Do
Report Title
1
Identitii Limited
Annual Report FY23
Contents
A letter from our Chairperson .............................................................................. 3
A letter from our CEO .......................................................................................... 5
Directors Report ................................................................................................... 7
Auditor’s Independence Declaration ................................................................. 19
Consolidated Statement of Profit or Loss and Other Comprehensive Income . 20
Consolidated Statement of Financial Position ................................................... 22
Consolidated Statement of Changes in Equity ................................................. 23
Consolidated Statement of Cash Flows ............................................................ 25
Notes to the Consolidated Financial Statements .............................................. 26
Directors’ Declaration ........................................................................................ 52
Independent Auditor’s Report ............................................................................ 53
Additional ASX Information ................................................................................ 58
Corporate Directory ........................................................................................... 61
About Identitii
Identitii is helping companies
securely manage and share
sensitive financial data.
Identitii Limited
Annual Report FY23
Chairperson’s Letter
A letter from our
Chairperson
Dear Fellow Shareholders,
As I reflect on the past year, I want to thank you for
your patience and support for Identitii.
It has been a challenging 12 months, driven partly
by market sentiment and downward pressure on
technology companies globally and by revenue
growth within our Company that has not met
expectations.
to
relentlessly
The Board, the CEO and the entire team have
worked
“One
Platform” strategy to position our product for a
sustainable and profitable future while driving
additional demand in a financial services market
that has itself focused on reducing cost.
implement our
Market Opportunity
The focus of global Regulators on data security (in
the wake of significant cyber breaches) and
financial crime reporting in the financial services
industry has not diminished and, if anything, has
become more intense. This presents our business
with both an opportunity and a risk.
The opportunity suggests that the industry will be
under increasing pressure from regulators to
reduce the risks associated with manual analysis,
and insecure methods of sharing and reporting
critical data both internally and to regulators. This
is likely to lead to them investing more in
technologies that make it easier to ensure the
security of sensitive data both when it is stored or
when regulations require it to be shared. This
should present additional revenue generation
opportunities for the Company, that may also be
enhanced by changes to local and international
privacy regulations and new companies falling
under financial crime regulations, such as Tranche
2 in Australia.
The risk is that this also demands a much higher
standard and demonstrable data
security
standards by service providers, which is likely to
result in expanded security assessments and
vetting of companies like Identitii who are looking
to provide these services to customers. I am
confident we can meet these challenges given a
significant focus by the entire business on ensuring
information security
we adopt
standards.
the highest
Our Team
We have rightsized our team over the past year in
terms of numbers and skill sets to ensure that our
costs are sustainable, and our skill sets are
concentrated on our “One Platform” strategy. As
we have evolved our platform and reduced or
removed legacy software components, this has
positioned us well to take advantage of future
opportunities.
The entire team continues to operate at an
impressive level and is extraordinarily committed to
the company's success. While demand for skilled
software engineers in this field is incredibly high,
we have consistently been able to retain our
talented and capable team.
To my observation, this is mainly due to the quality
of our leadership, the clarity and importance of our
purpose, and our people's “get stuff done” culture.
Over the past year, our new CTO, Tim Dickinson,
has developed an impressive and exciting product
roadmap that not only builds on our history but also
positions us very well to expand our product
offering in the near future. With this roadmap, we
expect to increase our sector sales without the
need for extensive platform revisions.
resulting
Our new Head of Operations, Ben Jackson, has
successfully established unparalleled information
security standards,
impeccable
information security audit outcomes. With his
unwavering passion and extensive knowledge, he
has dramatically reduced our risk of compromise
and secured our reputation as a highly reliable
business entity in the eyes of our current and
prospective customers.
in
During the year, we also secured the services of
CFO Rebecca Shooter-Dodd, who significantly
improved our financial management and provided
long-term fiscal guidance to support sustainable
product development.
Cost Management
We have also continued to look for opportunities to
reduce operating costs responsibly to ensure we
extend our cash runway without limiting our ability
to meet our client’s expectations or restrain our
ability to enhance our platform in areas that we
believe will create new market and revenue
opportunities. It is a constantly evolving balance
that requires commitment and agility from everyone
in the business.
3
Identitii Limited
Annual Report FY23
Chairperson’s Letter
Focus on Shareholder Value
Our focus on creating increased shareholder value
is uncompromising.
We truly value your support and are determined to
deliver long-term value.
Our "One Platform" strategy is the key to our future
success, and we are committed to achieving
sustained growth and development, aligned with
fiscal
these
strategies, we aim to drive higher revenue growth,
increase customer usage, and
improve our
operating margins.
responsibility. By
implementing
We look forward to a rewarding year ahead, and I
am confident of a much more positive report in 12
months’ time.
Tim Phillipps
Board Chairperson
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Identitii Limited
Annual Report FY23
A letter from our CEO
A letter from
our CEO
Dear shareholders and friends,
Identitii and
the exciting opportunity
Thank you for your continued support and interest
the
in
Company is pursuing in an ever-changing global
marketplace. FY23 was a year of significant
change for Identitii, and I am pleased to report that
the Company made strong progress in several key
areas that are already positively impacting our
ability to deliver sustainable growth in the coming
year/s.
We delivered our One Platform Strategy to
resolve legacy complexity, by focusing on only one
platform, one cloud environment, one product
roadmap and one future. As a result, we reduced
technology costs, and increased research and
development and innovation activities.
We right-sized our team and recognised the need
for key leaders with direct experience in scaling
early-stage ventures like Identitii. As a result, we
hired a new CTO, CFO and Head of Operations,
who have all had tremendous impacts since
joining.
We sunsetted the DART product as part of the
One Platform Strategy, exiting the contract with
HSBC Hong Kong. As a result, not only did we
lower operating costs, but we created significant
capacity that was reinvested towards developing
our product roadmap.
Growing global opportunity ahead
Identitii is pursuing a global opportunity to help the
financial services
industry collect and share
sensitive data. Today our platform is being used by
more than 160 teams around the world, helping our
customers reduce the operational, technical, and
regulatory burden of managing sensitive data, to
accelerate cross border payments, manage the
exchange of customer data, reduce manual
exceptions, and streamline and automate
regulatory
include
traditional institutions like HSBC, Mastercard and
Rabobank, and newer fintechs like Novatti and
Monoova. Incredibly, traditional institutions and
newer fintech’s still use forms of communication
which lack the secure data requirements needed to
reporting. Our customers
protect personal information, relying on people,
emails and spreadsheets, to collect and share
sensitive data both within and between
organisations.
Steady forward commercial progress
The Company has been steadily building brand
recognition within the financial services industry in
Australia and other key global markets and is well-
positioned for future commercial success. Our
renewed focus this year on faster-moving fintech
companies and partnerships that will enable rapid
scale is yet to provide boosts to revenue, but we
have seen increases in the total number of sales
pipeline opportunities, and are simultaneously
progressing existing prospects with a growing
number of new prospects. Breaking new ground
and being the first-to-market with a technology
solution to a manual problem, as Identitii is, takes
time and requires consistent forward momentum.
Early success is very difficult to come by, but the
disparate nature of new contracts does not mean
we are pursuing the wrong opportunity. We are
right to continue.
Continued product & technology development
Throughout the year, led by our new CTO, the team
has been hard at work developing our product and
our research and development initiatives, in the
wake of our One Platform strategy. Our team has
been exploring new technologies and solutions that
have not only bolstered our core offerings but have
opened up new avenues for problem solving. We
this year,
saw significant product progress
launching new SMR reporting capability ahead of
looming Tranche 2 reforms, being among the first
to submit ISO 20022 reports to AUSTRAC,
extending our automated FinCrime Reporting data
platform into New Zealand, and growing our Patent
Portfolio with a newly awarded patent in Singapore.
These developments will all contribute to our ability
to attract and win new business, ensuring that
investments in innovation will continue to be a
cornerstone of our long-term strategy.
Our investment in Payble
Payble, Identitii’s joint venture with CommBank’s
x15ventures, is modernising household billing and
payments, overlaying existing ERP systems and
payment processors with their SaaS platform,
enabling large billers to bridge the gap between
their
consumer
capabilities
expectations, without any complex technology
internal
and
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Identitii Limited
Annual Report FY23
A letter from our CEO
further $1.2m
integration or changes. The company grew its
portfolio of customers during the year, ending the
year with ten customers on SaaS contracts, eight
of them local governments. During the year Payble
received a
from
x15ventures, with Identitii also exercising its right to
convert outstanding intellectual property licence
fees into further equity. Under the leadership of
founder Elliott Donazzan, Payble has continued to
grow revenue, built out a strong and experienced
team, and is on-track to break-even by the end of
FY24.
investment
Summarising the year
Operating an early-stage technology company in
the current economic environment is a challenging
task and operating a public one even more so. By
many measures our Company is in its strongest
position since first listing in late 2018. Activity on
our platform is growing, we implemented several
material reductions in operating costs that will fully
materialise in FY24, the number of prospective
customers engaged with us is the highest it has
ever been, and our pipeline of opportunities is
growing faster than ever. As we look to the future,
we are increasingly optimistic. We believe our
unwavering commitment to continuous innovation,
financial prudence, and customer needs will be key
drivers of our success. The momentum we've
quietly built over the past year positions us well for
many years of growth.
Thank you for your continued support of the Board,
the Executive Staff and our Team.
Regards,
John Rayment
Chief Executive Officer
FY23 highlights
H1
• New patent awarded in Singapore,
increases patent portfolio
• Automated FinCrime Reporting data
platform extended into New Zealand
• Former Assembly Payments co-CEO, Tim
•
Dickinson joins as CTO
x15ventures invested further $1.2 million
in Payble, jointly owned by Identitii
• New investor hub launched
H2
• Monoova signed licence agreement to
use Identitii's platform for AUSTRAC
reporting
• Rabobank starts reporting to AUSTRAC
•
•
using the Identitii platform
Industry roundtable series launched to
accelerate new business acquisition
Identitii commended during finals of the
Pitch! RegTech event in Singapore
• SMR reporting capability launched, ahead
•
of looming Tranche 2 reforms
Identitii among the first to submit ISO
20022 reports to AUSTRAC
• Partnership with the Financial Integrity
Hub to increase awareness
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Identitii Limited
Annual Report FY23
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 2023 and the auditor’s report thereon.
Directors
The Directors of the Company at any time during the year ended 30 June 2023 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
Mr. Simon Griffin
BA (Economics)
Independent Non-Executive Director
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.
Simon brings over 14 years’ experience in global
financial services, having worked in senior and
executive roles in companies including Macquarie
Bank, OFX, HiFX and XE.com. He also brings
significant expertise in scaling technology businesses
including Propsa and Car Next Door.
Chair of the Nomination and Remuneration Committee.
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Identitii Limited
Annual Report FY23
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
Nomination and
Remuneration
Committee
A
6
6
6
6
B
6
6
6
6
A
3
-
3
-
B
3
-
3
-
A
2
-
-
2
B
2
-
-
2
Timothy Phillipps
John Rayment
Rhyll Gardner
Simon Griffin
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 complete confidence in their compliance. 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 highlights for the year ended 30 June 2023 are noted below.
Review of operations
During the year ended 30 June 2023, the Group achieved the following:
• On 29 August 2022, Identitii was granted approval of a Singapore Patent for the same invention as they currently
hold a U.S. Patent for.
• On 27 October 2022, the Company announced a 1 for 2 Non-Renounceable Rights Issue to raise up to $4 million,
with the rights issue shares to be issued at $0.04 per share, together with 1 free attaching option for every 2 shares
applied for and issued. The options are exercisable at $0.08 with a two-year expiry.
• On 8 December 2022, the Company launched its automated Financial Crime reporting to New Zealand’s Financial
Intelligence Unit (Z FIU) via its anti-money laundering and counter terrorism financing (AML/CTF) reporting platform.
• On 14 December 2022, the Company announced that it has agreed to end its agreement with HSBC Hong Kong,
under which it provides support for HSBC’s Digital Accounts Receivables Tool (HSBC DART), which was built on
Identitii technology. Ending this agreement resulted in cost savings for the Group.
• On 28 December 2022, the Company closed its Non-Renounceable Rights Issue on 20 December 2022, and raised
$416,868 before costs, with a shortfall balance of $3,607,320. On 29 December 2022, 10,421,706 shares were issued,
along with 5,210,853 options.
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Identitii Limited
Annual Report FY23
Directors Report
• On 30 January 2023, the Company announced that it had hired a new Chief Technology Officer - Tim Dickinson, and
new Chief Financial Officer - Rebecca Shooter-Dodd.
• On 15 March 2023, the Company announced that it has signed a new software license agreement with leading
Australian B2B payments provider Monoova Global Payments Pty Ltd. Monoova will use Identitii’s cloud-hosted
reporting platform to help further automate and improve auditability of their reporting obligations to AUSTRAC.
• On 4 April 2023, the Company announced that it is among the first to successfully report ISO 20022 transactions to
AUSTRAC 2.0, the regulator’s updated reporting system designed specifically to accept the new data rich ISO 20022
format.
• On 20 June 2023, the Company announced that it has made it easier for financial services businesses to submit
Suspicious Matter Reports (SMR) to AUSTRAC via its regulatory reporting platform, ahead of the proposed Tranche
2 reforms to the Australian AML/CTF Act.
Review of financial conditions
The Group reported revenue from contracts with customers of $1,363,063 for the year ended 30 June 2023 (30 June 2022:
$1,457,627), a decrease of 6% from the prior year. The Group reported a net loss after tax of $5,997,504 for the year
ended 30 June 2023 (30 June 2022: $4,997,031) which was substantially driven by salary and employee benefit expenses
and expenditure on research and development (R&D) related activities.
The Group had a positive net current asset balance of $855,569 (30 June 2022: $5,635,074) and a positive overall net
asset balance of $2,324,906 (30 June 2022: $7,432,594) at 30 June 2023.
The Group had $1,287,005 of cash and cash equivalents on hand at 30 June 2023 (30 June 2022: $5,074,133) and
reported a net cash outflow from operating activities of $5,203,726 during the year ended 30 June 2023 (30 June 2022:
$6,014,695).
Significant changes in the state of affairs
In the opinion of the Directors there were no significant changes in the state of affairs of the Group that occurred during
the year ended 30 June 2023.
Dividends
No dividends were declared or paid by the Company during the financial year ended 30 June 2023 (30 June 2022: Nil).
Events subsequent to reporting date
On 5 September 2023, the Company announced that its Rights Issue closed on 30 August 2023, and raised $1,338,160
before costs, with a shortfall balance of $789,735. The Rights Issue was a pro-rata non-renounceable entitlement issue to
eligible shareholders of one (1) New Share for every one (1) Existing Share held by eligible shareholders on the Record
Date, at an issue price of $0.01 per New Share. 133,816,609 New Shares were issued and allotted on 5 September 2023.
On 21 September 2023, the Company announced that it had successfully completed the Shortfall Offer, raising a further
$789,735 via the issue of shortfall shares at the issue price of $0.01 per Share, bringing the total capital raised under the
Rights Issue to $2,127,895 before costs.
On 28 September 2023, the Company announced $1.0M in annualised cost savings, to further extend its cash runway.
The operational changes to realise $1.0M in annualised cost savings have all been put into effect, and the Company
expects to see the resulting decreases in cash outflows materialise in the coming quarters. Savings have been realised in
cloud infrastructure (consolidating multiple suppliers), legal costs (finalising patent strategy work), operational costs (office
downsizing and licence cancellations) and headcount (including some reallocations to offshore roles). Additionally, all three
Non-Executive Directors on our Board have elected to reduce the cash component of their remuneration by 25%,
substituting the reduced cash component for ordinary shares in the Company, subject to shareholder approval.
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.
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Identitii Limited
Annual Report FY23
Likely developments
Directors Report
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:
Timothy Phillipps
John Rayment (1)
Rhyll Gardner
Simon Griffin
Ordinary shares
Options over
ordinary shares
2,538,464
4,771,824
-
-
211,538
8,397,652
-
-
(1)
Shares held by Elorey Pty Ltd, of which John Rayment is a beneficiary.
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 2023 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.
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Identitii Limited
Annual Report FY23
Non-audit services
Directors Report
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in Note 19 to the financial statements.
The Board are 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 18 and forms part of the Directors’ report for the year ended 30 June 2023.
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.
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Identitii Limited
Annual Report FY23
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 2023. 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 make 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.
Year ended to
Chairman’s fee
Non-Executive Directors fee
30 June 2023
$
30 June 2022
$
75,000
50,000
75,000
50,000
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Identitii Limited
Annual Report FY23
Directors Report
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.
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Identitii Limited
Annual Report FY23
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 2023
$
$
Salary
Superannuation
(A)
$
Executive Directors
John Rayment
310,000
32,550
20,159
Non-Executive Directors
Timothy Phillipps
Rhyll Gardner
Simon Griffin
Other KMP
Catherine Lin (1)
Rebecca Shooter-Dodd (2)
Total
75,000
50,000
53,978
48,710
59,750
597,438
-
-
5,668
5,115
-
43,333
-
-
-
-
-
20,159
$
-
-
-
-
-
-
-
Share options (B)
(variable)
$
$
162,568
525,277
31%
-
-
-
-
-
75,000
50,000
59,646
53,825
59,750
162,568
823,498
(1) Resigned 8 January 2023.
(2) Appointed 8 January 2023. Remuneration invoiced via Traverse Accountants Pty Ltd of which Rebecca Shooter-Dodd is a beneficiary. This includes remuneration for CFO related services only.
(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.
-
-
-
-
-
14
Identitii Limited
Annual Report FY23
Directors Report
Table 1
Short-term benefits
Post-employment
Other long-term
benefits
Termination
benefits
Share-based
payments
Total
% share-based
payments
Salary
Superannuation
(variable)
Year ended 30 June 2022
$
$
(A)
$
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
532,824
-
-
-
-
1,227
1,250
9,583
40,560
-
-
-
-
-
962
-
20,069
Share options (B)
$
$
201,616
534,223
38%
-
-
-
16,084
-
-
(26,267)
191,433
50,000
4,030
4,030
85,249
13,493
14,712
92,123
797,860
-
-
-
19%
-
-
-
$
-
-
-
-
-
-
-
12,974
12,974
(1)
(2)
(3)
(4)
(5)
(6)
Salary increased from $260,000 to $310,000 per annum effective 1 January 2022.
Appointed 2 June 2022.
Remuneration invoiced via Aston Consulting Pty Ltd of which Steven James is a beneficiary. Resigned 2 June 2022.
Resigned 7 October 2021.
Appointed 15 June 2022.
Resigned 30 November 2021.
In accordance with AASB 119 Employee Benefits, annual leave is classified as other long-term employee benefits.
(A)
(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.
15
Identitii Limited
Annual Report FY23
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 2023, 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 was the Chief Financial Officer of the Group up to her resignation effective 8 January 2023.
Catherine received a base salary of $275,000 per annum plus superannuation.
16
Identitii Limited
Annual Report FY23
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 2023 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 2023
Granted/
(forfeited)
during the
year
Held at 30
June 2023
Vested
during the
year
Vested at 30
June 2023
Exercisable at
30 June 2023
Timothy Phillipps
-
211,538
211,538
-
-
-
John Rayment
8,000,000
397,652
8,397,652
500,000
1,000,000
1,000,000
Rhyll Gardner
Simon Griffin
Catherine Lin
Rebecca Shooter-Dodd
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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.
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.
17
Identitii Limited
Annual Report FY23
5. KMP transactions (continued)
c) Movement in shares
Directors Report
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
Catherine Lin
Rebecca Shooter-Dodd
Held at 1 July
2022
Acquired Held at 30 June
2023
846,155
1,590,608
423,078
795,304
1,269,233
2,385,912
-
-
-
-
-
-
-
-
-
-
-
-
This Directors’ Report is signed in accordance with a resolution of the Board of Directors:
Timothy Phillipps
Chairperson
Sydney
29 September 2023
18
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 2023, 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 September 2023
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
19
Identitii Limited
Annual Report FY23
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Revenue from contracts with customers
Research and development tax incentive
Government grants
Interest income
Gain on loss of control of subsidiary
Total revenue and other income
Expenses
Note
2
30 June 2023
$
30 June 2022
$
1,363,063
1,490,084
36,303
21,114
-
2,910,564
1,457,627
1,190,700
43,284
498
1,860,064
4,552,173
Salaries and employee benefit expenses
2,179,630
3,109,750
14
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 of impairment on trade receivables
Research and development expenses
Share of equity-accounted investee loss
22
Total expenses
405,977
564,062
148,983
13,875
738,465
52,694
163,532
537,878
191,926
55,449
(749)
3,425,480
430,866
8,908,068
541,737
707,506
296,876
99,254
797,291
67
290,293
495,521
153,208
55,721
(1,825)
2,736,559
267,246
9,549,204
20
Identitii Limited
Annual Report FY23
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Loss before income tax
Income tax expense
Loss for the year
Note
30 June 2023
$
30 June 2022
$
(5,997,504)
(4,997,031)
3
-
-
(5,997,504)
(4,997,031)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
(19,528)
(73,375)
Total comprehensive loss for the year
(6,017,032)
(5,070,406)
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
Basic and diluted loss per share (cents)
(5,997,504)
(4,833,962)
15
-
(163,069)
(5,997,504)
(4,997,031)
15
4
(6,017,032)
(4,907,337)
-
(163,069)
(6,017,032)
(5,070,406)
(2.90)
(2.64)
21
Identitii Limited
Annual Report FY23
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
Note
30 June 2023
$
30 June 2022
$
Assets
Cash and cash equivalents
Research and development tax incentive receivable
Trade and other receivables
Contract assets
Loans to equity-accounted investees
Current 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 provisions
Contract liabilities
Borrowings
Current liabilities
Total liabilities
Net assets
Equity
Share capital
Share options reserve
Foreign currency translation reserve
Retained losses
Total equity
6
7
2
9
8
9
10
11
2
12
13
14
1,287,005
1,490,084
211,708
-
-
5,074,133
1,193,963
512,390
120,250
120,000
2,988,797
7,020,736
49,860
1,392,307
-
27,170
1,469,337
4,458,134
583,029
251,820
318,379
980,000
2,133,228
2,133,228
2,324,906
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
7,432,594
33,438,200
32,934,833
4,306,491
(19,886)
3,900,514
(358)
(35,399,899)
(29,402,395)
2,324,906
7,432,594
22
Identitii Limited
Annual Report FY23
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Note
Share
capital
Share option
reserve
$
$
Foreign
currency
translation
reserve
$
Retained
losses
Total equity
$
$
Balance at 1 July 2022
32,934,833
3,900,514
(358)
(29,402,395)
7,432,594
Loss after tax
Other comprehensive income
Total comprehensive loss
Issue of ordinary share capital
Costs of equity raising
Equity-settled share-based payments
13
13
14
-
-
-
541,976
(38,609)
-
-
-
-
-
-
405,977
-
(5,997,504)
(5,997,504)
(19,528)
-
(19,528)
(19,528)
(5,997,504)
(6,017,032)
-
-
-
-
-
-
541,976
(38,609)
405,977
Balance at 30 June 2023
33,438,200
4,306,491
(19,886)
(35,399,899)
2,324,906
23
Identitii Limited
Annual Report FY23
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
13
13
14
14
-
-
-
-
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
24
Identitii Limited
Annual Report FY23
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Cash flows utilised in operations
Note
30 June 2023
$
30 June 2022
$
1,847,455
1,464,792
(8,218,360)
(8,425,325)
(6,370,905)
(6,960,533)
Receipts from government grants and tax incentives
1,240,015
945,340
Interest received
Interest and other costs of finance paid
987
(73,823)
498
-
Total cash flows used in operating activities
16
(5,203,726)
(6,014,695)
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Cash flows from loans to equity-accounted investees
Loss of control of subsidiary
Other investing cash flows
Total cash flows from/(used in) investing activities
Cash flows from financing activities
Proceeds from the issue of shares
Transaction costs related to the issue of shares
Proceeds from borrowings
12
Lease payments
Transaction costs related to borrowings and leases
Total cash flows from financing activities
Net (decrease)/increase in cash held
Opening cash balance
Effect of movement in exchange rates
Closing cash balance
6
-
-
12,386
-
-
12,386
416,868
(36,109)
980,000
-
-
1,360,759
(3,830,581)
5,074,133
43,453
1,287,005
(65,335)
2,309
70,000
(547,423)
(27,000)
(567,449)
7,403,986
(327,813)
-
(13,039)
(67)
7,063,067
480,923
4,489,311
103,899
5,074,133
25
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1. Significant Accounting Policies
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out either in
the respective notes or below. These policies have been consistently applied to all the periods presented, unless otherwise
stated. The financial statements are for the Group including Identitii Limited and its subsidiary.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (“AASB”). The financial statements also comply with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The
financial statements comprise the consolidated financial statements of the Group which is a for-profit entity for financial
reporting purposes under Australian Accounting Standards.
Historical cost convention
The consolidated financial statements, except for the cash flow information, have been prepared on an accruals basis and
are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets,
financial assets, and financial liabilities.
Critical accounting estimates
The preparation of the consolidated financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed throughout the financial statements.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at the end of the reporting period.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee
if and only if the Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee)
• Exposure, or rights, to variable returns from its involvement with the investee, and
•
The ability to use its power over the investee to affect its returns
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee
•
• Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
•
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over
the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income, and expenses of a
subsidiary acquired or disposed of during the year are included in the statement of profit and loss and other comprehensive
income from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
the Group’s accounting policies. All intra-Group assets and liabilities, equity, income, expenses, and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
26
Identitii Limited
Annual Report FY23
Going concern
Notes to the Consolidated Financial Statements
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred a loss for the year ended 30 June 2023 of $5,997,504
(30 June 2022: $4,997,031) and total cash outflows from operating activities of $5,203,726 (30 June 2022: $6,014,695).
As at that date, the Group had net current assets of $855,569 (30 June 2022: $5,635,074) and net assets of $2,324,906
(30 June 2022: $7,432,594). As such the Group needs to raise additional capital to support its operating activities.
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will continue as a
going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business
and at the amounts stated in the financial report.
The Directors believe there are reasonable grounds that the Group 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 $1,287,005 in cash and cash equivalents as at the balance date;
The Group successfully raised $980,000 in debt funding during the year and is evaluating plans to secure additional
debt funding later in the calendar year;
The Group successfully raised equity funding of $378,278 during the financial year;
•
• On 5 September 2023, the Group announced that its Rights Issue closed on 30 August 2023, and raised $1,338,160
before costs, with a shortfall balance of $789,735. The Rights Issue was a pro-rata non-renounceable entitlement
issue to eligible shareholders of one (1) New Share for every one (1) Existing Share held by eligible shareholders on
the Record Date, at an issue price of $0.01 per New Share. 133,816,609 New Shares were issued and allotted on 5
September 2023, and the Company expects the shortfall to be placed shortly.
• On 21 September 2023, the Company announced that it had successfully completed the Shortfall Offer, raising a
further $789,735 via the issue of shortfall shares at the issue price of $0.01 per Share, bringing the total capital raised
under the Rights Issue to $2,127,895 before costs.
• On 28 September 2023, the Company announced $1.0M in annualised cost savings, to further extend its cash runway.
•
The Group has the ability to further scale back a significant portion of its expenditure if required; and
Accordingly, the Directors believe that the Group will be able to continue as a going concern and that it is appropriate to
adopt the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the amounts or classification of recorded assets or
liabilities that might be necessary if the Group does not continue as a going concern.
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.
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.
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 current when it is expected to be realized or intended to be sold or consumed in normal operating cycle; it is
held primarily for the purpose of trading; it is expected to be realized 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.
27
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
A liability is current when it is expected to be settled in 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.
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.
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.
New, revised or amended accounting standards adopted
The Group has retrospectively adopted, as at the date of incorporation, all of the new, revised or amended Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the International
Financial Reporting Interpretations Committee (IFRIC) that are relevant to its operations and effective for the year
commencing 1 July 2022. There was no material impact on the group’s financial statements on the adoption of these
Standards and Interpretations.
Revised or amending Accounting Standards or Interpretations that are not yet mandatory for the year ended 30 June 2023
have not been early adopted.
2. Revenue
The Group generates revenue primarily from the licensing of software and the provision of professional and maintenance
services to its customers. During the period the Group also generated revenue from its new Software-as-a-Service (SaaS)
platform.
a) 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
2023
$
645,703
21,827
635,533
60,000
2022
$
598,682
27,551
808,144
23,250
Revenue from contracts with customers
1,363,063
1,457,627
28
Identitii Limited
Annual Report FY23
2. Revenue (continued)
b)
Timing of revenue recognition
Notes to the Consolidated Financial Statements
The following table, revenue is disaggregated by timing of revenue recognition
For the year ended 30 June
Services transferred at a point in time
Services transferred over time
c)
Contract balances
2023
$
635,533
727,530
2022
$
808,144
649,483
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 2023
$
30 June 2022
$
17,049
-
264,302
120,250
(318,379)
(259,712)
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:
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
30 June 2023
$
30 June 2022
$
120,250
-
(120,250)
-
26,400
240,250
(146,400)
120,250
30 June 2023
$
30 June 2022
$
259,712
603,424
(259,712)
(285,045)
318,379
179,650
504,873
(179,650)
(245,161)
259,712
No information has been provided about remaining performance obligations at 30 June 2023 that have an original
expected duration of one year or less, as allowed by AASB 15.
29
Identitii Limited
Annual Report FY23
2. Revenue (continued)
Accounting Policy - Revenue
Notes to the Consolidated Financial Statements
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 Nature and timing of satisfaction of performance obligations
Licence fees
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.
Maintenance fees
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.
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 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.
Usage fees
Professional services
(Including setup,
training, and other
support costs)
30
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
2. Revenue (continued)
Accounting Policy - Revenue (continued)
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.
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.
Accounting policy - 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.
Accounting policy - 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.
3.
Income tax expense
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.
a)
Amounts recognised in profit or loss
Current tax expense
Deferred tax expense
Aggregate income tax expense
30 June 2023
$
30 June 2022
$
-
-
-
-
-
-
31
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
3.
Income tax expense (continued)
b)
Reconciliation of accounting loss to taxable loss
Loss before tax
Adjustments to accounting loss
Non-deductible expenses
Tax exempt income
Taxable loss
Income tax expense
30 June 2023
$
30 June 2022
$
(5,997,504)
(4,997,031)
4,066,247
3,196,755
(1,566,921)
(3,250,429)
(3,498,178)
(5,050,705)
-
-
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 2023
30 June 2022
Gross amount
$
Tax effect
$
Gross amount
$
Tax effect
$
Tax losses
19,472,746
4,868,187
16,951,800
4,237,950
Accounting Policy - Income Tax Expense
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 incomes 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.
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.
32
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
3.
Income tax expense (continued)
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.
4. 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.
30 June 2023
$
30 June 2022
$
Loss for the year attributable to owners of Identitii Limited
(5,997,504)
(4,833,962)
Weighted-average number of ordinary shares
Issued ordinary shares at 1 July
Effect of shares issued during the year
200,809,923
151,791,071
6,041,066
31,333,234
Weighted-average number of ordinary shares at 30 June
206,850,989
183,124,305
Basic and diluted loss per share (cents)
(2.90)
(2.64)
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 2023 and 30 June 2022.
5. 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.
33
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
5. Operating segments (continued)
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
Total revenue and other income
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
Segment assets
Segment liabilities
Geographic information
Software Development and Licensing
2023
$
1,363,063
1,526,387
2,889,450
2022
$
1,457,627
3,094,048
4,551,675
21,114
498
2,910,564
4,552,173
Software Development and Licensing
2023
$
2022
$
(5,952,049)
(4,898,208)
(13,875)
21,114
(52,694)
(99,254)
498
(67)
(5,997,504)
(4,997,031)
-
-
(5,997,504)
(4,997,031)
4,458,134
2,133,228
8,818,256
1,385,662
The Group’s main operations and place of business is in Australia, with majority of its revenue being derived in Asia.
Revenue from contracts with customers
Asia
Australia
United States of America
30 June 2023
$
30 June 2022
$
292,493
623,988
446,582
561,660
443,765
452,202
1,363,063
1,457,627
Revenue is based on the location of the customer. Refer to Note 2 for further detail on major customers, products, and
services.
34
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
5. Operating segments (continued)
Location of current assets
Australia
Location of non-current assets
Australia
30 June 2023
$
30 June 2022
$
2,988,797
2,988,797
7,020,736
7,020,736
30 June 2023
$
30 June 2022
$
1,469,337
1,469,337
1,797,520
1,797,520
Non-current assets include intangibles, property, plant and equipment, investment in and loans to equity-accounted
investees.
Location of current liabilities
Australia
6. Cash and cash equivalents
Bank balances
Term deposits
30 June 2023
$
30 June 2022
$
2,133,228
2,133,228
1,385,662
1,385,662
30 June 2023
$
30 June 2022
$
1,287,005
5,000,288
-
73,845
1,287,005
5,074,133
Accounting Policy - Cash and cash equivalents
Cash and cash equivalents include 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.
7. Trade and other receivables
Trade receivables
Prepayments
Other receivables
30 June 2023
$
30 June 2022
$
17,046
145,012
49,650
211,708
264,302
192,541
55,547
512,390
35
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
7. Trade and other receivables (continued)
Accounting Policy - 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 provision for impairment. Trade receivables generally have 30-to-45-day payment terms.
Collectability of trade receivables is reviewed on an ongoing basis in accordance with the expected credit loss (“ECL”)
model. Credit losses are measured at the present value of all cash shortfalls (i.e., the difference between the cash flows
due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are
discounted at the effective interest rate of the financial asset.
The ECL assessment completed by the Group as at 30 June 2023 has resulted in an immaterial credit loss and no
impairment allowance has been recognised by the Group (30 June 2022: $Nil).
Critical accounting judgements, estimates and assumptions
The provision for impairment of receivables and the ECL calculation assessment requires a degree of estimation and
judgment. The level of provision is assessed by considering the recent sales experience, the ageing of receivables,
historical collection rates and specific knowledge of the individual debtor’s financial position.
8. Equity-accounted investees
30 June 2023
$
30 June 2022
$
Investment in associates - Payble
1,392,307
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 22 for further information on investment in associates.
On 22 December 2022, x15ventures invested a further $1.2 million in Payble. During the funding round, Identitii exercised
its right to convert the outstanding intellectual property license fee, payable to the Company over three years, into additional
equity. As of 30 June 2023, Identitii’s investment in Payble was 32.8%. See Note 9 for loans to equity-accounted investees.
9. Loans to equity-accounted investees
Current
Non-current
Loan to Payble Pty Ltd
30 June 2023
$
30 June 2022
$
-
-
-
120,000
779,144
899,144
36
Identitii Limited
Annual Report FY23
10. Trade and other payables
Trade payables
Other payables and accruals
Notes to the Consolidated Financial Statements
30 June 2023
$
30 June 2022
$
399,014
184,015
583,029
299,212
345,105
644,317
Accounting Policy - Trade and other payables
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 amortized cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
11. Employee provisions
Provision for annual leave
Superannuation payable
Employee taxes withheld
Other
30 June 2023
$
30 June 2022
$
184,538
67,282
-
-
251,820
222,468
96,690
156,646
5,829
481,633
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.
Accounting Policy - Employee Provisions
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-term cash bonus or profit-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.
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.
37
Identitii Limited
Annual Report FY23
12. Borrowings
Current
R&D Loan Facility
R&D Loan Facility
Notes to the Consolidated Financial Statements
30 June 2023
$
30 June 2022
$
980,000
980,000
-
-
On 8th March 2023, the Company entered into a new term loan facility of $980,000, secured against future R&D refunds
to be received by the Company. The facility is a prepayment of the forecasted R&D tax incentive claim for the year ended
30 June 2023, with a termination date of 20 October 2023. The facility attracts interest at a rate of 16% p.a., which has
been fully paid in advance on the date of draw down.
Accounting Policy - Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest rate method.
13. Share capital
Ordinary shares
30 June 2023
30 June 2022
$
Number of
shares
$
Number of
shares
In issue at beginning of the year
32,934,833
200,809,923
25,775,278
151,791,071
Issued in settlement of Director loan
Issued for cash, net of costs of equity –
placement
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 to employee
in accordance with employment contract
In issue at end of the year – authorised,
fully paid and no par value
-
-
-
-
20,000
285,714
5,467,154
37,500,000
378,278
10,421,706
1,334,401
8,774,914
-
-
-
-
30,000
375,000
181,000
1,131,250
105,089
1,189,474
127,000
951,974
20,000
377,359
-
-
33,438,200
212,798,462
32,934,833
200,809,923
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.
38
Identitii Limited
Annual Report FY23
13. Share capital (continued)
Issue of ordinary shares
Notes to the Consolidated Financial Statements
On 1 September 2022, the Company issued 400,000 shares at a price of $0.095 per share to a consultant as consideration
for investor relation services.
On 25 November 2022, the Company issued 394,737 shares at a price of $0.095 per share to a consultant as consideration
for investor relation services.
On 25 November 2022, the Company issued 377,359 shares at a price of $0.053 per share to an employee in accordance
with their employment contract.
On 29 December 2022, as part of a rights issue to existing shareholders, the Board approved the issue of 10,421,706
ordinary shares in the Company at a price of $0.04 per share. Share issue costs of $38,590 were incurred in relation to
this issuance.
On 24 May 2023, the Company issued 394,737 shares at a price of $0.095 per share to a consultant as consideration for
investor relation services. Share issue costs of $7,911 were incurred in relation to issuances for investor relation services
throughout the year.
Accounting policy - 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.
Capital management
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.
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.
14. Share based payment arrangements
For the year ended 30 June 2023, the Group recognised a share-based payment expense of $405,977 in the statement of
profit or loss (30 June 2022: $541,737) under the following share-based payment arrangements.
Share options & performance rights
30 June 2023
30 June 2022
$
Number of
options
$
Number of
options
Director options
PAC Partners options
979,674
12,358,082
817,106
12,358,082
79,196
5,000,000
79,196
5,000,000
Equity incentive plan - options
3,188,760
10,728,769
3,004,212
16,241,405
Equity incentive plan - performance rights (i)
58,861
3,800,000
Options issued on rights offering
(ii)
-
5,210,834
-
-
-
-
On issue at end of year
4,306,491
37,097,685
3,900,514
33,599,487
The number and weighted-average exercise price of share options under the share-based payment arrangements noted
above were as follows:
39
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
14. Share based payment arrangements (continued)
Number of
options
Weighted
average
exercise
price
Number of
options
Weighted
average
exercise
price
2023
2023
2022
Outstanding at 1 July
33,599,487
$0.26
35,332,499
Forfeited during the year
(2,766,344)
$0.15
(3,208,012)
Expired during the year
(2,746,292)
$0.75
(6,950,000)
Granted during the year
5,210,834
$0.08
8,425,000
Outstanding at 30 June
33,297,685
$0.20
33,599,487
2022
$0.28
$0.15
$0.36
$0.23
$0.26
(i)
Performance Rights Issued
On 6 March 2023, the Company granted a total of 3,800,000 Performance Rights in the following tranches:
•
•
•
Tranche 1: 1,650,000 Rights, vesting 1 July 2023, expiring 31 December 2024.
Tranche 2: 1,650,000 Rights, vesting 1 July 2024, expiring 31 December 2024.
Tranche 3: 500,000 Rights, vesting on satisfaction of set Milestones, expiring 31 October 2027.
All Rights have nil exercise prices.
The tranches have the following vesting conditions:
•
•
•
Tranche 1: Maintain continuous employment to 1 July 2023.
Tranche 2: Maintain continuous employment to 1 July 2024.
Tranche 3: Maintain continuous employment to 1 July 2024, and Identitii recording revenue of at least $5 million
in the preceding 12-month period.
The Rights have no exercise price, and as such have been valued as per the ID8 share price as at the date of
acceptance, weighted based on the likelihood of the vesting conditions being met.
(ii)
Options Issued on Rights Offering
On 20 December 2022 the Non-Renounceable Rights Offering closed, with 5,210,834 share options granted to participants
on 29 December 2022. No expense has been recognised in respect of these options for the period ended 30 June 2023,
as they were issued to equity shareholders in their capacity as shareholders. The options have an exercise price of $0.08
and vest over a two-year period.
40
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
14. Share based payment arrangements (continued)
(iii)
Share-based Payment Valuations Year Ending 30 June 2022
The following inputs were used in the measurement of the fair values at grant date of the share-based payment
awards granted during the prior financial 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
$0.0161
$0.0920
$0.2500
$0.0161
$0.0920
$0.0158
$0.0950
$0.2500
$0.2400
Expected volatility (1)
75 – 85%
75 – 85%
70 – 80%
Contractual life of options (years)
Expected dividends
Risk free rate (2)
3
Nil
3
Nil
2
Nil
0.19%
0.19%
0.78%
Valuation method
Black-Scholes
Black-Scholes
Black-Scholes
Expiry date
8 July 2024
8 July 2024
21 January 2024
Employee Incentive Plan 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 (yrs)
Expected dividends
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
5
Nil
Risk free rate (2)
0.77%
0.59%
0.63%
1.44%
1.47%
1.75%
1.75%
1.75%
2.14%
Valuation method
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.
41
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
14.Share based payment arrangements (continued)
Accounting Policy - Share-based payments
Equity Incentive Plan (EIP)
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.
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 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 or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increase 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.
Critical accounting judgements, estimates and adjustments
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black Scholes option pricing
model, using the assumptions noted above.
15. Non-controlling interest
The below table summarises the information relating to each of the Group’s subsidiaries that have a material non-
controlling interest (NCI), after intra-group eliminations.
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.
42
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
15.Non-controlling interest (continued)
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
16. Reconciliation of cash flows from operating activities
Loss for the year
Adjustments for:
Equity settled share-based payment transactions
Annual leave provision
Depreciation and amortisation
Loss on disposal of asset
Gain on loss of control of subsidiary
Bank revaluation and unrealised FX gains and losses
Interest (income)/expense and other finance 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 provisions
Contract liabilities
30 June 2023
$
30 June 2022
$
-
-
-
-
-
-
363,485
-
(163,069)
-
(200,416)
-
30 June 2023
$
30 June 2022
$
(5,997,504)
(4,997,031)
405,977
-
37,054
257
-
(62,033)
(21,129)
(749)
123,750
430,866
(12,592)
541,737
8,259
116,222
12,469
(1,860,064)
(105,815)
67
(1,825)
67,000
267,246
(9,329)
(5,096,103)
(5,961,064)
300,682
(296,121)
120,250
(61,288)
(229,813)
58,667
(131,139)
(288,644)
(93,850)
373,208
6,732
80,062
Net cash from operating activities
(5,203,726)
(6,014,695)
43
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
17. 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 in impairment loss on trade receivables and contract
assets arising from contracts with customers
Trade receivables and contract assets
30 June 2023
$
30 June 2022
$
(749)
(1,825)
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.
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. To date no customer balances have been written off or
credit impaired at the reporting date.
For the year ending 30 June 2023, an ECL of nil (2022: Nil) has been assessed as the closing trade receivables
balance of $17,046 is considered immaterial.
44
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
17. Financial instruments – fair values and risk management (continued)
Cash and cash equivalents and other receivables
The Group held cash and cash equivalents of $1,287,005 at 30 June 2023 (30 June 2022: $5,074,133). 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 $194,662 at 30 June 2023 (30 June 2022: $248,088). 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.
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 2023
$
30 June 2022
$
749
(749)
-
2,574
(1,825)
749
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.
30 June 2023
Carrying
amount
$
Total
$
2 months or
less
$
2-12 months
$
12 months or
more
$
Contractual cash flows
Trade and other payables
583,029
583,029
583,029
-
Borrowings
980,000
980,000
-
980,000
1,563,029
1,563,029
583,029
980,000
-
-
-
45
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
17. Financial instruments – fair values and risk management (continued)
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
-
-
-
-
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
588,140
1,065,395
30 June 2023
USD
30 June 2022
USD
Trade receivables
Trade payables
Net statement of financial position exposure
Sensitivity analysis
-
(60,219)
527,921
36,366
(4,495)
1,097,266
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 2023
$
30 June 2022
$
22,311
(10,993)
159,283
(144,803)
There has been no change in assumptions or method used to determine foreign currency sensitivity from the prior
year.
18. Commitments
The Group has no commitments or contingencies.
46
Identitii Limited
Annual Report FY23
19. 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 2023
$
30 June 2022
$
Audit and review services
RSM (Australia)
Audit and review of financial statements
63,750
68,420
RSM (Hong Kong)
Audit and review of financial statements
5,685
69,435
5,299
73,719
47
Identitii Limited
Annual Report FY23
20. Related parties
Notes to the Consolidated Financial Statements
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 2023
$
30 June 2022
$
597,438
43,333
20,159
-
162,568
823,498
532,824
40,560
20,069
12,974
191,433
797,860
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.
b) KMP transactions
KMP of the Company control approximately 1% of the voting shares of the Company as at 30 June 2023.
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:
Transaction values for year
ended 30 June
Balance outstanding as at 30
June
Transactions
2023
$
2022
$
Loan from Director – John Rayment
-
20,000
2023
$
-
2022
$
-
21. List of subsidiaries
The table below lists the controlled entities of the Group as at 30 June 2023.
Name
Principal place of business
Ownership interest
Identitii Hong Kong Limited
Hong Kong
100%
100%
30 June 2023
30 June 2022
The Company provided $6,152 (30 June 2022: $79,966) 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.
48
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
22. Investment in associates
Investment in associates is 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
30 June 2023
30 June 2022
Payble Pty Ltd
Australia
32.8%
44%
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.
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.
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
Fair value on date control was lost
Forgiveness of loan in exchange for shares
Share of associate loss after tax
Closing carrying amount
Payble Pty Ltd
30 June 2023
$
30 June 2022
$
679,891
1,017,908
1,697,799
348,248
-
604,228
982,777
1,587,005
223,955
779,144
348,248
1,003,099
1,349,551
583,906
1,312,416
1,312,416
604,628
604,628
903,154
-
-
1,170,400
920,019
(430,866)
1,392,307
-
(267,246)
903,154
49
Identitii Limited
Annual Report FY23
Notes to the Consolidated Financial Statements
22. Investment in associates (continued)
Accounting Policy - 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.
23. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2023, the parent entity of the Group was Identitii Limited.
Results of parent entity
Total comprehensive loss for the year
(5,983,799)
(6,191,579)
30 June 2023
$
30 June 2022
$
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
4,023,778
5,493.114
2,121,151
2,121,151
8,050,015
8,944,678
1,373,686
1,373,686
33,438,181
32,934,833
4,292,785
3,900,514
(34,359,003)
(29,264,355)
3,371,963
7,570,992
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments
The parent entity had no capital commitments for property, plant, and equipment as at 30 June 2023 and 30 June 2022.
50
Identitii Limited
Annual Report FY23
24. Fair value measurements
Notes to the Consolidated Financial Statements
The carrying amount of the Group’s financial assets and financial liabilities is a reasonable approximation of fair value.
25. Subsequent events
On 5 September 2023, the Company announced that its Rights Issue closed on 30 August 2023, and raised $1,338,160
before costs, with a shortfall balance of $789,735. The Rights Issue was a pro-rata non-renounceable entitlement issue to
eligible shareholders of one (1) New Share for every one (1) Existing Share held by eligible shareholders on the Record
Date, at an issue price of $0.01 per New Share. 133,816,609 New Shares were issued and allotted on 5 September 2023,
and the Company expects the shortfall to be placed shortly.
On 21 September 2023, the Company announced that it had successfully completed the Shortfall Offer, raising a further
$789,735 via the issue of shortfall shares at the issue price of $0.01 per Share, bringing the total capital raised under the
Rights Issue to $2,127,895 before costs.
On 28 September 2023, the Company announced $1.0M in annualised cost savings, to further extend its cash runway.
The operational changes to realise $1.0M in annualised cost savings have all been put into effect, and the Company
expects to see the resulting decreases in cash outflows materialise in the coming quarters. Savings have been realised in
cloud infrastructure (consolidating multiple suppliers), legal costs (finalising patent strategy work), operational costs (office
downsizing and licence cancellations) and headcount (including some reallocations to offshore roles). Additionally, all three
Non-Executive Directors on our Board have elected to reduce the cash component of their remuneration by 25%,
substituting the reduced cash component for ordinary shares in the Company, subject to shareholder approval.
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.
51
Identitii Limited
Annual Report FY23
Directors’ Declaration
1.
In the opinion of the Directors of Identitii Limited (‘the Company’):
Directors’ Declaration
a.
the consolidated financial statements and notes that are set out on pages 20 to 51 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 2023 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 1 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 2023.
Signed in accordance with a resolution of the Board of Directors:
Timothy Phillipps
Chairperson
Sydney
29 September 2023
52
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 2023, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial
performance for the year then ended; 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.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 of the financial report, which indicates that the Group incurred a net loss of $5,997,504
during the year ended 30 June 2023. As stated in Note 1, these events or conditions, along with other matters as
set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability
to continue as a going concern. Our conclusion is not modified in respect of this matter.
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
53
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Equity method of accounting for investments with significant influence
Refer to Note 8 and Note 22 in the financial statements.
Investments in associates are carried at a value of
$1,392,307 after
to equity of
$920,019 loans to the associate and accounting for
the company shares of losses of $430,866.
the conversion
It was determined in FY22 that the Company no
longer retained control of Payble and, as a result,
to an
Payble went
investment in associate.
from being a subsidiary
its right
During the FY23 financial year, the Company
exercised
the outstanding
intellectual property license fee, amounting to $0.9m
payable by the associate to Identitii into additional
equity.
to convert
As of 30 June 2023, the Company’s investment in
Payble was 32.8%.
We consider this to be a key risk due to the following
reasons:
•
•
The variability of the Company’s interest for the
period as a result of conversion of the loan and
x15venture’s further investment.
Accounting for investments in associates is
non-routine and can be technically complex in
nature.
Our audit procedures included the following:
• Obtained and reviewed the Subscription and
Set-off Deed signed between the Company and
Payable.
• Obtained
and
reviewed managements’
calculation for the loan conversion including
agreements to the Subscription and Set-off
Deed.
• Obtained and reviewed the application of equity
method of accounting to the Company’s share of
equity-accounted investee losses.
• Obtained the financial statements for Payble and
recalculated the share of associate loss after tax.
•
Verified that the amounts and disclosures in
financial statements were
Note 22 of
consistent with the financial statements of
Payble.
the
• Critically evaluated managements assessment
of whether the asset was impaired.
•
Assessing
presentation
requirements
Standards.
the compliance of
the
disclosures with
Australian
financial
the
Accounting
and
of
54
Key Audit Matter
How our audit addressed this matter
Share-based payments – Refer to Note 14 in the financial statements.
The Group recognised a share-based payment
expense of $405,977 in the statement of profit or loss
for the year ended 30 June 2023 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.
into
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.
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
55
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2023 but does not include the financial report and 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 12 to 18 of the directors' report for the year ended
30 June 2023.
In our opinion, the Remuneration Report of Identitii Limited, for the year ended 30 June 2023, complies with
section 300A of the Corporations Act 2001.
56
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 September 2023
57
Identitii Limited
Annual Report FY23
Additional ASX Information
Additional ASX Information
In accordance with ASX Listing Rule 4.10, the Directors provide the following information as at 25 September
2023.
Securities on Issue
Identitii has the following securities on issue as at 25 September 2023:
Type
Security
ASX Listed
ASX Listed
Unlisted
Unlisted
Fully paid ordinary shares (ID8)
Options exercisable at $0.08 and expiring 29
December 2024 (ID8O)
Options
Performance Rights
Number of
securities
425,588,014
5,210,834
Number of
security holders
2,110
136
22,457,685
3,800,000
31
11
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.
Distribution schedule of the number of holders of ordinary shares
Holdings Ranges
Holders
Total Units
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
57
371
386
912
384
16,839
1,210,047
2,961,570
34,231,518
387,168,040
Totals
2,110
425,588,014
%
0.000
0.280
0.700
8.040
90.970
100.000
Marketable Parcels
Identitii has 1,421 shareholders holding less than a marketable parcel 41,666 shares each (i.e., less than
$500 per parcel of shares) based on the closing price of AUD 0.012 on 22 September 2023 representing a
total of 425,588,014 shares.
On-Market Buy-Back
Identitii is not undertaking an on-market buy-back.
Restricted securities
Identitii does not have any restricted securities on issue.
58
Identitii Limited
Annual Report FY23
Twenty largest shareholders
Shareholder
Additional ASX Information
Number of
shares held
% of
issued
capital
1
2
3
4
5
6
7
8
9
13
14
BEAUVAIS CAPITAL PTY LTD
70,668,757
16.605%
LINK TRADERS (AUST) PTY LTD
MR FREDERICK BART
O'DWYER TECHNOLOGY TRAINING PTY LIMITED
20,822,412
4.893%
19,631,740
4.613%
18,000,000
4.229%
MR CAMERON BEAVIS
14,025,030
3.295%
BART SUPERANNUATION PTY LIMITED <4F INVESTMENTS
SUPERFUND A/C>
11,608,500
2.728%
MR EVAN PHILIP CLUCAS & MS LEANNE JANE WESTON
8,976,000
2.109%
PAT PROPERTY PTY LTD
CITICORP NOMINEES PTY LIMITED
10
FANE LEVY INVESTMENTS PTY LTD
11
ELOREY PTY LTD
12 MR SURESHKUMAR RAJALINGAM
JAMBER INVESTMENTS PTY LTD
6,829,837
1.605%
5,991,064
1.408%
5,937,500
1.395%
4,771,824
1.121%
4,463,702
1.049%
3,250,000
0.764%
BANNABY INVESTMENTS PTY LIMITED
3,149,193
0.740%
15 MISS MICHELLE JOHANNE SEAGROTT
3,027,493
0.711%
16 MR STEVEN ROBERT HEATH
3,000,000
0.705%
17
PINTIA PTY LTD
2,973,754
0.699%
18
THIRD PARTY NOMINEES PTY LTD
2,904,725
0.683%
19 MR HANS RICHARD EBERSTALLER
2,800,000
0.658%
20
SUPAROSE PTY LTD
2,588,762
0.608%
Total Securities of Top 20 Holdings
215,420,293
50.617%
Total Securities
425,588,014
59
Identitii Limited
Annual Report FY23
Additional ASX Information
Substantial shareholders
The following shareholders have disclosed a substantial holding:
Holder Name
Cameron Beavis
Fred Bart
Link Traders (Aust) Pty Ltd
O’Dwyer Technology Training Pty Limited
Number of Shares
%
Voting Power
84,693,787
31,240,240
21,002,412
18,000,000
19.90%
9.0%
6.06%
5.19%
60
Corporate Directory
Directors
Timothy Phillipps, Chairperson
John Rayment
Rhyll Gardner
Simon Griffin
Company Secretary
Elissa Hansen
Registered Office
388 George Street
Sydney
NSW 2000
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
61
62