23 August 2022
Appendix 4E
Summary Financial Report
Results for announcement to the market
For the financial year ended 30 June 2022
Consolidated Group
Year ended
30 June
2022
Year ended
30 June
2021
Variance to prior year
$’000
$’000
$’000
%
Revenues from ordinary activities
53,459
48,570
4,889
10.1%
Profit/(loss) after tax from ordinary
activities attributable to members
(13,195)
(12,497)
(698)
(5.6%)
Net profit/(loss) attributable to members
(13,195)
(12,497)
(698)
(5.6%)
Net tangible assets/(liabilities) per security
(cents)
1.4
1.7
The net tangibles asset backing per security of 1.4 cents presented above is inclusive of right-of-use assets and liabilities. The net tangible
asset per security, as at 30 June 2022, would reduce to 1.2 cents (2021: 1.4 cents) if right-of use assets were excluded, and lease liabilities were
included in the calculation.
Dividends and distributions
The company has not declared, and does not propose to pay, any dividends for year ended 30 June 2022.
Details of any dividend or distribution reinvestment plans in operation: Not Applicable.
Other
Additional Appendix 4E disclosure requirements and commentary on significant features of the operating performance, results of segments,
business combination, trends in performance, foreign entities and other factors affecting the results for the period are contained in the 2022
Annual Report, including the Chairman’s Letter and CEO Report.
This document should be read in conjunction with the 2022 Annual Report, including Chairman’s Letter and CEO Report, and any public an-
nouncements made in the period by Envirosuite Limited in accordance with the continuous disclosure requirements of the Corporations Act 2001
(Cth) and the ASX Listing Rules.
This report is based on consolidated financial statements which have been audited by PKF Brisbane Audit.
1
Envirosuite LimitedLevel 12, 432 St Kilda RdMelbourne VIC 3004(ASX: EVS) ACN: 122 919 948www.envirosuite.comPhone: (02) 8484 5819 2022
Annual Report
Contents
At a glance
Chairman’s Letter
CEO Report
How Envirosuite adds value
Our Products & Technology
Land, Expand and Scale Strategy
Global Operations Review
Financial Statements
3
Envirosuite Annual Report 2022
Envirosuite Annual Report 2022
4
Key Metrics
$53.0m
Annual Recurring Revenue
14.1% YOY
416
Client sites
11.5% YOY
$53.5m
Statutory revenue
10.1% YOY
47.9%
Gross profit1
10.6% YOY
$(4.0m)
Adjusted EBITDA (loss)
Improved 11.8% YOY
ARR
$53.0m
$46.5m
$43.0m
Jun 20
Jun 21
Jun 22
GROSS PROFIT %1
32.5%
47.9%
43.3%
Envirosuite is a global leader in
environmental intelligence, trusted
by the world’s leading industry
operators in Aviation, Mining
& Industrial, Waste and Water.
Envirosuite provides industry operators with
insights so businesses can unlock value beyond
Software as a Service (SaaS) and Solution as
compliance, allowing them to engage with
a Service for managing and mitigating their
communities and make real-time decisions to
impacts on communities and the environment in
reduce risk and optimise their operations.
relation to noise, vibration, odour, dust, air quality
and water.
By harnessing the power of environmental
intelligence, Envirosuite helps industries grow
Envirosuite’s software combines leading-edge
sustainably and communities to thrive.
science and innovative technology with industry
expertise to produce predictable and actionable
Jun 20
Jun 21
Jun 22
WHAT IS ENVIRONMENTAL INTELLIGENCE?
TOTAL SITES
329
373
416
Flight tracking
Machine learning
We take
environmental
input such as:
and harness
the power of:
so our customers
can receive:
Noise
Water
Weather
Dust, Odour &
Air Quality
Vibration
Decades of
experience
Proven data
algorithms
Scientific
excellence
to make informed
decisions that
enable:
Increased
production
Tangible cost
savings
Optimised
operations
Social license
to operate
Predictive
modelling
Automated
compliance
analysis
Real-time smart
alerting
Trusted quality
insights
Jun 20
Jun 21
Jun 22
5
1 - Gross Profit is presented on an EBITDA basis
Envirosuite Annual Report 2022
6
Proudly taking innovative
Australian technology
to the world
Our Purpose
Our Vision
We believe environmental intelligence is the
We harness the power of environmental
key to improving the wellbeing of people and
the planet.
intelligence, so industries grow sustainably, and
communities thrive.
Our Mission
Our Difference
We are driven to create world-leading, science-
We are a leading environmental intelligence
based technology to help our customers act
technology provider that solves complex
faster, perform better, and realise their full
environmental challenges across noise, vibration,
potential with environmental intelligence.
odour, dust, air quality and water with our suite of
software products and IoT.
Our Values
Our business advantages
We know that to achieve our long-term goals,
we need to build a culture of high performance.
One where all Environauts are committed to
our purpose, working collaboratively as a team
while focusing on innovation to deliver value to
our customers. As Environauts, we rise to the
challenge because:
We’re driven by purpose
We move as one
First mover – a global first mover in
environmental intelligence software and IoT
Commitment to customers – we have long-
lasting relationships with sector-leading
customers
Global presence – established operations
and high performing teams across key growth
markets
We believe customers are the reason
Digital transformation – deeply embedded into
customer operations and their digital ecosystems
We earn the trust
We challenge the now
Importance of problem statement – growing
focus on environmental impact due to ESG, SDG
and social licence to operate
Clients in
46
Countries
254
Employees
4000+
Connected
IoT devices
30+
Years
experience
Exciting partnerships have
opened new opportunities
for Envirosuite, including our
odour mitigation partnership
with Byers Scientific in USA.
Our Brisbane-based
software engineering team
take part in ‘jam-days’
to collaboratively solve
development challenges.
Our new ‘Centre of
Excellence’ in the
Philippines is driving
increased scale across the
Envirosuite business.
In Colombia, Cerrejon mine
relies on Envirosuite so
heavily that they have it
running in their control room
every day.
7
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Envirosuite Annual Report 2022Envirosuite Annual Report 2022 Chairman’s Letter
Dear Shareholders,
Before we reflect on the past financial year, I
would like to thank you for your ongoing support
for Envirosuite. I know from many conversations
with investors, that the past year has been
challenging with investors constantly reassessing
David Johnstone
Chairman
While many companies have seen their valuations
significantly reduced, Envirosuite has mostly
maintained its valuation through this volatile
period. What has helped us is that we have been
able to achieve strong revenue growth, while at
the same time demonstrating fiscal responsibility
with targeted investment focused on near-term
that are now beginning to gain traction in
global markets with our Land, Expand and
EVS Aviation customers. More pleasing yet, is
relationships, industry sectors and geographies.
that ongoing innovation by our team has created
We have in the past year sought to further
Scale strategy. The second half of FY22 was
future growth opportunity in the sector with
communicate and educate the market and we
particularly strong and we finished the year in
the release of ANOMSX, a cloud-based digital
will continue to release business updates and
Q4 with record sales and a growing pipeline of
platform that brings together several Envirosuite
information through both the ASX platform
potential customers.
products, including NoiseDesk and Carbon
and our online channels as appropriate and I
their portfolios, with a particular focus on
EVS Omnis, our Industrial product, is our growth
technology-based growth stocks.
engine, where we are seeing existing customers
The result of the strategic product mix is a
Emission Software.
encourage all interested investors to subscribe
and follow our progress on many fronts.
expanding its use from initial project sites to
business with high growth, strong cross and
To every single one of our “Environauts”, a special
deploy the technology at scale across multiple
upsell opportunities and growing margins – add
thank you and shout out to you all, we ask a lot
sites. At the same time Omnis continues to land
new material customers and open significant new
Envirosuite’s well established track record of
product leadership and innovation, and we
of you and you do deliver in spades. I might add,
with passion and a strong belief in what we do,
industry verticals. Omnis’ growth has exponential
have a recipe for success. Another important
provides our customers with the data and tools to
potential, and the team have the mandate to drive
development this year has been the enhanced
make fully informed and smart decisions, which
this growth aggressively.
diversification across products and regions.
make a real time impact to communities and the
revenue generating activities. As a result, we
Additionally, EVS Omnis provides Envirosuite with
have a clear pathway towards Adjusted EBITDA
a strong cross-sell opportunity into EVS Water,
profitability during FY23 and a strong cash
our SaaS-based high-margin water solutions. In
balance. This put us in an strong position to
December 2021, the Company raised $10.5m to
pursue the well understood growth opportunity in
accelerate the commercialisation of EVS Water
front of us.
and I am pleased to say that the product has
The America’s have provided particularly strong
planet.
growth during the year and the appointment of
Aaron Lapsley as Chief Operating Officer, based
in Austin Texas, has brought a global perspective
to our operations and the executive leadership
team.
Thank you to all our shareholders for your
continued support that we look forward to
progressively rewarding as the company pursues
its strategic growth agenda.
From a macro perspective, I believe that investors
continue to understand the growing weight of
Environmental, Social and Governance (ESG)
considerations, how they shape the world we
live in and why that is such a powerful tailwind
for this business. Envirosuite’s technology gives
our customers the ability to empirically measure
their performance and then make data-driven
gained meaningful early traction. EVS Water is
The executive leadership team also welcomed
a high margin true SaaS offering, revenues do
not need to match EVS Omnis or EVS Aviation
in order to make a meaningful contribution
Justin Owen as Chief Financial Officer with interim
CFO Michael Hamilton moving into the position
of Head of Strategy. The strengthening of the
towards Envirosuite’s overall profitability. With
executive team and enhanced global presence
a natural cross-sell with EVS Omnis customers,
provide the Company with the necessary
the business is well placed to grow revenues and
firepower to execute on its growth agenda.
David Johnstone
Chairman
profitability across these two products.
The appointment of Stuart Bland and Tim Ebbeck
decisions regarding their environmental and
EVS Aviation has been the surprise package
as non-executive directors added significant
social responsibilities and future sustainability.
of FY22, particularly in the second half of the
additional expertise and experience to the board
Our digital products and platforms take the
measurement of ESG factors from a “point-in-time”
basis to “real-time” data. This digitisation journey
is a global phenomenon disrupting every sector of
the economy and Envirosuite is leading the charge
regarding digital environmental intelligence.
The Company has continued to make significant
investments into its strategic mix of products,
year when planes returned to our skies and air
with their respective and complementary skills
traffic surged back towards pre-pandemic levels,
and backgrounds. The addition of CEO Jason
although not quite there yet in some countries.
Cooper as Managing Director completed the
As the long-recognised leader in aviation noise
building out of the board and complements the
monitoring it is pleasing to see airports continue
key executive appointments mentioned above.
to commit to their ongoing noise monitoring and
their need for continuous improvement through
project work we are being asked to perform. We
have also seen significant renewals from existing
We remain committed to keeping the market well
informed of the key value points in the business
including across our platforms, commercial
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Envirosuite Annual Report 2022Envirosuite Annual Report 2022 CEO Report
Dear Shareholders,
Envirosuite has delivered another strong financial
We passionately believe in unlocking the power
It was particularly exciting to see the strong
performance in FY22, as we continue to deliver
of environmental intelligence, so industries can
interest we have generated from large multi-
Environmental Intelligence solutions for our
grow sustainably, and communities can thrive.
site customers this year, with several globally
Jason Cooper
CEO
customers around the world.
We are focused on our mission to create leading
science-based technology that helps our global
customers measure, act, plan and engage
with greater efficiency through data-driven
In this year’s report we are pleased to share
with you some case studies of customers that
are using our platform. We believe that this is
important as it demonstrates how we create
value for our customers and our shareholders.
environmental intelligence.
Strategy
By adopting a “product-led” approach we
We continue to make strong progress towards
have innovated rapidly, bringing new features,
achieving our four strategic pillars. These four
capabilities and scientific models to our
pillars guide our priorities, decision making,
customers. Our three product portfolios EVS
product development and organisational
Aviation, EVS Omnis and EVS Water provide a
structure;
strategic mix with significant upsell and cross sell
potential.
The level of engagement from our global
customer base has increased significantly, driven
at a macro level by the growing recognition
of the Environmental, Social and Governance
(ESG) factors on business performance and
sustainability.
In FY22, Envirosuite grew total revenue by 10.1%,
surpassing the $50m milestone for the first time
to reach $53.5m, of which 82.1% is recurring. We
ended the financial year with 416 customer sites,
an 11.5% increase on last year and a key metric
by which we measure our growth and product
success. Gross Profit continues to improve with
gross profit of 47.0%, showing strong growth
from 42.4% in prior year.
Our strong FY22 financial and operational result
demonstrates not only the value of Envirosuite’s
technology and the human expertise that delivers
that technology to customers around the world,
but also the trust those customers have put in
Envirosuite as a technology partner to help drive
their operational and environmental performance.
Growth: Drive growth through customer site
acquisition
Product: Innovative science-driven
Environmental Intelligence and cloud-based
platforms
Customer: Focus on measurable value creation
Scale: Reinvest in people, technology and
processes to rapidly scale
Our FY22 results are a clear validation of our
strategy, which is now delivering growth in terms
of customer sites and revenue, with a clear
pathway to profitability.
Growth: Drive growth through customer
site acquisition
FY22 was a year of record sales growth for
Envirosuite, achieving $8.5m in New ARR and
$9.8m in Project Sales. We added 43 sites across
the three products and experienced strong
growth in all three of our geographic regions
(APAC, Americas and EMEA).
significant organisations coming onboard and at
the very beginning of our Land, Expand and Scale
customer journey.
Much of the success is due to structural, process
and people improvements that we have made in
the sales team, and North America in particular
provided another significant contribution to the
Company’s growth this year. In the final quarter
of FY22 we saw strong demand developing
across the three regions, all contributing equally
to growth.
It was pleasing to see the progress of EVS Water
globally following the continued investment this
year, with our first implementations taking place
in Hong Kong, Singapore, France, Spain, USA and
Australia.
During the year we have enjoyed a significant
increase in brand awareness and inbound
marketing leads thanks to the launch of our
new brand and website. We are leveraging our
strong brand to communicate clearly to our
customers and engage them with real-world
empirical case studies.
Envirosuite’s growth has accelerated significantly
this year, and we are only now scratching the
surface with regards to our overall addressable
market. We will continue to drive site acquisition
across our platforms and generate tangible
customer value.
CEO Key Highlights
ARR, Revenue, Sites and Gross profit
FY22 was a standout year for Envirosuite as we accelerated our growth
in all key metrics. We have achieved 14.1% growth in ARR, added 43
sites to our expanding customer portfolio, and increased total revenue
by 10.1%. We continue to improve the scalability and profitability of the
company with Gross Profit (on an EBITDA basis) now at 47.9% for the
full year.
Product Innovation
Our ongoing investment into scientific excellence and product
development has deepened our sustainable competitive advantage
and accelerated our strong product differentiation this year. It is
exciting that an Australian company is leading the charge with world
class Environmental Intelligence technology platforms.
Regional Growth
All three regions have transformed their go-to-market strategy in the
last 12 months and this has resulted in strong revenue and ARR growth
at a company level. The Americas has set the benchmark again with a
31.3% growth in ARR adding 25 new sites in the last year.
Land, Expand & Scale
With some of the world’s largest Industrial company names as
customers, we have now built out a repeatable customer engagement
journey. This year we experienced record sales growth with key wins
with new and existing strategic customers across all three portfolios.
People & Culture
As much as we are a technology company, we are also a people
company. I am proud of all the Environauts around the world who
are actively contributing to our mission, vision and purpose to be the
world’s leading Environmental Intelligence company.
Scalability
Over the past 18 months we have invested into the right tools,
systems and processes to improve the scalability of the business.
We have applied this strategic thinking to all aspects of the business
(marketing, operations, the regions and support functions), which has
resulted in a continually improving Gross Profit margin.
Profitability
The performance of the company over the last 12 months and the
outlook for FY23 has enabled us to confirm our pathway to profitability
during FY23. We will continue to focus on high quality revenue, growth
and gross margin improvement to ensure that we have a long-term
sustainable company.
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CEO report
decision making information across the various
in FY21. Utilising funds from the Capital Raise
The launch of a new ticketing system in
stakeholders at our customers’ airports. ANOMSX
in December, we built a strong team around
December has improved our operational
also provides Envirosuite with greater flexibility
EVS Water. EVS Water’s products (SeweX and
efficiency and responsiveness to customers.
to offer solutions across market segments, from
Plant Optimiser) are cloud-based, off the shelf
Our library of information and AI-driven portal
large commercial down to small regional airports.
platforms, providing our customers ongoing
enables customers to self-help and quickly
The migration of the EVS Aviation platforms to
AWS is making strong progress, with some of
our largest airport customers having already
value-add capabilities at a strong contribution
identify and, in many situations, rectify issues in a
margin for Envirosuite.
timely manner.
SeweX proved its global and versatile
With the addition of our Centre of Excellence
started the process. We plan to migrate all hosted
applicability with success across each region
office in the Philippines we will continue to drive
customers to AWS in future.
including the Greater Paris Sanitation Authority,
operational improvements across all products,
EVS Omnis: Product leadership drives
transformational growth
A key highlight in FY22 was the launch of EVS
Omnis’ platform, which saw the convergence of
Noise and Air Quality onto one platform. FY22
demonstrated its effectiveness in the market;
its ability to scale with significant customers,
present itself as valuable to new industries
and continue its mission to help operators of
all shapes and sizes work more effectively
themselves and with their communities.
WA Water Corporation, Depuración de Aguas del
operations and geographical jurisdictions.
Mediterráneo (DAM) and the City of Kalamazoo,
Michigan, USA.
Our Operational Excellence team has enhanced
the platform implementation experience for our
Plant Optimiser immediately demonstrated
customers, with a focus on scalability, support
its effectiveness once deployed, providing
and efficiency to ensure that our customers get
optimisation recommendations that would deliver
value from our solutions as quickly as possible.
a reduction in chemical dosing amounts of
over 20%.
Customer: Focus on measurable value creation
from a customer perspective
Scale: Invest in people, technology and
processes to rapidly scale
We are now successfully operating all three
product platforms in the cloud, which has had a
With the new EVS Omnis platform also came the
and user engagement we have continued to
support our customers, and our ability to more
By relentlessly focusing on customer satisfaction
material impact on both the way we deploy and
Product: Innovative science-driven
Environmental Intelligence and cloud-
based platforms
We have seen our Product & Innovation teams go
release of our innovative “Emissions Intelligence”
improve our customer retention and user metrics.
efficiently and effectively develop, test and roll
from strength to strength in the past 12 months.
air quality technology, which provides customers
We introduced data analytics into our platforms
out new software features at scale.
Deeper, more engaging conversations with our
with the ability to precisely understand their site
to generate valuable insights into how the
customers and internal staff have resulted in the
emissions, the operations that are generating
software is being used and how we can improve
development of powerful new capabilities and
them and their location and severity. This allows
the user experience. This has resulted in several
features that solve complex scenarios.
them to make immediate operational decisions
major user experience and design changes.
Through these improvements to product,
infrastructure and deployment methodologies,
we have continued to improve our gross margin.
This has steadily grown with revenue throughout
EVS Aviation: Innovative enhancements provide
for continued growth
As aircraft returned to the skies post-COVID,
we saw EVS Aviation customers invest in their
monitoring and community engagement solutions
with several long-term clients extending their
contracts with us. Envirosuite continued to
extend its competitive advantage in Aviation
with the launch of EVS Aviation’s cloud platform,
ANOMSX.
and understand prior operational plans to inform
future activities. This can often be realised using
already deployed IoT devices and their data sets,
offering existing customers even greater value.
our cutting-edge hyper-local meteorological
dataset and forecast capabilities, emission
expertise, site-based historical IoT data, cloud-
computing and particulate dispersion modelling.
This continued focus on user experience and
the year and, with our strategic product mix
value creation has helped ensure that we have
providing upsell and cross-sell opportunities, we
a low customer churn. We also introduced a
see a clear upward trajectory and pathway to
new structure around customer success, with
profitability.
feedback, data and our domain knowledge to
support adoption.
The investment we have made into creating a
global footprint, through people and offices,
has been a cornerstone and key pillar of our
growth strategy. This year we have begun to truly
Our Environmental Intelligence Services team
leverage that investment and I’m excited about
supports our customers around the world,
our potential in the coming year.
Developed with over 12 months research,
a strong emphasis on the customer experience
Emissions Intelligence is powered by combining
and making sure we are leveraging real-time
With the ANOMSX platform now hosting our
innovative NoiseDesk solution and further
at SaaS margins
adoption of our Carbon Emissions software,
We are exceptionally proud of our progress
we continue to provide greater access to
and success following the launch of EVS Water
that customers achieved their regulatory and
operational requirements. This team contributed
significantly to revenue growth and customer
satisfaction.
EVS Water: Delivering incredible customer value
leveraging our technology and systems to ensure
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CEO report
Our Land, Expand and Scale strategy has
been highly effective in FY22 with rapid
take up of our products in all regions with
highly scalable customers. We are highly
confident that the momentum that we
have built in FY22 will continue into FY23
and beyond.
People and Culture
Our Vision, Mission and Purpose continues to
drive the future orientation of the company and
it is the people of Envirosuite that provide our
strongest differentiation. We refer to our team
as the “Environauts” and we have focused on the
engagement, direction and development of our
teams.
Globally we have embraced a goal-orientated
process, called OKRs (Objectives, Key Results)
to drive the focus and accountability of the
organisation. Each quarter we align our goals and
drive the key results to ensure we continue to
meet our overall objectives.
Leadership
Outlook
Our customers are reporting that ESG
considerations are increasingly driving buying
decisions, where institutional investors,
regulators, and governments are demanding
accurate and quantifiable measurement and
monitoring of key ESG metrics. Our customers
only see this trend continuing. With our strategic
positioning as a global provider of these services,
there is evidence that our product suites will
continue to grow Group revenues and earnings.
It is now clear that EVS Omnis is a highly scalable
Environmental Intelligence platform that serves
customers in many different segments. With
the Aviation industry showing strong signs of
getting back to pre-pandemic levels we are well
positioned to continue to support our customers
through what is clearly a transformative time.
By leveraging the reference sites of EVS Water
in North America and Europe, we now have
early validation globally that supports our strong
product market fit.
Our Land, Expand and Scale strategy has been
highly effective in FY22 with rapid take up of
our products in all regions with highly scalable
customers. This will be a continuing focus for
our sales and marketing team, supporting some
of the most significant industrial organisations
on the planet. We are highly confident that
the momentum that we have built in FY22 will
continue into FY23 and beyond.
FY22 marked a step change in the leadership
Signature
structure where we added some significant
capability to the Executive team. In November
we appointed Sabina Todd as the Regional
General Manager in APAC based in Brisbane.
In January we appointed Aaron Lapsley as the
Jason Cooper
Chief Operating Officer, based in Austin Texas,
Chief Executive Officer
providing a global perspective on our operations.
Justin Owen also joined in January as the Chief
Financial Officer and is based in Melbourne.
Michael Hamilton moved into the position of Head
of Strategy after he supported the company in
the Interim CFO role for four months.
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Envirosuite Annual Report 2022Envirosuite Annual Report 2022
Envirosuite is the world’s most
advanced environmental
intelligence technology provider
Our Purpose
Our Vision
Our Mission
We believe environmental
intelligence is the key to
improving the wellbeing of
people and the planet.
We harness the power of
environmental intelligence so
industries grow sustainably
and communities thrive.
To create world-leading,
science-based technology
to help our customers act
faster, perform better and
realise their full potential
with environmental
intelligence.
OUR DIFFERENCE
WHAT WE DO
PRODUCTS
VALUE
SCIENCE BUILT-IN
An advanced environmental
intelligence portfolio that embeds
decades of science, innovation
through expertise and complex
modelling, all made simple for users.
COMMITMENT TO CUSTOMERS
We put customers at the heart
of what we do to build long-
lasting, trusted relationships and
expand this to our partners and
stakeholders.
HUMAN INGENUITY,
ENVIRONMENTAL
TECHNOLOGY
Our global team is made up of
talented, passionate domain experts
who are driven by a collective
purpose and empowered to offer
their unique contribution everyday.
ESG ENABLING,
SDG ADVANCING
Society demands measurable,
sustainable performance. Our
technology supports ESG criteria
and advances the SDG agenda,
serving the interests of all
stakeholders and our shareholders.
LEADING ENVIRONMENTAL
INTELLIGENCE
The world's most advanced
environmental intelligence solutions
for Aviation, Waste, Wastewater,
Water Treatment, Mining & Industrial
C O L L ABORATE
Collaborating with
industry, regulators
and communities
to solve complex
environmental
challenges.
TIC
S
O
N
G
A
We are agnostic,
partnering with
a variety of
technologies to
give our customers
flexibility and choice.
We design, build
and provide secure,
science-based
environmental
intelligence software
and IoT platforms.
Domain
knowledge and
expertise across
air, dust, odour,
noise, vibration
and water.
Our customers
are empowered to
monitor, predict
and mitigate their
operational impact.
A R E
W
T
S O F
E
X
P
E
R
T
S
EVS Water
Digital twin technology for
water treatment powered
by machine learning and
deterministic modelling.
I
N
N
O
V
A
T
I
O
N
EVS Omnis
Powerful software built for
industrial facilities to act on
emissions, plan for operational
risks and engage with
stakeholders.
EVS Aviation
World leading software and
hardware built for solving
complex challenges from airport
noise, aircraft tracking and
community engagement.
BUILT FOR TODAY WITH
TOMORROW'S OUTCOMES
IN MIND
Optimise operational outcomes,
increase production, make tangible
cost savings and build social
licence to operate with surrounding
communities.
RAPID RESPONSE AND
ENGAGEMENT
Easy-to-use, location-specific public
portals to educate and engage with
communities and stakeholders,
including observation submissions
to foster transparent two-way
communication.
UNLOCK VALUE BEYOND
COMPLIANCE
Harness predictive insights from the
environmental monitoring network
to avoid unwanted impacts and keep
production moving.
ENVIRONMENTAL INTELLIGENCE
REIMAGINES RISK
Our technology empowers
organisations to unleash innovation
and continuous improvement,
enhancing operational efficiencies
while building community trust.
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18
PRODUCT INSIGHTS
CUSTOMER FEEDBACK
Envirosuite Annual Report 2022Envirosuite Annual Report 2022 What makes Envirosuite
platforms so powerful
Day 1 value
The moment our products get ‘turned on’ our
customers can start making decisions. Whether
that be reducing chemical use, engaging with their
community about flight paths, adjusting capital
investment plans or deciding when to operate
emission generating machinery in the upcoming 24
to 48 hours.
Each of these decisions create immediate ROI from
the platform and deepen our customers’ decision
making capability in the future.
Decision advantage
across your
organisation
Due to the expansive data within reach of the
product and the breadth of insight we can offer,
often the impact of an Envirosuite system goes
well beyond one department, but can improve the
activities of many others across the organisation.
SaaS / COTS
solutions
Our industry is ripe with one-off solutions,
intermittent studies and siloed data capture.
Envirosuite’s platforms offer our customers all the
opportunities that SaaS and commercial off-the-
shelf (COTS) solutions offer such as scalability,
Science & innovation
Our solutions provide critical operational and
organisational decision making insights. We do this
by founding all our solutions in science, ensuring
that our data is backed by industry standards and
supported by experts. Innovation is constant at
Envirosuite as we look for powerful ways to solve our
customers problems in more valuable and helpful
easy access to new technology, regular upgrades,
ways.
enhanced security and easy-to-use interfaces.
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20
Envirosuite Annual Report 2022Envirosuite Annual Report 2022 The platforms required
to operate in our rapidly
evolving world
Product vision
Our customers can continue to achieve their goals and
adapt to the pressures of a rapidly changing world.
As the world continues to demand accountability for
our actions and their resulting impact, our customers
and global communities will be able to navigate these
changes confidently, transparently and efficiently.
Operational decisions are made confidently with
data that reflects their importance. Both industry and
community are coming together over trusted, scientific
information to have collaborative conversations. Value
beyond compliance is unlocked to realise efficiency
gains within regulatory boundaries while influencing
better measurement methods to benefit society.
This is environmental intelligence.
How we deliver our
strategy
We deliver to this strategy using science and
experience combined with repeatable COTS, SaaS
and IoT technologies. We continually invest in our core
software technologies to ensure we deliver their value
to all our customers. SaaS is our preferred delivery
method and provides our customers with effective
Total Cost of Ownership and peace of mind. IoT is the
lifeblood of the platforms and enables them to provide
the critical operational insights and decision making
capabilities our customers rely on, bringing numerous
data types and feeds together for higher situational
awareness. In order to deliver the most cutting edge,
trusted and insightful data, we build our software
using design and outcome-led principles and invest in
science to underpin the decisions we support.
These principles enable the democratisation of
complex science and domain expertise to deliver a
level of decision making far exceeding what would be
realistic for our customers to achieve otherwise.
A coming of age
EVS Omnis is a powerful platform bringing together
highly advanced meteorological forecasting and
weather systems, scientifically based emissions
dispersion modelling and 24/7 IoT monitoring networks.
It provides real-time, predictive, and historical analysis
tools to not only ensure facilities run compliant
operations but can act efficiently within the regulatory
and social expectations of them.
Not only was FY22 a significant technological step
forward with the launch of EVS Omnis, the release of
Emissions Intelligence technology and the convergence
of noise and air quality, but FY22 demonstrated its
effectiveness in the market; its ability to scale with
significant customers, present itself as valuable to new
industries and continue it’s mission to help operators of
all shapes and sizes work more effectively themselves
and with their communities.
Key Stats
231 client sites
~$1.2b SAM1 (ARR)
$18.1m ARR
6.6% Churn
$78,526 ARPS2
Marquee
Customers
Aggregate Industries
(part of Holcim Group)
Glencore
Newcrest Mining
Teck Resources
City of Chicago Department of
Public Health
Veolia
1 - Serviceable addressable market
2 - ARR per site
Launched with EVS Omnis, our new “Emissions
Intelligence” air quality technology provides
customers the ability to understand precisely
which operations are generating emissions, their
location and severity.
Emissions Intelligence helps make both
immediate operational decisions and
understanding prior operational plans to inform
future plans. This can often be realised using
already deployed IoT devices and their data sets,
offering existing customers even greater value.
The Emissions Intelligence engine uses
advanced scientific methods to compute,
analyse, and monitor the entirety of a site’s
emissions data, understanding emission sources,
rates, and dispersion plumes; in the past, now
and into the future.
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22
Envirosuite Annual Report 2022Envirosuite Annual Report 2022 From product foundations
to global customers’
Key Stats
13 client sites
2.8b SAM (ARR)
$1.0m ARR
0% Churn
$76,671 ARPS
Marquee
Customers
WA Water Corporation
SIAPP (Greater Paris Sanitation
Authority)
Singapore PUB
GHD
Following the establishment of the EVS Water portfolio
in FY21 with the acquisition of AQmB and the securing
of the renowned SeweX model from the University of
Queensland, we are very proud of the progress and
success we have made.
Utilising funds from the Capital Raise in December,
we built a team around the EVS Water products with
a clear goal – help the industry use this great science
and technology to improve their operations and the
environment by getting these products to market.
Both SeweX and Plant Optimiser products are cloud-
based, COTS platforms, providing ongoing value-
add capabilities and strong contribution margin for
Envirosuite as our customer base grows.
SeweX is a machine-learning based platform that
provides sewerage management agencies with insights
across their network at never-before-seen levels of
coverage and accuracy. This allows them to manage
with reduced cost and increased efficiency, using
detailed dynamic modelling of critical parameters
including hydrogen sulphide and methane gas
emissions, network corrosion, odour and safety risks
and even through to network capital planning. Insights
extend across numerous departments, from odour
and safety groups to operational maintenance teams
through to capital planning departments, offering
significant ongoing value to all.
SeweX proved its global and versatile applicability
through successes globally including SIAPP (the Greater
Paris Sanitation Authority), WA Water Corporation,
Depuración de Aguas del Mediterráneo (DAM) and the
City of Kalamazoo, Michigan, USA.
Plant Optimiser, a chemical and water treatment
optimisation platform, offering customers reduced
risk, reduced costs, and more environmentally friendly
settings to achieving water quality requirements.
Plant Optimiser uses a combination of deterministic
and machine learning based modelling, on top of a
digital-twin of the facility to provide operators detailed
optimised plant setpoints to use in operating their
facility on a daily basis.
Plant Optimiser immediately demonstrated its
effectiveness once deployed, providing optimisation
recommendations of more than a 20% reduction in
chemical dosing amounts.
23
Ongoing innovation
extending our industry
leadership
EVS Aviation demonstrated its leadership in the sector
as our long-term clients allocated post-COVID budget
to extend our services and respond to increased air
traffic as aircraft return to the skies. With over 170
airports, including most of the worlds key transport
hubs as customers, Envirosuite has built a meaningful
competitive advantage in the aviation sector.
EVS Aviation products combine to create the world’s
leading environmental management solution for
airports. We provide deep analytics on top of rich
data sets, delivering insights to reduce environmental
impacts and demonstrate compliance to key
stakeholders, while improving operational efficiency.
This year saw continued investment into the EVS
Aviation portfolio, focusing on our key go-forward
cloud platform of ANOMSX. With ANOMSX now hosting
our popular Noise Desk solution and further adoption
of Carbon Emissions, it continues to push the industry
towards greater access to decision making information
across the various stakeholders at the airports.
ANOMSX also provides Envirosuite with greater
flexibility to offer solutions across market segments,
from large commercial hubs to smaller regional
airports.
During the year we saw further adoption of our Carbon
Emissions solution, which helps airports to reduce their
carbon footprints.
The groundwork and foundations for migration to AWS
have been completed, with some of our largest airport
customers having already begun their migration and
plans in place to migrate all hosted customers in the
future.
Key Stats
172 client sites
~$194m SAM (ARR)
$33.9m ARR
1% Churn
$197,137 ARPS
Marquee
Customers
Port Authority of New York and
New Jersey
Los Angeles World Airports
Aena
Airservices
Heathrow Airport
Amsterdam Airport Schipol
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Envirosuite Annual Report 2022Envirosuite Annual Report 2022 FY22 Product initiatives
and highlights
Launched EVS Omnis
Water from seed to global
We launched EVS Omnis, our most
We have successfully taken what were early-
comprehensive Environmental Intelligence
platform for the Industrial market, our preeminent
stage technologies acquired in FY21 in both
SeweX (University of Queensland research) and
offering, and a platform to further build our
Plant Optimiser (AQmB acquisition) and delivered
industrial business around. Offering our
those technologies to customers globally. We
customers unparalleled situational awareness
built product and development teams focused
combining real-time air quality and noise
on these technologies. These teams have now
monitoring, making EVS Omnis a one-stop-shop
turned these early-stage technologies into
for their environmental operations.
compelling solutions, securing new customers
Emissions Intelligence
Launched with EVS Omnis, the release of our new
innovative “Emissions Intelligence” air quality
technology empowers our customers to precisely
understand their site emissions, which operations
are generating them, their location and severity.
This allows them to make immediate operational
decisions and understand prior operational plans
to inform future activities. This can often be
realised using already deployed IoT devices and
their data sets, offering existing customers even
greater value.
and delivering immediate value to them.
SeweX commercial
off-the-shelf product
We have taken what was a renowned ‘single-
use’ modelling system and transforming it to a
multi-tenanted, reusable SaaS COTS product,
empowering the entire industry to access and
benefit from leading research findings.
NoiseDesk on ANOMS X
From launch in FY21 to be our new go-forward
platform, ANOMSX continues to expand its
Developed with over 12 months research,
capabilities. FY22 saw the launch of our popular
Emissions Intelligence combines our cutting-
NoiseDesk offering onto ANOMSX, providing
edge hyper-local meteorological dataset and
our customers and their users a powerful, yet
forecast capabilities, emission expertise, site-
easy to use interface. Now a truly SaaS offering,
based historical IoT data, cloud-computing and
this provides Envirosuite with the ability to offer
particulate dispersion modelling.
ongoing value more efficiently and effectively.
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Envirosuite Annual Report 2022
Envirosuite Annual Report 2022
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26
Envirosuite Annual Report 2022Envirosuite Annual Report 2022 Built for global
scale and customer
acquisition
Envirosuite’s momentum on the global stage
new framework into our sales process, we have
value by providing a single source of truth for
has accelerated over the last 12 months, off
seen better stakeholder coverage across active
environmental impact. On the back of this new
the back of ongoing investment in our world-
opportunities, greater visibility into opportunity
capability, we signed a strategic ‘land’ customer
leading environmental intelligence technologies
progress, and increased forecast accuracy
and a strong focus on optimizing our sales and
across all regions.
marketing engine to execute our Land, Expand
and Scale strategy. The results have been
encouraging, demonstrating our growth potential
with record sales for the company and key
wins with new and existing strategic customers
across our three portfolios, further validating our
product-market fit.
Building scalability and repeatability into
sales and marketing
During the year we improved automation and
performance tracking across the marketing
function with marketing automation technology
that streamlines, automates and measures
marketing tasks and workflows. This has enabled
us to provide valuable insights to our sales team
on prospect engagement, strengthened our lead
scoring and nurturing capabilities, and provided
a deeper understanding of our target audiences
and how they engage with us. The result is a
We constantly strive for improvement across the
more scalable and repeatable marketing engine
organisation, and from a sales perspective this
that can support our business into the future,
improvement came through the adoption of a
and a direct improvement on our lead quality and
sales qualification framework uniquely suited to
conversion rates.
complex enterprise sales. After providing training
to the global sales team and implementing the
Land, Expand and Scale now a proven
strategy
Our Land, Expand and Scale strategy continues
to deliver results, as we focus our energy on
working with organisations that closely match
our ideal customer profiles and operate multiple
facilities across our target geographies.
Over the past year, we have continued to develop
EVS Omnis capabilities into an all-in-one platform
by adding noise management capabilities.
This has provided more powerful support to
decisions at industrial operations across multiple
parameters, while also increasing customer
for EVS Omnis, Aggregate Industries in the UK,
a leading sustainable building materials supplier
owned by the Holcim Group. EVS Omnis will be
deployed at Aggregate’s Lafarge Cement facility,
enabling its operations teams to manage site-
generated dust, odour and noise emissions,
while providing transparency to communities
surrounding the facility in Cauldon, Staffordshire.
We look forward to expanding our relationship
with Aggregate Industries and the Holcim Group
as the cement industry continues to strengthen
its commitment to sustainability.
“Understanding the environment we operate
in, and the impact we’re having, is integral to
our business strategy and our commitment to
building progress towards a more sustainable
construction industry. We know that noise
and dust can have an impact on surrounding
communities, which is why we’re extremely proud
to become the first cement plant in the world to
commit to using a complete monitoring solution.
EVS Omnis will allow us to continuously monitor
at key community locations 365 days a year. This
will help us to not only better understand our
operations within the local community, but also
give us insights into our processes to proactively
manage them. We expect the system to be
operational by the end of this year,”
- Kirstin McCarthy, Sustainability Director at
Aggregate Industries.
“We know that noise and dust can have
an impact on surrounding communities,
which is why we’re extremely proud to
become the first cement plant in the world
to commit to using a complete monitoring
solution.”
- Kirstin McCarthy, Sustainability Director
at Aggregate Industries.
We landed our first European mining site with
a major metal, mining and smelting company.
This first site is the largest copper mine in
Northern Europe, which experiences operational
challenges due to unforeseen weather changes,
leading to dust events that impact local
communities. Through a combination of real-
time monitoring and hyper-local forecasting
data, EVS Omnis empowers the mine to act on
site emissions, plan for weather risk and engage
transparently with all stakeholders, maximising
operational efficiency to support production
goals. This mining company has a strong
presence in the region, and we look forward to
expanding our relationship to support production
goals at other sites.
We deepened and broadened our relationship
with Aena, the world’s number one airport
operator in terms of passenger traffic and
a long-term customer of Envirosuite. Aena
manages 46 airports in Spain, including Madrid
and Barcelona, and uses multiple EVS Aviation
products to help monitor and manage their noise,
but most of most of all, provide data that they can
trust. Furthermore, we have established ENAC
accreditation in ISO 20906, which represents
a guarantee for Aena in relation to the data
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Envirosuite Annual Report 2022Envirosuite Annual Report 2022 quality provided by EVS Aviation products. In
the last 12 months, we signed agreements with
Aena to provide EVS Aviation solutions to three
additional airports including ANOMS, WebTrak
and accredited acoustic specialist support
services. We also expanded our ISO 20906 data
accreditation to six more Aena sites.
Delivering cross-portfolio solutions to our
customers
FY22 saw Envirosuite sell across our portfolios
to the same customer on multiple occasions. The
City of Chicago, an existing aviation customer,
is seeking to enhance the way that it manages
and responds to odour and pollution impacts
Across Europe, improved compliance with green
from industrial facilities across the city. After
procedures to reduce emissions has become
working closely with the city to understand
essential. Detailed and accurate calculation of
its requirements, Envirosuite now provides a
greenhouse gas (GHG) emissions is required to
target reductions activities, while communicating
proactive environmental intelligence solution via
the EVS Omnis platform. Using this solution, the
clearly to all stakeholders. Our Carbon Emissions
city can quickly assess the relative contribution
solution provides this capability, and Aena has
of known pollution sources, forecast future
now adopted the solution for Madrid, Barcelona
impacts on residential areas based on upcoming
and Palma de Mallorca airports. This solution will
meteorological conditions, and work proactively
help Aena engage with airlines and stakeholders
with the right facilities to mitigate those impacts.
around flight emissions by providing timely,
accurate data on aircraft GHG emissions for
reduction and mitigation activities.
We’ve seen our EVS Water portfolio scale, not
only to additional sites with the same customer,
but also as a business scale globally. In Australia,
we have gone from signing an agreement for an
initial site with WA Water Corporation in August to
a total of seven sites within the last financial year.
During this timeframe, we have scaled the EVS
Water business on the global stage in signing
our first SeweX sites outside of the APAC region.
The City of Kalamazoo in the United States,
Depuración de Aguas del Mediterráneo (DAM)
in Spain and SIAAP (the Greater Paris Sanitation
Authority) in France have all committed to using
SeweX to manage an initial section of their sewer
networks, with the expectation to scale those
agreements to cover the broader networks over
time. These successes are exciting examples of
how we are taking our newest Australian-made
technologies to the world, demonstrating the
value that the water industry globally can benefit
from our products, our strong market fit as well
as the expertise and capability of our people.
Deeper customer value through strategic
odour management
This year we entered a strategic partnership
with Byers Scientific to provide a packaged
offering that combines Byers’ best-in-class
odour control systems with Envirosuite’s EVS
Omnis platform to address complex emission
problems for Industrial, Waste and Wastewater
companies. We have delivered our first combined
solution to Cedar Hills Regional Landfill in King
County, Washington, USA. With this solution,
control measures are triggered specifically
targeting those areas of the landfill causing an
odour issue. The targeted controls are triggered
via complex alerts in the EVS Omnis platform
that are configured based on specific odour
thresholds and meteorological conditions.
This sophisticated environmental intelligence
system has empowered King County to engage
proactively and transparently with its community
around odour management at the landfill, and is
delivering efficiencies in odour control costs due
to the targeted nature of the mitigation system,
where measures are only applied when and
where they are needed.
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Envirosuite Annual Report 2022Envirosuite Annual Report 2022
Global
Operations
Review
FY22 was characterised by growth in several
operates with higher levels of standardisation,
Location strategy
ways. The business experienced strong sales
streamlined processes, and logistical
growth, delivered for customers with expanded
coordination to deliver on customer expectations
throughput across global and regional operations,
and control the order-to-cash cycle, as well as
and built many foundational capabilities for more
to ultimately improve customer unit economics,
operationally efficient execution in future. The
which was a key performance indicator of
year saw key IT systems newly implemented or
focus for FY22 across the business. Overall,
substantially improved, including better adoption
Envirosuite improved statutory gross margin by
by key user groups, enabling our teams and
4.6 percentage points, from 42.4% in FY21 to
management to operate with better accuracy,
47.0% in FY22.
visibility and control. It ended on a high note as
many months of focused effort culminated in
Envirosuite opening and staffing the first phase
of hiring for its new office in the Philippines,
which currently comprises Environauts working in
finance, supply chain and customer support, and
where other corporate teams are planning future
growth. Overall, the business took a large step
forward in FY22 towards better understanding
operations, coordinating globally, delivering
regionally, and expanding capabilities for scalable
growth in FY23 and beyond.
Customer project delivery
A key aspect of Envirosuite’s operational and
financial performance is the ability to complete
customer projects, ultimately leading to fully
operational technology solutions that add value
to customers quickly and efficiently. Envirosuite
closed out a record number of projects in
FY22, bringing online 43 new customer sites.
The aviation industry segment had some
major projects close out at some of the largest
and most recognisable airports in the world.
Across the globe, Envirosuite’s customers
continued to rely on its industry-leading noise
monitoring technology and our projects oversaw
the installation and commissioning of noise
monitoring terminals in the field at airports and
industrial sites across multiple countries.
EVS Omnis experienced overall 13% recurring
revenue growth in FY22 and strong sales
performance from all three regions. EVS Omnis
Globally, Envirosuite embarked on a full
operational review in Q2 documenting the
regional and corporate organisational structures,
staff roles, major work types and processes, and
annualised throughput. This resulted in several
initiatives, many still ongoing, that will seek to
align regional processes, tools and operational
reporting. The APAC region, as one example,
completed plans for a major organisation
restructuring that will provide more functional
oversight of the various country-level operations,
as well as deploying standard processes and
reporting requirements for project managers,
field services and sub-contractors. EMEA and
Americas teams also successfully initiated
resource sharing of project managers between
the regions to help smooth peak loads that
can be unpredictable. The introduction of the
Philippines office, once the customer support
“Operations Centre” team is fully operational
(planned for Q1 FY23), will have cascading
impacts on project delivery to increase capacity.
It will free up Environauts in the regional
operations teams who have been working
part time on EVS Omnis technical support and
implementation to focus on their primary roles
as project managers and customer success
managers, and in the short term it will double the
dedicated global application support team for
EVS Omnis products.
Envirosuite entered FY22 with a goal of driving
world-class, scalable customer support and
shared services organisations. After reviewing
eventually maintenance and other lifecycle
milestones for approximately 4,000 unique
pieces of monitoring devices in use around the
world.
alternatives, it was decided that the Philippines
Instrumentation investment
provided the best opportunity for a new office
that balances location, access to talent and cost
structure to unlock scalable growth. For that
office location the project team selected Clark
City, a growing technology and international
business hub near metropolitan Manila and
served by Clark International Airport.
In addition to the new office in the Philippines,
Envirosuite continued to leverage and grow
operations in lower-cost markets within its other
global regions. The best example is the team
delivering complex, highly technical
and automated air quality modeling solutions
and customer support from the office in
Santiago, Chile.
Support Hub
Envirosuite made significant strides towards
modernising and improving its customer and
technical support function in FY22. A significant
portion of this effort centered around procuring
and implementing a sophisticated, cloud-based
customer management system. The new system
went live in February with a full transition for
users through March. It provides a stable and
extensible foundation for global customer
support operations. The Operational Excellence
team has a roadmap of future functionality,
and new features were rolled out in Q4 and will
continue into FY23.
Following an upgrade to our Support Hub
that furthered our capabilities to monitor and
service a growing fleet of devices in the field,
the Operational Excellence team collected and
loaded device information into the system,
enabling centralised tracking of automated
monitoring, incidents, support requests, and
This year, the Instrumentation group, which
includes hardware engineering and supply chain
teams, occupied its new home in Notting Hill,
Victoria, a nearby suburb of Melbourne. The new
location includes dedicated spaces for staff, as
as well as a testing laboratory, manufacturing
space, and warehouse with loading area.
Envirosuite is proud to continue to invest in and
build Australian industrial capability. Notable R&D
projects in FY22 include a complete redesign of
Envirosuite’s best-in-class noise and vibration
monitoring terminal, the “EMU” Environmental
Monitoring Unit. This will mark the third major
design iteration of the EMU product line,
which builds upon a decades-long history and
forms the core of Envirosuite’s instrumentation
intellectual property. The EMU v3 ended the
fiscal year with successful prototype testing and
The Operational Excellence team collected
and loaded device information into
the Support Hub, enabling centralised
tracking of automated monitoring,
incidents, support requests, and
eventually maintenance and other lifecycle
milestones for approximately 4,000 unique
pieces of monitoring devices in use around
the world.
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Envirosuite Annual Report 2022Envirosuite Annual Report 2022 Global Operations Review
Global Operations Review
is expected to be fully introduced in the second
•
The Global Modeling Team (GMT), which
The mandate of the customer success CoE will
and markets started to bear fruit in FY22. This
half of FY23. The new version will bring several
provides air quality and odour model
be to build a scalable program for a professional
became especially favorable in the second half
enhancements, including smaller size, lower and
configuration and maintenance for specific
customer success function, which will contain:
with the launch of EVS Water products SeweX
more stable power consumption, better access
EVS Omnis customers and serves as a
for field maintenance, and pre-designed options
wealth of air quality and meteorology subject
for different installation applications.
matter expertise for the company;
Global supply chain
•
The Global Solutions Team (GST), a new
concept setup in FY22, which works to
Envirosuite decided to build its inventory in first
develop standardised solutions for the most
half of FY22. Orders for safety stock were made
for key noise & vibration monitors, air quality
monitors, weather stations and power and
communications components such as modems
and IoT gateways. The investment paid off in the
second half of FY22 with global inventory levels
closing the fiscal year 17% below the trailing
twelve month average due to overall strong sales
growth, extended lead times from suppliers, and
a handful of large sales orders in Q4 that were
forecast well in advance. Maintaining the right
inventory levels to minimise customer project
deployment times will continue to be a major
focus heading into FY23.
Global expertise
common customer applications; and
•
Innovation, which is a generalised function
led by EIS with participation from other
groups (e.g. Product and Development
teams) to help coordinate and manage
proof-of-concept (POC) projects for
emerging and adjacent technologies and/or
markets or market segments, and to develop
the business cases for pursuing additional
investment.
EIS works at the intersection of customers, sales,
product and ongoing support to demonstrate
leadership, apply expertise and create customer
value. As Envirosuite is constantly working to
understand and automate the leading science
An essential ingredient to the Envirosuite value
of emissions and their impact on communities,
proposition is having subject matter expertise
EIS will continue to provide a bridge between
in-house and available to help with customer
stakeholders to drive product and services
inquiries, solution design, product innovation, and
revenue and create customer value in FY23 and
supporting services, such as the configuration
beyond.
and maintenance of complex scientific
models. FY22 was the year that Envirosuite’s
Environmental Intelligence Services (EIS) group
evolved fully into a central, globally managed
team, built specifically to provide these services.
The EIS group ended the year with four distinct
areas of scope:
•
Aviation services, which provides consulting
and managed services to airports and
includes the Global Noise Office (GNO),
a growing team dedicated to managing
airport noise and flight data operations and
reporting for specific airport customers;
Customer success
Envirosuite set up and staffed a small global
center of excellence (“CoE”) for customer
success to provide centralised and shared
services, such as customer user training. This
CoE was partially operational in Q4 and is already
leading the significant effort for systematically
upgrading over 100 existing ES2 customers to
the newly-released EVS Omnis platform. It will be
fully operational in Q1 of FY23.
• Coordinating the regional resources into
a consistent global process and reporting
framework;
and Plant Optimiser. Sales teams are now
offering multi-parameter solutions to existing
customers and qualified prospects. Regional
sales resources are actively pursuing deals with
•
Providing shared services such as user
wastewater treatment plant operators for facility
training and customer analytics;
• Driving customer success teams to embed
Envirosuite solutions in customer operations;
• Understanding and increasing user adoption
of Envirosuite products;
•
Analysing and managing customer churn
risk, including baselines and targets;
•
Identifying upsell and cross-sell
opportunities; and
• Coaching customer success teams to
improve global customer satisfaction,
including owning the customer satisfaction
score (CSAT) measurement strategy.
The customer success CoE has been mostly
focused on EVS Omnis this year, where there has
been the biggest opportunity and growth. As it
builds capability, the team will continue to draw
on the best practices of the EVS Aviation team,
while adapting them to a new model serving
higher volume, lower cost customer segments.
Sales velocity
A consistent global process was implemented
in FY22 that, while still capable of improvement,
has proven successful and sets the standard
for other functions developing global processes
and data models (e.g. project management). In
addition, Envirosuite’s sales operations function
has focused its energy on building a roadmap and
scoping for future enhancements to Envirosuite’s
sales tools, with enhanced data collection,
process improvements and automation planned.
Adding to the tools and processes, the
ecosystem strategy of Envirosuite’s products
odour monitoring (EVS Omnis) and sewer network
corrosion and odour modeling (EVS Water). One
such deal closed in Q4 for a U.S. municipality
in Michigan that is expanding their existing
wastewater treatment plant odour monitoring
solution to incorporate SeweX for modeling
the sewer networks serving the plant. This is a
highly replicable solution upsell. There are also
active opportunities selling multi-parameter
solutions to cities and industrial customers for
combined environmental intelligence solutions
across air quality and noise monitoring. This
solution has been greatly enabled by the recent
release of noise functionality in the EVS Omnis
product. There are other opportunities and active
projects with long-term airport customers to add
functionality for air quality monitoring or carbon
tracking from flight operations. These cross-sell
and upsell opportunities leverage broad, cross-
discipline environmental domain expertise and
provide high margin, product-led revenue growth
that increases share of wallet and customer
stickiness.
The vision of creating a unified platform for
environmental intelligence to help industry,
environment and community thrive together
was firmly established in sales activity in
FY22. Continued growth of multi-parameter
opportunities is expected for FY23 with an
emphasis on embedding Envirosuite as the
technology partner of choice for environmental
managers across industrial, municipal and airport
customers.
33
34
Envirosuite Annual Report 2022Envirosuite Annual Report 2022
Directors’ report
Your directors present their report, together with the financial
statements of the consolidated entity (referred to hereafter as the
Group) consisting of Envirosuite Limited (ABN: 42 122 919 948) (the
Company) and its controlled entities (referred to hereafter as the Group
or Envirosuite), for the financial year ended 30 June 2022.
Directors
The following persons were directors of the Company at any time during, or since the end of, the financial year up to the
date of this report, unless otherwise stated:
David Johnstone (Non-executive Chair)
Jason Cooper (Managing Director and CEO) – Appointed Managing Director 1 March 2022
Peter White (Non-executive Director) – Resigned 25 November 2021
Hugh Robertson (Non-executive Director)
Sue Klose (Non-executive Director)
Stuart Bland (Non-executive Director) – Appointed 1 March 2022
Tim Ebbeck (Non-executive Director) – Appointed 1 March 2022
Particulars of each director’s experience and qualifications are set out later in this report.
Principal activities and significant changes in nature of activities
During the period, the principal continuing activities of the Group consisted of the development and sale of environmental
management technology solutions.
In December 2021, the Group raised $10,469k of equity ($9,946k net of transaction costs), through an institutional
placement with the funds raised primarily to be used to accelerate growth in the Group’s strategic water segment, EVS
Water, as well as driving scale and resilience across the business.
Expanding the EVS Water offering was and continues to be a major initiative for the year with additional resources
employed in product, marketing, and sales roles. The Company has now generated $997k in annual recurring revenue
(ARR) as of 30 June 2022 with EVS Water sales representing 12.9% of the Company’s Q4 FY22 ARR sales. This milestone
included sales to customers in international markets of North America and Europe, along with a growing base in Asia
Pacific.
Building on the transformation opportunities identified in FY21, Envirosuite opened the Philippines “Centre of Excellence”
office in June 2022. The teams represented are from several departments including Customer Support and Finance.
The impact of the COVID-19 pandemic has resulted in businesses and employees redefining the office environment and
providing workplace flexibility. Having staff located globally represents a key advantage for the Group in maintaining and
servicing our global customers.
35
Envirosuite Annual Report 2022 Review of operations for the year
Operating Results
The loss of the Group after providing for income tax amounted to $13,195k (FY21: $12,497k).
A$000
Recurring revenue
Non-recurring revenue
Other revenue
Total operating revenue
Cost of revenue
Gross profit
Operating expenses
Other income/(expense)
Operating deficit
Net Loss after tax
FY22
43,877
9,563
19
53,459
(28,355)
25,104
(37,769)
90
(12,575)
(13,195)
FY21
Movement $
Movement %
40,391
8,154
25
48,570
(27,980)
20,590
(31,955)
(377)
(11,742)
(12,497)
3,486
1,409
(6)
4,889
(375)
4,514
(5,814)
467
(833)
(698)
8.6%
17.3%
(24.0%)
10.1%
(1.3%)
21.9%
(18.2%)
123.9%
(7.1%)
(5.6%)
Adjusted EBITDA1
(3,962)
(4,492)
530
11.8%
53,044
416
82.1%
47.0%
46,472
373
83.2%
42.4%
6,572
43
(1.1%)
4.6%
14.1%
11.5%
(1.3%)
10.8%
Other Key Metrics
ARR
Sites
Recurring revenue as %
of total revenue
Gross profit %
1 - Refer to definition on page 39.
Key Highlights
•
Total revenue of $53,459k of which 82.1% is recurring, increased $4,889k (10.1%) over FY21 predominantly due to
strong Annual Recurring Revenue (ARR) sales over the prior 12 months converting into booked recurring revenue in
Americas and EMEA. While non-recurring revenue has increased as a proportion of total revenue and is 17.3% higher
than FY21 it provides a lead indicator on future recurring revenue while having a slight adverse impact on gross
margin percentage.
•
Significant developments in product delivery along with exiting low margin sales and restructuring of the China
business has seen cost of revenue increasing by 1.3% or $375k over FY21 compared to $4,889k increase in total
revenue. Our investment in product capability has enabled the Group to deliver scalable environmental intelligence
solutions to the customer base.
•
Improvements to product, infrastructure and deployment methodologies has seen gross profit (statutory) percentage
of 47.0% grow appreciably from 42.4% in FY21. The mix of recurring revenue generated from the product suite along
with the growth in non-recurring revenue impacted further improvements to gross profit percentage.
36
Envirosuite Annual Report 2022 Directors’ report
• Operating expenses increased 18.2% over FY21 as a result of investment into our strategic pillars of Growth, Product,
Customer and Scale.
Strong investment into EVS Water globally, specifically highly technical resources across product, development,
sales and marketing and regional subject matter experts.
Driving the strategic goals the Group invested in:
– Growth: Driven by all pillars as well as investment into the sales team and our new brand and website driving
significant increases in brand awareness;
– Product: Strong investment in EVS Water, EVS Aviation and EVS Omnis products and people driving operating
expenses and R&D capitalisation increases as we develop powerful new capabilities and features that solve
complex scenarios. Global innovation and networking within the Group’s product suite has seen significant
development in, and delivery of, the product roadmaps;
– Customer: Focused spend on transformation projects driving operational efficiency and responsiveness to
customers, including the transition from private data centres to AWS, the launch of a new AI-driven ticketing
system and the addition of our Centre of Excellence office in the Philippines; and
– Scale: Focus on creating a global footprint, through people and offices, has seen investment into the
leadership structure in the second half of FY22 with the appointment of two non-executive directors and
completion of the global leadership team.
•
Improvement of Adjusted EBITDA loss of 11.8% over FY21 was driven by revenue growth and improved leverage at the
gross profit line.
Revenue by Region
A$000
Recurring revenue
Asia Pacific
EMEA
Americas
Total Recurring revenue
Trading revenue
Asia Pacific
EMEA
Americas
Total Trading revenue
ARR
Asia Pacific
EMEA
Americas
Total ARR
Sites
Asia Pacific
EMEA
Americas
Number of sites
37
FY22
FY21
Movement $
Movement %
15,372
13,901
14,604
43,877
17,056
16,541
19,843
53,440
17,224
15,915
19,905
53,044
116
125
175
416
14,980
12,846
12,565
40,391
17,573
14,819
16,153
48,545
16,365
14,498
15,159
46,472
105
118
150
373
392
1,055
2,039
3,486
(517)
1,722
3,690
4,895
859
967
4,746
6,572
11
7
25
43
2.6%
8.2%
16.2%
8.6%
(2.9%)
11.6%
22.8%
10.1%
5.2%
6.5%
31.3%
14.1%
10.5%
5.9%
16.7%
11.5%
Envirosuite Annual Report 2022
Continued outstanding growth in the Americas region, supported by a 31.3% increase in ARR and a 22.8% increase in
total trading revenue, places the Americas as the strongest growing region and having the largest share of total trading
revenue. Growth in site revenue within the Americas has driven average ARR per site up 12.9% predominantly a result of
expansion opportunities.
EMEA had elevated growth in recurring and non-recurring revenue with an 11.6% increase in total trading revenue.
Revenues in Asia Pacific were lower in FY22, predominantly due to FY21 including significant low margin non-recurring
revenues in China that were not repeated in FY22.
Revenue by Product Family
A$000
FY22
FY21
Movement $
Movement %
Recurring revenue
EVS Aviation
EVS Omnis
EVS Water
Total Recurring revenue
Trading revenue
EVS Aviation
EVS Omnis
EVS Water
Total Trading revenue
ARR
EVS Aviation
EVS Omnis
EVS Water
Total ARR
Sites
EVS Aviation
EVS Omnis
EVS Water
Total Sites
31,061
12,699
117
43,877
34,961
18,352
127
53,440
33,908
18,139
997
53,044
172
231
13
416
29,050
11,298
43
40,391
32,067
16,432
46
48,545
31,770
14,637
65
46,472
163
207
3
373
2,011
1,401
74
3,486
2,894
1,920
81
4,895
2,138
3,502
932
6,572
9
24
10
43
6.9%
12.4%
172.1%
8.6%
9.0%
11.7%
176.1%
10.1%
6.7%
23.9%
1433.8%
14.1%
5.5%
11.6%
333.3%
11.5%
EVS Aviation recurring revenues increased by $2,011k (6.9%) over FY22 and non-recurring revenue has also seen growth
of $883k, as the effects of COVID on the aviation industry started to reduce and client project spend increased.
Strong growth in ARR for EVS Omnis of 23.9% over FY22 and 24 sites won over the past 12 months have driven EVS
Omnis non-recurring revenues up $519k and recurring revenue up 12.4%. The impact of these new ARR wins on recurring
revenue was reduced due to supply chain issues impacting the delivery of instrumentation.
Momentum in FY22 has seen EVS Water ARR increase to $997k and sites to 13, resulting in an average ARR per site of
$76.7k compared to $21.7k in FY21.
38
Envirosuite Annual Report 2022 Directors’ report
Earnings before interest, tax, depreciation and amortisation (EBITDA)
A$000
FY22
FY21
Movement $
Movement %
(13,195)
(12,497)
(698)
Net loss after tax
Add back: Tax expense
Add back: Net finance expense
Add back: Depreciation and amortisation
EBITDA
Less: AASB 16 Depreciation & interest
Add back: Share-based payments
Add back: Foreign currency (gains) / losses
Add back: Transaction and integration costs
Add back: Philippines set up costs
Add back: Property make good provisions
410
210
8,157
(4,418)
(1,688)
1,477
(202)
112
245
512
468
287
6,996
(4,746)
(1,578)
946
293
593
-
-
Adjusted EBITDA
(3,962)
(4,492)
(58)
(77)
1,161
328
(110)
531
(495)
(481)
245
512
530
(5.6%)
(12.4%)
(26.8%)
16.6%
6.9%
(7.0%)
56.1%
(168.9%)
(81.1%)
-
-
11.8%
EBITDA is a non-IFRS measure and is calculated by adding back depreciation, amortisation and interest from net loss
before tax. Adjusted EBITDA also adds back share-based compensation expense, foreign currency gains and losses,
transformation, transaction and integration costs and property make good provisions (which are seen as non-recurring)
and excludes the impacts of adopting AASB 16, as the application of the standard results in operating expenses being
excluded from EBITDA.
Improvement of Adjusted EBITDA loss of 11.8% over FY21 was driven by revenue growth and improved leverage at the
gross profit line.
Financial Position
A$000
Cash and cash equivalents
Current assets
Current liabilities
Net current assets
Total tangible assets
Net tangible assets
Net cash from / (used in) operating activities
FY22
16,292
34,979
(19,657)
15,322
41,114
16,097
(3,188)
FY21
17,640
32,715
(16,083)
16,632
40,034
17,491
(8,510)
Movement $
(1,348)
2,264
(3,574)
(1,310)
1,080
(1,394)
5,322
Cash and Cash Equivalents decreased by $1,364k during FY22. A capital raise in December 2021 resulted in a cash inflow
of $10,469k ($9,946k net of transaction costs) to fund further expansion of EVS Water. The inflow was offset by the
following spend:
•
•
$3,188k outflow (FY21: $8,510k) from operating activities;
$4,750k cash used in the acquisition of intangible assets (FY21: $3,116k) which consist of capitalised product
development costs across EVS Aviation, EVS Omnis and EVS Water;
•
$1,762k in payments for Property, Plant and Equipment (FY21: $741k) which includes $1,298k of equipment leased to
clients in FY22; and
•
$1,878k in payments for lease liabilities related to buildings (FY21: $1,521k).
Total cash used in operating activities when adding capitalised development costs and repayment of lease liabilities
(“Adjusted Operating Cashflow”) was an outflow of $9,816k, this is up from $8,946k in the FY21 showing the increased
investment in EVS Water and investment into our strategic pillars.
39
Envirosuite Annual Report 2022 The Group has a solid balance sheet following the cash raised during FY22, the lack of debt on the balance sheet (other
than lease liabilities) and the strong management of Adjusted EBITDA and operating cashflows during the year.
The Directors continue to monitor the impacts of the COVID-19 pandemic on group operations and respond appropriately
to risks identified.
Significant changes in the state of affairs
In December 2021 the Company successfully completed a capital raising for $10,469k via an institutional placement.
The capital raising provided funds to accelerate the Company’s investment into growing incremental sales in the EVS
Water business.
Apart from the capital raise, there were no other significant changes in the state of affairs of the Group during the
financial year.
Dividends paid or recommended
No dividends were paid by the Company to members during the financial year. No dividends were recommended or
declared for payment, but not paid, to members during the financial year.
Events after the reporting period
The Directors are not aware of any matters or circumstances that have arisen since 30 June 2022 that have significantly
affected or may significantly affect the operations of the Group in subsequent financial years, the results of those
operations, or the state of affairs of the Group in future financial years.
Business growth strategy
The Group continues to be focussed on delivering growth and investing in capability.
Growth is being driven by:
•
•
•
•
recognising first mover advantage in environmental intelligence and accelerating the product roadmap across all
product suites;
innovative product development, specifically EVS Water, and continuing innovation globally;
land, expand and scale across all product suites and geographies; and
strong regional growth lead by the Americas.
Acceleration of capability is being delivered through investment into:
•
•
•
engineering: to increase product development and innovation capability;
operations and support: improving performance, customer support and instrument innovation; and
security: safeguarding the operational environment to protect existing and future customers.
Material business risks
The Group is subject to risks of both a general nature and ones that are specific to its business activities including but not
limited to:
retaining existing customers and keeping them engaged in the product;
acquiring new customers and accelerating sales within all product lines and geographies;
•
•
• maintaining and growing each product’s capability ensuring it is continuing to meet current and future market
•
requirements;
exposure to geographic regions and the risks associated with doing business in these regions including political and
economic uncertainties as well as different levels of sophistication in the legal and regulatory frameworks; and
•
protecting the group’s intellectual property, ensuring no infringement of intellectual property rights.
Likely developments and expected results of operations
There are no likely developments in the operations of the Group that were not finalised at the date of this report.
Environmental regulation
The Group is not subject to any significant environmental regulation under a law of the Commonwealth or of a State or
Territory, in which the group operates.
40
Envirosuite Annual Report 2022 Directors’ report
Information on Directors
David Johnstone, Chair (Appointed 10 February 2014)
David is an experienced executive and chairman who has been actively involved in business for more than 35 years,
successfully starting, owning and operating a vast range of businesses. David joined the Board as a non-executive
Director in February 2014 and was appointed Chairman in September 2016.
David also Chairs Cooper Investors, a specialist equity investor group with in excess of $12bn in funds under
management, and Sports Club HQ a technology company that specialises in managing the Registration and Competition
Management data requirements for Sporting clubs and associations.
David is also a non-executive director of Southern Cross Partners and is an Advisory Board Member to NexPay. David
has also served as both a director, non-executive director, Chair and advisor to both public and private companies in the
technology, communications, finance, wealth management, insurance, risk management and sporting sectors.
Member of the Audit and Risk Management Committee, Chairman of the Audit and Risk Management Committee (from 1
August 2020 through 31 December 2021), Chairman of the Remuneration and Nomination Committee.
Jason Cooper, Managing Director and CEO (Appointed 1 March 2022)
Mr. Cooper joined Envirosuite in July 2020 as chief operating officer, was appointed as Chief Executive Officer in March
2021 and appointed Managing Director March 2022. Since joining Envirosuite, Mr Cooper has been instrumental in driving
the strategy for the Company during the backdrop of the COVID-19 pandemic. In this time, he finalised the integration
of the major acquisition, commercialised EVS water nationally and internationally while driving growth across all product
lines and regions.
Jason is a highly regarded and well-respected industry leader with more than 20 years’ experience in the technology
sector. He has had broad experience working in senior executive roles in both multi-national and start-up environments.
During his career he has held senior roles across sales, operations and general management in the Silicon Valley, London,
and Melbourne. Jason holds an executive MBA in Entrepreneurship and Innovation from HEC, France.
Peter White, Director (Appointed 10 July 2017 / resigned 25 November 2021)
Mr White was the CEO of Envirosuite from April 2012 to May 2016 and returned to be CEO again in July 2017 and was
appointed Managing Director in October 2020. Mr White retired from being CEO and Managing Director in February 2021
and became a Non-executive director of Envirosuite and resigned 25 November 2021. During his time at Envirosuite, he
led the successful development and transition to a cloud-based SaaS offering of the Envirosuite platform that has become
the core part of the Omnis product family the Company has today. Mr White also led the acquisition of EMS Bruel & Kjaer
Holdings and AqMB and secured the exclusive license to SeweX.
Over the past 33 years, Mr White has held executive and sales management positions in global technology companies
including Hewlett Packard, Motorola, Siemens and Tandem Computers. He has extensive global experience gained
through international business development roles in Asia, Europe and the USA.
Peter has a particular skillset and experience in selling innovative and large, technology deals. This has included individual
deals worth hundreds of millions of dollars, as well as application software deals to several governments, as well as some
of the world’s biggest banks and telecommunication carriers.
Hugh Roberston, Director (Appointed 1 November 2018)
Hugh Robertson has over 35 years experience in the financial services sector and equity markets. Hugh is an experienced
company director across a broad range of businesses with a concentration on small cap industrial stocks.
Hugh’s more recent directorships include AMA Group Limited (ASX:AMA), Centrepoint Alliance Limited (ASX:CAF),
TasFoods Limited (ASX:TFL), Hub24 Limited (ASX:HUB) and he is currently a Non-Executive Director of Maggie Beer
Holdings Limited (ASX: MBH), Touch Ventures Limited (ASX: TVL) and Chair of Credit Clear Limited (ASX: CCR).
41
Envirosuite Annual Report 2022 Sue Klose, Director (Appointed 1 December 2020)
Sue Klose is an experienced non-executive director and executive, with a diverse background in digital business growth
and operations, corporate development, strategy and marketing. Sue was previously the Head of Digital and Chief
Marketing Officer (CMO) of GraysOnline and Director of Digital Corporate Development for News Ltd.
She is currently a non-executive director of Nearmap (ASX: NEA), Pureprofile (ASX: PPL), Halo Food Co. (ASX: HLF) as well
as a number of unlisted groups.
Sue has an MBA in Finance, Strategy and Marketing from the JL Kellogg School of Management at Northwestern
University, and a Bachelor of Science in Economics from the Wharton School of the University of Pennsylvania.
Member of the Audit and Risk Management Committee (from 1 December 2020), Chair of the of the Audit and Risk
Management Committee (From 1 January 2022)
Stuart Bland, Director (Appointed 1 March 2022)
Stuart has over 30 years broad commercial executive experience, primarily in global SaaS businesses undergoing
high rates of growth. His industry experience includes technology (fintech, knowledge management), defence, sport,
telecommunications, biotechnology and wine.
Stuart’s executive experience includes 14 years as Chief Financial Officer at Iress Ltd (ASX:IRE) and Chief Financial Offer
roles at Melbourne IT Ltd and Panviva Pty Ltd.
Stuart is currently a member of the Advisory Board to Cablex Pty Ltd, as well as consulting to a number of other Boards.
Member of the Remuneration and Nomination Committee. (from 1 July 2022)
Tim Ebbeck, Director (Appointed 1 March 2022)
Tim has over 35 years of board, executive, and advisory experience across a range of industries including technology,
public sector, media, sport, professional services, energy and finance.
Tim’s executive experience includes roles as Chief Executive Officer at SAP (ANZ), Chief Executive of Oracle (ANZ), Chief
Commercial Officer of SAP (APJ), Chief Commercial Officer of NBN Co, as well as Chief Financial Officer of Unisys South
Pacific and TMP Worldwide Asia Pacific.
Tim is presently Non-Executive Director of ReadyTech Ltd (RDY.ASX), XPON Technologies Ltd (XPN.ASX), Australia Tower
Network Limited and The Yield Technology Solutions Limited. He is also a Board Member of the NSW Health Central Coast
Local Health District.
Directors equity participation and other relevant interests
As of the date of this report, Directors have relevant interests in ordinary shares, as well as options and performance
rights to subscribe for ordinary shares in Envirosuite Limited, as outlined in the following table. Each option entitles the
holder to subscribe for one ordinary share of Envirosuite Limited subject to the holder paying the exercise price. Each
performance right entitles the holder to receive one ordinary share upon certain vesting conditions being met.
Non-Executive Directors
Ordinary Shares
Performance Rights
Options
David Johnstone
Hugh Robertson
Sue Klose
Stuart Bland
Tim Ebbeck
Executive Director
Jason Cooper
7,033,106
22,252,311
500,000
510,194
62,500
-
-
-
-
-
1,000,000
8,000,000
-
-
2,000,000
-
-
-
42
Envirosuite Annual Report 2022 Directors’ report
Company Secretary
Adam Gallagher holds Graduate Diplomas in Applied Corporate Governance and Information Systems, a Masters in
Commerce and a Bachelor of Economics and was appointed Company Secretary 8 Feb 2022.
Adam was previously Company Secretary and Director of Envirosuite from 2012 to 2020, during which time he was
instrumental in each of the Company’s transformational growth phases. He has also held officeholder roles in other ASX
listed technology companies including ASX: CT1, YPB, and currently in ASX: CCR, CCA and PHL.
Prior to Adam Gallagher’s appointment, Rachel Ormiston (LLB, Certificate in Governance Practice) was Company
Secretary appointed 24 Aug 2020, resigning 8 Feb 2022. Rachel has almost 20 years’ experience as a lawyer and joined
the Company as General Counsel in August 2018, where she established the Legal Department. She continues with the
Company as General Counsel and Vice President of Human Resources.
Meetings of directors
The numbers of meetings of the Company’s Board of directors and committees of the Board held during the year ended
30 June 2022, and the numbers of meetings attended by each director were as follows:
2022 Meetings
David Johnstone
Jason Cooper
Peter White
Hugh Robertson
Sue Klose
Stuart Bland
Tim Ebbeck
Full Meetings
of Directors
Audit and Risk
Management Committee (*)
Remuneration and
Nomination Committee (**)
A
14
6
6
14
14
4
4
B
14
6
6
14
14
4
4
A
5
-
-
-
5
-
-
B
5
-
-
-
5
-
-
A
-
-
-
-
-
-
-
B
-
-
-
-
-
-
-
A - Number of meetings attended. B - Number of meetings held during the time the director held office or was a member of the committee during the year (number eligible to attend).
* The committee charters provide for a minimum of 2 meetings to be held each year per committee. In addition to formal meetings the members meet informally on a regular basis and discuss matters
within the charter. Each committee Chair provides a report to the board at each monthly board meeting.
** During the 2022 financial year, David Johnstone was the only member of the Remuneration & Nomination Committee and as such no formal meetings were held. The activities undertaken by David
Johnstone regarding Remuneration and Nomination were minuted in the Director meetings.
Shares under option
Unissued ordinary shares of Envirosuite Limited under option at the date of this report are as follows:
Grant date
25-Oct-18
28-Feb-20
28-Feb-20
19-Mar-20
21-Dec-20
29-Apr-21
Total
Expiry date
Exercise price ($)
Number under option
30-Oct-22
28-Feb-23
28-Feb-23
1-Apr-23
21-Dec-22
21-Dec-22
0.16
0.20
0.25
0.40
0.40
0.20
750,000
75,000,000
20,000,000
1,000,000
2,000,000
10,000,000
108,750,000
No options were issued in the current year. In December 2020, the Company issued 2,000,000 options to Ms Sue Klose in
connection with her appointment to the Board of Directors. In April 2021, the Company issued 10,000,000 options to Mr
Alberto Calderon in connection with his appointment as advisor to the CEO of Envirosuite.
43
Envirosuite Annual Report 2022
No option holder has any right under the options to participate in any other share issue of the Company or any other
related entity.
During the financial year, options for 48,750,000 of shares lapsed without being exercised. An additional 2,000,000
options were exercised during the reporting period. No options have lapsed post balance date.
Indemnification and insurance of officers or auditor
During the year, the Group paid insurance premiums for a Directors and Officers Liability Insurance Policy. This policy
covers Directors and Officers of the Group. In accordance with normal commercial practices under the terms of the
insurance contracts, the disclosure of the nature of the liabilities insured against and the amount of the premiums are
prohibited by the policy.
No indemnities have been given or insurance premiums paid, during or since the end of the financial year for the auditor of
the Group.
Proceedings on behalf of the Company
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of
the Corporations Act 2001.
Non audit services
No fees were paid or payable to PKF Brisbane Audit, being the auditor the Group, for non-audit and other assurance work
during the year ending 30 June 2022 (2021: Nil). Amounts paid or payable to PKF and its related practices for non-audit
and other assurance work totaled $25,316 (2021: $4,504).
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 5 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 5 to the financial
statements do not compromise the external auditor’s independence requirements of the Corporations Act 2001 for the
following reasons:
•
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
•
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants (including Independence Standards) issues by the Accounting Professional and
Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-
making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.
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 on page 55.
Rounding of amounts
The Company is an entity to which Legislative Instrument 2016/191 applies and accordingly amounts in the financial
statements and directors’ report have been rounded to the nearest thousand dollars, unless otherwise stated.
44
Envirosuite Annual Report 2022 Remuneration Report
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations
Act 2001.
The report is structured as follows:
A.
B.
C.
D.
E.
F.
G.
A.
Key management personnel covered in this report
Principles used to determine the nature and amount of remuneration and link to performance
Share-based compensation
Details of remuneration
Shareholdings of key management personnel
Loans to key management personnel
Other transactions with key management personnel
Key management personnel covered in this report
The remuneration disclosures in this report cover the following persons who were classified as Key Management
Personnel (KMP) of the Group during the 2022 financial year. KMP (as defined in AASB 124 Related Party Disclosures) are
those persons who, directly or indirectly, have authority and responsibility for planning, directing and controlling major
activities of the Group.
KMP
Position
Term
Non-Executive Directors
David Johnstone
Independent Chair
Peter White
Non-Executive Director
Hugh Robertson
Non-Executive Director
Sue Klose
Stuart Bland
Tim Ebbeck
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Full Year
Resigned 25 Nov 2021
Full Year
Full Year
Effective 1 Mar 2022
Effective 1 Mar 2022
Jason Cooper
Chief Executive Officer and Managing Director
Effective 1 Mar 2022
Executives
Jason Cooper
Aaron Lapsley
Justin Owen
Chief Executive Officer
Chief Operating Officer
Chief Financial Officer
Matthew Patterson
Chief Financial Officer
1 Mar 2021 – 28 Feb 2022
Effective 10 Jan 2022
Effective 24 Jan 2022
Resigned 12 Nov 2021
B.
(i)
Principles used to determine the nature and amount of remuneration
Executive pay
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework seeks to align executive reward with achievement of strategic
objectives and the creation of value for shareholders and conform to market practice for delivery of reward.
The Board seeks to ensure that executive reward satisfies the following key criteria for good reward governance
practices:
•
•
•
•
•
competitiveness
shareholder alignment
performance
transparency and simplicity
capital management
45
Envirosuite Annual Report 2022
The Group has structured an executive remuneration framework that it believes is market competitive and complementary
to the objectives of the organisation.
The executive pay and reward framework generally has three components:
Fixed remuneration
Base Pay
•
Executives are offered a competitive base pay that comprises the fixed component of
pay and rewards.
•
•
There are no guaranteed base pay increases included in any executives’ contracts.
Retirement benefits are delivered under the Australian superannuation legislation
at 10% of base salary for the financial year ended 30 June 2022, up to the maximum
superannuation contribution base.
•
Base pay is structured as a total remuneration package which may be delivered
as a combination of cash and prescribed non-financial benefits at the executives’
Performance-based remuneration
discretion.
Short-term Incentives
•
STI is provided to Executive KMPs equivalent to between 30% and 50% of their
(STI)
base pay, where payment is dependent upon satisfaction of certain performance
conditions.
•
STI arrangements are paid out in cash.
Long-term incentives
•
Executive KMP are awarded LTIs to focus the efforts of the Executive KMP on
(LTI)
the achievement of sustainable long-term value creation for the Group and the
shareholders.
•
Awards of LTIs may be made upon entering into an employment contract with the
Group, and as part annual reviews of remuneration arrangements.
•
Executive KMP LTI awards are governed by the provisions of the Company’s
Performance Rights Plan. Vesting conditions are specified at the time of the award,
and details of the awards made to Executive KMP are discussed further below.
Remuneration and other terms of employment for Executive KMP are formalised in service or employee agreements. All
Executive KMP agreements are reviewed annually by the Remuneration and Nominations Committee. A summary of the
terms in Executive KMP agreements is discussed further below.
Overview of FY22 Executive KMP Remuneration
Fixed Remuneration1
STI Entitlement
LTI Entitlement
Jason Cooper
Aaron Lapsley2
Justin Owen3
Matthew Patterson4
AUD363,000
USD215,000
AUD330,000
AUD280,000
50%
30%
30%
30%
8,500,000 Performance Rights
2,000,000 Performance Rights
2,000,000 Performance Rights
2,000,000 Performance Rights
1 - Fixed remuneration is inclusive of superannuation contributions where required by law to be made by Envirosuite
2 - Appointed 10 Jan 2022
3 - Appointed 24 Jan 2022
4 - Resigned 12 Nov 2021
46
Envirosuite Annual Report 2022 Remuneration report
FY22 STI Outcomes for Executive KMP
At the beginning of FY22 each Executive KMP was given a target STI opportunity subject to the achievement of financial
and personal targets. For FY22, the maximum STI each Executive KMP could earn was kept at the target amount. The
target performance measures are set at levels in line with the Company’s medium term plans, and personal goals align
with key operational strategic objectives.
The following tables detail the FY22 STI performance outcomes for Envirosuite’s Executive KMPs:
Name and Role
Target STI FY22 ($)
Actual STI FY22 ($)
Actual STI as a % of Target
Jason Cooper
Chief Executive Officer and
Managing Director
Aaron Lapsley
Chief Operating Officer
Justin Owen
Chief Financial Officer
Total
165,000
120,098
42,9831
38,7121
246,695
31,286
28,177
179,561
1 - Pro-rata from employment commencement date
72.8%
72.8%
72.8%
-
For FY22 the STI performance conditions were based on a combination of new ARR contracts awarded (1/3), Adjusted
EBITDA (1/3) and personal targets (1/3).
FY22 LTI awards issued to Executive KMP
Executive KMP were issued with performance rights in FY22.
These awards are summarised as follows:
Mr. Cooper and the Company entered into a new employment contract on 12 October 2021, effective 1 July 2021 under
which Mr. Cooper is entitled to the following performance rights as an LTI:
i)
1,500,000 fully paid ordinary shares of which 500,000 vest on 28 February 2022, 500,000 vest on 28 February
2023 and 500,000 vest on 28 February 2024;
ii) 750,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the Australian
Stock Exchange (ASX) reaches $0.25 per share and remains at or above $0.25 per share for a continuous period of
30 days thereafter;
iii) 750,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX
reaches $0.40 per share and remains at or above $0.40 per share for a continuous period of 30 days thereafter;
iv) 1,500,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX
reaches $0.50 per share and remains at or above $0.50 per share for a continuous period of 30 days thereafter;
v) 2,000,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX
reaches $0.75 per share and remains at or above $0.75 per share for a continuous period of 30 days thereafter;
vi) 2,000,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX
reaches $1.00 per share and remains at or above $1.00 per share for a continuous period of 30 days thereafter.
Performance rights issued to Mr. Cooper under a prior contract lapsed as part of granting the above award.
47
Envirosuite Annual Report 2022
Mr. Lapsley and the Company entered into an employment contract on 10 December 2021 under which Mr. Lapsley is
entitled to the following performance rights as an LTI:
i)
1,000,000 fully paid ordinary shares of which 500,000 vest on 10 January 2023 and 500,000 vest on 10 January
2024;
ii) 500,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX
reaches $0.35 per share and remains at or above $0.35 per share for a continuous period of 30 days thereafter;
iii) 500,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX
reaches $0.50 per share and remains at or above $0.50 per share for a continuous period of 30 days thereafter;
Mr. Owen and the Company entered into an employment contract on 23 December 2021 under which Mr. Owen is entitled
to the following performance rights as an LTI:
i)
1,000,000 fully paid ordinary shares of which 500,000 vest on the first anniversary of his employment and 500,000
vest on the second anniversary;
ii) 500,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX reaches
$0.35 per share and remains at or above $0.35 per share for a continuous period of 30 days thereafter;
iii) 500,000 fully paid ordinary shares that vest in the event that the Companies share price as listed on the ASX reaches
$0.50 per share and remains at or above $0.50 per share for a continuous period of 30 days thereafter.
An Executive KMP’s entitlement to participate in performance rights granted to them will cease and they will not be
entitled to be issued ordinary shares, if at the time the performance rights become entitled to vest they have resigned
or given notice of resignation over their employment with the Company or they have been terminated for cause or
performance related reasons.
Under the Company’s Performance Rights Plan rules, the Directors have the capacity to accelerate vesting timeframes
in certain situations including where a takeover bid is made for the Company or where a person becomes entitled to not
greater than 50% of the total shares in the Company.
Executive KMP Service Agreement Summary
Each Executive KMP has entered an employment contract with the Group. Details of the relevant contracts are set out in
the table below:
Executive KMP
Jason Cooper1
Aaron Lapsley
Justin Owen
Duration
of Service
Agreement
Ongoing
Ongoing
Ongoing
Notice period by
Executive
Notice Period
by Company
3 months
At will
2 months
3 months
At will
2 months
1- A termination payment of six months base remuneration inclusive of superannuation applies in the event of a change in control and, if within six months, Mr.
Cooper is either dismissed or there has been a significant reduction in his remuneration or duties.
(ii)
Non-executive directors
On appointment to the Board, all Directors enter into a service agreement with the Company in the form of a letter of
appointment. The letter summarises the Board policies and terms, including compensation, relevant at the time of their
appointment to the office of director.
48
Envirosuite Annual Report 2022
Remuneration report
Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of, the
directors. Fees and payments to Non-Executive Directors can be made directly in the form of salaries and wages, noting
no annual or long service leave entitlement accrue or via companies controlled by the director. Non-executive directors’
fees and payments are reviewed annually by the Remuneration and Nominations Committee.
Non-Executive Director’s fees are determined within an aggregate directors’ fee pool limit. The current pool limit is
$600,000 per annum which was approved at the Company’s Annual General Meeting (AGM) held 25 November 2021. The
previous limit was $400,000 per annum. At this AGM, Shareholders also approved for Non-Executive Director fees to be
paid via equity, in addition to the methods already approved in the Company’s constitution.
The following fees apply:
Fees per Annum
Chair
Other Directors
Committee Chair
Committee Member
FY22
$110,000
$80,000
$10,000
$5,000
FY21
$90,000
$60,000
$10,000
nil
No fees as described above are paid to Directors who hold an employee contract with the Company.
C.
(i)
Share-based compensation
Options and Performance Rights
The Group issues options and performance rights to employees to provide long-term incentives for employees to deliver
value to shareholders by aligning interests and conserving cash. The Group also issues options to Directors to align their
personal interests with that of the shareholders.
Each option provides the right to acquire one ordinary share in Envirosuite Limited for a stated exercise price, subject
to the relevant vesting conditions being met. Each performance right provides the right to receive one ordinary share in
Envirosuite Limited subject to the relevant vesting criteria being met. Performance rights are awarded with no exercise
price being payable when vesting conditions are satisfied. Options and performance rights carry no voting rights or
entitlements to receive dividends.
The options and performance rights issued to employees in prior financial years were designed to provide long-term
incentives for employees to deliver value to shareholders by aligning interests and conserving cash reserves.
Upon exercising vested options and performance rights they convert to ordinary shares in Envirosuite Limited and carry
the standard dividend and voting rights available to ordinary shareholders.
Details of options and performance rights over ordinary shares in the Company provided as remuneration to each director
of Envirosuite Limited and each of the Executive KMP of the parent entity and the Group are set out below. Further
information on the options and performance rights issued to Executive KMP and other employees of the Group is set out in
Note 16 to the financial statements.
49
Envirosuite Annual Report 2022 Options
Finan-
cial
Year
Balance at
Start of Year
Granted
Exercised
Forfeited /
Other
Balance at
End of Year
Vested and
Exercisable
Unvested
Executive Directors
P. White
2022
-
(retired 28 Feb 2021)
2021
5,000,000
A. Gallagher
2022
-
(resigned 31 Jul 2020)
2021
7,500,000
Non-Executive Directors
D. Johnstone
P. White
2022
5,000,000
2021
5,000,000
2022
5,000,000
(resigned 25 Nov 2021)
2021
-
H. Robertson
S.Klose
Z.Zhang
2022
5,000,000
2021
5,000,000
2022
2,000,000
2021
2022
-
-
2021
12,500,000
-
-
-
-
-
-
-
-
-
-
-
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,000,000)**
-
(7,500,000)*
(5,000,000)
-
-
-
-
-
-
-
-
-
-
-
5,000,000
5,000,000
(5,000,000)
-
-
5,000,000**
5,000,000
5,000,000
(5,000,000)
-
-
-
-
-
-
(12,500,000)*
5,000,000
5,000,000
2,000,000
2,000,000
2,000,000
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Departed Envirosuite during the year, options not included as part of balance at end of year
** Mr White retired as CEO and Managing Director on 28th Feb 2021 at which point he was no longer an Executive Director and became a Non-Executive Director.
Details of options and performance rights has been split between the period of Mr White in his role of Executive Director and the period of his role as Non-Executive
Director.
Performance rights
Finan-
cial
Year
Balance at
Start of Year
Granted
Vested
Forfeited /
Other
Balance at
End of Year
Vested and
Exercisable
Unvested
4,000,000
8,500,000
(1,000,000)
(11,500,000)1
-
Executives
J. Cooper
A. Lapsley
(appointed 10 Jan 2022)
J. Owen
(appointed 24 Jan 2022)
2022
2021
2022
2021
2022
2021
-
-
-
-
-
M. Patterson
2022
2,000,000
(resigned 12 Nov 2021)
2021
2,000,000
Executive Director
J. Cooper
(appointed Managing
Director 1 Mar 2022)
2022
2021
-
-
4,000,000
2,000,000
-
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(666,667)
(1,333,333)
4,000,000
2,000,000
-
2,000,000
-
-
-
2,000,000
-
-
-
-
-
-
-
500,000
-
4,000,000
2,000,000
-
2,000,000
-
-
1,500,000
8,000,0001
8,000,000
-
-
-
-
8,000,000
-
1 - Mr Cooper was appointed Managing Director 1 Mar 2022, in addition to his position of Chief Executive Officer
50
Envirosuite Annual Report 2022 Remuneration report
The table below provides the fair value of performance rights issued to each Executive KMP:
Performance rights
Date of grant
Date of
expiry
Date of vesting
Number
granted
Fair value per right at grant
Fair value of
performance
rights at grant
1-Jul-21
1-Feb-22
28-Feb-22
500,000
$0.093 for non-market
46,500
1-Jul-21
1-Feb-23
28-Feb-23
500,000
$0.093 for non-market
46,500
1-Jul-21
1-Feb-24
28-Feb-24
500,000
$0.093 for non-market
46,500
1-Jul-21
1-Jul-21
1-Jul-21
1-Jul-21
1-Jul-21
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
750,000
$0.07726 for market
750,000
$0.06867 for market
1,500,000
$0.06557 for market
2,000,000
$0.05857 for market
57,946
51,499
98,351
117,141
2,000,000
$0.05137 for market
102,749
10-Jan-22
10-Jan-23
10-Jan-23
500,000
$0.215 for non-market
107,500
10-Jan-22
10-Jan-24
10-Jan-24
500,000
$0.215 for non-market
107,500
10-Jan-22
10-Jan-22
(1)
(1)
(1)
(1)
500,000
$0.19534 for market
97,671
500,000
$0.18414 for market
92,072
24-Jan-22
24-Jan-23
24-Jan-23
500,000
$0.200 for non-market
100,000
24-Jan-22
24-Jan-24
24-Jan-24
500,000
$0.200 for non-market
100,000
24-Jan-22
24-Jan-22
(1)
(1)
(1)
(1)
500,000
$0.18056 for market
90,282
500,000
$0.16847 for market
84,233
Jason Cooper
Aaron Lapsley
Justin Owen
(1) Market and non-market performance requirements. Market performance conditions are linked to the Company’s share price. The Non-market performance
condition is ongoing employment with the Group as at Vesting date.
(ii)
Shares
No shares were granted to KMP during the year.
D.
Details of remuneration
The table below sets out Executive KMP and Director remuneration for the financial year ending 30 June 2022 and the
prior year comparative period in accordance with the requirements of the Accounting Standards and the Corporations Act
(Cth). The table reflects the accounting value of remuneration attributable to KMP, derived from the various components
of compensation. Refer to the accounting policies in the financial statements for details on how remuneration has been
measured, including the determination of fair value of options and performance rights granted (refer Note 1(g)).
51
Envirosuite Annual Report 2022 Remuneration
Financial
Year
Salary and fees
STI
Term Benefits Superannuation
Ordinary
Shares
Performance
rights
Options
Total
Short Term
Long Term
Share-Based Payments
Non-Executive Directors
D. Johnstone
P. White1
H. Robertson2
S. Klose
S. Bland3
T. Ebbeck3
Z.Zhang4
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
137,500
109,167
154,996
20,000
33,333
60,000
77,273
41,500
26,667
-
26,667
-
-
25,000
Executive Directors
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,727
-
-
-
-
-
-
-
2022
330,000
120,098
14,555
23,568
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
286,667
42,291
-
-
-
-
21,694
-
200,000
25,830
121,161
21,694
-
12,500
-
-
-
-
-
-
149,232
31,286
(2,788)
5,218
-
-
-
-
131,923
28,177
10,988
11,584
-
172,972
-
-
-
-
27,042
9,319
280,000
41,307
-
21,694
J. Cooper5
P. White1
A.Gallagher6
Executives
A. Lapsley7
J. Owen8
M. Patterson9
Total
-
-
-
46,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
137,500
109,167
154,996
20,000
80,000
60,000
85,000
123,000
164,500
-
-
-
-
-
26,667
-
26,667
-
-
(526,881)
(501,881)
523,565
106,707
-
-
-
-
256,931
-
237,015
-
11,500
97,240
-
-
-
-
-
-
-
-
-
-
-
-
-
1,011,786
457,359
-
368,685
-
12,500
439,879
-
419,687
-
220,833
440,241
2,603,015
2022
1,240,563
179,561
49,797
57,416
46,667
1,029,011
2021
1,034,834
109,428
121,161
65,082
-
203,947 (403,881)
1,130,571
1 - Retired from Managing Director role and appointed Non-executive Director 28 Feb 2021. Resigned Non-executive Director role 25 Nov 2021
2 - H. Robertson has elected to receive a portion of fees in ordinary shares, which will not be issued until after the upcoming Annual General Meeting following shareholder approval
3 - Appointed Non-executive Director 1 Mar 2022
4 - Z. Zhang was appointed as a Non-executive Director on 6th Dec 2019 and resigned on 28th Nov 2020. The options issued to to Z. Zhang in FY20 only vest on $10,000,000 in revenue (audited in
accordance with international financial reporting standards) being received into the wholly owned China subsidiaries of Envirosuite Limited by 31 Dec 2021. The probability of this occurring was
assessed to 0% as at 30 Jun 2021 which resulted in the reversal of the option expense recognised in the prior year
5 - Appointed Managing Director 1 Mar 2022, in addition to his position of Chief Executive Officer
6 - A. Gallagher ceased to be a KMP on the 31st Jul 2020 when he resigned from the Board of Directors. His remuneration includes fees charged as Company Secretary as well as Director fess up to
this date
7 - Appointed Chief Operating Officer 10 Jan 2022
8 - Appointed Chief Financial Officer 24 Jan 2022
9 - Resigned as Chief Financial Officer 12 Nov 2021
52
Envirosuite Annual Report 2022
Remuneration report
E.
Shareholdings of key management personnel
The numbers of shares in the Company held during the financial year by each director of Envirosuite Limited and other
Executive KMP of the Group, including their personally related parties, are set out below. Where an individual is no longer
deemed KMP of the Group during the year, their shareholdings are removed through the ‘other changes during the year’
column.
Ordinary
Shares
Financial
Year
Balance at
start of year
Granted as
compensation
Exercise of options / per-
formance rights granted as
compensation
Other changes
during the year
Balance at
end of year
Non-Executive Directors
D. Johnstone
P. White
H. Robertson
S. Klose
S. Bland
T. Ebbeck
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Executive Directors
J. Cooper
P. White
A. Gallagher
Executives
A. Lapsley
J. Owen
M. Patterson
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
7,033,106
6,815,459
9,237,681
-
20,421,209
18,935,279
500,000
-
-
-
-
-
-
-
-
9,237,681
-
4,639,526
-
-
-
-
847,253
-
38,039,249
39,627,945
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
217,647
7,033,106
7,033,106
(9,237,681)*
-
9,237,681
1,831,102
9,237,681
22,252,311
1,485,930
20,421,209
-
500,000
510,194
-
62,500
-
-
-
-
(9,237,681)*
-
(4,639,526)**
-
-
28,309
-
(847,253)**
500,000
500,000
510,194
-
62,500
-
1,000,000
-
-
-
-
-
-
-
28,309
-
-
847,253
847,253
1,000,000
(7,652,829)
31,386,420
-
(1,588,696)
38,039,249
* Mr White retired as CEO and Managing Director on 28th Feb 2021 at which point he was no longer an Executive Director and became a Non-executive Director.
Details of options and performance rights has been split between the period of Mr White in his role of Executive Director and the period of his role as Non-executive
Director. Mr White departed Envirosuite during the year, shares not included as part of the balance at end of year
** Departed Envirosuite during the year, shares not included as part of balance at end of year
53
Envirosuite Annual Report 2022 F.
Loans to key management personnel
There were no loans to KMP during the reporting period
G.
Other transactions with key management personnel
There are no other transactions with KMP of Envirosuite Limited and their related parties.
This concludes the remuneration report, which has been audited.
This report is made in accordance with the resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act.
On behalf of the Directors
David Johnstone
Chairman
23 August 2022
54
Envirosuite Annual Report 2022 U ’ C C
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF ENVIROSUITE LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2022, there have
been no contraventions of:
(a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
PKF BRISBANE AUDIT
SHAUN LINDEMANN
PARTNER
BRISBANE
23 AUGUST 2022
55
Envirosuite Annual Report 2022
CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Trading revenue
Other revenue
Total operating revenue
Cost of revenue
Gross profit
Operating expenses
Sales and marketing
Product development
General and administrative
Total operating expenses
Other income / (expense)
Operating deficit
Net finance expense
Net loss before tax
Income tax expense
Net loss after tax
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income / (loss) for the year, net of tax
Total comprehensive loss for the year
Net loss attributed to:
Equity holders of Envirosuite Limited
Total comprehensive loss attributable to:
Equity holders of Envirosuite Limited
Notes
4
5
5
6
Consolidated Group
2022
$’000
53,440
19
2021
$’000
48.545
25
53,459
48,570
(28,355)
(27,980)
25,104
20,590
(13,369)
(8,557)
(15,843)
(37,769)
90
(12,143)
(5,679)
(14,133)
(31,955)
(377)
(12,575)
(11,742)
(210)
(287)
(12,785)
(12,029)
(410)
(468)
(13,195)
(12,497)
18
18
(278)
(278)
(13,177)
(12,775)
(13,195)
(12,497)
(13,177)
(12,775)
Basic loss per share
Diluted loss per share
23
23
Cents
(1.12)
(1.12)
Cents
(1.22)
(1.22)
The accompanying notes form part of these financial statements.
56
Envirosuite Annual Report 2022 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Consolidated Group
Notes
2022
$’000
2021
$’000
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Inventories
Total current assets
Non-current Assets
Property, plant and equipment
Right of use assets
Deferred tax assets
Intangible assets
Other assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Revenue in advance
Other liabilities
Employee benefit provisions
Lease liabilities and other borrowings
Total current liabilities
Non-current Liabilities
Employee benefit provisions
Lease liabilities and other borrowings
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
57
7
8
10
9
11
12
6
13
10
14
14
15
12
15
12
6
16
17
17
16,292
12,448
3,884
2,355
34,979
3,508
1,711
972
17,640
11,555
1,046
2,474
32,715
3,047
3,253
878
108,652
108,931
916
1,019
115,759
117,128
150,738
149,843
8,467
4,092
1,526
4,527
1,045
7,973
2,686
-
3,894
1,530
19,657
16,083
160
1,206
3,994
5,360
141
2,472
3,847
6,460
25,017
22,543
125,721
127,300
180,597
10,798
(65,674)
125,721
169,520
11,928
(54,148)
127,300
Envirosuite Annual Report 2022 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Total transactions with owners and other transfers
13,612
At 30 June 2021
169,520
11,928
(54,148)
127,300
At 1 July 2020
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Transactions with owners, in their capacity as owners,
and other transfers
Issue of shares
Transaction costs of capital raising (inc. tax effect)
Options and Performance Rights issued - value of services
Shares issued / to be issued to employees
Shares options and performance rights expired or lapsed
At 1 July 2021
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Transactions with owners, in their capacity as owners, and
other transfers
Issue of shares
Transaction costs of capital raising (inc. tax effect)
Options and Performance Rights issued - value of services
Shares issued / to be issued to employees
Ordinary shares
$’000
Reserves
$’000
Retained losses
$’000
Total Equity
$’000
155,908
11,740
(41,663)
125,985
-
-
-
14,026
(930)
55
461
-
-
(12,497)
(12,497)
(278)
(278)
-
-
939
(461)
(12)
466
-
(278)
(12,497)
(12,775)
-
-
-
-
12
12
14,026
(930)
994
-
-
14,090
169,520
11,928
(54,148)
127,300
-
-
-
10,469
(548)
200
956
-
18
18
-
-
1,477
(956)
(13,195)
(13,195)
-
18
(13,195)
(13,177)
-
-
-
-
1,669
1,669
10,469
(548)
1,677
-
-
11,598
Shares options and performance rights expired or lapsed
-
(1,669)
Total transactions with owners and other transfers
11,077
(1,148)
At 30 June 2022
180,597
10,798
(65,674)
125,721
The accompanying notes form part of these financial statements.
58
Envirosuite Annual Report 2022 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated Group
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Other (expenses) / revenue
Taxes paid
Interest received
Interest paid
Notes
June 2022
$’000
June 2021
$’000
51,619
48,482
(54,099)
(56,674)
(2,480)
(8,192)
(253)
(472)
23
(6)
180
(482)
1
(17)
Net cash (used in) operating activities
21
(3,188)
(8,510)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for acquisition of business
Payments for intangible assets
Net cash (used in) investing activities
Cash flows from financing activities
Net proceeds / (repayment) of borrowings
Proceeds from issue of shares
Share issue transaction costs
Repayment of lease liabilities
Net cash provided by financing activities
(1,762)
(741)
-
(5,599)
(4,750)
(3,116)
(6,512)
(9,456)
69
10,669
(524)
(1,878)
8,336
(58)
14,025
(929)
(1,521)
11,517
Net (decrease) in cash and cash equivalents
(1,364)
(6,449)
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the year
16
17,640
16,292
(296)
24,385
17,640
The accompanying notes form part of these financial statements.
59
Envirosuite Annual Report 2022 NOTES TO FINANCIAL STATEMENTS
61
(1.) Summary of significant accounting policies
81
(14.) Trade and other payables
69 (2.) Financial risk management
81
(15.) Employee benefit provisions
71
(3.) Segment information
82 (16.) Issued capital
72
(4.) Revenue
73
(5.) Expenses
74
(6.) Tax
83 (17.) Reserves and retained losses
83 (18.) Commitments and contingencies
84 (19.) Related party transactions
75
(7.) Cash and cash equivalents
85 (20.) Business combinations
76
(8.) Trade and other receivables
86 (21.) Cash flow statement reconciliation
76
(9.) Inventories
76
(10.) Other assets
87
(22.) Share based payments
88 (23.) Earnings per share
76
(11.) Property, plant and equipment
88 (24.) Subsequent events
76
(12.) Right of use assets and lease liabilities
88 (25.) Parent entity financial information
79
(13.) Intangible assets
60
Envirosuite Annual Report 2022 NOTES TO FINANCIAL STATEMENTS
Notes to Financial Statements
For the Financial Year Ended 30 June 2022
For the Financial Year Ended 30 June 2022
These consolidated financial statements and notes represent those of Envirosuite Limited (“the Company”) and controlled
entities (the “Consolidated Group” or “Group”).
The separate financial statements of the parent entity, Envirosuite Limited, have not been presented within this financial report as
permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 23 August 2022 by the directors of the Company.
1.
(a)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The consolidated financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and the Corporations Act
2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded
would result in financial statements containing relevant and reliable information about transactions, events and conditions.
Material accounting policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Compliance with IFRSs as issued by the IASB
Compliance with Australian Accounting Standards ensures that this Financial Report complies with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Consequently, this Financial
Report is compliant with IFRS.
significant change in circumstances.
(b)
Principles of consolidation
Basis of Measurement
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical
costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
Comparative Periods
Comparative periods presented in these financial statements have been restated to align with current year presentation.
Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the Group. The following are:
• Measurement of expected credit losses (ECL) allowance for trade receivables – the measurement of the ECL allowance
for trade receivables relies on estimates of expected credit losses to be incurred for trade receivables taking into account
historical losses and the financial condition of the customer. Refer to Note 1(j) for further discussion.
•
Impairment of goodwill and other intangible assets – the Group tests goodwill and other intangible assets, including
capitalised software development costs, for impairment in accordance with the accounting policy stated in Note 1(n).
These calculations require the use of assumptions regarding the future profitability of the cash generating units to which
the goodwill and intangibles have been allocated, as well as future cash flows related to the intangible asset. Refer to
Note 13 for details of the assumptions used in determining the recoverable amount of goodwill and other intangible
assets.
• Valuation of options – the Group has issued share options in connection with the acquisition of EMS Bruel & Kjaer Holdings
as well as to employees and directors as compensation for services. The valuation of these options is based on using a
Black-Scholes valuation model that relies on various assumptions. Refer to Note 22 for details.
• Valuation of performance rights – the Group has issued performance rights in connection with long-term incentive
arrangements with employees. Where these performance rights have market-based performance conditions, they are
valued by external advisors using a Monte Carlo simulation methodology.
• Recovery of deferred tax assets – deferred tax assets are recognised for deductible temporary differences if
management considers that it is probable that future taxable profits will be available to utilise those temporary
differences. Significant judgement is required to determine the amount of deferred tax assets that can be recognised,
based upon the likely timing and the level of future taxable profits over the next two years together with future tax
planning strategies. Refer to Note 6 for details for the unused tax losses.
61
1.
(a)
•
•
•
•
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basis of preparation
COVID-19 Pandemic – judgement has been exercised in considering the impacts of the COVID-19 Pandemic has or may
have on the Group. This consideration extends to the nature of services offered, customers, supply chains, staffing and
geographical regions in which the group operates. Other than addressed above or in specific notes, there does not
appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to
events or conditions which may materially impact the Group unfavourably as a reporting date or subsequently as a result
of the COVID-19 Pandemic. The board continues to actively monitor the situation.
Inventory provisions – judgement has been exercised in calculating the net realisable value of inventory to determine
whether a provision for inventory obsolescence should be recognised based on an assessment of technological and
market developments and on an analysis of historical and projected usage with regard to quantities on hand.
Estimation of useful lives of assets – the Group determines the estimated useful lives and related depreciation and
amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change
significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will
increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets
that have been abandoned or sold will be written off or written down.
Lease term – the lease term is a significant component in the measurement of both the right-of-use asset and lease
liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease
or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when
ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that
create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered
at the lease commencement date. Factors considered may include the importance of the asset to the Group’s operations;
comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant
leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is
reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (Envirosuite Limited) and
all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it 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 over
the entity. A list of subsidiaries is contained in Note 19 to the financial statements.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date
on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases.
Intercompany transactions, balances and unrealised gains or losses on transactions between entities in the Consolidated Group
are eliminated in full on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where
necessary to ensure consistency with the policies adopted by the Group.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Envirosuite Limited.
(c)
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses. The acquisition method of
accounting is used to account for all business combinations, unless it is a combination involving entities or businesses under
common control. The business combination will be accounted for from the date that control is attained, at which point the fair
value of identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain
limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or
liability is remeasured in each reporting period to fair value, with changes in fair value recognised in profit or loss, unless the
change in fair value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial
instrument, are recognised as expenses in the profit and loss when incurred. The acquisition of a business may result in the
recognition of goodwill or a gain from a bargain purchase.
Envirosuite Annual Report 2022
1.
(a)
•
•
•
•
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basis of preparation
COVID-19 Pandemic – judgement has been exercised in considering the impacts of the COVID-19 Pandemic has or may
have on the Group. This consideration extends to the nature of services offered, customers, supply chains, staffing and
geographical regions in which the group operates. Other than addressed above or in specific notes, there does not
appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to
events or conditions which may materially impact the Group unfavourably as a reporting date or subsequently as a result
of the COVID-19 Pandemic. The board continues to actively monitor the situation.
Inventory provisions – judgement has been exercised in calculating the net realisable value of inventory to determine
whether a provision for inventory obsolescence should be recognised based on an assessment of technological and
market developments and on an analysis of historical and projected usage with regard to quantities on hand.
Estimation of useful lives of assets – the Group determines the estimated useful lives and related depreciation and
amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change
significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will
increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets
that have been abandoned or sold will be written off or written down.
Lease term – the lease term is a significant component in the measurement of both the right-of-use asset and lease
liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease
or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when
ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that
create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered
at the lease commencement date. Factors considered may include the importance of the asset to the Group’s operations;
comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant
leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is
reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or
significant change in circumstances.
(b)
Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (Envirosuite Limited) and
all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it 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 over
the entity. A list of subsidiaries is contained in Note 19 to the financial statements.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date
on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases.
Intercompany transactions, balances and unrealised gains or losses on transactions between entities in the Consolidated Group
are eliminated in full on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where
necessary to ensure consistency with the policies adopted by the Group.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Envirosuite Limited.
(c)
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses. The acquisition method of
accounting is used to account for all business combinations, unless it is a combination involving entities or businesses under
common control. The business combination will be accounted for from the date that control is attained, at which point the fair
value of identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain
limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or
liability is remeasured in each reporting period to fair value, with changes in fair value recognised in profit or loss, unless the
change in fair value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial
instrument, are recognised as expenses in the profit and loss when incurred. The acquisition of a business may result in the
recognition of goodwill or a gain from a bargain purchase.
62
Envirosuite Annual Report 2022
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
•
•
•
the consideration transferred;
any non-controlling interests; and
the acquisition date fair value of any previously held equity interest; over the acquisition date fair value of net identifiable
assets acquired.
Adjustments may be made to fair value of net identifiable assets acquired and to goodwill after the acquisition date if additional
information is obtained about facts and circumstances related to the acquired business that existed at the acquisition date.
However, no further adjustments are made to the acquisition balance sheet and initial goodwill recognised beyond one year
from the acquisition date. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised.
Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it
might be impaired, and is carried at cost less accumulated impairment losses.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose.
Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions
and do not affect the carrying amount of goodwill.
(d)
Foreign currency translation
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in
which that entity operates. The consolidated financial statements are presented in Australian dollars, which is the parent entity’s
functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair
value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in
equity as a qualifying cash flow or net investment hedge.
(g)
Employee benefits
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group’s presentation
currency, are translated as follows:
•
•
•
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are
recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial
position. The cumulative amount of these differences is reclassified into profit or loss in the period in which the operation is
disposed of.
(e)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Chief Executive Officer and the board of directors. Refer Note 3 for segment
information.
Geographical segmentation is the primary basis of segmentation used by the Group.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 Operating Segments are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where information about
the segment would be useful to users of the financial statements.
outflows.
63
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1.
(f)
Revenue recognition
The following is a summary of the revenue recognition for each revenue stream:
Recurring revenue
Includes software platform subscription revenues and maintenance and support services related to monitoring equipment
provided by the Group. These revenues are recognised over time being over the term of the contracts, based on the effort
incurred by the Group being as the services are provided.
Non-recurring revenue
environmental monitoring units.
Includes revenue from projects for the installation of environmental monitoring solutions and upgrades, and sales of
Project revenue is recognised over time based on a percentage of completion method, as this is the performance obligation.
The stage of completion for determining the amount of revenue to recognise is assessed based on the cost-to-cost method
whereby the percentage of completion is estimated based on the costs incurred to date as a percentage of the total expected
costs to deliver the project. The estimate of the total costs to deliver the project is an estimate that requires judgement by
management and is based on quotes from third parties, the cost of the equipment held in inventory, and estimated cost of
internal labour based on number of labour hours required.
Sales of environmental monitoring units are recognised when risk has transferred to the buyer.
Government grants and rebates
Grants and rebates from the government are recognised at their fair value where there is a reasonable assurance that the grant
or rebate will be received and the Group will comply with all the attached conditions. Government grants and rebates relating
to costs are deferred and recognised as income over the period necessary to match them with the costs that they are intended
to compensate. Government grants and rebates relating to the purchase of property, plant and equipment and the development
of IT and software capital costs are included in current and non-current liabilities as deferred income and are credited to income
on a straight line basis over the expected lives of the related assets.
Contract assets and liabilities
Where the Group provides services to customers and the consideration is unconditional, a receivable is recognised as accrued
income and included within Trade and other receivables. Where the customer pays upfront for services that have not yet been
provided, a contract liability is recognised, which is disclosed on the face of the balance sheet as revenue in advance.
Employee benefits includes wages and salaries, bonuses, annual leave and long service leave. Certain employees are awarded
share based payments in the form of options and/or performance rights, which entitle the employee to shares in Envirosuite
Limited upon certain vesting conditions being met.
A liability is recognised for employee benefits in the period that the service is performed where the Group has a present legal or
constructive obligation to pay the amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months
after the end of the period in which the employees render the related service are recognised in respect of employees' services
up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The
liability for annual leave is recognised in the current employee benefit provisions. All other short-term employee benefit
obligations are presented as part of other current payables.
Long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the
period in which the employees render the related service is recognised in the non-current employee benefit provisions and
measured as the present value of expected future payments to be made in respect of services provided by employees up to the
end of the reporting period. 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 end of the reporting period on
Australian Corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash
Envirosuite Annual Report 2022
1.
(f)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue recognition
The following is a summary of the revenue recognition for each revenue stream:
Recurring revenue
Includes software platform subscription revenues and maintenance and support services related to monitoring equipment
provided by the Group. These revenues are recognised over time being over the term of the contracts, based on the effort
incurred by the Group being as the services are provided.
Non-recurring revenue
Includes revenue from projects for the installation of environmental monitoring solutions and upgrades, and sales of
environmental monitoring units.
Project revenue is recognised over time based on a percentage of completion method, as this is the performance obligation.
The stage of completion for determining the amount of revenue to recognise is assessed based on the cost-to-cost method
whereby the percentage of completion is estimated based on the costs incurred to date as a percentage of the total expected
costs to deliver the project. The estimate of the total costs to deliver the project is an estimate that requires judgement by
management and is based on quotes from third parties, the cost of the equipment held in inventory, and estimated cost of
internal labour based on number of labour hours required.
Sales of environmental monitoring units are recognised when risk has transferred to the buyer.
Government grants and rebates
Grants and rebates from the government are recognised at their fair value where there is a reasonable assurance that the grant
or rebate will be received and the Group will comply with all the attached conditions. Government grants and rebates relating
to costs are deferred and recognised as income over the period necessary to match them with the costs that they are intended
to compensate. Government grants and rebates relating to the purchase of property, plant and equipment and the development
of IT and software capital costs are included in current and non-current liabilities as deferred income and are credited to income
on a straight line basis over the expected lives of the related assets.
Contract assets and liabilities
Where the Group provides services to customers and the consideration is unconditional, a receivable is recognised as accrued
income and included within Trade and other receivables. Where the customer pays upfront for services that have not yet been
provided, a contract liability is recognised, which is disclosed on the face of the balance sheet as revenue in advance.
(g)
Employee benefits
Employee benefits includes wages and salaries, bonuses, annual leave and long service leave. Certain employees are awarded
share based payments in the form of options and/or performance rights, which entitle the employee to shares in Envirosuite
Limited upon certain vesting conditions being met.
A liability is recognised for employee benefits in the period that the service is performed where the Group has a present legal or
constructive obligation to pay the amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months
after the end of the period in which the employees render the related service are recognised in respect of employees' services
up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The
liability for annual leave is recognised in the current employee benefit provisions. All other short-term employee benefit
obligations are presented as part of other current payables.
Long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the
period in which the employees render the related service is recognised in the non-current employee benefit provisions and
measured as the present value of expected future payments to be made in respect of services provided by employees up to the
end of the reporting period. 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 end of the reporting period on
Australian Corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash
outflows.
64
Envirosuite Annual Report 2022
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Share based payments
Share based compensation benefits are provided to employees and directors via the Envirosuite Limited Employee Share Option
Plan, the Envirosuite Performance Rights Plan and the Envirosuite Limited Employee Share Plan. Information relating to these
schemes is set out in Note 22.
The fair value of options granted under the Envirosuite Limited Employee Share Option Plan and performance rights granted
under the Envirosuite Performance Rights Plan is recognised as an employee benefit expense with a corresponding increase in
equity. The total amount to be expensed is determined by reference to the fair value of the options and performance rights
granted, which includes any market performance conditions but excludes the impact of any service and non-market performance
vesting conditions and the impact of any non-vesting conditions. Fair value of options at grant date are determined using a
Black & Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option. Fair value of non-market-based performance rights granted is based on the share price
at grant date and the risk free interest rate for the term of the vesting period of the performance right. Fair value of market-
based performance rights granted is based on the Monte Carlo simulation methodology.
Non-market vesting conditions are included in assumptions about the number of options and performance rights that are
expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options and
performance rights that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the
revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee
accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is
demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without
possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
Benefits falling due more than 12 months after reporting date are discounted to present value.
(h)
Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a
business combination, or items recognised directly in other comprehensive income or otherwise directly in equity. Income tax
on items recognised directly in Other Comprehensive Income or otherwise directly in equity is also recognised in other
comprehensive income or directly in equity, respectively. Deferred tax is recognised for assets and liabilities initially recognised
as a result of a business combination, other than goodwill, where the accounting basis is different to the tax basis.
Current Tax
Current tax expense charged to the profit or loss is the tax payable on taxable income. Current tax liabilities/(assets) are
measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority.
Deferred Tax
Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as
unused tax losses.
Deferred tax is provided in full, using the Asset-Liability Method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax is not recognised
for:
•
•
•
temporary differences on the initial recognition of an asset or liability in a transaction that is not a business combination
and that neither affects accounting nor taxable profit nor loss;
temporary differences related to investments in subsidiaries, associates, and joint arrangements to the extent that the
Company is able to control the timing of reversal of the temporary differences and it is probable that they will not reverse
in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and
are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
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.
Deferred tax assets and liabilities are offset when a legally enforceable right of set-off exists and when the deferred tax balances
relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable
right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Envirosuite Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. As a
consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in
the consolidated financial statements. In addition to its own current and deferred tax amounts, Envirosuite Limited also
recognises the current tax liabilities and the deferred tax amounts arising from unused tax losses and unused tax credits
assumed from controlled entities in the Tax Consolidated Group.
Goods and Service Tax
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as part of the cost of 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 taxation authority is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows included in receipts from
customers or payments to suppliers.
Envirosuite Limited and its wholly owned Australian controlled entities except Envirosuite Holdings Pty Ltd are grouped for GST.
The Group classifies petty cash, cash balances and term deposits with financial institutions that have a term of 90 days or less
The Group has a single business model for its financial assets whose objective is hold the assets to collect contractual cash
flows that are solely payments of principal and interest. Financial assets include trade receivables which are initially recognised
when they are originated. Trade receivables are typically due within 30 to 90 days of the invoice being issued and are initially
(i)
Cash and cash equivalents
as cash and cash equivalents.
(j)
Trade and other receivables
measured at the transaction price.
Impairment
The Group recognises loss allowance for expected credit loss (ECLs) on trade receivables and contract assets. The Company
measures loss allowances using the simplified approach under AASB 9 Financial Instruments, which is an amount equal to lifetime
ECLs. Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a trade receivable has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience
and informed credit assessment and including forward-looking information. In assessing credit risk, customers were
disaggregated based on various industry groups, location and customer size.
The Group assumes that the credit risk on a trade receivable has increased significantly if it is more than 90 days past due. The
Group considers a financial asset to be in default when:
there is significant financial difficulty of the customer;
•
•
•
Measurement of ECLs
a breach of contract such as a default or being more than 90 days past due; or
it is probable that the customer will enter bankruptcy or other financial reorganisation.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group
expects to receive). ECLs are discounted at the effective interest rate of the financial asset.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof.
65
Envirosuite Annual Report 2022
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred tax assets and liabilities are offset when a legally enforceable right of set-off exists and when the deferred tax balances
relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable
right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Envirosuite Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. As a
consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in
the consolidated financial statements. In addition to its own current and deferred tax amounts, Envirosuite Limited also
recognises the current tax liabilities and the deferred tax amounts arising from unused tax losses and unused tax credits
assumed from controlled entities in the Tax Consolidated Group.
Goods and Service Tax
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as part of the cost of 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 taxation authority is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows included in receipts from
customers or payments to suppliers.
Envirosuite Limited and its wholly owned Australian controlled entities except Envirosuite Holdings Pty Ltd are grouped for GST.
(i)
Cash and cash equivalents
The Group classifies petty cash, cash balances and term deposits with financial institutions that have a term of 90 days or less
as cash and cash equivalents.
(j)
Trade and other receivables
The Group has a single business model for its financial assets whose objective is hold the assets to collect contractual cash
flows that are solely payments of principal and interest. Financial assets include trade receivables which are initially recognised
when they are originated. Trade receivables are typically due within 30 to 90 days of the invoice being issued and are initially
measured at the transaction price.
Impairment
The Group recognises loss allowance for expected credit loss (ECLs) on trade receivables and contract assets. The Company
measures loss allowances using the simplified approach under AASB 9 Financial Instruments, which is an amount equal to lifetime
ECLs. Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a trade receivable has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience
and informed credit assessment and including forward-looking information. In assessing credit risk, customers were
disaggregated based on various industry groups, location and customer size.
The Group assumes that the credit risk on a trade receivable has increased significantly if it is more than 90 days past due. The
Group considers a financial asset to be in default when:
•
•
•
there is significant financial difficulty of the customer;
a breach of contract such as a default or being more than 90 days past due; or
it is probable that the customer will enter bankruptcy or other financial reorganisation.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group
expects to receive). ECLs are discounted at the effective interest rate of the financial asset.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof.
66
Envirosuite Annual Report 2022
1.
(k)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventories
The Group acquires and manufactures environmental monitoring instruments and accessories, which are initially accounted for
as inventory. Inventories are measured at the lower of cost and net realisable value. The cost of environmental monitor
inventories is based on the specific identification of their individual costs while the cost of consumables and other smaller
inventory items is based on a weighted average cost formula. Provisions are made to write down slow-moving, excess and
obsolete items to net realisable value, based on an assessment of technological and market developments and on an analysis
of historical and projected usage with regard to quantities on hand.
Where instruments are used for demonstration purposes or when customers enter into a contract to use instruments where the
Group retains ownership, the instrument is transferred from inventories to property, plant and equipment and is depreciated on
a straight-line basis over its useful life. If the instrument is returned at the end of the contract, it is not transferred back to
Inventories but is retained in property, plant and equipment. The cost to install the instrument at the customer’s site is expensed
as incurred.
(l)
Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure
will flow to the Group. If significant parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment. Any gain and loss on disposal of an item
of property, plant and equipment is recognised in profit or loss.
Depreciation
Depreciation is calculated to write off the cost of property, plant and equipment less their estimated residual values using the
straight-line basis over their estimated useful lives, and is generally recognised in profit or loss. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by
the end of the lease term. Land is not depreciated. The estimated useful lives of property, plant and equipment for the current
period is as follows:
•
•
•
•
•
Computer equipment
4 years
Furniture and fixtures
5 - 10 years
Leasehold improvements
Remaining life of the lease (1 - 5 years)
Monitors and sensors
5 years
Right-of-use assets
Lower of economic or lease life
(m)
Right of use assets
Right of use assets are measured at cost and comprise the amount that is recognised for the lease liability on initial recognition
(refer to Note 1(p)) less any lease incentives received and including direct costs and restoration-related costs. Right of use
assets include leased buildings and data centres and are depreciated over the remaining life of the lease. The remaining life of
the leased buildings are of 1 to 5 years. The Group does not recognise a right of use asset for short term or low value leases,
instead the expense is recognised over the lease term as appropriate as part of operating expenses in the income statement.
(n)
Intangible assets
Intangible assets include acquired intangible assets as part of asset acquisitions and business combinations, as well as internally
developed software costs. The estimated useful lives of intangible assets for the current period is as follows:
•
•
•
•
Internally developed software 5-7 years
Acquired software
Customer relationships
Brand value
5 years
5 years
5 years
67
Research and development
solutions.
The Company develops software where customers pay a monthly license fee. The Company also develops environmental
monitoring equipment that it either sells or leases to its customers as part of providing them with environmental monitoring
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design
and testing of new or improved products) are recognised as intangible assets when it is probable that the project will, after
considering its commercial and technical feasibility, be completed and generate future economic benefits and its costs can be
measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services
and direct labour. Other development expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised
development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use on a
straight line basis over its useful life.
Impairment
At the end of each reporting period, the Group assess whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal sources. If such an indication exists, an impairment test is
carried out on the asset by comparing the assets carrying value to its recoverable amount being the higher of an asset's fair
value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (cash generating units).
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
(o)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 to 90 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially
at their fair value and subsequently measured at amortised cost using the effective interest method.
(p)
Lease liabilities
Lease liabilities are initially measured at the present value of the future lease payments at the commencement date of the lease,
discounted using the interest rate implicit in the lease (or if that rate cannot be readily determined, the lessee’s incremental
borrowing rate). Lease payments are allocated between interest principal and interest with the interest component recognised
in the income statement as part of finance expense. Any variable lease payments not included in the measurement of the lease
liability are recognised in the income statement within operating expenses in the period in which the event or condition that
triggers those payments occurs.
Lease liabilities are remeasured when there is a change in future lease payments arising from a change in lease term, an
assessment of an option to purchase the underlying asset, or a change in the estimated amounts payable under the lease. When
the lease liability is remeasured, a corresponding adjustment is made to the carrying value of the Right of use asset, or in the
income statement if the carrying value of the Right of use asset has been fully written down.
(q)
Provisions
Provisions for legal claims and make good obligations are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the
amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present
obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of
the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is
recognised as interest expense.
Envirosuite Annual Report 2022
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Research and development
The Company develops software where customers pay a monthly license fee. The Company also develops environmental
monitoring equipment that it either sells or leases to its customers as part of providing them with environmental monitoring
solutions.
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design
and testing of new or improved products) are recognised as intangible assets when it is probable that the project will, after
considering its commercial and technical feasibility, be completed and generate future economic benefits and its costs can be
measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services
and direct labour. Other development expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised
development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use on a
straight line basis over its useful life.
Impairment
At the end of each reporting period, the Group assess whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal sources. If such an indication exists, an impairment test is
carried out on the asset by comparing the assets carrying value to its recoverable amount being the higher of an asset's fair
value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (cash generating units).
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
(o)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 to 90 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially
at their fair value and subsequently measured at amortised cost using the effective interest method.
(p)
Lease liabilities
Lease liabilities are initially measured at the present value of the future lease payments at the commencement date of the lease,
discounted using the interest rate implicit in the lease (or if that rate cannot be readily determined, the lessee’s incremental
borrowing rate). Lease payments are allocated between interest principal and interest with the interest component recognised
in the income statement as part of finance expense. Any variable lease payments not included in the measurement of the lease
liability are recognised in the income statement within operating expenses in the period in which the event or condition that
triggers those payments occurs.
Lease liabilities are remeasured when there is a change in future lease payments arising from a change in lease term, an
assessment of an option to purchase the underlying asset, or a change in the estimated amounts payable under the lease. When
the lease liability is remeasured, a corresponding adjustment is made to the carrying value of the Right of use asset, or in the
income statement if the carrying value of the Right of use asset has been fully written down.
(q)
Provisions
Provisions for legal claims and make good obligations are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the
amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present
obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of
the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is
recognised as interest expense.
68
Envirosuite Annual Report 2022
1.
(r)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.
FINANCIAL RISK MANAGEMENT
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the
proceeds. Incremental costs directly attributable to the issue of new shares for the acquisition of a business are not included in
the cost of the acquisition as part of the purchase consideration.
If the entity reacquires its own equity instruments, for example as the result of a share buyback, those instruments are deducted
from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration
paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.
(s)
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the
entity, on or before the end of the financial year but not distributed at balance date.
(t)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit or loss attributable to equity holders of the Company, excluding any costs of servicing equity other than
ordinary shares and
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the 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
(c)
Foreign currency risk
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
(u)
Rounding of amounts
The Company is of a kind referred to in legislative instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to the ''rounding off'' of amounts in the financial report. Amounts in the financial report have been rounded
off in accordance with that instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
(v)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the financial year ended 30 June 2022. The Group not yet assessed the impact
of these new or amended Accounting Standards and Interpretations.
The Group is exposed to a variety of financial risks, principally related to credit, liquidity, and foreign currency risk. The Chief
Executive Officer (CEO) and Chief Financial Officer (CFO) are responsible for managing financial risk exposures of the Group.
(a)
Credit risk
The Group is exposed to the risk of a financial loss if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Credit risk arises principally from the Group’s receivables from customers. The Group’s maximum
exposure to credit risk at the balance date is the carrying amount of financial assets, net of any provisions for impairment and
excluding the value of any other collateral or other security.
The gross trade and other receivables balance at 30 June 2022 was $14,127k (2021: $13,641k) and the aging analysis of trade
receivables is provided in Note 8. The Group exposure to credit risk is affected by the regions and industries the Group’s
customers operate in. The majority of the Group’s customers are airports and water and waste operators around the world with
a growing exposure to customers within the mining industry.
Trade receivables are managed on an ongoing basis. The Group does not have any material credit risk exposure to any single
debtor. Aging analysis and ongoing collectability reviews are performed and, when appropriate, an expected credit risk loss
provision is raised. Historically, the Group has not had any significant write-offs in its trade receivables.
(b)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. At 30 June
2022, the Group had cash and cash equivalents of $16,292k (2021: $17,640k).
Total cash used in operating activities when adding capitalised development costs (included in cash flows from investing
activities) and repayment of lease liabilities (included in cash flows from financing activities) (“Adjusted Operating Cash
Flow”) was an outflow $9,816k (2021: $8,946k).
In December 2021, the Group raised additional equity of $10,469k ($9,946k net of transaction costs). Noting the additional
cash raised during the financial period and the lack of debt on the balance sheet (other than lease liabilities recognised
under AASB 16) the directors are of the view that the Group will continue to be able to pay its debts as and when they fall
due and have prepared the financial report on a going concern basis.
$‘000
CAD
EUR
GBP
RMB
USD
NTD
Other
Total
2022
2021
-10%
+10%
Exposure
(AUD)
Exposure
(AUD)
1,008
3,398
1,784
1,601
5,400
1,200
1,299
112
378
198
178
600
133
144
(92)
(309)
(162)
(146)
(491)
(109)
(117)
15,690
1,743
(1,426)
117
1,962
659
1,043
3,367
1,606
738
9,492
-10%
13
218
73
116
374
178
82
1,054
+10%
(11)
(178)
(60)
(95)
(306)
(146)
(67)
(863)
Foreign currency risk is the risk that the future cash flows of a financial instrument or forecasted transaction will fluctuate
because of changes in foreign exchange rates. The Group operates internationally and as such has exposure to foreign currency
movements. Approximately 70% of the Group’s revenue for the period ended 30 June 2022 was earned in foreign currency
(2021: 69%). The Group primarily has exposure to Euro (“EUR”), US dollars (“USD”), Canadian dollars (“CAD”), British pound
(“GBP”), and Chinese renminbi (“RMB”) from cash balances and trade receivables which are partially offset by trade and other
payables, employee provisions and borrowings in those currencies. The table below shows the impact to comprehensive income
before tax from a 10% increase and 10% decrease in the foreign currency exchange rate against the Australian dollar (“AUD”).
69
Envirosuite Annual Report 2022
2.
FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial risks, principally related to credit, liquidity, and foreign currency risk. The Chief
Executive Officer (CEO) and Chief Financial Officer (CFO) are responsible for managing financial risk exposures of the Group.
(a)
Credit risk
The Group is exposed to the risk of a financial loss if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Credit risk arises principally from the Group’s receivables from customers. The Group’s maximum
exposure to credit risk at the balance date is the carrying amount of financial assets, net of any provisions for impairment and
excluding the value of any other collateral or other security.
The gross trade and other receivables balance at 30 June 2022 was $14,127k (2021: $13,641k) and the aging analysis of trade
receivables is provided in Note 8. The Group exposure to credit risk is affected by the regions and industries the Group’s
customers operate in. The majority of the Group’s customers are airports and water and waste operators around the world with
a growing exposure to customers within the mining industry.
Trade receivables are managed on an ongoing basis. The Group does not have any material credit risk exposure to any single
debtor. Aging analysis and ongoing collectability reviews are performed and, when appropriate, an expected credit risk loss
provision is raised. Historically, the Group has not had any significant write-offs in its trade receivables.
(b)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. At 30 June
2022, the Group had cash and cash equivalents of $16,292k (2021: $17,640k).
Total cash used in operating activities when adding capitalised development costs (included in cash flows from investing
activities) and repayment of lease liabilities (included in cash flows from financing activities) (“Adjusted Operating Cash
Flow”) was an outflow $9,816k (2021: $8,946k).
In December 2021, the Group raised additional equity of $10,469k ($9,946k net of transaction costs). Noting the additional
cash raised during the financial period and the lack of debt on the balance sheet (other than lease liabilities recognised
under AASB 16) the directors are of the view that the Group will continue to be able to pay its debts as and when they fall
due and have prepared the financial report on a going concern basis.
(c)
Foreign currency risk
$‘000
CAD
EUR
GBP
RMB
USD
NTD
Other
Total
2022
2021
Exposure
(AUD)
1,008
3,398
1,784
1,601
5,400
1,200
1,299
15,690
-10%
112
378
198
178
600
133
144
1,743
+10%
(92)
(309)
(162)
(146)
(491)
(109)
(117)
(1,426)
Exposure
(AUD)
117
1,962
659
1,043
3,367
1,606
738
9,492
-10%
13
218
73
116
374
178
82
1,054
+10%
(11)
(178)
(60)
(95)
(306)
(146)
(67)
(863)
Foreign currency risk is the risk that the future cash flows of a financial instrument or forecasted transaction will fluctuate
because of changes in foreign exchange rates. The Group operates internationally and as such has exposure to foreign currency
movements. Approximately 70% of the Group’s revenue for the period ended 30 June 2022 was earned in foreign currency
(2021: 69%). The Group primarily has exposure to Euro (“EUR”), US dollars (“USD”), Canadian dollars (“CAD”), British pound
(“GBP”), and Chinese renminbi (“RMB”) from cash balances and trade receivables which are partially offset by trade and other
payables, employee provisions and borrowings in those currencies. The table below shows the impact to comprehensive income
before tax from a 10% increase and 10% decrease in the foreign currency exchange rate against the Australian dollar (“AUD”).
70
Envirosuite Annual Report 2022
3.
SEGMENT INFORMATION
3.
SEGMENT INFORMATION (continued)
The Group is organised into three geographic operating segments: Asia-Pacific (APAC), Americas and Europe, Middle East and
Africa (EMEA) plus a central Corporate segment which contains costs that are managed centrally that are not allocated to the
geographic segments. These operating segments are based on the internal reports that are reviewed and used by the CEO and
board of directors, (who are identified as the Chief Operating Decision Makers (CODM)) in assessing performance and in
determining the allocation of resources.
Segment assets and liabilities are not presented as they are not regularly provided to the CODM and assets and liabilities are
only reviewed and considered on a consolidated basis.
The Group has a secondary operating segment which is each product family, being EVS Aviation, EVS Omnis and EVS Water.
CODMs are provided with reporting on the recurring and non-recurring revenue for these secondary operating segments.
Asia Pacific
15,372
1,684
-
17,056
(9,354)
7,702
(3,656)
(5)
4,041
(31)
4,010
Asia Pacific
14,980
2,593
3
17,576
(11,950)
4,626
(3,693)
(56)
877
(31)
846
EMEA
13,901
2,640
-
16,541
(9,925)
6,616
(3,706)
134
3,044
(14)
3,030
EMEA
12,846
1,973
10
14,829
(7,625)
7,204
(2,821)
(64)
4,319
(6)
4,313
America
14,604
5,239
-
19,843
(9,076)
10,767
(5,098)
223
5,892
(25)
Corporate
-
-
19
19
-
19
(25,309)
(262)
(25,552)
(140)
5,867
(25,692)
America
12,565
3,588
-
16,153
(7,405)
8,748
(3,390)
(257)
5,101
(45)
Corporate
-
-
12
12
-
12
(22,051)
-
(22,039)
(205)
Total
43,877
9,563
19
53,459
(28,355)
25,104
(37,769)
90
(12,575)
(210)
(12,785)
Total
40,391
8,154
25
48,570
(27,980)
20,590
(31,955)
(377)
(11,742)
(287)
5,056
(22,244)
(12,029)
Regional
2022
$‘000
Recurring revenue
Non-recurring revenue
Other revenue
Total operating revenue
Cost of revenue
Gross profit
Operating expenses
Other (expense) / income
Operating deficit
Net finance expense
Net loss before tax
2021
$‘000
Recurring revenue
Non-recurring revenue
Other revenue
Total operating revenue
Cost of revenue
Gross profit
Operating expenses
Other expense
Operating deficit
Net finance expense
Net loss before tax
71
Product family
2022
$‘000
Recurring revenue
Non-recurring revenue
Other revenue
Total operating revenue
2021
$‘000
Recurring revenue
Non-recurring revenue
Other revenue
Total operating revenue
4.
REVENUE
Recurring revenue
Non-recurring revenue
Trading revenue
Other revenue
Other revenue
Total operating revenue
Research and development tax incentives
Aviation EVS Omnis EVS Water
Corporate
EVS
31,061
3,900
-
12,699
5,653
-
34,961
18,352
29,050
3,017
-
11,298
5,134
-
32,067
16,432
117
10
-
127
43
3
-
46
-
-
19
19
-
-
25
25
Total
43,877
9,563
19
53,459
Total
40,391
8,154
25
48,570
EVS Aviation EVS Omnis EVS Water
Corporate
2022
$’000
43,877
9,563
2021
$’000
40,391
8,154
53,440
48,545
-
19
19
6
19
25
53,459
48,570
The Group generated 65% of its revenues for the current reporting period from customers in the Airport industry (2021: 66%). In
addition, the Group generated 18% of its total income and 21% of its recurring income from the Australian government and
entities controlled by the Australian government (2021: 20% and 23%).
Envirosuite Annual Report 2022
3.
SEGMENT INFORMATION (continued)
The Group has a secondary operating segment which is each product family, being EVS Aviation, EVS Omnis and EVS Water.
CODMs are provided with reporting on the recurring and non-recurring revenue for these secondary operating segments.
Product family
2022
$‘000
Recurring revenue
Non-recurring revenue
Other revenue
Total operating revenue
2021
$‘000
Recurring revenue
Non-recurring revenue
Other revenue
Total operating revenue
4.
REVENUE
Recurring revenue
Non-recurring revenue
Trading revenue
Research and development tax incentives
Other revenue
Other revenue
Total operating revenue
EVS
Aviation EVS Omnis EVS Water
117
12,699
10
5,653
-
-
31,061
3,900
-
Corporate
-
-
19
Total
43,877
9,563
19
34,961
18,352
127
19
53,459
EVS Aviation EVS Omnis EVS Water
43
3
-
29,050
3,017
-
11,298
5,134
-
Corporate
-
-
25
Total
40,391
8,154
25
32,067
16,432
46
25
48,570
2022
$’000
43,877
9,563
2021
$’000
40,391
8,154
53,440
48,545
-
19
19
6
19
25
53,459
48,570
The Group generated 65% of its revenues for the current reporting period from customers in the Airport industry (2021: 66%). In
addition, the Group generated 18% of its total income and 21% of its recurring income from the Australian government and
entities controlled by the Australian government (2021: 20% and 23%).
72
Envirosuite Annual Report 2022
5.
EXPENSES
6.
TAX
The Group categorises expenses within the Consolidated Income Statement based on the function of the expense. The table
below discloses expenses based on the nature of the expense.
Cost of revenue and operating expenses
Cost of revenue
Total operating expenses
Total cost of revenue and operating expenses
Total cost of revenue and operating expenses is comprised of:
Employment costs
Share based compensation
Consultants and contractors
Professional fees
Computer expenses
Equipment costs
Building costs
Director’s fees
Audit and audit related fees
Depreciation and amortisation (excl intangible asset – software amortisation)
Other operating expenses
Sub-total
Software development cost - capitalised
Intangible asset – software amortisation
R&D costs capitalised, net
2022
$’000
(28,355)
(37,769)
(66,124)
(36,424)
(1,477)
(1,693)
(2,439)
(2,830)
(4,612)
(906)
(405)
(395)
(5,160)
(11,683)
(68,024)
4,897
(2,997)
1,900
2021
$’000
(27,980)
(31,955)
(59,935)
(33,358)
(946)
(1,886)
(2,479)
(2,352)
(3,546)
(957)
(277)
(299)
(5,515)
(9,142)
(60,757)
2,301
(1,479)
822
Total cost of revenue and operating expenses
(66,124)
(59,935)
During the year the following fees were paid or payable for services provided by the auditor of the parent entity (PKF Brisbane
Audit), its related practices and non-related audit firms:
Audit and review of financial reports
Other assurance services
Other non-audit services
Total remuneration of auditors
2022
$’000
395
-
25
420
2021
$’000
299
-
5
304
(b)
Reconciliation of income tax expense to prima facie tax payable
Prima facie tax benefit on operating deficit at 30.0% (2021: 26.0%)
(3,835)
(3,128)
(a)
Income tax expense / (benefit)
Current tax expense / (benefit)
Deferred tax expense / (benefit)
Total income tax expense / (benefit)
Tax effects of items which are non-deductible / (non-assessable) in
calculating taxable income:
Non-allowable items (including R&D expenditure)
Share based payments expensed during the year
Difference in offshore tax rates
Add / (less):
Under/(over) provision for income tax in prior year
Revaluation of Deferred tax balances due to change in tax rate
Deferred tax valuation allowance increase
Total income tax expense / (benefit)
(c) Deferred income tax
Trade and other receivables
2022
Inventory
Property, plant and equipment
Right of use asset and Lease
liability
Intangible asset
Revenue in advance
Employee provisions
Issued capital
Net DTA / (DTL)
Tax losses
Valuation allowance
Balance as 30 June 2022
Opening
Recognised in
Balance
profit or loss
$’000
Charged
directly to
Equity
$’000
Effect of
foreign
Deferred
Deferred
exchange
Tax Asset
Tax Liability
$’000
$’000
$’000
481
629
(17)
197
174
807
578
-
(5,829)
9,798
(9,787)
(2,969)
$’000
(229)
(460)
(11)
(46)
(824)
154
316
-
-
5,325
(4,285)
(60)
-
-
-
-
-
-
-
8
-
-
-
8
252
169
151
-
-
328
1,123
586
-
-
-
-
-
-
-
-
-
-
(1)
(1)
(2,687)
2,687
15,123
(14,073)
972
(3,994)
2022
$’000
350
60
410
(67)
443
(46)
311
(681)
4,285
410
2021
$’000
243
225
468
(25)
246
169
(640)
(174)
4,020
468
(28)
(6,653)
-
-
-
-
-
-
-
-
73
Envirosuite Annual Report 2022
6.
TAX
Income tax expense / (benefit)
(a)
Current tax expense / (benefit)
Deferred tax expense / (benefit)
Total income tax expense / (benefit)
2022
$’000
350
60
410
2021
$’000
243
225
468
Reconciliation of income tax expense to prima facie tax payable
(b)
Prima facie tax benefit on operating deficit at 30.0% (2021: 26.0%)
(3,835)
(3,128)
Tax effects of items which are non-deductible / (non-assessable) in
calculating taxable income:
Non-allowable items (including R&D expenditure)
Share based payments expensed during the year
Difference in offshore tax rates
Add / (less):
Under/(over) provision for income tax in prior year
Revaluation of Deferred tax balances due to change in tax rate
Deferred tax valuation allowance increase
Total income tax expense / (benefit)
(67)
443
(46)
311
(681)
4,285
410
(25)
246
169
(640)
(174)
4,020
468
(c) Deferred income tax
2022
Trade and other receivables
Inventory
Property, plant and equipment
Right of use asset and Lease
liability
Intangible asset
Revenue in advance
Employee provisions
Issued capital
Net DTA / (DTL)
Tax losses
Valuation allowance
Balance as 30 June 2022
Opening
Balance
$’000
481
629
(17)
Recognised in
profit or loss
$’000
(229)
(460)
(11)
Charged
directly to
Equity
$’000
-
-
-
Effect of
foreign
exchange
$’000
-
-
-
Deferred
Tax Asset
$’000
252
169
-
Deferred
Tax Liability
$’000
-
-
(28)
197
(5,829)
174
807
578
-
9,798
(9,787)
(2,969)
(46)
(824)
154
316
-
-
5,325
(4,285)
(60)
-
-
-
-
8
-
-
-
8
-
-
-
-
-
-
-
(1)
(1)
151
-
328
1,123
586
(2,687)
15,123
(14,073)
972
-
(6,653)
-
-
-
2,687
-
-
(3,994)
74
Envirosuite Annual Report 2022
6.
TAX (Continued)
8.
TRADE AND OTHER RECEIVABLES
2021
Trade and other receivables
Inventory
Property, plant and equipment
Right of use asset and Lease
liability
Intangible asset
Trade and other payables
Revenue in advance
Employee provisions
Issued capital
Net DTA / (DTL)
Tax losses
Valuation allowance
Balance as 30 June 2021
Opening
Balance
$’000
120
92
(42)
Recognised in
profit or loss
$’000
361
537
25
Charged
directly to
Equity
$’000
-
-
-
Effect of
foreign
exchange
$’000
-
-
-
Deferred
Tax Asset
$’000
481
629
-
Deferred
Tax Liability
$’000
-
-
(17)
184
(5,692)
94
166
1,384
564
-
6,138
(5,763)
(2,755)
13
(137)
(94)
8
(577)
-
-
3,660
(4,020)
(225)
-
-
-
-
-
14
-
-
-
14
-
-
-
-
-
-
-
-
(3)
(3)
197
-
-
174
807
578
(1,999)
9,798
(9,787)
878
-
(5,829)
-
-
-
-
1,999
-
-
(3,847)
The Group has unused tax losses of $43,319,979 (2021: $34,266,606) and R&D tax offsets of $2,466,806 (2021: $1,058,808)
for which a valuation allowance of $14,072,801 (2021: $9,786,941) has been placed against the related deferred tax asset of
$15,122,999 (2021: $9,797,582).
7.
CASH AND CASH EQUIVALENTS
Cash at bank
Term deposits
Cash and cash equivalents
2022
$’000
16,168
124
16,292
2021
$’000
17,488
152
17,640
Term deposits are with financial institutions with an investment grade rating and are for a term of 90 days or less. While the
Group is exposed to interest rate risk on cash and term deposits, the impact of fluctuations in market interest rates is not material
to the Group’s performance.
Inventories are carried at the lower of cost or net realisable value.
Trade receivables, net aging analysis
Trade receivables
Provision for impairment
Trade receivables, net
Contract assets
Other debtors
Trade and other receivables
Not past due
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due more than 91 days
Total
Fair value and credit risk
9.
INVENTORIES
Work in progress
Finished goods
Inventories
10.
OTHER ASSETS
Prepayments
Finance lease receivables
Deposits
Loan note receivable
Other current assets
Prepayments
Finance lease receivables
Deposits
Other non-current assets
2022
$’000
10,286
(1,679)
8,607
3,781
60
12,448
5,823
1,611
411
249
513
8,607
2022
$’000
664
1,691
2,355
2022
$’000
1,263
18
1,077
1,526
3,884
37
-
879
916
2021
$’000
10,079
(2,086)
7,993
3,552
10
11,555
5,383
740
435
418
1,017
7,993
2021
$’000
371
2,103
2,474
2021
$’000
960
65
21
-
1,046
51
18
950
1,019
Due to the short-term nature of these receivables, the carrying amount is assumed to approximate their fair value. The maximum
exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above. The fair value
of securities held for certain trade receivables is insignificant as is the fair value of any collateral sold or re-pledged. Refer to
Note 2 for more information on the risk management policy of the Group and the credit quality of the Group's trade receivables.
Management have considered the impact of COVID-19 on trade and other receivables and do not anticipate a significant
deterioration of recoverability beyond the level of current provisioning.
75
Envirosuite Annual Report 2022
8.
TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for impairment
Trade receivables, net
Contract assets
Other debtors
Trade and other receivables
Trade receivables, net aging analysis
Not past due
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due more than 91 days
Total
Fair value and credit risk
2022
$’000
10,286
(1,679)
8,607
3,781
60
12,448
5,823
1,611
411
249
513
8,607
2021
$’000
10,079
(2,086)
7,993
3,552
10
11,555
5,383
740
435
418
1,017
7,993
Due to the short-term nature of these receivables, the carrying amount is assumed to approximate their fair value. The maximum
exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above. The fair value
of securities held for certain trade receivables is insignificant as is the fair value of any collateral sold or re-pledged. Refer to
Note 2 for more information on the risk management policy of the Group and the credit quality of the Group's trade receivables.
Management have considered the impact of COVID-19 on trade and other receivables and do not anticipate a significant
deterioration of recoverability beyond the level of current provisioning.
9.
INVENTORIES
Work in progress
Finished goods
Inventories
Inventories are carried at the lower of cost or net realisable value.
10.
OTHER ASSETS
Prepayments
Finance lease receivables
Deposits
Loan note receivable
Other current assets
Prepayments
Finance lease receivables
Deposits
Other non-current assets
2022
$’000
664
1,691
2,355
2022
$’000
1,263
18
1,077
1,526
3,884
37
-
879
916
2021
$’000
371
2,103
2,474
2021
$’000
960
65
21
-
1,046
51
18
950
1,019
76
Envirosuite Annual Report 2022
Right of use assets
Buildings
Balance at 1 July
Additions
Terminations of leases
Exercise of early termination option
Derecognition of right of use asset
Depreciation
Effect of foreign exchange
Balance at 30 June
Data centres
Balance at 1 July
Depreciation
Effect of foreign exchange
Balance at 30 June
Total Right of use assets
Lease liabilities
Current
Non-Current
Balance at end of year
2022
$’000
3,016
459
(62)
(534)
-
(1,211)
43
1,711
237
(246)
9
-
2021
$’000
3,227
1,161
(212)
-
(62)
(1,043)
(55)
3,016
516
(239)
(40)
237
1,711
3,253
2022
$’000
1,045
1,206
2,251
2021
$’000
1,530
2,472
4,002
Building leases for periods of less than 12 months and variable lease payments for recharge of overhead costs by the building
owner are included within building costs as disclosed in Note 5.
Lease liabilities are included within lease liabilities and other borrowings on the Consolidated Statement of Financial Position.
Interest expense on lease liabilities for 2022 was $230,914 (2021: $296,066) and is included within net finance expense on the
Consolidated Income Statement.
10.
OTHER ASSETS (Continued)
12.
RIGHT OF USE ASSETS AND LEASE LIABILITIES
Prepayments represent prepaid insurance, prepaid software licenses, and other prepaid expenses. Deposits include deposits
for building leases as well as cash backed bid and performance bond deposits. These deposits are pledged as security against
non-performance of the Group, including non-payment of rent, inability to deliver based on the bid submitted, or inability to
deliver based on a contract entered into with a customer. Deposits in prior year of $950k have been reclassified from current to
non-current where a deposit term date is greater than 12 months from balance sheet date.
Loan note receivable represents the final settlement of the Spectris Instrumentation and Systems Shanghai Limited (Spectris)
acquisition in May 2018, there is an equal amount payable in other liabilities, refer to Note 14. To finalise the acquisition under
the laws and regulations of China, a flow of cash between the Spectris and Group subsidiaries in China is required. As a Group
there is a net nil impact on working capital and cash flow, however, given the loan notes are with separate legal entities within
the groups and is a material value, the Group has presented the balances grossed up in current assets and current liabilities.
The loan notes are expected to be settled in the first quarter of the 2023 financial year.
11.
PROPERTY, PLANT AND EQUIPMENT
Reconciliations of the carrying amounts of the various components of property, plant and equipment at the beginning and end
of the current year and prior year are presented in the table below. Refer to Note 20 for further details on the acquired balances
as part of the acquisition of AqMB Group in 2021.
Furniture and
fixtures
Computer
equipment
Monitors and
sensors
Leasehold
improvements
488
60
-
(75)
4
477
(294)
-
(68)
75
(3)
(290)
187
1,546
284
-
-
(8)
1,822
(853)
-
(338)
-
-
(1,191)
631
6,425
81
1,298
-
26
7,830
(4,544)
90
(844)
-
53
(5,245)
2,585
507
39
-
-
-
546
(228)
(90)
(122)
-
(1)
(441)
105
Furniture and
fixtures
Computer
equipment
Monitors and
sensors
Leasehold
improvements
1,106
71
-
-
(661)
(28)
488
(894)
(85)
-
663
22
(294)
194
2,704
419
-
(15)
(1,442)
(120)
1,546
(2,133)
(276)
-
1,441
115
(853)
693
8,783
96
433
(12)
(2,649)
(226)
6,425
(6,499)
(744)
12
2,637
50
(4,544)
1,881
360
149
-
-
-
(2)
507
(123)
(105)
-
-
-
(228)
279
Total
8,966
464
1,298
(75)
22
10,675
(5,919)
-
(1,372)
75
49
(7,167)
3,508
Total
12,953
735
433
(27)
(4,752)
(376)
8,966
(9,649)
(1,210)
12
4,741
188
(5,919)
3,047
2022
$’000
Cost value
Balance as at 1 June 2021
Additions
Transfer from inventories
Disposals
Effect of foreign exchange
Balance as at 30 June 2022
Accumulated depreciation
Balance as at 1 June 2021
Reclassifications
Depreciation for the period
Disposals
Effect of foreign exchange
Balance as at 30 June 2022
Net book value
2021
$’000
Cost value
Balance as at 1 June 2020
Additions
Transfer from inventories
Disposals
Asset write-off
Effect of foreign exchange
Balance as at 30 June 2021
Accumulated depreciation
Balance as at 1 June 2020
Depreciation for the period
Disposals
Asset write-off
Effect of foreign exchange
Balance as at 30 June 2021
Net book value
77
Envirosuite Annual Report 2022
12.
RIGHT OF USE ASSETS AND LEASE LIABILITIES
Right of use assets
Buildings
Balance at 1 July
Additions
Terminations of leases
Exercise of early termination option
Derecognition of right of use asset
Depreciation
Effect of foreign exchange
Balance at 30 June
Data centres
Balance at 1 July
Depreciation
Effect of foreign exchange
Balance at 30 June
Total Right of use assets
2022
$’000
3,016
459
(62)
(534)
-
(1,211)
43
1,711
237
(246)
9
-
1,711
2021
$’000
3,227
1,161
(212)
-
(62)
(1,043)
(55)
3,016
516
(239)
(40)
237
3,253
Building leases for periods of less than 12 months and variable lease payments for recharge of overhead costs by the building
owner are included within building costs as disclosed in Note 5.
Lease liabilities are included within lease liabilities and other borrowings on the Consolidated Statement of Financial Position.
Interest expense on lease liabilities for 2022 was $230,914 (2021: $296,066) and is included within net finance expense on the
Consolidated Income Statement.
Lease liabilities
Current
Non-Current
Balance at end of year
2022
$’000
1,045
1,206
2,251
2021
$’000
1,530
2,472
4,002
78
Envirosuite Annual Report 2022
13.
INTANGIBLE ASSETS
13.
INTANGIBLE ASSETS (continued)
Reconciliations of the carrying amounts of the various components of intangible assets at the beginning and end of the current
year and prior year are presented in the table below. Other intangibles consist of customer relationships, brand value and
intellectual property. Refer to Note 20 for further details on the acquired balances as part of the acquisition of AqMB in 2021.
2022
$’000
Cost value
Balance at 1 July 2021
Additions
Reclassification
Write-off
Effects of foreign exchange
Balance at 30 June 2022
Accumulated amortisation
Balance as at 1 July 2021
Amortisation for the period
Write-off
Balance as at 30 June 2022
Net book value
2021
$’000
Cost value
Balance at 1 July 2020
Acquired in business combination
Additions
Effects of foreign exchange
Balance at 30 June 2021
Accumulated amortisation
Balance at 1 July 2020
Amortisation for the period
Balance at 30 June 2021
Net book value
Impairment tests
Internally
developed
software
Acquired
Software
Other
Intangibles
11,070
4,491
(38)
-
-
15,523
(4,263)
(2,050)
-
(6,313)
9,210
11,372
99
(310)
(219)
-
10,942
(2,693)
(2,137)
27
(4,803)
6,139
5,193
419
348
-
-
5,960
(1,261)
(947)
-
(2,208)
3,752
Goodwill
89,513
-
-
-
38
89,551
-
-
-
-
89,551
Internally
developed
software
Goodwill
Acquired
Software
Other
Intangibles
89,383
-
128
2
89,513
-
-
-
89,513
8,769
-
2,301
-
11,070
(2,784)
(1,479)
(4,263)
6,807
9,398
1,204
770
-
11,372
(616)
(2,077)
(2,693)
8,679
5,103
-
90
-
5,193
(315)
(946)
(1,261)
3,932
Total
117,148
5,009
-
(219)
38
121,976
(8,217)
(5,134)
27
(13,324)
108,652
Total
112,653
1,204
3,289
2
117,148
(3,714)
(4,503)
(8,217)
108,931
In accordance with accounting standard AASB 136 Impairment of Assets, the Group tests goodwill for impairment annually or
more frequently whenever indicators of impairment are identified. In accordance with the accounting standard the Group has
set 30 June as the date for the annual review for impairment of the cash generating units (CGUs) to which goodwill has been
allocated, representing a change from the previous period being 31 December.
In testing for impairment, the carrying amount of each CGU is compared against the recoverable amount. AASB 136 defines
recoverable amount as being the higher of its fair value less cost of disposal (FVLCOD) and its value in use. The Group has
adopted FVLCOD as the basis for determining the recoverable amount of each CGU.
In adopting FVLCOD, the Group has applied accounting standard AASB 13 Fair Value Measurement as directed by AASB 136. In
applying AASB 13 the Group has adopted the Income Approach to determine fair value. The income Approach converts future
cash amounts to a single (discounted) amount using a discounted cash flow model. The fair value measured reflects current
market expectations about future amounts and is a technique commonly applied by market participants in determining fair value.
Under the Income Approach adopted, the Group has allowed for restructure costs representing cost synergies that a market
participant would typically apply in an orderly transaction between market participants.
The discounted cash flow model (DCF) uses post-tax cash flow projections that are based on the most recent Board approved
12-month budget and extrapolated for a further four years using underlying customer revenue contract data, appropriate growth
rates, cost synergies, risk-based discount rates and a terminal value as appropriate for the CGU. Terminal growth rates applied
in the DCF are based on estimates of long-term industry growth in the country in which the CGU primarily operates.
The assumptions applied in calculating the recoverable amounts of the CGU in testing for impairment are as follows:
Input
Budget period
Forecast period
Four-year revenue compound annual
growth rate post year 1
Post tax discount rate
Terminal growth rate
Asia Pacific
Americas
EMEA
1 year from 1 Jul 22
1 year from 1 Jul 22
1 year from 1 Jul 22
4 years from 1 Jul 23
4 years from 1 Jul 23
4 years from 1 Jul 23
14.48%
12.25%
2.75%
15.24%
12.00%
2.75%
14.14%
12.60%
2.75%
The discount rates for each CGU reflects management’s estimate of the time value of money and the Group’s weighted average
cost of capital adjusted for each CGU’s risk-free rate in each CGU’s major operating country and the volatility of the share price
relative to market movements.
for environmental intelligence products.
Projected revenue growth rates in each CGU are appropriate based on experience and forecasts of the growth of the market
Based upon the FVLCOD estimates using a discounted cash flow model, the carrying values of the CGU’s and the goodwill
therein are not impaired (2021: no impairment).
Previously the Group used the FVLCOD approach to assess the recoverability amount of the CGUs. However, the fair value of
the CGU was determined based on applying the Envirosuite Limited’s revenue multiple, calculated by dividing the market
capitalisation of Envirosuite Limited by the forecast of the next twelve months (NTM) revenue and applying this revenue multiple
to internal forecasts of NTM revenue for each CGU. The revised approach was deemed more appropriate in aligning market
value of the CGUs to an approach more commonly utilised by market participants.
The Group has identified that there are three regional Cash Generating Units (CGU) which are aligned with the operating
segments disclosed in Note 3 and against which goodwill and other intangible assets are allocated and tested. Goodwill has
been allocated to each CGU as follows:
Sensitivities
Management have made judgements and estimates in respect of impairment testing. Should these judgements and estimates
Asia Pacific
EMEA
Americas
Total Goodwill allocated
79
2022
$’000
37,743
29,701
22,107
89,551
not occur the resulting goodwill carrying amount may decrease.
The key sensitivities that management has considered are as follows:
Revenue decreases by 5% per year over the forecast period
•
•
•
Terminal growth rate decrease 5%
where the CGU resides
Post tax discount rate increased by between 4.5% and 6.7% for the CGU based upon market factors for countries
Incorporating these sensitivities within the DCF model has not impacted the CGU impairment outcome.
Envirosuite Annual Report 2022
13.
INTANGIBLE ASSETS (continued)
In accordance with accounting standard AASB 136 Impairment of Assets, the Group tests goodwill for impairment annually or
more frequently whenever indicators of impairment are identified. In accordance with the accounting standard the Group has
set 30 June as the date for the annual review for impairment of the cash generating units (CGUs) to which goodwill has been
allocated, representing a change from the previous period being 31 December.
In testing for impairment, the carrying amount of each CGU is compared against the recoverable amount. AASB 136 defines
recoverable amount as being the higher of its fair value less cost of disposal (FVLCOD) and its value in use. The Group has
adopted FVLCOD as the basis for determining the recoverable amount of each CGU.
In adopting FVLCOD, the Group has applied accounting standard AASB 13 Fair Value Measurement as directed by AASB 136. In
applying AASB 13 the Group has adopted the Income Approach to determine fair value. The income Approach converts future
cash amounts to a single (discounted) amount using a discounted cash flow model. The fair value measured reflects current
market expectations about future amounts and is a technique commonly applied by market participants in determining fair value.
Under the Income Approach adopted, the Group has allowed for restructure costs representing cost synergies that a market
participant would typically apply in an orderly transaction between market participants.
The discounted cash flow model (DCF) uses post-tax cash flow projections that are based on the most recent Board approved
12-month budget and extrapolated for a further four years using underlying customer revenue contract data, appropriate growth
rates, cost synergies, risk-based discount rates and a terminal value as appropriate for the CGU. Terminal growth rates applied
in the DCF are based on estimates of long-term industry growth in the country in which the CGU primarily operates.
The assumptions applied in calculating the recoverable amounts of the CGU in testing for impairment are as follows:
Input
Budget period
Forecast period
Four-year revenue compound annual
growth rate post year 1
Post tax discount rate
Terminal growth rate
Asia Pacific
Americas
EMEA
1 year from 1 Jul 22
1 year from 1 Jul 22
1 year from 1 Jul 22
4 years from 1 Jul 23
4 years from 1 Jul 23
4 years from 1 Jul 23
14.48%
12.25%
2.75%
15.24%
12.00%
2.75%
14.14%
12.60%
2.75%
The discount rates for each CGU reflects management’s estimate of the time value of money and the Group’s weighted average
cost of capital adjusted for each CGU’s risk-free rate in each CGU’s major operating country and the volatility of the share price
relative to market movements.
Projected revenue growth rates in each CGU are appropriate based on experience and forecasts of the growth of the market
for environmental intelligence products.
Based upon the FVLCOD estimates using a discounted cash flow model, the carrying values of the CGU’s and the goodwill
therein are not impaired (2021: no impairment).
Previously the Group used the FVLCOD approach to assess the recoverability amount of the CGUs. However, the fair value of
the CGU was determined based on applying the Envirosuite Limited’s revenue multiple, calculated by dividing the market
capitalisation of Envirosuite Limited by the forecast of the next twelve months (NTM) revenue and applying this revenue multiple
to internal forecasts of NTM revenue for each CGU. The revised approach was deemed more appropriate in aligning market
value of the CGUs to an approach more commonly utilised by market participants.
Sensitivities
Management have made judgements and estimates in respect of impairment testing. Should these judgements and estimates
not occur the resulting goodwill carrying amount may decrease.
The key sensitivities that management has considered are as follows:
•
•
•
Revenue decreases by 5% per year over the forecast period
Terminal growth rate decrease 5%
Post tax discount rate increased by between 4.5% and 6.7% for the CGU based upon market factors for countries
where the CGU resides
Incorporating these sensitivities within the DCF model has not impacted the CGU impairment outcome.
80
Envirosuite Annual Report 2022
14.
TRADE AND OTHER PAYABLES
16.
ISSUED CAPITAL
Trade payables
GST / VAT payable
Accrued expenses
Other payables
Total trade and other payables
OTHER LIABILITIES
Loan note payable
Total other liabilities
2022
$’000
3,207
473
906
3,881
8,467
2022
$’000
1,526
1,526
2021
$’000
3,480
233
683
3,577
7,973
2021
$’000
-
-
Loan note payable represents the final settlement of the Spectris Instrumentation and Systems Shanghai Limited (Spectris)
acquisition in May 2018, there is an equal amount receivable in other assets, refer to Note 10.
15.
EMPLOYEE BENEFIT PROVISIONS
Employee benefits
Current
Balance at 1 July
Additional provisions
Amounts used
Balance at 30 June
Non-current
Balance at 1 July
Additional provisions
Amounts used
Balance at 30 June
2022
$’000
3,894
2,335
(1,702)
4,527
141
19
-
160
2021
$’000
6,203
267
(2,576)
3,894
230
-
(89)
141
Amounts not expected to be settled within the next 12 months
The provision for long service leave includes an estimate of the entitlements for employees in Australia who are expected to
have completed seven to ten years of continuous employment depending on the state in which they reside. The entire amount
of long service leave for employees where there is an unconditional entitlement is presented as current, since the Group does
not have an unconditional right to defer settlement. Provision for long service leave where the entitlement only becomes
unconditional in a period beyond 12 months are presented as non-current.
Movements in the number of ordinary shares on issue during the financial year is presented in the following table.
Movements in ordinary shares
Balance at 1 July
Issue of ordinary shares - exercising of employee and
director share options
Issue of ordinary shares - employee performance rights
Issue of ordinary shares - institutional and share placement
Issue of ordinary shares - accelerated non-renounceable
Issue of ordinary shares - transaction costs of capital
entitlement offer
raising (inc. tax effect)
2022
Number
2022
$’000
2021
Number
2021
$’000
1,193,839,427
169,520
1,024,685,906
155,908
2,000,000
6,511,653
52,345,620
-
-
28
500,000
1,039
10,469
3,648,555
120,178,667
10,215
-
44,826,299
3,811
55
461
(548)
89
-
-
(930)
-
Issue of ordinary shares - Employee Share Plan - $1k offer
572,270
Ordinary shares on issue at 30 June
1,255,268,970
180,597
1,193,839,427
169,520
Options
•
•
•
No options were issued for the year ended 30 June 2022.
For the year ended 30 June 2021, the Company issued the following options:
2,000,000 issued to directors with an exercise price of $0.40 each that expire in December 2022.
10,000,000 issued to investors with an exercise price of $0.20 each that expire in December 2022.
No options issued to employees for the year ended 30 June 2021.
Each option allows the holder to receive one ordinary share of Envirosuite Limited upon paying the exercise price prior to the
expiration date. Information relating to the options, including details of options issued, exercised and lapsed during the financial
year and options outstanding at the end of the financial year, is set out in Note 22.
During 2021, the probability of the China Employee ESOP options vesting was reassessed as nil, resulting in the reversal of
option expense recognised in the prior period. The 15,000,0000 options were expected to be granted progressively and
otherwise not later than 3 years from the date of approval on 25 November 2019. These options lapsed as vesting was
conditional on $10,000,000 in revenue (audited in accordance with international financial reporting standards) being received
into the wholly owned China subsidiaries of Envirosuite Limited by 31 December 2021 and this revenue requirement was not
satisfied by the due date.
Share based payments
Executive performance rights issued to employees for the year ended 30 June 2022 totalled 17,411,675 (30 June 2021:
13,596,890), refer to Note 22. Each performance right entitles the holder to receive one ordinary share of Envirosuite Limited
upon certain vesting conditions being met.
Capital risk management
The Group's objectives when managing capital are 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 optimal capital structure to reduce the cost of
capital.
1.88x)
Consistent with others in the industry, the Group monitors capital on the basis of the quick ratio. This ratio is calculated as
current assets (excluding inventory) divided by current liabilities. The quick ratio at 30 June 2022 was 1.66x (30 June 2021:
At 30 June 2022, the Group had cash and cash equivalents of $16,292k and no borrowings other than lease liabilities recognised
under AASB 16. The Group also has standing credit facility arrangements with banks of $294k (2021: $359k) of which $146k
was available as at 30 June 2022 (2021: $237k). The Group generated an operating cash outflow of $3,188k for the year ending
30 June 2022 (2021: $8,510k). The Group focuses on rolling cash flow forecasts to ensure that it has sufficient funding available
from cash and cash equivalents to fund operations.
81
Envirosuite Annual Report 2022
16.
ISSUED CAPITAL
Movements in the number of ordinary shares on issue during the financial year is presented in the following table.
Movements in ordinary shares
Balance at 1 July
Issue of ordinary shares - exercising of employee and
director share options
Issue of ordinary shares - employee performance rights
Issue of ordinary shares - institutional and share placement
Issue of ordinary shares - accelerated non-renounceable
entitlement offer
Issue of ordinary shares - transaction costs of capital
raising (inc. tax effect)
Issue of ordinary shares - Employee Share Plan - $1k offer
Ordinary shares on issue at 30 June
Options
No options were issued for the year ended 30 June 2022.
2022
Number
2022
$’000
2021
Number
2021
$’000
1,193,839,427
169,520
1,024,685,906
155,908
2,000,000
6,511,653
52,345,620
28
500,000
55
1,039
10,469
3,648,555
120,178,667
461
10,215
-
-
-
44,826,299
3,811
(548)
-
(930)
572,270
1,255,268,970
89
180,597
-
1,193,839,427
-
169,520
For the year ended 30 June 2021, the Company issued the following options:
•
•
•
No options issued to employees for the year ended 30 June 2021.
2,000,000 issued to directors with an exercise price of $0.40 each that expire in December 2022.
10,000,000 issued to investors with an exercise price of $0.20 each that expire in December 2022.
Each option allows the holder to receive one ordinary share of Envirosuite Limited upon paying the exercise price prior to the
expiration date. Information relating to the options, including details of options issued, exercised and lapsed during the financial
year and options outstanding at the end of the financial year, is set out in Note 22.
During 2021, the probability of the China Employee ESOP options vesting was reassessed as nil, resulting in the reversal of
option expense recognised in the prior period. The 15,000,0000 options were expected to be granted progressively and
otherwise not later than 3 years from the date of approval on 25 November 2019. These options lapsed as vesting was
conditional on $10,000,000 in revenue (audited in accordance with international financial reporting standards) being received
into the wholly owned China subsidiaries of Envirosuite Limited by 31 December 2021 and this revenue requirement was not
satisfied by the due date.
Share based payments
Executive performance rights issued to employees for the year ended 30 June 2022 totalled 17,411,675 (30 June 2021:
13,596,890), refer to Note 22. Each performance right entitles the holder to receive one ordinary share of Envirosuite Limited
upon certain vesting conditions being met.
Capital risk management
The Group's objectives when managing capital are 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 optimal capital structure to reduce the cost of
capital.
Consistent with others in the industry, the Group monitors capital on the basis of the quick ratio. This ratio is calculated as
current assets (excluding inventory) divided by current liabilities. The quick ratio at 30 June 2022 was 1.66x (30 June 2021:
1.88x)
At 30 June 2022, the Group had cash and cash equivalents of $16,292k and no borrowings other than lease liabilities recognised
under AASB 16. The Group also has standing credit facility arrangements with banks of $294k (2021: $359k) of which $146k
was available as at 30 June 2022 (2021: $237k). The Group generated an operating cash outflow of $3,188k for the year ending
30 June 2022 (2021: $8,510k). The Group focuses on rolling cash flow forecasts to ensure that it has sufficient funding available
from cash and cash equivalents to fund operations.
82
Envirosuite Annual Report 2022
17.
RESERVES AND RETAINED LOSSES
Reserves
Foreign exchange translation reserve
Movements
Balance at 1 July
Effects of foreign exchange translation
Foreign exchange translation reserve – balance at 30 June
Share-based payments reserve
Movements
Balance at 1 July
Share based payments expense – net
Transfer to retained losses
Share based payment reserve – balance at 30 June
Total Reserves
Retained Losses
Movements
Balance at 1 July
Transfer from employee shares reserve
Net loss for the year
Retained losses – balance at 30 June
Nature and purpose of reserves
2022
$’000
(925)
18
(907)
12,854
520
(1,669)
11,705
10,798
2022
$’000
(54,148)
1,669
(13,195)
(65,674)
2021
$’000
(647)
(278)
(925)
12,387
479
(12)
12,854
11,929
2021
$’000
(41,663)
12
(12,497)
(54,148)
Foreign currency translation reserve
Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive income and
accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment
is disposed of.
Share based payments reserve
The share based payments reserve is used to recognise the accrued grant date fair value of options and performance rights
issued to employees and directors but not exercised and issued. The fair value of options and performance rights is accrued
into the share based payment reserve over the service period. When options and performance rights are exercised and issued,
the grant date fair value is transferred from the share based payment reserve to Ordinary shares. When options are vested but
not exercised by the expiry date, the grant date fair value is transferred from the share based payment reserve to Retained
Losses. Where performance rights lapse, the amortised fair value is transferred from the share based payments reserve to
retained losses.
Dividends
The Group has not paid or declared any dividends during the period (2021: nil). Franking credits available for subsequent financial
years amount to $653,889 (2021: $651,756).
18.
COMMITMENTS AND CONTINGENCIES
Contingencies
The Group has potential exposure to guarantees it has issued to third parties in relation to the performance and obligation of
controlled entities with respect to property lease rentals and customer contractual obligations amounting to $1,158,890 (30 June
2021: $1,423,305).
19.
RELATED PARTY TRANSACTIONS
Key management personnel
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable to each
member of the Group’s key management personnel (KMP) for the year ended 30 June 2022.
The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:
During 2021, the probability of options issued to KMP in the prior period vesting was reassessed as nil, resulting in the reversal
of option expense recognised in the prior period.
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total KMP compensation
The parent entity within the Group is Envirosuite Limited.
Parent entity
Subsidiaries
Entity Name
Envirosuite Operations Pty Ltd
Envirosuite Holdings Pty Ltd
Envirosuite Corp
Envirosuite Europe Sociedad Limitada
Envirosuite Canada Inc.
Envirosuite Chile SpA
Envirosuite Colombia S.A.S.(1)
Beijing Envirosuite Environmental Science & Technology(1)
Hengli Ruiyan Environmental Engineering Co. Ltd(1)
Envirosuite Brasil Comercializacao De Equioamentos Ltda.
AqMB Pty Ltd.
AqMB Holdings Pty Ltd.
Envirosuite Holdings No 2 Pty Ltd
Envirosuite Australia No 2 Pty Ltd
EMS Bruel & Kjaer Pty Ltd
Envirosuite Inc
EMS Bruel & Kjaer Iberica S.A.
Envirosuite Denmark Aps
Envirosuite BV
Envirosuite UK Ltd
Envirosuite Korea Ltd
Envirosuite Taiwan Ltd
Australia
Australia
USA
Spain
Canada
Chile
Colombia
China
China
Brazil
Australia
Australia
Australia
Australia
Australia
USA
Spain
Denmark
Netherlands
United Kingdom
South Korea
Taiwan
2022
$’000
1,470
57
-
1,076
2,603
2021
$’000
1,266
65
-
(200)
1,131
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Country of
Incorporation
30 June 2022
30 June 2021
(1)
These subsidiaries have a financial year-end of 31 December as required by local regulations. The Group has received
an exemption from ASIC from aligning the financial year end of these subsidiaries with that of the Envirosuite Limited,
being 30 June
Transactions with other related parties
There were no other transactions with related parties during the financial year.
83
Envirosuite Annual Report 2022
19.
RELATED PARTY TRANSACTIONS
Key management personnel
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable to each
member of the Group’s key management personnel (KMP) for the year ended 30 June 2022.
The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total KMP compensation
2022
$’000
1,470
57
-
1,076
2,603
2021
$’000
1,266
65
-
(200)
1,131
During 2021, the probability of options issued to KMP in the prior period vesting was reassessed as nil, resulting in the reversal
of option expense recognised in the prior period.
Parent entity
The parent entity within the Group is Envirosuite Limited.
Subsidiaries
Entity Name
Envirosuite Operations Pty Ltd
Envirosuite Holdings Pty Ltd
Envirosuite Corp
Envirosuite Europe Sociedad Limitada
Envirosuite Canada Inc.
Envirosuite Chile SpA
Envirosuite Colombia S.A.S.(1)
Beijing Envirosuite Environmental Science & Technology(1)
Hengli Ruiyan Environmental Engineering Co. Ltd(1)
Envirosuite Brasil Comercializacao De Equioamentos Ltda.
AqMB Pty Ltd.
AqMB Holdings Pty Ltd.
Envirosuite Holdings No 2 Pty Ltd
Envirosuite Australia No 2 Pty Ltd
EMS Bruel & Kjaer Pty Ltd
Envirosuite Inc
EMS Bruel & Kjaer Iberica S.A.
Envirosuite Denmark Aps
Envirosuite BV
Envirosuite UK Ltd
Envirosuite Korea Ltd
Envirosuite Taiwan Ltd
Country of
Incorporation
Australia
30 June 2022
%
100
30 June 2021
%
100
Australia
USA
Spain
Canada
Chile
Colombia
China
China
Brazil
Australia
Australia
Australia
Australia
Australia
USA
Spain
Denmark
Netherlands
United Kingdom
South Korea
Taiwan
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(1)
These subsidiaries have a financial year-end of 31 December as required by local regulations. The Group has received
an exemption from ASIC from aligning the financial year end of these subsidiaries with that of the Envirosuite Limited,
being 30 June
Transactions with other related parties
There were no other transactions with related parties during the financial year.
84
Envirosuite Annual Report 2022
20.
BUSINESS COMBINATIONS
Current year acquisitions
There were no acquisitions during the financial year.
Prior year acquisitions
Acquisition of AqMB Group
On 17 August 2020, the group acquired 100% of the issued capital of AqMB Pty Ltd, a water modelling R&D technology software
company. Through acquiring 100% of the issued capital of AqMB Pty Ltd, the Group obtained control of the company, which
primarily represented the rights to the software developed. The acquisition was part of the Group’s strategy to expand into the
market for Environmental Intelligence within the Water industry with the technology from AqMB, along with Envirosuite’s
exclusive license over SeweX algorithms, used in Envirosuite’s EVS Water product, which was launched in November 2020.
Acquisition Balance Sheet
Purchase consideration
Cash paid
Less: cash acquired
Purchase consideration, net
Fair value of identifiable net assets acquired
Acquired software
Trade and other receivables
Total fair value of identifiable net assets acquired
Residual representing goodwill
Acquisition of EMS Bruel & Kjaer Holdings
2021
$’000
1,205
-
1,205
1,204
1
1,205
-
On 28 February 2020, the group acquired all of the share capital of EMS Bruel & Kjaer Holdings Pty Ltd (“EMS”) with the details
of that acquisition disclosed in the 2020 Annual Report. During the year ending 30 June 2021, the final purchase consideration
payments were made totalling $4,394k, which was $213k greater than the amount provisioned as at 30 June 2020. The
additional purchase consideration amount of $213k was offset with additional provisions recognised in connection with the
acquisition and resulted in a net increase to the goodwill recognised for EMS of $128k during 2021.
21.
CASH FLOW STATEMENT RECONCILIATION
Reconciliation of net profit / (loss) after tax to net cash flow from operations
Loss after tax
Add back: Depreciation and amortisation
Add back: Foreign exchange (gain) / loss
Add back: Non-cash share based payments
Sub-total
Changes in operating assets and liabilities
Increase in trade and other debtors
Decrease in inventories
Increase in other assets
Increase in deferred tax
Increase / (decrease) in trade creditors
Increase in other liabilities
Increase / (decrease) in other provisions
Net cash outflow from operating activities
Changes in liabilities arising from financing activities
Net cash used in financing activities
Lease Liability
Balance at 1 July
Finance charges
Acquisition of leases
Termination of leases
Exercise of early termination option
Effects of foreign exchange
Balance at 30 June
(3,810)
(4,180)
2022
$’000
(13,195)
8,157
(249)
1,477
(893)
119
(2,735)
53
1,900
1,526
653
(3,188)
2021
$’000
(12,497)
6,994
377
946
(825)
628
(801)
214
(1,317)
169
(2,398)
(8,510)
2022
$’000
4,002
(1,878)
231
459
(62)
(534)
33
2,251
2021
$’000
4,407
(1,521)
295
1,166
(223)
-
(122)
4,002
Cash flow from operating activities excludes cash paid to suppliers and employees that are capitalised as internally developed
software within intangible assets. These cash flows are included as cash paid for intangible assets.
85
Envirosuite Annual Report 2022
21.
CASH FLOW STATEMENT RECONCILIATION
Reconciliation of net profit / (loss) after tax to net cash flow from operations
Loss after tax
Add back: Depreciation and amortisation
Add back: Foreign exchange (gain) / loss
Add back: Non-cash share based payments
Sub-total
Changes in operating assets and liabilities
Increase in trade and other debtors
Decrease in inventories
Increase in other assets
Increase in deferred tax
Increase / (decrease) in trade creditors
Increase in other liabilities
Increase / (decrease) in other provisions
Net cash outflow from operating activities
2022
$’000
(13,195)
8,157
(249)
1,477
(3,810)
(893)
119
(2,735)
53
1,900
1,526
653
(3,188)
2021
$’000
(12,497)
6,994
377
946
(4,180)
(825)
628
(801)
214
(1,317)
169
(2,398)
(8,510)
Cash flow from operating activities excludes cash paid to suppliers and employees that are capitalised as internally developed
software within intangible assets. These cash flows are included as cash paid for intangible assets.
Changes in liabilities arising from financing activities
Lease Liability
Balance at 1 July
Net cash used in financing activities
Finance charges
Acquisition of leases
Termination of leases
Exercise of early termination option
Effects of foreign exchange
Balance at 30 June
2022
$’000
4,002
(1,878)
231
459
(62)
(534)
33
2,251
2021
$’000
4,407
(1,521)
295
1,166
(223)
-
(122)
4,002
86
Envirosuite Annual Report 2022
22.
SHARE BASED PAYMENTS
23.
EARNINGS PER SHARE
The Group issued options and performance rights to employees and directors as compensation for services provided.
In calculating earnings per share, there were no adjustments made to net loss after tax or comprehensive loss for the period.
Employee share plan
Under the Envirosuite Limited Employee Share Plan, shares issued to employees for no cash consideration vest immediately on
grant date. On this date, the market value of the shares issued is recognised as an employee benefits expense with a
corresponding increase in equity.
Performance rights
Under the Envirosuite Performance Rights Plan, Envirosuite issues performance rights to employees, (usually at senior levels
within the company), that convert to ordinary fully paid shares, upon the achievement of certain vesting conditions. Offers made
to staff under the Plan are designed to incentivise senior, specialist and key employees, to deliver long term returns for
shareholders. Participation in the Plan is at the Board's discretion and at intervals determined by the Board, and no individual
staff member has the right to receive any guaranteed benefits.
Vesting conditions/milestones are specified at the time of grant, with the purpose of motivating certain staff behaviours
including: retention, share price performance and the achievement of key company goals. The Board may impose both conditions
on dealings in the performance rights for a prescribed time, or any forfeiture conditions, and any such conditions are to be
notified to staff in their invitation to participate in the Plan. The Board also may waive in whole, or in part, any of the conditions
applicable to a grant of performance rights.
Participants in the Plan only become eligible for the performance rights to convert to ordinary shares upon achievement of the
relevant milestone/s. Where a staff member ceases their employment with the company ahead of achieving the relevant
milestone/s, their entitlement is forfeited. Performance rights may only convert to ordinary fully paid shares and are not
convertible to cash.
The Board is entitled to suspend the operation of the Plan and may at any time cancel the Plan, on the condition that the
suspension or cancellation of the Plan does not prejudice the existing rights of Participants.
Parent entity financial statements
for at cost value less impairment.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Reserves
Retained losses
Total Equity
There were 17,411,675 performance rights issued during the year (2021: 13,596,890).
Employee share option plan and scheme
The establishment of the Employee Share Option Plan was approved by the Board prior to the IPO of Envirosuite Limited
(formerly: Pacific Environment Limited). The plan is designed to provide long term incentives for employees and directors to
deliver long term shareholder returns. Participation in the plan is at the Board's discretion and no individual has a contractual
right to participate in the plan or to receive any guaranteed benefits.
The amount of options that will vest depends on the individual contracts agreed by Envirosuite Limited. Once vested, the options
remain exercisable for a period of up to seven years after the grant date. When exercisable, each option is convertible into one
ordinary share on the day of the next Board meeting or within 15 business days, whichever is earlier. The exercise price of
options is pre-determined in the individual option agreements.
Options were issued to employees under the Employee Share Option Plan. Under this scheme, options granted vest as specified
under the individual option. The options are not forfeitable but lapse on the date specified in the individual option agreement. If
an employee ceases employment the options vest immediately and the employee has seven days to exercise the option at the
current market price or the original exercise price, whichever is greater. If the employee does not exercise the options, the
options lapse.
Options were also granted to non-employees during the period that have similar terms to those under the Employee Share
Option Plan. Set out on the following pages are summaries of options granted.
Options outstanding as at 30 June 2020
Granted
Expired
Options outstanding as at 30 June 2021
Granted
Forfeited/Lapsed
Exercised
Expired
Options outstanding as at 30 June 2022
Number of options
147,833,333
12,000,000
(333,333)
159,500,000
-
(26,250,000)
(2,000,000)
(22,500,000)
108,750,000
Weighted average
exercise price
0.23
0.23
0.16
0.23
-
0.15
0.10
0.40
0.22
As at 30 June 2022, there were 106,250,000 options (2021: 133,250,000) that were exercisable at a weighted average price of
$0.22 per share (2021: $0.24 per share). The weighted average remaining life of the options outstanding is 0.64 years (2021:
1.46 years).
87
Weighted average number of shares used in denominator
Basic earnings per share
Diluted earnings per share
2022
number
2021
number
1,182,343,365
1,182,343,365
1,027,169,980
1,027,169,980
There are 28,250,000 in share options issued and in-the-money, and 17,919,690 of performance rights that are not included in
diluted earnings per share as these would have an antidilutive effect on earnings per share. These potential ordinary shares are
antidilutive as their conversion to ordinary shares would decrease loss per share. If these share options were included in the
calculation of diluted earnings per share, the weighted average number of shares used in the denominator would be
1,234,512,144.
24.
SUBSEQUENT EVENTS
The directors are not aware of any matters or circumstances have arisen since the end of the financial year that significantly
affected, or could significantly affect, the operations of the consolidated Group, the results of those operations, or the state of
affairs of the consolidated Group in future financial years.
25.
PARENT ENTITY FINANCIAL INFORMATION
The following information has been extracted from the books and records of the parent entity and has been prepared in
accordance with Australian Accounting Standards. Non-current assets includes investment in subsidiaries which are accounted
2022
$’000
1,809
164,708
166,517
425
883
1,308
180,597
11,705
(27,093)
165,209
2022
$’000
(3,840)
(3,840)
2021
$’000
11,604
148,207
159,811
546
1,813
2,359
169,520
12,854
(24,922)
157,452
2021
$’000
(8,342)
(8,342)
Income Statement and Statement of Comprehensive Income
Profit / (loss) after tax
Total comprehensive profit / (loss)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company guarantees
the debts of the others. No deficiencies of assets exist in any of these subsidiaries.
Envirosuite Annual Report 2022
23.
EARNINGS PER SHARE
In calculating earnings per share, there were no adjustments made to net loss after tax or comprehensive loss for the period.
Weighted average number of shares used in denominator
Basic earnings per share
Diluted earnings per share
2022
number
1,182,343,365
1,182,343,365
2021
number
1,027,169,980
1,027,169,980
There are 28,250,000 in share options issued and in-the-money, and 17,919,690 of performance rights that are not included in
diluted earnings per share as these would have an antidilutive effect on earnings per share. These potential ordinary shares are
antidilutive as their conversion to ordinary shares would decrease loss per share. If these share options were included in the
calculation of diluted earnings per share, the weighted average number of shares used in the denominator would be
1,234,512,144.
24.
SUBSEQUENT EVENTS
The directors are not aware of any matters or circumstances have arisen since the end of the financial year that significantly
affected, or could significantly affect, the operations of the consolidated Group, the results of those operations, or the state of
affairs of the consolidated Group in future financial years.
25.
PARENT ENTITY FINANCIAL INFORMATION
Parent entity financial statements
The following information has been extracted from the books and records of the parent entity and has been prepared in
accordance with Australian Accounting Standards. Non-current assets includes investment in subsidiaries which are accounted
for at cost value less impairment.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Reserves
Retained losses
Total Equity
Income Statement and Statement of Comprehensive Income
Profit / (loss) after tax
Total comprehensive profit / (loss)
2022
$’000
1,809
164,708
166,517
425
883
1,308
180,597
11,705
(27,093)
165,209
2022
$’000
(3,840)
(3,840)
2021
$’000
11,604
148,207
159,811
546
1,813
2,359
169,520
12,854
(24,922)
157,452
2021
$’000
(8,342)
(8,342)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company guarantees
the debts of the others. No deficiencies of assets exist in any of these subsidiaries.
88
Envirosuite Annual Report 2022
DIRECTORS DECLARATION
In accordance with a resolution of the directors of Envirosuite Limited, the directors of the Company declare that:
(a) The financial statements and notes set out on pages 56-96 are in accordance with the Corporations Act 2001, and:
(i) comply with Australian Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
(ii) give a true and fair view of the financial position as at 30 June 2022 and of the
performance for the year ended on that date of the Consolidated Group; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations by the chief executive office and chief financial officer required by section 295A
of the Corporations Act 2001
David Johnstone, Chairman
23 August 2022
89
Envirosuite Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ENVIROSUITE LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Envirosuite Limited (the Company), which comprises
the consolidated statement of financial position as at 30 June 2022, the consolidated income statement and
statement of comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies
and other explanatory information, and the directors’ declaration of the Company and the consolidated entity
comprising the Company and the entities it controlled at the year’s end or from time to time during the financial
year.
In our opinion the financial report of Envirosuite Limited is in accordance with the Corporations Act 2001,
including:
a)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022
and of its performance for the year ended on that date; and
b)
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity 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.
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. The following single matter was 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 the matter. For the matter below, our description of how our audit addressed the matter is provided
in that context.
90
1.
Carrying amount of intangible assets
Why significant
How our audit addressed the key audit matter
assurance conclusion thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
As at 30 June 2022 the carrying value of intangible
assets is $108,652,000 (2021: $108,931,000), as
disclosed in Note 13.
In assessing this key audit matter, we involved senior
audit team members who understand the industry.
Our audit procedures included, amongst others:
The consolidated entity’s accounting policy in respect
of intangible assets is outlined in Note 1(n), and for
goodwill in Note 1(c).
The carrying amount of intangible assets is a key audit
matter due to:
the significance of the balance (being 72% of
•
total assets); and
•
management’s assessment of impairment.
the level of judgement applied in evaluating
As outlined in Notes 1 and 13, management assessed
whether the carrying amount of intangible assets was
impaired through impairment testing utilising a fair
value less costs of disposal model.
Significant judgements are applied in determining key
assumptions used
the model. Specifically,
management prepared a discounted cash flow model
utilising the income approach.
in
The key assumptions used in the model include
projected revenue growth rates, discount and terminal
growth rates. The judgements made in determining
the underlying assumptions in the model have a
significant impact on determining whether the carrying
amount of intangible assets exceeds the fair value,
and accordingly the amount of any impairment
charge, to be recorded in the current financial year.
No impairment charge was made during the year.
•
•
•
•
•
•
•
evaluating management’s methodology for
determining the carrying amount of intangible
assets by comparing the fair value less costs
of disposal model with generally accepted
valuation methodology and accounting
standard requirements;
conducting sensitivity analysis on key
assumptions such as the projected revenue
growth rates, discount and terminal growth
rates, within reasonable foreseeable ranges,
and comparing the calculated recoverable
amount to the carrying value of net assets of
each cash-generating unit (‘CGU’);
challenging the key assumptions used in
management’s discounted cashflow model
by:
- assessing projected revenue growth rates
set by management
to
historical results and future approved budgets
- evaluating the discount and terminal growth
rates set by management in comparison to
market and industry information available
- assessing the impact of the COVID-19
pandemic on all key assumptions
assessing
changes in model and key assumptions;
assessing
designations applied;
reviewing the work of management’s expert,
including their competence, necessary skill,
objectivity and independence; and
assessing the appropriateness of the related
disclosures in Note 13.
the appropriateness of any
the appropriate of
in comparison
the CGU
Other Information
The Directors are responsible for the other information. The other information comprises the information
included in the consolidated entity’s Annual Report, but does not include the financial report and our auditor’s
report thereon.
91
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.
Directors’ Responsibilities 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 Note 1, the
Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability 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 consolidated entity 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 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 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 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 consolidated entity’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 consolidated entity’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
Envirosuite Annual Report 2022
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Directors’ Responsibilities 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 Note 1, the
Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability 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 consolidated entity 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 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 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 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 consolidated entity’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 consolidated entity’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
92
Envirosuite Annual Report 2022
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 consolidated entity 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 consolidated entity to express an opinion on the Group financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our 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 our audit.
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 our 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 our 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
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2022.
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.
Opinion
In our opinion, the Remuneration Report of Envirosuite Limited for the year ended 30 June 2022 complies
with section 300A of the Corporations Act 2001.
PKF BRISBANE AUDIT
SHAUN LINDEMANN
PARTNER
BRISBANE
23 August 2022
93
Envirosuite Annual Report 2022
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 consolidated entity 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 consolidated entity to express an opinion on the Group financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our 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 our audit.
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 our 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 our 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
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2022.
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
In our opinion, the Remuneration Report of Envirosuite Limited for the year ended 30 June 2022 complies
with section 300A of the Corporations Act 2001.
Standards.
Opinion
PKF BRISBANE AUDIT
SHAUN LINDEMANN
PARTNER
BRISBANE
23 August 2022
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94
Envirosuite Annual Report 2022
The names of the twenty largest holders of quoted equity securities are listed below:
Name
National Nominees Limited
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
RUBI HOLDINGS PTY LTD
BNP PARIBAS NOMS PTY LTD
MR ROBIN ORMEROD & MS KRISTIN ZEISE
THE ADAMS MCLEAN SUPERANNUATION FUND PTY LTD
COALWELL PTY LIMITED
BUNGEELTAP PTY LTD
MUTUAL TRUST PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BSD PTY LTD
THIRTY-FIFTH CELEBRATION PTY LTD
SPECTRIS GROUP HOLDINGS LTD
MR ROBIN ORMEROD
FORDHOLM CONSULTANTS PTY LTD
TOM HADLEY ENTERPRISES PTY LTD
MR PETER JAMES WHITE & MRS EVA MARIA WHITE
Unquoted equity securities
Envirosuite Limited unlisted options over ordinary shares issues
Performance rights over ordinary shares issued
Number held
Percentage
154,266,451
12.25%
7.14%
4.00%
3.21%
2.92%
2.48%
2.02%
1.91%
1.67%
1.64%
1.16%
1.08%
1.01%
0.95%
0.88%
0.79%
0.64%
0.64%
0.60%
0.55%
89,893,808
50,394,791
40,392,115
36,750,349
31,250,000
25,441,409
24,100,000
21,014,705
20,700,000
14,659,381
13,612,019
12,744,674
12,000,000
11,042,286
10,000,000
8,059,342
8,000,000
7,518,334
6,937,681
Number held
108,750,000
17,931,675
598,777,345
47.54%
SHAREHOLDER INFORMATION
1. SHAREHOLDING (continued)
The shareholder information set out below was applicable at 12 August 2022
Twenty largest quoted equity security holders
1. SHAREHOLDING
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Shares
102
874
811
2,553
1,141
5,481
Options
-
-
-
-
8
8
Performance
Rights
-
-
-
3
25
28
The number of shareholdings held in less than marketable parcels was 320 with total shares of 501,673.
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
National Nominees Limited
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Number held
154,266,451
89,893,808
Percentage
12.25%
7.14%
Voting Rights
The voting rights attaching to each class of equity securities are set out below
Ordinary shares
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.
Options
Options carry the standard voting rights available to ordinary shareholders when converted to ordinary shares.
Performance rights
Performance rights carry the standard voting rights available to ordinary shareholders when converted to ordinary shares.
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Envirosuite Annual Report 2022
1. SHAREHOLDING (continued)
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
National Nominees Limited
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
RUBI HOLDINGS PTY LTD
BNP PARIBAS NOMS PTY LTD
MR ROBIN ORMEROD & MS KRISTIN ZEISE
THE ADAMS MCLEAN SUPERANNUATION FUND PTY LTD
COALWELL PTY LIMITED
BUNGEELTAP PTY LTD
MUTUAL TRUST PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BSD PTY LTD
THIRTY-FIFTH CELEBRATION PTY LTD
SPECTRIS GROUP HOLDINGS LTD
MR ROBIN ORMEROD
FORDHOLM CONSULTANTS PTY LTD
TOM HADLEY ENTERPRISES PTY LTD
MR PETER JAMES WHITE & MRS EVA MARIA WHITE
Number held
154,266,451
89,893,808
50,394,791
40,392,115
36,750,349
31,250,000
25,441,409
24,100,000
21,014,705
20,700,000
14,659,381
13,612,019
12,744,674
12,000,000
11,042,286
10,000,000
8,059,342
8,000,000
7,518,334
6,937,681
Percentage
12.25%
7.14%
4.00%
3.21%
2.92%
2.48%
2.02%
1.91%
1.67%
1.64%
1.16%
1.08%
1.01%
0.95%
0.88%
0.79%
0.64%
0.64%
0.60%
0.55%
598,777,345
47.54%
Unquoted equity securities
Envirosuite Limited unlisted options over ordinary shares issues
Performance rights over ordinary shares issued
Number held
108,750,000
17,931,675
96
Envirosuite Annual Report 2022
Corporate Directory
Envirosuite Limited
ABN: 42 122 919 948
Board of Directors
David Johnstone
Chairman
Hugh Robertson
Director
Jason Cooper
Managing Director
Sue Klose
Director
Stuart Bland
Director
Tim Ebbeck
Director
Company Secretary
Adam Gallagher
Registered office and
principal place of business
Envirosuite Limited
Level 12, 432 St Kilda Rd
Melbourne VIC 3004
Phone: 02 8484 5819
Share Registry
Boardroom Pty Limited
Level 12, 225 George Street,
Sydney, New South Wales 2000
Phone: 02 9290 9600
Auditor
PKF Brisbane Audit
Level 6, 10 Eagle Street,
Brisbane, Queensland 4000
Phone: 07 3839 9733
Stock Exchange Listing
Envirosuite Limited shares are
listed on the Australian Securities
Exchange (Code EVS)
www.envirosuite.com