMITED
6,075,055
2.61
SWK FAMILY PTY LIMITED
5,976,731
2.57
CITICORP NOMINEES PTY LIMITED
4,127,626
1.78
MR ANDRIS BALMAKS
2,957,405
1.27
PETER JAMES MURPHY
2,931,985
1.26
J&B FUND MANAGEMENT PTY LTD
2,850,872
1.23
INFOGATE PTY LTD
2,801,130
1.20
MERB INVESTMENTS PTY LTD
2,401,936
1.03
CPU SHARE PLANS PTY LTD
1,527,617
0.66
MAYHAM PTY LTD
1,500,987
0.65
MR STEPHEN KOWAL
1,096,212
0.47
STUART ALTHAUS RETIREMENT PTY LTD
1,030,283
0.44
VINMAN NOMINEES PTY LTD
1,020,000
0.44
CRAIG JOHN SOMERVILLE
889,412
0.38
MARHARD SUPERANNUATION PTY LTD
750,000
0.32
Total
213,633,934
91.88
Unquoted equity securities
There are 4,609,286 unquoted Performance Rights on issue.
There is one holder who holds 20% or more unquoted equity securities; Stephen Kowal holds 1,372,614
unquoted equity securities.
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Shareholder Information
Shareholder Information
Atturra Annual Report 2023
82
Substantial holders
The following shareholders have disclosed a substantial shareholder notice to the ASX:
Ordinary Shares
Number held
% of total
shares issued
Date of notice
Shan Kanji, combined holdings of Driftwood IT Pty Ltd,
263 Finance Pty Ltd and Shan Kanji
130,049,595
55.92%
23 August 2023*
Richmond Hill Capital Pty Ltd and associates
14,187,344
6.10%
3 August 2023
*As disclosed in the Form 604 dated 23 August 2023
Restricted securities
Of the 232,524,941 shares on issue, 121,102,119 shares are restricted securities. The restricted securities will
be released from voluntary escrow on 01 October 2023.
On-market buy-back
There is no on-market buy-back scheme in operation for the Company’s quoted shares.
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.
Performance Rights
There are no voting rights attached to Performance Rights.
Stock Exchange on which the Company’s Securities are Quoted
The Company’s listed equity securities are quotes on the Australian Securities Exchange.
Review of Operations
A review of operations is contained in the Directors Report.
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.
Annual General Meeting
As advised to the ASX on 31 July 2023, the Annual General Meeting of the Company is scheduled for Friday, 6
October 2023.
Directors
Shan Kanji
Stephen Kowal
Nicole Bowman
Jonathan Rubinsztein
Company secretary
Kunal Shah
Registered office
Level 33, Aurora Place
88 Phillip 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
Crowe Audit Australia
Level 24
1 O’Connell St
Sydney
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 2023 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 2023
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