APPENDIX 4E STATEMENT
(Listing rule 4.3A)
IDENTITII LIMITED
FINAL REPORT
for the year ended 30 June 2022
Results for announcement to the market
1. Revenues from ordinary
activities
30 June 2022
$
1,457,627
30 June 2021
$
1,364,197
% change to prior year
up
7%
2. Loss after tax attributable
(4,833,962)
(5,825,443)
down
17%
to members
Dividend information
3.
Total dividend per ordinary share
No dividends were proposed for the year ending 30 June 2022 and 30 June 2021.
4. Record date for determining entitlements to the final dividend
Not applicable
5. Net tangible asset per security
Net tangible assets
30 June 2022
30 June 2021
$
7,432,594
$
4,945,118
Number of shares Number of shares
Total number of ordinary shares of the Company
200,809,923
151,791,071
Net tangible asset backing per ordinary security
$0.04
$0.03
This information should be read in conjunction with any public announcements made in the period by Identitii
Limited in accordance with continuous disclosure requirements of the Corporations Act 2001 and Listing Rules.
Additional information supporting the Appendix 4E disclosure requirements can be found in the Director’s Report
and the Consolidated Financial Report for the year ended 30 June 2022, which has been independently audited
by RSM. The Independent Audit Report by RSM is included in the Consolidated Financial Report for the year
ended 30 June 2022.
Report Title
1
Identitii Limited
Annual Report FY22
Contents
A letter from our Chairperson ............................................................................. 3
A letter from our CEO......................................................................................... 4
Directors Report ................................................................................................. 6
Auditor’s Independence Declaration ................................................................ 21
Consolidated Statement of Profit or Loss and Other Comprehensive Income . 22
Consolidated Statement of Financial Position .................................................. 24
Consolidated Statement of Changes in Equity ................................................. 26
Consolidated Statement of Cash Flows ........................................................... 28
Notes to the Consolidated Financial Statements .............................................. 30
Directors’ Declaration ....................................................................................... 74
Independent Auditor’s Report .......................................................................... 75
Additional ASX Information .............................................................................. 80
Corporate Directory .......................................................................................... 82
About Identitii
Identitii is helping regulated entities
build trust and ensure clarity,
confidence and compliance.
Identitii Limited
Annual Report FY22
Chairperson’s Letter
A letter from our
Chairperson
“We have been through a year of change and relentless
focus on market opportunity. I am delighted by the
extraordinary commitment of the people and their
unwavering belief in the business's future success.”
Tim Phillipps, Board Chairperson
Dear Fellow Shareholder,
The regulatory environment in which our company
operates has continued to evolve in FY22, as has
how we help our customers and the industry
respond to those challenges. We are now well
positioned with exemplary leadership, a team
deeply experienced in the payments environment,
and an agile and cost-effective technology
platform to truly take advantage of the growing
market opportunity.
With the support and tireless efforts of our CEO
and commercial and product team, we have
successfully navigated our way through a well-
planned and considered period of rebuilding and
laying solid foundations for future growth. We
have and will continue to focus on the right
outcomes to deliver real market penetration and
long-term shareholder value.
Market context and future opportunity
The growth of digital payments platforms and
channels remains constant. Volumes of payment
activity continue to increase. As new payment
providers enter the market and the breadth of
payment regulations seems to expand endlessly,
the challenges the industry faces in reaching and
demonstrating compliance become more
complex.
Our focus on capturing, managing and reporting
payment transactions efficiently and
comprehensively creates significant compliance
confidence for payment providers and regulators.
This is the essence of our future market
opportunity—a comprehensive store of payment
activity and simplified technology to make sense
of it.
Focus on product and sales
Our product team has positioned our business
incredibly well to take advantage of the emerging
market opportunity with a highly efficient and agile
technology that enables our platform to
incrementally serve many more sectors and
geographically diverse clients while
simultaneously reducing the cost to serve. This
will drive significant long-term value.
Equally, it has positioned the sales and marketing
team to attack the accessible market with
confidence. This impact is already evident in a
very deep and diverse pipeline of potential clients.
Our team
The team assembled over the past 12 months is
nothing short of extraordinary. They deeply
understand the payments sector, have captured
the opportunity, and implemented a product
strategy that will monetise demand for the future.
The platform the team has built, and continues to
expand, provides a strong foundation for growth in
a remarkably short time. I continue to be
encouraged by the team's focus on client
experience and delivering our strategic
aspirations. They are cohesive and culturally
strong, and I am confident they will drive the
future.
Board expansion
We have also recently expanded our board to
ensure a balanced and appropriate diversity of
sector skills, experience and strategic thinking to
enhance our success. I am pleased to welcome
Rhyll Gardner and Simon Griffin to the Board.
Rhyll has an extensive career in banking,
including senior executive positions with St.
George, Westpac, BOQ and Suncorp. She has a
proven track record of managing market risk and
compliance, including digitising operations. She
has lived and breathed the challenges that Identitii
now solve.
Simon is a senior executive experienced in
helping high-growth, technology-led businesses to
grow and scale. He was the CEO of xe.com and
the merged HiFX business, executing a strategy
to ensure XE became an internationally
recognised payments provider and adding value
and bottom-line results.
I am excited by the work the team has done over
the past 12 months and am confident that as a
result, our journey forward will be successful and
drive shareholder value for the future. I am
honoured to have been invited to Chair this very
capable team.
Tim Phillipps, Board Chairperson
3
Identitii Limited
Annual Report FY22
A letter from our CEO
A letter from
our CEO
Dear shareholders and friends,
Thank you for your support and interest in Identitii.
I am pleased to report that during FY22 the
Company made strong progress on our plans to
drive mass adoption of our technology platform in
Australia, New Zealand and other global markets.
In addition to our brand, the Company progressed
four critical assets which should materially
increase our market capitalisation in the coming
year/s.
We invested in People to rapidly increase the
level of payments expertise within the Company,
which has changed our technology strategy and
our sales process, enabling faster customer
growth. We invested in our Platform so
prospective customers can experience our
technology, which has already increased the
speed of deals through our pipeline, also enabling
faster customer growth. We invested in our
Patent, advancing the program to monetise our
US Patent, and applications in several other
important global markets, which collectively have
massive value creation potential. We supported
our investment in Payble together with
Commbank’s x15ventures, which is starting to
show encouraging signs of growth having
delivered several key milestones throughout the
year.
The innovation adoption curve
Identitii is innovating the way reporting entities
(financial services businesses) compile, review
and submit mandatory transaction reporting to
government regulators, currently in Australia with
New Zealand next, then potentially the Canadian
market and other global markets to follow. These
reporting obligations are certainly not new, but the
use of cloud technology to augment or replace
manual processes, to reduce non-compliance risk,
to reduce human error risk, to reduce operating
costs, and to enable data trend analysis – is
relatively new. The Company is capitalising on an
emerging opportunity where industry focus and
investment is being driven by Boards, Executive
teams and Government regulators. We are at the
initial “innovators” stage of the innovation adoption
curve and investing in sales and marketing to
accelerate into the “early adopters” and then
“early majority” stages.
Payments industry expertise
Without question, the biggest asset of any
business is its people. Since inception, Identitii
has always attracted great people, highly
motivated and capable individuals that have built
the Company we are today. Over the past twelve
months, particularly since our Chief Commercial
Officer, Joe Higginson, joined us from Investec
Bank in the UK, the Company has been heavily
focused on attracting people who have worked
with our prospective customers, who understand
the scale and complexity of the problem we’re
solving and how buying processes work. Having
this experience in the business is critical to our
future success, to ensure we’re building the right
solutions, projecting the right messages, and
converting interest into customers. We have made
enormous gains in critical functions like sales,
product, operations and finance, that will
contribute significantly to progressing our plans.
One platform strategy
As a function of its early growth plans, Identitii
currently maintains several slightly different
products, hosted on physical and multiple cloud
environments for HSBC Hong Kong, HSBC
Australia, Mastercard and (together) the balance
of our current and future customers, who sit on
the new Identitii SaaS platform. These early
strategic growth decisions have created friction
between the need to service existing, bespoke
customer contracts, and the need to build a
scalable future. The great news is that with
payments industry expertise has come achievable
plans, that are already well underway, to resolve
this complexity by focusing on only one platform,
one cloud environment, one product roadmap and
one future. This new “one platform strategy” is
already showing benefits and in the coming year
should deliver lower technology costs, higher
sales conversion rates and ultimately faster
growth.
Our investment in Payble
Payble, Identitii’s joint venture with CommBank’s
x15ventures, is the world’s first “bill payment
engagement platform”, helping large billing
organisations in Australia solve the problem that
each year more than 75 million bills aren’t paid on
time. Several key early-stage milestones were
delivered in FY22, laying solid foundations for
4
Identitii Limited
Annual Report FY22
A letter from our CEO
future growth in Payble and the value of Identitii’s
investment. These milestones include their first
customer, Energy On, going live on the platform to
validate the technology; three new large billing
customers signing contracts, in City of Kingston,
Moreton Bay Regional Council and Cessnock City
Council; becoming the first consumer payments
company in Australia to be granted Consumer
Data Right (CDR) accreditation; and receiving
further capital investment from CommBank,
accompanied by the appointment of Elise
Fairbairn, Managing Director, Institutional Banking
& Markets to the Board of Directors.
Summarising the year
We continue to see growing interest from across
the industry, in Australia and New Zealand, and
several other global markets, for an automated
solution to manual regulatory reporting processes.
We have focused heavily on building a team of
industry experts to ensure the Company is well-
placed to capitalise on these opportunities, and
we have designed and implemented a cloud
technology strategy to ensure it is easy to
experience our platform and make rapid buying
decisions. We also welcomed several new
customers to the new Identitii SaaS platform this
year further validating our strategy, including
Novatti Group and both Standard Chartered and
Rabobank in Australia. Reflecting on FY22, I am
confident the Company has put the right
foundations in place, ensuring we are well-placed
to move quickly along the innovation adoption
curve in the year ahead.
I hope you enjoy reading our annual report. Thank
you for your continued support of the Board, the
Executive and our Team.
Regards,
John Rayment
Chief Executive Officer
FY22 Highlights
H1
● Global payments company Novatti
signed three-year licence
● Standard Chartered Australia signed
three-year licence
● New SaaS platform launched to boost
addressable market
● Strategic initiatives to monetise US
patent progress
● Novatti went live with SaaS platform for
AUSTRAC reporting
● HSBC launched DART, built on Identitii
technology, in Australia and Singapore
Identitii platform processes over 1.5
million payment messages
●
● CBA invested additional $0.7 million in
Payble
● $0.9 million R&D Tax Incentive rebate
received in relation to FY21
● $7.4 million raised via Placement and
Shareholder Rights Issue
H2
● Rabobank signed five-year licence
● New platform sandbox released
enabling accelerated new customer
growth
● New Board welcomes former banking
and international payments CEOs
● New CFO with former ANZ, Thomson
Reuters and Nestle experience
● Revenue from customers up 7% from
FY21
● 684% growth in revenue from
customers (FY18-FY22)
5
Identitii Limited
Annual Report FY22
Directors Report
Directors Report
The Directors present their report together with the consolidated financial statements of the Group comprising
of Identitii Limited (the Company) and its subsidiaries for the year ended 30 June 2022 and the auditor’s report
thereon.
Directors
The Directors of the Company at any time during the year ended 30 June 2022 and up to the date of this report
are:
Name, qualification and independence status
Experience, special responsibilities and other
directorships
Executive
Mr. John Rayment
Dip Proj Mgt, Dip Bus Mgmt, Dip Bus Mktg
Executive Director
Non-Executive
Mr. Timothy Phillipps
Dip Arts
Independent Non-Executive Director
Chairperson
Ms. Rhyll Gardner
B. Comm, B. Econ, M. Applied Finance, MBA
(Exec), F FIN, GAICD
Independent Non-Executive Director
Appointed 2 June 2022
John brings a wealth of experience to Identitii,
having supported many early-stage ventures
through sharp periods of growth. He has held
board and executive roles at Travelex across the
globe and has proven success in helping
businesses to scale in line with rapidly expanding
customer demand.
John is the Chief Executive Officer/Managing
Director of the Company.
Tim is a Financial Crime and RegTech expert
with 45 years of industry experience, most
recently at Deloitte, where he held Global and
Asia-Pacific roles in financial crime compliance
and analytics, and prior to that with ASIC as
Director of Enforcement.
Member of the Audit and Risk Committee and
member of the Nomination and Remuneration
Committee.
Rhyll is an active and experienced Non-Executive
Director, building on 35 years of senior executive
experience in banking and finance with ASX
listed banks including St.George, Westpac, BOQ
and Suncorp. She also brings to the Company
over 15 years of board and committee
experience across multiple sectors.
Chair of the Audit and Risk Committee.
6
Identitii Limited
Annual Report FY22
Directors Report
Name, qualification and independence status
Experience, special responsibilities and other
directorships
Non-Executive
Mr. Simon Griffin
BA (Economics)
Independent Non-Executive Director
Appointed 2 June 2022
Mr. Steven James
M(Fin Serv) Law, NSAA, Dip FM, GAICD
Independent Non-Executive Director
Chairman
Resigned 2 June 2022
Mr. Nicholas Armstrong
B. Sc
Non-Executive Director
Resigned 7 October 2021
Simon has had a 20-year career working across
Management Consulting, International Payments
and fast growing technology companies. In
particular, he spent over 10 years working in
senior and executive roles within International
Payments at ASX listed OFX where he was Chief
Commercial Officer followed by 3 years in the UK
at HiFX and XE.com. In addition, Simon has
significant expertise in scaling technology
businesses including Prospa and Car Next Door.
During his career Simon has led teams across
Strategy, Sales, Marketing, Operations and
Customer Service. As CEO of global,
international payments player Xe.com, he had
ultimate accountability for ensuring profitable
growth in a highly competitive and challenging
market with ever increasing regulatory and
compliance hurdles.
Chair of the Nomination and Remuneration
Committee.
Steve has held senior leadership and board
positions at multiple public and private
organisations, including the Commonwealth Bank
of Australia, CommSec, Aston Consulting,
Motorcycling Australia and Seer Asset
Management. He also played a pivotal role in
developing the first online stockbroking business
for financial planners, which was later sold to
CommSec.
Nicholas is an entrepreneur, with over 15 years’
experience in building and scaling technology
businesses. Nicholas was founder and CEO of
COZero Holdings Ltd, an energy technology
company, until it was taken over by a Japanese
strategic investor in 2013. Nicholas co-founded
Identitii in 2014 with Eric Knight and was the
CEO for 6 years before moving into the role of
Non-Executive Director in May 2020.
7
Identitii Limited
Annual Report FY22
Company secretary
Directors Report
Elissa Hansen has over 20 years’ experience advising boards and management on corporate governance,
compliance, investor relations and other corporate related issues. She has worked with boards and
management on a range of ASX listed companies including assisting companies through the IPO process.
Elissa is a Chartered Secretary who brings best practice governance advice, ensuring compliance with the
Listing Rules, Corporations Act and other relevant legislation.
Directors’ meetings
The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company
during the financial year are:
Board of Directors
Audit and Risk
Committee
A
11
11
-
-
11
4
B
11
11
-
-
10
4
A
3
-
-
-
3
1
B
3
-
-
-
3
1
Nomination and
Remuneration
Committee
A
B
-
-
-
-
-
-
-
-
-
-
-
-
Timothy Phillipps
John Rayment
Rhyll Gardner
Simon Griffin
Steven James
Nicholas Armstrong
A
B
Eligible to attend
Attended
Principal activities
Identitii is a regulatory technology (RegTech) company that helps financial services businesses and other
regulated entities gain visibility into, and control over, the data needed to meet financial crime reporting
obligations both in Australia and around the world.
The Company’s cloud platform was built to make reporting to regulators, including AUSTRAC in Australia, easy
and automated, and to give Boards and management teams increased confidence that their compliance
obligations are being met. It is also helping its customers build trust, credibility and confidence within the
industry and with regulators as they work together to combat increasing financial crime.
The strategic business highlights and activities of the Group for the year ended 30 June 2022 are noted below.
Review of operations
a) Business highlights
• On 30 July 2021, the Group announced it had signed a three-year licence agreement with Novatti Group
Limited for its AUSTRAC reporting platform, worth $0.2 million.
• On 2 September 2021, the Group announced the launch of a brand new SaaS platform to help all
AUSTRAC reporting entities reduce the risk of non-compliance with transaction reporting obligations.
• On 23 September 2021, the Group announced it had signed a three-year licence agreement with Standard
Chartered Australia for its SaaS platform, worth $0.3 million.
8
Identitii Limited
Annual Report FY22
Review of operations (continued)
Directors Report
• On 22 October 2021, the Company was placed into a trading halt following confirmation on 26 October
2021 that the Group had successfully raised $6.0 million in a placement to sophisticated and institutional
investors. Under the placement, 37.5 million shares were issued at $0.16 per share.
• On 23 November 2021, the Company announced it had successfully raised $1.4 million via a shareholder
rights issue. Under the rights issue, 8.8 million shares were issued at $0.16 per share.
• On 16 June 2022, the Company announced it had signed a five-year software licence agreement with
Rabobank Australia for its SaaS platform, worth $0.6 million.
b) Corporate activity
• Following the results of a General Meeting held on 6 July 2021 the Company issued 285,714 shares at
$0.07 per share to John Rayment in full and final settlement of his loan to the Company in March 2020.
• Furthermore, 1,000,000 share options vesting over two years pending continued employment, with an
exercise price of $0.25 and 8 July 2024 expiry, were issued to both Steven James and Nicholas Armstrong
in their capacity as Non-Executive Directors of the Company.
• On 7 October 2021, Nicholas Armstrong resigned as Non-Executive Director.
• On 15 November 2021, CBA New Digital Businesses Pty Ltd (x15ventures) invested a further $0.7 million
into Payble Pty Ltd (Payble). This investment by x15ventures reduced Identitii’s shareholding in Payble to
44.2% on an undiluted basis, resulting in the Company ceasing to retain control of Payble. Furthermore,
Payble commenced payment of a $1.0 million assignment fee to Identitii for intellectual property previously
developed by the Company. Payment is being made in monthly instalments over two years and
commenced on 30 November 2021.
• On 1 December 2021, Trent Jerome resigned as Chief Financial Officer of the Group.
• On 21 January 2022, the Company issued:
−
−
−
1,693,750 shares at $0.16 per share as consideration for capital raising fees and investor relation
services provided to the Group,
375,000 shares at $0.08 per share as consideration for marketing and branding services provided to
the Group, and
5,000,000 share options as consideration for a successful capital raise. These share options are
exercisable at $0.24 per share and expire on 20 January 2024.
• On 4 February 2022, the Company announced the appointment of Merilyn Speiser and Richard Thomas
as Advisors to the Board of Directors. In addition to their advisory roles, Merilyn joins as a Member of the
Nomination and Remuneration Committee and Richard joins as a Member of the Audit and Risk
Committee.
• On 2 June 2022, the Company announced the appointment of two Non-Executive Directors to the Board,
namely Rhyll Gardner and Simon Griffin, and the appointment of Catherine Lin as Chief Financial Officer.
Furthermore, Steven James resigned from the Board and was replaced as Chairperson by Timothy
Phillipps with immediate effect.
Review of financial conditions
The Group reported revenue from contracts with customers of $1,457,627 for the year ended 30 June 2022
(30 June 2021: $1,364,197), an increase of 7% from the prior year. The Group reported a net loss after tax of
$4,997,031 for the year ended 30 June 2022 (30 June 2021: $5,873,875) which was substantially driven by
salary and employee benefit expenses and expenditure on research and development (R&D) related activities.
9
Identitii Limited
Annual Report FY22
Directors Report
Review of financial conditions (continued)
The Group had a positive net current asset balance of $5,635,074 and a positive overall net asset balance of
$7,432,594 at 30 June 2022.
The Group had $5,074,133 of cash and cash equivalents on hand at 30 June 2022 and reported a net cash
outflow from operating activities of $6,014,695 during the year ended 30 June 2022.
Significant changes in the state of affairs
During the year ended 30 June 2022, x15ventures invested a further $0.7 million into Payble Pty Ltd (Payble),
reducing Identitii’s shareholding in Payble to 44.2% on an undiluted basis. This resulted in the Company
ceasing to retain control of Payble and triggered a change in accounting treatment whereby Payble results are
now recognised as a separate line item as opposed to being consolidated into the results of Identitii Limited.
In the opinion of the Directors there were no other significant changes in the state of affairs of the Group that
occurred during the year ended 30 June 2022, other than noted above.
Dividends
No dividends were declared or paid by the Company during the financial year ended 30 June 2022.
Events subsequent to reporting date
On 27 July 2022, the Board approved the conversion of the balance of the Payble loan into shares at the next
Payble capital raise. The loan will be converted at the same valuation and price as other investors that
participate in the capital raise. This will allow Payble to focus cash on growth activities.
Other than the matters discussed above, there has not arisen in the interval between the end of the year and
the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of
the Directors, to affect significantly in future financial years the operations of the Group, the results of those
operations, or the state of affairs of the Group.
Likely developments
The Group will continue to develop the Identitii platform whilst continuing to serve existing customers, sign new
customers and grow its pipeline of partners. This will require further investment in product and business
development and marketing. Further information about likely developments in the operations of the Group and
the expected results of those operations in future financial years has not been included in this report because
disclosure of the information would likely result in unreasonable prejudice to the Group.
Environmental regulation
The Group’s operations are not regulated by any significant law of the Commonwealth or of a State or Territory
relating to the environment.
Directors interests
The relevant interest of each Director in the shares and options over shares issued by the companies within
the Group, as notified by the Directors to the ASX in accordance with S205G(1) of the Corporations Act 2001,
at the date of this report is as follows:
10
Identitii Limited
Annual Report FY22
Directors interests (continued)
Timothy Phillipps
John Rayment (1)
Rhyll Gardner
Simon Griffin
Steven James (2)
Nicholas Armstrong (3)
Directors Report
Ordinary shares
Options over
ordinary shares
846,155
-
1,590,608
8,000,000
-
-
-
-
100,000
8,840,044
1,000,000
2,350,000
(1)
(2)
(3)
Shares held by Elorey Pty Ltd, of which John Rayment is a beneficiary.
Steven James ceased as a Non-Executive Director on 2 June 2022. The shares and options held balance is at date of cessation.
Nicholas Armstrong ceased as a Non-Executive Director on 7 October 2021. The shares and options held balance is at date of
cessation. HSBC Custody Nominees (Australia) Pty Ltd acted as custodian over 7,000,000 shares for security purposes pursuant
to a Master Loan Agreement and Deed of Security entered into with Nicholas Armstrong in his personal capacity, however Nicholas
Armstrong remained the ultimate beneficial owner of the shares. Majority of the balance of the shares and the options were held by
275 Invest 2 Pty Ltd ATF the 275 Investment Trust, of which Nicholas Armstrong is a beneficiary.
Share options
Unissued shares under option
At the date of this report, unissued shares of the Group under option are:
Expiry date
2 October 2022
8 October 2022
21 October 2022
19 November 2022
1 January 2023
14 January 2023
11 February 2023
6 March 2023
18 March 2023
27 May 2023
20 January 2024
8 July 2024
21 October 2025
1 January 2026
Exercise price Number of shares
$0.75
$0.75
$0.15
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
$0.24
$0.25
$0.15
$0.15
2,292,686
50,000
2,000,000
97,169
100,000
14,018
12,191
49,680
30,548
100,000
5,000,000
2,000,000
8,000,000
10,141,988
11
Identitii Limited
Annual Report FY22
Share options (continued)
Expiry date
1 July 2026
7 January 2027
2 March 2027
14 March 2027
1 July 2028
1 August 2028
Total unissued shares under option
All unissued shares are ordinary shares of the Company.
Directors Report
Exercise price Number of shares
$0.15
$0.15
$0.15
$0.15
$0.75
$0.75
375,000
150,000
750,000
150,000
358,082
1,928,125
33,599,487
All options issued to employees under the Group’s Equity Incentive Plan expire on the earlier of their expiry
date or termination of the employee’s employment, unless approved otherwise by the Board. All other options
expire on their expiry date.
Further details about share-based payments to Directors and Key Management Personnel are included in the
remuneration report in Table 1.
Shares issued on exercise of options
During or since the end of the financial year, no ordinary shares of the Company were issued by the Group as
a result of the exercise of options.
Indemnification and insurance of officers and auditors
The Company has entered into a director protection deed with each Director. Under these deeds, the Company
indemnifies the Directors against all liabilities to another person that may arise from their position as Director
of the Company and its controlled entities.
The Company has not indemnified or made a relevant agreement for indemnifying against a liability to any
person who is or has been an auditor of the Group.
The Group paid insurance premiums in respect of Directors’ and Officers’ liability and legal expenses insurance
contracts for the year ended 30 June 2022 and subsequent to the year end. Such insurance contracts insure
against certain liability (subject to specific exclusions), persons who are or have been Directors or Executive
Officers of the Group.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year
are outlined in Note 27 to the financial statements.
12
Identitii Limited
Annual Report FY22
Non-audit services (continued)
Directors Report
The Board is satisfied that the provision of non-audit services during the financial year, by the auditor, is
compatible with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 for the following reasons:
•
•
all non-audit services have been reviewed by the Board to ensure they do not impact integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in the
APES 110 Code of Ethics for Professional Accountants issued 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.
Officers of the Company who are former partners of RSM
There are no officers of the Company who are former partners of RSM.
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all
or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
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 21 and forms part of the Directors’ report for the year ended 30 June 2022.
Rounding of amounts to the nearest dollar
In accordance with ASIC Corporations (Rounding of Financial/Directors’ Reports) Instrument 2016/191, the
amounts in the Directors’ Report and consolidated financial statements have been rounded to the nearest
dollar.
13
Identitii Limited
Annual Report FY22
Audited Remuneration Report
Directors Report
The Directors present the Remuneration Report (the Report) for the Company and its subsidiaries (the Group)
for the year ended 30 June 2022. This Report forms part of the Directors’ Report and has been audited in
accordance with Section 300A of the Corporations Act 2001. The Report details the remuneration
arrangements for the Group’s Key Management Personnel (KMP):
• Executive Directors and other KMP
• Non-Executive Directors
KMP are those persons who, directly or indirectly, have authority and responsibility for planning, directing and
controlling the major activities of the Group.
1. Principles of remuneration
The performance of the Group depends upon the quality and commitment of the Directors and Executives.
The philosophy of the Directors in determining remuneration levels is to:
•
•
•
set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
establish appropriate hurdles for variable executive remuneration.
The Nomination and Remuneration Committee reviews and makes recommendations to the Board on the
Group’s remuneration policies, procedures and practices. It also defines the individual packages offered to
Executive Directors and KMP, for recommendation to the Board.
The Board may consider engaging an independent remuneration consultant to advise the Board on appropriate
levels of remuneration relative to its industry peer group.
In accordance with Corporate Governance best practice (Recommendation 8.2), the structure of Non-
Executive Director and Executive remuneration is separate and distinct as follows:
a) Non-Executive Directors
Fixed and variable remuneration
The Board seeks to set Non-Executive Directors’ remuneration at a level that provides the Group with the
ability to attract and retain Directors of a high calibre whilst incurring a cost that is acceptable to
shareholders.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be
determined from time to time by a general meeting. This amount has been fixed by the Company at
$250,000. The amount of aggregate remuneration and the manner in which it is apportioned amongst
directors is reviewed annually. The Board considers advice from shareholders and takes into account the
fees paid to Non-Executive Directors of comparable companies when undertaking the annual review
process.
Non-Executive Directors’ base fees cover all main board activities and membership of all committees;
however, they do not receive performance-related compensation and are not provided with retirement
benefits apart from statutory superannuation. Non-executive Directors are entitled to participate in the
Equity Incentive Plan.
14
Identitii Limited
Annual Report FY22
Directors Report
1. Principles of remuneration (continued)
Year ended to
Chairperson fee
Non-Executive Director fee
30 June 2022
$
30 June 2021
$
75,000
50,000
75,000
50,000
b) Executives and Executive Director remuneration
Remuneration for Executives and Executive Directors consists of fixed and variable remuneration only.
Fixed remuneration
Fixed remuneration is reviewed annually by the Directors. The process consists of a review of relevant
comparative remuneration in the employment market and within the Group. The Group may engage an
independent remuneration consultant to advise the Board on appropriate levels of remuneration for the
Group’s Executive Directors relative to its industry peer group.
Variable remuneration
Variable remuneration is provided in the form of share options under the Group Equity Incentive Plan
(EIP). Under the EIP, one share option entitles the holder to one share in the Company subject to vesting
conditions. Executives and Executive Directors vesting conditions are linked to continued years of service
and may be linked to performance hurdles. The Board have the discretion to settle share options with a
cash equivalent payment. Participants in the EIP will not pay any consideration for the grant of the share
option unless determined otherwise. Share options will not be listed and may not be transferred, assigned
or otherwise dealt with unless approved by the Directors. If the executive’s employment terminates before
the share options have vested, the share options will lapse, unless approved otherwise by the Board.
2. Details of remuneration
Details of the remuneration of the KMP as defined in AASB 124 Related Party Disclosures are set out in Table
1 which follows.
The KMP of the Group have authority and responsibility for planning, directing and controlling the activities of
the Group. The KMP make or participate in making decisions that affect the whole, or a substantial part, of the
business or who have the capacity to affect significantly the Group’s financial standing.
The KMP of the Group are the Executive and Non-Executive Directors and the Chief Financial Officer.
15
Identitii Limited
Annual Report FY22
Directors Report
Details of the nature and amount of each major element of remuneration of each Director of the Company, and other KMP of the Group are:
Table 1
Short-term
benefits
Post-
employment
Other long-term
benefits
Termination
benefits
Share-based
payments
Total % share-based
payments
Year ended 30 June 2022
$
$
(A)
$
Salary Superannuation
Executive Directors
John Rayment (1)
Non-Executive Directors
Timothy Phillipps
Rhyll Gardner (2)
Simon Griffin (2)
Steven James (3)
Nicholas Armstrong (4)
Other KMP
Catherine Lin (5)
Trent Jerome (6)
Total
285,000
28,500
19,107
50,000
4,030
4,030
69,165
12,266
12,500
95,833
-
-
-
-
1,227
1,250
9,583
-
-
-
-
-
962
-
532,824
40,560
20,069
(1) Salary increased from $260,000 to $310,000 per annum effective 1 January 2022.
(2) Appointed 2 June 2022.
(3) Remuneration invoiced via Aston Consulting Pty Ltd of which Steven James is a beneficiary. Resigned 2 June 2022.
(4) Resigned 7 October 2021.
(5) Appointed 15 June 2022.
(6) Resigned 30 November 2021.
$
-
-
-
-
-
-
-
-
-
-
16,084
-
-
12,974
12,974
(26,267)
191,433
Share options
(B)
(variable)
$
$
201,616
534,223
38%
50,000
4,030
4,030
85,249
13,493
14,712
92,123
797,860
-
-
-
19%
-
-
-
16
Identitii Limited
Annual Report FY22
Directors Report
Table 1
Short-term benefits
Post-
employment
Other long-term
benefits
Share-based
payments
Total % share-based
payments
Salary Consulting fee Superannuation
$
(A)
$
Share options
(B)
(variable)
$
$
Year ended 30 June 2021
$
Executive Directors
John Rayment (1)
226,667
Non-Executive Directors
Steven James (2)
Timothy Phillipps (3)
Nicholas Armstrong (4)
Other KMP
Trent Jerome (5)
Margarita Claringbold (6)
64,425
4,762
45,662
95,833
84,600
$
-
-
-
21,533
14,107
442,384
704,691
63%
-
-
-
-
-
-
-
64,425
4,762
-
-
47,674
132,474
36%
34,800
4,338
-
-
9,104
-
5,603
-
52,837
-
163,377
84,600
32%
-
Total
521,949
34,800
34,975
19,710
542,895
1,154,329
(1) Salary increased from $210,000 to $260,000 per annum effective 1 March 2021.
(2) Remuneration invoiced via Aston Consulting Pty Ltd of which Steven James is a beneficiary.
(3) Appointed 27 May 2021.
(4) Share options held via 275 Invest 2 Pty Ltd of which Nicholas Armstrong is a beneficiary.
(5) Appointed 1 February 2021.
(6) Remuneration invoiced via Gram Accounting & Advisory Pty Ltd of which Margarita Claringbold is a beneficiary. This includes remuneration for CFO, accounting and equity raise related services.
Resigned 31 December 2020.
(A) In accordance with AASB 119 Employee Benefits, annual leave is classified as other long-term employee benefits.
(B) The fair value of share options is calculated at the grant date using an option-pricing model and allocated to each reporting period from grant date to vesting date depending on the vesting conditions
attached to the options. The value disclosed is the portion of the fair value of the options recognised as an expense in the reporting period.
17
Identitii Limited
Annual Report FY22
3. Service agreements
Directors Report
The following is a summary of the current major provisions of the agreement relating to remuneration of the
Executive Director.
John Rayment – Chief Executive Officer
John Rayment is the Chief Executive Officer of the Group and is considered a key member of the Group’s
management team.
John receives a base salary of $310,000 per annum plus superannuation and holds 8,000,000 share options
with attached service and performance vesting conditions.
During the year ended 30 June 2022, no bonuses were paid to John Rayment.
Employment conditions
Commencement date: 19 March 2020
Term: Ongoing until notice is given by either party
Review: Annually
Notice period required on termination: 3 months by either party
Termination benefits: None
Independent review
To ensure the Group complies with industry best practice in relation to the remuneration of its Executive
Director, the Non-Executive Directors of the Group will consider engaging the services of a remuneration
consultant to conduct an independent assessment of the remuneration packages negotiated with its Executive
Director.
The following is a summary of the current major provisions of the agreement relating to remuneration of
Executive KMP:
Catherine Lin – Chief Financial Officer
Catherine Lin is the Chief Financial Officer of the Group and is considered a key member of the Group’s
management team.
Catherine receives a base salary of $275,000 per annum plus superannuation.
Commencement date: 15 June 2022
Term: Ongoing until notice is given by either party
Notice period required on termination: 1 month by either party
Termination benefits: None
Trent Jerome – Chief Financial Officer
Trent Jerome was the Chief Financial Officer of the Group up to his resignation effective 30 November 2021.
Trent received a base salary of $230,000 per annum plus superannuation and held 2,000,000 share options
with attached service and performance vesting conditions. 400,000 of these share options were retained on
termination with the balance forfeited.
18
Identitii Limited
Annual Report FY22
4. Equity instruments
Directors Report
All share options refer to options over ordinary shares of Identitii Limited, which are exercisable on a one-for-
one basis under the Equity Incentive Plan (EIP).
a) Options over equity instruments granted as compensation
All options expire on the earlier of their expiry date or termination of the individual’s employment.
Vesting is conditional on the individual remaining in employment during the vesting period unless
determined by the Board otherwise.
Share options were granted to KMP as compensation during the year ended 30 June 2022 as noted
in the table below.
b) Analysis of movements in equity instruments
The movement during the year in the number of options over ordinary shares in Identitii Limited held,
directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:
Held at
1 July
2021
Granted/
(forfeited)
during the
year
Held at 30
June 2022
Vested
during the
year
Vested at
30 June
2022
Exercis-
able at 30
June 2022
Timothy Phillipps
-
John Rayment
8,000,000
Rhyll Gardner
Simon Griffin
Steven James (1)
-
-
-
-
-
-
-
-
-
-
-
8,000,000
500,000
500,000
500,000
-
-
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Nicholas Armstrong (2)
1,350,000
1,000,000
2,350,000
450,000
1,350,000
1,350,000
Catherine Lin
Trent Jerome (3)
-
-
-
-
-
-
2,000,000
(1,600,000)
400,000
400,000
400,000
400,000
(1) Steven James ceased as a Non-Executive Director on 2 June 2022. The options held balance noted above is at the date
he ceased employment with the Company.
(2) Nicholas Armstrong ceased as a Non-Executive Director on 7 October 2021. The options held balance noted above is at
the date he ceased employment with the Company.
(3) Trent Jerome ceased as Chief Financial Officer on 30 November 2021. The options held balance noted above is at the
date he ceased employment with the Company
5. KMP transactions
a) Loans from KMP and their related parties
There were no loans outstanding at the end of the year from KMP and their related parties, where the
individual’s aggregate loan balance exceeded $100,000 in the reporting period.
19
Identitii Limited
Annual Report FY22
Directors Report
5. KMP transactions (continued)
b) Other transactions with KMP
A number of KMP, or their related parties, hold positions in other entities that result in them having
control, or joint control, over the financial or operating policies of that entity.
Terms and conditions of transactions with KMP and their related parties are no more favourable than
those available, or which might reasonably be expected to be available, on similar transactions to non-
KMP related entities on an arm’s length basis.
c) Movement in shares
The movement during the year in the number of ordinary shares in Identitii Limited held, directly,
indirectly or beneficially, by each KMP, including their related parties, is as follows:
Timothy Phillipps
John Rayment
Rhyll Gardner
Simon Griffin
Steven James (1)
Held at 1 July
2021
Acquired/
(disposed)
Held at 30 June
2022
-
1,304,894
846,155
285,714
846,155
1,590,608
-
-
-
-
-
-
-
100,000
100,000
Nicholas Armstrong (2)
9,609,275
(769,231)
8,840,044
Catherine Lin
Trent Jerome (3)
-
-
-
-
-
-
(1)
(2)
(3)
Steven James ceased as a Non-Executive Director on 2 June 2022. The shares held balance noted above is at the date
he ceased employment with the Company.
Nicholas Armstrong ceased as a Non-Executive Director on 7 October 2021. The shares held balance noted above is at
the date he ceased employment with the Company.
Trent Jerome ceased as Chief Financial Officer on 30 November 2021. The shares held balance noted above is at the
date he ceased employment with the Company.
This Directors’ Report is signed in accordance with a resolution of the Board of Directors:
Timothy Phillipps
Chairperson
Sydney
29 August 2022
20
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Identitii Limited for the year ended 30 June 2022, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Gary Sherwood
Partner
Sydney NSW
Dated: 29 August 2022
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
21
Identitii Limited
Annual Report FY22
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Note
30 June 2022
$
30 June 2021
$
Revenue from contracts with customers
Research and development tax incentive
Government grants
Other income
Interest income
8
9
Gain on loss of control of subsidiary
15
Total revenue and other income
1,457,627
1,190,700
43,284
-
498
1,860,064
4,552,173
1,364,197
905,319
417,936
12,726
1,823
-
2,702,001
Expenses
Salaries and employee benefit expenses
3,109,750
2,690,002
21
Share-based payments
Consultants fees
Advertising and marketing
Depreciation and amortisation
General expenses
Interest expense
Legal expenses
Office expenses
Travel and accommodation
Short-term lease payments
(Reversal) / impairment on trade receivables
541,737
707,506
296,876
99,254
797,291
67
290,293
495,521
153,208
55,721
(1,825)
806,766
886,805
121,794
402,013
1,056,250
46,757
151,536
435,698
24,844
24,292
2,530
Gain on lease modification
-
(72,005)
Research and development expenses
2,736,559
1,998,594
Share of equity-accounted investee loss
30
267,246
-
Total expenses
9,549,204
8,575,876
22
Identitii Limited
Annual Report FY22
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Note
30 June 2022
$
30 June 2021
$
(4,997,031)
(5,873,875)
10
-
-
(4,997,031)
(5,873,875)
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Foreign currency translation
(73,375)
65,893
Total comprehensive loss for the year
(5,070,406)
(5,807,982)
Loss for the year attributable to:
Owners of Identitii Limited
Non-controlling interests
Comprehensive loss for the year attributable to:
Owners of Identitii Limited
Non-controlling interests
(4,833,962)
(5,825,443)
22
(163,069)
(48,432)
(4,997,031)
(5,873,875)
(4,907,337)
(5,759,550)
22
(163,069)
(48,432)
(5,070,406)
(5,807,982)
Basic and diluted loss per share (cents)
11
(2.64)
(4.46)
23
Identitii Limited
Annual Report FY22
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
Assets
Cash and cash equivalents
Research and development tax incentive receivable
Trade receivables
Other receivables
Contract assets
Loans to equity-accounted investees
Note
30 June 2022
$
30 June 2021
$
12
8
8
16
5,074,133
1,193,963
264,302
248,088
120,250
120,000
4,489,311
905,319
227,419
153,832
26,400
-
Current assets
7,020,736
5,802,281
Intangible assets
Property, plant and equipment
Investment in equity-accounted investees
Loans to equity-accounted investees
Other non-current assets
Non-current assets
Total assets
Liabilities
Trade and other payables
Employee liabilities and provisions
Contract liabilities
Borrowings and lease liabilities
Current liabilities
Total liabilities
13
14
15,30
16
17
18
8
19
-
88,052
903,154
779,144
27,170
1,797,520
8,818,256
644,317
481,633
259,712
-
1,385,662
1,385,662
57,006
101,536
-
-
-
158,542
5,960,823
271,109
474,901
179,650
33,039
958,699
958,699
Net assets
7,432,594
5,002,124
24
Identitii Limited
Annual Report FY22
Consolidated Statement of Financial Position
Equity
Share capital
Share options reserve
Foreign currency translation reserve
Other reserves
Retained losses
Equity attributable to owners of Identitii Limited
Non-controlling interests
Total equity
Note
30 June 2022
$
30 June 2021
$
20
21
22
22
32,934,833
25,775,278
3,900,514
4,517,002
(358)
-
73,017
688,123
(29,402,395)
(26,414,781)
7,432,594
-
4,638,639
363,485
7,432,594
5,002,124
25
Identitii Limited
Annual Report FY22
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Note
Share
capital
Share
option
reserve
$
$
Foreign
currency
translation
reserve
$
Other
reserves
Retained
losses
Total
Non-
controlling
interest
Total equity
$
$
$
$
$
Balance at 1 July 2021
25,775,278
4,517,002
73,017
688,123
(26,414,781)
4,638,639
363,485
5,002,124
Loss after tax
Other comprehensive income
Total comprehensive loss
Loss of control of subsidiary
Issue of ordinary share capital
Costs of equity raising
Equity-settled share-based payments
Transfer share-based payments
reserve to retained earnings
22
20
20
21
21
-
-
-
-
7,761,986
(602,431)
-
-
-
-
-
-
-
-
541,737
(1,158,225)
Balance at 30 June 2022
32,934,833
3,900,514
(358)
-
(73,375)
(73,375)
-
-
-
(4,833,962)
(4,833,962)
(163,069)
(4,997,031)
-
(73,375)
-
(73,375)
(4,833,962)
(4,907,337)
(163,069)
(5,070,406)
-
-
-
-
-
(688,123)
688,123
-
(200,416)
(200,416)
-
-
-
-
-
-
-
-
7,761,986
(602,431)
541,737
1,158,225
-
(29,402,395)
7,432,594
-
-
-
-
-
7,761,986
(602,431)
541,737
-
7,432,594
26
Identitii Limited
Annual Report FY22
Consolidated Statement of Changes in Equity
Note
Share
capital
Share
option
reserve
$
$
Foreign
currency
translation
reserve
$
Balance at 1 July 2020
17,930,105
3,710,236
7,124
Loss after tax
Other comprehensive income
Total comprehensive loss
-
-
-
Issue of ordinary share capital
Costs of equity raising
NCI acquisition without loss of control
Equity-settled share-based payments
20
20
22
21
8,063,347
(218,174)
-
-
-
-
-
-
-
-
806,766
-
65,893
65,893
-
-
-
-
Other
reserves
Retained
losses
Total
Non-
controlling
interest
Total equity
$
-
-
-
-
-
-
688,123
-
$
$
(20,589,338)
1,058,127
$
-
$
1,058,127
(5,825,443)
(5,825,443)
(48,432)
(5,873,875)
-
65,893
-
65,893
(5,825,443)
(5,759,550)
(48,432)
(5,807,982)
-
-
-
-
8,063,347
(218,174)
-
-
8,063,347
(218,174)
688,123
411,917
1,100,040
806,766
-
806,766
Balance at 30 June 2021
25,775,278
4,517,002
73,017
688,123
(26,414,781)
4,638,639
363,485
5,002,124
27
Identitii Limited
Annual Report FY22
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Note
30 June 2022
$
30 June 2021
$
Cash flows from operating activities
Receipts from customers
Receipts from government grants and tax incentives
1,464,792
945,340
1,395,598
1,192,781
Payments to suppliers and employees
(8,425,325)
(7,348,417)
Cash flows utilised in operations
(6,015,193)
(4,760,038)
Interest received
Interest and other costs of finance paid
498
-
3,193
(2,769)
Total cash flows from operating activities
24
(6,014,695)
(4,759,614)
Cash flows from investing activities
Acquisition of property, plant and equipment
(65,335)
(45,136)
Proceeds from disposal of property, plant and
equipment
Cash flows from loans to equity-accounted investees
Loss of control of subsidiary
22
Other investing cash flows
Total cash flows from investing activities
Cash flows from financing activities
Proceeds from the issue of shares
Transaction costs related to the issue of shares
Repayment of borrowings
Lease payments
Transaction costs related to borrowings and leases
Other financing cash flows
2,309
70,000
(547,253)
(27,170)
(567,449)
7,403,986
(327,813)
-
(13,039)
(67)
-
-
-
-
-
(45,136)
8,923,237
(341,405)
(600,000)
(125,649)
(61,687)
100,000
Total cash flows from financing activities
7,063,067
7,894,496
28
Identitii Limited
Annual Report FY22
Consolidated Statement of Cash Flows
Net increase in cash held
Opening cash balance
Effect of movement in exchange rates
Note
30 June 2022
$
30 June 2021
$
480,923
4,489,311
103,899
3,089,746
1,411,309
(11,744)
Closing cash balance
12
5,074,133
4,489,311
29
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1. Reporting entity
Identitii Limited (the Company) is a Company incorporated and domiciled in Australia and whose shares are
publicly traded on the Australian Securities Exchange (ASX:ID8). The registered office and principal place of
business is 285a Crown Street, Surry Hills, NSW 2010.
These consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Identitii
Limited as at 30 June 2022 and the results of all subsidiaries for the year then ended. Identitii Limited and its
subsidiaries together are referred to in these financial statements as the Group.
The Group is a for profit entity and is primarily involved in the RegTech industry, developing and licensing
software for regulated entities. Its main product is a platform that helps customers meet financial crime
reporting obligations.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 29 August
2022.
2. Basis of preparation
These consolidated financial statements are general purpose financial statements which have been prepared
in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International
Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).
Details of the Group’s accounting policies are included in Note 6.
Going concern
The financial report has been prepared on the going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and settlement of liabilities in the ordinary course of business
and assumes the Group will have sufficient cash resources to pay its debts as and when they become due
and payable for at least 12 months from the date of signing the financial report.
The statement of profit or loss and other comprehensive income for the year ended 30 June 2022 reflects a
loss for the year of $4,997,031 and total cash outflows from operating activities of $6,014,695.
The Directors believe that it is reasonably foreseeable that the Company will continue as a going concern and
that it is appropriate to adopt the going concern basis in the preparation of the financial report after considering
the following:
• The Group has $5,074,133 in cash and cash equivalents as at the balance date;
• The Group successfully raised $7,403,986 in funding during the year and currently has placement capacity
to issue up to 49,715,638 securities (under ASX Listing Rules 7.1 and 7.1A) without the requirement for
additional shareholder approval, in the event future funding is required;
• The Group has the ability to scale back a significant portion of its expenditure if required; and
• The Group continues to extend its customer base and has other potential customer engagements in the
pipeline.
Consequently, the Directors have concluded there are reasonable grounds to believe that the Group will
continue to be able to pay its debts as and when they become due and payable for a period of no less than 12
months from the date of signing this financial report and that the preparation of the 30 June 2022 financial
report on a going concern basis is appropriate.
30
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
3. Functional and presentation currency
These consolidated financial statements are presented in Australian dollars which is the Group’s functional
currency. The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that instrument, amounts in the consolidated financial statements
and directors’ report have been rounded off to the nearest Australian dollar, unless otherwise stated.
4. Use of judgements and estimates
In preparing these consolidated financial statements, management has made judgements and estimates that
affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income
and expenses. Management bases its judgements, estimates and assumptions on historical experience and
on various other factors, including expectations of future events that management believe to be reasonable
under the circumstances. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are
recognised prospectively.
a) Judgements
Information about judgements made in applying accounting policies that have the most significant effect
on the amounts recognised in the financial statements is included in the following notes:
COVID-19 pandemic – judgement has been exercised in considering the impacts that the COVID-19
pandemic has had, or may have, on the Group based on known information. This consideration extends
to the nature of the services offered, customers, staffing and geographic regions in which the Group
operates; and
Note 8 – revenue recognition: whether revenue from licence fees is recognised over time or at a point in
time.
b) Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties at 30 June 2022 that have a significant risk
of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial
year are as follows:
The measurement and realisation of the R&D tax incentive: determining the percentage of expenditure
that is directly attributable to eligible R&D activities when measuring the R&D tax incentive. Uncertainty
exists over the quantum and timing of realisation of the R&D tax incentive claim until such time as the
claim has been examined and accepted by the Australian Tax Office (ATO);
Note 10 – recognition of deferred tax assets: availability of future taxable profit against which deductible
temporary differences and tax losses carried forward can and cannot be utilised; and
Note 21 – share-based payments: key assumptions in determining the valuation of share-based payment
transactions on grant date. Key assumptions include expected expiry dates, volatility rates and likelihood
of vesting.
5. New or amended accounting standards and interpretations
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted in preparing these consolidated financial statements.
31
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies
a) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Identitii
Limited ('company' or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the year
then ended. Identitii Limited and its subsidiaries together are referred to in these financial statements as
the Group.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of
profit or loss and other comprehensive income, statement of financial position and statement of changes
in equity of the Group. Losses incurred by the Group are attributed to the non-controlling interest in full,
even if that results in a deficit balance.
Where the Group ceases to have control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The Group recognises the fair value of the consideration received and the fair value
of any investment retained together with any gain or loss in profit or loss.
b) Associates
Associates are entities over which the Group has significant influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share
of the profits or losses of the associate is recognised in profit or loss and the share of the movements in
equity is recognised in other comprehensive income. Investments in associates are carried in the
statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of
the associate. Goodwill relating to the associate is included in the carrying amount of the investment and
is neither amortised nor individually tested for impairment. Dividends received or receivable from
associates reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including
any unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the
associate and recognises any retained investment at its fair value. Any difference between the associate's
carrying amount, fair value of the retained investment and proceeds from disposal is recognised in profit
or loss.
32
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Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
c) Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency of the Group at the exchange
rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional
currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured
at fair value in a foreign currency are translated into the functional currency at the exchange rate when
the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction. Foreign currency differences
are generally recognised in profit or loss and presented within general expenses.
d) Revenue from contracts with customers
Information about the Group’s accounting policies relating to contracts with customers is provided in Note
8.
e) Research and development tax incentive
The R&D tax incentive encourages companies to engage in R&D benefiting Australia, by providing a tax
offset (or a cash refund if in a tax loss position) for eligible R&D activities. The Group recognises the R&D
tax incentive in profit or loss when the Group incurs the eligible R&D expenditure. The R&D tax incentive
income is presented on a gross basis and is not netted off against the R&D costs to which it relates.
f) Government grants
The Group recognises an unconditional government grant in profit or loss when the grant becomes
receivable. Grants that compensate the Group for expenses incurred are recognised in profit or loss on a
systematic basis in the periods in which the expenses are recognised. The grants are recognised on a
gross basis in income and are not netted off against the expenditure to which it relates.
Refer to Note 9 for further details.
g) Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for
the amount expected to be paid under short
sharing plans if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
term cash bonus or profit
‑
‑
Other long
term employee benefits
‑
The Group’s net obligation in respect of long
term employee benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods. That benefit is
discounted to determine its present value. Re-measurements are recognised in profit or loss in the period
in which they arise.
‑
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of
those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to be
settled wholly within 12 months of the reporting date, they are discounted.
33
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
Share-based payment arrangements
Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions
are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost is measured at fair value on grant date using a suitable option pricing model such as Black
Scholes, Binomial or Monte Carlo.
The grant date fair value of equity-settled share-based payment arrangements is recognised as an
expense, with a corresponding increase in equity over the vesting period of the award. The amount
recognised as an expense is adjusted to reflect the number of awards for which the related service and
non-market performance conditions are expected to be met, such that the amount ultimately recognised
is based on the number of awards that meet the related service and non-market performance conditions
at the vesting date.
For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based
payment is measured to reflect such conditions and there is no true up for differences between expected
and actual outcomes.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective of whether that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum, an expense is recognised as if the modification has
not been made. An additional expense is recognised, over the remaining vesting period, for any
modification that increases the total fair value of the share-based compensation benefit as at the date of
modification.
The share-based payment reserve in equity is transferred to retained earnings when the unexercised
option expires.
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 items recognised directly in equity.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in respect of previous years. The amount of tax
payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects
uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted
at the reporting date. Current tax also includes any tax liability arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes.
34
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
Deferred tax is not recognised for:
•
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss; and
temporary differences related to investments in subsidiaries to the extent that the Group is able to
control the timing of the reversal of the temporary differences and it is probable that they will not
reverse in the foreseeable future.
Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that future taxable profits will be available against which they
can be utilised. Future taxable profits are determined based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset
in full, the future taxable profits, adjusted for reversals of existing temporary differences, are considered,
based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent
that is has become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when
they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement
of deferred tax reflects the tax consequences that would follow the manner in which the Group expects,
at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
i) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent
unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12
months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
j) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
k) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement between 30 and 45 days.
35
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
l) Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but
where the Group is yet to establish an unconditional right to consideration. Contract assets are treated as
financial assets for impairment purposes.
m) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
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 or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Subsequent expenditure
Subsequent expenditure is capitalised only when it is probable that the future economic benefits
associated with the expenditure will flow to the Group.
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their
estimated residual values using the straight-line method over their estimated useful lives and is generally
recognised in profit or loss.
The estimated useful lives of property, plant and equipment for current and comparative periods are as
follows:
Right-of-use asset
Office fit out
Computer equipment
Office equipment
2022
3 years
3 years
3 years
5 years
2021
3 years
3 years
3 years
5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted
if appropriate.
n)
Intangible assets
Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are
not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets
are subsequently measured at cost less amortisation and any impairment.
36
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are
measured as the difference between net disposal proceeds and the carrying amount of the intangible
asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the
expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
The estimated useful lives of intangible assets for current and comparative periods are as follows:
Acquired software
o) Trade and other payables
2022
1 year
2021
1 year
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
p) Contract liabilities
Contract liabilities represent the Group’s obligation to transfer goods or services to a customer and are
recognised when a customer pays consideration, or when the Group recognises a receivable to reflect its
unconditional right to consideration (whichever is earlier) before the Group has transferred the goods or
services to the customer.
q) Borrowings
Borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
r)
Leases
The Group adopted AASB 16 from 1 July 2019 applying the modified retrospective approach, under which
the cumulative effect of initial application was recognised in retained earnings at 1 July 2019. Except for
short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities
are recognised in the statement of financial position.
For classification within the statement of cash flows, the interest and the principal portion of the lease
payments are disclosed in financing activities.
For lessor accounting, the standard did not substantially change how a lessor accounts for leases.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and an estimate of costs expected to be incurred for dismantling and removing
the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of
use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
37
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised as the present value of the lease payments to be made over the term of the lease, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate.
Lease payments comprise of:
•
•
•
•
fixed payments less any lease incentive receivables;
variable lease payments that depend on an index or a rate;
amounts expected to be paid under residual value guarantees; and
the exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which
they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Short-term leases and low-value assets
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are expensed on a straight line basis to profit or loss over the lease term.
s) Financial instruments
Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets and financial
liabilities are initially recognised when the Group becomes a party to the contractual provisions of the
instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial
liability is initially measured at fair value plus transaction costs that are directly attributable to its acquisition
or issue. A trade receivable without a significant financing component is initially measured at the
transaction price.
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at: amortised cost; fair value in other
comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or fair value through profit
or loss (FVTPL).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets, in which case all affected financial assets are reclassified
on the first day of the first reporting period following the change in the business model.
38
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
A financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated as FVTPL:
•
•
It is held within a business model whose objective is to hold assets primarily to collect contractual
cash flows; and
Its contractual term gives rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding (SPPI test).
The Group does not have any debt or equity investments that are classified and measured at FVOCI.
Therefore, all financial assets that do not meet the classification requirements for amortised cost are
classified and measured at FVTPL.
Financial assets – assessment whether contractual cash flows are solely payments of principal and
interest
For the purpose of this assessment, principal is defined as the fair value of the financial asset on initial
recognition. Interest is defined as consideration for the time value of money and for the credit risk
associated with the principal amount outstanding during a particular period of time and for other basic
lending risks and costs, as well as profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument. This includes assessing whether the financial asset
contains a contractual term that could change the timing or amount of contractual cash flows such that it
would not meet this condition. In making this assessment, the Group considers:
•
•
•
•
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate;
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets.
A prepayment feature is consistent with the SPPI criterion if the prepayment amount substantially
represents unpaid amounts of principal and interest on the principal amount outstanding, which may
include reasonable additional compensation for early termination of the contract. Additionally, for a
financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or
requires prepayment at an amount that substantially represents the contractual par amount plus accrued
contractual interest is treated as consistent with this criterion if the fair value of the prepayment feature is
insignificant at initial recognition.
Financial assets – subsequent measurement and gains and losses
Type of financial asset
Financial assets at FVTPL
Financial assets at
amortised cost
These assets are subsequently measured at fair value. Net gains and
losses, including any interest or dividend income, are recognised in profit
or loss.
These assets are subsequently measured at amortised cost using the
effective interest method. The amortised cost is reduced by impairment
losses. Interest income, foreign exchange gains and losses and
impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
39
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
Financial liabilities – classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified
as FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including
any interest expenses, are recognised in profit or loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method. Interest expense and foreign exchange
gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in
profit or loss.
Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not
retain control of the financial asset. The Group also derecognises a financial asset when its terms are
modified and the cash flows associated with the modified asset are substantially different, in which case
a new financial asset based on the modified terms is recognised at fair value.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or
expire. The Group also derecognises a financial liability when its terms are modified and the cash flows
of the modified liability are substantially different, in which case a new financial liability based on the
modified terms is recognised at fair value. On derecognition of a financial liability, the difference between
the carrying amount extinguished and the consideration paid (including any non-cash assets transferred
or liabilities assumed) is recognised in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group currently has a legally enforceable right to offset the
amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability
simultaneously.
t)
Impairment
A. Non-derivative financial assets
Financial instruments and contract assets
The Group recognises loss allowances for expected credit losses (ECLs) on:
•
•
financial assets measured at amortised cost; and
contract assets.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which
are measured at 12-month ECLs:
•
•
financial assets (excluding trade receivables) that are determined to have low credit risk at the
reporting date; and
other financial assets and bank balances for which credit risk (ie. the risk of default occurring over
the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to
lifetime ECLs and are calculated using a provision matrix under the simplified approach.
40
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
When determining whether credit risk of a financial asset 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
includes forward looking information and the use of macro-economic factors.
The Group assumes that the credit risk on a financial asset has increased if it is more than 30 days past
due.
The Group considers a financial asset to be in default when:
•
•
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group
to actions such as realising security (if held); or
the financial asset is more that 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial
instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12
months after the reporting date (or a shorter period if the expected life of the instrument is less than 12
months).
The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
Measurement of ECLs
ECLs are a probability weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (ie. 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 asset.
ECLs for trade receivables and contract assets are calculated using a provision matrix based on historical
default rates adjusted for current and forecast credit conditions including other business, financial and
economic factors such as geographical region and external credit rating.
Credit impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit
impaired. A financial asset is credit impaired when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit impaired includes the following:
•
•
•
•
significant financial difficulty of the borrower;
a breach of contract such as default or being more that 90 days past due;
restructuring of an amount due to the Group on terms that the Group would not consider otherwise;
or
it is probable that the borrower will enter bankruptcy or other financial reorganisation.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of the assets.
There have been no changes in estimation techniques or significant assumptions made during the year.
41
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
Write off
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. For corporate customers,
the Group individually makes an assessment with respect to the timing and amount of write off based on
whether there is reasonable expectation of recovery. The Group expects no significant recovery for the
amount written off. However, financial assets that are written off could still be subject to enforcement
activities in order to comply with the Group’s procedures for recovery of amounts due.
B. Non
financial assets
‑
At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash
generating units (CGUs).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs
to sell. Value in use is based on the estimated future cash flows, discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. They are allocated to reduce the carrying
amount of assets in the CGU on a pro rata basis. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been recognised.
u) Share capital
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from
equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance
with AASB 112.
v) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to, the tax authority are presented as operating
cash flows.
w) Comparative figures
Comparative figures have been adjusted to conform to changes in presentation for the current financial
year where required by Accounting Standards or as a result of changes in Accounting Policy.
42
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
6. Significant accounting policies (continued)
x) Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in the principal or, in its absence, the
most advantageous market to which the Group has access at that date. The fair value of a liability reflects
its non-performance risk. A number of the Group’s accounting policies and disclosures require the
measurement of fair values, for both financial and non-financial assets and liabilities.
When one is available, the Group measures fair value of an instrument using the quoted price in an active
market for that instrument. A market is regarded as active if transactions for the asset or liability take place
with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no
quoted price in an active market, then the Group uses valuation techniques that maximise the use of
relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique
incorporates all of the factors that market participants would take into account in pricing a transaction.
The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction
price ie. the fair value of the consideration given or received.
If the Group determines that the fair value on initial recognition differs from the transaction price and the
fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor
based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation
to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the
difference between the fair value on initial recognition and the transaction price. Subsequently, that
difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later
than when the valuation is wholly supported by observable market data or the transaction is closed out.
7. Operating segments
An operating segment is a component of the Group
•
•
that engages in business activities from which it may earn revenues and incur expenses (including
revenue and expenses relating to transactions with the Group’s other components), and
whose operating results are reviewed regularly by the Group’s chief operating decision maker for the
purpose of making decisions about allocating resources to the segment and assessing its performance.
The Group currently has one reportable segment, which develops and licenses software for regulated entities.
The revenues and profits generated by the Group’s operating segment and segment assets are summarised
below:
For the year ended 30 June
Sales to external customers
Other revenue and income
Total segment revenue and income
Unallocated revenue:
Interest revenue
Software Development and Licensing
2022
$
1,457,627
3,094,048
4,551,675
2021
$
1,364,197
1,335,981
2,700,178
498
1,823
Total revenue and other income
4,552,173
2,702,001
43
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
7. Operating segments (continued)
For the year ended 30 June
EBITDA
Depreciation and amortisation
Interest revenue
Interest expense
Loss before income tax
Income tax expense
Loss for the year
Software Development and Licensing
2022
$
2021
$
(4,898,208)
(5,426,928)
(99,254)
(402,013)
498
(67)
1,823
(46,757)
(4,997,031)
(5,873,875)
-
-
(4,997,031)
(5,873,875)
Segment assets
8,818,256
5,960,823
Segment liabilities
1,385,662
958,699
Geographic information
The Group’s main operations and place of business is in Australia, with majority of its revenue being derived
overseas.
Revenue from contracts with customers
Asia
Australia
United States of America
30 June 2022
$
30 June 2021
$
561,660
443,765
452,202
505,989
341,625
516,583
1,457,627
1,364,197
Revenue is based on the location of the customer. Refer to Note 8 for further detail on major customers,
products and services.
Location of non-current assets
Australia
30 June 2022
$
30 June 2021
$
1,797,520
1,797,520
158,542
158,542
Non-current assets include intangibles, property, plant and equipment, investment in and loans to equity-
accounted investees.
44
Identitii Limited
Annual Report FY22
8. Revenue
Notes to the Consolidated Financial Statements
The Group generates revenue primarily from the licensing of software and the provision of professional and
maintenance services to its customers.
a) Performance obligations and revenue recognition policies
Under its contracts, the Group grants a licence to the customer for the use of its software. The contract
will specify the term of the licence, the jurisdictions in which the licence may be utilised and protocols to
be followed to extend the licence beyond the agreed licence term.
The contracts also facilitate the provision of certain software, training, maintenance, customisation and
configuration or other services from the Group in consideration for the payment of fees. The customer is
granted, for the term of each contract, a non-exclusive, perpetual, irrevocable and royalty-free licence to
use the software in a specific use case. The Group retains all rights, title and interest in the intellectual
property of the software.
The Group is currently recognising revenue under these enterprise level and SaaS contracts for licence
fees, maintenance fees, usage fees and professional services, each regarded as a separate performance
obligation. Revenue is measured based on the consideration specified in the contract and is recognised
when the Group transfers control over the product or service to the customer. Charges are determined by
a number of factors including transaction volume, customisation requirements, ongoing support and
maintenance and new feature releases. Pricing changes for each renewal term are to be mutually agreed
in writing.
The following table provides information about the nature and timing of the satisfaction of performance
obligations in its contracts with customers including the related revenue recognition policies.
Product and
services
Licence fees
Nature and timing of satisfaction of performance obligations
The contracts require the Group to undertake maintenance and software
enhancement activities throughout the licence period that significantly affects
the intellectual property (IP) to which the customers have rights. The nature of
the Group’s performance obligation in granting a licence is regarded as a right
to access the IP and thus the Group recognises licence fee revenue over time.
Licence fee revenue is recognised in equal monthly instalments from the date
the licence is first transferred and for the term of the contract. The licence fee
is a fixed annual fee as specified in the contract.
There remains $1,213,555 in relation to contracted licence fees for which no
revenue or deferred revenue has been recognised as the performance
obligations have not been met as at 30 June 2022.
45
Identitii Limited
Annual Report FY22
8. Revenue (continued)
Product and
services
Maintenance fees
Usage fees
Notes to the Consolidated Financial Statements
Nature and timing of satisfaction of performance obligations
Maintenance (software, equipment and hosted services maintenance) is to be
provided to customers on an ongoing basis from the date the licence is first
transferred and throughout the term of the contract.
The maintenance fee is a fixed annual fee as specified in the contract.
Under AASB 15, the performance obligation to provide maintenance services
is first met upon transfer of the licence and is ongoing throughout the term of
the contract. The total maintenance fee revenue to be billed under the contract
is recognised in equal monthly instalments over time from the date the licence
is first transferred.
There remains $30,240 in relation to contracted maintenance fees for which no
revenue or deferred revenue has been recognised as the performance
obligations have not been met as at 30 June 2022.
Usage fee revenue is determined by the number of successful transactions (as
defined in the contract) and is based on information provided to the Group by
the customer. Usage fees are recognised only when the later of the usage
occurs and the licence fee obligation has been satisfied. Usage fees are
variable fees and may be subject to an annual cap as specified in the contract.
The Group recognises usage fee revenue over time based on when the usage
occurs.
Professional services
(including setup,
training and other
support costs)
Professional services include setup, training and support costs as well as
individual customisation projects that are separate and distinct performance
obligations.
The Group recognises revenue at a point in time based on time and materials
incurred in delivering the product and services to its customers as per the terms
and prices specified in the contract. Invoices are generated on confirmation of
product and service delivery and revenue is recognised at that point in time.
There remains $414,341 in relation to contracted professional services for
which no revenue or deferred revenue has been recognised as the
performance obligations have not been met as at 30 June 2022.
Where revenue is billed in advance, a contract liability is recognised and amortised over the period of the
invoice. Where revenue is billed in arrears, a contract asset is recognised at the time of revenue
recognition and transferred to trade receivables when the invoice is generated.
Warranties, returns and refunds
The warranty period will run from the licence start date and over a specified period of time. Under the
warranty period the Group undertakes that the product and services supplied are of satisfactory quality
and fit for purpose, free from defects in design, operate in accordance with the contract and that
appropriate master copies are maintained by the Group.
46
Identitii Limited
Annual Report FY22
8. Revenue (continued)
Notes to the Consolidated Financial Statements
In the event of an unresolved third party intellectual property rights claim, customers may elect to return
all deliverables under the contract and be refunded in full for all charges paid by the customer to date.
Revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. Due to the absence of any third party intellectual property
rights claims during the current and prior period, no adjustment has been made to revenue recognised
during the period for expected returns.
Customers may terminate or partially terminate the contract by written notice to the Group. Due to the
absence of any such written notices to the Group during the current and prior period, no adjustment has
been made to revenue recognised during the period for expected refunds on termination.
b) Disaggregation of revenue
In the following table, revenue is disaggregated by nature of product and service and is done so in
conjunction with the Group’s reporting segment.
For the year ended 30 June
Nature of product and service
Licence and usage fees
Maintenance fees
Professional services
SaaS fees
Software Development and Licensing
2022
$
598,682
27,551
808,144
23,250
2021
$
359,206
21,303
983,688
-
Revenue from contracts with customers
1,457,627
1,364,197
c) Contract balances
The following table provides information about trade receivables, contract assets and contract liabilities
from contracts with customers.
Trade receivables
Contract assets
Contract liabilities
30 June 2022
$
30 June 2021
$
264,302
120,250
227,419
26,400
(259,712)
(179,650)
Reconciliation of the written down values of contract assets and contract liabilities at the beginning and
end of the current and prior financial year are set out below:
47
Identitii Limited
Annual Report FY22
8. Revenue (continued)
Contract assets
Opening balance 1 July
Additions
Transfer to trade receivables
Closing balance 30 June
Contract liabilities
Opening balance 1 July
Payments received in advance
Transfer to revenue – in opening balance
Transfer to revenue – other balances
Closing balance 30 June
Notes to the Consolidated Financial Statements
30 June 2022
$
30 June 2021
$
26,400
240,250
66,500
153,400
(146,400)
(193,500)
120,250
26,400
30 June 2022
$
30 June 2021
$
179,650
504,873
(179,650)
(245,161)
259,712
44,545
550,533
(44,545)
(370,883)
179,650
No information has been provided about remaining performance obligations at 30 June 2022 that have
an original expected duration of one year or less, as allowed by AASB 15.
9. Government grants
Export market development grant
COVID-19 related grants
30 June 2022
$
30 June 2021
$
43,284
-
43,284
100,000
317,936
417,936
The Export Market Development Grant (EMDG) scheme is a key Australian Government financial assistance
program that encourages small to medium sized Australian businesses to develop export markets by granting
funding to cover eligible export expenditure, up to a maximum claim of $150,000. The Group recognises the
EMDG in profit or loss when the application is successful and the Group receives an unconditional right to the
income.
The EMDG grant received in the current year is lower than in previous years due to reduced spend on eligible
export activities as a result of worldwide COVID-19 restrictions.
COVID-19 related grants were temporary subsidies for businesses affected by COVID-19 and consisted mostly
of the JobKeeper and Cash Flow Boost payment schemes. Both schemes have closed as at the date of this
report.
48
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
10. Income tax expense
a) Amounts recognised in profit or loss
Current tax expense
Current year
Tax expense
b) Reconciliation of accounting loss to taxable loss
Loss before tax
Adjustments to accounting loss
Non-deductible expenses
Tax exempt income
Taxable loss
Tax expense
30 June 2022
$
30 June 2021
$
-
-
-
-
30 June 2022
$
30 June 2021
$
(4,997,031)
(5,873,875)
3,196,755
3,063,404
(3,250,429)
(1,053,724)
(5,050,705)
(3,864,195)
-
-
The Group is in a net tax loss position and does not recognise a deferred tax asset.
c) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items, because it is not probable
that future taxable profit will be available against which the Group can use the benefits therefrom.
30 June 2022
30 June 2021
Gross amount
$
Tax effect
$
Gross amount
$
Tax effect
$
Tax losses
16,951,800
4,237,950
12,489,797
3,434,694
11. Loss per share
The calculation of basic and diluted loss per share has been based on the following loss attributable to ordinary
shareholders and weighted-average number of ordinary shares outstanding.
49
Identitii Limited
Annual Report FY22
11. Loss per share (continued)
Notes to the Consolidated Financial Statements
30 June 2022
$
30 June 2021
$
Loss for the year attributable to owners of Identitii Limited
(4,833,962)
(5,825,443)
Weighted-average number of ordinary shares
Issued ordinary shares at 1 July
151,791,071
81,778,198
Effect of shares issued during the year
31,333,234
48,799,915
Weighted-average number of ordinary shares at 30 June
183,124,305
130,578,113
Basic and diluted loss per share (cents)
(2.64)
(4.46)
Share-based payment options have not been included in the calculation of diluted loss per share as these are
considered anti-dilutive as at 30 June 2022 and 30 June 2021.
12. Cash and cash equivalents
Bank balances
Term deposits
13. Intangible assets
Software – at cost
Less: Accumulated amortisation
30 June 2022
$
30 June 2021
$
5,000,288
4,415,466
73,845
73,845
5,074,133
4,489,311
30 June 2022
$
30 June 2021
$
62,112
(62,112)
-
62,112
(5,106)
57,006
50
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
13. Intangible assets (continued)
Reconciliation of carrying amount
Balance at 1 July 2020
Amortisation expense
Balance at 30 June 2021
Amortisation expense
Balance at 30 June 2022
14. Property, plant and equipment
Reconciliation of carrying amount
Software
$
62,112
(5,106)
57,006
(57,006)
-
Right-of-
use asset
$
Office fit
out
$
Computer
equipment
$
Office
equipment
$
Total
$
Cost
Balance at 1 July 2020
774,563
351,024
100,190
39,299
1,265,076
Modification of lease
(396,024)
Additions
Disposals
-
-
-
-
-
-
49,330
(3,999)
-
-
-
(396,024)
49,330
(3,999)
Balance at 30 June 2021
378,539
351,024
145,521
39,299
914,383
Balance at 1 July 2021
378,539
351,024
145,521
39,299
914,383
Additions
Disposals
Loss of control of subsidiary
-
-
-
-
-
-
62,513
-
62,513
(37,257)
(37,483)
(74,740)
(2,272)
-
(2,272)
Balance at 30 June 2022
378,539
351,024
168,505
1,816
899,884
51
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
14. Property, plant and equipment (continued)
Right-of-
use asset
$
Office fit
out
$
Computer
equipment
$
Office
equipment
$
Total
$
Accumulated depreciation
Balance at 1 July 2020
247,416
97,269
55,776
12,340
412,801
Modification of lease
(8,378)
-
-
-
(8,378)
Depreciation
Disposals
128,986
243,118
31,623
7,834
411,561
-
-
(3,137)
-
(3,137)
Balance at 30 June 2021
368,024
340,387
84,262
20,174
812,847
Balance at 1 July 2021
368,024
340,387
84,262
20,174
812,847
Depreciation
Disposals
Loss of control of subsidiary
10,515
10,637
32,652
5,413
59,217
-
-
-
-
(35,950)
(24,012)
(59,962)
(270)
-
(270)
Balance at 30 June 2022
378,539
351,024
80,694
1,575
811,832
Carrying amounts
At 1 July 2020
527,147
253,755
44,414
26,959
852,275
Balance at 30 June 2021
10,515
10,637
61,259
19,125
101,536
Balance at 30 June 2022
-
-
87,811
241
88,052
During the current year, the Company decided not to exercise the option to extend its long-term office lease
when it expired in August 2021 and it moved to a monthly term lease. The Company subsequently secured
new office space in May 2022 on a 12 month lease. The Group has elected not to recognise a right-of-use
asset and corresponding lease liability for short-term leases of 12 months or less. As such, the lease payments
on the new office are expensed on a straight line basis to profit and loss over the lease term.
15. Equity-accounted investees
Investment in associates
30 June 2022
$
30 June 2021
$
903,154
-
On 15 November 2021, x15ventures invested $0.7 million into Payble, diluting Identitii’s shareholding in Payble
from 60.1% to 44.2%. On this date it was determined that Identitii no longer retained control of Payble and, as
a result, Payble went from being a subsidiary to an investment in associate. Refer to Note 30 for further
information on investment in associates.
52
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
15. Equity-accounted investees (continued)
On the date control was lost, Identitii derecognised the assets and liabilities of Payble from the consolidated
statement of financial position and recognised its investment in Payble at fair value. This resulted in a gain on
loss of control of $1,860,064 in the consolidated statement of profit or loss for the year ended 30 June 2022.
16. Loans to equity-accounted investees
Current
Non-current
Loan to Payble Pty Ltd
30 June 2022
$
30 June 2021
$
120,000
779,144
899,144
-
-
-
During the prior year, Identitii sold intellectual property (IP) to Payble for $1.0 million under an Intellectual
Property Agreement. Payment of this IP-related Assignment Fee commenced during the current year. Under
the agreement, the loan is to be repaid in monthly instalments over two years and is indexed against Payble’s
revenue growth. If repayments have not reached $1.0 million by 30 November 2023, a final top-up payment
will be made by Payble on 1 December 2023.
Subsequent to year-end, the Board approved the conversion of the balance of the above loan into shares at
the next Payble capital raise. The loan will be converted at the same valuation and price as other investors
that participate in the capital raise. This will allow Payble to focus cash on growth activities.
17. Trade and other payables
Trade payables
Other payables and accruals
18. Employee liabilities and provisions
Provision for annual leave
Superannuation payable
Employee taxes withheld
Other
30 June 2022
$
30 June 2021
$
299,212
345,105
644,317
103,887
167,222
271,109
30 June 2022
$
30 June 2021
$
222,468
96,690
156,646
5,829
481,633
238,767
95,906
140,228
-
474,901
53
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
18. Employee liabilities and provisions (continued)
Amounts not expected to be settled within the next 12 months
The provision for annual leave includes all unconditional entitlements where employees have completed the
required period of service and also where employees are entitled to pro-rata payments in certain
circumstances. The entire amount is presented as current, since the Group does not have an unconditional
right to defer settlement. However, based on past experience, the Group does not expect all employees to
take the full amount of accrued leave or require payment within the next 12 months.
19. Borrowings and lease liabilities
Current liabilities
Borrowings (a)
Lease liabilities (b)
Total liabilities
a) Borrowings
Borrowings at the end of the year were as follows:
Director loan - John Rayment
30 June 2022
$
30 June 2021
$
-
-
-
-
20,000
13,039
33,039
33,039
30 June 2022
$
30 June 2021
$
-
-
20,000
20,000
On 17 March 2020 the Group received a loan of $100,000 from John Rayment. This loan was for 12
months, interest free and was to convert to equity at $0.07 per share as approved by shareholders. On
17 November 2020 the Company issued 1,142,857 shares to John Rayment in partial settlement of the
loan, leaving a remaining loan balance of $20,000. On 7 July 2021 a further 285,714 shares were issued
to John Rayment in full and final settlement of his loan.
b) Lease liabilities
The Group’s long term lease agreement expired in August 2021. It is currently on a lease that is classified
as short-term under AASB 16 and is, therefore, not recognised in the statement of financial position.
54
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
19. Borrowings and lease liabilities (continued)
c) Terms and repayment schedule
The terms and conditions of outstanding borrowings and lease liabilities are as follows:
30 June 2022
30 June 2021
Director loan - unsecured
Lease liabilities
Total liabilities
0%
6%
2021
2021
Nominal
interest
rate p.a
Year of
maturity
Face
value
Carrying
amount
$
Face
value
$
Carrying
amount
$
-
-
-
20,000
20,000
378,539
13,039
398,539
33,039
$
-
-
-
d) Reconciliation of movements in borrowings and lease liabilities to cash flows arising from financing
activities
Balance at 1 July
Changes from financing cash flows
Repayment of borrowings
Lease payments
Transaction costs related to borrowings and leases
Other financing cash flows
2022
$
2021
$
33,039
1,323,748
-
(13,039)
(67)
-
(600,000)
(125,649)
(61,687)
100,000
Total changes from financing cash flows
(13,106)
(687,336)
Other changes
Finance costs
Conversion of borrowings to equity
Lease modification
Balance at 30 June
67
(20,000)
-
-
36,278
(180,000)
(459,651)
33,039
55
Identitii Limited
Annual Report FY22
20. Share capital
Notes to the Consolidated Financial Statements
Ordinary shares
30 June 2022
30 June 2021
$
Number of
shares
$
Number of
shares
In issue at beginning of the year
25,775,278
151,791,071
17,930,105
81,778,198
Issued for cash, net of costs of equity –
entitlement offer
-
-
1,832,720
27,259,400
Issued in settlement of Director loan
20,000
285,714
80,000
1,142,857
Issued for cash, net of costs of equity –
placement
Issued for cash, net of costs of equity –
share purchase plan
Issued for cash, net of costs of equity –
rights issue
Issued not for cash – consideration for
marketing services
Issued not for cash – consideration for
capital raise management services
Issued not for cash – consideration for
investor relation services
Issued not for cash – consideration for
investor relation services
5,467,154
37,500,000
3,903,426
27,500,000
-
-
1,978,750
13,698,630
1,334,401
8,774,914
-
-
30,000
375,000
50,277
411,986
181,000
1,131,250
90,000
562,500
37,000
389,474
-
-
-
-
-
-
In issue at end of the year –
authorised, fully paid and no par value
32,934,833
200,809,923
25,775,278
151,791,071
All ordinary shares rank equally with regard to the Company’s residual assets.
Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote
per share at general meetings of the Company.
Issue of ordinary shares
On 7 July 2021, the Company issued 285,714 shares at $0.07 per share to John Rayment in final settlement
of his loan.
On 1 November 2021, as part of a placement to sophisticated and institutional investors, the Board approved
the issue of 37,500,000 ordinary shares in the Company at a price of $0.16 per share.
On 24 November 2021, as part of a rights issue to existing shareholders, the Board approved the issue of
8,774,914 ordinary shares in the Company at a price of $0.16 per share.
56
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
20. Share capital (continued)
On 21 January 2022, the Board approved the issue of:
•
•
•
375,000 ordinary shares in the Company at $0.08 per share for marketing services received;
1,131,250 ordinary shares in the Company at $0.16 per share for capital raise management services
received; and
562,500 ordinary shares in the Company at $0.16 per share for investor relation services received.
On 20 June 2022, the Board approved the issue of 389,474 ordinary shares in the Company at $0.095 per
share for investor relation services received.
Nature and purpose of reserves
The share option reserve comprises the cost of the Company shares issued under the Group’s share-based
payment plans. Refer to Note 21.
The foreign currency translation reserve comprises all foreign currency differences arising from the translation
of the financial statements of foreign operations.
Other reserves comprises the notional equity gain on dilution of the parent entity’s ownership interest in its
subsidiary without a loss of control.
Dividends
No dividends were declared or paid by the Company for the current or previous year.
21. Share-based payment arrangements
For the year ended 30 June 2022, the Group recognised a share-based payment expense of $541,737 in the
statement of profit or loss (30 June 2021: $806,766) under the following share-based payment arrangements.
Share options
30 June 2022
30 June 2021
$
Number of
options
$
Number of
options
Director options
Canaccord options
Gleneagle options
PAC Partners options
(i)
(ii)
(ii)
(ii)
817,106
12,358,082
599,406
10,358,082
-
-
-
-
992,485
1,950,000
165,740
5,000,000
79,196
5,000,000
-
-
Equity incentive plan
(iii)
3,004,212
16,241,405
2,759,371
18,024,417
In issue at end of year
3,900,514
33,599,487
4,517,002
35,332,499
The following summarises changes in share-based payment arrangements during the current year.
57
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
21. Share-based payment arrangements (continued)
(i) Share options issued to Directors
John Rayment (equity settled)
A share-based payment expense of $201,616 in relation to John Rayment’s options has been recognised
in the statement of profit or loss for the year ended 30 June 2022.
Nicholas Armstrong and Steven James (equity settled)
On 6 July 2021, Nicholas Armstrong and Steven James were granted 1,000,000 share options each at
an exercise price of $0.25 per share in their capacity as Non-Executive Directors. The share options were
to vest in two equal tranches for each 12 months of continuous service to the Company and the Board
and expire on 8 July 2024.
Nicholas Armstrong resigned as Non-Executive Director of the Company on 7 October 2021 and, as a
result, his share options will not vest.
Steven James resigned as Non-Executive Director on 2 June 2022 and his options vested in full on
termination. The fair value of share options granted have been measured using the Black-Scholes model.
A share-based payment expense of $16,084 in relation to these options has been recognised in the
statement of profit or loss for the year ended 30 June 2022.
(ii) Share options issued to supplier of services
Canaccord Genuity (Australia) Limited (equity settled)
The 1,950,000 share options previously granted to Canaccord Genuity (Australia) Limited (Canaccord),
in consideration for corporate advisory services provided, expired on 1 July 2021. The share-based
payment reserve of $992,485 has been transferred to retained earnings as at 30 June 2022.
Gleneagle Securities (Aust) Pty Ltd (equity settled)
The 5,000,000 share options previously granted to Gleneagle Securities (Aust) Pty Ltd (Gleneagle), in
consideration for underwriting services provided, expired on 13 May 2022. The share-based payment
reserve of $165,740 has been transferred to retained earnings as at 30 June 2022.
PAC Partners Securities Pty Ltd (equity settled)
On 21 January 2022, the Company issued 5,000,000 share options to PAC Partners Securities Pty Ltd
(PAC Partners) in consideration for capital raise management services provided. The options vested
immediately, have an exercise price of $0.24 per share and expire on 20 January 2024.
The fair value of share options granted have been measured using the Black-Scholes model. A share-
based payment expense of $79,196 in relation to these options has been recognised in the statement of
profit or loss for the year ended 30 June 2022.
(iii) Equity Incentive Plan (equity settled)
On 10 January 2018 the Group established the Equity Incentive Plan (EIP). This is a long-term plan under
which share options or performance rights to subscribe for shares may be offered to eligible employees
and consultants as selected by the Directors at their discretion. Currently only share options have been
awarded under the EIP.
Under the EIP, one share option entitles the holder to one share in the Company subject to vesting
conditions such as the satisfaction of performance hurdles and/or continued employment. The Board have
the discretion to settle share options with a cash equivalent payment.
58
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
21. Share-based payment arrangements (continued)
Participants in the EIP will not pay any consideration for the grant of the share option unless determined
otherwise. Share options will not be listed and may not be transferred, assigned or otherwise dealt with
unless approved by the Board.
If the employee’s employment terminates before the share options have vested, the share option will
lapse, unless approved otherwise by the Board. Eligible employees holding a share option pursuant to
the EIP have no rights to dividends and are not entitled to vote at shareholder meetings until that share
option is vested and, where required, exercised.
Share options previously granted to employees
A share-based payment expense of $202,316 in relation to EIP share options previously granted to
employees has been recognised in the statement of profit or loss for the year ended 30 June 2022.
During the year 3,208,012 unvested share options under the EIP were forfeited in relation to employees
who left the Company.
New share options granted to employees
During the year, the Company granted 1,425,000 share options at an exercise price of $0.15 per share
to eligible employees. The share options vest in equal instalments from grant date pending specific
service, performance and market conditions being met.
A share-based payment expense of $42,525 in relation to new EIP share options granted to employees
has been recognised in the statement of profit or loss for the year ended 30 June 2022.
Set out below is a summary of options granted to employees under the plan:
Grant date
Expiry date
Exercise
price
Balance at
start of
year
Granted
Expired /
forfeited
Balance at
end of year
06/07/2018
01/08/2028
$0.75
1,350,000
01/08/2018
01/08/2028
$0.75
578,125
02/10/2018 –
27/05/2019
02/10/2022 –
27/05/2023
$0.75
2,646,292
01/01/2019
01/01/2023
$0.75
100,000
30/04/2021
01/01/2026
$0.15
13,350,000
-
-
-
-
-
-
-
-
-
1,350,000
578,125
2,646,292
100,000
(3,208,012)
10,141,988
01/07/2021
01/07/2026
26/08/2021
01/07/2026
02/09/2021
01/07/2026
16/11/2021
01/07/2026
07/01/2022
07/01/2027
02/03/2022
02/03/2027
14/03/2022
14/03/2027
$0.15
$0.15
$0.15
$0.15
$0.15
$0.15
$0.15
-
-
-
-
-
-
-
75,000
75,000
75,000
150,000
150,000
750,000
150,000
-
-
-
-
-
-
-
75,000
75,000
75,000
150,000
150,000
750,000
150,000
18,024,417
1,425,000
(3,208,012)
16,241,405
59
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
21. Share-based payment arrangements (continued)
a) Measurement of grant date fair values
The following inputs were used in the measurement of the fair values at grant date of the share-based
payment awards granted during the year.
Director options
Supplier options
Nicholas Armstrong
Steven James
PAC Partners
Number of options
1,000,000
1,000,000
5,000,000
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility (1)
Contractual life of options (years)
Expected dividends
Risk free rate (2)
Valuation method
Expiry date
$0.0161
$0.0920
$0.2500
$0.0161
$0.0920
$0.2500
$0.0158
$0.0950
$0.2400
75 – 85%
75 – 85%
70 – 80%
3
Nil
3
Nil
2
Nil
0.19%
0.19%
0.78%
Black-Scholes
Black-Scholes
Black-Scholes
8 July 2024
8 July 2024
20 January 2024
(1) Expected volatility - a measure of the amount by which a share price is expected to fluctuate during a period and is based on
the historical share price volatility of a group of comparable companies, including Identitii Limited, as at the grant date.
(2) Risk free rate - the yield available on Australian Government bonds with a term comparable to the likely term of the options.
60
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
21. Share-based payment arrangements (continued)
EIP: Staff options
Number of options
75,000
75,000
75,000
150,000
150,000
187,500
375,000
187,500
150,000
Fair value at grant date
$0.0457
$0.0594
$0.1110
$0.1045
$0.0603
$.0441
$.0441
$0.0467
$0.0392
Share price at grant date
$0.0910
$0.1100
$0.1750
$0.1600
$0.1050
$0.0790
$0.0790
$0.0790
$0.0720
Exercise price
$0.1500
$0.1500
$0.1500
$0.1500
$0.1500
$0.1500
$0.1500
$0.1500
$0.1500
Expected volatility (1)
80 – 90%
80 – 90%
80 – 90%
80 – 90%
80 – 90%
80 – 90%
80 – 90%
80 – 90%
80 – 90%
Contractual life (years)
Expected dividends
Risk free rate (2)
Valuation method
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
0.77%
0.59%
0.63%
1.44%
1.47%
1.75%
1.75%
1.75%
2.14%
Black-
Scholes
Black-
Scholes
Black-
Scholes
Black-
Scholes
Black-
Scholes
Black-
Scholes
Black-
Scholes
Monte Carlo
Black-
Scholes
Expiry date
1 Jul 2026
1 Jul 2026
1 Jul 2026
1 Jul 2026
7 Jan 2027
2 Mar 2027
2 Mar 2027
2 Mar 2027 14 Mar 2027
Vesting conditions
(A)
(A)
(A)
(A)
(A)
(B)
(C)
(D)
(A)
(1)
Expected volatility - a measure of the amount by which a share price is expected to fluctuate during a period and is based on the historical share price volatility of a group of comparable companies,
including Identitii Limited, as at the grant date.
(2) Risk free rate - the yield available on Australian Government bonds with a term comparable to the likely term of the options.
(A) Share options vest in three equal annual tranches, commencing from grant date, subject to continued service with the Company.
(B) Share options vest in four equal annual tranches, commencing from grant date, subject to continued service with the Company.
(C) 187,500 share options vest when the Group records revenue of at least $5 million in the preceding twelve month period and 187,500 share options vest when the Group records revenue of at least $10
million in the preceding twelve month period.
(D) Share options vest when the Company’s closing share price on the ASX is at or above $0.46 per share for twenty consecutive trading days.
61
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
21. Share-based payment arrangements (continued)
b) Reconciliation of outstanding share options
The number and weighted-average exercise price of share options under the share-based payment
arrangements noted above were as follows:
Number of
options
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
2022
2022
2021
Outstanding at 1 July
35,332,499
$0.28
12,302,820
Forfeited during the year
(3,208,012)
$0.15
(1,070,321)
Expired during the year
(6,950,000)
$0.36
-
Granted during the year
8,425,000
$0.23
24,100,000
Outstanding at 30 June
33,599,487
$0.26
35,332,499
2021
$0.53
$0.33
-
$0.15
$0.28
Exercisable at 30 June
15,003,654
$0.39
11,049,165
$0.50
22. Non-controlling interest
The following table summarises the information relating to each of the Group’s subsidiaries that have a material
non-controlling interest (NCI), after intra-group eliminations.
In April 2021, x15ventures acquired a 31.3% interest in Payble, decreasing Identitii’s ownership from 87.5%
to 60.1%. The carrying amount of Payble’s net liabilities in the Group’s consolidated financial statements on
the date of x15ventures investment was $98,625.
Carrying amount of NCI given
Consideration received
Increase in equity attributable to owners of the parent
30 June 2022
$
30 June 2021
$
-
-
-
411,877
1,100,000
688,123
On 15 November 2021, the Company’s ownership interest in Payble further decreased from 60.1% to 44.2%
and it was determined the Company no longer retained control of Payble.
The equity reserve above was transferred to retained losses at the time the Company ceased to control Payble.
Non-controlling interests for the current year are calculated up to the date control was lost. The results below
show the position as at 15 November 2021, the date the ownership interest in Payble reduced.
62
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
22. Non-controlling interest (continued)
NCI percentage
Current assets
Non-current assets
Current liabilities
Net assets
Net assets attributable to NCI
Loss after tax
Total comprehensive loss
Loss allocated to NCI
Other comprehensive loss allocated to NCI
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Payble Pty Ltd
39.9%
39.9%
15 November 2021
$
30 June 2021
$
567,336
2,003
79,443
489,896
195,469
408,694
408,694
163,069
163,069
925,258
2,258
28,926
898,590
411,917
203,116
203,116
48,432
48,432
(377,177)
(544,668)
(174,868)
(3,327)
-
1,100,040
Net (decrease) / increase in cash and cash equivalents
(921,845)
921,845
Reconciliation of NCI
Balance 1 July
Initial investment in subsidiary
Loss allocated to NCI
NCI acquisition without loss of control
Loss of control of subsidiary
Balance 30 June
23. Capital management
30 June 2022
$
30 June 2021
$
363,485
-
(163,069)
-
(200,416)
-
40
(48,432)
411,877
-
-
363,485
The Group’s objective is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business.
63
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
23. Capital management (continued)
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital
structure, the Group may issue new shares or sell assets to reduce debt.
24. Reconciliation of cash flows from operating activities
Loss for the year
Adjustments for:
Other income – rent relief
Equity-settled share-based payment transactions
Annual leave provision
Depreciation and amortisation
Loss on disposal of asset
Gain on lease modification
Gain on loss of control of subsidiary
Bank revaluation and unrealised FX gains and losses
Interest expense and other finance costs
Capital raise transaction costs
Bad and doubtful debts
Equity-settled consulting fees
Share of equity-accounted investee loss
Other non-cash generating expenses
Changes in:
Trade and other receivables
R&D tax receivable
Contract assets
Trade and other payables
Employee liabilities and provisions
Contract liabilities
30 June 2022
$
30 June 2021
$
(4,997,031)
(5,873,875)
-
541,737
8,259
116,222
12,469
(12,726)
806,766
92,572
416,667
862
-
(72,005)
(1,860,064)
(105,815)
67
-
(1,825)
67,000
267,246
(9,329)
-
(10,151)
43,988
123,231
2,530
50,277
-
3,381
(5,961,064)
(4,428,483)
(131,139)
(288,644)
(93,850)
373,208
6,732
80,062
(151,206)
(164,938)
40,100
3,375
(193,567)
135,105
Net cash from operating activities
(6,014,695)
(4,759,614)
64
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
25. Financial instruments – fair values and risk management
i. Accounting classifications and fair values
The carrying amount of the Group’s financial assets and financial liabilities is a reasonable approximation of
fair value due to their short term nature.
ii. Financial risk management
The Group has exposure to the following risks arising from financial instruments:
•
•
•
credit risk (see ii (b))
liquidity risk (see ii (c))
foreign currency risk (see ii (d))
a) Risk management framework
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the
Group’s risk management framework. The Board of Directors has established the Audit and Risk
Committee, which is responsible for developing and monitoring the Group’s risk management policies.
The Group’s risk management policies are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations and arises principally from the Group’s receivables from customers.
The carrying amount of financial assets and contract assets represents the maximum credit exposure.
Impairment losses on financial assets and contract assets recognised in profit or loss are as follows:
(Decrease) / increase in impairment loss on trade
receivables and contract assets arising from contracts
with customers
30 June 2022
$
30 June 2021
$
(1,825)
2,530
Trade receivables and contract assets
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
Management also considers the factors that may influence the credit risk of its customer base including
the default risk associated with the industry and country in which the customers operate.
The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment
period of 45 days for corporate customers.
Expected credit loss assessment for corporate customers
The Group uses a provision matrix to measure ECLs of trade receivables from corporate customers,
which comprise of a small number of large balances.
65
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
25. Financial instruments – fair values and risk management (continued)
The Group is still in its early stages of revenue generation with a small customer base and therefore
doesn’t have extensive historical information on which to base its loss rates. Its loss rates are
management’s best estimate based on industry comparatives and will be updated at every reporting
period to reflect current and forecast credit conditions including other business, financial and economic
factors. Loss rates are determined separately for each credit risk grade, based on external credit rating
definitions from a reputable credit rating agency. To date no customer balances have been written off or
credit impaired at the reporting date.
The following tables provides information about the exposure to credit risk and ECLs for trade receivables
and contract assets for corporate customers as at 30 June 2022.
30 June 2022
External
credit rating
Weighted
average loss
rate
Credit
impaired
Not past due
BBB- to AAA
Not past due
No rating
0 - 30 days
BBB- to AAA
0.1%
0.2%
0.5%
No
No
No
30 June 2021
External
credit rating
Weighted
average loss
rate
Credit
impaired
Not past due
BBB- to AAA
0 - 30 days
BBB- to AAA
61 - 180 days
BBB- to AAA
0.1%
0.5%
3.0%
No
No
No
Gross
carrying
amount
$
281,738
16,250
87,313
385,301
Gross
carrying
amount
$
125,179
27,814
77,000
229,993
Impairment
loss
allowance
$
279
33
437
749
Impairment
loss
allowance
$
125
139
2,310
2,574
Cash and cash equivalents and other receivables
The Group held cash and cash equivalents of $5,074,133 at 30 June 2022 (30 June 2021: $4,489,311).
The majority of cash and cash equivalents are held with financial institution counterparties, which are
rated A- to AA, based on credit agency ratings. The Group considers its cash and cash equivalents to
have low credit risk based on the external credit ratings of the counterparties.
The Group held other receivables of $248,088 at 30 June 2022 (30 June 2021: $153,832). The Group
considers its other receivables to have low credit risk based on historical data available, the reputation of
the counterparties and the systematic ease with which the receivables are recoverable.
The Group did not recognise an impairment allowance for cash and cash equivalents and other
receivables during the current and prior year under review.
66
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
25. Financial instruments – fair values and risk management (continued)
Movements in the allowance for impairment in respect of trade receivables, contract assets and
other financial assets
The movement in the allowance for impairment in respect of trade receivables, contract assets and other
financial assets during the year was as follows.
Balance at 1 July
Net remeasurement of loss allowance
Balance at 30 June
c) Liquidity risk
30 June 2022
$
30 June 2021
$
2,574
(1,825)
749
44
2,530
2,574
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate, but
manageable, borrowing facilities are maintained. The Group also monitors the level of expected cash
inflows on trade and other receivables together with expected cash outflows on trade and other payables.
Exposure to liquidity risk
The following are the contractual maturities of financial liabilities at the reporting date. The amounts are
gross, undiscounted and include contractual interest payments where applicable.
Contractual cash flows
30 June 2022
Carrying
amount
$
Total
$
2 months or
less
$
2-12
months
$
12 months
or more
$
Trade and other payables
644,317
644,317
644,317
644,317
644,317
644,317
-
-
-
-
30 June 2021
Carrying
amount
$
Total
$
2 months or
less
$
2-12
months
$
12 months
or more
$
Contractual cash flows
Borrowings and leases
33,039
33,039
33,039
Trade and other payables
271,109
271,109
271,109
304,148
304,148
304,148
-
-
-
-
-
-
67
Identitii Limited
Annual Report FY22
Notes to the Consolidated Financial Statements
25. Financial instruments – fair values and risk management (continued)
d) Foreign currency risk
The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between
the currencies in which sales, purchases, receivables and borrowings are denominated and the respective
functional currencies of the Group companies. The Group’s exposure to foreign currency risk is
concentrated primarily in cash and trade receivables as some customers are invoiced in United States
Dollars (USD). The Group reduces this foreign currency risk by using the USD from customer sales to
pay expenses that are incurred in USD. Other foreign currency risk is not material at present.
Exposure to foreign currency risk
The following is the summary quantitative data about the Group’s exposure to currency risk as reported
to the management of the Group:
Cash and cash equivalents
Trade receivables
Trade payables
Net statement of financial position exposure
Sensitivity analysis
30 June 2022
USD
30 June 2021
USD
1,065,395
36,366
(4,495)
1,097,266
621,955
71,088
(16,561)
676,482
If foreign exchange rates were to increase / decrease by 10 per cent from rates used to determine fair
values as at the end of the reporting period, assuming all other variables that might impact fair value
remain constant, then the impact on profit or loss for the year would be as follows:
Impact on profit after tax
10% increase in USD/AUD exchange rate
10% decrease in USD/AUD exchange rate
30 June 2022
$
30 June 2021
$
159,283
(144,803)
89,814
(81,650)
There has been no change in assumptions or method used to determine foreign currency sensitivity from
the prior year.
26. Commitments
The Group has no commitments or contingencies.
68
Identitii Limited
Annual Report FY22
27. Auditors’ remuneration
Notes to the Consolidated Financial Statements
During the financial year the following fees were paid or payable for services provided by RSM, the auditor of
the Company, its network firms and unrelated firms:
30 June 2022
$
30 June 2021
$
Audit and review services
RSM (Australia)
Audit and review of financial statements
68,420
51,500
RSM (Hong Kong)
Audit and review of financial statements
5,299
73,719
20,989
72,489
28. Related parties
Parent and ultimate controlling party
Identitii Limited is the parent and ultimate controlling party of the Group.
Transactions with Key Management Personnel (KMP)
a) KMP compensation
KMP compensation comprised the following:
Compensation by category
Short-term employment benefits
Post-employment benefits
Other long-term employment benefits
Termination benefits
Share-based payments
30 June 2022
$
30 June 2021
$
532,824
40,560
20,069
12,974
191,433
797,860
556,749
34,975
19,710
-
542,895
1,154,329
Compensation of the Group’s KMP includes salaries, non-cash benefits and mandatory contributions to
post-employment superannuation and provident funds. Certain Directors as well as senior employees of
the Group are entitled to participate in the Equity Incentive Plan.
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Identitii Limited
Annual Report FY22
28. Related parties (continued)
b) KMP transactions
Notes to the Consolidated Financial Statements
KMP of the Company control approximately 1% of the voting shares of the Company as at 30 June 2022.
Terms and conditions of transactions with KMP and their related parties are no more favourable than
those available, or which might reasonably be expected to be available, on similar transactions to non-
KMP related entities on an arm’s length basis.
The aggregate value of transactions and outstanding balances related to KMP and entities over which
they have control or significant influence were as follows:
Transactions
Transaction values for year
ended 30 June
Balance outstanding as at
30 June
2022
$
2021
$
2022
$
2021
$
Loan from Director – John Rayment
20,000
80,000
-
20,000
An unsecured loan with no interest and a 12 month repayment term was advanced from John Rayment
to the Company in March 2020. This loan has been converted to equity at $0.07 per share and repaid in
full as at 30 June 2022. Refer to Note 19 (a) for further details.
In March 2022, an unsecured personal working capital loan of $24,000, with 10% interest and a 2 month
repayment term, was advanced from the Company to former founder and Non-Executive Director,
Nicholas Armstrong.
29. List of subsidiaries
The table below lists the controlled entities of the Group as at 30 June 2022.
Name
Principal place of business
Ownership interest
Identitii Hong Kong Limited Hong Kong
Payble Pty Ltd
Australia
30 June 2022
30 June 2021
100%
-
100%
60%
The Company provided $79,966 (30 June 2021: $69,990) of financial support during the year to Identitii Hong
Kong Limited to assist with the payment of current and ongoing general operating costs mostly in relation to
salaries and employee benefit expenses.
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Identitii Limited
Annual Report FY22
30.
Investment in associates
Notes to the Consolidated Financial Statements
Investment in associates are accounted for using the equity method of accounting. Information relating to
associates that are material to the Group are set out below:
Name
Principal place of business
Ownership interest
Payble Pty Ltd
Australia
44%
-
30 June 2022
30 June 2021
The following table summarises the financial information of Payble, as included in its own financial statements,
and reconciles it to the carrying amount of the Group’s interest in Payble.
There is no information for the period up to and including 30 June 2021 as Payble was a subsidiary. The
information presented in the 30 June 2022 table includes the results of Payble for the period from 15 November
– 30 June 2022 when Payble was an equity-accounted investee.
Payble Pty Ltd
30 June 2022
$
30 June 2021
$
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Summarised statement of profit or loss and other
comprehensive income
Loss after tax
Total comprehensive loss
Reconciliation of the carrying amount in associate
Opening carrying amount – 1 July
Fair value on date control was lost
Share of associate loss after tax
Closing carrying amount – 30 June
604,228
982,777
1,587,005
223,955
779,144
1,003,099
583,906
604,628
604,628
-
1,170,400
(267,246)
903,154
-
-
-
-
-
-
-
-
-
-
-
-
-
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Identitii Limited
Annual Report FY22
31. Parent entity disclosures
Notes to the Consolidated Financial Statements
As at, and throughout, the financial year ended 30 June 2022, the parent entity of the Group was Identitii
Limited.
Results of parent entity
Total comprehensive loss for the year
(6,191,579)
(4,446,282)
30 June 2022
$
30 June 2021
$
Financial position for the parent entity
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity
Share capital
Reserves
Retained losses
Total equity
Contingent liabilities
8,050,015
6,805,285
8,944,678
6,961,866
1,373,686
1,373,686
900,588
900,588
32,934,833
25,775,278
3,900,514
4,517,002
(29,264,355)
(24,231,002)
7,570,992
6,061,278
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30
June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 6.
32. Fair value measurements
The carrying amount of the Group’s financial assets and financial liabilities is a reasonable approximation of
fair value.
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Identitii Limited
Annual Report FY22
33. Subsequent events
Notes to the Consolidated Financial Statements
On 27 July 2022, the Board approved the conversion of the balance of the Payble loan into shares at the next
Payble capital raise. The loan will be converted at the same valuation and price as other investors that
participate in the capital raise. This will allow Payble to focus cash on growth activities.
73
Identitii Limited
Annual Report FY22
Directors’ Declaration
Directors’ Declaration
1.
In the opinion of the Directors of Identitii Limited (‘the Company’):
a.
the consolidated financial statements and notes that are set out on pages 22 to 73 are in
accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
performance for the financial year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
ii.
b.
There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
2.
3.
The Directors draw attention to Note 2 to the financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2022.
Signed in accordance with a resolution of the Board of Directors:
Timothy Phillipps
Chairperson
Sydney
29 August 2022
74
INDEPENDENT AUDITOR’S REPORT
To the Members of Identitii Limited
Opinion
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
We have audited the financial report of Identitii Limited (the Company) and its controlled entity (the Group), which
comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Group, would be on the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
75
Key Audit Matter
How our audit addressed this matter
Gain on loss of control of Payble – Deconsolidation from Subsidiary to Associate
Our audit procedures in relation to the Payble
deconsolidation included the following:
• Obtaining an understanding of the transaction
resulting in the loss of control and inspecting
supporting documentation
the
existence and validity of the transaction.
confirming
• Reviewing
the client prepared accounting
memorandum and related workings in relation to
the gain on
loss of control and critically
evaluating the reasons for determining that
control has been lost of the subsidiary.
• Reviewing managements calculation for the gain
on loss of control and the investment in equity
the
accounted
accounting treatment is in accordance with
AASB 10 and AASB 128.
investments and ensuring
• Consulting with the National Technical Partner in
relation to the proposed accounting treatment
and the related workings and calculations to
ensure that they are consistent with expectations
and in accordance with the requirements of the
Australian Accounting Standards.
• Reviewing the underlying accounting records
and ensuring they are consistent with the client
prepared accounting memorandum and related
calculations.
• Assessing the adequacy of the presentation and
disclosures in relation to the transaction are
appropriate under the circumstances, and in
accordance with the requirements of Australian
Accounting Standards.
Refer to Note 15 in the financial statements.
The Group recognised a gain on loss of control of
subsidiary amounting to $1,860,064 in the statement
of profit or loss for the year ended 30 June 2022.
Payble Pty Ltd (Payble) was incorporated in October
2020. On incorporation, Identitii owned a majority
shareholding at 87.5%, with the remaining 12.5%
held by Elliott Donazzan (Founder, CEO). On 12
April 2021, CBA New Digital Businesses Pty Ltd
(x15ventures) invested $1.1m into Payble, diluting
Identitii’s shareholding to 60.1%.
On 15 November 2021, x15ventures invested a
further $0.7m into Payble, further diluting Identitii’s
shareholding to 44.2%. As Identitii’s ownership
interest has fallen below 50%, they no longer have a
majority shareholding.
On this date it was determined that Identitii no longer
retained control of Payble and, as a result, Payble
was accounted for as an investment in associate
rather than a subsidiary.
We consider this to be a key audit matter due to the
following reasons:
• Accounting for loss of control of a subsidiary is
non-routine and complex.
• The quantum of the effect of the transaction is
significant, and
judgement and
there
technical complexity involved in the application
of the requirements of AASB 10, Consolidated
Financial Statements, and the quantification of
the effect of the loss of control.
is
• There remains technical complexity in relation
to the quantification and accounting for the
investment in associate.
• The deconsolidation of Payble is technically
complex and consequently the accounting
requires additional disclosures within
the
financial statements.
76
Key Audit Matter
How our audit addressed this matter
Share-based payments – Refer to Note 21 in the financial statements.
The Group recognised a share-based payment
expense of $541,737 in the statement of profit or loss
for the year ended 30 June 2022 under various
share-based payment arrangements.
Management has accounted for these arrangements
in accordance with AASB 2 Share-Based Payments.
Accounting for share-based payments and the share
option reserve are considered key audit matters due
to the following:
• Accounting for share-based payments is
non-routine and complex.
inputs
• There is significant judgement in relation to
the
the valuation models,
including the likelihood of vesting conditions
and performance hurdles being met, and the
appropriate valuation methodology to apply.
into
Our audit procedures in relation to the share-based
payments included the following:
• Making enquiries of management about the
the
the rationale behind,
nature of, and
instruments issued.
• Reviewing the terms and conditions of the
instruments issued.
• Reviewing managements expert's valuation
their
report, giving due consideration
independence and capability.
to
• Reviewing
the valuation methodology
to
ensure it is in compliance with AASB 2.
• Verifying the mathematical accuracy of the
underlying model.
• Management engaged a third-party expert
for the valuation process.
• Reviewing the inputs to the valuation model for
reasonableness.
• Critically evaluating the key assumptions used,
considering the market, the grant date share
the
price and current date share price,
expected volatility in the share price, the
vesting period, and the number of instruments
expected to vest.
• Recalculating the value of the share-based
payment expense to be recognised and the
reserve balance, for accuracy, factoring in any
cancellations, modifications, expiry, or vesting.
• Reviewing
the adequacy of
the relevant
in
disclosures,
respect of judgements made, in the financial
statements.
the disclosures
including
77
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 2022 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and 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 Group are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control
as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair
view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 20 of the directors' report for the year ended
30 June 2022.
In our opinion, the Remuneration Report of Identitii Limited, for the year ended 30 June 2022, complies with
section 300A of the Corporations Act 2001.
78
Responsibilities
The directors of the Group 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.
RSM AUSTRALIA PARTNERS
G N Sherwood
Partner
Sydney, NSW
Dated: 29 August 2022
79
Identitii Limited
Annual Report FY22
Additional ASX Information
Additional ASX Information
In accordance with ASX Listing Rule 4.10, the Directors provide the following information as at 7 August 2022.
a) Distribution of shareholders and options holders
Fully paid ordinary shares
holding ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Marketable parcels
Holders
Number of shares % of issued capital
58
435
454
1,029
328
2,304
17,909
1,440,682
3,510,177
37,916,732
157,924,423
200,809,923
0.010
0.720
1.750
18.880
78.640
100.000
Identitii has 805 shareholders holding less than a marketable parcel of 8,928 shares each (i.e. less than $500
per parcel of shares) based on the closing price of AUD 0.056 on 5 August 2022 representing a total of
3,575,285 shares.
Options
Identitii has 33,599,487 unlisted options on issue held by 45 option holders.
b) Substantial shareholders
Identitii does not have any substantial holders.
c) Voting rights
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting
or by proxy has one vote on a show of hands.
d) Restricted securities
Identitii does not have any restricted securities on issue.
e) On-market buy-back
Identitii is not undertaking an on-market buy-back.
80
Identitii Limited
Annual Report FY22
Additional ASX Information
f) Twenty largest shareholders
Shareholder
1 Citicorp Nominees Pty Limited
2 KTM Ventures Innovation Fund LP
3 Wodi Wodi Pty Limited
4
Mr Evan Philip Clucas & Ms Leanne Jane Weston
5 Mr Frederick Bart
6
Link Traders (Aust) Pty Ltd
7 Pat Property Pty Ltd
Number of
shares held
% of issued
capital
7,618,373
3.794%
7,388,134
3.679%
7,000,000
3.486%
4,488,000
2.235%
4,096,857
2.040%
3,411,206
1.699%
3,329,837
1.658%
8 O’Dwyer Technology Training Pty Limited
3,000,000
1.494%
9 Mr David Russell Stewart & Mrs Adrienne Ruth Stewart
2,715,000
1.352%
10 Mr Benjamin Buckingham
2,119,967
1.056%
11 Bannaby Investments Pty Limited
2,099,462
1.045%
12 Mr James John Bart
2,008,487
1.000%
13 Mr Xuan Hung Le & Mrs Kim Doan Le
1,952,241
0.972%
14 Creighton & Co Investments Pty Ltd
15 Oxleigh Pty Ltd
1,749,669
0.871%
1,731,562
0.862%
16 Jamber Investments Pty Ltd
1,625,000
0.809%
17 Chifley Portfolios Pty Ltd
1,613,320
0.803%
18 Mr David Ross Musumeci
19 Elorey Pty Ltd
20 LSF 2000 Pty Ltd
Total Securities of Top 20 Holdings
Total Securities
1,594,133
0.794%
1,590,608
0.792%
1,540,000
0.767%
62,671,856
31.208%
200,809,923
81
Corporate Directory
Directors
Timothy Phillipps, Chairperson
John Rayment
Rhyll Gardner
Simon Griffin
Company Secretary
Elissa Hansen
Registered Office
285a Crown Street
Surry Hills
NSW 2010
Telephone: (02) 9056 4160
ABN 83 603 107 044
Company Website
https://identitii.com/
Auditors
RSM Australia Pty Ltd
Level 13
60 Castlereagh Street
Sydney
NSW 2000
Solicitors
Law Squared
Level 13
50 Carrington St
Sydney
NSW 2000
Securities Exchange Listing
Identitii Limited shares are
Listed on the Australian
Securities Exchange.
ASX Code: ID8
Share Registry
Boardroom Pty Limited
Level 12
225 George Street
Sydney
NSW 2000
Telephone: (02) 9290 9600
82
83