Envirosuite Limited
Level 30, 385 Bourke Street
Melbourne VIC 3000
(ASX: EVS) ACN: 122 919 948
www.envirosuite.com
Phone: (02) 8484 5819
2 - A non-cash impairment charge of $18.3m was recognised from the impairment assessment completed as at 30 June 2024. One of the
considerations of the impairment assessment is the market capitalisation of the Company relative to the overall carrying value of goodwill.
Further details on the impairment charge taken up, and assumptions adopted are set out in Note 13 of the financial statements.
The net tangibles asset backing per security of 0.1 cents presented above is inclusive of right-of-use assets and liabilities. The net tangible
asset per security, at 30 June 2024, would reduce to 0.0 cents (2023: 0.7 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 2024.
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 2024
Annual Report, including the Chairman’s Letter and CEO Report.
This document should be read in conjunction with the 2024 Annual Report, including Chairman’s Letter and CEO Report, and any public
announcements 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.
20 August 2024
Appendix 4E
Summary Financial Report
Consolidated Group
Year ended
30 June
2024
Year ended
30 June
2023
Variance to prior year
$’000
$’000
$’000
%
Revenues from ordinary activities
59,378
57,899
1,479
2.6%
Profit / (loss) after tax from ordinary
activities attributable to members2
(32,248)
(10,278)
(21,970)
(213.8%)
Net profit / (loss) attributable to members2
(32,248)
(10,278)
(21,970)
(213.8%)
Net tangible assets / (liabilities) per
security (cents)
0.1
0.91
Results for announcement to the market
For the financial year ended 30 June 2024
1 - Current and prior year net tangible assets / (liabilities) per security has been updated to exclude deferred tax liabilities previously included within the calculation.
Key metrics
At a glance
Chair’s Review
CEO’s Review
Portfolio Update
Financial Statements
Contents
This Full Year Report (Report) is lodged with the Australian Securities and Investments Commission and ASX Limited.
Envirosuite Ltd (EVS) ABN 42 122 919 948 is a publicly listed company in Australia. The Report contains information
prepared on the basis of the Corporations Act 2001 (Cth), 4th edition ASX Corporate Governance Councilʼs Corporate
Governance Principles and Recommendations, Accounting Standards and interpretations issued by the Australian
Accounting Standards Board and International Financial Reporting Standards and interpretations issued by the
International Accounting Standards Board.
The Report also provides information on the EVS Groupʼs activities and performance throughout the full year of FY24,
showing how the EVS Group is creating value through its strategy, operations, governance and financial activities.
Nothing in the Report is, or should be taken as, an offer of securities in EVS for issue or sale, or an invitation to apply for
the purchase of such securities.
All figures in the Report are in Australian dollars unless otherwise stated.
ABN: 42 122 919 948
Envirosuite Limited
Chair
Director
Director
Managing Director
Director
David Johnstone
Colby Manwaring
Stuart Bland
Jason Cooper
Sue Klose
Board of Directors
Adam Gallagher
Company Secretary
Envirosuite Limited
Level 30, 385 Bourke St
Melbourne VIC 3000
Phone: 02 8484 5819
Registered office and
principal place of business
Boardroom Pty Limited
Level 8, 210 George Street,
Sydney, New South Wales 2000
Phone: 02 9290 9600
Share Registry
PKF Brisbane Audit
Level 2, 66 Eagle Street,
Brisbane, Queensland 4000
Phone: 07 3839 9733
Auditor
Envirosuite Limited shares are
listed on the Australian Securities
Exchange (Code EVS)
Stock Exchange Listing
1 - Numbers presented on an EBITDA basis
GROSS PROFIT %
SITES
ARR ($m)
EBITDA GROWTH
ADJUSTED EBITDA ($m)
52.5%
Gross profit1
1.7% YoY
$61.1m
Annual recurring revenue
2.8% YoY
$59.4m
Statutory revenue
2.6% YoY
435
Customer sites
(1.8%) YoY
$1.1m
Adjusted EBITDA profit
123.1% YoY
Key Metrics
($4.0m)
($4.5m)
$0.5m
$1.1m
Net revenue growth
Cost management
Gross margin leverage
$3.3m
($1.6m)
($1.8m)
($0.2m)
($0.7m)
($0.2m)
($1.2m)
FY23
EBITDA
Total
Recurring
Revenue
Non-recurring
revenue
Cost of
revenue
Operating
expenses
Other
FY24
EBITDA
Total
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
6
5
Jun 21
Jun 22
Jun 23
Jun 24
$53.0m
$46.5m
$59.4m
$61.1m
416
373
443
435
Jun 21
Jun 22
Jun 23
Jun 24
47.9%
43.3%
51.6%
52.5%
Jun 21
Jun 21
Jun 22
Jun 22
Jun 23
Jun 23
Jun 24
Jun 24
Envirosuite is the world’s most
advanced environmental
intelligence technology provider.
Envirosuite provides cutting-edge solutions that
empower customers to optimise their operations
while protecting and strengthening their social
license and community relationships in relation to
noise, vibration, odour, dust, air quality and water
management.
With high-calibre customers across the aviation,
mining, industrial, waste, wastewater and
water treatment sectors, Envirosuite combines
evidence-based science with innovative
technologies and industry expertise to reduce
operational and safety risk, improve productivity,
and proactively engage with communities and
regulatory stakeholders.
By harnessing the power of environmental
intelligence, Envirosuite helps industries to grow
sustainably and communities to thrive.
114
Emission Alert
μg/m3
Activate reduced operations until
1pm or deploy water truck.
RECOMMENDED ACTION
Haul Truck
2.7
Vibration Alert
mm/s
Warning - high risk of structural
damage. Reduce nearby works.
SYSTEM ALERT
Blasting
94
Dust Alert
μg/m3
Adverse weather conditions
predicted within 6 hours. Alter
operations as required.
RECOMMENDED ACTION
Wind
88
Noise Alert
dB
Noise event recorded and
classified. Increase surveillance.
SYSTEM ALERT
Machinery
7
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
Dear fellow Shareholders,
I am pleased to present Envirosuite’s 2024 Annual
Report, which will be my last as Chairman, having
previously announced my intention to step down.
I encourage all investors to carefully read and
consider the contents of the Annual Report and
the associated disclosures to make an informed
assessment of the value of the Company.
To this end, I note the deterioration in our share
price, which has been deeply disappointing for
all shareholders including myself. Despite having
more than $60m in annualised recurring revenue
(ARR) and a diverse global blue-chip client
base, Envirosuite currently has one of the lowest
market valuations to ARR on the ASX. At the time
of writing, the Company’s market capitalisation of
approximately $52 million represented less than
85% of its ARR.
The combination of Envirosuite’s current
low market valuation, its strong business
fundamentals and its global leadership position
in environmental intelligence technology resulted
in significant corporate interest in the Company
over the past 12 months. This has received some
media attention.
Your Board is very cognisant of its obligations to
explore and properly assess all opportunities put
before us. We have considered and advanced
a range of corporate discussions that have
contemplated full sale, as well as partial and
commercially strategic investments. These
types of discussions are highly sensitive and
confidential, and we do not speculate on what
may or may not occur. We will work through
each opportunity that arises and we will update
the market as required in accordance with our
disclosure obligations. However, in the interests
of all our shareholders, particularly our longer-
term holders, we have no intention of selling them
out by folding to any discounted opportunistic
proposal which may emerge as a result of the
current low share price.
We are adequately funded and have no current
plans to raise capital aside from acting on
commercially strategic opportunities if they arise.
During FY24 your Company took many strategic
operational decisions to take significant costs out
of the business. While the impact of these actions
is not yet fully reflected in this set of financial
statements, they are already benefiting our
margins and earnings and will continue to do so.
In another move to improve our future financial
performance, we took steps to discontinue low
margin, non-core legacy contracts from earlier
years that were no longer commercially viable.
While this action will be very positive for future
earnings, it has led to higher-than-average
reported churn. We also needed to reflect the
costs associated with the various corporate
discussions and associated costs during the year.
We have delineated between costs such as the
above that are one-off in nature and those that
are continuing and have reported on underlying
or ‘Adjusted EBITDA’.
With the decline in Envirosuite’s market value
during the year we have taken a conservative
approach and written down the cost of the
goodwill on the balance sheet.
This non-cash accounting item has no impact
on the business’s performance or prospects;
however, it has affected the headline earnings
number for the 2024 financial year.
Envirosuite’s globally leading products are at the
core of the now omnipresent ESG theme and
they help ensure our customers can continue to
operate in their communities around the world.
For our Aviation customers, it means keeping
planes flying by managing the noise and
community impacts caused by aviation activities
in the urban areas surrounding airports. The
extended capabilities in Carbon Emissions and
recently delivered sustainable airspace ANSP
solution positions the Company strongly to pursue
the emerging Net Zero and GHG growth vertical in
Aviation.
Envirosuite’s commitment to solutions facilitating
environmental and social responsibility not only
aligns with current ESG market trends but also
positions us as a leader in the space. For our
EVS Industrial customers, from mines to waste
facilities and a wide range of industrial emitters
that require a social license to operate, we bridge
the relationship with data and insights that drives
community trust and operational optimisation.
Regulatory requirements around the world
continue to move in line with community
expectations for better ESG performance from
companies. Our customers are increasingly
seeking long term technology partners that can
leverage their existing monitoring sensor network
and build upon it to extract greater value from
their data through software platforms. As a
world leader in this space, this helps ensure our
revenues are strong and sustainable.
As mentioned above, I will be stepping down as
Chair of Envirosuite once my successor is named.
I thank all shareholders, fellow board members
and the Envirosuite team for their support and
efforts throughout the process.
Envirosuite is a great company achieving tangible
outcomes for people and industries around
the world. Remember that planes cannot fly
without Envirosuite’s solutions, which service
most of the world’s largest airports. We are also
seeing that mines and other heavy industries are
increasingly reliant on our solutions to continue
their operations in response to regulatory and
community expectations
The new era of environmental and social
governance is with us, and I believe that the
Company has a very strong future.
Sincerely,
David Johnstone
Chair
Chair’s Review
David Johnstone
CHAIR
10
9
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
CEO’s Review
Dear valued shareholders,
This past year has undoubtedly been one of the
most challenging in our Company’s history. The
decline in our share price reflects the difficult
market conditions and the significant headwinds
in our commitment to executing our strategy. We
strongly believe that the foundations we have
laid, coupled with the resilience of our team and
the critical nature of our technology position us
well for future growth and success.
The Company set an objective to deliver positive
Adjusted EBITDA less Capitalised Development
on a run rate basis during FY24. We did not
fully achieve this, primarily due to a shortfall in
anticipated Project Sales and associated non-
recurring revenues. There is always a timing risk
associated with when customers will commission
projects, with several projects expected in FY24
being deferred to FY25. This impact to revenue
was mitigated through active cost management
during the year.
Envirosuite has achieved another year of an
Adjusted EBITDA positive result which was our
stated objective at the start of the year. We have
continually balanced the need of growth as well
as strong fiscal management to deliver these
results. It has been pleasing to see the growth
in both our EVS Aviation and EVS Industrial
portfolios globally and particularly the Americas.
Within EVS Industrial we focused on greater
consistency in our sales velocity, which has
resulted in consistently winning around $1.4m
new ARR per quarter. The key segments that we
achieved growth in was in Mining and Waste,
underpinned by our world leading technology
and strong macro-economic drivers around
environmental and social responsibility and the
Environmental Justice social movement in the
USA. Importantly, the Industrial business typically
has a shorter timeframe from contract signing
to revenue recognition, which improves the pull
through of new ARR to recognised recurring
revenue.
At the end of Q3 we made the decision to
consolidate our EVS Water products under the
EVS Industrial portfolio which leveraged the
significant advancements that we had made in
the capabilities of our newly released software
products in the Water sector. This structural
change led to a cost reduction of approximately
$2.5 million dollars on an annualised basis. Our
cutting-edge technology continues to serve the
Water sector around the world.
In October we announced a debt facility
with Partners for Growth which supports our
operational requirements as we continue to
grow. The facility supports arrangements where
Envirosuite allows customers to bundle their
instrumentation requirements together with
their software and support components into
the recurring payments over the contract term.
The facility also provides funding to support the
Company’s working capital requirements.
From a product perspective we have achieved
several significant milestones which have
helped us grow market share and further
support our customers’ needs, strengthening
our competitive advantage. In EVS Industrial
we deepened our operational optimisation
value proposition with the Omnis platform now
capturing and linking operational response data
to environmental alerts, providing customers
with an understanding of response effectiveness
not previously possible. Within EVS Aviation
we extended the capabilities of our Carbon
Emissions management module to further assist
customers in calculating and reporting on aircraft
greenhouse gas emissions. We also successfully
delivered an innovative combination of existing
EVS Aviation technology to leading air navigation
service provider (ANSP) Nav Canada as a single
automated solution, empowering the customer to
increase their progress around operational and
environmental optimisation and demonstrate that
to communities and external stakeholders.
As many of you may have read there was some
media speculation on interest from private equity
and other strategic investment opportunities
through the year. We managed this process
with the assistance of our professional advisors,
however these enquiries did result in some
substantial one-off costs which we have outlined
in the financial statements. These options have
included partial sale, sale of whole company as
Jason Cooper
CEO
well as strategic investment opportunities. We continue
to explore different strategic options in the interest of
maximising shareholder value and will keep the market
informed in line with our disclosure obligations.
As stated back in the annual reports for FY22 and
FY23, we have a clear focus on our core market sectors
in the EVS Industrial portfolio which includes: Mining,
Industrial, Waste and Wastewater. This has proven to
be successful as we have successfully created a global
brand at the same time, growing our market share in
all four sectors. We have focused on improving Gross
Margin, ARPS, Expansion and Scale opportunities
and increasing customer engagement. This strategy
has had an impact on a higher churn rate in FY24
from previous years as some of the legacy non-core
contracts have come to an end such as construction
contracts. We have also actively managed low margin
contracts which has resulted in our decision to not
renew these contracts in FY24.
Whilst this churn in FY24 has had an impact on the
overall growth of the company, the core growth into
higher margin and long-term contracts was achieved
in FY24. We remain confident that these strategic
decisions to focus on long-term value creation in our
focus sectors are the right ones, as they have resulted
in the Company winning more long-term contracts for
sites and assets that will require our technology for
many years sets us up for further growth in FY25 and
beyond.
Central to our strategy has been the focus on growth
in the Americas and we have been pleased with the
impressive results from this region in FY24. Americas
has continued to provide strong customer acquisition
with meaningful new customer wins as well as
expansion and scale within our existing customer
base. Importantly this has been focused on the
recurring revenue contracts aligned with our core value
proposition. We have certainly been encouraged by the
quality of new customers that the Americas team has
been able to secure and grow through expansion and
scale opportunities, particularly in the Mining sector.
Importantly we have won back customers in this period
that we had previously churned.
EVS Industrial has been the primary growth engine of
the Company and the Mining sector has once again
proven to be our most successful sector in FY24. This
is measured by the increase in ARR, Average Revenue
12
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
11
CEO’s Review
per Site (ARPS), the underlying gross margin as
well as the strong operational improvement we
continue to provide to our customers. We are
highly confident that we are well positioned to
continue our accelerated growth in the Mining
sector with our existing product set that we have
been able to bring to market to date and the
future product development opportunities on our
roadmap.
We have prioritised a customer engagement
focus that drives stronger product adoption as
well as a focus on understanding our customers
needs for both today and well into the future.
This continues to shape the roadmap and ensure
we remain as the market leader in our chosen
segments. We understand our customers operate
in a complex and dynamic environment and
we are committed to supporting them through
this evolving landscape. This represents a
strong growth corridor for our Company and
remains a top priority as we move into FY25. A
critical component of our business model is the
importance of our solution to our customers
around the world. As legislation continues to
evolve, the need for our solutions is becoming
more essential to operate.
One of the pleasing aspects of FY24 has been
the contribution of our staff around the world
leveraging several areas of excellence. In
Santiago, Chile our global solutions and global
modelling teams have helped to rapidly advance
the way that we turn on our Industrial sites and
ensure our customers have highly accurate site-
specific data that they can rely on to make real
time and predictive decisions. We will continue
to invest into this centre of excellence to support
our growth in Mining and the broader EVS
Industrial platform.
At Envirosuite, our people continue to be our
most valuable asset, and we are steadfast in our
commitment to their growth and professional
development and grateful for their efforts and
contributions to our exciting Company. Over the
past year, we have further cultivated a culture
of collaboration, innovation, diversity, and
inclusivity, all of which remain core to our identity.
I want to thank our dedicated workforce for once
again demonstrating remarkable resilience and
adaptability, driving our collective success in an
ever-changing market landscape.
Envirosuite’s strong leadership team has adeptly
navigated complex market dynamics, steering
the Company towards sustained growth and
profitability. The leadership team remains
focused on leveraging our strengths, capitalising
on opportunities, and addressing challenges
with agility and determination. With a clear vision
and strategic direction, we are well-positioned
to capitalise on emerging trends and continue
driving sustainable success.
As we transition into FY25, I am highly
confident we have the right strategy and
focus to accelerate growth. Once again, our
technology has demonstrated its immense value
to governments and industries worldwide. Our
market leadership position in Aviation continues
to set the benchmark globally and we’ve been
proud of the wins that we have announced on
a competitive base, demonstrating that our
technology and our domain knowledge and
expertise are the strong differentiators. Our
pipeline has grown and we continue to work with
Airports and strategic airspace operators to more
deeply penetrate the aviation sector.
The EVS Industrial portfolio, headlined by Omnis
– the world’s leading environmental intelligence
platform – continues to innovate and strengthen
its product differentiation. Our focus on key
accounts that have significant expansion and
scale opportunity will be our primary focus where
we can deploy our technology in a highly scalable
manner, leveraging our existing global footprint
and our efficient processes. We serve customers
in over 40 countries today and our business
model can support rapid acceleration for FY25
and beyond. As we have seen all around the
world, the demand for environmental intelligence,
ESG and Net Zero underpins our confidence that
our addressable market continues to grow year
on year.
We have consistently demonstrated strong
fiscal management over the past few years,
and as we move into FY25, our commitment to
disciplined cash and capital management remains
unwavering. This year, we will build on our global
operational footprint to not only improve our
financial ratios and operating leverage but also to
drive growth and create substantial value for our
shareholders.
Our focus extends beyond efficiency, scalability,
and productivity; we are also deepening
customer engagement and accelerating time-
to-value. These efforts will be pivotal in driving
further improvements across our business
metrics and ensuring sustained growth.
We extend our deepest thanks to David for
his dedicated leadership and invaluable
contributions during his tenure as Chair. His
guidance has been instrumental in steering the
Company through significant milestones, and we
wish him all the best in his future endeavours.
In closing, I want to extend my heartfelt gratitude
to our shareholders for their continued support
and confidence in Envirosuite. Together, we will
embrace the opportunities ahead, driving growth
and enhancing value as we help create a world
where people, planet and industry can partner
and prosper.
Jason Cooper
CEO
14
13
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
Recurring Revenue
# New Sites
Average Revenue
per Site
Total Sites
$18.2m
40
$99k
247
10.9% YoY
21.2% YoY
10.2% YoY
-3.1% YoY
Envirosuite has delivered sustainable revenue
growth within EVS Industrial in FY24 while
deepening its product competitive advantage
and market penetration in its high-value focus
sectors: Mining, Waste, Wastewater and Industrial.
Recurring revenue has grown 10.9% YoY to $18.2m
underpinned by new ARR sales of $5.7m and the
addition of 40 new sites (up 21.2% YoY).
With compelling value propositions strengthened
by further product development, combined with
the intensifying pressure and tightening regulations
around environmental and social responsibility
globally, the portfolio’s foundations are strong and
the Land, Expand and Scale strategy is delivering.
•
Won 31 new high-calibre customer logos.
•
Increased Average Revenue per Site (ARPS)
by 10.2% YoY to $99,000 on the back of
solution expansions and upsells with existing
customers.
•
Average Sites per Customer of 1.2 clearly
indicating significant opportunities to scale
solutions to subsequent sites operated by
existing customers.
The ARPS increase is especially pleasing,
showcasing Envirosuite’s ability to drive adoption
and deliver tangible value to new customers quickly,
accelerating opportunities to grow with those
customers and deepen that value through expanded
offerings and denser monitoring networks.
While some of the Company’s top-line growth in
FY24 has been offset by churn, contract end-of-life
and downsell, much of this offset was expected or
consciously incurred following strategic decisions
in recent years to focus on the four key sectors
and to consolidate the instrumentation strategy to
focus on developing noise and vibration capabilities.
These strategic decisions have enabled a deeper
understanding of customers and their requirements,
resulting in stronger product market fit and brand
awareness. Of the churn that was not consciously
incurred, some of this was attributed to customer
facilities temporarily ceasing production due to
capital works and not requiring a solution during
that period, or force majeure events.
These strategic decisions have also contributed
to the increase in ARPS and will deliver gross
margin improvement long-term, with the
Company:
•
only pursuing high value industries where
facilities require environmental management
solutions to operate, and will be in operation
for decades; and
•
consciously electing not to renew customer
contracts that are non-core or depend on
specific instrumentation that is no longer
supported.
Transitioning into FY25, the Company remains
confident that these strategic decisions will
continue to deliver long-term contracts for
facilities that require environmental intelligence
technology for many years.
Omnis, the Industrial portfolio’s headline product,
extended its competitive advantage over
traditional environmental solutions as innovative
new capabilities were developed during the
year. New community-facing reports and public
portals are now available, helping customers
transparently share environmental performance
data and insights with community stakeholders
to build trust and demonstrate operational
responsibility, including site activity, noise, air
quality, and more.
The recently released ‘Alert Responses’ capability
has significantly strengthened Omnis’ operational
optimisation value proposition, with the platform
now collecting on-site actions taken in response
to the multi-faceted alerts that customers have
configured. Capturing and linking this operational
response data to the alert events provides a
powerful and easily accessible understanding of
mitigation effectiveness not previously possible.
This capability directly supports Triggered Action
Response Plans (TARPs) for mine sites and Odour
Management Plans (OMPs) for waste sites and
wastewater treatment plants, which are critical
components of each industry’s operations.
With customers’ data security requirements
intensifying, the Company continued to
invest in increased data security controls and
systems within the EVS Industrial portfolio.
This investment and the resulting continuous
improvements are strong competitive
differentiators and ensure Envirosuite is well-
positioned to meet and respond to customers’
data security needs.
The Company enters FY25 with a renewed
growth mindset. With proven product offerings,
demonstrated traction in the four focus sectors
but in Mining and Waste in particular, and a
clear Land, Expand and Scale strategy, the EVS
Industrial portfolio is well-positioned to achieve
greater success.
Sustainable growth in high value focus sectors
* As announced on 28 March 2024 via the Australian Stock Exchange (ASX), the EVS Water products were consolidated into the EVS Industrial portfolio
during the financial year. The above EVS Industrial data for both the current and comparative year have been updated to reflect this consolidation.
16
15
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
Site-wide environmental
intelligence at Newmont’s
Cadia Valley Operations
Provide a site-wide environmental
intelligence solution to manage
dust, noise, and odour emissions
as well as water management,
including transparently presenting
environmental performance data
proactively through publicly
accessible community-facing
reports.
As social and regulatory pressures
around environmental impact and
performance intensify, Newmont is
proactively looking to technology
solutions to help it improve outcomes
for surrounding communities, derisk
environmental compliance and
optimise environmental management
and reporting.
PROJECT DESCRIPTION
SELECTED TO
18
17
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
Recurring Revenue
Average Revenue
per Site
$34.6m
$194k
4.6% YoY
-0.3% YoY
Envirosuite continues to compete strongly and win
in the Aviation industry, securing new business
and renewing major customers during FY24 often
through competitive tender processes. EVS Aviation
recurring revenue grew 4.6% YoY (11.7% when
excluding the abnormal churn event in FY23 Q3)
to $34.6m on the back of new ARR sales of $2.2m
during the year and the addition of 10 new airport
sites.
Noise management, flight tracking and community
engagement continue to be key challenges that
airports must manage as part of their operations
and Envirosuite remains the market leader in this
space. Airports and air navigation service providers
(ANSPs) are also increasingly focused on ‘green
aviation’, with many publicly committing to Net
Zero targets. EVS Aviation’s Carbon Emissions
module for airports and the recently delivered
sustainable airspace solution means Envirosuite
is well-positioned to pursue this emerging growth
opportunity.
EVS Aviation has benefited from the successful
execution of the Company’s Land, Expand and Scale
strategy in FY24.
•
Won 6 new customer logos.
•
Maintained high Average Revenue per Site of
$194,000 with new ARR during the year driven
by solution expansions and upsells with existing
customers.
•
Leveraging existing technology to solve new
problems in emerging segments, specifically
with leading ANSP Nav Canada.
Announced in FY23, Nav Canada is seeking to
optimise both the flight experience of airline
passengers and the ground and airborne operational
performance of airports and airlines to deliver
improved environmental outcomes. The customer’s
team has worked alongside Envirosuite during
FY24 and is now using an innovative combination of
Envirosuite’s existing flight path tracking, on-ground
tracking, and Carbon Emissions capabilities. The
single automated solution can measure, analyse
and communicate operational performance
across these four airports, as well as track
additional metrics around flight efficiency and
environmental impact. This capability empowers
Nav Canada to increase their progress around
operational and environmental optimisation,
enabling them to demonstrate these proactive
improvements to communities and external
stakeholders.
The Company hosted its flagship customer
event ‘FORUM23’ for the first time in four years
following the disruption COVID-19 caused to
the industry. Held in both Europe and North
America, the events are an opportunity for
Envirosuite to connect customers with each other
and collaborate on current and future industry
challenges. Attended by a combined 87 users
and decision-makers representing 55 customers,
the events generated significant demand for
expanded solutions including InsightFull, Carbon
Emissions and Noise Modelling, as well as EVS
Industrial solutions for air quality and water
management at airports. Pleasingly, some of
these opportunities are now won and contributed
new ARR. FORUM23 also played a key role in
securing long-term renewals with major airport
customers London Heathrow and Dublin Airport
during the year. London Heathrow is especially
noteworthy as it is one of the world’s leading
airports and uses almost all EVS Aviation
solutions.
Customer retention and upsell remains a core
component within the EVS Aviation portfolio,
with churn remaining very low. However, revenue
growth during the year was impacted by downsell
with some customers at contract renewal, where
the scope of services was reduced. Scope
reduction was typically due to significantly
fewer aircraft operations at some airports, and
competitive pressure on price in some cases.
The Company took significant steps forward
in leveraging its industry leading flight and
operations tracking technology to deliver unique
solutions to address growing sustainability and
environmental pressures facing Aviation. This
innovative approach provides a method for
ANSPs and airports to benchmark their flight
operations’ performance against the established
Civil Air Navigation Services Organisation
(CANSO) standards.
With the industry’s increasing focus on achieving
Net Zero targets, ‘Global Warming Potential’
values were added to the Carbon Emissions
Management module during the year. Further
detail and precision around the emission
calculations was also introduced. These two
enhancements further assist customers in
calculating and reporting on the greenhouse gas
emissions of aircraft operating in their airspace,
which is a key piece in tracking progress against
Net Zero goals.
With customers’ data security requirements
intensifying in recent years, the Company
continues to invest in increased data security
controls and systems within the EVS Aviation
portfolio. This investment and continuous
improvements are strong competitive
differentiators and ensure Envirosuite is well-
positioned to meet and respond to customers’
data security needs.
With demand for noise and community
engagement solutions remaining strong and
new opportunities emerging to cross-sell EVS
Industrial solutions and in the ‘green aviation’
space, combined with Envirosuite’s market
leadership position in the Aviation industry, the
Company enters FY25 well-positioned to achieve
greater success.
# New Sites
10
-37.5% YoY
Global market leader, well-positioned to pursue emerging opportunities
Total Sites
188
0.0% YoY
20
19
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
Long-term renewal and
major expansion with
Dublin Airport Authority
Continue delivering noise and
operations management solutions
and services, and begin providing
localised, dynamic community
engagement portal InsightFull
as well as ANOMS Noise
Quota Management and Airline
Compliance Management modules.
Dublin Airport (DUB) wants to
ensure its operation is not only
adhering to regulations but also
operating and growing sustainably.
To achieve this, DUB requires the
best technology solutions in the
market to ensure it successfully
executes its noise management
strategies, meets its regulatory
obligations and strengthens
community relationships.
PROJECT DESCRIPTION
SELECTED TO
22
21
Envirosuite Annual Report 2024
Envirosuite Annual Report 2024
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) and its
controlled entities (referred to hereafter as the Company, Group or
Envirosuite), for the financial year ended 30 June 2024.
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)
Sue Klose (Non-executive Director)
Stuart Bland (Non-executive Director)
Colby Manwaring (Non-executive Director) - Appointed 1 September 2023
Hugh Robertson (Non-executive Director) - Resigned 1 September 2023
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 year, the principal continuing activities of the Group consisted of the development and sale of environmental
management technology solutions.
Directors’ report
23
Envirosuite Annual Report 2024
Review of operations for the year
Operating results
The loss of the Group after providing for income tax amounted to $32.2m (FY23: $10.3m loss).
$000
FY24
FY23
Movement $
Movement %
Recurring revenue
52,797
49,487
3,310
6.7%
Non-recurring revenue
6,520
8,123
(1,603)
(19.7%)
Other revenue
61
289
(228)
(78.9%)
Total operating revenue
59,378
57,899
1,479
2.6%
Cost of revenue
(29,339)
(28,728)
(611)
(2.1%)
Gross profit
30,039
29,171
868
3.0%
Operating expenses
(42,765)
(40,362)
(2,403)
(6.0%)
Other income / (expense)
(115)
143
(258)
(180.4%)
Impairment of goodwill
(18,327)
-
(18,327)
-
Operating deficit
(31,168)
(11,048)
(20,120)
(182.1%)
Net Loss after tax
(32,248)
(10,278)
(21,970)
(213.8%)
EBITDA
(1,202)
(1,613)
411
25.5%
Adjusted EBITDA
1,073
481
592
123.1%
Other Key Metrics
ARR ($000)
61,092
59,433
1,659
2.8%
Sites
435
443
(8)
(1.8%)
Recurring revenue as %
of total revenue
88.9%
85.5%
3.4%
4.0%
Gross profit % (statutory)
50.6%
50.4%
0.2%
0.4%
Key highlights
•
Recurring revenue increased $3.3m (6.7% growth, 11.4% growth excluding abnormal churn event in FY23). Growth
driven by strong performance in the Americas 13.3% and EMEA 13.8% regions.
•
In addition to customer delays, and local economic conditions impacting non-recurring revenue, the Industrial non-
recurring revenue was impacted by decisions to support Industrial customers to bundle equipment purchases into
their recurring subscription fees, rather than require an outright purchase of monitors and sensors (which would be
recognised as non-recurring revenue). The impact of a higher proportion of customers bundling equipment is also
evident in higher investment spend and balance sheet recognition of monitors and sensors.
•
Gross profit 50.6% (52.5% on an EBITDA basis) increased from 50.4% (51.6% EBITDA basis) demonstrating
Envirosuite’s commitment to achieving gross margin improvement despite challenges in non-recurring revenue
growth.
•
As a percentage of total trading revenue, expenses increased 2.0% from 70.1% to 72.1% in FY24 primarily caused by
an increase in amortisation of software – a result of continued investment into strengthening Envirosuite’s product
offerings.
24
Envirosuite Annual Report 2024
Directors’ report
•
Ongoing improvement in EBITDA of 25.5% ($0.4m) over FY23 directly resulting from the improved margin of $0.9m,
offset by modest expense increases, primarily sales and marketing related initiatives including the ‘FORUM23’
aviation customer events in Europe and the Americas.
•
EBITDA growth in H2 FY24 was adversely impacted by $2.2m of non-recurring costs. These non-recurring costs
related to corporate activity and restructuring initiatives, including the announced strategy change in EVS Water, as
the EVS operating structure continues to evolve to drive profitability goals.
•
Adjusted EBITDA improved by 123.1% to $1.1m in FY24 demonstrating the gross margin improvement along with
prudent cost management.
•
A non-cash impairment charge of $18.3m was recognised from the impairment assessment completed as at 30 June
2024. One of the considerations of the impairment assessment is the market capitalisation of the Company relative to
the overall carrying value of goodwill. Further details on the impairment charge taken up, and assumptions adopted
are set out in Note 13 of the financial statements.
•
The Company set an objective to deliver positive Adjusted EBITDA less Capitalised Development on a run rate basis
during FY24. We did not fully achieve this, primarily due to a shortfall in anticipated Project Sales and associated
nonrecurring revenues. There is always a timing risk associated with when customers will commission projects, with
several projects expected in FY24 being deferred to FY25. This impact to revenue was mitigated through active cost
management during the year.
Revenue by Region
$000
FY24
FY23
Movement $
Movement %
Recurring revenue
Asia Pacific
14,009
15,323
(1,314)
(8.6%)
EMEA
17,586
15,448
2,138
13.8%
Americas
21,202
18,716
2,486
13.3%
Total Recurring revenue
52,797
49,487
3,310
6.7%
Trading revenue
Asia Pacific
16,092
17,359
(1,267)
(7.3%)
EMEA
19,670
17,661
2,009
11.4%
Americas
23,555
22,590
965
4.3%
Total Trading revenue
59,317
57,610
1,707
3.0%
ARR
Asia Pacific
15,092
15,187
(95)
(0.6%)
EMEA
20,286
20,255
31
0.2%
Americas
25,714
23,991
1,723
7.2%
Total ARR
61,092
59,433
1,659
2.8%
Sites
Asia Pacific
111
118
(7)
(5.9%)
EMEA
133
136
(3)
(2.2%)
Americas
191
189
2
1.1%
Number of sites
435
443
(8)
(1.8%)
•
Total recurring revenue increased $3.3m (6.7%) over FY23 with strong growth in in the Americas 13.3% and EMEA
13.8% regions. Excluding the churn event in APAC, total recurring revenue growth was 11.4% over FY23.
25
Envirosuite Annual Report 2024
•
The Company elected to not renew some low margin, non-core recurring revenue contracts during FY24, improving
the quality of the revenue base for future improved profitability, resulting in higher churn during FY24.
•
Non-recurring revenue in all regions was below expectations following customer delays in project commencements and
economic conditions in some countries.
Revenue by Product Family
$000
FY24
FY23
Movement $
Movement %
Recurring revenue
EVS Aviation
34,563
33,052
1,511
4.6%
EVS Industrial (Including Water)*
18,234
16,435
1,799
10.9%
Total Recurring revenue
52,797
49,487
3,310
6.7%
Trading revenue
EVS Aviation
38,742
37,147
1,595
4.3%
EVS Industrial (Including Water)*
20,575
20,463
112
0.5%
Total Trading revenue
59,317
57,610
1,707
3.0%
ARR
EVS Aviation
36,550
36,434
116
0.3%
EVS Industrial (Including Water)*
24,542
22,999
1,543
6.7%
Total ARR
61,092
59,433
1,659
2.8%
Sites
EVS Aviation
188
188
-
-
EVS Industrial (Including Water)*
247
255
(8)
(3.1%)
Total Sites
435
443
(8)
(1.8%)
* As announced on 28 March 2024 via the Australian Stock Exchange (ASX), the EVS Water products were consolidated into the EVS Industrial portfolio during the financial year. The above EVS
Industrial data for both the current and comparative year have been updated to reflect this consolidation.
Continued within EVS Industrial recurring revenue demonstrates the success of the strategic focus on the four high value
sectors: Mining, Industrial, Waste and Wastewater.
EVS Industrial portfolio continues to grow, proportionately representing 34.5% of recurring revenue compared to 33.2%
in FY23 and 29.2% in FY22. Increased Average Revenue per Site (ARPS) by 10.2% YoY to $99k on the back of solution
expansions and upsells with existing customers.
In addition to customer delays, and local economic conditions impacting on non-recurring revenue generally, the Industrial
non-recurring revenue was impacted by decisions to support Industrial customers to bundle equipment purchases into
their recurring subscription fees, rather than require an outright purchase of monitors and sensors.
Envirosuite continues to compete strongly and win in the Aviation industry, securing new business and renewing major
customers during FY24 often through competitive tender processes. EVS Aviation recurring revenue grew 4.6% YoY to
$34.6m (11.7% excluding Q3 FY23 churn event).
26
Envirosuite Annual Report 2024
Directors’ report
Earnings before interest, tax, depreciation and amortisation (EBITDA)
$000
FY24
FY23
Movement $
Movement %
Net loss after tax
(32,248)
(10,278)
(21,970)
(213.8%)
Add back: Tax benefit
(106)
(960)
854
89.0%
Add back: Net finance expense
1,186
190
996
524.2%
Add back: Impairment of goodwill
18,327
-
18,327
-
Add back: Depreciation & amortisation
11,639
9,435
2,204
23.4%
EBITDA
(1,202)
(1,613)
411
25.5%
Less: AASB 16 depreciation & interest
(1,179)
(1,191)
12
1.0%
Add back: Share-based payments
673
743
(70)
(9.4%)
Add back: Foreign currency losses / (gains)
217
(82)
299
364.6%
Add back: Restructuring cost savings
1,486
1,833
(347)
(18.9%)
Add back: Transaction and integration costs
1,078
671
407
60.7%
Add back: Philippines set up costs
-
159
(159)
(100.0%)
Add back: Property make good provisions
-
(39)
39
100.0%
Adjusted EBITDA
1,073
481
592
123.1%
EBITDA is a non-IFRS measure and is calculated by adding back depreciation, amortisation, impairment and interest from
net loss before tax. Adjusted EBITDA also adds back share-based compensation expense, foreign currency gains and
losses and excludes the impacts of adopting AASB 16, as the application of the standard results in operating expenses
being excluded from EBITDA. Additionally, costs which are not seen as recurring are excluded, including restructuring
costs and cost savings, transaction and integration costs and other costs.
Improved EBITDA growth of 25.5% ($0.4m) over FY23 was driven by improved gross margin of $0.9m, offset by modest
expense increases, primarily sales and marketing related initiatives including the ‘FORUM23’ aviation customer events in
Europe and the Americas. H2 FY24 EBITDA growth was suppressed by restructuring, transaction and integration costs.
The Company structure continues to evolve to enable emerging profitability goals to be achieved at the EBITDA metric.
Adjusted EBITDA represents a substantial improvement of 123.1% to $1.1m, realising the gross margin improvement of
$0.9m along with prudent cost management while continuing to invest in future growth through increased sales and
marketing spend.
As part of Envirosuite’s focus on transitioning to profitability through strong operating cost management, the Group
undertook a number of strategic restructuring decisions during FY24, resulting in recurring cost savings of $1.5m.
Transaction and integration costs increased in FY24, and the main elements comprised non-recurring project costs linked
to transformation from physical to cloud based infrastructure, and professional advisor fees linked to corporate activity
costs associated with identifying, pursuing, evaluating and responding to corporate opportunities during the year.
Financial position
$000
FY24
FY23
Movement $
Cash and cash equivalents
3,549
8,277
(4,728)
Borrowings, net of costs
7,720
-
7,720
Current assets
23,970
26,762
(2,792)
Current liabilities
(21,794)
(22,137)
343
Net current assets
2,176
4,625
(2,449)
Total tangible assets
32,637
36,142
(3,505)
Net tangible assets
965
11,351
(10,386)
27
Envirosuite Annual Report 2024
Adjusted operating cash flow
$000
FY24
FY23
Movement $
Movement %
Cash from / (used in) operating activities (statutory)
(2,375)
746
(3,121)
(418.4%)
Less: Capitalised development costs
(5,396)
(5,760)
364
6.3%
Cash (used in) / from operating activities including
capitalised development costs
(7,771)
(5,014)
(2,757)
(55.0%)
Cash and Cash Equivalents decreased by $4.3m during FY24 compared to $8.5m decrease in FY23. Cash outflow of
$4.3m comprised:
•
($2.4m) cash used in operating activities (statutory), FY23 $0.7m inflow
•
($8.1m) cash used in investing activities (including the $5.4m capitalised development costs), FY23 ($8.1m)
•
$6.2m cash provided by financing activities, FY23 ($1.1m) outflow
•
($0.4m) adverse effects of exchange rates, FY23 $0.5m positive
Statutory cash used in operating activities was a ($2.4m) outflow to 30 June 2024, $3.1m higher outflow than FY23, and
factors impacting on this movement include:
•
An increase in funds invested into working capital balances that will drive contracted services and project deliveries
to customers in FY25. The working capital requirements were supported by the securing of a debt facility in the
period (discussed in the financing activities section below). Working capital requirements included:
•
$0.8m increase in trade receivables and accrued income due to timing of contracted billings in Q4 FY24. This
increase has been settled through the receipt of cash post year end.
•
$0.5m increase in inventories / instrumentation in preparation for project implementations in FY25.
•
Offset partially by an increase in revenue in advance $0.7m as customers are billed in advance of service and
project deliveries for Q1 FY25.
•
FY23 inflow was favourably impacted by sustained improvement in accounts receivable collections in the year
following the establishment and impact of the Philippines based centre of excellence and the strict cash management
in place at 30 June 2023.
Cash used in investing activities has remained stable in the current year at ($8.1m) with spend on revenue generating
activities including:
•
($5.4m) cash used in the acquisition of intangible assets, FY23 ($5.8m), which consists of capitalised product
development costs across EVS Aviation and EVS Industrial;
•
($2.7m) in payments for Property, Plant and Equipment, FY23 ($2.3m), which includes investment in revenue
generating assets, and monitors and sensors ($2.2m), FY23 ($1.6m). The increase in equipment is due to EVS
Industrial growth where the Company chooses to bundle monitors and sensors into customer subscriptions rather
than purchasing up-front, triggering growth in recurring revenue rather than non-recuring revenue.
Financing activities resulted in a net inflow of $6.2m as a result of securing a debt facility in October 2023 (refer
Borrowings Note 16 in the financial statements for details) and was comprised of:
•
$8.8m net drawdowns, to support operating and investing activities as outlined above
•
($1.1m) of borrowing costs incurred in setting up the 3 year debt facility and interest payments
•
($1.4m) in payments for lease liabilities related to buildings, FY23 ($1.3m)
Net tangible assets have decreased by $10.4m since 30 June 2023 primarily due to:
•
($7.7m) increase in non-current borrowing liabilities from the securing of the debt facility
•
($4.7m) decrease in cash and cash equivalents
•
$1.9m increase in trade and other receivables, inventory and property, plant and equipment – monitors and sensors
bundled to customers.
Net assets reduced to $85.0m at 30 June 2024 from $116.5m at 30 June 2023 due to the movements in net tangible
assets described above and the impairment and amortization of goodwill of $21.5m.
The Directors continue to monitor the impacts of the current economic climate on Group operations and respond
appropriately to risks identified.
28
Envirosuite Annual Report 2024
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group in the 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 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 2024 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 focused 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, across all product sets, and continuing innovation globally based on customer and
industry feedback;
•
Land, Expand and Scale across all product suites and geographies; and
•
strong regional growth, with regular, replicable scaled growth being achieved in 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
The Group generates more than half of its revenue from the Aviation industry, which leads to a degree of revenue
concentration. The Group manages this risk by running regular sessions on product capabilities and improvements
with customers, in addition to incorporating customer feedback into product design and capabilities ultimately to
improve customer satisfaction. The growth of EVS Industrial and cross sell between customer market segments is
further mitigation of this risk.
•
Acquiring new customers and accelerating sales within all product lines and geographies
Envirosuite’s business strategy drives the acquisition of new customers and accelerate sales globally in a competitive
market where technology and products are changing. The Group participates in industry forums and promotes
its product lines via global marketing opportunities to ensure prominent industry positioning as a global leader in
environmental intelligence.
•
Product capabilities
Operating within a competitive technological market drives the requirement to remain aware of technological
advancements. Through the research and development initiatives, the Group invests in maintaining and growing each
product’s capability as well as ensuring it continues to meet current and future market requirements.
•
Recruitment and retention of employees
The Group regularly reviews its employee value proposition and has developed a range of programs designed to
attract and retain skilled employees and foster diversity and inclusion.
Directors’ report
29
Envirosuite Annual Report 2024
•
Operational risk
Operating in multiple regions, the Group is exposed to the complexity of business operations, including legal and
compliance risks. The Group manages these risks by maintaining an effective risk management framework and
processes, including cyber and data privacy processes.
•
Intellectual property risk
Advanced networks and product security measures, together with appropriate legal restraints are in place to protect
the group’s intellectual property, minimising the risk to the 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.
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 40 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 NexPay Pty Ltd, a global education payments platform and is a founding partner of Cadre Partners which
delivers specialised leadership and mentoring services to CEOs and family businesses. He also consults to Energizer
Solar, a global business delivering a complete solar ecosystem to power homes and lifestyles.
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 (to 1 February 2023),
Member of the Audit and Risk Management Committee (from 1 February 2023).
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 Group 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.
Qualifications - Bachelor of Engineering (Electrical Engineering) from RMIT, EMBA in Entrepreneurship and Innovation from
HEC, France, GAICD
30
Envirosuite Annual Report 2024
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 Aussie Broadband (ASX: ABB) and Acusensus (ASX: ACE) as well as Chair of
Stride Mental Health Pty Ltd.
Qualifications - MBA in Finance, Strategy and Marketing from the JL Kellogg School of Management at Northwestern
University, B.S. Econ from the Wharton School of the University of Pennsylvania, GAICD
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), Member of the Remuneration and Nomination Committee (from 1
December 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 IT technology, cyber security, 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 Officer
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.
Qualifications - B.Ec (Monash), MApp. Fin (Macquarie), FCA, GAICD.
Member of the Remuneration and Nomination Committee (from 1 July 2022 to 31 January 2023), Chairman of the
Remuneration and Nomination Committee (from 1 February 2023), Member of the Audit and Risk Committee (from 1
February 2023).
Colby Manwaring, Director (Appointed 1 September 2023)
Colby is an experienced board member and executive with a proven track record of driving growth in technology
companies in Australia, UK, Spain, and several USA locations. Colby’s most recent executive roles included CEO of multi-
national infrastructure analytics software company, Innovyze, which subsequently sold to software giant Autodesk in
2021 for $1Bn USD ($1.55Bn AUD), where he continued as a Vice President.
Colby has successfully aligned organic growth initiatives to product and people resources to deliver balanced growth and
profitability outcomes. He has also led buy-side and sell-side M&A initiatives for six businesses, in addition to advising on
due diligence and integration planning of over 30 others.
Qualifications - BS and MS in Civil and Environmental Engineering from Brigham Young University, Minor of Engineering
Business Administration from the Brigham Young University Marriott School of Management. License Professional
Engineer 343777-2202 Utah USA
Hugh Roberston, Director (Appointed 1 November 2018 – Resigned 1 September 2023)
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 Longtable Limited
(ASX:LON) and Chair of Credit Clear Limited (ASX: CCR).
Directors’ report
31
Envirosuite Annual Report 2024
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
7,168,245
-
-
Sue Klose
1,000,000
-
-
Stuart Bland
650,194
-
2,000,000
Colby Manwaring
272,846
-
2,000,000
Hugh Robertson1
-
-
-
Executive Director
Jason Cooper
3,150,000
6,000,000
-
1 - Resigned as Non-Executive Director 1 September 2023
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 February 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.
Meetings of directors
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board committee held during the
year ended 30 June 2024, and the number of meetings attended by each director were:
Full Meetings
of Directors
Audit and Risk
Management Committee(*)
Remuneration and
Nomination Committee(*)
2024 Meetings
A
B
A
B
A
B
David Johnstone
9
9
5
5
2
2
Jason Cooper
9
9
-
-
-
-
Sue Klose
9
9
5
5
2
2
Stuart Bland
9
9
5
5
2
2
Colby Manwaring**
7
7
-
-
-
-
Hugh Robertson ***
2
2
-
-
-
-
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.
** Appointed as director effective 1 September 2023
*** Resigned as director effective 1 September 2023
32
Envirosuite Annual Report 2024
Shares under option
Unissued ordinary shares of Envirosuite Limited under option at the date of this report are as follows:
Grant date
Expiry date
Exercise price ($)
Number under option
29-Apr-21
30-May-25
0.20
10,000,000
01-Dec-22
01-Dec-25
0.40
2,000,000
19-Dec-23
19-Dec-26
0.20
2,000,000
Total
14,000,000
•
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.
•
In December 2022, the Company issued 2,000,000 options to Mr Stuart Bland in connection with his appointment to
the Board of Directors.
•
In December 2023, the Company issued 2,000,000 options to Mr Colby Manwaring in connection with his
appointment to the Board of Directors.
No option holder has any right under the options to participate in any other share issue of the Company or any other
related entity.
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 2024 (2023: Nil). Amounts paid or payable to PKF and its related practices for non-audit
and other assurance work totaled $33,919 (2023: $10,952).
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
Directors’ report
33
Envirosuite Annual Report 2024
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 43.
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.
34
Envirosuite Annual Report 2024
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.
Key management personnel covered in this report
B.
Principles used to determine the nature and amount of remuneration and link to performance
C.
Share based compensation
D.
Details of remuneration
E.
Shareholdings of key management personnel
F.
Loans to key management personnel
G.
Other transactions with key management personnel
A.
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 2024 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
Non-Executive Chair
Full Year
Sue Klose
Non-Executive Director
Full Year
Stuart Bland
Non-Executive Director
Full Year
Colby Manwaring
Non-Executive Director
Appointed 1 September 2023
Hugh Robertson
Non-Executive Director
Resigned 1 September 2023
Executive director
Jason Cooper
Chief Executive Officer and Managing Director
Full Year
Executives
Justin Owen
Chief Financial Officer
Full Year
B.
Principles used to determine the nature and amount of remuneration and link to performance
(i)
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
Remuneration Report
35
Envirosuite Annual Report 2024
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 11% of base salary for the financial year ended 30 June 2024, 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’
discretion.
Performance based remuneration
Short-term incentives
(STI)
•
STI is provided to executive KMPs equivalent to between 30% and 50% of their
base pay, where payment is dependent upon satisfaction of certain performance
conditions.
•
STI arrangements are paid out in cash.
Long-term incentives
(LTI)
•
Executive KMP are awarded LTIs to focus the efforts of the executive KMP on
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 FY24 executive KMP remuneration framework
Fixed remuneration1
STI entitlement
LTI entitlement
Jason Cooper
$370,559
50%
Periodic performance right awards
Justin Owen
$339,399
30%
Periodic performance right awards
1. Fixed remuneration is inclusive of superannuation contributions where required by law to be made by Envirosuite
36
Envirosuite Annual Report 2024
FY24 STI outcomes for executive KMP
At the beginning of FY24 each executive KMP was given a target STI opportunity subject to the achievement of financial
and personal targets. For FY24, 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.
For FY24 the STI performance conditions were based on a combination of factors, as summarised below:
ARR
Growth
Total
Revenue
Adjusted
EBITDA1
Management
EBITDA2
Personal
Targets
Total %
Total $
Jason Cooper
Target3
12.5%
10.0%
6.0%
5.0%
16.5%
50%
171,600
Actual4
6.4%
2.9%
0.9%
0.2%
13.7%
24.0%
82,364
Justin Owen
Target3
4.5%
4.5%
6.0%
4.5%
10.5%
30%
93,600
Actual4
2.3%
1.3%
0.9%
0.2%
6.6%
11.2%
35,049
1.
EBITDA is a non-IFRS measure and is calculated by adding back depreciation, amortisation, impairment and interest from net loss before tax. Adjusted
EBITDA also adds back share-based compensation expense, foreign currency gains and losses and excludes the impacts of adopting AASB 16, as the
application of the standard results in operating expenses being excluded from EBITDA. Additionally, costs which are not seen as recurring are excluded,
including restructuring costs and cost savings, transaction and integration costs and other costs.
2.
Management EBITDA (MEBITDA) is Adjusted EBITDA plus R&D costs capitalized.
3.
Expressed as a percentage of total fixed remuneration available on achieving the targeted metric.
4.
Expressed as a percentage of total fixed remuneration achieved based on actual performance against targeted metric.
FY24 LTI outcomes for executive KMP
During the year, no new performance rights were awarded to Mr Cooper, and 2,000,000 performance rights which had
been approved in prior periods, vested.
During the year, Mr Owen received a new LTI award comprising 1,040,000 performance rights. The award is split into two
equal tranches of 520,000 performance rights with a twelve (12) and a twenty-four (24) month vesting period. The vesting
criteria is linked to ongoing employment, continuity in role and responsibility and satisfactory performance, which is
consistent with the vesting criteria used for other executive LTI awards made during the year.
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
Duration of service
agreement
Notice period by
executive
Notice period
by Company
Jason Cooper1
Ongoing
3 months
3 months
Justin Owen
Ongoing
2 months
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.
Remuneration report
37
Envirosuite Annual Report 2024
(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.
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
FY24
FY23
Chair
$120,000
$120,000
Other Directors
$80,000
$80,000
Committee Chair
$10,000
$10,000
Committee Member
$5,000
$5,000
No fees as described above are paid to Directors who hold an employee contract with the Company.
C.
Share based compensation
(i)
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 the Company 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 the
Company 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.
Upon exercising vested options, or vested performance rights, they convert to ordinary shares in the Company and carry
the same dividend and voting rights available to ordinary shareholders.
Details of options and performance rights 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.
38
Envirosuite Annual Report 2024
Options
Financial
year
Balance at
start of year
Granted
Exercised
Forfeited /
Other
Balance at
end of year
Vested and
exercisable
Unvested
Non-executive directors
D. Johnstone
2024
-
-
-
-
-
-
-
2023
-
-
-
-
-
-
-
S. Klose
2024
-
-
-
-
-
-
-
2023
2,000,000
-
-
(2,000,000)
-
-
-
S. Bland
2024
2,000,000
-
-
-
2,000,000
2,000,000
-
2023
-
2,000,000
-
-
2,000,000
2,000,000
-
C. Manwaring
(Appointed 1 Sept
2023)
2024
-
2,000,000
-
-
2,000,000
2,000,000
-
2023
-
-
-
-
-
-
-
H. Robertson
(Resigned 1 Sept
2023)
2024
-
-
-
-
-
-
-
2023
-
-
-
-
-
-
-
Performance rights
Financial
year
Balance at
start of year
Granted
Vested
Forfeited /
Other
Balance at
end of year
Vested and
exercisable
Unvested
Executive director
J. Cooper
2024
8,000,000
-
(2,000,000)
-
6,000,000
-
6,000,000
2023
8,000,000
-
-
-
8,000,000
-
8,000,000
Performance rights
Financial
year
Balance at
start of year
Granted
Vested
Forfeited /
Other
Balance at
end of year
Vested and
exercisable
Unvested
Executives
J. Owen
2024
1,500,000
1,040,000
-
-
2,540,000
500,000
2,040,000
2023
2,000,000
-
(500,000)
-
1,500,000
-
1,500,000
Remuneration report
39
Envirosuite Annual Report 2024
The table below provides additional details on each series of performance rights held by an executive KMP during the
year:
Performance rights
Date of grant
Date of
vesting
Number
granted
Fair value per
right at grant
Fair value of performance
rights at grant
Vesting Criteria
Jason Cooper
1-Jul-211
30-Sep-24
500,000
$0.093
$46,500
2
1-Jul-211
30-Sep-24
1,500,000
$0.071
$106,050
2
1-Jul-211
30-Sep-25
2,000,000
$0.052
$104,600
2
1-Jul-211
30-Sep-26
2,000,000
$0.040
$80,400
2
Justin Owen
24-Jan-22
24-Jan-24
500,000
$0.200
$100,000
2
24-Jan-22
-
500,000
$0.181
$90,282
3
24-Jan-22
-
500,000
$0.168
$84,233
4
1-Jul-23
1-Jul-24
520,000
$0.090
$46,800
2
1-Jul-23
1-Jul-25
520,000
$0.090
$46,800
2
1. Mr Cooper’s performance right targets were amended at the 2022 Annual General Meeting.
2. Vesting criteria includes continuity of employment, continuity in role and responsibility, and satisfactory performance.
3. Vesting requires the Company’s share price to reach or exceed $0.35 per share continuously over a 30 day period.
4. Vesting requires the Company’s share price reaches or exceed $0.50 continuously over a 30 day period.
The Performance Rights Plan rules provide a number of areas where the Board has the right to exercise its discretion.
During the year the Board resolved that it would exercise its discretion for a portion of the share price linked performance
rights held by Mr Owen in the event of a change of control in the Company. The effect of the resolution is that, in the event
of a change of control, the Board will resolve that 50% of each of the $0.35 and $0.50 series of performance rights held by
Mr Owen would be eligible to vest (resulting in a total of 500,000 performance rights vesting). This resolution is subject to
Mr Owen’s continuity of employment.
(ii)
Shares
No shares were granted to KMP during the year, other than shares issued on the exercise of vested performance rights.
40
Envirosuite Annual Report 2024
D.
Details of remuneration
The table below sets out Executive KMP and Director remuneration for the financial year ending 30 June 2024 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)).
Short term
Long term
Share based payments
Remuneration
Financial
year
Salary and fees
$
STI
$
Term benefits
$
Superannuation
$
Ordinary
shares
$
Performance
rights
$
Options
$
Total
$
Non-executive directors
D. Johnstone
2024
130,000
-
-
-
-
-
-
130,000
2023
132,917
-
-
-
-
-
-
132,917
S. Klose
2024
85,586
-
-
9,414
-
-
-
95,000
2023
84,470
-
-
8,447
-
-
-
92,917
S. Bland
2024
95,000
-
-
-
-
-
-
95,000
2023
89,167
-
-
-
-
-
46,000
135,167
C. Manwaring1
2024
66,667
-
-
-
-
-
12,600
79,267
2023
-
-
-
-
-
-
-
-
H. Robertson2
2024
13,333
-
-
-
-
-
-
13,333
2023
-
-
-
-
80,000
-
-
80,000
T. Ebbeck3
2024
-
-
-
-
-
-
-
-
2023
20,000
-
-
-
-
-
-
20,000
Executive directors
J. Cooper
2024
343,200
82,364
20,007
27,399
-
-
-
472,970
2023
330,000
162,250
15,349
25,292
-
164,053
-
696,944
Executives
J.Owen
2024
312,000
35,049
18,231
27,399
-
99,367
-
492,046
2023
300,000
89,000
3,665
25,292
-
108,333
-
526,290
A. Lapsley4
2024
-
-
-
-
-
-
-
-
2023
165,477
-
4,149
6,895
-
-
-
176,521
Total
2024
1,045,786
117,413
38,238
64,212
-
99,367
12,600
1,377,615
2023
1,122,032
251,250
23,163
65,926
80,000
272,386
46,000
1,860,756
1. C. Manwaring was appointed non-executive director on 1 September 2023.
2. H. Robertson resigned as non-executive director on 1 September 2023.
3. T. Ebbeck resigned as non-executive director on 30 September 2022.
4. A. Lapsley resigned as Executive on 13 January 2023.
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.
Remuneration report
41
Envirosuite Annual Report 2024
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
2024
7,168,245
-
-
-
7,168,245
2023
7,033,106
-
-
135,139
7,168,245
S. Klose
2024
500,000
-
-
500,000
1,000,000
2023
500,000
-
-
-
500,000
S. Bland
2024
650,194
-
-
-
650,194
2023
510,194
-
-
140,000
650,194
C. Manwaring1
2024
-
-
-
272,846
272,846
2023
-
-
-
-
-
H. Robertson
2024
22,720,147
-
-
(22,720,147)2
-
2023
22,252,311
467,836
-
-
22,720,147
Executive directors
J. Cooper
2024
1,150,000
-
2,000,000
-
3,150,000
2023
1,000,000
-
-
150,000
1,150,000
Executives
J. Owen
2024
583,309
-
-
-
583,309
2023
23,309
-
500,000
60,000
583,309
Total
2024
32,771,895
-
2,000,000
(21,947,301)
12,824,594
2023
31,386,420
467,836
1,000,000
(77,361)
32,771,895
1. C. Manwaring was appointed non-executive director on 1 September 2023.
2. H. Robertson resigned as non-executive director on 1 September 2023, shares not included in balance at year end.
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
Chair
20 August 2024
42
Envirosuite Annual Report 2024
PKF Brisbane Pty Ltd is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separately owned legal entity and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). Liability limited by a scheme approved under
Professional Standards Legislation.
AUDITOR’S INDEPENDENCE DECLARATION
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 2024, 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.
This declaration is in respect of Envirosuite Limited and the entities it controlled during the year.
PKF BRISBANE AUDIT
TIM FOLLETT
PARTNER
BRISBANE
20 AUGUST 2024
PKF Brisbane Audit
ABN 33 873 151 348
Level 2, 66 Eagle Street
Brisbane, QLD 4000
Australia
+61 7 3839 9733
brisbane@pkf.com.au
pkf.com.au
Notes
2024
$’000
2023
$’000
Trading revenue
Other revenue
59,317
61
57,610
289
Total operating revenue
4
59,378
57,899
Cost of revenue
5a
(29,339)
(28,728)
Gross profit
30,039
29,171
Operating expenses
Sales and marketing
(12,999)
(12,323)
Product development
(13,897)
(12,059)
General and administrative
(15,869)
(15,980)
Total Operating expenses
5a
(42,765)
(40,362)
Other income / (expense)
(115)
143
Impairment of goodwill
13
(18,327)
-
Operating deficit
(31,168)
(11,048)
Net finance expense
5b
(1,186)
(190)
Net loss before tax
(32,354)
(11,238)
Income tax benefit / (expense)
6
106
960
Net loss after tax
(32,248)
(10,278)
Other comprehensive income / (loss)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
(446)
498
Other comprehensive income / (loss) for the year, net of tax
(446)
498
Total comprehensive loss for the year
(32,694)
(9,780)
Net loss attributed to:
Equity holders of Envirosuite Limited
(32,694)
(10,278)
Total comprehensive loss attributable to:
Equity holders of Envirosuite Limited
(32,694)
(9,780)
Cents
Cents
Basic loss per share
23
(2.54)
(0.81)
Diluted loss per share
23
(2.54)
(0.81)
Consolidated Group
FOR THE YEAR ENDED 30 JUNE 2024
CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
The accompanying notes form part of these financial statements.
44
Envirosuite Annual Report 2024
Notes
2024
$’000
2023
$’000
ASSETS
Current Assets
Cash and cash equivalents
7
3,549
8,277
Trade and other receivables
8
11,744
10,962
Inventories
9
4,476
3,936
Other assets
10
4,201
3,587
Total Current assets
23,970
26,762
Non-current Assets
Property, plant and equipment
11
5,749
5,245
Right of use assets
12
1,390
2,110
Deferred tax assets
6
924
1,301
Intangible assets
13
85,697
107,246
Other assets
10
1,528
2,025
Total Non-current assets
95,288
117,927
TOTAL ASSETS
119,258
144,689
LIABILITIES
Current Liabilities
Trade and other payables
14
8,138
8,743
Contract liabilities
14
5,879
5,165
Other liabilities
14
1,526
1,526
Employee benefit provisions
15
5,509
5,545
Lease liabilities
12
742
1,158
Total current liabilities
21,794
22,137
Non-current Liabilities
Employee benefit provisions
15
298
227
Borrowings
16
7,720
-
Lease liabilities
12
1,860
2,427
Deferred tax liabilities
6
2,549
3,382
Total Non-current liabilities
12,427
6,036
TOTAL LIABILITIES
34,221
28,173
NET ASSETS
85,037
116,516
EQUITY
Issued capital
17
181,817
181,352
Reserves
18
1,970
1,666
Retained losses
18
(98,750)
(66,502)
TOTAL EQUITY
85,037
116,516
Consolidated Group
The accompanying notes form part of these financial statements.
AT 30 JUNE 2024
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
45
Envirosuite Annual Report 2024
Notes
Ordinary shares
$’000
Reserves
$’000
Retained losses
$’000
Total Equity
$’000
At 1 July 2022
Comprehensive income / (loss)
180,597
10,798
(65,674)
125,721
Loss for the year
-
-
(10,278)
(10,278)
Other comprehensive income for the year
-
498
-
498
Total Comprehensive income / (loss) for the year
-
498
(10,278)
(9,780)
Transactions with owners, in their capacity as owners, and
other transfers
Shares issued / to be issued to directors
80
-
-
80
Shares issued / to be issued to employees
923
(923)
-
-
Transaction costs of capital raising (tax effect)
(248)
-
-
(248)
Options and performance rights issued - value of services
-
743
-
743
Shares options and performance rights expired or lapsed
-
(9,450)
9,450
-
Total transactions with owners and other transfers
755
(9,630)
9,450
575
At 30 June 2023
181,352
1,666
(66,502)
116,516
At 1 July 2023
Comprehensive income / (loss)
181,352
1,666
(66,502)
116,516
Loss for the year
-
-
(32,248)
(32,248)
Other comprehensive income for the year
-
(446)
-
(446)
Total Comprehensive income / (loss) for the year
-
(446)
(32,248)
(32,694)
Transactions with owners, in their capacity as owners, and
other transfers
Shares issued / to be issued to directors
-
-
-
-
Shares issued / to be issued to employees
680
(680)
-
-
Options and performance rights issued - value of services
-
735
-
735
Shares options and performance rights expired or lapsed
-
(62)
-
(62)
Issue of warrants
16,18
-
757
-
757
Transaction costs of capital raising (tax effect)
(215)
-
-
(215)
Total Transactions with owners and other transfers
465
750
-
1,215
At 30 June 2024
181,817
1,970
(98,750)
85,037
The accompanying notes form part of these financial statements.
FOR THE YEAR ENDED 30 JUNE 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
46
Envirosuite Annual Report 2024
Notes
2024
$’000
2023
$’000
Cash flows from operating activities
Receipts from customers
60,133
59,836
Payments to suppliers and employees
(61,719)
(59,282)
(1,586)
554
Other revenue / (expenses)
(181)
289
Taxes paid
(624)
(149)
Interest received
63
79
Interest paid
(47)
(27)
Net cash (used in) / from operating activities
21
(2,375)
746
Cash flows from investing activities
Payments for property, plant and equipment
(2,660)
(2,292)
Payments for intangible assets
13
(5,397)
(5,760)
Payments of other investing activities
(83)
-
Net cash used in investing activities
(8,140)
(8,052)
Cash flows from financing activities
Net proceeds from borrowings
16
8,832
98
Payment of borrowing transaction costs
(526)
-
Payment of interest and other finance costs
(652)
-
Repayment of lease liabilities
(1,433)
(1,292)
Net cash from / (used in) financing activities
6,221
(1,194)
Net decrease in cash and cash equivalents
(4,284)
(8,500)
Effects of exchange rate changes on cash and cash equivalents
(434)
485
Cash and cash equivalents at the beginning of the financial year
8,277
16,292
Cash and cash equivalents at the end of the year
3,549
8,277
Consolidated Group
FOR THE YEAR ENDED 30 JUNE 2024
CONSOLIDATED STATEMENT OF CASH FLOWS
The accompanying notes form part of these financial statements.
47
Envirosuite Annual Report 2024
49 (1.) Summary of material accounting policies
58 (2.) Financial risk management
60 (3.) Segment information
61
(4.) Revenue
62 (5.) Expenses
63 (6.) Tax
64 (7.) Cash and cash equivalents
64 (8.) Trade and other receivables
65 (9.) Inventories
65 (10.) Other assets
65 (11.) Property, plant and equipment
66 (12.) Right of use assets and lease liabilities
67 (13.) Intangible assets
69 (14.) Trade and other payables
69 (15.) Employee benefit provisions
70 (16.) Borrowings
71
(17.) Issued capital
72 (18.) Reserves and retained losses
73 (19.) Commitments and contingencies
73 (20.) Related party transactions
74 (21.) Cash flow statement reconciliation
75 (22.) Share based payments
76 (23.) Earnings per share
76 (24.) Subsequent events
76 (25.) Parent entity financial information
77
Consolidated Entity Disclosure Statement
78
Directors Declaration
Notes to Financial
Statements
48
Envirosuite Annual Report 2024
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 20 August 2024 by the directors of the Company.
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
(a)
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.
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.
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 performance rights – the Group has issued performance rights in connection with long-term incentive
arrangements with key management personnel. 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 together with future tax planning strategies. Refer to Note 6 for details for the unused
tax losses.
•
Valuation of share warrants – the Group has issued Share warrants in connection with the establishment of the debt facility
with Partners for Growth (refer Note 16 for further details). The share warrants have been valued by external advisors
using a Monte Carlo simulation methodology.
•
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.
NOTES TO FINANCIAL STATEMENTS
For the Financial Year Ended 30 June 2024
49
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(a)
Basis of preparation
•
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 20 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.
50
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(c)
Business Combinations (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.
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.
51
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(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
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 as a contract asset. Where the customer pays upfront for services that
have not yet been provided revenue in advance, a contract liability, is recognised, which is disclosed on the face of the balance
sheet as revenue in advance.
Contract assets also include costs to fulfil contracts and sales commission. The Group amortises the fulfilment costs on a straight-line basis across the
contract term with the customer as part of the cost of sales.
(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 which is expected to be settled in the next 12 months is recognised in the current employee benefit provision..
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.
52
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(g) Employee benefits (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.
53
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(h)
Income tax (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.
54
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(k)
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 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(q)) 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
5 years
•
Customer relationships
5 years
•
Brand value
5 years
55
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(n) Intangible assets (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)
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.
(q)
Borrowings
Loans and borrowings are initially recognised at the fair value of consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an
effective yield basis, within finance costs in the statement of comprehensive income.
The Group derecognises financial liabilities when the obligations of the Group are discharged, cancelled or have expired.
(r)
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.
56
Envirosuite Annual Report 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(s)
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.
(t)
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.
(u)
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
•
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
(v)
Warrants
Share warrants issued by the Company in connection with the establishment of financial liabilities are recorded as transaction
costs under AASB 9: Financial Instruments. The fair value of the Warrants recorded as transaction costs are subsequently
measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective yield basis,
within finance costs in the statement of comprehensive income.
Once the share warrants are exercised, the amount recognised in the reserve is transferred to issued capital on issue of shares.
If the share warrants are forfeited, or they expire, the amounts recognised in the reserve will be transferred to accumulated losses.
(w)
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.
(x)
Comparative information
Certain comparatives have been reclassified to conform with current year presentation. This has not had any material impact on
the financial position of the Group as at 30 June 2023 or the results for the year then ended.
(z)
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 2024. The Group not yet assessed the impact of these
new or amended Accounting Standards and Interpretations.
57
Envirosuite Annual Report 2024
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. The
board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange
risk, credit risk, and investment of excess liquidity.
(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 2024 was $12,670k (2023: $12,398k) (excluding provision for
impairment) 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 industrial
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 2024,
the Group had cash and cash equivalents of $3,549k (2023: $8,277k).
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) and excluding non-recurring
costs (“Adjusted Operating Cash Flow”) was an outflow $6,640k (2023: $3,170k).
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecasted cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at reporting date:
2024
$’000
2023
$’000
Partners for Growth VI, L.P.
3,668
-
The following are the undiscounted contractual cashflows of the Group’s financial liabilities based on their contractual maturity
dates as at 30 June 2024. It is broadly representative of the exposure throughout the year.
2024
Non-derivative financial liabilities
1 year or less
$‘000
1 – 5 years
$‘000
Over 5 years
$‘000
Remaining
Contractual
maturities
$‘000
Non-interest bearing
Trade payables
2,544
- -
2,544
Accruals and other payables
5,594
-
-
5,594
Interest bearing – fixed and variable
rate
Lease liabilities
742
1,860
-
2,602
Loan from Partners for Growth
-
8,832
-
8,832
Total non-derivatives
8,880
10,692
-
19,572
2023
Non-derivative financial liabilities
1 year or less
$‘000
1 – 5 years
$‘000
Over 5 years
$‘000
Remaining
Contractual
maturities
$‘000
Non-interest bearing
Trade payables
3,852
- -
3,852
Accruals and other payables
4,891
-
-
4,891
Interest bearing – fixed and variable
rate
Lease liabilities
1,158
2,427
-
3,585
Loan from Partners for Growth
-
-
-
-
Total non-derivatives
9,901
2,427
-
12,328
58
Envirosuite Annual Report 2024
2.
FINANCIAL RISK MANAGEMENT (continued)
Noting the Company’s demonstrated ability to raise cash from investors and debt financiers when required to fund growth
initiatives, along with strong fiscal management, positive Adjusted EBITDA and operating cashflows, 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.
As noted in Note 16, Group’s debt facility is subject to debt covenants. If the Group were to breach those debt covenants in the
future, the Group may be required to repay those debts earlier than indicated in the table above.
(c)
Foreign currency risk
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 77% of the Group’s revenue for the period ended 30 June 2024 was earned in foreign currency (2023:
74%). The Group primarily has exposure to Euro (EUR), US dollar (USD), Canadian dollar (CAD), British pound (GBP), Chinese
renminbi (CNY), Taiwan dollar (TWD) and Brazilian Real (BRL) 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”).
2024
2023
$‘000
Exposure
(AUD)
-10%
+10%
Exposure
(AUD)
-10%
+10%
BRL
540
60
(49)
1,111
123
(101)
CAD
646
72
(59)
714
79
(65)
CNY
1,375
153
(125)
1,707
190
(155)
EUR
1,569
174
(143)
2,748
305
(250)
GBP
1,239
138
(113)
1,021
113
(93)
TWD
1,277
142
(116)
1,638
182
(149)
USD
2,807
312
(255)
3,632
404
(330)
Other
780
86
(70)
1,016
114
(92)
Total
10,233
1,137
(930)
13,587
1,510
(1,235)
59
Envirosuite Annual Report 2024
3.
SEGMENT INFORMATION
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.
Regional
2024
$‘000
Asia Pacific
EMEA
Americas
Corporate
Total
Recurring revenue
14,009
17,586
21,202
-
52,797
Non-recurring revenue
2,083
2,084
2,353
-
6,520
Other revenue
-
-
-
61
61
Total Operating revenue
16,092
19,670
23,555
61
59,378
Cost of revenue
(7,236)
(10,702)
(11,401)
-
(29,339)
Gross profit
8,856
8,968
12,154
61
30,039
Operating expenses
(2,559)
(2,798)
(4,831)
(32,577)
(42,765)
Other income / (expense)
-
-
-
(115)
(115)
Impairment of goodwill
(8,012)
(10,315)
-
-
(18,327)
Operating deficit
(1,715)
(4,145)
7,323
(32,631)
(31,168)
Net finance expense
(25)
(1)
(21)
(1,139)
(1,186)
Net loss before tax
(1,740)
(4,146)
7,302
(33,770)
(32,354)
2023
$‘000
Asia Pacific
EMEA
Americas
Corporate
Total
Recurring revenue
15,323 15,448 18,716
-
49,487
Non-recurring revenue
2,036 2,213 3,874
-
8,123
Other revenue
-
-
- 289 289
Total Operating revenue
17,359
17,661 22,590 289 57,899
Cost of revenue
(8,380)
(9,191)
(11,158)
-
(28,728)
Gross profit
8,979
8,470
11,432
289
29,171
Operating expenses
(3,054)
(2,682)
(4,696)
(29,930)
(40,362)
Other (expense) / income
-
-
- 143 143
Operating deficit
5,925
5,788
6,736
(29,498)
(11,048)
Net finance expense
(24)
(4) 18
(180)
(190)
Net loss before tax
5,901
5,784
6,754
(29,678)
(11,238)
60
Envirosuite Annual Report 2024
3.
SEGMENT INFORMATION (continued)
The Group has a secondary operating segment which is each product family, being EVS Aviation and EVS Industrial.
CODMs are provided with reporting on the recurring and non-recurring revenue for these secondary operating segments.
As announced on 28 March 2024 via the Australian Stock Exchange (ASX), the EVS Water products were consolidated into the
EVS Industrial portfolio during the financial year. The above table for both the current and comparative year have been updated
to reflect this consolidation.
Product family
2024
$‘000
EVS Aviation EVS Industrial*
Corporate
Total
Recurring revenue
34,563
18,234
-
52,797
Non-recurring revenue
4,179
2,341 -
6,520
Other revenue
-
-
61
61
Total Operating revenue
38,742
20,575
61
59,378
2023
$‘000
EVS Aviation EVS Industrial*
Corporate
Total
Recurring revenue
33,052
16,435
-
49,487
Non-recurring revenue
4,095
4,028
- 8,123
Other revenue
-
-
289
289
Total Operating revenue
37,147
20,463 289 57,899
* EVS Water was consolidated into the EVS Industrial portfolio during the 2024 financial year. The above segment notes for both
the current and comparative year have been updated to reflect this consolidation.
4.
REVENUE
2024
$’000
2023
$’000
Recurring revenue
52,797
49,487
Non-recurring revenue
6,520
8,123
Trading revenue
59,317
57,610
Other revenue
61
289
Other revenue
61
289
Total Operating revenue
59,378
57,899
The Group generated 12% of its total income and 13% of its recurring income from the Australian government and entities
controlled by the Australian government (2023: 15% and 16%).
61
Envirosuite Annual Report 2024
5.
EXPENSES
a(i).
Expenses by Function
The Group categorises expenses within the Consolidated Income Statement based on the function of the expense.
2024
$’000
2023
$’000
Cost of revenue and operating expenses
Cost of revenue
(29,339)
(28,728)
Total operating expenses
(42,765)
(40,362)
Total cost of revenue and operating expenses
(72,104)
(69,090)
a(ii).
Expenses by Nature
The table below discloses expenses based on the nature of the expense.
Employment costs
(39,497)
(37,776)
Share based compensation
(673)
(743)
Consultants and contractors
(3,776)
(3,444)
Professional fees
(2,317)
(2,430)
Computer expenses
(8,759)
(8,370)
Equipment costs
(2,357)
(3,744)
Building costs
(1,007)
(1,135)
Director’s fees
(423)
(416)
Audit and audit related fees
(370)
(369)
Depreciation and amortisation (excl intangible asset – software amortisation)
(6,177)
(5,647)
Other operating expenses
(6,682)
(6,739)
Sub-total
(72,038)
(70,813)
Software development cost - capitalised
5,396
5,511
Intangible asset – software amortisation
(5,462)
(3,788)
R&D costs capitalised, net
(66)
1,723
Total cost of revenue and operating expenses
(72,104)
(69,090)
b.
Net finance expense
Finance income
2024
$’000
2023
$’000
Interest income
63
79
Total finance income
63
79
Finance expense
Interest and finance costs on borrowings
(652)
-
Interest expense using the effective interest rate
(170)
-
Interest and finance costs on leases
(249)
(243)
Other
(178)
(26)
Total finance expense
(1,249)
269
Net finance expense
(1,186)
(190)
c.
Auditors’ remuneration
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:
2024
$’000
2023
$’000
PKF Brisbane
213
224
Related firms (PKF overseas firms)
140
128
Non-related firms
17
17
Total Remuneration of auditors
370
369
62
Envirosuite Annual Report 2024
6.
TAX
(a)
Income tax expense / (benefit)
2024
$’000
2023
$’000
Current tax expense / (benefit)
565 228
Deferred tax expense / (benefit)
(671)
(1,188)
Total Income tax expense / (benefit)
(106)
(960)
(b)
Reconciliation of income tax expense to prima facie tax payable
Prima facie tax benefit on operating deficit at 30.0% (2023: 30.0%)
(9,706)
(3,371)
Effect of foreign exchange on profit / loss
(69)
47
Tax effects of items which are non-deductible / (non-assessable) in
calculating taxable income:
Non-allowable items (including R&D expenditure)
46
37
Share based payments expensed during the year
202
223
Difference in offshore tax rates
(98)
(101)
Impairment of goodwill
5,498
-
Add / (less):
Under / (over) provision for income tax in prior year
976
122
Deferred tax valuation allowance increase
3,045
2,083
Total Income tax expense / (benefit)
(106)
(960)
(c) Deferred income tax
2024
Opening
Balance
$’000
Recognised in
profit or loss
$’000
Charged
directly to
Equity
$’000
Effect of
foreign
exchange
$’000
Deferred
Tax Asset
$’000
Deferred
Tax Liability
$’000
Trade and other receivables
184
(47)
-
- 137
-
Inventory
69
10
-
- 79
-
Property, plant and equipment
(26)
(41)
-
1
-
(66)
Right of use asset and lease
liability
434
(75)
-
- 359
-
Intangible asset
(6,528)
690
-
-
-
(5,838)
Revenue in advance
365
(126)
-
- 239
-
Employee provisions
1,220
(49)
-
- 1,171
-
Issued capital
338
-
(215)
- 122
-
Net DTA / (DTL)
-
-
-
-
(3,355)
3,355
Tax losses
18,018
3,354
-
(1) 21,372
-
Valuation allowance
(16,155)
(3,045)
-
-
(19,200)
-
Balance at 30 June 2024
(2,081)
671
(215)
-
924
(2,549)
63
Envirosuite Annual Report 2024
6.
TAX (continued)
The Group has unused tax losses of $62,557,010 (2023: $51,939,898) and R&D tax offsets of $3,004,417 (2023: $2,898,391) for
which a valuation allowance of $19,200,296 (2023: $16,155,178) has been placed against the related deferred tax asset of
$21,371,675 (2023: $18,017,884).
7. CASH AND CASH EQUIVALENTS
2024
$’000
2023
$’000
Cash at bank
3,549 8,177
Term deposits
- 100
Cash and cash equivalents
3,549
8,277
Term deposits in 2023 were 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.
8.
TRADE AND OTHER RECEIVABLES
2024
$’000
2023
$’000
Trade receivables
7,524 7,349
Provision for impairment
(1,165)
(1,436)
Trade receivables, net
6,359
5,913
Contract assets
5,292 4,884
Other debtors
93 165
Trade and other receivables
11,744
10,962
Trade receivables, net aging analysis
Not past due
4,071
3,978
Past due 1-30 days
1,111
943
Past due 31-60 days
536
255
Past due 61-90 days
206
231
Past due more than 91 days
435
506
Total
6,359
5,913
Fair value and credit risk
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.
2023
Opening
Balance
$’000
Recognised in
profit or loss
$’000
Charged
directly to
Equity
$’000
Effect of
foreign
exchange
$’000
Deferred
Tax Asset
$’000
Deferred
Tax Liability
$’000
Trade and other receivables
252
(68)
-
-
184
-
Inventory
169
(100)
-
- 69
-
Property, plant and equipment
(28)
2
-
-
-
(26)
Right of use asset and lease
liability
151
283
-
- 434
-
Intangible asset
(6,653)
125
-
-
-
(6,528)
Revenue in advance
328
37
-
- 365
-
Employee provisions
1,123
97
-
- 1,220
-
Issued capital
586
-
(248)
-
338
-
Net DTA / (DTL)
-
-
-
-
(3,172)
3,172
Tax losses
15,123
2,895
-
1 18,018
-
Valuation allowance
(14,073)
(2,083)
-
-
(16,155)
-
Balance at 30 June 2023
(3,022)
1,188
(248)
1
1,301
(3,382)
64
Envirosuite Annual Report 2024
9.
INVENTORIES
2024
$’000
2023
$’000
Inventories
4,476
3,936
Inventories
4,476
3,936
Inventories are carried at the lower of cost or net realisable value.
10.
OTHER ASSETS
2024
$’000
2023
$’000
Prepayments
1,885
1,745
Deposits
790
316
Loan note receivable
1,526
1,526
Other current assets
4,201
3,587
Prepayments
43
2
Deposits
1,485
2,023
Other non-current assets
1,528
2,025
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.
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 half of the 2025 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.
2024
Furniture and
fixtures
$’000
Computer
equipment
$’000
Monitors and
sensors
$’000
Leasehold
improvements
$’000
Total
$’000
Cost value
Balance at 1 June 2023
423 2,047 9,712 1,811 13,993
Additions
26
104
336
8
474
Transfer from inventories
-
-
2,186
-
2,186
Reclassifications
-
-
(201)
-
(201)
Disposals
(2)
(50)
(176)
-
(228)
Effect of foreign exchange
(13)
(36)
(314)
(9)
(372)
Balance at 30 June 2024
434
2,065
11,543
1,810
15,852
Accumulated depreciation
Balance at 1 June 2023
(295)
(1,496)
(6,475)
(482)
(8,748)
Depreciation for the period
(52)
(258)
(1,237)
(246)
(1,793)
Reclassifications
-
-
(63)
-
(63)
Disposals
-
39
76
-
115
Effect of foreign exchange
9
29
338
10
386
Balance at 30 June 2024
(338)
(1,686)
(7,361)
(718)
(10,103)
Net book value
96
379
4,182
1,092
5,749
65
Envirosuite Annual Report 2024
11.
PROPERTY, PLANT AND EQUIPMENT (continued)
2023
Furniture and
fixtures
$’000
Computer
equipment
$’000
Monitors and
sensors
$’000
Leasehold
improvements
$’000
Total
$’000
Cost value
Balance at 1 June 2022
477
1,822 7,830
546 10,675
Additions
16
180 -
1,372 1,568
Transfer from inventories
-
- 1,586
- 1,586
Disposals
(78)
(3)
(25)
(120)
(226)
Effect of foreign exchange
8
48
321
13 390
Balance at 30 June 2023
423 2,047
9,712
1,811 13,993
Accumulated depreciation
Balance at 1 June 2022
(290)
(1,191)
(5,245)
(441)
(7,167)
Depreciation for the period
(62)
(297)
(1,010)
(147)
(1,516)
Disposals
62
2 19 108 191
Effect of foreign exchange
(5)
(10)
(239)
(2)
(256)
Balance at 30 June 2023
(295)
(1,496)
(6,475)
(482)
(8,748)
Net book value
128 551 3,237 1,329 5,245
12.
RIGHT OF USE ASSETS AND LEASE LIABILITIES
Right of use assets
2024
$’000
2023
$’000
Balance at 1 July
2,110 1,711
Additions
210 1,332
Depreciation
(929)
(949)
Effect of foreign exchange
(1) 16
Total right of use assets
1,390
2,110
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 2024 was $249,434 (2023: $242,635) and is included within net finance expense on the
Consolidated Income Statement.
Lease liabilities
2024
$’000
2023
$’000
Current
742 1,158
Non-Current
1,860 2,427
Total lease liabilities
2,602
3,585
66
Envirosuite Annual Report 2024
13.
INTANGIBLE ASSETS
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.
2024
Goodwill
$’000
Internally
developed
software
$’000
Acquired
software
$’000
Other intangibles
$’000
Total
Cost value
Balance at 1 July 2023
89,552
20,378
10,942 6,616
127,488
Additions
-
4,829
-
568
5,397
Effects of foreign exchange
(29)
-
-
-
(29)
Balance at 30 June 2024
89,523
25,207
10,942
7,184
132,856
Accumulated amortisation
Balance at 1 July 2023
-
(9,674)
(6,987)
(3,581)
(20,242)
Amortisation for the period
-
(4,957)
(2,183)
(1,450)
(8,590)
Impairment expense
(18,327)
-
-
-
(18,327)
Balance at 30 June 2024
(18,327)
(14,631)
(9,170)
(5,031)
(47,159)
Net book value
71,196
10,576
1,772
2,153
85,697
2023
Goodwill
$’000
Internally
developed
software
$’000
Acquired
software
$’000
Other intangibles
$’000
Total
$’000
Cost value
Balance at 1 July 2022
89,551
15,523
10,942
5,960
121,976
Additions
-
4,855
- 656
5,511
Effects of foreign exchange
1
-
-
-
1
Balance at 30 June 2023
89,552
20,378 10,942
6,616
127,488
Accumulated amortisation
Balance at 1 July 2022
-
(6,313)
(4,803)
(2,208)
(13,324)
Amortisation for the period
-
(3,361)
(2,183)
(1,373)
(6,917)
Write-off
-
-
(1)
-
(1)
Balance at 30 June 2023
-
(9,674)
(6,987)
(3,581)
(20,242)
Net book value
89,552
10,704 3,955
3,035 107,246
Impairment tests
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:
2024
$’000
2023
$’000
Asia Pacific
29,702
37,743
EMEA
19,386
29,701
Americas
22,108
22,108
Total Goodwill allocated
71,196
89,552
67
Envirosuite Annual Report 2024
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.
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
Asia Pacific
Americas
EMEA
Budget period
1 year from 1 Jul 24
1 year from 1 Jul 24
1 year from 1 Jul 24
Forecast period
4 years from 1 Jul 25
4 years from 1 Jul 25
4 years from 1 Jul 25
Four-year revenue compound annual
growth rate post year 1
9.43%
10.78%
9.99%
Post tax discount rate
13.40%
14.40%
13.90%
Terminal growth rate
2.61%
1.90%
1.90%
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.
Impairment
At 30 June 2024, a non-cash goodwill impairment loss of $18,327k was recognised in the Consolidated Income Statement and
Statement of Comprehensive Income.
This was a result of impairment testing undertaken whereby the carrying amount of the Asia Pacific CGU exceeded the
recoverable amount by $8,012k, in addition to the EMEA CGU’s carrying amount exceeding its recoverable amount by $10,315k
based on long term cash flow forecasts prepared for the purpose of assessing impairment. These long-term impairment cash flow
forecasts applied a reduction in CAGR due to the actual growth in APAC and EMEA being less than anticipated which triggered an
impairment loss. The impairment calculation assumes historical growth rate assumptions in line with accounting standards and
regulatory guidance requirements and should not be interpreted as management expectations for future growth.
As at 30 June 2024, the recoverable amount of the Asia Pacific CGU was $34,024k and the EMEA CGU was $26,750k.
No impairment was noted in relation to the Americas CGU.
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 5.6% and 6.0% for the CGU based upon market factors for countries where
the CGU resides
68
Envirosuite Annual Report 2024
14.
TRADE AND OTHER PAYABLES
2024
$’000
2023
$’000
Trade payables
2,544 3,852
GST / VAT payable
990 717
Accrued expenses
437 277
Other payables
4,167
3,897
Total Trade and other payables
8,138
8,743
REVENUE IN ADVANCE
2024
$’000
2023
$’000
Revenue in advance
5,879
5,165
Total Revenue in advance
5,879
5,165
Revenue in advance is a contract liability and is recognised in accordance with the revenue recognition accounting policy at Note 1(f).
OTHER LIABILITIES
2024
$’000
2023
$’000
Loan note payable
1,526
1,526
Total Other liabilities
1,526
1,526
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
2024
$’000
2023
$’000
Current
Balance at 1 July
5,545
4,527
Additional provisions
4,558
6,010
Amounts used
(4,683)
(4,854)
Unused amounts reversed
89
(138)
Balance at 30 June
5,509
5,545
Non-current
Balance at 1 July
227
160
Additional provisions
146
95
Unused amounts reversed
(75)
(28)
Balance at 30 June
298
227
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 provision for long
service leave which is not expected to be settled within 12 months after the end of the period is presented as non-current.
69
Envirosuite Annual Report 2024
16.
BORROWINGS
Non-current liabilities
2024
$’000
2023
$’000
Loan from Partners for Growth VI, L.P. (PFG)
8,832
-
Put Liability - PFG
862
Warrants
(1,491)
-
Capitalised borrowing costs
(483)
-
Balance at 30 June 2024
7,720
-
Loan from Partners for Growth VI, L.P. (PFG)
On 6 October 2023, the Group secured a debt facility of $7,500,000 from Partners for Growth VI, L.P. (PFG), a San Francisco Bay
based provider of growth funding solutions to technology companies. On 22 April 2024, the Group further extended the facility
with PFG to a total facility limit of $12,500,000. The original interest rate and term of the facility remained unchanged post the
extension signed on 22 April 2024.
The purpose of the facility was to support certain contractual arrangements where Envirosuite allows customers to bundle their
instrumentation requirements together with their software and support components into the recurring payments over the contract
term. The facility is also intended to provide funding to support the Company’s working capital requirements.
The Group has drawn down $8,832,000 of the facility during the year. The remaining $3,688,000 is available for immediate
drawdown.
The PFG facility is for a term of 36 months from 6 October 2023 with interest variable over the life of the facility. The interest rate
is the greater of the 3 months BBSW rate plus 7.75% pa and 11.75% pa.
The borrowings are secured by a general first ranking security charge over the assets of the Company. All other debt is
subordinated to PFG’s loan unless permitted by PFG or mandatory by law to have priority.
Warrants – 6 October 2023
As part of the original loan agreement, the Group issued warrants to PFG Nominees, an associate entity of Partners for Growth on
the following terms:
•
EVS received cash consideration of $78.78 in exchange for 13,638,900 Warrants issued to PFG to the total value of
$750,000, exercisable at $0.055 with a 5-year term to expiry (6 October 2028).
•
PFG may choose a cashless exercise such that they will receive the difference between the total number of shares that
may be applied to under the Warrants and $750,000. The value difference is determined based on the 10-day VWAP
prior to exercise.
•
In lieu of exercising the Warrants, PFG have the option to put the Warrants to the Company for $750,000. The Warrants
can only be put upon a change of control (including a sale), liquidation or upon expiry.
Warrants – 22 April 2024
As part of the facility extension, the Group issued warrants to PFG Nominees, an associate entity of Partners for Growth on the
following terms:
•
EVS received cash consideration of $67.94 in exchange for 9,743,994 Warrants issued to PFG to the total value of
$500,000, exercisable at $0.051 with a 5-year term to expiry (22 April 2029).
•
PFG may choose a cashless exercise such that they will receive the difference between the total number of shares that
may be applied to under the Warrants and $500,000. The value difference is determined based on the 10-day VWAP
prior to exercise.
•
In lieu of exercising the Warrants, PFG have the option to put the Warrants to the Company for $500,000. The Warrants
can only be put upon a change of control (including a sale), liquidation or upon expiry.
As at 30 June 2024, a total of 23,382,894 warrants were on issue by the Group to PFG Nominees.
During the financial year, the Group had the warrants independently valued by a third party using a Monte Carlo Simulation
model.
The fair value of the warrants under the third-party valuation was calculated at $1,619,000. The warrants (including the imbedded
put option) issued have been treated as a transaction cost under AASB 9: Financial Instruments, refer Note 18 for details on the
valuation methodology.
Loan covenants
Under the terms of the PFG facility, the Group is required to comply with the following financial reporting covenants at the end of
each month:
•
Borrowing base
•
Minimum unrestricted cash balance of $1.5m with 100% of this balance held by entities in Australia, Canada, Denmark,
United Kingdom, United States of America, Spain and Brazil.
•
Minimum revenue covenant – The company must maintain a minimum average consolidated subscription recurring
revenue of $3.5m based upon trailing 12-month period.
The Group has complied with all PFG covenants throughout the financial year, including the above specified financial reporting
covenants. There are no indications that the Group may have difficulties complying with PFG’s covenants moving forward.
70
Envirosuite Annual Report 2024
16.
BORROWINGS (continued)
Financing arrangements & covenants
Unrestricted access was available at year end reporting date to the following lines of credit.
2024
$’000
2023
$’000
Total facilities
Partners for Growth VI, L.P.
12,500
-
Used at the reporting date
Partners for Growth VI, L.P.
8,832
-
Unused at the reporting date
Partners for Growth VI, L.P.
3,668
-
17.
ISSUED CAPITAL
Movements in the number of ordinary shares on issue during the financial year is presented in the following table.
2024
2024
2023
2023
Movements in ordinary shares
Number
$’000
Number
$’000
Balance at 1 July
1,261,606,466 181,352 1,255,268,970 180,597
Issue of ordinary shares - employee performance rights
6,672,167
680 5,869,660 923
Issue of ordinary shares - directors
-
- 467,836 80
Transaction costs of capital raising (inc. tax effect)
-
(215)
-
(248)
Other movements
(6,430)
-
-
-
Ordinary shares on issue at 30 June
1,268,272,203
181,817 1,261,606,466 181,352
Options
For the year ended 30 June 2024, the Company issued the following options:
•
2,000,000 issued to directors with an exercise price of $0.20 each that expire on 19 December 2026.
For the year ended 30 June 2023, the Company issued the following options:
•
2,000,000 issued to directors with an exercise price of $0.40 each that expire on 1 December 2025.
At reporting date, the Company had the following options on issue:
•
10,000,000 issued to investors with an exercise price of $0.20 each that expire on 30 May 2025.
•
2,000,000 issued to directors with an exercise price of $0.40 each that expire on 1 December 2025.
•
2,000,000 issued to directors with an exercise price of $0.20 each that expire on 19 December 2026.
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.
Share based payments
Executive performance rights issued to employees for the year ended 30 June 2024 totalled 8,630,040 (30 June 2023:
6,418,226), 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 2024 was 0.89x (30 June 2023: 1.03x)
At 30 June 2024, the Group had cash and cash equivalents of $3,549k as well as unused borrowing facilities totalling $3,668k.
71
Envirosuite Annual Report 2024
18.
RESERVES AND RETAINED LOSSES
Reserves
2024
$’000
2023
$’000
Foreign exchange translation reserve
Balance at 1 July
(409)
(907)
Effects of foreign exchange translation
(446)
498
Foreign exchange translation reserve – balance at 30 June
(855)
(409)
Share based payments reserve
Balance at 1 July
2,075
11,705
Share based payments expense – net
(7)
(180)
Transfer to retained losses
-
(9,450)
Share based payments reserve – balance at 30 June
2,068
2,075
Warrants reserve
Balance at 1 July
-
-
Issue of warrants
757
-
Warrants reserve – balance at 30 June
757
-
Total Reserves
1,970
1,666
Retained losses
Balance at 1 July
(66,502)
(65,674)
Transfer from share based payments reserve
-
9,450
Net loss for the year
(32,248)
(10,278)
Retained losses – balance at 30 June
(98,750)
(66,502)
Nature and purpose of reserves
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.
Warrant reserve
The warrant reserve is used to recognise the fair value of warrants issued by the Company. The warrants are independently
valued by a third party using a Monte Carlo Simulation model. Once the share warrants are exercised, the amount recognised in
the reserve is transferred to issued capital on issue of shares. If the share warrants are forfeited, or they expire, the amounts
recognised in the reserve will be transferred to retained losses.
In 2024, the Group issue warrants to PFG Nominees with a fair value of $1,619,000. The call option component of the warrant has
been recorded within Warrants reserve ($757k), with the put option component of the warrant being recorded as a put option
liability ($862k) – refer Note 16.
The value of the warrants included in the warrant’s equity reserve was calculated by an independent valuation expert using the
Monte Carlo Simulation Methodology.
The assumptions used in the valuation are as follows:
Warrants Tranche #1
Warrants Tranche #2
Exercise Price ($)
$0.055
$0.051
Share price at grant date ($)
$0.059
$0.056
Grant date
6 October 2023
22 April 2024
Expiry date
6 October 2028
22 April 2029
Volatility
65.0%
65.0%
Risk free rate
4.124%
3.966%
Dividend yield
0%
0%
Value of call option component of warrant ($)
$0.0332
$0.0312
Value of put option component of warrant ($)
$0.0378
$0.0356
Total value per warrant (call + put component) ($)
$0.0710
$0.0668
Total number of warrants issued
13,638,900
9,743,994
72
Envirosuite Annual Report 2024
18.
RESERVES AND RETAINED LOSSES (continued)
Dividends
The Group has not paid or declared any dividends during the period (2023: nil). Franking credits available for subsequent financial
years amount to $653,889 (2023: $653,889).
19.
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 $1,404,217 (30 June
2023: $1,786,068).
20.
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 2024.
The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:
2024
$’000
2023
$’000
Short-term employee benefits
1,202
1,397
Post-employment benefits
64
66
Share based payments
112
398
Total KMP compensation
1,378
1,861
Parent entity
The parent entity within the Group is Envirosuite Limited.
Subsidiaries
Entity Name
Country of Incorporation
2024
%
2023
%
Envirosuite Operations Pty Ltd (1)
Australia
100
100
Envirosuite Holdings Pty Ltd
Australia
100
100
Envirosuite Holdings No 2 Pty Ltd (1)
Australia
100
100
Envirosuite Australia No 2 Pty Ltd (1)
Australia
100
100
EMS Bruel & Kjaer Pty Ltd (1)
Australia
100
100
Envirosuite Brasil Comercializacao De Equioamentos Ltda.
Brazil
100
100
Envirosuite Canada Inc.
Canada
100
100
Envirosuite Chile SpA
Chile
100
100
Beijing Envirosuite Environmental Science & Technology. (2)
China
100
100
Hengli Ruiyan Environmental Engineering Co. Ltd. (2)
China
100
100
Envirosuite Colombia S.A.S. (2)
Colombia
100
100
Envirosuite Denmark Aps
Denmark
100
100
Envirosuite BV
Netherlands
100
100
Envirosuite Philippines Inc (3)
Philippines
100
-
Envirosuite Korea Ltd
South Korea
100
100
Envirosuite Europe Sociedad Limitada
Spain
100
100
Envirosuite Iberica S.A.
Spain
100
100
Envirosuite Taiwan Ltd
Taiwan
100
100
Envirosuite UK Ltd
United Kingdom
100
100
Envirosuite Corp
United States of America
100
100
Envirosuite Inc
United States of America
100
100
(1)
These subsidiaries are part of a tax consolidated group with Envirosuite Limited as the head entity and taxpayer in respect
of the Group.
(2)
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.
(3)
Envirosuite Philippines Inc was established July 2023.
73
Envirosuite Annual Report 2024
20.
RELATED PARTY TRANSACTIONS (continued)
Transactions with other related parties
There were no other transactions with related parties during the financial year.
21.
CASH FLOW STATEMENT RECONCILIATION
Reconciliation of net profit / (loss) after tax to net cash flow from operations
2024
$’000
2023
$’000
Loss after tax
(32,248)
(10,278)
Add back: Depreciation and amortisation
11,639 9,435
Add back: Non-cash share based payments
673 743
Add back: Finance costs
823
-
Add back: Impairment of goodwill
18,327
-
Add back: Foreign exchange (gain) / loss
162
260
Sub-total
(624)
160
Changes in operating assets and liabilities
(Increase) / decrease in trade receivables
(782) 1,486
(Increase) / decrease in inventories
(540)
(1,581)
(Increase) in other assets
(117)
(812)
(Increase) / decrease in deferred tax
(456)
(941)
Increase in trade and other payables
109 1,349
Increase in employee benefit provisions
35 1,085
Net cash outflow from operating activities
(2,375)
746
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
2024
$’000
2023
$’000
Balance at 1 July
3,585
2,251
Repayment of lease liabilities
(1,433)
(1,292)
Finance charges
249 243
Acquisition of leases
210 2,549
Termination of leases
-
(182)
Effects of foreign exchange
(9)
16
Balance at 30 June
2,602
3,585
74
Envirosuite Annual Report 2024
22.
SHARE BASED PAYMENTS
The Group issued options and performance rights to employees and directors as compensation for services provided.
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. No shares were issued under the Employee Share Plan during the year (2023: nil).
Performance rights
Under the Envirosuite Performance Rights Plan, Envirosuite issues performance rights to employees, 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.
There were 8,630,040 performance rights issued during the year (2023: 6,418,226).
Number of Performance
Rights
Performance rights outstanding at 30 June 2022
17,931,675
Issued
6,418,226
Exercised
(5,869,660)
Forfeited / lapsed
(2,175,000)
Performance rights outstanding at 30 June 2023
16,305,241
Issued
8,630,040
Exercised
(6,672,167)
Forfeited / lapsed
(795,887)
Performance rights outstanding at 30 June 2024
17,467,227
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 directors to deliver long term shareholder
returns. Participation in the plan is at the Board's discretion and no individual has a right to receive any guaranteed benefits. The
options issued during the financial year were to a Non-Executive Director following shareholder approval at the Annual General
Meeting.
Set out on the following pages are summaries of options granted.
Number of options
Weighted average
exercise price $
Options outstanding at 30 June 2022
108,750,000
0.22
Granted
2,000,000
0.40
Expired
(98,750,000)
0.40
Options outstanding at 30 June 2023
12,000,000
0.23
Granted
2,000,000
0.20
Options outstanding at 30 June 2024
14,000,000
0.23
At 30 June 2024, there were 14,000,000 options (2023: 12,000,000) that were exercisable at a weighted average price of $0.23
per share (2023: $0.23 per share). The weighted average remaining life of the options outstanding is 1.15 years (2023: 1.92 years).
75
Envirosuite Annual Report 2024
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
2024
number
2023
number
Basic earnings per share
1,268,272,203
1,261,606,466
Diluted earnings per share
1,268,272,203
1,261,606,466
There are 14,000,000 share options (2023: 12,000,000) issued and 17,467,227 (2023: 16,305,241) 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 1,206,117,336 (2023: 1,236,340,861).
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
2024
$’000
2023
$’000
Assets
Current assets
146
158
Non-current assets
151,722
164,883
Total Assets
151,868
165,041
Liabilities
Current liabilities
702
617
Non-current liabilities
10,270
1,457
Total Liabilities
10,972
2,074
Equity
Issued capital
181,817
181,352
Reserves
2,825
2,075
Retained losses
(43,746)
(20,460)
Total Equity
140,896
162,967
Income Statement and Statement of Comprehensive Income
2024
$’000
2023
$’000
Profit / (loss) after tax
(23,286)
(2,817)
Total comprehensive profit / (loss)
(23,286)
(2,817)
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 2024
76
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
AT 30 JUNE 2024
Entity Name
Type of entity
% of
Share
Capital
Country of
Incorporation
Australian
resident or
foreign
resident
Countries of
residence for tax
purpose
Parent entity
Envirosuite Limited
Body corporate
n/a
Australia
Australia
Australia
Controlled Entities
Envirosuite Operations Pty Ltd
Body corporate
100
Australia
Australia
Australia
Envirosuite Holdings Pty Ltd
Body corporate
100
Australia
Australia
Australia
Envirosuite Holdings No 2 Pty Ltd
Body corporate
100
Australia
Australia
Australia
Envirosuite Australia No 2 Pty Ltd
Body corporate
100
Australia
Australia
Australia
EMS Bruel & Kjaer Pty Ltd
Body corporate
100
Australia
Australia
Australia
Envirosuite Brasil Comercializacao De
Equioamentos Ltda.
Body corporate
100
Brazil
Foreign
Brazil
Envirosuite Canada Inc.
Body corporate
100
Canada
Dual (1)
Canada / Australia
Envirosuite Chile SpA
Body corporate
100
Chile
Foreign
Chile
Beijing Envirosuite Environmental Science
& Technology.
Body corporate
100
China
Dual (1)
China / Australia
Hengli Ruiyan Environmental Engineering
Co. Ltd.
Body corporate
100
China
Dual (1)
China / Australia
Envirosuite Colombia S.A.S.
Body corporate
100
Colombia
Foreign
Colombia
Envirosuite Denmark Aps
Body corporate
100
Denmark
Dual (1)
Denmark / Australia
Envirosuite BV
Body corporate
100
Netherlands
Dual (1)
Netherlands /
Australia
Envirosuite Philippines Inc
Body corporate
100
Philippines
Dual (1)
Philippines /
Australia
Envirosuite Korea Ltd
Body corporate
100
South Korea
Dual (1)
South Korea /
Australia
Envirosuite Europe Sociedad Limitada
Body corporate
100
Spain
Dual (1)
Spain / Australia
Envirosuite Iberica S.A.
Body corporate
100
Spain
Dual (1)
Spain / Australia
Envirosuite Taiwan Ltd
Body corporate
100
Taiwan
Dual (1)
Taiwan / Australia
Envirosuite UK Ltd
Body corporate
100
United
Kingdom
Dual (1)
United Kingdom /
Australia
Envirosuite Corp
Body corporate
100
United States
of America
Dual (1)
United States of
America / Australia
Envirosuite Inc
Body corporate
100
United States
of America
Dual (1)
United States of
America / Australia
(1)
As of 30 June 2024, based on the interpretations required for the purpose of the making a consolidated entity
disclosure statement in accordance with Section 295(3A) of the Corporations Act, these subsidiaries had Australia as
an additional tax residency to their country of incorporation.
Basis of preparation
This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and
includes information for each entity that was part of the consolidated entity as at the end of the financial year in accordance
with AASB 10 Consolidated Financial Statements.
Determination of tax residency
Section 295 (3A) (vi) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax Assessment
Act 1997. The determination of tax residency involves judgement as there are different interpretations that could be adopted,
and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
•
Australian tax residency: The consolidated entity has applied current legislation and judicial precedent, including
having regard to the Tax Commissioner’s public guidance in Tax Ruling TR 2018/5.
•
Foreign tax residency: The consolidated entity has applied current legislation and judicial precedent in the
determination of foreign tax residency.
77
Envirosuite Annual Report 2024
DIRECTORS DECLARATION
In accordance with a resolution of the directors of Envirosuite Limited, the directors of the Company declare that:
•
In the directors’ opinion, the attached financial statements and notes comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements.
•
In the directors’ opinion, the attached financial statements and notes comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in Note 1 to the financial
statements;
•
In the directors’ opinion, the attached financial statements and notes give a true and fair view of the Group's financial
position as at 30 June 2024 and of its performance for the financial year ended on that date; and
•
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
•
In the directors’ opinion, the attached consolidated entity disclosure statement is true and correct.
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.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
David Johnstone
Chairman
20 August 2024
78
Envirosuite Annual Report 2024
This page has intentionally been left blank
79
Envirosuite Annual Report 2024
PKF Brisbane Pty Ltd is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separately owned legal entity and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). Liability limited by a scheme approved under
Professional Standards Legislation.
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) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2024, 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, and notes to the
consolidated financial statements, including material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
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 Group’s financial position as at 30 June 2024 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 Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For the matter below, our description of how our audit addressed the matter is
provided in that context.
PKF Brisbane Audit
ABN 33 873 151 348
Level 2, 66 Eagle Street
Brisbane, QLD 4000
Australia
+61 7 3839 9733
brisbane@pkf.com.au
pkf.com.au
Envirosuite Annual Report 2024
80
Carrying amount of intangible assets
Why significant
How our audit addressed the key audit matter
As at 30 June 2024 the carrying value of
intangible assets is $85,697,000 (2023:
$107,246,000), as disclosed in Note 13. For
the year ended 30 June 2024 an impairment
loss of $18,327,000 was recognised, as
disclosed in Note 13.
The Group’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 asset balance
(being 72% of total assets) and the
impairment loss;
•
the significant audit effort required
to test the Group’s impairment
assessment; and
•
the level of judgement applied in
evaluating management’s
assessment of impairment.
As outlined in Notes 1 and 13, management
assessed the carrying amount of intangible
assets through impairment testing utilising a
fair value less costs of disposal model in
which significant judgements are applied in
determining key assumptions. Specifically,
management prepared a discounted cash
flow model utilising the income approach.
The key assumptions 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 the
carrying amount of intangible assets, and
accordingly the amount of impairment
charge recorded.
In assessing this key audit matter, our work included,
but was not limited to, the following to consider,
whether the Group’s methodology for assessing
impairment is in accordance with AASB 136:
Impairment of Assets:
•
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;
•
challenging the key assumptions used in
management’s fair value less costs of disposal
model by:
- assessing projected revenue growth rates set
by management in comparison 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 forecasted costs to ensure
appropriate costs are included commensurate
to the achievement of revenue forecasts
- evaluating terminal value growth rates and
calculations
•
assessing the appropriateness of any changes
in model and key assumptions;
•
assessing the appropriateness of the CGU
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.
81
Envirosuite Annual Report 2024
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
82
Envirosuite Annual Report 2024
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 Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the group financial report. 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.
83
Envirosuite Annual Report 2024
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2024.
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 2024 complies
with section 300A of the Corporations Act 2001.
PKF BRISBANE AUDIT
TIM FOLLETT
PARTNER
BRISBANE
20 August 2024
84
Envirosuite Annual Report 2024
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable at 14 August 2024.
1. SHAREHOLDING
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Size of holding
Shares Options
Performance
Rights
1 – 1,000
106
-
-
1,001 – 5,000
640
-
-
5,001 – 10,000
668
-
-
10,001 – 100,000
2,041
-
3
100,001 and over
1,061
3
17
4,516
3
20
The number of shareholdings held in less than marketable parcels was 98 with total shares of 3,357.
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
Number held
Percentage
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
215,022,638
16.95%
UBS NOMINEES PTY LTD
79,656,975
6.28%
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.
85
Envirosuite Annual Report 2024
1. SHAREHOLDING (continued)
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Number held
Percentage
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
215,022,638
16.95%
UBS NOMINEES PTY LTD
79,656,975
6.28%
CITICORP NOMINEES PTY LIMITED
45,806,664
3.61%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
43,895,235
3.46%
RUBINO GROUP PTY LTD
31,250,000
2.46%
MR ROBIN ORMEROD & MS KRISTIN ZEISE
30,359,342
2.39%
TOM HADLEY ENTERPRISES PTY LTD
23,000,000
1.81%
THE ADAMS MCLEAN SUPERANNUATION FUND PTY LTD
21,014,705
1.66%
COALWELL PTY LIMITED
20,700,000
1.63%
BUNGEELTAP PTY LTD
15,127,217
1.19%
BSD PTY LTD
14,000,000
1.10%
MUTUAL TRUST PTY LTD
13,612,019
1.07%
BRIGHTX PTY LTD
12,068,348
0.95%
HENDO FAMILY SUPERANNUATION PTY LTD
11,200,000
0.88%
THIRTY-FIFTH CELEBRATION PTY LTD
11,042,286
0.87%
HOSANDA CORPORATION PTY LIMITED
10,050,000
0.79%
SPECTRIS GROUP HOLDINGS LTD
10,000,000
0.79%
MISS MENGJIAO ZHAO
8,648,889
0.68%
FORDHOLM CONSULTANTS PTY LTD
8,615,955
0.68%
MR DAVID JAMES MCARTHUR
8,000,000
0.63%
633,070,273
49.92%
Unquoted equity securities
Number held
Unlisted options over ordinary shares issues
14,000,000
Performance rights over ordinary shares issued
17,467,227
86
Envirosuite Annual Report 2024
www.envirosuite.com