intelliHR
Annual Report 2022

Plain-text annual report

2022 A N N U A L R E P O R T For personal use only THIS PAGE LEFT INTENTIONALLY BLANK For personal use only 3 CONTENTS CONTENTS 4 2022 HIGHLIGHTS 5 CORPORATE DIRECTORY 6 EXECUTIVE CHAIR’S LETTER 8 DIRECTORS' REPORT 11 INFORMATION ON DIRECTORS 17 MEETINGS OF DIRECTORS 18 REMUNERATION REPORT (AUDITED) 18 Key management personnel covered in this report 19 Remuneration policy and link to performance 20 Elements of remuneration 21 Link between remuneration and performance 22 Remuneration expenses for executive KMP 23 Contractual arrangements with executive KMP 23 Non-executive Director arrangements 23 Additional statutory information 27 SHARES UNDER OPTION 28 INSURANCE OF OFFICERS AND INDEMNITIES 29 NON-AUDIT SERVICES 30 DECLARATION OF INDEPENDENCE 31 CORPORATE GOVERNANCE STATEMENT 33 FINANCIAL REPORT 36 Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2022 37 Consolidated balance sheet As at 30 June 2022 38 Consolidated statement of changes in equity For the year ended 30 June 2022 39 Consolidated statement of cash flows For the year ended 30 June 2022 73 DIRECTORS’ DECLARATION 74 INDEPENDENT AUDITOR’S REPORT 76 REPORT ON THE REMUNERATION REPORT 78 SHAREHOLDER INFORMATION 78 Distribution of equity securities 79 Equity security holders 80 Substantial holders 80 Voting rights 40 NOTES TO THE FINANCIAL REPORT 40 Note 1 Summary of significant accounting policies 50 Note 2 Parent information 51 Note 3 Revenue 52 Note 4 Loss for the year 53 Note 5 Income tax expense 55 Note 6 Key Management Personnel Compensation 55 Note 7 Auditor’s Remuneration 56 Note 8 Earnings per share 57 Note 9 Cash and cash equivalents 57 Note 10 Investments 57 Note 11 Trade and other receivables 58 Note 12 Plant and equipment 59 Note 13 Leases 60 Note 14 Intangible assets 60 Note 15 Trade and other payables 60 Note 16 Provisions 61 Note 17 Contributed equity 63 Note 18 Reserves 64 Note 19 Operating segments 66 Note 20 Cash flow information 67 Note 21 Share-based payments 69 Note 22 Events after the reporting date 69 Note 23 Related party transactions 70 Note 24 Contingent Assets and liabilities 70 Note 25 Commitments 71 Note 26 Financial risk management For personal use only Annual Report 2022 4 T O TA L C U S T O M E R L I F E T I M E VA L U E $115.5m N E T P R O M O T E R S C O R E 46 C O N T R A C T E D S U B S C R I B E R S 71,402 I N C R E A S E O F 3 7, 9 4 6 O N F Y 2 0 2 1  8 8 % Y OY C O N T R A C T E D A R R $7.7m $ 3 . 7 8 M I N C R E A S E  9 7 % YOY C O N T R A C T E D C U S T O M E R S 320 1 1 8 C U S T O M E R S L O C AT E D O U T S I D E A U S T R A L I A C A S H R E C E I P T S $5.631m 9 1 % I N C R E A S E O F $ 2 . 6 8 M O V E R F Y 2 0 2 1 G L O B A L S U B S C R I B E R S 45% 5 0 % O F G R O W T H I N F Y 2 0 2 2 W E R E G L O B A L S U B S C R I B E R S A V E C O N T R A C T E D C U S T O M E R A R R $24,059 I N C R E A S E O F 2 8 % O V E R F Y 2 0 2 1 2022 HIGHLIGHTS (NON INTERNATIONAL FINANCIAL REPORTING STANDARDS MEASURES) For personal use only 5 CORPORATE DIRECTORY DIRECTORS A Bellas B.Econ, DipEd, MBA, FAICD, FCPA, FGS R Bromage B.Bus, CAHRI I Charles B Occ Therapy, MBA, G. Dip AICD M Donovan B Lajoie D Slocomb B.Bus (Fin), LLB (Hons I), MFin SECRETARY S M Yeates CA, B.Bus PRINCIPAL PLACE OF BUSINESS Level 28, 345 Queen Street, Brisbane QLD 4000 REGISTERED OFFICE Level 28, 345 Queen Street, Brisbane QLD 4000 SHARE REGISTER Link Market Services Limited Level 21, 10 Eagle Street Brisbane QLD 4000 www.linkmarketservices.com.au AUDITOR BDO Audit Pty Ltd Level 10, 12 Creek Street Brisbane QLD 4000 www.bdo.com.au SOLICITORS Atkinson Corporate Lawyers Level 8 99 St Georges Tce Perth, WA, 6000 BANKERS Commonwealth Bank of Australia STOCK EXCHANGE LISTING intelliHR Limited shares are listed on the Australian Securities Exchange (ASX:IHR). WEBSITE ADDRESS www.intellihr.com CORPORATE DIRECTORY For personal use only 6 Annual Report 2022 FY22 has continued to present new challenges with an ongoing volatile and complex global environment. As a result, the last two and a half years has seen the HR function evolve, and the growth of "Chief People and Culture Officers". HR leaders and their strategic input on workforce engagement, wellbeing, and culture, has taken an increasingly prominent role in their organisations. They are empowering all people leaders inside an organisation with the data, insight, and experience to together build culture in this new remote and hybrid working world, managing through the great resignation, navigating a highly competitive talent market, on top of the emergent needs for mental health and wellbeing in the workplace. This sees workforce data, analytics, and insights become critical to driving sustainable and long-term positive impact for all business leaders including HR. While other HR technology solutions are focused largely on digitising physical HR workflows, we are focused on building the platform to empower tomorrow’s HR professionals. On a foundation of data and intelligence, we apply AI and machine learning to generate meaningful insights and analytics for HR professionals and broader team leaders. With this background, FY22 saw intelliHR continue to deliver record levels of year-on-year growth fueled by a focus upon the needs of these progressive HR leaders and their organisations. intelliHR has continued to expand the size of its ideal customer, with several enterprise customers and some of ANZ’s largest and most recognised employer brands opting to partner with intelliHR. Some of the key milestones completed during FY22 include ˆ Contracting our 300th customer. ˆ Pushing through 70,000 contracted subscribed headcount. ˆ Winning 11 enterprise customers. ˆ Achieving record enterprise conversions including recent marquee enterprise deal with Mitre 10 NZ (with c.7,750 headcount) up against two prominent global HR technology vendors. ˆ Growing our ideal customer to 200-2000 headcount with Average Contracted ARR expanding to $24,000 a 28% YoY increase. ˆ Continuing to maintain low levels of churn <1% of revenue. ˆ Delivering intelliHR as a reseller product to UK-based enterprise payroll customer, Cintra. This year intelliHR continued to drive its mission and aligned business plan of becoming a globally-recognised HR SaaS platform. Following an internal strategic review, we have a clear pathway to accelerate to $10m ARR, manage our cash reserve more effectively, and bring forward the point at which we are operating cash flow positive. Our growth is exciting, having recorded our strongest 12 month period of ARR, customer cash receipts and revenue growth. The Company successfully increased its customer base to 320, grew subscribed headcount by 88% to 71,402, grew contracted subscribed headcount by 97%, a $3.78m increase, and generated a $1.1m in contracted professional services income. Cash receipts rose to $5.631m a 91% YoY increase. EXECUTIVE CHAIR'S LETTER MATT DONOVAN Executive Chair EXECUTIVE CHAIR’S LETTER It is my pleasure to present the Annual Report of intelliHR Limited for the year to 30 June 2022. For personal use only 7 EXECUTIVE CHAIR'S LETTER intelliHR continues to enjoy a strong customer Net Promoter Score (NPS) presently at 46, with minimal lost revenue (less than 1%) experienced during the last 12 months. This low level of customer churn results in our expected customer lifetime value stretching over 10 years. During FY22, revenue retention from the customer base at June 2021 was also excellent, at 115%. During FY22 we have increased focus and investment into growing our best-of-breed partner ecosystem. Through an organisational restructure during Q4, we have taken steps to better support these valuable integration and reseller partnerships, positioning intelliHR to leverage the revenue conversion efficiency that relationships such as Cintra and others offer. Our focus is upon partnerships that help: ˆ Drive growth of our ideal enterprise customer. ˆ Support the eco-system enterprise companies use. ˆ Help to expand and scale our implementation capacity. During the first half of FY22 we signed our first eco-system partnership to promote intelliHR as a fully-integrated product offering within UK based payroll provider, Cintra. The partnership has already generated $251k of ARR during FY22. These conversions were achieved ahead of the successful market launch in the UK of the ‘Cintra HR – powered by intelliHR’ product which was completed at Cintra’s annual customer event. Our increased partnership activities in Q4 has seen a further 12 partner relationships contracted including Deputy, KKR’s Humanforce, and Expr3ss!, with 8 of these also building native integrations into the intelliHR platform. intelliHR is negotiating in both the global and ANZ regions with multiple Tier 1 and 2 consulting firms to expand our ideal and enterprise customer implementation capacity along with new lead generation sources. An example of these new partnerships is Phase 3, UKs leading HR, payroll, and finance systems professional and managed services firm and we expect additional signings to be finalised over the course of Q1 FY23. intelliHR has continued its product and market focus upon the people management needs of enterprise customers. intelliHR is a best-of-breed people management system that allows organisations to maintain a real-time handle on their people and performance. We are able to quickly configure the platform to support each customer’s own culture and business strategy and contribute to their strategic decision-making with data- driven insights that amaze and inform executive teams. We have continued to invest heavily into the development of the intelliHR platform ensuring we continue shaping a compelling and differentiated set of capabilities for enterprise, global and local customers. The value generated by the intelliHR platform is reflected in our strong customer loyalty and retention, with the platform continuing to achieve excellent levels of Annual Net Retained Revenue Growth at 115%, and less than 1% of revenue lost in the last twelve months. intelliHR’s global relevance is also evidenced by the expansion of subscribers into 18 countries and approximately 45% of our contracted subscribed headcount is now accounted for by our global customers. In the year ahead, the Company’s growth strategy will focus upon building scale and leveraging the strong relationships being forged with partners. It will continue to focus upon high value integrations to support new customer lead generation opportunities and fast-track the building of an ecosystem of integrated best-in-class HR tools, centered around intelliHR as the essential core intelligent people platform for business. In closing, I would like to thank the talented, diverse, and diligent team at intelliHR for their efforts over the year. As well, I would like to thank our Independent Directors, Tony Bellas, Belle Lajoie, Ilona Charles, and David Slocomb, as well as Greg Baynton (retired) and Jamie Duffield (retired), along with Executive Director Robert Bromage for their diligence and support in guiding the Company through this exciting phase in its development. We are confident that we have the talent and technology that can deliver outstanding outcomes for our customers and build enduring value for our shareholders. MATTHEW DONOVAN Executive Chair For personal use only 8 Annual Report 2022 DIRECTORS' REPORT DIRECTORS AND COMPANY SECRETARY The following persons were Directors of intelliHR Limited during the whole of the financial year or from the date of appointment and up to the date of this report. M Donovan was appointed as a Director on 30 November 2021 and continues in office at the date of this report. G Baynton was a Director from the beginning of the financial year until his resignation on 30 November 2021. J Duffield was a Director from the beginning of the financial year until his resignation on 30 November 2021. The Company Secretary is Suzanne Yeates. Suzanne was appointed to the position of Company Secretary in 2016. She is a Chartered Accountant, Founder and Principal of Outsourced Accounting Solutions Pty Ltd. She holds similar positions with other public and private companies. PRINCIPAL ACTIVITIES The principal activities of the Group during the financial year were the development of an innovative, cloud-based people management platform. No significant change in the nature of these activities occurred during the period. DIVIDENDS The Directors do not recommend the payment of a dividend. No dividend was paid during the year. REVIEW OF OPERATIONS intelliHR has generated record growth across all major metrics including customers, subscribers, revenue, implementation and retention. FY22 has delivered accelerated levels of customer conversions, with an increasing Enterprise focus delivering a higher average ARR from our customer base. Following an internal strategic review in Q3 the business has developed a clear pathway to accelerate to $10m ARR, and to manage our cash reserve more effectively, with a key goal of bringing forward the point at which we are operating cash flow positive. Financial Performance ˆ 97% YoY increase in Contracted Annual Recurring Revenue to $7.7m a $3.78m increase on June 2021 ˆ 109% YoY in reported Income at $5.144m ˆ 88% YoY increase to 71,402 in Contracted subscribed headcount ˆ 36% YoY increase in Contracted Professional Services to $1.1m ˆ 91% YoY increase in full year FY22 Cash Receipts from Customers to $5.631m Customer Growth ˆ 45% of our total contracted subscribed headcount is generated from agreements outside of Australia ˆ $7.7m Contracted ARR, 320 paying customers, and 71,402 paying subscribed headcount contracted as at 30 June 2022 ˆ Conversion of 11 high profile Enterprise Customers over the course of FY22 with a strong pipeline of future Enterprise conversions being established and maintained ˆ Increased traction was achieved across key established industries including Healthcare, Retail, and Professional Services such as Law, Engineering, Finance, and Technology amongst others. Healthcare was particularly strong having accounted for nearly 30% of our growth. ˆ A Bellas ˆ R Bromage ˆ I Charles ˆ B Lajoie ˆ D Slocomb DIRECTORS' REPORT Your Directors present their report on the consolidated entity consisting of intelliHR Limited and the entities it controlled at the end of, or during, the year ended 30 June 2022. Throughout the report, the consolidated entity is referred to as the Group. For personal use only 9 Operational Performance ˆ The Company continued to see strong customer and revenue retention with less than 1% of revenue lost in the last 12 months, with revenue retention from the customer base at June 2021 of 115% ˆ During Q4 we have contracted 12 partner relationships including Deputy, Humanforce, and Expr3ss!, with 8 of these also building native integrations to the intelliHR product. intelliHR is negotiating in both the global and ANZ regions with multiple Tier 1 and 2 consulting firms, and has signed an agreement with Phase 3, UKs leading HR, payroll, and finance systems professional and managed services firm ˆ Eco-system development is paying dividends with over 90% of the conversions in Q4 FY22 having an ecosystem integration focus ˆ The outcomes of our Q3 strategic review have seen Q4 net cash used in operations reduced by 24% compared to Q3 to $2.2m through a combination of restructuring cost savings (as previously announced) and increased cash inflows. Further strong growth in customer receipts is expected over coming quarters with the current WIP pipeline standing at 16,558 paying subscribers ˆ Product development and engineering capacity and capability expansion resulted in further product improvements during FY22 DIRECTORS’ REPORT THE PEOPLE PLATFORM Innovation shipped in the last 12 months ˆ Analytics highlights ˆ Extended insight generation ˆ Language detection for sentiment analysis ˆ Core HR metrics expansion i.e. Gender Pay Gap ˆ Custom fields (with API's) now across all core data models (People, Job, Rem, Training) ˆ Bulk data tool extension ˆ Increased end points of the public API ˆ Marketplace of 50 plus* Intelligent ˆ Custom performance ˆ Performance improvement enhancement ˆ Language available in beta now include French, French Canadian, Spanish, German, Swedish Human ˆ 360 degree feedback ˆ Goal measurements ˆ Training expansion ˆ Dashboard self service tile visibility Empowering ˆ Azure AD integration ˆ Protective framework and language upgrades ˆ Consistent upgrades to core infrastructure Secure For personal use only Annual Report 2022 10 DIRECTORS' REPORT Strategy and Outlook Looking forward, the company is excited to further build upon FY22 successes in FY23. intelliHR is accelerating growth from its innovative and configurable HR platform which is proven to quickly meet the needs of organisations across the globe, providing an expanded market opportunity looking forward to FY23. It has continued to invest into efficiently scaling sales operations through a range of product initiatives including foreign language capabilities, ecosystem and channel development which similarly increase the addressable market. ˆ intelliHR has firmly established a strong platform for global SaaS HR success over the course of FY22. The company has continued to invest in building our global subsidiaries intelliHR Americas and intelliHR UK, initially employing 2 salespeople this team has now expanded to 11 providing comprehensive sales and support coverage across the entire North American and UK Markets. ˆ Continue to accelerate toward offering a marketplace-based ecosystem built from best of breed people focused platforms with intelliHR at the core ˆ Continue to adapt our offering at all levels to service the increasing scale opportunity offered by Enterprise customers. The range of customers that we support is now 50 to 10,000 employees, multilingual and located across the globe ˆ Continue to develop emerging Reseller technology partnerships creating a new scalable distribution channel As disclosed in the financial report, the Group recorded a net loss of $8,993,293 (2021: $7,633,419) and net operating cash outflows of $6,020,284 (2021: $3,095,924) for the year ended 30 June 2022. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS In September 2021, $10.667m was raised through the placement of 46,378,260 shares, and following ratification at the AGM in December 2021, $0.833m was raised through the placement of 3,621,740 shares to Colinton Capital Partners. EVENTS SINCE THE END OF THE FINANCIAL YEAR There are no matters or circumstances that have arisen since 30 June 2022 that have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the Group in future financial years. For personal use only 11 INFORMATION ON DIRECTORS OTHER CURRENT DIRECTORSHIPS Director of Barker Foundation Ltd and Co-Founder and Director of Worldly Group Pty Ltd. FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS ˆ None SPECIAL RESPONSIBILITIES ˆ Chair of the Board ˆ Chair of the Nomination Committee ˆ Member of the Audit & Risk Committee ˆ Member of the People Committee INTERESTS IN SHARES AND OPTIONS ˆ 2,150,000 ordinary shares M DONOVAN Executive Chair EXPERIENCE AND EXPERTISE Mr Donovan brings 30 years of business and marketing expertise. Matt has founded a digital agency in Australia, brand consulting business in New York, luxury agency in China, and shopper marketing practice in Asia. Matt was the youngest Chief Strategy Officer in Australian advertising at 28, and has held Chief Strategy roles in the US, China, and Asia Pacific. Matt was EVP, Managing Director for McCann Erickson’s flagship New York office. Matt spent 8 years at Microsoft HQ in Redmond as Global General Manager & Partner responsible for brand, data & insights, direct business, and integrated channels for the Windows and Office product portfolios where Matt co- authored the Windows 10 vision, Office and Microsoft 365, and launch of Microsoft Teams. "Leadership is a privilege, Leaders set the tone. Everyone in this business is a leader." – Satya Nadella, CEO Microsoft " intelliHR is the intelligent people platform for tomorrow’s Chief People Officers and HR leaders.” For personal use only 12 Annual Report 2022 INFORMATION ON DIRECTORS OTHER CURRENT DIRECTORSHIPS Deputy Chairman of NOVONIX Limited (ASX: NVX) and Director of State Gas Limited (ASX: GAS). FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS ˆ Shine Corporate Ltd (ASX: SHI) - Ceased June 2020. SPECIAL RESPONSIBILITIES ˆ Member of the Nomination Committee ˆ Member of the Audit & Risk Committee ˆ Member of the People Committee INTERESTS IN SHARES AND OPTIONS ˆ 5,277,751 ordinary shares EXPERIENCE AND EXPERTISE Mr Bellas brings over 35 years of experience in the public and private sectors. Tony was previously CEO of the Seymour Group, one of Queensland’s largest private investment and development companies. Prior to joining the Seymour Group, Tony held the position of CEO of Ergon Energy, a Queensland Government- owned corporation involved in electricity distribution and retailing. Before that, he was CEO of CS Energy, also a Queensland Government-owned corporation and the State’s largest electricity generation company, operating over 3,500 MW of gas-fired and coal-fired plant at four locations. Tony previously had a long career with Queensland Treasury, achieving the position of Deputy Under Treasurer. Tony is a Director of the following unlisted companies: Healthcare Logic Global Limited, Loch Explorations Pty Ltd, Green and Gold Minerals Pty Ltd, and Burlington Mining Pty Ltd. A BELLAS Non-Executive Director "You cannot mandate productivity; you must provide the tools to let people become their best." – Steve Jobs " intelliHR provides a set of key strategic people management tools for organisations to help their people become their best.” For personal use only 13 INFORMATION ON DIRECTORS EXPERIENCE AND EXPERTISE Mr Bromage is a HR Professional and technologist with 25 years in the industry. An experienced businessman, his entrepreneurial flair and continuous, forward-thinking improvement is fueled by his passion for HR and high- performing business. His career has centered around the field of building validated performance prediction models, developing his expertise in human capital management analytics. He actively researches the future of people management, which drives intelliHR’s evolution. Career highlights include: ˆ Founder of intelliHR – a global HR technology business developing and currently marketing a next-generation cloud-based people management Platform ˆ Founder of APRG - a Human Capital Management Consulting organisation focused on delivering leading consulting services to Australian businesses. Specialties: People and Culture Strategy Alignment, Performance Management Frameworks, HR Process Design, Attrition Reduction, HR Software Development, HR Technology Implementation, HR Metrics and Predictive Analytics. OTHER CURRENT DIRECTORSHIPS ˆ None FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS ˆ None SPECIAL RESPONSIBILITIES ˆ Executive Director, Product and Strategic Partnerships INTERESTS IN SHARES AND OPTIONS ˆ 21,388,365 ordinary shares ˆ 650,759 performance rights R BROMAGE Executive Director " intelliHR continues to go from strength to strength demonstrating that both our product and team are world class and highly competitive in the global HR technology market." For personal use only 14 Annual Report 2022 INFORMATION ON DIRECTORS EXPERIENCE AND EXPERTISE Ms Charles is CEO and co-founder of ShiloPeople, an on- demand human resources consultancy. She is an experienced executive with an extensive career in human resources, transformation and change across multiple industries and geographies. She has worked across global and complex organisations from entrepreneurial start-ups to large-scale, multi-national corporates. Industries include digital and technology, financial services, health, telecommunications and government. Ms Charles holds a Bachelor of Applied Science (OT), Graduate Diploma Business Administration and a Masters of Business Administration. She is a graduate of the Australian Institute of Company Directors and a Certified member of the Australian Human Resources Institute. I CHARLES Non-Executive Director OTHER CURRENT DIRECTORSHIPS ˆ Director LaunchVic FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS ˆ Goulburn Valley Health (GVH) – ceased July 2022 ˆ People Advisory Committee Burnet Institute (sub- committee of the Board) – ceased 2021 SPECIAL RESPONSIBILITIES ˆ Chairman of the People Committee ˆ Member of the Nomination Committee INTERESTS IN SHARES AND OPTIONS ˆ 259,113 ordinary shares Pursuant to a Call Option Deed with Colinton Capital Partners I (A) Pty Ltd (ACN 620 748 718) as Trustee for Colinton Capital Partners Fund I (A) Trust (CCP) dated 19 February 2021, Ilona Charles has an option to acquire 250,000 of IHR ordinary shares held by CCP as the registered holder for an exercise price of $0.40, exercisable at any time before 19 February 2025 subject to certain vesting conditions. "Globally, HR has played a lead role as their organisations navigate an uncertain environment. Never has there been a more important time for a business to have access to high quality people data." For personal use only 15 INFORMATION ON DIRECTORS EXPERIENCE AND EXPERTISE Ms Lajoie is the CEO of Cloudscene and is a globally recognised technology leader and expert at rapidly growing organisations from start-up to scale. Ms Lajoie has played critical roles in the growth and commercial success of some of Australia's most successful technology start-ups and has 13 years’ experience in both Telecommunications and SaaS sectors. Ms Lajoie has spent her career working as an integral member of the leadership teams at PIPE networks, NEXTDC, Megaport, and Cloudscene. B LAJOIE Non-Executive Director " In FY22 intelliHR delivered continued ARR growth and laid the foundations for global channel growth. The product is now being recognised as a global competitor and the need for HR technology is an enormous opportunity." OTHER CURRENT DIRECTORSHIPS ˆ None FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS ˆ None SPECIAL RESPONSIBILITIES ˆ Member of the People Committee ˆ Member of the Nomination Committee INTERESTS IN SHARES AND OPTIONS ˆ 230,601 ordinary shares For personal use only 16 Annual Report 2022 INFORMATION ON DIRECTORS EXPERIENCE AND EXPERTISE Mr Slocomb is a Partner at Australian mid-market private equity firm, Colinton Capital Partners. Mr Slocomb has significant prior experience in private equity and investment banking with former roles at global investment firms The Carlyle Group, Oaktree Capital and Macquarie Group. He was also previously CFO at Guzman y Gomez. He holds a Master of Finance from INSEAD Business School and a Bachelor of Business (Finance)/Bachelor of Laws (Hons I) from the Queensland University of Technology. OTHER CURRENT DIRECTORSHIPS ˆ Director of Turtle HoldCo Pty Ltd (Buildsafe) FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS ˆ None SPECIAL RESPONSIBILITIES ˆ Chairman of the Audit & Risk Committee ˆ Member of the People Committee ˆ Member of the Nomination Committee INTERESTS IN SHARES AND OPTIONS ˆ None D SLOCOMB Non-Executive Director "FY22 was a pivotal year for intelliHR, with the signing of senior global technology executive, Matt Donovan, and the game changing reseller agreement with UK enterprise payroll provider, Cintra." For personal use only 17 DIRECTORS’ REPORT MEETINGS OF DIRECTORS The number of meetings of the Company’s Board of Directors and of each board committee held during the year ended 30 June 2022, and the number of meetings attended by each Director were: FULL MEETINGS OF DIRECTORS MEETINGS OF AUDIT & RISK COMMITTEE MEETING OF PEOPLE COMMITTEE A B A B A B G Baynton 3 3 2 2 N/A N/A A Bellas 7 7 3 3 3 3 I Charles 7 7 N/A N/A 3 3 M Donovan 4 4 1 1 N/A N/A J Duffield 3 3 2 2 N/A N/A B Lajoie 7 7 N/A N/A 3 3 R Bromage 6 7 N/A N/A N/A N/A D Slocomb 7 7 3 3 3 3 A = Number of meetings attended B = Number of meetings held during the time the Director held office or was a member of the committee during the year The nomination committee did not meet during FY2022. For personal use only Annual Report 2022 18 REMUNERATION REPORT REMUNERATION REPORT (AUDITED) The Directors present the intelliHR Limited 2022 remuneration report, outlining key aspects of our remuneration policy and framework, and remuneration awarded this year. The report is structured as follows: (a) Key management personnel (KMP) covered in this report (b) Remuneration policy and link to performance (c) Elements of remuneration (d) Link between remuneration and performance (e) Remuneration expenses for executive KMP (f) Contractual arrangements for executive KMP (g) Non-executive Director arrangements (h) Additional statutory information (A) KEY MANAGEMENT PERSONNEL COVERED IN THIS REPORT NON-EXECUTIVE AND EXECUTIVE DIRECTORS, AND OTHER KEY MANAGEMENT PERSONNEL (See pages 11 to 16 for details about each Director) NON-EXECUTIVE DIRECTORS G Baynton (Non-executive Director) (Resigned 30 November 2021) A Bellas (Non-executive Director) I Charles (Non-executive Director) J Duffield (Non-executive Director) (Resigned 30 November 2021) B Lajoie (Non-executive Director) D Slocomb (Non-executive Director) EXECUTIVE DIRECTORS R Bromage (Executive Director) M Donovan (Executive Chair) (Appointed 30 November 2021) OTHER KEY MANAGEMENT PERSONNEL P Trappett (Chief Financial Officer) For personal use only 19 REMUNERATION REPORT (B) REMUNERATION POLICY AND LINK TO PERFORMANCE The role of a remuneration committee is performed by the full Board of Directors. The Board reviews and determines the remuneration policy and structure annually to ensure it remains aligned to business needs and conforms with our remuneration principles. In particular, the Board aims to ensure that remuneration practices are: ˆ competitive and reasonable, enabling the Group to attract and retain key talent ˆ aligned to the Group’s strategic and business objectives and the creation of shareholder value ˆ transparent and easily understood, and ˆ align with shareholder interests and are acceptable to shareholders ELEMENT PURPOSE PERFORMANCE METRICS POTENTIAL VALUE CHANGES FOR FY 2022 Fixed remuneration (FR) Provide competitive market salary including superannuation and non-monetary benefits Nil Positioned at median market rate None STI Reward for in-year performance Based on individual KPIs. 50% of TFR None LTI Alignment to long-term shareholder value Performance vesting conditions 50% of TFR None Long term incentives are assessed periodically and are designed to promote long-term stability in shareholder returns. Assessing performance The Board of Directors is responsible for assessing performance against KPIs and determining the LTI to be paid. For personal use only Annual Report 2022 20 (C) ELEMENTS OF REMUNERATION (i) Fixed annual remuneration (FR) Executives receive their fixed remuneration as cash. FR is reviewed annually and is benchmarked against market data for comparable roles in companies in a similar industry and with similar market capitalisation. The Board has the flexibility to take into account capability, experience, value to the organisation and performance of the individual. An external remuneration consultant, HRascent, was engaged during FY2022 to benchmark executive remuneration. As a result of the review, executive salaries were adjusted to be positioned at the 50th percentile of the market. Superannuation is included in FR for executives. (ii) Short term incentives Short term incentives for all key management personnel (excluding non-executive Directors) have been implemented for FY2022. They are eligible to receive a bonus of up to 50% of their total fixed remuneration at the end of the financial year, subject to the executive achieving the KPIs set for them during the financial year. The Group reserves the right to pay any STI in either cash, fully paid ordinary shares or performance rights at the Board of Director’s sole discretion. If an executive does not achieve each of the KPIs during the financial year, the Board shall determine the appropriate pro rate STI to be received by the Executive. The Board of Directors shall make this determination for both the Executive Directors and Chief Financial Officer. For the year ended 30 June 2022, key performance indicators were based on the Group objectives focusing on customer and revenue growth. Achievement against KPIs is reviewed annually by the Board of Directors. For each KMP eligible for short-term incentive, the percentage split of the available bonus awarded and forfeited is disclosed in the following table. NAME 2022 2021 AWARDED % FORFEITED % AWARDED % FORFEITED % R Bromage 0% 100% 61%* 39% P Trappett 0% 100% 59%* 41% * STI awarded for 2021 was settled in shares. REMUNERATION REPORT For personal use only 21 REMUNERATION REPORT (iii) Long-term incentives Executive KMP participate, at the Board’s discretion, in a performance based long term incentive program (LTI) with a maximum annual benefit of 50% of TFR, which is assessed over a three-year period and is payable in shares or performance rights at the discretion of the Board. Performance rights will vest if the relative total shareholder return is measured at or above the 3-year average of the S&P ASX small ordinaries Ex A-REIT Franking Credit Adjusted Annual Total Return Index Cap Index, unless otherwise agreed. Options There were no options granted to KMP during FY2022. (D) LINK BETWEEN REMUNERATION AND PERFORMANCE During the year, the Group has generated losses from its principal activity. The Group aims to align its executive remuneration to its strategic and business objectives and the creation of shareholder wealth. However, as the Group is still growing, the group’s financial performance is not necessarily consistent with the measures used in determining the variable amounts of remuneration to be awarded to the KMPs. As a consequence, there may not always be a direct correlation between the group’s key performance measures and the variable remuneration awarded. Share prices are subject to the influence of fluctuation in the domestic and global economy, and as such, increases and decreases may occur independently of executive performance. Given the nature of the Group’s activities and the consequential operating results, no dividends have been paid. There have been no returns of capital in the current or previous financial periods. The details of market price movements are as follows: SHARE PRICE Year end 30 June 2022 5.6 cents Year end 30 June 2021 22.0 cents Year end 30 June 2020 5.2 cents Year end 30 June 2019 7.7 cents On admission to ASX - 23 January 2018 30 cents For personal use only Annual Report 2022 22 (E) REMUNERATION EXPENSES FOR EXECUTIVE KMP The following table shows details of the remuneration expense recognised for the Group’s executive key management personnel for the current and previous financial year measured in accordance with the requirements of the accounting standards. NAME YEAR FIXED REMUNERATION VARIABLE REMUNERATION CASH SALARY $ CASH SALARY INCREASE 01/05/2021 $ DIRECTORS SHARES $ NON- MONETARY BENEFITS $ ANNUAL AND LONG SERVICE LEAVE** $ POST- EMPLOYMENT BENEFITS $ OPTIONS / PERFORMANCE RIGHTS* $ STI $ TOTAL $ RELATED TO PERF % EXECUTIVE DIRECTORS R Bromage 2022 522,638 - - 5,555 (159,636) 23,970 59,792 - 452,319 13.2% 2021 300,000 - - 4,917 3,006 28,500 695,612 - 1,032,035 67.4% M Donovan 2022 38,468 - 8,631 - - 4,710 - - 51,809 0% 2021 - - - - - - - - - 0% NON-EXECUTIVE DIRECTOR A Bellas 2022 44,033 - 44,032 - - 8,804 - - 96,869 0% 2021 30,000 3,333 8,333 - - 4,017 - - 45,683 0% G Baynton 2022 12,500 - 12,500 - - 2,500 - - 27,500 0% 2021 30,000 - 5,000 - - 3,350 - - 38,350 0% J Duffield 2022 12,500 - 12,500 - - 2,500 - - 27,500 0% 2021 30,000 - 5,000 - - 3,350 - - 38,350 0% A Bignell 2022 - - - - - - - - - 0% 2021 25,000 - - - - 2,375 - - 27,375 0% D Slocomb 2022 33,000 - 30,000 - - - - - 63,000 0% 2021 33,350 - 5,000 - - - - - 38,350 0% N Cook 2022 - - - - - - - - - 0% 2021 10,000 - - - - 950 - - 10,950 0% I Charles 2022 30,000 - 30,000 - - 6,001 - - 66,001 0% 2021 11,016 - 11,016 - - 2,148 - - 24,179 0% B Lajoie 2022 30,000 - 30,000 - - 6,001 - - 66,001 0% 2021 5,114 - 5,114 - - 997 - - 11,224 0% OTHER KEY MANAGEMENT PERSONNEL P Trappett 2022 229,154 - - - 9,093 22,346 - - 260,593 0% 2021 180,000 - - - 4,866 17,100 433,625 - 635,591 68.2% TOTAL KMP REMUNERATION EXPENSED 2022 952,293 - 167,663 5,555 (150,543) 76,832 59,792 - 1,111,592 - 2021 654,479 3,333 39,463 4,917 7,872 62,787 1,129,237 - 1,902,088 - REMUNERATION REPORT * Options/performance rights granted under the executive options or performance rights Incentive plan are expensed over the performance period, which includes the year in which the options / performance rights are granted and the subsequent vesting period. ** Other long-term benefits as per Corporations Regulation 2M.3.03(1) Item 8. The amounts disclosed in this column represent the movements in the associated provision. They may be negative where a KMP has taken more leave than accrued during the year. For personal use only 23 REMUNERATION REPORT (F) CONTRACTUAL ARRANGEMENTS WITH EXECUTIVE KMP COMPONENT M DONOVAN R BROMAGE P TRAPPETT Fixed remuneration (inc. superannuation) $110,000 $373,568 $263,568 Contract duration Ongoing Ongoing Ongoing Notice by the individual / Company 3 months 6 months 6 months Termination benefits - - - * There are no further contractual arrangements with Executive KMP outside of the cash remuneration shown above and the STI and LTI’s shown at section (c) (G) NON-EXECUTIVE DIRECTOR ARRANGEMENTS Fees are reviewed annually by the Board taking into account comparable roles. The current base fees were reviewed with effect from 1 May 2021. A non-executive Chairperson receives fees of $100,000 per annum, plus superannuation, payable $50,000 in cash and $50,000 in shares. Other non-executive Directors receive fees of $60,000 per annum, plus superannuation, payable $30,000 in cash and $30,000 in shares. All non-executive Directors enter into a service agreement with the Group in the form of a letter of appointment. The letter summarises the Board policies and terms, including remuneration relevant to the office of Director. (H) ADDITIONAL STATUTORY INFORMATION (i) Performance based remuneration granted, exercised and forfeited during the year The table below shows for each KMP the value of options that were granted, exercised and forfeited during FY2022. During FY2022 3,895,543 options held by Robert Bromage expired. The number of options and percentages vested/forfeited for each grant are disclosed on page 20. OPTIONS 2022 VALUE GRANTED* $ VALUE EXERCISED** $ A Bellas - - I Charles - - M Donovan - - B Lajoie - - D Slocomb - - R Bromage - - P Trappett - - * The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of remuneration ** The value at the exercise date of options that were granted as part of remuneration and were exercised during the year has been determined as the intrinsic value of the options at that date. For personal use only Annual Report 2022 24 PERFORMANCE RIGHTS 2022 VALUE GRANTED* $ VALUE EXERCISED** $ P Trappett 109,327 198,589 R Bromage 125,596 342,723 * The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of remuneration ** The value at the exercise date of performance rights that were granted as part of remuneration and were exercised during the year has been determined as the intrinsic value of the performance rights at that date. (ii) Terms and conditions of the share-based payment arrangements Performance Rights The terms and conditions of each grant of performance rights affecting remuneration in the current or a future reporting period are as follows: GRANT DATE VESTING DATE EXPIRY DATE EXERCISE PRICE VALUE PER PERFORMANCE RIGHT AT GRANT DATE PERFORMANCE ACHIEVED % VESTED 1/7/2018 1/7/2021 1/7/2022 N/A $0.20 0% 0% 29/10/2021 1/7/2022 30/6/2024 N/A $0.21 0% 0% 30/11/2021 1/7/2022 30/6/2024 N/A $0.193 0%* 0% * Weighted average of performance rights achieved The number of performance rights over ordinary shares in the Company provided as remuneration to key management personnel is shown on page 25. The performance rights carry no dividend or voting rights. The performance rights vest as follows: a) 367,347 vest on 1 July 2021 if the relative total shareholder return is at or above the 3-year average of the S&P ASX small ordinaries Ex A-REIT Franking Credit Adjusted Annual Total Return Index Cap Index b) 1,117,136 vest on achievement of mutually agreed KPIs that relate to FY2022. When exercisable, each performance right is convertible into one ordinary share of intelliHR Limited. If an executive ceases employment before the rights vest, the rights will be forfeited, except in limited circumstances that are approved by the Board on a case-by-case basis. (iii) Reconciliation of options, performance rights and ordinary shares held by KMP The table below shows a reconciliation of options held by each KMP from the beginning to the end of FY2022. No options were forfeited during the year. REMUNERATION REPORT For personal use only 25 REMUNERATION REPORT Options 2022 NAME & GRANT DATES BALANCE AT THE START OF THE YEAR PLACEMENT BONUS OPTIONS GRANTED AS COMPENSATION BALANCE AT THE END OF THE YEAR UNVESTED VESTED VESTED EXPIRED EXERCISED VESTED AND EXERCISABLE % VESTED UNVESTED A BELLAS - - - - - - - - - - - G BAYNTON - - - - - - - - - - - J DUFFIELD - - - - - - - - - - I CHARLES - - - - - - - - - - D SLOCOMB - - - - - - - - - - M DONOVAN - - - - - - - - - - R BROMAGE 23/11/2016 - 4,312,209 - - - (3,895,543) (416,666) - - - P TRAPPETT - - - - - - - - - - Performance Rights The table below shows how many performance rights were granted and vested during the year. NAME & GRANT DATES BALANCE AT THE START OF THE YEAR VESTED DURING THE YEAR FORFEITED DURING THE YEAR GRANTED AS COMPENSATION BALANCE AT THE END OF THE YEAR MAXIMUM VALUE YET TO VEST* $ UNVESTED VESTED UNVESTED VESTED P TRAPPETT 2022 2,003,711 - (968,727) (667,637) 520,607 887,954 - - 2021 1,458,256 - (698,182) (392,727) 1,636,364 2,003,711 - - R BROMAGE 2022 2,727,273 - (1,671,818) (1,055,455) 650,759 650,759 - - 2021 - - - - 2,727,273 2,727,273 - - * The maximum value of the performance rights yet to vest has been determined as the amount of the grant date fair value of the rights that are yet to be expensed. The minimum value of deferred shares yet to vest is nil, as the shares will be forfeited if the vesting conditions are not met. For personal use only Annual Report 2022 26 Shareholdings 2022 NAME BALANCE AT THE START OF THE YEAR ISSUED ON EXERCISE OF OPTIONS VESTING OF PERFORMANCE RIGHTS DIRECTOR SHARES OTHER CHANGES DURING THE YEAR BALANCE AT THE END OF THE YEAR ORDINARY SHARES A Bellas 4,957,545 - - 234,838 - 5,192,383 G Baynton 6,863,689 - - - (6,863,689) ** - J Duffield 4,155,583 - - - (4,155,583) ** - M Donovan - - - 2,000,000 150,000 *** 2,150,000 D Slocomb - - - - - - I Charles - - - 173,745 - 173,745 B Lajoie - - 145,233 - 145,233 R Bromage 27,493,439 416,666 1,671,818 - (8,193,558) * 21,388,365 P Trappett 2,055,857 - 968,727 - - 3,024,584 * Off market trades ** Shareholding at date of resignation *** Shares held at date of appointment (iv) Other transactions with key management personnel On 30 April 2021, the company entered into a loan agreement for $124,999.80 with Mr R Bromage for the purpose of funding the exercise of 416,666 options (exercise price $0.30, expiring 30 April 2022). The loan was limited in recourse over the shares issued on exercise of the options, Mr Bromage provided a personal guarantee for the loan, and the Company placed a holding lock over the shares to secure payment. The loan had interest of 10%, payable quarterly in arrears in cash, and has a term of 1 year, with early repayment if Mr Bromage ceased to be a Director or employee of the Company. A share-based payment expense of $71,750 was recognised in FY2021 to reflect the incremental fair value of the modified option. This loan was repaid in full on 16 May 2022. (v) Other transactions with key management personnel and their related parties During the financial year, payments for recruiting services from ShiloPeople (director-related entity of Ilona Charles) of $94,244 were made. The current trade payable balance as at 30 June 2022 was $6,600. All transactions were made on normal commercial terms and conditions at market rates. (vi) Reliance on external remuneration consultants In October 2021, the Remuneration Committee engaged HRascent to review its existing remuneration policies and to provide recommendations on executive based salary, short-term and long-term incentive plan design. HRascent was paid $9,500 for these services. HRascent has confirmed that any remuneration recommendations have been made free from undue influence by members of the Group’s key management personnel. END OF REMUNERATION REPORT (AUDITED) REMUNERATION REPORT For personal use only 27 SHARES UNDER OPTION SHARES UNDER OPTION Unissued ordinary shares Unissued ordinary shares of intelliHR Limited under option at the date of this report are as follow: SECURITIES EXPIRY DATE EXERCISE PRICE NUMBER UNDER OPTION OPTIONS 11/08/2017 11/08/2022 $0.02 244,000 27/02/2018 14/02/2023 $0.32 160,000 23/07/2018 30/06/2023 $0.30 169,000 02/10/2020 30/08/2024 $0.22 3,060,000 01/07/2021 30/06/2025 $0.38 870,000 PERFORMANCE RIGHTS 03/09/2018 01/07/2022 N/A 367,347 09/11/2018 01/11/2022 N/A 250,000 29/10/2021 30/06/2024 N/A 1,809,110 30/11/2021 30/06/2024 N/A 650,759 Unissued ordinary shares of intelliHR Limited under performance right at the date of this report total 3,077,216. 520,607 of these performance rights are the performance rights granted as remuneration to Mr Trappett during the financial year. 650,759 of these performance rights are the performance rights granted as remuneration to Mr Bromage during the current financial year. The remaining 617,347 performance rights were granted during the prior financial years. Details of the performance rights granted to key management personnel are disclosed on page 25 above. No performance right holder or option holder has any right to participate in any other share issue of the Company or any other entity. No performance rights have been granted since the end of the financial year. For personal use only Annual Report 2022 28 INSURANCE OF OFFICERS AND INDEMNITIES INSURANCE OF OFFICERS AND INDEMNITIES (a) Insurance of officers During the financial year, intelliHR Limited paid a premium of $205,530 to insure the Directors and Officers of the Company. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a willful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Group. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. (b) Indemnity of auditors intelliHR Limited has not agreed to indemnify their auditors. (c) Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001. For personal use only 29 NON-AUDIT SERVICES NON-AUDIT SERVICES The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group are important. Details of the amounts paid or payable to the auditor (BDO) for audit and non-audit services provided during the year are set out below. The Board of Directors has considered the position and, in accordance with advice received from the audit and risk committee is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: ˆ all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor ˆ none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants. During the year, the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit firms: CONSOLIDATED 2022 $ 2021 $ Taxation services BDO Services Pty Ltd Preparation of Tax and FBT Return, and R&D AusIndustry Return 19,321 19,886 TOTAL REMUNERATION FOR NON-AUDIT SERVICES 19,321 19,886 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 30. Rounding of amounts Amounts in the Director's Report have been rounded off, in accordance with the ASIC Legislative Instrument 2016/191, to the nearest dollar. This report is made in accordance with a resolution of Directors. M Donovan Executive Chair Brisbane, 29 August 2022 For personal use only Annual Report 2022 30 DECLARATION OF INDEPENDENCE BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au DECLARATION OF INDEPENDENCE BY L G MYLONAS TO THE DIRECTORS OF INTELLIHR LIMITED As lead auditor of intelliHR Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of intelliHR Limited and the entities it controlled during the period. L G Mylonas Director BDO Audit Pty Ltd Brisbane, 29 August 2022 For personal use only 31 CORPORATE GOVERNANCE STATEMENT Corporate governance statement intelliHR Limited and the Board are committed to achieving and demonstrating the highest standards of corporate governance. intelliHR Limited has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. The 2022 corporate governance statement is dated as at 30 June 2022 and reflects the corporate governance practices in place throughout the 2022 financial year. The 2022 corporate governance statement was approved by the Board on 29 August 2022. A description of the Group’s current corporate governance practices is set out in the Group’s corporate governance statement, which can be viewed at https://intellihr.com/investor-relations/#corporate-governance. . For personal use only Annual Report 2022 32 THIS PAGE LEFT INTENTIONALLY BLANK For personal use only 33 F I N A N C I A L R E P O R T 2022 For personal use only Annual Report 2022 34 FINANCIAL REPORT These financial statements are for intelliHR Limited. The financial statements are presented in the Australian currency. intelliHR Limited is a Company limited by shares, incorporated and domiciled in Australia. Its principal place of business is: intelliHR Limited Level 28, 345 Queen Street Brisbane QLD 4000 The financial statements were authorised for issue by the Director's on 29 August 2022. The Directors have the power to amend and reissue the financial statements. All press releases, financial reports and other information are available at our website: www.intellihr.com. . For personal use only 35 FINANCIAL REPORT ANNUAL REPORT 2022 FINANCIAL REPORT INTELLIHR LIMITED ACN 600 548 516 40 NOTES TO THE FINANCIAL REPORT 40 Note 1 Summary of significant accounting policies 50 Note 2 Parent information 51 Note 3 Revenue 52 Note 4 Loss for the year 53 Note 5 Income tax expense 55 Note 6 Key Management Personnel Compensation 55 Note 7 Auditor’s Remuneration 56 Note 8 Earnings per share 57 Note 9 Cash and cash equivalents 57 Note 10 Investments 57 Note 11 Trade and other receivables 58 Note 12 Plant and equipment 59 Note 13 Leases 60 Note 14 Intangible assets 60 Note 15 Trade and other payables 60 Note 16 Provisions 61 Note 17 Contributed equity 63 Note 18 Reserves 64 Note 19 Operating segments 66 Note 20 Cash flow information 67 Note 21 Share-based payments 69 Note 22 Events after the reporting date 69 Note 23 Related party transactions 70 Note 24 Contingent Assets and liabilities 70 Note 25 Commitments 71 Note 26 Financial risk management 33 FINANCIAL REPORT 36 Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2022 37 Consolidated balance sheet As at 30 June 2022 38 Consolidated statement of changes in equity For the year ended 30 June 2022 39 Consolidated statement of cash flows For the year ended 30 June 2022 73 DIRECTORS’ DECLARATION 74 INDEPENDENT AUDITOR’S REPORT 76 REPORT ON THE REMUNERATION REPORT 78 SHAREHOLDER INFORMATION 78 Distribution of equity securities 79 Equity security holders 80 Substantial holders 80 Voting rights For personal use only Annual Report 2022 36 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED Notes 2022 $ 2021 $ Revenue 3 5,144,268 2,463,765 Other income 3 444,488 344,651 Employee benefits expense (7,420,254) (5,718,046) Directors remuneration (869,385) (1,298,791) Depreciation and amortisation expense (2,410,371) (1,932,995) Marketing expense (1,944,463) (863,980) Finance expense (114,527) (127,490) General and administrative expense (1,814,837) (500,533) Loss before income tax expense 4 (8,985,081) (7,633,419) Income tax expense 5 (8,212) - Loss after income tax for the year (8,993,293) (7,633,419) Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations 4,054 1,093 Other comprehensive income for the period, net of tax 4,054 1,093 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (8,989,239) (7,632,326) Earnings per share attributable to the ordinary equity holders of the Company: Cents Cents Basic earnings per share 8 (2.79) (2.91) Diluted earnings per share 8 (2.79) (2.91) The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. For personal use only 37 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2022 CONSOLIDATED ASSETS Notes 2022 $ 2021 $ Current assets Cash and cash equivalents 9 5,482,489 4,102,453 Investments 10 421,006 - Trade and other receivables 11 881,841 730,402 Total current assets 6,785,336 4,832,855 Non-current assets Investments 10 - 416,838 Plant and equipment 12 45,133 21,424 Right-of-use asset 13 395,710 1,954,563 Intangible assets 14 4,397,944 2,593,071 Total non-current assets 4,838,787 4,985,896 TOTAL ASSETS 11,624,123 9,818,751 LIABILITIES Current liabilities Trade and other payables 15 3,103,925 2,568,027 Lease liability 13 534,990 573,274 Total current liabilities 3,638,915 3,141,301 Non-current liabilities Provisions 16 75,363 23,836 Lease liability 13 - 1,667,611 Total non-current liabilities 75,363 1,691,447 TOTAL LIABILITIES 3,714,278 4,832,748 NET ASSETS 7,909,845 4,986,003 EQUITY Contributed equity 17 36,792,101 25,278,740 Reserves 18 5,219,299 4,815,525 Accumulates losses (34,101,555) (25,108,262) Total equity 7,909,845 4,986,003 The above consolidated balance sheet should be read in conjunction with the accompanying notes. For personal use only Annual Report 2022 38 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022 CONTRIBUTED EQUITY $ SHARE BASED PAYMENTS RESERVE $ FOREIGN CURRENCY TRANSLATION RESERVE $ ACCUMULATED LOSSES $ TOTAL $ BALANCE AT 1 JULY 2020 18,671,536 2,737,563 38 (17,474,843) 3,934,294 Loss for the period - - - (7,633,419) (7,633,419) Other comprehensive income - - 1,093 - 1,093 TOTAL COMPREHENSIVE INCOME - - 1,093 (7,633,419) (7,632,326) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs 6,607,204 - - - 6,607,204 Share-based payments - 2,076,831 - - 2,076,831 BALANCE AT 30 JUNE 2021 25,278,740 4,814,394 1,131 (25,108,262) 4,986,003 Loss for the period - - - (8,993,293) (8,993,293) Other comprehensive income - - 4,054 - 4,054 TOTAL COMPREHENSIVE INCOME - - 4,054 (8,993,293) (8,989,239) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs 11,513,361 11,513,361 Share-based payments 399,720 399,720 BALANCE AT 30 JUNE 2022 36,792,101 5,214,114 5,185 (34,101,555) 7,909,845 For personal use only 39 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED Notes 2022 $ 2021 $ Cash flows from operating activities Receipts from customers (GST inclusive) 5,630,553 2,946,273 Payments to suppliers and employees (GST inclusive) (11,601,924) (6,076,699) Interest received 20,234 29,117 Interest paid (52,716) (97,635) Income tax paid (16,431) - Government stimulus received - 103,020 Net cash outflow from operating activities 20(a) (6,020,284) (3,095,924) Cash flows from investing activities Payments for development (4,193,803) (2,436,748) Payments for plant and equipment (57,868) (24,046) Proceeds from sale of plant and equipment 3,771 - Research and development tax incentive refund 876,223 664,814 Refunds / (Payments) for security deposits - - Net cash outflow from investing activities (3,371,677) (1,795,980) Cash flows from financing activities Proceeds on issue of shares 11,982,475 6,678,959 Payment of capital raising costs 17 (637,606) (71,756) Repayment of principal portion of lease liability (591,461) (404,308) Proceeds on loan to related party 15,306 - Net cash inflow from financing activities 10,768,714 6,202,895 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,376,753 1,310,991 Cash and cash equivalents at the beginning of the year 4,102,453 2,790,577 Effects of exchange rate changes on cash and cash equivalents 3,283 885 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 20(b) 5,482,489 4,102,453 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 40 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of intelliHR Limited (the Company) as at and for the year ended 30 June 2022 comprise the company and its controlled entities (the Group). These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs. The financial statements were authorised for issue by the Directors on 29 August 2022. The Directors have the power to amend and reissue the financial statements. Going Concern The financial report has been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. As disclosed in the financial report, the Group recorded a net loss of $8,993,293 (2021: $7,633,419) and net operating cash outflows of $6,020,284 (2021: $3,095,924) for the year ended 30 June 2022. As at 30 June 2022, the Group has cash of $5,482,489 (2021: $4,102,453). The ability of the Group to continue as a going concern is principally dependent upon one or more of the following: ˆ the ability of the Group to raise capital as and when necessary. ˆ the ability to complete successful development and commercialisation of the Group’s software platform. These conditions give rise to material uncertainty, which may cast significant doubt over the Group’s ability to continue as a going concern. The Directors believe that the going concern basis of preparation is appropriate following the successful capital raising completed during the period and the increased revenues now being achieved through software sales. Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial report. This financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Group be unable to continue as a going concern. a. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of intelliHR Limited (‘Company’ or ‘Parent Entity’) as at 30 June 2022 and the results of all subsidiaries for the year then ended. intelliHR Limited and its subsidiaries together are referred to in these financial statements as the ‘Group’. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 41 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, balance sheet and statement of changes in equity of the Group. Losses incurred by the Group are attributed to the non-controlling interest in full, even if that results in a deficit balance. Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non- controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. b. Income tax The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: ˆ When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or ˆ When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled, and it is probable that the temporary difference will not reverse in the foreseeable future. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 42 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. c. Foreign Currency Transactions and Balances Functional and presentation currency The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars, which is the parent entity’s functional currency. Transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non- monetary items measured at historical cost continued to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange difference arising on the translation of monetary items are recognised in profit of loss, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise, the exchange difference is recognised in profit or loss. Group companies The financial results and position of foreign operations, whose functional currency is different from the Group’s presentation currency, are translated as follows: ˆ Assets and liabilities are translated at exchange rates prevailing as the end of the reporting period; ˆ Income and expenses are translated at the average exchange rates for the period; and ˆ Accumulated losses are translated at the exchange rates prevailing at the date of the transaction. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 43 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Exchange differences arising on the translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the balance sheet. The cumulative amount of these differences is reclassified into profit or loss in the period in which the operation is disposed of. d. Revenue and other income Revenue from contracts with customers Measurement and recognition Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the services promised. Service operating fees Service operating fees primarily consists of fees that give customers access to the intelliHR platform and to technical support. These revenues are recognised evenly over the performance period, beginning on the date the service is made available to the customer. Contracts typically have a term of 1 to 3 years in duration and customers are invoiced in advance for service operating fees on an annually, quarterly or monthly basis. Payment terms vary by customer but typically range from 7 to 30 days. Service initiation fees Service initiation fees charged to customers for implementation services are recognised over the life of the contract. Costs directly attributable to the implementation services are capitalised and amortised over a period consistent with the term of revenue recognition. Contracts typically have a term of 1 to 3 years and customers are invoiced on the date of contract signing. Payment terms vary by customer but typically range from 7 to 30 days. One off workshop fees and integration builds Consulting workshops are provided to customers to assist with redesigning HR processes and building integrations with other platforms. These services are invoiced at the time of the delivery and are recognised at a point in time. Payment terms vary by customer but typically range from 7 to 30 days. Financing components The Group does not expect to have any contracts where the period between the transfer of the promised services to the customer and payment by the customer exceeds 1 year. Consequently, the Group does not adjust any of the transaction prices for the time value of money. Payments from customers are generally collected in advance of provision of services. In applying AASB 15 to contracts with customers, the Group has determined that there are no material rights offered by way of options for additional services to be provided at a discount within the contractual terms. Where the Group provides discounts or rebates to customers, these are factored into the transaction price and are recognised on a systematic basis in line with the revenue stream to which they relate. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 44 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Grant Revenue Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. e. Impairment of non-financial assets At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include considering external sources of information and internal sources of information, including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. f. Development costs Expenditure during the research phase of a project and costs associated with maintaining the software are recognised as an expense when incurred. Development costs are capitalised only when all of the recognition requirements per AASB 138 can be demonstrated. Please refer to Note 1(s) for the summary requirements. Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate portion of relevant overheads. Capitalised development costs are amortised on a straight-line basis over three years, which given the constant and rapid development of the project, management considers to represent the useful life of the project. g. Plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their expected useful lives as follows: Plant and equipment - 2 years The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 45 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. h. Right to use assets and lease liabilities Right-of-use assets are measured at cost which includes the amount of the initial measurement of the lease liability; any lease payments made at or before the commencement date less any lease incentives received; any initial direct costs incurred by the Group; and an estimate of costs to be incurred by the Group to 'make good' the asset. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. The lease liability is measured at the present value of the lease payments discounted at the Group’s incremental borrowing rate. Lease payments include fixed payments, and variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date. The Group has no short-term and low-value leases. i. Employee benefits Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Other long-term employee benefits The liability for long service leave not expected to be settled within 12 months of the reporting date are measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, options, or performance rights over shares, that are provided to employees in exchange for the rendering of services. The cost of equity-settled transactions is measured at fair value on grant date. Fair value is determined using various valuation methods including Binomial and the Monte Carlo Simulation method that considers the exercise price, the term of the performance right, the impact of dilution, the share price at grant date and expect price volatility of the underlying share, the expected dividend yield, and the risk-free interest rate for the term of the performance right. The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 46 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether that market condition has been met, provided all other conditions are satisfied. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. j. Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are measured at the best estimate of the amounts required to settle the obligation at the end of the reporting period. k. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. l. Trade receivables Trade receivables include amounts due from customers for goods sold and services performed in the ordinary course of business and the Group has unconditional rights to payment. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit loss. The simplified approach to measuring expected credit losses has been applied, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. m. 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 amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 47 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) n. Other receivables Other receivables are recognised at amortised cost, less any provision for impairment. o. Current and non-current classification Assets and liabilities are presented in the balance sheet based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in 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. p. Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. q. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of intelliHR Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. r. Goods and Services Tax (‘GST’) and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 48 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. s. Critical accounting estimates and judgements Recognition of Development Costs For the purpose of measurement, AASB 138 allows costs incurred in the development stage to be capitalised if all of the following requirements can be demonstrated: ˆ It is technically feasible that the intangible asset will be completed so that it will be available for use; ˆ It is the intention to complete the intangible asset and use it; ˆ It can be demonstrated that it is probable that the intangible asset will generate future economic benefits; ˆ There are adequate resources to complete the development of the intangible asset; ˆ The expenditure attributable to the intangible asset during its development can be measured reliably. As the Group meets all the above requirements, all costs directly attributable and necessary to create, produce and prepare the asset to be capable of operating in the manner intended, have been capitalised. All costs to maintain the development asset are expensed as incurred. Share based payment transactions The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the binomial tree model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions, including share price volatility, interest rates and vesting periods would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact the profit or loss and equity. Incremental borrowing rate Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 49 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) t. Accounting Standards issued but not yet effective Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2022. This includes: i. Amendments to Classification of Liabilities as Current or Non-Current (AASB 2020-1) As these amendments only apply for the first time to the 30 June 2024 balance sheet (and 30 June 2023 comparative balance sheet), the Group is not yet able to make an assessment of the impact regarding the right to defer settlement, compliance with bank covenants, and intention to settle. However, regarding the classification of liabilities that could be settled prior to maturity by the entity transferring its own equity instruments, the entity does not believe that the amendments will have a significant impact on the classification of liabilities in either the 30 June 2024 balance sheet (or 30 June 2023 comparative balance sheet). ii. Amendments to Disclosure of Accounting Policies and Definition of Accounting Estimates (AASB 2021-2) There will be no impact on the financial statements when these amendments are first adopted because they apply prospectively to changes in accounting estimates that occur on or after the beginning of the first annual reporting period to which these amendments apply, i.e. annual periods beginning on or after 1 July 2023. iii. Amendments to Disclosure of Accounting Policies and Definition of Accounting Estimates (AASB 2021-2) This has a disclosure impact only with material accounting policy information requiring to be disclosed relating to material transactions on or after 1 January 2023. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 50 NOTE 2 PARENT INFORMATION The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards. BALANCE SHEET 2022 $ 2021 $ ASSETS Current assets Cash and cash equivalents 4,611,819 3,756,346 Trade and other receivables 90,709 112,460 Total current assets 4,702,528 3,868,806 Non-current assets Plant and equipment 45,133 21,424 Intangible assets 3,304,653 1,281,847 Total non-current assets 3,349,786 1,303,271 TOTAL ASSETS 8,052,314 5,172,077 LIABILITIES Current liabilities Payables 142,469 186,074 Total current liabilities 142,469 186,074 TOTAL LIABILITIES 142,469 186,074 NET ASSETS 7,909,845 4,986,003 EQUITY Contributed equity 36,792,101 25,278,740 Reserves 5,219,299 4,815,525 Accumulates losses (34,101,555) (25,108,262) Total equity 7,909,845 4,986,003 Statement of Profit or Loss and Other Comprehensive Income TOTAL COMPREHENSIVE INCOME (8,993,293) (7,633,419) For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 51 NOTE 2 PARENT INFORMATION (CONTINUED) Guarantees intelliHR Limited has not entered into any guarantees, in the current or previous reporting period, in relation to the debts of its subsidiaries. Contingent liabilities At 30 June 2022, intelliHR Limited did not have any contingent liabilities (2021: Nil). Contractual commitments At 30 June 2022, intelliHR Limited did not have any contractual commitments (2021: Nil). NOTE 3 REVENUE 2022 2021 AUSTRALIA/ NZ $ AMERICAS/ UK $ TOTAL $ AUSTRALIA/ NZ $ AMERICAS/ UK $ TOTAL $ Revenue from contracts with customers Over time (Service Operating Fees) 3,676,144 656,192 4,332,336 1,814,990 225,316 2,040,305 Over time (Service Initiation Fees) 448,094 86,037 534,131 239,684 9,896 249,580 At a point in time (Workshop Fees) 258,226 19,575 277,801 170,953 2,926 173,879 Total revenue 4,382,464 761,804 5,144,268 2,225,627 238,138 2,463,765 Other income 2022 $ 2021 $ Interest received 20,303 36,461 Government stimulus income - 131,645 Grant income 259,020 176,545 Lease modification 163,465 - Other income 1,700 - Total other income 444,488 344,651 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 52 NOTE 4 LOSS FOR THE YEAR Loss before income tax includes the following items that are unusual because of their nature, size or incidence: 2022 $ 2021 $ Amortisation of intangible assets 1,771,728 1,490,536 Depreciation of property, plant and equipment 30,759 8,772 Depreciation of right-of-use asset 607,884 433,687 Total 2,410,371 1,932,995 Included in employee benefits expense and Directors remuneration: Superannuation contributions 509,983 348,483 Share based payments expense 442,378 2,189,331 Loss on foreign exchange 19,501 23,317 Interest paid on lease liabilities 52,716 97,635 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 53 NOTE 5 INCOME TAX EXPENSE This note provides an analysis of the Group’s income tax expense, shows what amounts are recognised directly in equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Group’s tax position. (a) Numerical reconciliation of income tax expense to prima facie tax payable 2022 $ 2021 $ Profit/(loss) before income tax expense (8,985,081) (7,633,419) Tax at the Australian tax rate of 25% (2021: 26%) (2,246,270) (1,984,688) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Non-deductible items 680,083 962,733 Adjustment for current tax of prior periods 8,212 - Adjustment to deferred tax assets and liabilities for tax losses and temporary differences not recognised 1,566,187 1,021,955 Income tax expense / (benefit) 8,212 - (b) Tax losses Unused tax losses for which no deferred tax asset has been recognised 21,464,440 15,079,123 Potential tax benefit @ 25% (2021: 26%) 5,366,110 3,920,572 (c) Tax expense (income) recognised directly in equity Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss or other comprehensive income but directly debited or credited to equity: Deferred tax: Share issue costs - - For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 54 NOTE 5 INCOME TAX EXPENSE (CONTINUED) (d) Deferred tax assets 2022 $ 2021 $ The balance comprises temporary differences attributable to: Tax losses 5,366,110 3,920,572 Employee entitlements 159,366 151,798 Share issue costs 155,497 76,128 Accrued expenses 73,143 52,795 Rights of use asset 34,820 74,444 TOTAL DEFERRED TAX ASSETS 5,788,936 4,275,737 Set-off of deferred tax liabilities pursuant to set-off provisions (145,326) (120,199) Deferred tax assets not recognised (5,643,610) (4,155,538) Net deferred tax assets - - (e) Deferred tax liabilities The balance comprises temporary differences attributable to: Development assets 14,076 9,905 Interest receivable - 5,046 Prepayments 131,250 105,248 TOTAL DEFERRED TAX LIABILITIES 145,326 120,199 Set-off of deferred tax liabilities pursuant to set-off provisions (145,326) (120,199) NET DEFERRED TAX LIABILITIES - - Unused losses which have not been recognised as an asset, will only be obtained if: (i) the Group derives future assessable income of a nature and of an amount sufficient to enable the losses to be realised; (ii) the Group continues to comply with the conditions for deductibility imposed by the law; and (iii) no changes in tax legislation adversely affect the Group in realising the losses. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 55 NOTE 6 KEY MANAGEMENT PERSONNEL COMPENSATION Refer to the remuneration report contained in the Directors’ report for details of the remuneration paid or payable to each member of the Group’s key management personnel (KMP) for the year ended 30 June 2022. The totals of remuneration paid to KMP of the Group during the year are as follows: 2022 $ 2021 $ Short-term employee benefits 974,968 710,064 Other long-term benefits 76,832 62,787 Share-based compensation 59,792 1,129,237 TOTAL KMP COMPENSATION 1,111,592 1,902,088 Short-term employee benefits These amounts include fees and benefits paid to the non-executive Directors as well as all salary, paid leave benefits and fringe benefits paid to Executive Directors and employees. Other long-term benefits These amounts are the current-year’s superannuation contributions made during the  year and the movement of long service leave liabilities. Share-based payments These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured by the fair value of the options, performance rights and shares granted on grant date. NOTE 7 AUDITOR’S REMUNERATION 2022 $ 2021 $ Remuneration of the auditor for: Auditing or reviewing the financial reports 87,460 74,350 Remuneration for non-audit services Preparation of Tax and FBT Return, and R&D AusIndustry Return 19,321 19,886 TOTAL AUDITOR’S REMUNERATION 106,781 94,236 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 56 NOTE 8 EARNINGS PER SHARE (a) Basic earnings per share 2022 Cents 2021 Cents TOTAL BASIC EARNINGS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE COMPANY (2.79) (2.91) (b) Diluted earnings per share TOTAL DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE COMPANY (2.79) (2.91) (c) Reconciliations of earnings used in calculating earnings per share 2022 $ 2021 $ BASIC EARNINGS PER SHARE Profit / (loss) attributable to the ordinary equity holders of the Company used in calculating basic earnings per share (8,993,293) (7,633,419) DILUTED EARNINGS PER SHARE Profit / (loss) attributable to the ordinary equity holders of the Company used in calculating diluted earnings per share (8,993,293) (7,633,419) (d) Weighted average number of shares used as the denominator 2022 Number 2021 Number Weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share 322,790,894 262,094,919 (e) Information concerning the classification of securities (i) Options and performance rights Options and performance rights on issue during the year are not included in the calculation of diluted earnings per share because they are antidilutive for the year ended 30 June 2022. These options and performance rights could potentially dilute basic earnings per share in the future. Details relating to options and performance rights are set out in note 21. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 57 NOTE 9 CASH AND CASH EQUIVALENTS 2022 $ 2021 $ Cash at bank and on hand 5,482,489 4,102,453 TOTAL CASH AND CASH EQUIVALENTS 5,482,489 4,102,453 NOTE 10 INVESTMENTS 2022 $ 2021 $ Current fixed term cash deposits (restricted) 421,006 - Non-current fixed term cash deposits (restricted) - 416,838 TOTAL INVESTMENTS 421,006 416,838 NOTE 11 TRADE AND OTHER RECEIVABLES 2022 $ 2021 $ Trade receivables 316,614 250,398 Other receivables - 19,408 Prepayments 565,227 460,596 TOTAL CURRENT TRADE AND OTHER RECEIVABLES 881,841 730,402 Credit risk The Group has no significant concentration of credit risk with respect to any counterparties or on a geographical basis. Amounts are considered as “past due” when the debt has not been settled, with the terms and conditions agreed between the Group and the customer to the transaction. Payment terms with customers range from 7 to 30 days after invoice date. The Group assesses impairment on trade receivables using the simplified approach of the expected credit loss (ECL) model under AASB 9. Due to the minimal history of bad debt write offs and strong credit approval processes, the Group have determined that the incorporation of the ECL model will not have a material effect on impairment as at 30 June 2022. The balance of receivables that remain within initial trade terms are considered to be of high credit quality and due to no credit losses recognised by the Group to date there has been no allowance made for expected credit losses for the year ended 30 June 2022. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 58 NOTE 12 PLANT AND EQUIPMENT PLANT AND EQUIPMENT 2022 $ 2021 $ At cost 226,421 172,325 Accumulated depreciation (181,288) (150,901) TOTAL PROPERTY, PLANT AND EQUIPMENT 45,133 21,424 MOVEMENTS IN CARRYING AMOUNTS Plant and equipment Balance at 1 July 21,424 6,150 Additions 57,868 24,046 Disposals (3,400) - Depreciation expense (30,759) (8,772) BALANCE AT 30 JUNE 45,133 21,424 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 59 NOTE 13 LEASES The Group is the lessee of an office premises and information about this lease is presented below: RIGHT-OF-USE ASSET 2022 $ 2021 $ Balance at 1 July 1,954,563 3,038,186 Accumulated Depreciation (607,884) (1,083,623) Lease modification (950,969) - Balance at 30 June 395,710 1,954,563 LEASE LIABILITIES 2022 $ 2021 $ Maturity Analysis Less than one year 534,990 573,274 One to five years - 1,667,611 More than five years - - Total Lease Liabilities at 30 June 534,990 2,240,885 AMOUNTS RECOGNISED IN PROFIT OR LOSS 2022 $ 2021 $ Interest on lease liabilities 52,716 97,635 Depreciation right-of-use-asset 607,884 433,687 Profit on lease modification 163,465 - AMOUNTS RECOGNISED IN THE STATEMENT OF CASHFLOWS 2022 $ 2021 $ Cashflows from operating activities Interest paid 52,716 97,635 Cash flows from financing activities Repayment of borrowings 591,461 404,308 There was a lease modification in FY2022 due to intelliHR exercising the early termination clause in the lease. A reduction in the scope of the lease has been recognised in FY2022 due to the original termination date of the lease being 31 December 2025 and the modified termination date being 31 December 2022. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 60 NOTE 14 INTANGIBLE ASSETS DEVELOPMENT COSTS 2022 $ 2021 $ Cost 11,865,158 8,288,557 Accumulated amortisation (7,467,214) (5,695,486) TOTAL DEVELOPMENT COSTS 4,397,944 2,593,071 MOVEMENTS IN CARRYING AMOUNTS Balance at 1 July 2,593,071 2,135,128 Additions – internally developed 4,193,804 2,436,748 Research and development tax incentive (617,203) (488,269) Amortisation charge (1,771,728) (1,490,536) BALANCE AT 30 JUNE 4,397,944 2,593,071 Impairment testing Based on the existing market conditions as well as forward-looking estimates at the end of the period management have determined that no indicators of impairment are present and that the carrying value of the development asset is appropriate. NOTE 15 TRADE AND OTHER PAYABLES UNSECURED LIABILITIES 2022 $ 2021 $ Trade payables 106,404 294,940 Other payables 2,360,057 1,689,247 Accrual for annual leave 633,629 488,189 Accrual for long service leave 3,835 95,651 TOTAL TRADE AND OTHER PAYABLES 3,103,925 2,568,027 NOTE 16 PROVISIONS 2022 $ 2021 $ Provision for long service leave 75,363 23,836 TOTAL PROVISIONS 75,363 23,836 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 61 NOTE 17 CONTRIBUTED EQUITY (a) Share capital 2022 Shares 2021 Shares 2022 $ 2021 $ FULLY PAID ORDINARY SHARES 339,140,908 280,406,519 36,792,101 25,278,740 (b) Ordinary share capital DATE DETAILS NOTE NUMBER OF SHARES ISSUE PRICE $ 1 JULY 2020 BALANCE 193,407,826 - 18,671,536 July 2020 Exercise of options (c) 20,000 $0.02 400 August 2020 Exercise of options (c) 3,925,944 $0.01 39,259 Exercise of options (c) 235,944 $0.04 9,438 Exercise of options (c) 2,406,668 $0.075 180,500 STI shares issued (f) 1,375,758 - - Placement shares (g) 2,731,956 $0.075 204,897 September 2020 Placement shares (g) 30,601,377 $0.075 2,295,103 Entitlement offer shares (h) 40,820,707 $0.075 3,061,553 STI shares issued (i) 1,500,000 - 112,500 Exercise of options (c) 100,000 - 7,500 October 2020 Exercise of options (c) 111,111 $0.01 1,111 December 2020 Exercise of options (c) 338,334 $0.30 101,500 January 2021 Exercise of options (c) 115,000 $0.30 34,500 March 2021 Exercise of options (c) 147,000 $0.02 2,940 Exercise of options (c) 68,894 $0.04 2,759 May 2021 Exercise of options (c) 2,083,334 $0.30 625,000 Exercise of option ( j) 416,666 - - Share issue costs (71,756) 30 JUNE 2021 BALANCE 280,406,519 25,278,740 July 2021 Exercise of options (c) 297,501 $0.075 22,313 August 2021 Exercise of options (c) 741,666 $0.075 55,625 September 2021 Exercise of options (c) 24,000 $0.04 960 Placement shares (d) 46,378,260 $0.23 10,667,000 Exercise of options (c) 10,000 $0.020 200 December 2021 Exercise of options (c) 177,778 $0.010 1,778 Placement shares (j) 3,621,740 $0.23 833,000 Director incentive shares (e) 593,219 $0.207 122,796 Exercise of options (c) 80,000 $0.020 1,600 Placement shares (k) 2,000,000 $0.20 400,000 Performance Rights (l) 4,535,864 - - January 2022 Director incentive shares (e) 59,807 $0.195 11,667 April 2022 Director incentive shares (e) 214,554 $0.159 34,028 Share issue costs (637,606) 30 JUNE 2022 BALANCE 339,140,908 36,792,101 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 62 NOTE 17 CONTRIBUTED EQUITY (CONTINUED) (c) Exercise of options The issue of fully paid ordinary shares on the exercise of options. (d) Issued to sophisticated and institutional investors The issue of 46,378,260 fully paid ordinary shares to sophisticated and institutional investors at an issues price of $0.23 cash. (e) Issued to sophisticated and institutional investors The Issue of fully paid ordinary shares to Directors as part of the Non-Executive Director remuneration package. (f) STI shares issued 1,375,758 ordinary shares were issued to KMP on the achievement of FY2020 KPI's and associated vesting of performance rights. (g) Issued to sophisticated investor 33,333,333 ordinary shares were issued to a sophisticated investor at an issue price of $0.075 cash. (h) Rights issue 40,820,707 ordinary shares issued under a 1 for 5 rights issue. (i) STI shares issued On 11 September 2020 following receipt of shareholder approval at an EGM, 1,500,000 shares were issued to R Bromage as settlement for his FY2020 STI. (j) Issued to sophisticated investor The issue of 3,621,740 fully paid ordinary shares to Colinton Capital Partners at an issues price of $0.23 cash. (k) Issued to Director The issue of 2,000,000 fully paid ordinary shares to Matthew Donovan at an issue price of $0.20. (l) Issue on vesting of performance rights The issue of 4,535,864 fully paid ordinary shares on vesting of Executive performance rights. (m) Capital Management The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The capital structure of the Company includes equity attributable to equity holders, comprising of issued capital, reserves, and accumulated losses. In order to maintain or adjust the capital structure, the Company may issue new shares, sell assets to reduce debt or adjust the level of activities undertaken by the company. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 63 NOTE 17 CONTRIBUTED EQUITY (CONTINUED) The Group monitors capital on the basis of cash flow requirements for operational, and exploration and evaluation expenditure. The Group will continue to use capital market issues and joint venture participant funding contributions to satisfy anticipated funding requirements. The Group has no externally imposed capital requirements. The Group’s strategy for capital risk management is unchanged from prior years. NOTE 18 RESERVES 2022 $ 2021 $ Share-based payment reserve 5,214,114 4,814,394 Movements: Balance 1 July 4,814,394 2,737,563 Share based payments expensed 178,558 1,786,807 Share based payments capitalised 96,162 402,524 STI’s settled in shares 125,000 (112,500) STI’s to be settled in shares - - BALANCE 30 JUNE 5,214,114 4,814,394 The share-based payment reserve records items recognised as expenses on valuation of director, employee and contractor options and performance rights. 2022 $ 2021 $ Foreign currency translation reserve 5,185 1,131 Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive Income as described in note 1c and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net Investment is disposed of. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 64 NOTE 19 OPERATING SEGMENTS The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (Chief Operating Decision Makers) in assessing performance and determining the allocation of resources. The Group is managed primarily on a geographic basis that is the location of the respective areas of revenue generation in Asia Pacific and Americas. (Americas includes Canada, United States and Great Britain). The Group has no customers from which it generates greater than 10% of its revenue. (2021: Nil). Basis of accounting for purposes of reporting by operating segments. (a) Accounting policies adopted Unless stated otherwise, all amounts reported to the Board with respect to operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statement of the Group. (b) Segment assets Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic value from the asset. In most instances, segment assets are clearly identifiable on the basis of their nature and physical location. (c) Segment liabilities Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables. (d) Unallocated items The following items for revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment: ˆ Interest income ˆ Global administrative and other expenses ˆ Global software development expenses ˆ Global customer help desk services ˆ Global marketing ˆ Share-based payments ˆ Research and development tax incentive ˆ Government incentives ˆ Income tax expense For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 65 NOTE 19 OPERATING SEGMENTS (CONTINUED) (e) Segment Information Segment Performance AUSTRALIA/NZ $ AMERICAS / UK $ UNALLOCATED $ TOTAL $ 30 June 2022 Revenue from contracts with customers Over time (Service Operating Fees) 3,676,144 656,192 - 4,332,336 Over time (Service Initiation Fees) 448,094 86,037 - 534,131 At a point in time (Workshop Fees) 258,226 19,575 - 277,801 Other income - - 444,488 444,488 TOTAL REVENUE AND OTHER INCOME 4,382,464 761,804 444,488 5,588,756 Segment result 30 JUNE 2022 2,032,572 (865,290) (10,160,575) (8,993,293) Segment assets 30 JUNE 2022 564,450 259,014 10,800,659 11,624,123 Segment liabilities 30 JUNE 2022 1,518,701 307,191 1,888,386 3,714,278 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 66 NOTE 20 CASH FLOW INFORMATION (a) Reconciliation of profit / (loss) after income tax to net cash inflow from operating activities 2022 $ 2021 $ PROFIT / (LOSS) FOR THE PERIOD (8,993,293) (7,633,419) Adjustments for: Share based payments 568,210 2,076,831 Depreciation and amortisation 1,802,487 1,499,308 Depreciation Right-of-use asset 607,884 433,687 Profit on sale of plant and equipment (372) - Profit on lease modification (163,465) - Grant income (259,020) (176,545) Change in operating assets and liabilities: (Increase)/decrease in trade and other receivables (66,216) (197,369) Decrease in other assets 399,265 358,872 Increase/(decrease) in trade and other payables (209,846) 25,832 Increase in provisions 294,082 516,879 NET CASH INFLOW (OUTFLOW) FROM OPERATING ACTIVITIES (6,020,284) (3,095,924) CONSOLIDATED (b) Cash and cash equivalents shown in the statement of cashflows comprises the following: Note 2022 $ 2021 $ Cash and cash equivalents 9 5,482,489 4,102,453 TOTAL CASH AND CASH EQUIVALENTS 5,482,489 4,102,453 (c) Non-cash financing and investing activities 2022 $ 2021 $ Share based payments capitalised 96,162 402,524 STI settled in shares - 112.500 (d) Net debt reconciliation This section sets out an analysis of net debt, and the movements in net debt for each period presented. 2022 $ 2021 $ Cash and cash equivalents 5,482,489 4,102,453 Lease liability repayable within one year (534,990) (573,274) Lease liability repayable after one year - (1,667,611) Net debt 4,947,499 1,861,568 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 67 NOTE 20 CASH FLOW INFORMATION (CONTINUED) LIABILITIES FROM FINANCING ACTIVITIES CASH/BANK OVERDRAFT $ BORROWINGS DUE WITHIN 1 YEAR $ BORROWING DUE AFTER 1 YEAR $ TOTAL $ As at 30 June 2020 2,790,577 (404,308) (2,240,885) 145,384 Cashflows 1,311,876 404,308 - 1,716,184 Lease liability - (573,274) 573,274 - As at 30 June 2021 4,102,453 (573,274) (1,667,611) 1,861,568 Cashflows 1,380,036 573,274 - 1,953,310 Lease liability - (534,990) 1,667,611 1,132,621 As at 30 June 2022 5,482,489 (534,990) - 4,947,499 NOTE 21 SHARE-BASED PAYMENTS OPTIONS The intelliHR Limited Employee Option Plan is designed to provide long-term incentives for employees to deliver long-term shareholder returns. Under the plan, participants are granted options which only vest if certain performance standards are met. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. Options are granted under the plan for no consideration and carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. Set out below are summaries of options granted under the plan: NUMBER WEIGHTED AVERAGE EXERCISE PRICE OPTIONS OUTSTANDING AS AT 1 JULY 2020 9,382,214 $0.10 Granted 4,350,000 $0.25 Forfeited (31,000) $0.16 Exercised (4,538,893) $0.01 Expired - - OPTIONS OUTSTANDING AS AT 1 JULY 2021 9,162,321 $0.22 Granted - - Forfeited (470,000) $0.23 Exercised (291,778) $0.02 Expired (3,897,543) $0.20 OPTIONS OUTSTANDING AS AT 30 JUNE 2022 4,503,000 $0.25 The weighted average share price on the exercise of options was $0.20 (2021: $0.18). The number of options vested and exercisable as at 30 June 2022 is 1,883,003. The weighted average share price of these is $0.23. For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 Annual Report 2022 68 NOTE 21 SHARE-BASED PAYMENTS (CONTINUED) Share options outstanding at the end of the year have the following expiry date and  exercise prices: DATE OPTIONS GRANTED EXPIRY DATE EXERCISE PRICE SHARE OPTIONS 30 JUNE 2022 11/8/2017 11/8/2022 $0.02 244,000 27/2/2018 14/2/2023 $0.32 160,000 30/6/2018 30/6/2023 $0.30 169,000 14/9/2020 30/8/2024 $0.22 3,060,000 30/6/2021 30/6/2025 $0.38 870,000 TOTAL OF SHARE OPTIONS 4,503,000 Weighted average remaining contractual life of options outstanding at end of period 2.1 years PERFORMANCE RIGHTS A summary of movements of all performance rights issued is as follows: NUMBER PERFORMANCE RIGHTS OUTSTANDING AS AT 1 JULY 2021 8,026,439 Granted 2,459,869 Vested (4,535,864) Forfeited (2,873,228) Expired - PERFORMANCE RIGHTS OUTSTANDING AS AT 30 JUNE 2022 3,077,216 The weighted average remaining contractual life of performance rights outstanding at year end was 1.6 years (2021: 1.9 years). 2,459,869 performance rights were granted to executives during the financial year (details Included in the table below). GRANT DATE NUMBER OF RIGHTS VESTING CONDITIONS VESTING DATE % VESTED EXPIRY DATE FAIR VALUE AT GRANT DATE PER RIGHT 01/07/2018 367,347 Vest if the relative total shareholder return is measured at or above the 3-year average of the P&S ASX small ordinaries Ex A-REIT Franking Credit Adjusted Total Return Index Cap Index 30/6/2022 0% 01/07/2022 $0.23 30/11/2018 250,000 Vest if the relative total shareholder return is measured at or above the 3-year average of the P&S ASX small ordinaries Ex A-REIT Franking Credit Adjusted Total Return Index Cap Index 30/6/2022 0% 01/07/2022 $0.14 29/10/2021 1,809,110 Achievement of mutually agreed KPIs for FY2022 focusing on customer growth 1/7/2022 0% 30/06/2024 $0.21 30/11/2021 650,759 Achievement of mutually agreed KPIs for FY2022 focusing on customer growth 1/7/2022 0% 30/06/2024 $0.19 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 69 NOTE 21 SHARE-BASED PAYMENTS (CONTINUED) a. On 29 October 2021 and 30 November 2021 1,809,110 and 650,759 performance rights were granted to employees under the intelliHR Limited Performance Rights Plan to take up ordinary shares. All of the performance rights have been awarded under the Group's STI program and vest on achievement of mutually agreed KPI's. The performance rights hold no voting or dividend rights and are not transferable. The fair value of these performance rights was $505,510. This value was determined with reference to the market value of IHR securities on grant date being $0.21 and $0.193 respectively. NOTE 22 EVENTS AFTER THE REPORTING DATE No matters or circumstances have arisen since 30 June 2022 that have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in future financial years. NOTE 23 RELATED PARTY TRANSACTIONS Related Parties The Group’s main related parties are as follows: a. Entities exercising control over the Group The company does not have an ultimate controlling entity. b. Key management personnel Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity is considered key management personnel. For details of disclosures relating to remuneration of key management personnel, refer to Note 6. c. Other related parties Other related parties include close family members of key management personnel and entities that are controlled or jointly controlled by those key management personnel, individually or collectively with their close family members. d. Transactions with related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. For personal use only Annual Report 2022 70 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 NOTE 23 RELATED PARTY TRANSACTIONS (CONTINUED) The following transactions occurred with related parties: OTHER RELATED PARTIES 2022 $ 2021 $ Purchase of goods and services: A company of which R Bromage is a Director provided recruiting services during the year under normal commercial terms and conditions. - 103,042 A company of which I Charles is a Director provided recruiting services during the year under normal commercial terms and conditions. 94,244 - Sales of goods and services: A company of which R Bromage is a Director was a customer during the year under normal commercial terms and conditions. - 3,308 Outstanding balances arising from sales/purchases of goods and services: A company of which I Charles is a Director has a current payables balance of 6,600 - NOTE 24 CONTINGENT ASSETS AND LIABILITIES The Group does not have any contingent assets or liabilities as at 30 June 2022. NOTE 25 COMMITMENTS The Group does not have any commitments as at 30 June 2022. For personal use only 71 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 NOTE 26 FINANCIAL RISK MANAGEMENT The Group’s financial instruments consist mainly of deposits with banks and accounts receivable and payable. The totals for each category of financial instruments, measured in accordance with AASB 9: Financial Instruments as detailed in the accounting policies to these financial statements, are as follows: Note 2022 $ 2021 $ Financial assets Cash and cash equivalents 9 5,482,489 4,102,453 Trade and other receivables 11 316,614 269,806 Cash deposits 10 421,006 416,838 TOTAL FINANCIAL ASSETS 6,220,109 4,789,097 Financial liabilities Trade and other payables 15 2,466,461 1,984,187 TOTAL FINANCIAL LIABILITIES 2,466,461 1,984,187 The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. Credit risk Credit risk is managed on a Group basis. Credit risk arises primarily from cash and cash equivalents and deposits with banks and financial institutions. For bank and financial institutions, only independently rated parties with a minimum rating of ‘AA’ are accepted. Refer to Note 11 for further details on credit risks associated with trade receivables. Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance facilities were available to the Group at the end of the reporting period. Most financial assets and financial liabilities mature within one year except for fixed term cash deposits. For personal use only Annual Report 2022 72 NOTE 26 FINANCIAL RISK MANAGEMENT (CONTINUED) Market risk Market risk is the risk that the change in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The Group is not exposed to market risks other than interest rate risk, and foreign exchange risk. The Group's exposure to foreign currency risk at the 30 June 2022, expressed in Australian dollars, was: 2022 $ 2021 $ Cash and cash equivalents – CA$, US$ and UK$ 402,240 35,239 Trade receivables – CA$, US$, NZ$ and UK$ 223,012 165,344 Trade Payables – US$, NZ$ and UK$$ 76,759 64,787 Cash flow and fair value interest rate risk As the Group has interest-bearing cash assets, the Group’s income and operating cash flows are exposed to changes in market interest rates. The Group manages its exposure to changes in interest rates by using fixed term deposits. At 30 June 2022, if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables held constant, post-tax profit / (loss) for the year would have been $55,295 (2021: $42,348) lower/higher, as a result of higher/lower interest income from cash and cash equivalents. Fair Value The carrying value of all financial assets and financial liabilities approximate their fair value, due to their short term nature. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 For personal use only 73 DIRECTORS’ DECLARATION IN THE DIRECTORS’ OPINION: (a) the financial statements and notes set out on pages 36 to 72 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and (ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for the financial year ended on that date, and (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Directors. M Donovan Executive Chair Brisbane, 29 August 2022 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 For personal use only Annual Report 2022 74 INDEPENDENT AUDITOR’S REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au INDEPENDENT AUDITOR'S REPORT To the members of intelliHR Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of intelliHR Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the year ended on that date; 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 Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in 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 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter. For personal use only 75 INDEPENDENT AUDITOR’S REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. 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. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Capitalisation of Development Costs Key audit matter How the matter was addressed in our audit The Group capitalises costs incurred in the development of its software, as disclosed in note 14. These costs are then amortised over the estimated useful life of the asset. The capitalisation of development costs was a key audit matter due to the significance of the balance and the judgement involved in assessing whether the criteria set out in AASB 138 Intangible Assets required for capitalisation of such costs have been met and the useful life of the asset is reasonable. The Group’s judgements include whether the costs capitalised, including payroll costs, were directly attributable to development projects, rather than related to research or maintenance operations. Our work on capitalised development costs was focused on the Group’s process in determining the projects which should be capitalised and the determination of the appropriate allocation of overhead and payroll costs to be capitalised in accordance with AASB 138. Our audit procedures included the following: • Assessed the nature of a sample of projects against the requirements of AASB 138 to determine if they were capital in nature, including an assessment of whether capitalised costs related to the development phase of the project and the generation of probable future economic benefits. • On a sample basis, vouched the payroll costs capitalised to supporting payroll records and assessed the procedures applied by the Group to appropriately record and allocate staff costs to capitalised development expenditure. • On a sample basis, vouched overhead costs capitalised to supporting documentation and assessed the procedures applied by the Group to appropriately allocate overhead costs to capitalised development expenditure. • Assessing the adequacy of disclosures in the financial statements. Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and 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. For personal use only Annual Report 2022 76 INDEPENDENT AUDITOR’S REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. 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/admin/file/content102/c3/ar1_2020.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 18 to 26 of the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of intelliHR Limited, for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit Pty Ltd L G Mylonas Director Brisbane, 29 August 2022 For personal use only THIS PAGE LEFT INTENTIONALLY BLANK For personal use only Annual Report 2022 78 SHAREHOLDER INFORMATION SHAREHOLDER INFORMATION The shareholder information set out below was applicable as at 17 August 2022. A DISTRIBUTION OF EQUITY SECURITIES Analysis of numbers of equity security holders by size of holding: CLASS OF EQUITY SECURITY ORDINARY SHARES 1 - 1,000 47 1,001 – 5,000 410 5,001 – 10,000 257 10,001 – 50,000 629 50,001 - 100,000 157 100,001 and over 321 TOTAL DISTRIBUTION OF EQUITY SECURITIES 1,821 There were no holders of less than a marketable parcel of ordinary shares. For personal use only 79 SHAREHOLDER INFORMATION B EQUITY SECURITY HOLDERS Twenty largest quoted equity security holders The names of the twenty largest holders of quoted equity securities are listed below: ORDINARY SHARES NAME NUMBER HELD % OF ISSUED SHARES Colinton Capital Partners Pty Ltd 44,916,146 13.23% Slattery Family Asset Management Pty Ltd 38,020,206 11.20% Robert Jon Bromage 21,388,365 6.30% National Nominees Limited 10,501,487 3.09% ITA Vero Pty Ltd 8,558,919 2.52% Immanuel Developments Pty Ltd 8,283,334 2.44% HSBC Custody Nominees (Australia) Limited 7,245,768 2.13% Intercontinental Pty Ltd 6,031,312 1.78% Mr Adam Patrick Warbrooke 5,533,203 1.63% Bond Street Custodians Limited 4,957,545 1.46% JD Investments Holding Pty Ltd 4,240,124 1.25% K R Khatri (Dental) Pty Ltd 4,090,332 1.20% UBS Nominees Pty Ltd 4,000,000 1.18% Colinton Capital Partners Pty Ltd 3,851,790 1.13% Mr Thomas George Hackett & Mrs Nerida Leith Hackett 3,250,000 0.96% J J N A Super Pty Ltd 2,677,039 0.79% Mrs Lori Michele Lowther 2,653,560 0.78% Immanuel Developments Pty Ltd 2,500,000 0.74% Kokoris Superannuation Pty 2,221,200 0.65% Chatterton Pty Ltd 2,176,492 0.64% TOTAL 187,096,822 55.10% Unquoted equity securities NUMBER OF ISSUE NUMBER OF HOLDERS Options over ordinary shares 4,439,000 54 Performance rights 3,077,216 5 For personal use only Annual Report 2022 80 There are no holders of more than 20% of unquoted share options on issue. Holders of more than 20% of unquoted performance rights on issue NUMBER HELD % OF TOTAL ON ISSUE Robert Bromage 650,759 21.15% Paul Trappett 887,954 28.86% Glenn Donaldson 846,529 27.51% C SUBSTANTIAL HOLDERS Substantial holders in the company are set out below: NUMBER HELD PERCENTAGE Ordinary shares Colinton Capital Partners Pty Ltd 44,916,146 13.23% Slattery Family Asset Management Pty Ltd 38,020,206 11.20% Robert Jon Bromage 21,388,365 6.30% D VOTING RIGHTS The voting rights attaching to each class of equity securities are set out below: (a) Ordinary shares: On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. (b) Performance rights: No voting rights (c) Share options: No voting rights SHAREHOLDER INFORMATION For personal use only THIS PAGE LEFT INTENTIONALLY BLANK For personal use only INTELLIHR.COM intelligent people management. For personal use only

Continue reading text version or see original annual report in PDF format above