Chairman’s message
Dear Shareholder,
It gives me great pleasure to welcome you to the 2020 Annual Report for icetana Limited
(ASX: ICE), our first since listing on the Australian Securities Exchange in December 2019
following our successful IPO (Initial Public Offer).
icetana formed in 2009 to commercialise technology developed by researchers at Curtin
University, in the form of artificial intelligence (AI) driven analytics software. This software
analyses very large data sets to identify anomalous activity and movements outside
normal patterns, providing a dramatic improvement in active monitoring of security
surveillance networks. The software integrates with existing video surveillance systems or
can be deployed to directly interface with surveillance camera feeds and thereafter reports
anomalous or unusual movement patterns and activity in real-time.
icetana completed its IPO to provide funding to accelerate our penetration into the rapidly
growing global market for video analytics solutions using AI and machine learning. Since
the IPO icetana’s has also transitioned to a Software as a Service (SaaS) operation,
allowing the Company to build recurring revenue streams. The Company has gained
significant traction in securing enterprise-grade customers, and currently provides support
to 29 customers with more than 13,000 cameras in 46 locations around the globe.
Since listing, in March 2020, we have deployed our solutions to key new verticals and
geographies, including a Netherlands based global bank, representing icetana’s first
European deployment, in the financial services sector. The contract followed an extensive
trial with the client in 2018 and it has a total order value of A$110,000 for the first year
of support and maintenance, with potential to extend camera coverage over time. The
banking and financial sectors operate some of the largest surveillance networks in the
world, which are estimated to account for up to 25% of the IP video surveillance market,
according to a 2019 Allied Market Research report.
Domestically we also secured new clients including, the South Bank cultural, social,
educational and recreational precinct in Brisbane, which will cover up to 100 cameras in
the first 12 months across a range of dining facilities, playgrounds, walkways, bike paths
and parklands, showing the growing need and use for video analytics solutions within
Australia and Asia Pacific.
Deployments and renewals in core verticals also continued including renewals with an
Australian casino precinct, three universities (North America and Australia) and new orders
for a number of retail shopping malls in Australia. In June, Mount Royal University in
Canada also renewed its subscription for a further four years through value added reseller
Delco Security. Mount Royal deployed the icetana system over a year ago, monitoring
more than 200 cameras across its campus in Calgary, and providing real-time notifications
to campus staff about motion anomalies and unusual events. The contract extension was
particularly relevant as it highlighted icetana’s expanding market opportunity within North
America as a key geography for growth.
Unfortunately the impacts of COVID-19, specifically in the second half of the year, did
impact our growth and revenue, however icetana still posted modest growth to its
customer base and annualized recurring revenue (ARR) during the March and June
quarters. In parallel, the company implemented several measures to conserve cash
including cuts to Directors’ remuneration and executive team salaries, as well as full-time
staff reducing their hours. We made a smooth transition to working from home, limiting
the disruption of travel restrictions and we realigned sales and product development efforts
towards industry verticals less impacted by COVID restrictions.
From a product development perspective, we delivered more updates to our solutions in
the June quarter than in the previous nine months, demonstrating the quality and
efficiency of our research and development team and the goal to achieve market leading
product status.
We finished the year in a strong financial position, with $2.67 million cash at bank and a
strong base of receivables that settled shortly after year end. The Company will continue
to seek new opportunities to build scale and to broaden its customer base, product offering
and technological advantage in the year ahead.
I would like to thank our Shareholders for their support during our first 6 months on the
ASX, and look forward to that support continuing as we work to scale the business in
FY2021. Thanks also go to our Management team and staff, particularly those who were
instrumental in our successful IPO and ASX listing, and for their performance during the
challenging operating environment over the past six months. Finally, I would like to thank
my fellow Board members for their guidance and support throughout the year.
Mark Potts
Non-Executive Chairman
CEO’s message
Dear fellow shareholders,
While operating conditions since icetana listed late last year have presented several
challenges, it has been pleasing to see the progress our Company has made in building a
high performing team and continuing to secure new customers and contract renewals.
Our transition to a Software as a Service (SaaS) operation is complemented by a non-
SaaS direct-licensing model, which includes recurring maintenance fees where customers
or markets have a strong preference for an upfront payment arrangement. Recurring
revenues by way of SaaS and maintenance fees increased as a proportion of total revenue
for the financial year to approximately 60%, up from 53% the previous year.
In light of COVID-19, customer decision making processes were affected during the
financial year and continue to be challenging post year-end. However, rather than lost
opportunities, these actions are largely manifesting as delays and deferrals to deals the
Company had been planning to close in the near term. Some of icetana’s key vertical
markets, including retail malls, casinos and universities have been very directly impacted
by COVID-19 restrictions. Whilst there has been no impact thus far on renewals of existing
customers in these verticals, there have been some deferrals of tenders, deployments and
implementations caused by the uncertainty within customers’ own business operations,
and these delays have impacted our own revenues for the financial year.
We implemented numerous cost savings measures, particularly during the final quarter of
the financial year to help preserve our strong cash position. The Company accessed
Australian Federal Government programs such as the JobKeeper allowance where possible
to further support our cash retention objective. The savings and allowance claims
implemented resulted in a substantial reduction in net cash expenditure during the final
quarter which is flowing through to Q1 FY21. The Company will continue to review and
reduce its expenditure where appropriate and access Government support programs
where it is entitled to do so.
icetana reported sales revenue of $1,181,096, which was down 16% on the corresponding
year of $1,407,405. The Company also had $948,553 in unearned revenue as at 30 June
2020, representing pre-payments received from customers who typically pay for annual
subscriptions 12 months in advance. After providing for income tax, icetana posted a loss
of $3,157,649, a 6% improvement on the FY2019 loss of $3,383,186. icetana’s financial
position remains strong, with net current assets of $2.674 million and nil debt as at 30
June 2020.
I am proud of the way the team has rallied around our cost savings measures and made
additional customer implementations with only remote access. We also rolled out some
significant product enhancements and pivoted our marketing towards clearer line of sight
revenue opportunities.
Our deal pipeline remains positive, and as corporate sentiment improves we expect
revenues to grow in a more predictable manner. The market for video analytics continue
to grow with the understanding of artificial intelligence and this is driving increasing
demand. We continue to secure enterprise-grade customers, and in the year ahead we
will be targeting additional industry verticals as part of the product development roadmap.
These additional industry vertical markets include prisons, healthcare, financial services
and remote guarding services organisations. I look forward to keeping you updated of our
progress on executing our strategy in FY21.
Matt Macfarlane
Chief Executive Officer
icetana Limited
Corporate Directory
For the year ended 30 June 2020
Board of Directors
Mark Potts
Non-Executive Chairman
Matthew Macfarlane
Managing Director and Chief Executive Officer
Geoff Pritchard
Non-Executive Director
Justin Mannolini
Non-Executive Director
Company Secretary
Shane Cranswick
Registered office and principal place of business
Level 4
45 St Georges Terrace
Perth
Western Australia 6000
Website
www.icetana.com.au
Auditors
Butler Settineri (Audit) Pty Ltd
Unit 16
100 Railway Road
Subiaco
Western Australia 6008
www.butlersettineri.com.au
Share registry
Automic Registry Services
Level 2
267 St Georges Terrace
Perth
Western Australia 6000
www.automicgroup.com.au
Stock exchange
ASX Limited (ASX)
www.asx.com.au
ASX code
ASX:ICE
icetana Limited
For the year ended 30 June 2020
Contents
Directors’ Report
Auditor’s independence declaration
Consolidated statement of profit or loss for the year ended 30 June 2020
Consolidated statement of financial position as at 30 June 2020
Consolidated statement of changes in equity for the year ended 30 June 2020
Consolidated statement of cash flows for the year ended 30 June 2020
Notes to the consolidated financial statements for the year ended 30 June 2020
Directors’ declaration
Audit report
2
16
17
18
19
20
21
54
55
1
icetana Limited
Directors' report
30 June 2020
The directors present their report, together with the financial statements, on the Consolidated Entity (referred to hereafter as
the 'Consolidated Entity') consisting of icetana Limited (referred to hereafter as the 'Company' or 'Parent Entity') and the
entities it controlled for the year ended 30 June 2020.
Directors
The following persons were directors of icetana Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Mark Potts
Matthew Macfarlane
Geoff Pritchard
Justin Mannolini (appointed 18 December 2019)
Rohan McDougall (resigned on 18 December 2019)
James Williams (resigned on 1 October 2019)
Principal activities
During the financial year the principal continuing activity of the Consolidated Entity consisted of the development and sale of
an AI assisted video surveillance software using technology based on machine learning to provide automatic real-time
anomalous event detection.
Review of operations
Founded in 2009, icetana was formed to commercialise technology developed by researchers at Curtin University that
allows for the efficient analysis of very large data sets to identify anomalous activity and events outside normal patterns.
icetana has commercialised the technology by developing Artificial Intelligence (AI) assisted video surveillance software
using machine learning techniques to provide automated real-time anomalous event detection (icetana Solution) for use
cases including security, loss prevention, theft and health and safety. The icetana Solution integrates with existing video
surveillance systems or can be deployed to directly interface with surveillance camera feeds. The software ‘learns’ activity
patterns (not object or facial recognition) for fixed-field-of-view cameras and creates a model of ‘normal’ movement patterns
and activity. After the learning phase, the software then reports anomalous or unusual movement patterns and activity in
real-time, through a user interface that highlights those anomalous events. Security operators, typically based in operations
centres responsible for monitoring hundreds to thousands of cameras, can review the unusual events and determine
appropriate response.
To date, significant traction has been made in securing enterprise grade customers and the Company currently has over 25
active customers across a number of core industry verticals with installed sites in over 40 locations supporting in excess of
12,000 video surveillance cameras globally. The product has application to multiple customer segments and use-cases and
will be targeting additional industry verticals as part of the product development roadmap (e.g. prisons, healthcare and
financial services).
icetana’s business is transitioning swiftly to a Software as a Service (SaaS) operation, allowing the Company to build
recurring revenue streams. This is complemented by a non-SaaS direct-licensing model which includes recurring
maintenance fees where customers or markets have a strong preference for such upfront arrangement.
Customer decision making processes have been affected by COVID-19 during the financial year and continue to be
challenged post year-end. This has typically manifested as delays and deferrals to deals the Company had been planning to
close in the near term, rather than lost opportunities. Some of icetana’s key vertical markets, including retail malls, casinos
and universities have been very directly impacted by COVID-19 restrictions. Whilst there has been no impact thus far on
renewals of existing customers in these verticals, there have been some deferrals of tenders, deployments and
implementations caused by the uncertainty within customers’ own business operations and these delays have impacted
revenues for the financial year.
The Company implemented numerous cost savings measures in the final quarter of the financial year to help preserve our
strong cash position. The Company assessed and where appropriate accessed Government programs such as the
JobKeeper allowance to further support our cash retention objective. The savings and allowance claims that were
implemented have resulted in a substantial reduction in net cash expenditure during the final quarter and this has flowed
through to the post year end period. The Company will continue to review and reduce its expenditure where appropriate
and access Government support programs where it is entitled to do so.
2
icetana Limited
Directors' report
30 June 2020
Review of operations (cont.)
The loss for the Consolidated Entity after providing for income tax amounted to $3,157,649 (30 June 2019 $3,383,186).
For the year ended 30 June 2020 the Consolidated Entity reported sales revenue of $1,181,096, down 16% on the
corresponding year of $1,407,405. However recurring revenues by way of SaaS and maintenance fees increased as a
proportion of total revenue for the financial year to approximately 60% (53% in 2019). The Company also had $948,553 in
unearned revenue as at 30 June 2020 representing pre-payments received from customers who typically pay for annual
subscriptions 12 months in advance.
The financial position of the Consolidated Entity remains strong with net current assets of $2.674 million and nil debt.
Dividends
No dividends were paid or declared since the start of the financial period. No recommendation for payment of dividends
has been made.
Significant changes in the state of affairs
During the year ended 30 June 2020, icetana successfully closed its $5 million initial public offering (“IPO”) and was admitted
to the official list of the Australian Securities Exchange (“ASX”), commencing trading on 23 December 2019.
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial year.
Matters subsequent to the end of the financial year
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not been financially positive for the
Consolidated Entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government and
other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus
that may be provided.
No matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
Likely developments and expected results of operations
icetana will continue to implement the business strategies put in place to drive the Company towards a growth trajectory in
the foreseeable future, subject to a stable macro-economic environment. The Company will continue to seek new
opportunities to build scale and to broaden its customer base, product offering and technological advantage.
In reliance on s299A(3) of the Corporations Act 2001, we have not disclosed further information on business strategies and
prospects, because disclosure of that information is likely to result in unreasonable prejudice to the Group.
Environmental regulation
The current activities of the Company are not subject to any significant environmental regulation. However, the Board believes
that the Company has adequate systems in place to manage its environmental obligations and is not aware of any breach of
any environmental requirements during the period covered by this report as they apply to the Company.
Information on directors
Mark Potts
Non-Executive Chairman
B.Sc
Name:
Title:
Qualifications:
Experience and expertise: Mark has 30-plus years' experience in senior executive and board positions, in start-ups
and large corporates. Most recently he was the worldwide CTO and VP for Corporate
Strategy at Hewlett Packard Enterprise. Prior to Hewlett Packard, Mark was the founder
of several successful venture backed start-ups that have driven technology disruption
and business innovation in varied industries.
Non-executive director of Resolute Mining Limited (ASX:RSG) (appointed 29 June
2017)
Non-executive chairman of Decimal Software Limited (ASX: DSX) (resigned 24
December 2018)
Chairman
566,511
Other current ASX
directorships:
Former ASX directorships
(last 3 years):
Special responsibilities:
Interests in shares:
3
icetana Limited
Directors' report
30 June 2020
Interests in options:
Contractual right to shares: None
1,062,143
Name:
Title:
Qualifications:
Experience and expertise: Matthew was the founding CEO of the Company and returned to the role in September
Matthew Macfarlane
Managing Director and Chief Executive Officer
B.Com, CA (Australia), GAICD
2018. He is a successful entrepreneur, angel and venture capital investor and worked for
over 10 years doing international cross-border mergers and acquisitions.
He co-founded software start-up Vibe Capital (Minti) which raised over $2.6m from early
stage investors; and also co-founded the $40m venture capital firm Yuuwa Capital in 2009.
He has taken on acting-CEO roles at icetana and Australian Export Grains Innovation
Centre (AEGIC) in the past 5 years during CEO absences. In 2018 he was recognised by
the West Australian IT and Telecoms Association (WAITTA) as the Pearcey Entrepreneur
of the Year.
He is the Chair of Spacecubed Ventures Pty Ltd, an independent Director of PetRescue Ltd
and a Director of the Australian Export Grains Innovation Centre (AEGIC).
Other current ASX
directorships:
Former ASX directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in performance
rights:
Contractual right to shares:
None
None
None
1,324,649
2,606,560
1,050,000
5,642,702 options – grant subject to shareholder approval at 2020 Annual General Meeting
Geoffrey Pritchard
Non-Executive Director
B.Com, CA (Australia), MBA, GAICD
Name:
Title:
Qualifications:
Experience and expertise: Geoff is an experienced Chairman, Executive Director and Chief Executive actively
engaged across Governance, Strategy Consulting, Corporate Advisory, Venture Capital
and Private Equity to the Superannuation, Family Office, Financial Services and
Technology Sectors.
He co-founded and is Chairman of Go Capital Pty Ltd, a Private Equity and Venture
Capital business with a focus on the technology sector and a significant investor in
icetana Ltd.
Mr Pritchard was previously CEO of the Western Pacific Financial Group and led the
business into its ASX exit in 2007.
None
None
Other current ASX
directorships:
Former ASX directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in performance
rights:
Contractual right to shares: None
None
39,550,195
10,479,314
Nil
Name:
Title:
Qualifications:
Justin Mannolini
Non-Executive Director, appointed 18 December 2019
GAICD, SF Fin
4
icetana Limited
Directors' report
30 June 2020
Experience and expertise:
Other current ASX
directorships:
Former ASX directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in performance
rights:
Contractual right to shares: None
None
125,000
468,870
Nil
Justin is a partner in the Corporate Advisory Group of Australian law firm Gilbert + Tobin. He
is currently serving in a non-executive capacity on a number of listed, private and
Government Boards. He has over 20 years' corporate finance experience as a lawyer and
investment banker, and has advised on a wide range of M&A, reconstruction and equity
capital markets transactions across a number of industry sectors including energy &
resources, financial services, technology, engineering & mining services, food & beverage
and real estate.
He is currently also a director of Northern Australia Infrastructure Facility (appointed May
2016)
Non-Executive Chairman of Jindalee Resources Limited (ASX: JRL) (appointed a director
in September 2013)
None
Name:
Title:
Qualifications:
Experience and expertise:
Rohan McDougall
Non-Executive Director, resigned 18 December 2019
B.Sc, MBA, GAICD
Rohan has been the Director of Commercialisation at Curtin University since 2008. He has
more than 20 years of experience in commercialisation of new technologies including being
integrally involved in the establishment and operation of numerous technology-based
companies. He has played a lead role in negotiation and completion of countless technology-
based agreements and partnerships with companies in Australia and internationally. He has
worked in both a commercial start-up environment and in institutional technology transfer
roles. Before Curtin he worked for a listed biotechnology company as the Chief Operating
Officer and in commercialisation of technology out of the University of New South Wales as
a General Manager, Life Sciences at Unisearch Ltd.
He is currently a director of Renergi Pty Ltd. Other activities include co- founding a number
of innovation community events including Univation and WestTech Fest.
None
None
Other current ASX
directorships:
Former ASX directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in performance
rights:
Contractual right to shares: Nil
Chairman (prior to resignation)
Nil
Nil
Nil
Name:
Title:
Qualifications:
Experience and expertise:
James Williams
Non-Executive Director, resigned 1 October 2019
James is a co-founder and Investment Director of Yuuwa Capital LP, a venture capital firm
based in Western Australia and substantial shareholder of icetana. Prior to Yuuwa Capital,
he was Managing Director of two medical device companies, Resonance Health Ltd
(ASX:RHT) and Argus Biomedical Pty Ltd, both of which secured regulatory approvals
under his leadership. He conceived, co-founded and is a former CTO and Director of
iCeutica, Inc., a clinical stage nano drug delivery company. iCeutica was acquired by
Philadelphia-based lroko Pharmaceuticals in 2011. lroko received FDA approval for the first
three iCeutica formulations between 2013 and 2015. He is currently Chairman of Dimerix
Limited (ASX:DXB), Director PolyActiva Pty Ltd and alternate director of Adalta Limited
(ASX:1AD). He is also a member of the "Panel of Experts" for the University of Western
5
icetana Limited
Directors' report
30 June 2020
Australia's Pathfinder Fund and a member of the Australian Federal Government's
Entrepreneur Program Committee.
James is Non-Executive Chairman of ASX-listed Dimerix Ltd (ASX:DXB) and a Non-
Executive Director of ASX- listed Adalta Limited (ASX:1AD).
Nil
Other current ASX
directorships:
Former ASX directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in performance
rights:
Contractual right to shares: None
None
Nil
Nil
Nil
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Shane Cranswick (B.Com, CA, FFin, FGIA, MAICD) has held the role of Company Secretary since 8 November 2017. He is
an accomplished finance executive with over 20 years’ experience in senior management roles in predominantly listed
companies both in Australia and overseas. Mr Cranswick has gained a Bachelor of Commerce degree from the University of
Western Australia then commenced his career with an international Chartered Accounting firm.
Meeting of directors
The number of meetings of the Consolidated Entity’s Board of Directors (‘the Board’) during the year ended 30 June 2020,
and the number of meetings attended by each director were:
Director
Mark Potts
Matthew Macfarlane
Geoff Pritchard
Justin Mannolini
Rohan McDougall
James Williams
Attended
8
8
8
6
2
1
Held
8
8
8
6
2
1
Held: represents the number of meetings held during the time that the director held office.
Remuneration report (Audited)
The remuneration report details the key management personnel remuneration arrangements for the Consolidated Entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
6
icetana Limited
Directors' report
30 June 2020
Principles used to determine the nature and amount of remuneration
The objective of the Consolidated Entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the Consolidated Entity depends on the quality of its directors and executives. The remuneration philosophy
is to attract, motivate and retain high performance and high quality personnel.
The Board has structured an executive remuneration framework that is market competitive and complementary to the reward
strategy of the Consolidated Entity.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent
remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market.
The chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles
in the external market. The chairman is not present at any discussions relating to the determination of his own remuneration.
Non-executive directors do not receive share options or other incentives.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The existing approved maximum annual aggregate remuneration is $300,000.
Executive remuneration
The Consolidated Entity aims to reward executives based on their position and responsibility, with a level and mix of
remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
7
icetana Limited
Directors' report
30 June 2020
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board based on individual and business unit performance, the overall performance of the Consolidated Entity and
comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits where it does not create any
additional costs to the Consolidated Entity and provides additional value to the executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles
of executives. STI payments are granted to executives based on specific annual targets and key performance indicators
('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and product
management.
The long-term incentives ('LTI') include long service leave and share-based payments. Options awarded to executives vest
over a period of three years. The Board reviewed the long-term equity-linked performance incentives specifically for
executives during the year ended 30 June 2020.
Consolidated entity performance and link to remuneration
From 1 July 2020, remuneration for certain individuals will be directly linked to the performance of the Consolidated Entity.
A portion of cash bonus and incentive payments are dependent on defined earnings per share targets being met. The
remaining portion of the cash bonus and incentive payments are at the discretion of the Board. Refer to the section 'Additional
information' below for details of the earnings and total shareholders return for the last five years.
The Board is of the opinion that the continued improved results can be attributed in part to the adoption of performance based
compensation and is satisfied that this improvement will continue to increase shareholder wealth if maintained over the
coming years.
Use of remuneration consultants
The Consolidated Entity did not engage external consultants to review existing remuneration policies during the year ended
30 June 2020.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Consolidated Entity are set out in the following tables.
The key management personnel of the Consolidated Entity consisted of the following directors of icetana
Limited:
●
●
●
●
●
●
Mark Potts - Non-Executive Chairman
Geoff Pritchard - Non-Executive Director
Justin Mannolini - Non-Executive Director (appointed 18 December 2019)
Matthew Macfarlane - Managing Director and Chief Executive Officer
Rohan McDougall – Non-Executive Director (resigned on 18 December 2019)
James Williams – Non-Executive Director (resigned on 1 October 2019)
And the following persons:
● Shane Cranswick - Company Secretary and Chief Financial Officer
● Kevin Brown – Chief Operating Officer
● Damon Watkins – Chief Revenue Officer
Changes since the end of the reporting period:
● Damon Watkins ceased employment with the Company on 24 July 2020
8
icetana Limited
Directors' report
30 June 2020
2020
Non-Executive
Directors:
M. Potts
(Chairman)
G. Pritchard4
J. Mannolini1
R. McDougall2
J. Williams3
Executive
Directors:
M. Macfarlane
G. Pritchard4
Other Key
Management
Personnel:
S. Cranswick
K. Brown5
D. Watkins6
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
53,208
4,927
18,136
-
-
-
-
-
-
-
185,600
173,333
91,324
-
179,045
107,077
116,218
837,544
45,662
-
15,535
152,521
-
-
-
-
-
-
-
-
-
-
-
3,345
-
1,723
-
-
26,308
3,167
156
-
-
-
-
862
-
21,347
10,172
12,517
78,579
4,414
508
653
6,593
-
-
-
-
-
-
-
-
-
-
-
19,536
-
-
-
-
-
76,246
4,927
19,859
-
-
-
48,841
9,768
352,935
186,268
29,304
-
-
279,773
117,757
144,922
107,449 1,182,686
1
2
3
4
5
6
Represents remuneration from 18 December to 30 June 2020
Represents remuneration from 1 July 2019 to 18 December 2019
Represents remuneration from 1 July 2019 to 1 October 2019
Mr Pritchard changed from an executive role to a non-executive role effective 1 May 2020
Represents remuneration from 7 October 2019 to 30 June 2020
Represents remuneration from 7 October 2019 to 30 June 2020
9
icetana Limited
Directors' report
30 June 2020
2019
Non-Executive
Directors:
R. McDougall
(Chairman)
M. Potts3
J. Williams
Executive
Directors:
M. Macfarlane2
G. Pritchard
C. Farquhar1
Other Key
Management
Personnel:
S. Cranswick
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
-
33,000
-
57,000
240,000
57,987
180,000
567,987
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,040
-
2,850
17,100
22,990
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,000
-
60,040
240,000
60,837
197,100
590,977
1
2
3
Represents remuneration from 1 July 2018 to 31 August 2018
Mr Macfarlane changed from a non-executive role to an executive role effective 3 September 2019.
Represents remuneration from 20 July 2018 to 30 June 2019
10
icetana Limited
Directors' report
30 June 2020
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Mark Potts
G. Pritchard
J. Mannolini
R. McDougall
J. Williams
Executive Directors:
M. Macfarlane
G. Pritchard
C. Farquhar
Other Key Management
Personnel:
S. Cranswick
K. Brown
D. Watkins
Fixed remuneration
2019
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
74%
100%
100%
-
-
60%
95%
N/a
74%
100%
89%
100%
100%
N/a
-
-
100%
100%
100%
100%
N/a
N/a
-
-
-
-
-
26%
-
N/a
16%
-
11%
-
-
N/a
-
-
-
-
-
-
N/a
N/a
26%
-
-
-
-
14%
5%
N/a
10%
-
-
-
-
N/a
-
-
-
-
-
-
N/a
N/a
Cash bonuses are dependent on meeting defined performance measures. The amount of the bonus is determined having
regard to the satisfaction of performance measures and weightings as described above in the section 'Consolidated entity
performance and link to remuneration'. The maximum bonus values are established at the start of each financial year and
amounts payable are determined in the final month of the financial year by the Board.
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
M. Macfarlane
G. Pritchard
Other Key Management Personnel:
K. Brown
D Watkins
S. Cranswick
Cash bonus paid/payable
2020
2019
Cash bonus forfeited
2019
2020
45%
N/a
N/a
40%
100%
N/a
N/a
N/a
N/a
N/a
55%
N/a
N/a
60%
0%
N/a
N/a
N/a
N/a
N/a
11
icetana Limited
Directors' report
30 June 2020
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Matthew Macfarlane
Managing Director and Chief Executive Officer
1 May 2019
Ongoing
Base salary for the year ending 30 June 2020 of $192,000 plus superannuation, to be
reviewed annually by the Board. 2 month termination notice by either party, revenue
bonus of up to 40% of salary subject to achievement of revenue targets to be agreed
with the Board annually, capital raise bonus of between $50,000-$150,000 (for the year
ended 30 June 2020 only) for successful completion of capital raising, eligible to
participate in Employee Stock Investment Plan (ESIP) subject to a Performance
Review and Board approval, non-solicitation and non-compete clauses. Effective 1 May
2020, Mr Macfarlane and the Company agreed to reduce base salary by 20% until such
time as the parties agree otherwise.
Shane Cranswick
Chief Financial Officer and Company Secretary
26 June 2017
Ongoing
Base salary for the year ending 30 June 2020 of $190,000 plus superannuation, to be
reviewed annually by the Board. 3 month termination notice by either party, capital raise
bonus of $50,000 (for the year ended 30 June 2020 only) for successful completion of
capital raising, non-solicitation and non-compete clauses. Effective 1 May 2020, Mr
Cranswick and the Company agreed to reduce base salary by 20% until such time as
the parties agree otherwise.
Kevin Brown
Chief Operating Officer
7 October 2019
Ongoing
Base salary for the year ending 30 June 2020 of $180,000 plus superannuation, to be
reviewed annually by the Board. 3 month termination notice by either party, eligible to
participate in Employee Stock Investment Plan (ESIP) subject to a Performance
Review and Board approval, non-solicitation and non-compete clauses. Effective 1 May
2020, Mr Brown and the Company agreed to reduce base salary by 20% until such
time as the parties agree otherwise.
Damon Watkins
Chief Revenue Officer
7 October 2019 (ceased employment on 24 July 2020)
Ongoing
Base salary for the year ending 30 June 2020 of $185,000 plus superannuation, to be
reviewed annually by the Board. 3 month termination notice by either party, 3 month
termination notice by either party, eligible to participate in Employee Stock Investment
Plan (ESIP) subject to a Performance Review and Board approval, revenue bonus
potential of up to $100,000 for ‘on target’ performance measured against KPI
achievements ($40,000 guaranteed) as agreed with the CEO annually, non-solicitation
and non-compete clauses. Effective 1 May 2020, Mr Watkins and the Company agreed
to reduce base salary and cash bonus by 20% until such time as the parties agree
otherwise.
12
icetana Limited
Directors' report
30 June 2020
Share-based compensation
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Name
M Potts
M Macfarlane
G Pritchard
J Mannolini
K Brown
D Watkins
S Cranswick
M Macfarlane
K Brown
D Watkins
S Cranswick
Number of
options
granted
Grant date
Vesting date and
exercisable date
Expiry date
Fair value
per option
Exercise price at grant date
937,739 18 Dec 2019
2,344,348 18 Dec 2019
468,870 18 Dec 2019
468,870 18 Dec 2019
1,758,261 18 Dec 2019
937,739 18 Dec 2019
1,406,609 18 Dec 2019
5,642,702 Note 2
4,232,026 1 May 2020
3,854,491 1 May 2020
2,586,916 1 May 2020
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 3
Note 3
Note 3
Note 3
30 Nov 2023
30 Nov 2023
30 Nov 2023
30 Nov 2023
30 Nov 2023
30 Nov 2023
30 Nov 2023
31 Mar 2024
31 Mar 2024
31 Mar 2024
31 Mar 2024
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.25
$0.25
$0.25
$0.25
$0.125
$0.125
$0.125
$0.125
$0.125
$0.125
$0.125
$0.093
$0.093
$0.093
$0.093
Notes.
1 Options vest on a quarterly basis over the 3 year period after the issue date with a further vesting condition of a twelve
month “cliff” from the commencement of employment, engagement or office with the Company. There is no entitlement to
retain any options (partially vested or otherwise) until 12 months of employment, engagement or office is completed. If
employment is ceased during the vesting period, any unvested options held are forfeited by director/KMP.
2 Granted 1 May 2020 subject to shareholder approval at the 2020 Annual General Meeting.
3 Options vest 1⁄3 in 12 months and quarterly thereafter over a total three year period commencing 1 May 2020. If employment
is ceased during the vesting period, any unvested options held are forfeited by director/KMP.
Options granted carry no dividend or voting rights.
All options were granted over unissued fully paid ordinary shares in the company. The number of options granted was
determined having regard to the satisfaction of performance measures and weightings as described above in the section
'Consolidated entity performance and link to remuneration'. Options vest based on the provision of service over the vesting
period whereby the executive becomes beneficially entitled to the option on vesting date. Options are exercisable by the
holder as from the vesting date. There has not been any alteration to the terms or conditions of the grant since the grant
date. There are no amounts paid or payable by the recipient in relation to the granting of such options other than on their
potential exercise.
13
Icetana Limited
Directors' report
30 June 2020
Values of options over ordinary shares granted, exercised and lapsed for directors and other key management personnel as
part of compensation during the year ended 30 June 2020 are set out below(note – value of options provided below is value
of options vested as at 30 June 2020):
Name
M Potts
M Macfarlane
G Pritchard
J Mannolini
K Brown
D Watkins
S Cranswick
Value of
options
exercised
during the during the
Vested and Value of
options
exercisable
vested
as at
30 June
2020
number
year
$
Value of
options
lapsed
during the
year
$
year
$
156,290
390,725
78,145
-
-
-
234,435
19,536
48,841
9,768
-
-
-
23,304
-
-
-
-
-
-
Remuneration
consisting of
options
for the
year
%
-
-
-
-
-
-
25.6%
13.8%
5.1%
0%
0%
0%
12.0%
This concludes the remuneration report, which has been audited.
Shares under option
All unissued ordinary shares of icetana Ltd under option (relating to key management personnel and other personnel) at the
date of this report are as follows:
Grant date
18 Dec 2019
1 May 2020
1 May 20201
Expiry date
30 Nov 2023
31 Mar 2024
31 Mar 2024
Exercise price
$0.30
$0.25
$0.25
Number under option
7,931,321
9,432,667
5,642,702
1.
Grant subject to shareholder approval at the 2020 Annual General Meeting
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of icetana Ltd were issued during the year ended 30 June 2020 and up to the date of this
report on the exercise of options granted:
Date options granted
11 May 2018
Exercise price
$0.068
Number of shares issued
1,760,954
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
14
icetana Limited
Directors' report
30 June 2020
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
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.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 52 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 52 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
●
Officers of the company who are former partners of Butler Settineri (Audit) Pty Ltd
There are no officers of the company who are former partners of Butler Settineri (Audit) Pty Ltd.
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
immediately after this directors' report.
Auditor
Butler Settineri (Audit) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Mark Potts
Non-Executive Chairman
28 August 2020
Perth, Western Australia
15
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of icetana Ltd and its controlled entities for the year
ended 30 June 2020, I declare that, to the best of my knowledge and belief, there
have been:
a) No contraventions of
the auditor
independence requirements of
the
Corporations Act 2001 in relation to the audit; and
b) No contraventions of any applicable code of professional conduct in relation
to the audit.
BUTLER SETTINERI (AUDIT) PTY LTD
MARIUS VAN DER MERWE CA
Director
Perth
Date: 28 August 2020
icetana Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue from continuing operations
Other income
Interest revenue
Expenses
Accountancy and audit fees
Advertising and marketing
Consultancy fees
Depreciation and amortisation expense
Employee benefits expense
Foreign exchange losses
Other expenses
Loss before income tax expense from continuing operations
Income tax benefit/expense
Note 30 Jun 2020 30 Jun 2019
$
$
5
6
7
8
1,181,096
1,407,405
182,000
11,331
602,061
6,171
(92,786)
(67,276)
(618,204)
(137,698)
(3,230,829)
36,310
(1,130,733)
(128,803)
(187,320)
(1,004,509)
(55,076)
(3,774,093)
131,957
(1,442,375)
(3,866,790)
(4,444,582)
709,141
1,061,396
Loss after income tax expense from continuing operations
(3,157,649)
(3,383,186)
Loss after income tax expense for the year
(3,157,649)
(3,383,186)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Net loss after income tax expense attributable to:
Non-controlling interest
Owners of icetana Limited
Total comprehensive loss attributable to:
Non-controlling interest
Owners of icetana Limited
(49,401)
(134,394)
(49,401)
(134,394)
(3,207,051)
(3,517,580)
52,089
(3,209,738)
76,251
(3,306,935)
(3,157,649)
(3,383,186)
30,943
(3,237,994)
(81,270)
(3,436,310)
(3,207,051)
(3,517,580)
Cents
Cents
Loss per share for profit attributable to the owners of icetana Limited
Basic loss per share
Diluted loss per share
23
23
(2.66)
(2.66)
(3.30)
(3.30)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
17
icetana Limited
Consolidated statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Stock on hand
Income tax refundable
Right-of-use asset
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Unearned revenue
Employee benefits
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Non-controlling interest
Retained profits
Total equity
Note 30 Jun 2020 30 Jun 2019
$
$
9
10
11
12
8
19
13
14
15
16
17
18
19
17
2,641,715
522,332
118,228
-
709,140
15,836
4,007,251
333,356
550,201
151,915
25,624
1,061,396
-
2,122,492
135,178
1,385
136,563
150,509
23,012
173,521
4,143,814
2,296,013
264,064
948,553
89,718
15,000
15,836
1,333,171
1,098,826
524,069
190,072
-
-
1,812,967
15,452
15,452
13,618
13,618
1,348,623
1,826,585
2,795,190
469,428
21
22
18,573,586
562,265
(311,049)
(16,029,612)
13,767,127
(135,833)
(341,992)
(12,819,874)
2,795,190
469,428
The above statement of financial position should be read in conjunction with the accompanying notes
18
icetana Limited
Consolidated statement of changes in equity
For the year ended 30 June 2020
Foreign
Currency
Translation
Reserve
$
Share
based
payments
Reserve
$
Issued
capital
$
Accumulated
losses
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 July 2018
13,717,127
(6,457)
-
(9,512,939)
(260,723)
3,937,008
Profit after income tax expense for the
year
Other comprehensive income for the
year, net of tax
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Shares issued
-
-
-
-
(129,376)
(129,376)
50,000
-
-
-
-
-
(3,306,935)
(76,251)
(3,383,186)
-
(5,018)
(134,394)
(3,306,935)
(341,992)
419,428
-
-
50,000
Balance at 30 June 2019
13,767,127
(135,833)
- (12,819,874)
(341,992)
469,428
Foreign
currency
Translation
Reserve
$
Issued
capital
$
Share
based
payments Accumulated
Reserve
$
losses
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 July 2019
13,767,127
(135,833)
-
(12,819,874)
(341,992)
469,428
Profit after income tax expense for the
year
Other comprehensive income for the
year, net of tax
Total comprehensive income for the year
-
-
-
-
(28,255)
(28,255)
Transactions with owners in their
capacity as owners:
Shares issued
Share issue costs
Share-based payments
6,119,654
(1,313,195)
-
-
-
-
-
-
-
726,354
(3,209,738)
52,089 (3,157,649)
-
(21,146)
(49,401)
(3,209,738)
30,943 (3,207,051)
-
-
-
6,119,654
(1,313,195)
726,354
-
Balance at 30 June 2020
18,573,586
(164,088)
726,354
(16,029,612)
(311,049)
2,795,190
The above statement of changes in equity should be read in conjunction with the accompanying notes
19
icetana Limited
Consolidated statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income tax refund
Net cash from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issue
Share issue costs
Reduction in finance lease principal
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Note 30 Jun 2020 30 Jun 2019
$
$
1,390,964
(5,403,276)
2,139,802
(6,000,152)
(4,131,010)
11,331
1,061,397
(3,860,350)
6,171
1,012,609
(2,939,584)
(2,841,570)
(30,295)
(16,644)
(30,295)
(16,644)
6,119,654
(705,540)
(86,475)
50,000
-
-
5,327,639
50,000
2,357,760
333,356
(49,401)
(2,808,214)
3,275,964
(134,394)
Cash and cash equivalents at the end of the financial year
9
2,641,715
333,356
The above statement of cash flows should be read in conjunction with the accompanying notes
20
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Consolidated Entity:
AASB 16 Leases
The Consolidated Entity has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value
assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-
line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods
of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under
AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the
operating expense is now replaced by interest expense and depreciation in profit or loss. For classification within the
statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease payments
are separately disclosed in financing activities. For lessor accounting, the standard does not substantially change how a
lessor accounts for leases.
The impact on the financial performance and position of the Consolidated Entity from the adoption of this Accounting
Standard is detailed in note 3.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Going Concern
During the year the Consolidated Entity continued to incur losses although reduced from the prior year as a result of lower
operating expenses. For the year ended 30 June 2020, the Consolidated Entity incurred a loss from continuing operations
after tax of $3,157,649 (30 June 2019: $3,383,186). In the same period the consolidated entity had operating cash outflows
of $2,939,584 (year ended 30 June 2019: $2,841,570).
Notwithstanding these matters, the consolidated financial statements have been prepared on a going concern basis. The
Directors consider this to be appropriate for the following reasons:
the projected cash flow through the renewal of existing customers and the addition of new customer orders;
the ability to reduce operating cash outflows dependent on the addition of new customer orders;
•
•
• access to capital markets, should funding be required, for the Consolidated Entity to continue to execute against its
business plan in the medium term.
The Directors have a reasonable expectation that; existing cash, additional inflows from sales to existing customers and the
R&D rebate recognised at year end will be sufficient to sustain operations for a period of not less than 12 months from the
date of signing the financial report. Furthermore, the Consolidated Entity has the ability to adjust its cash flows to ensure that
it can pay its debts as and when they fall due.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other
21
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial
instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Consolidated Entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated Entity only.
Supplementary information about the parent entity is disclosed in note 31.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of icetana Limited ('company'
or 'parent entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. icetana Limited and its
subsidiaries together are referred to in these financial statements as the 'Consolidated Entity'.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an entity
when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Consolidated Entity. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated Entity 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 Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the Consolidated Entity.
Losses incurred by the Consolidated Entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the Consolidated Entity 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
Consolidated Entity 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.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports to the Board. The Board is responsible for the allocation of resources to operating segments and
assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is icetana Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
22
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Consolidated Entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Consolidated Entity is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the Consolidated Entity:
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 good or 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 goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed
price or an hourly rate.
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.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
Government grants are netted off against the expenditure to which they relate.
23
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
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:
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
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.
●
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.
icetana Limited does not have any wholly-owned Australian subsidiaries and has not formed an income tax consolidated
group under the tax consolidation regime.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Consolidated Entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
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. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement
of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
24
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
The Consolidated Entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Consolidated Entity has transferred goods or services to the customer but where
the Consolidated Entity is yet to establish an unconditional right to consideration. Contract assets are treated as financial
assets for impairment purposes.
Customer acquisition costs
Customer acquisition costs are capitalised as an asset where such costs are incremental to obtaining a contract with a
customer and are expected to be recovered. Customer acquisition costs are amortised on a straight-line basis over the term
of the contract.
Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained or which are not
otherwise recoverable from a customer are expensed as incurred to profit or loss. Incremental costs of obtaining a contract
where the contract term is less than one year is immediately expensed to profit or loss.
Customer fulfilment costs
Customer fulfilment costs are capitalised as an asset when all the following are met: (i) the costs relate directly to the contract
or specifically identifiable proposed contract; (ii) the costs generate or enhance resources of the Consolidated Entity that will
be used to satisfy future performance obligations; and (iii) the costs are expected to be recovered. Customer fulfilment costs
are amortised on a straight-line basis over the term of the contract.
Right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an estimate of customers
who may exercise their right to return the goods and claim a refund. Such rights are measured at the value at which the
inventory was previously carried prior to sale, less expected recovery costs and any impairment.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in first
out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate
proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where applicable, transfers
from cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting rebates and
discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
Cash flow hedges
Cash flow hedges are used to cover the Consolidated Entity's exposure to variability in cash flows that is attributable to
particular risks associated with a recognised asset or liability or a firm commitment which could affect profit or loss. The
effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income through the cash
flow hedges reserve in equity, whilst the ineffective portion is recognised in profit or loss. Amounts taken to equity are
transferred out of equity and included in the measurement of the hedged transaction when the forecast transaction occurs.
25
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
Cash flow hedges are tested for effectiveness on a regular basis both retrospectively and prospectively to ensure that each
hedge is highly effective and continues to be designated as a cash flow hedge. If the forecast transaction is no longer
expected to occur, the amounts recognised in equity are transferred to profit or loss.
If the hedging instrument is sold, terminated, expires, exercised without replacement or rollover, or if the hedge becomes
ineffective and is no longer a designated hedge, the amounts previously recognised in equity remain in equity until the
forecast transaction occurs.
Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying
amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal
groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of
disposal of a non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss
previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as
held for sale are presented separately on the face of the statement of financial position, in current liabilities.
Associates
Associates are entities over which the Consolidated Entity has significant influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits or
losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other
comprehensive income. Investments in associates are carried in the statement of financial position at cost plus post-
acquisition changes in the Consolidated Entity's share of net assets of the associate. Goodwill relating to the associate is
included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. Dividends
received or receivable from associates reduce the carrying amount of the investment.
When the Consolidated Entity's share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables, the Consolidated Entity does not recognise further losses, unless it has incurred obligations
or made payments on behalf of the associate.
The Consolidated Entity discontinues the use of the equity method upon the loss of significant influence over the associate
and recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value
of the retained investment and proceeds from disposal is recognised in profit or loss.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
26
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where
they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii)
designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Consolidated Entity
intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the Consolidated Entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is
recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss
allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
Property, plant and equipment
Land and buildings are shown at fair value, based on periodic, at least every 3 years, valuations by external independent
valuers, less subsequent depreciation and impairment for buildings. The valuations are undertaken more frequently if there
is a material change in the fair value relative to the carrying amount. Any accumulated depreciation at the date of revaluation
is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the
asset. Increases in the carrying amounts arising on revaluation of land and buildings are credited in other comprehensive
income through to the revaluation surplus reserve in equity. Any revaluation decrements are initially taken in other
comprehensive income through to the revaluation surplus reserve to the extent of any previous revaluation surplus of the
same asset. Thereafter the decrements are taken to profit or loss.
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 property, plant and equipment
(excluding land) over their expected useful lives as follows:
Buildings
Leasehold improvements
Plant and equipment
40 years
3-10 years
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
27
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Consolidated Entity expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The Consolidated Entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Research and development
Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable
that the project will be a success considering its commercial and technical feasibility; the Consolidated Entity is able to use
or sell the asset; the Consolidated Entity has sufficient resources and intent to complete the development; and its costs can
be measured reliably. Capitalised development costs are amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 10 years.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 10 years.
Customer contracts
Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 5 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
28
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity 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.
Contract liabilities
Contract liabilities represent the Consolidated Entity's obligation to transfer goods or services to a customer and are
recognised when a customer pays consideration, or when the Consolidated Entity recognises a receivable to reflect its
unconditional right to consideration (whichever is earlier) before the Consolidated Entity has transferred the goods or services
to the customer.
Refund liabilities
Refund liabilities are recognised where the Consolidated Entity receives consideration from a customer and expects to refund
some, or all, of that consideration to the customer. A refund liability is measured at the amount of consideration received or
receivable for which the Consolidated Entity does not expect to be entitled and is updated at the end of each reporting period
for changes in circumstances. Historical data is used across product lines to estimate such returns at the time of sale based
on an expected value methodology.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders
equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured
in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Consolidated Entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on
an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
29
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
Provisions
Provisions are recognised when the Consolidated Entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the Consolidated Entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
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 wholly 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 annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. 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.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the Consolidated Entity receives the services that entitle the employees to receive payment. No account is taken of
any other vesting conditions.
The cost of equity-settled transactions are 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.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
●
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
30
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. 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 or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that 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 Consolidated Entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Consolidated Entity 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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
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.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Icetana 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.
31
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 1. Significant accounting policies (continued)
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.
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.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2020. The
Consolidated Entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most
relevant to the Consolidated Entity, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early
adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance
on measurement that affects several Accounting Standards. Where the Consolidated Entity has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under
the Australian Accounting Standards, the Consolidated Entity may need to review such policies under the revised framework.
At this time, the application of the Conceptual Framework is not expected to have a material impact on the Consolidated
Entity's financial statements.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the Consolidated Entity based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the Consolidated Entity operates. Other than as
addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements
or any significant uncertainties with respect to events or conditions which may impact the Consolidated Entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
32
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Share-based payment transactions
The Consolidated Entity 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 either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Refer to note 22 for
further information.
Revenue from contracts with customers involving sale of goods
When recognising revenue in relation to the sale of goods to customers, the key performance obligation of the Consolidated
Entity is considered to be the point of delivery of the goods to the customer, as this is deemed to be the time that the customer
obtains control of the promised goods and therefore the benefits of unimpeded access.
Determination of variable consideration
Judgement is exercised in estimating variable consideration which is determined having regard to past experience with
respect to the goods returned to the Consolidated Entity where the customer maintains a right of return pursuant to the
customer contract or where goods or services have a variable component. Revenue will only be recognised to the extent
that it is highly probable that a significant reversal in the amount of cumulative revenue recognised under the contract will
not occur when the uncertainty associated with the variable consideration is subsequently resolved.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that
affect inventory obsolescence.
Fair value measurement hierarchy
The Consolidated Entity is required to classify all assets and liabilities, measured at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted
prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine
what is significant to fair value and therefore which category the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable
inputs. Refer to note 50 for further information.
Estimation of useful lives of assets
The Consolidated Entity determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives
are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold
will be written off or written down.
Goodwill and other indefinite life intangible assets
The Consolidated Entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the
accounting policy stated in note 1. The recoverable amounts of cash-generating units have been determined based on
value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on
the current cost of capital and growth rates of the estimated future cash flows. Refer to note 27 for further information.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Consolidated Entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the Consolidated Entity and to the particular asset that
may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves
fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions.
33
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Income tax
The Consolidated Entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is
required in determining the provision for income tax. There are many transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain. The Consolidated Entity recognises
liabilities for anticipated tax audit issues based on the Consolidated Entity's current understanding of the tax law. Where
the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and
deferred tax provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Consolidated Entity considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Consolidated Entity's operations;
comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant
leasehold improvements; and the costs and disruption to replace the asset. The Consolidated Entity reassesses whether it
is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or
significant change in circumstances.
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.
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay
increases through promotion and inflation have been taken into account.
Lease make good provision
A provision has been made for the present value of anticipated costs for future restoration of leased premises. The
provision includes future cost estimates associated with closure of the premises. The calculation of this provision requires
assumptions such as application of closure dates and cost estimates. The provision recognised for each site is periodically
reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs
for sites are recognised in the statement of financial position by adjusting the asset and the provision. Reductions in the
provision that exceed the carrying amount of the asset will be recognised in profit or loss.
Warranty provision
In determining the level of provision required for warranties the Consolidated Entity has made judgements in respect of the
expected performance of the products, the number of customers who will actually claim under the warranty and how often,
and the costs of fulfilling the conditions of the warranty. The provision is based on estimates made from historical warranty
data associated with similar products and services.
Business combinations
As discussed in note 1, business combinations are initially accounted for on a provisional basis. The fair value of assets
acquired, liabilities and contingent liabilities assumed are initially estimated by the Consolidated Entity taking into
consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business
combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact
on the assets and liabilities, depreciation and amortisation reported.
34
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 3. AASB 16 Leases
Change in Accounting Policy
AASB 16 Leases supersedes AASB 117 Leases. The Consolidated Entity has adopted AASB 16 from 1 July 2019 which
has resulted in changes in the classification, measurement and recognition of leases. The new standard requires
recognition of a right-of-use asset (the leased item) and a financial liability (to pay rentals). The exceptions are short-term
leases and leases of low value assets.
The Consolidated Entity has adopted AASB 16 using the modified retrospective approach under which the reclassifications
and the adjustments arising from the new leasing rules are recognised in the opening Condensed Statement of Financial
Position on 1 July 2019. Under this approach, there is no initial Impact on accumulated losses under this approach, and
comparatives have not been restated.
The Consolidated Entity leases various premises. Prior to 1 July 2019, leases were classified as operating leases.
Payments made under operating leases were charged to profit or loss on a straight-line basis over the period of the lease.
From 1 July 2019, where a group company is a lessee, the Consolidated Entity recognises a right-of-use asset and a
corresponding liability at the date which the lease asset is available for use by the Consolidated Entity (i.e. commencement
date). Each lease payment is allocated between the liability and the finance cost. The finance cost is charged to profit or
loss over the lease period so as to produce a consistent period rate of interest on the remaining balance of the liability for
each period.
The lease liability is initially measured at the present value of the lease payments that are not paid at commencement date,
discounted using the rate implied in the lease (if applicable). If this rate is not readily determinable, the Group uses its
incremental borrowing rate.
Lease payments included in the initial measurement of the lease liability consist of:
• Fixed lease payments less any lease incentives receivable;
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at commencement
date;
• Any amounts expected to be payable by the Consolidated Entity under residual value guarantees;
• The exercise price of purchase options, if the Consolidated Entity is reasonably certain to exercise the options; and
• Termination penalties of the lease term reflects the exercise of an option to terminate the lease.
An extension option is included within the property lease held by the Company. In determining the lease term,
management considers all facts and circumstances that create an economic incentive to exercise an extension option.
Extension options are only included in the lease term if, at commencement date, it is reasonably certain that the options
will be exercised.
Subsequent to initial recognition, the lease liability is measured by increasing the carrying amount to reflect interest on the
lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments
made. The lease liability is remeasured (with a corresponding adjustment to the right-of-use asset) whenever there us a
change in the lease term (including assessments relating to extension and termination options), lease payments due to
changes in an index or rate, or expected payments under guaranteed residual values.
Right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or
before commencement date, less any lease incentives received and any initial direct costs. These right-of-use assets are
subsequently measured at cost less accumulated depreciation and impairment losses.
Where the terms of a lease require the Consolidated Entity to restore the underlying asset, or the Consolidated Entity has
an obligation to dismantle and remove a leased asset, a provision is recognised and measured in accordance with AASB
137. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset.
Right-of-use assets are depreciated on a straight-line basis over the term of the lease (or the useful life of the leased asset
if this is shorter). Depreciation starts on commencement date of the lease.
Where leases have a term of less than 12 months or relate to low value assets, the Consolidated Entity has applied the
optional exemptions to not capitalise these leases and instead account for the lease expense on a straight-line basis over
the lease term.
35
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 3. Operating Segments (continued)
Note 3. AASB 16 Leases (continued)
Impact on adoption of AASB 16
On adoption of AASB 16, the Consolidated Entity recognised lease liabilities in relation to leases which had previously
been classified as operating leases under the principles of AASB 117. These liabilities were measured at the present value
of the remaining lease payments. Payments are discounted where the time period covered is more than 12 months.
On initial application right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount
of any prepaid or accrued lease payments relating to that lease recognised in the Statement of Financial Position as at 30
June 2019.
In the Condensed Statement of Cash Flows, the Consolidated Entity has recognised cash payments for the principal
portion of the lease liability within financing activities, cash payments for the interest portion of the lease liability as interest
paid within operating activities and short-term lease payments and payments for lease of low-value assets within operating
activities.
The adoption of AASB 16 resulted in the recognition of right-of-use assets of $83,152 and lease liabilities of $83,152 in
respect of all operating leases, other than short-term leases and leases of low-value assets.
The net impact on retained earnings on 1 July 2019 was $nil.
Practical expedients applied
In applying AASB 16 for the first time, the Consolidated Entity has used the following practical expedients permitted by the
standard:
• For existing contracts as at 1 July 2019, the Consolidated Entity has elected to apply the definition of lease contained in
AASB 117 and Interpretation 4 and has not applied AASB 16 to contracts that were previously not identified as leases
under AASB 117 and Interpretation 4;
• Using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
Below is a reconciliation of total operating lease commitments as at 30 June 2019, as disclosed in the annual financial
statements for the year ended 30 June 2019, and the lease liabilities recognised on 1 July 2019:
Operating lease commitments disclosed as at 30 June 2019
Discounted using the lessee's incremental borrowing rate as at the date of initial application
Less: Short term leases recognised on a straight-line basis as an expense
Less: Low value leases recognised on a straight-line basis as an expense
Less: Contracts reassessed as service agreements
Add: Adjustment as a result of a different treatment of extension and termination options
Lease liabilities as at 1 July 2019
2019
$
83,152
83,152
-
-
-
-
83,152
36
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 4. Operating segments
Identification of reportable operating segments
The Board assess the Consolidated Entity’s performance based on geographical areas of operation. Accordingly, the
Consolidated Entity has identified 3 reportable segments, which are presented below:
Segment
Asia Pacific (APAC)
North America (NA)
Information
Responsible for all sales, marketing and product development efforts in Australia
and the broader Asia Pacific region
Responsible for all sales and marketing efforts in the United States and Canada
Europe, Middle East & Africa (EMEA) Responsible for all sales and marketing efforts in Europe, the Middle East and
Africa
Cost of revenue (included in EBITDA) are all the costs directly attributable to the ongoing delivery of the product. Sales and
marketing costs include direct in-country costs. A portion of general and administration costs, representing general
operating and product development expenses, remain unallocated in determining the segment contribution presented by
the Board.
The assets and liabilities of the Consolidated Entity are reported and reviewed by the Board in total and are not allocated
by operating segment. Operating segment assets and liabilities are therefore not disclosed.
Operating segment information
Consolidated – 30 June 2020
Revenue
Sales to external customers
Intersegment sales
Total sales revenue
Intersegment eliminations
Other revenue
Interest revenue
Total segment revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
APAC
$
NA
$
EMEA
$
Total
$
533,210
335,058
868,268
182,000
11,331
1,061,599
(3,282,927)
(106,277)
11,331
-
(3,377,873)
709,141
(2,668,732)
197,543
-
197,543
(89,578)
450,343
-
450,343
(245,480)
-
107,965
-
204,863
1,181,096
335,058
1,516,153
(335,058)
182,000
11,331
1,374,427
(284,915)
(2,720)
-
-
(287,635)
-
(287,635)
(172,581)
(28,701)
-
-
(201,282)
-
(201,282)
(3,740,423)
(137,698)
11,331
-
(3,866,790)
709,141`
(3,157,649)
37
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 3. Operating Segments (continued)
Note 4. Operating segments (continued)
Consolidated – 30 June 2019
Revenue
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue
Interest revenue
Other revenue
Total segment revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
Note 5. Revenue
APAC
$
NA
$
EMEA
$
Total
$
688,850
-
688,850
54,317
-
54,317
664,239
-
664,239
1,407,405
-
1,407,405
6,171
602,061
1,297,082
(3,081,920)
(50,540)
6,171
-
(3,126,289)
1,061,396
(2,064,893)
-
-
54,317
-
-
664,239
6,171
602,061
2,015,637
(580,280)
(2,589)
-
-
(582,869)
-
(582,869)
(733,477)
(1,946)
-
-
(735,424)
-
(735,424)
(4,395,677)
(55,076)
6,171
-
(4,444,582)
1,061,396
(3,383,186)
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated
Types of revenue and other income
Recurring revenue
Enterprise revenue
Total sales revenue
Geographical regions
APAC
NA
EMEA
Revenue by industry
Education
Retail
Commercial and other
2020
$
2019
$
704,345
476,751
1,181,096
533,210
197,543
450,343
1,181,096
307,432
514,275
359,389
1,181,096
749,640
657,765
1,407,405
688,850
54,317
664,239
1,407,405
226,323
534,311
646,771
1,407,405
38
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 6. Other income
Insurance recoveries
Government stimulus for COVID-19
Other
Note 7. Other expenses
Cost of sale and services
Legal fees
Rent and outgoings
Travel
Other
Note 8. Income tax expense
R&D tax incentive income
Current tax
Deferred tax
Aggregate income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory rate of 27.5%
Tax effect of R&D tax incentive income
Tax effect of permanent differences
Tax effect of temporary differences
Tax losses unrecognised / (recouped)
Aggregate income tax expense
30 Jun 2020 30 Jun 2019
$
$
-
182,000
-
599,952
-
2,109
182,000
602,061
269,669
46,360
96,775
232,233
485,696
266,581
105,624
217,622
347,870
504,678
1,130,733
1,442,375
(709,141)
-
-
(1,061,396)
-
-
(709,141)
(1,061,396)
(3,866,790)
(4,444,582)
(1,063,367)
(1,222,261)
(195,014)
478,667
(43,129)
113,703
(291,884)
691,583
(54,478)
(184,356)
(709,141)
(1,061,396)
(a) The Company has revenue losses of approximately $6,331,625 (2019: $5,405,585) for which no deferred tax asset has
been recognised.
(b) The Company has no franking credits currently available for future offset.
39
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 9. Current assets - cash and cash equivalents
Cash at bank
Cash on deposit
Note 10. Current assets – trade and other receivables
Trade receivables
Sundry debtors
The aging of receivables is as follows:
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
30 Jun 2020 30 Jun 2019
$
$
2,548,741
92,974
240,382
92,974
2,641,715
333,356
476,166
46,166
475,618
74,583
522,332
550,201
73,188
101,640
301,338
-
196,527
142,550
-
136,541
476,166
475,618
The Consolidated Entity has increased its monitoring of debt recovery as there is an increased probability of customers
delaying payment or being unable to pay, due the Coronavirus (COVID-19) pandemic. A total of $8,055 (USD $5,400) has
been written off during the year for matters unrelated to COVID-19.
There is no allowance for expected credit losses due to the nature of revenue transactions and current limited number of
customers meaning that all customers can individually be reviewed for potential debt issues.
Note 11. Prepayments
Prepayments
Note 12. Stock on hand
Stock - hardware
Stock - other
118,228
151,915
118,228
151,915
-
-
-
12,818
12,806
25,624
40
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 13. Non-current assets - property, plant and equipment
Structural improvements - at cost
Less: Accumulated depreciation
Computers & office equipment - at cost
Less: Accumulated depreciation
Low value pool - at cost
Less: Accumulated depreciation
30 Jun 2020 30 Jun 2019
$
$
77,244
(5,753)
71,491
77,244
(3,822)
73,422
240,248
(176,721)
63,527
221,054
(144,289)
76,765
679
(519)
160
663
(341)
322
135,178
150,509
Reconciliations
Reconciliations of the written down values at the beginning and end of the current financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Disposals
Depreciation expense
Structural
improvements
Computer & Low value
Office
Equipment
$
pool
$
Total
$
$
73,422
(1,931)
76,765
30,295
(3,261)
(40,271)
322
(162)
150,509
30,295
(3,261)
(42,365)
Balance at 30 June 2020
71,491
63,527
160
135,178
Note 14. Non-current assets - intangibles
Intangible assets - at cost
Less: Accumulated amortisation
Trademark
30 Jun 2020 30 Jun 2019
$
$
-
-
1,385
41,943
(20,316)
1,385
1,385
23,012
41
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 15. Trade and other payables
Trade payables
PAYG withholding payable
Accrued expenses
Net GST (refundable) / payable
Radium Capital R&D Advance
Premium insurance funding
Sundry creditors
Note 16. Unearned revenue
Unearned revenue
Note 17. Employee provisions
Provision for annual leave
Provision for long service leave
Provision for employee entitlements
Current employee provisions
Provision for long service leave
Non-current employee provisions
Note 18. Provisions
Lease make good
30 Jun
2020
$
30 Jun
2019
$
128,515
40,097
92,906
(9,324)
-
-
11,869
243,406
33,571
218,754
(5,874)
490,168
60,253
58,548
264,064 1,098,826
948,553
524,069
948,553
524,069
89,718
-
-
92,270
15,162
96,258
89,718
203,690
15,452
15,452
15,000
15,000
-
-
-
Lease make good
The provision represents the present value of estimated costs to make good the Australian premises leased by the
Consolidated Entity at the end of the lease term.
42
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 19. Right-of-use assets
Cost
Accumulated depreciation
Carrying value
Note 20. Lease Liabilities
Current liabilities
Non-current liabilities
Total lease liabilities
30 Jun
2020
$
30 Jun
2019
$
83,152
(67,316)
15,836
15,836
-
15,836
-
-
-
-
-
-
AASB 16 has been adopted during the period, refer note 2 for details.
The Consolidated Entity leases its operating premises. The lease for the Australian premises expired in February 2020 and
was leased on a month on month basis until 20th August 2020. On 3rd August 2020 icetana Ltd entered into an agreement
for a new lease at a different location for a 6 month period. This lease, given its short term nature, is not represented above.
A lease was renewed for the office in Dubai (for EMEA operations) during the year. This lease expires in February 2021 and
is represented by the lease liability above.
43
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 21. Equity - Issued Capital
Ordinary shares – fully paid
A Class Preference Shares
B Class Preference Shares
C Class Preference Shares
Share issue costs
Total
Movements in ordinary share capital
Details
Opening Balance
30 Jun 2020 30 Jun 2019 30 Jun 2020 30 Jun 2019
Shares
Shares
$
$
137,040,093
-
-
-
137,040,093
2
1,000,000 19,886,781
1,500,000
-
1,500,000
916,000
-
946,000
1,598,462
- 11,351,125
5,044,462 19,886,781 13,767,127
-
(1,313,195)
18,573,586 13,767,127
Date
Shares
Issue price
$
1 July 2018
5,023,339
13,717,127
Issue of C Class Preference Shares
20 July 2018
21,123
50,000
Balance
30 June 2019
5,044,462
13,767,127
Conversion of Convertible Notes
Shares issued on exercise of options (post-split)
Share split of ordinary shares
Share split of A Class Preference Shares
Share split of B Class Preference Shares
Share split of C Class Preference Shares
Share issued on IPO
Share issue costs (share based payments)
Share issue costs
18 December 2019
18 December 2019
18 December 2019
18 December 2019
18 December 2019
18 December 2019
18 December 2019
6,250,000
1,760,954
6,358,523
9,537,785
10,785,997
72,302,372
25,000,000
$0.160
$0.068
$0.200
1,000,000
119,654
-
-
-
-
5,000,000
(607,655)
(705,540)
Balance
30 June 2020
137,040,093
18,573,586
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
company does not have a limited amount of authorised capital.
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.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Consolidated Entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure
to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
44
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 21. Equity – Issued Capital (continued)
The Consolidated Entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current company's share price at the time of the investment. The Consolidated Entity is not
actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in
order to maximise synergies.
The Consolidated Entity is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements during the
financial year.
The Board manages the capital requirements of the Consolidated Entity on an ongoing basis.
45
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 22. Reserves
As at 30 June, the Consolidated Entity had the following reserve accounts:
(a) Foreign currency translation
(b) Performance rights
(c) Options
Total
30 Jun 2020 30 Jun 2019
$
$
(164,089)
-
726,354
562,265
(135,833)
-
-
(135,833)
(a) Foreign currency translation
The foreign currency reserve is used to recognise exchange differences arising from the translation of the financial
statements of foreign operations to Australian dollars.
Opening balance
Movement
Closing balance
30 Jun 2020 30 Jun 2019
$
$
(135,833)
(28,256)
(164,089)
(6,457)
(129,376)
(135,833)
(b) Performance rights
The performance rights reserve is used to recognise expenses on valuations of performance rights. Performance rights will
be expensed upon vesting conditions being met (see vesting conditions below).
Details
Opening Balance
Balance
Date
Number
$
1 July 2018
30 June 2019
-
-
Issued to employees
18 December 2019
3,000,000
Balance
30 June 2020
3,000,000
-
-
-
-
(c) Options and Performance Rights
The option reserve is used to recognise expenses on valuation of share options. In accordance with AASB 2, the value of
options granted has been independently assessed.
Details
Opening Balance
Balance
Date
Number
$
1 July 2018
30 June 2019
579,586
579,586
-
-
Share split of existing options
Issue of shareholder options
Issued to lead broker
Issued under the new ESIP (series 1)
Issue of further ESIP options (series 2)
Options forfeited pursuant to leaver provisions (series
1)
18 December 2019
18 December 2019
18 December 2019
18 December 2019
1 May 2020
2,044,037
30,000,000
5,626,436
9,377,594
13,862,158
-
-
607,655
118,699
-
30 June 2020
(325,000)
-
Balance
30 June 2020
61,164,610
726,354
46
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 22. Reserves (continued)
In December 2019 the Company granted a total of 9,377,393 options (series 1) and 3,000,000 performance rights to
employees, consultants and directors of the Consolidated Entity. The ESIP options vest quarterly from the date of grant
over a three year period. The Company expenses any valuation of the share options as they accrue over time. As at 30
June 2020, the Company has recognised an employee share-based payment expense of $118,699 in relation to these
options.
During the year, 325,000 options (series 1) were forfeited under the leaver provisions of the ESIP.
In May 2020 the Company granted a total of 13,862,158 options (series 2) to employees and consultants of the
Consolidated Entity. One third of the options granted will vest on 30 April 2021 (being 12 months after the issue date). The
balance of options (two thirds) will vest on a quarterly basis from 1 May 2021 to 31 March 2024 (being over the two year
period after the end of Year 1). As 12 months has not passed between the date of grant and the 30 June 2020, no options
had vested as at that date. The Company will expense the ESIP options as they accrue over time.
A further 5,642,702 options (series 2) will be granted, subject to shareholder approval at the 2020 Annual General Meeting,
to Matthew Macfarlane.
Vesting conditions of performance rights as follows:
Number
750,000
750,000
750,000
750,000
Vesting Conditions
$4m Revenue in the 12-month audited
period ending 30 June 2021
$6m Revenue in the 12-month audited
period ending 31 December 2021
$10m Revenue in the 12-month
audited period ending 31 December
2022
$12m Revenue in the 12-month
audited period ending 31 December
2024
Expiry Date
23 December 2024
23 December 2024
23 December 2024
23 December 2024
The fair value of the equity settled options/performance rights as at the date of grant using the Black-Scholes model taking
into account the terms and conditions upon which the options were granted:
Number
Grant Date
Expiry
Date
Exercise
Price
Fair value
at grant
date
Vesting
date
Value
Accrued
$
ESIP Options (series 2)
ESIP Options (series 1)
Lead Broker Options
Performance Rights
13,862,158 1 May 20 31 Mar 24
9,052,393 20 Dec 19 30 Nov 23
5,626,436 18 Dec 19 23 Dec 22
3,000,000 18 Dec 19 23 Dec 24
$0.25
$0.30
$0.30
Nil
$0.093 As above
$0.125 As above
$0.108 18 Dec 19
$0.200 As above
-
118,699
607,655
-
726,354
Dividend yields
Expected volatility
Risk-free interest rate
Expected life
Exercise Price
Grant date share price
ESIP
ESIP
Lead Broker
Options
0%
100%
2.04%
3 years
$0.30
$0.20
Options
Series 1
0%
100%
2.04%
4 years
$0.30
$0.20
Options
Series 2
0%
100%
0.41%
3.92 years
$0.25
$0.155
Performance
Rights
0%
100%
2.04%
5 years
Nil
$0.20
47
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 23. Earnings per share
Total comprehensive loss for the year:
Loss after income tax
Non-controlling interest
30 Jun 2020 30 Jun 2019
$
$
(3,237,994)
30,943
(3,436,310)
(81,270)
Loss after income tax attributable to the owners of icetana Limited
(3,207,051)
(3,517,580)
Basic earnings per share
Diluted earnings per share
Cents
Cents
(2.66)
(2.66)
(3.30)
(3.30)
Number
Number
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic loss per share
Adjustments for calculation of diluted loss per share:
Options over ordinary shares
121,707,136 103,951,280
Nil
Nil
Weighted average number of ordinary shares used in calculating diluted earnings per share 121,707,136 103,951,280
Note: Weighted average number of shares for comparative purposes has been calculated as if prior classes of shares were
converted to ordinary shares on the same terms as undertaken for the IPO.
Note 24. Equity – non-controlling interest
Accumulated losses at the start of the year
Net (loss) / profit attributable to non-controlling members
Accumulated losses at the end of the year
Note 25. Equity – retained earnings
Retained losses at the beginning of the financial year
Loss after income tax expense for the year
Retained losses at the end of the financial year
48
30 Jun 2020 30 Jun 2019
$
$
(341,992
30,943
(260,723)
(81,269)
(311,049)
(341,992)
(12,819,874)
(3,209,738)
(9,512,939)
(3,306,935)
(16,029,612) (12,819,874)
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 26. Dividends
There were no dividends declared or paid during the year.
Note 27. Financial instruments
Financial risk management objectives
The Consolidated Entity’s objective is to manage working capital so as to safeguard the Consolidated Entity’s ability to
continue as a going concern so that the Consolidated Entity can provide returns for shareholders.
The Consolidated Entity’s activities expose it to a variety of financial risks which may include market risk (including currency
risk, interest rate risk and price risk), credit risk and liquidity risk. The Consolidated Entity’s risk management program seeks
to minimise potential adverse effects on the financial performance of the Consolidated Entity.
Market risk
Foreign currency risk
The Consolidated Entity undertakes certain transactions denominated in foreign currencies, hence exposure to exchange
rate fluctuations.
The significant exposures are United States Dollar (USD), United Arab Emirates Dirham (AED) and British Pound (GBP)
currency fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity’s functional currency. The risk is managed using sensitivity analysis and
cash flow forecasting.
Interest rate risk
The Consolidated Entity’s exposure to interest rate risk is limited to fluctuations in the rate of interest earned or payable in
respect of cash balances as all other interest rates are fixed. Fluctuating interest rates are not expected to have a significant
impact on earnings or equity.
Price risk
The Consolidated Entity is not exposed to any significant price risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to
the financial statements. The Consolidated Entity does not hold any collateral.
As disclosed in note 10, due to the Coronavirus (COVID-19) pandemic, the Consolidated Entity has increased its monitoring
of debt recovery as there is an increased probability of customers delaying payment or being unable to pay. The
Consolidated Entity does not have an allowance for expected loss due to the nature and small size of its customer base.
Customer renewals occurred when due during the year and material renewal receivables as at 30 June 2020 have been
received post year end.
Generally, trade receivables are written off when there is no reasonable explanation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when they become due and payable. There are no arranged available borrowing
facilities at reporting date due to the strong cash position.
49
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 27. Financial instruments (continued)
The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves (and would obtain available
borrowing facilities if deemed necessary) by continuously monitoring actual and forecast cash flows and matching maturity
profiles of financial assets and liabilities.
Financing arrangements
There are no borrowing facilities as at the reporting date.
Remaining contractual maturities
The following tables detail the Consolidated Entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial
position.
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Consolidated – 2020
Trade payables
Insurance funding
Accrued expenses
R&D advance
Sundry creditors
Unearned revenue
Lease liability
Total
Consolidated – 2019
Trade payables
Insurance funding
Accrued expenses
R&D advance
Sundry creditors
Unearned revenue
Total
1 year or less
$
1 to 2 years
$
Over 2 years
$
128,515
-
92,906
-
11,869
804,745
15,836
1,053,871
-
-
-
-
-
143,808
-
143,808
1 year or less
$
1 to 2 years
$
Over 2 years
$
243,406
-
218,754
490,168
58,548
524,069
1,534,945
-
60,253
-
-
-
-
60,253
Remaining
contractual
maturities
$
128,515
-
92,906
-
11,869
948,553
15,836
1,197,679
Remaining
contractual
maturities
$
243,406
60,253
218,754
490,168
58,548
524,069
1,595,198
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 28. Contingent liabilities and contingent assets
The Consolidated Entity has given a bank guarantee as at 30 June 2020 of $37,974 (2019: $37,974) to the landlord for the
head office for icetana Ltd. Following the year ended 30 June 2020, the landlord was given notice for termination of the
lease on 20 August 2020, following which the bank guarantee will be released. There are no other contingent assets or
liabilities as at the reporting date.
Note 29. Related party transactions
Parent entity
icetana Ltd is the parent entity.
50
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 29. Related party transactions (continued)
Subsidiaries
Interests in subsidiaries are set out in note 32.
Associates
There are no associates.
Key management personnel (KMP)
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the Consolidated
Entity, directly or indirectly, including any elected member, are considered KMP. KMP are employed by the Consolidated
Entity under normal employment terms and conditions.
The aggregate compensation made to directors and other members of KMP of the Consolidated Entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
30 Jun 2020 30 Jun 2019
$
$
990,065
78,579
6,593
107,449-
563,000
22,990
27,987
-
1,182,686
613,977
Short-term employee benefits
These amounts include salary, fringe benefits and cash bonuses awarded to KMP.
Post-employment benefits
These amounts are the current year’s estimated cost of providing for the Consolidated Entity’s superannuation contributions
made during the year.
Long-term benefits
These amounts represent annual leave and long service leave benefits accruing during the year.
Disclosures relating to key management personnel are also set out in remuneration report included in the directors’ report.
Transactions with related parties
There were no transactions with related parties during the current year.
The Consolidated Entity’s main related parties are as follows:
• KMP - as defined above
• Other related parties – Any entity that is controlled by or over which KMP, or close family members of KMP, have
authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, are
considered related parties in relation to the Consolidated Entity.
• Entities subject to significant influence by the Consolidated Entity – An entity that has the power to participate in the
financial and operating policy decisions of an entity, but does not have control over those policies, is an entity which
holds significant influence. Significant influence may be gained by share ownership, statute or agreement.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 30. Remuneration of auditors
During the financial year the following fees were paid or payable for services rendered by Butler Settineri (Audit) Pty Ltd, the
auditor of the Consolidated Entity, its network firms and unrelated firms:
51
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 30. Remuneration of auditors (continued)
Audit services – Butler Settineri (Audit) Pty Ltd
Audit of the financial statements
Other services – Butler Settineri (Audit) Pty Ltd
Preparation of financial statements
Note 31. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves
Retained losses
Total equity
30 Jun 2020
$
30 Jun 2019
$
21,869
11,724
4,900
2,350
26,769
14,074
Parent
30 Jun 2020 30 Jun 2019
$
$
(2,668,733)
(2,064,893)
(2,668,733)
(2,064,893)
Parent
30 Jun 2020 30 Jun 2019
$
$
7,674,403
5,351,043
7,806,068
5,515,647
665,972
1,239,921
681,424
1,255,083
18,573,586 13,767,127
-
(9,506,563)
726,354
(12,175,296)
7,124,644
4,260,563
Note 32. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned
subsidiaries in accordance with the accounting policy described in note 1:
52
icetana Limited
Notes to the financial statements
For the year ended 30 June 2020
Note 32. Interest in subsidiaries (continued)
Name
icetana Inc
icetana Ltd
Principal place of business /
Country of incorporation
United States of America
United Kingdom
Ownership Interest
2020
%
100%
100%
2019
%
100%
100%
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary with non-
controlling interests in accordance with the accounting policy described in note 1:
Name
Principal place of business /
Country of incorporation
Icetana Systems Software Trading LLC United Arab Emirates (UAE)
Ownership Interest
2020
%
49%
2019
%
49%
The corporate regulations in the UAE require a local company to be a minimum 51% owned by a local UAE individual or
company. This is a common structure for foreign companies establishing UAE subsidiaries for trading purposes. Under the
structure, the Company’s local UAE representative, via a Management Agreement, provides control of corporate decisions
to the Company. LLC has no rights or ownership of the Company’s core intellectual property assets.
All subsidiaries have the same principal activities as the parent entity.
Note 33. Events after the reporting period
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not been financially positive for the
Consolidated Entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government
and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
Note 34. Reconciliation of profit after income tax to net cash from operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Loss on disposal of assets
Share based payment expense
Income tax
Change in operating assets and liabilities
Decrease / (increase) in trade and other receivables
Decrease / (increase) in prepayments
Decrease / (increase) in stock and other assets
Increase / (decrease) in trade and other payables
Increase / (decrease) in provisions
Increase / (decrease) in other liabilities
Consolidated
30 Jun 2020 30 Jun 2019
$
$
(3,157,649)
(3,383,186)
137,698
16,031
118,699
352,256
27,869
33,687
9,788
(410,278)
(83,520)
15,836
55,076
-
-
(48,787)
130,336
(26,617)
14,483
400,487
16,638
-
Net cash from operating activities
(2,939,584)
(2,841,570)
53
icetana Limited
Directors' declaration
30 June 2020
In the directors' opinion:
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard
AASB 134 'Interim Financial Reporting' and the Corporations Regulations 2001;
the attached financial statements and notes give a true and fair view of the Consolidated Entity’s financial position as
at 30 June 2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as and when they
become due and payable.
Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Mark Potts
Non-Executive Chairman
28 August 2020
Perth, Western Australia
54
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ICETANA LIMITED
Report on the Financial Report
Opinion
We have audited the financial report of icetana Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as
at 30 June 2020, the consolidated statement of profit and loss and other comprehensive
income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors’ declaration.
In our opinion,
(a)
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
2020 and of its financial performance for the year then ended; and
ii) complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
Basis for Opinion
We have conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under
the Auditor’s
in
those Standards are
Responsibilities for the Audit of the Financial Report section of our report.
further described
We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit
of the financial report in Australia. We have also fulfilled our ethical requirements 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 date of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significant 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, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
Revenue
Refer note 5
The Group recognises revenue when
the performance obligation under the
sales contract
This
performance obligation is achieved upon
delivery of the services.
is achieved.
How we addressed the Key Audit
Matter
We have reviewed the Group’s revenue
recognition policy for compliance with the
accounting standard AASB 15: Revenue
from Contracts with Customers (“AASB
15”).
tests of control over
We performed
management’s internal control system as
it relates to revenue.
We performed detailed analytical and
obtain
procedures
substantive
evidence
accuracy,
to
completeness and occurrence of revenue.
the
as
to
Equity and Capital Structure
Refer note 21
During the year, the Group successfully
issued fully paid ordinary shares as well
as various options of which some have
been exercised.
Research and Development Tax
Incentive
Refer notes 8
Management utilise key assumptions,
judgements and estimates in determining
the R&D Tax Incentive disclosed in note 8
and 10 which is material to the financial
statements.
Deferred Taxation
Refer note 8
Management utilise key assumptions,
judgements and estimates in calculating
the deferred tax disclosed in note 1 which
are material to the financial statements.
Our audit procedures
included an
examination of each issue of, fully paid
ordinary shares during the year as shown
in note 20. We also assessed whether or
not share-based payments should have
been
the
in
Employee Share Incentive Plan. Further,
third party share
we reconciled
registry to information announced to the
public.
recognised
relation
the
to
of
the
included an
Our audit procedures
evaluation
assumptions,
methodologies and conclusions used by
the Group in preparing the R&D Tax
Incentive application. We also focused on
the
report
of
disclosures regarding these assumptions
as disclosed at note 1.
adequacy
financial
of
the
included an
Our audit procedures
assumptions,
evaluation
methodologies and conclusions used by
the Group in preparing their estimate of
deferred taxes. We also focused on the
adequacy of financial report disclosures
regarding these assumptions as disclosed
at note 1.
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 2020, but does
not include the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly
we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially
inconsistent with the financial report or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information; we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with the 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 Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations, or have no realistic alternative but
to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error and to issue and
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 the financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We
also:
Identify and assess risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain and understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report,
including the disclosures, and whether the financial report represents the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
report. We are responsible for the direction, supervision and performance of the
Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were
of most significant in the audit of the financial report of the current period and are
therefore key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to
outweigh public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 6 to 14 of the directors’
report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of icetana Limited and its controlled entities,
for the year ended 30 June 2020, 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.
BUTLER SETTINERI (AUDIT) PTY LTD
MARIUS VAN DER MERWE CA
Director
Perth
Date: 28 August 2020
Corporate Governance
The Company believes corporate governance is a critical pillar on which business
objectives and, in turn, shareholder value must be built. The Board of icetana Limited
has adopted a suite of charters and key corporate governance documents which
articulate the policies and procedures followed by the Company.
These documents are available in the Corporate Governance section of the Company’s
website, https://icetana.com/corporate-governance/. These documents are reviewed to
address any changes in governance practices and the law.
The Company’s 2020 Corporate Governance Statement, which is current as at 30 June
2020 and has been approved by the Company’s Board, explains how icetana complies
with the ASX Corporate Governance Council’s ‘Corporate Governance Principles and
Recommendations – 3rd Edition’ in relation to the year ended 30 June 2020. The
Corporate Governance Statement is available in the Corporate Governance section of the
Company’s website, https://icetana.com/corporate-governance/ and will be lodged with
ASX together with an Appendix 4G at the same time that this Annual Report is lodged.
In addition to the ASX Corporate Governance Council’s ‘Corporate Governance Principles
and Recommendations – 3rd Edition’ the Board has taken into account a number of
important factors in determining its corporate governance policies and procedures;
including the:
• Relatively simple operations of the Company, which currently provides video analytics
solutions designed to automatically identify anomalous actions in real-time for large
scale surveillance networks
• Cost verses benefit of additional corporate governance requirements or processes;
• Size of the Board;
• Board’s experience in the technology sector;
• Organisational reporting structure and number of reporting functions, operational
divisions and employees;
• Relatively simple financial affairs with limited complexity and quantum;
• Relatively moderate market capitalisation and economic value of the entity; and
• Direct shareholder feedback.
5
ASX Additional Information
1. Twenty Largest Holders of Listed Securities
The names of the twenty largest holders of listed securities as at 7 October 2020
are listed below:
Name
Number of Ordinary Shares
%
1
2
3
4
5
6
7
8
Go Capital Tech Fund 2 Pty Ltd
Yuuwa Capital LP
Skiptan Pty Ltd
Curtin University
Altor Capital Management Pty Ltd
Svetha Venkatesh
Darien Industries Pty Ltd
Dr Angie Natalie Pinto & Mr Douglas
Pinto
9
Mr Mark Jeffrey Winfield
10 Nullaki Services Pty Ltd
11 Mrs Hema Naga Jyothi Danda
12 Mihai Lazarescu
13 Budhaditya Saha
14 Duc-Son Pham
15 Mr Shane Lyndon Cranswick
16 Kuppe Superannuation Fund Pty Ltd
17 Ubereno Pty Ltd
18 Cadvantage Australia Pty Ltd
19 Mr Nevres Crljenkovic
F&T Spagnolo Pty Ltd
20
Total Top 20
Others
Total Ordinary Shares on Issue
2. Distribution of Equity Securities
39,550,195
32,974,528
14,455,042
9,718,940
1,469,551
1,304,222
1,147,800
1,108,470
28.86
24.06
10.55
7.09
1.07
0.95
0.84
0.81
1,000,000
924,649
800,000
791,041
791,041
791,041
735,852
651,046
651,046
520,809
500,000
500,000
110,385,273
26,654,820
0.73
0.67
0.58
0.58
0.58
0.58
0.54
0.48
0.48
0.38
0.36
0.36
80.55
19.45
137,040,093 100.00
An analysis of numbers of holders of shares by size of holding as at 7 October
2020 is listed below:
Holding Ranges
Holders
Ordinary Shares
% of Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
More than 100,000
Totals
13
127
147
288
84
659
3,920
438,434
1,303,211
10,297,456
124,997,072
137,040,093
0.01
0.32
0.95
7.51
91.21
100.00
There were 85 shareholdings with less than a marketable parcel.
3. Voting Rights
Each ordinary share is entitled to vote when a poll is called, otherwise each
member present at a meeting or by proxy has one vote on a show of hands.
There are no voting rights attaching to any class of equity securities other than
shares.
4. Substantial shareholders
Substantial holders who have notified the Company in accordance with section
671B of the Corporations Act 2001 are as follows:
Holder Name
Number of Shares
% holding
Go Capital Tech Fund 2 Pty Ltd
Yuuwa Capital LP
Skiptan Pty Ltd
Curtin University
5. Unquoted Securities
Unlisted Options
Holder
Go Capital Tech Fund 2 Pty
Ltd
Yuuwa Capital LP
Zenix Nominees Pty Ltd
Others (less than 20%)
Total
Total holders
39,550,195
32,974,528
14,455,042
9,718,940
28.86
24.06
10.55
7.09
Shareholder
Options
Exercisable at
$0.30
Exp. 18 Dec
2022
Shareholder
Options
Exercisable
at $0.50
Exp. 18 Dec
2024
Options
Exercisable
at $0.30
Exp 18 Dec
2022
5,005,222
5,005,222
-
4,675,465
-
5,319,313
4,675,465
-
5,319,313
15,000,000 15,000,000
38
38
Unlisted Options
ESIP Options
ESIP Options
Exercisable at
$0.30
Exp. 30 Nov
2023
Exercisable
at $0.25
Exp. 31 Mar
2024
Holder
Matthew Macfarlane
Darien Industries Pty Ltd
Black Swan Capital Pty Ltd
Gary Pennefather
Others (less than 20%)
Total
Total holders
2,344,348
1,758,261
1,406,609
-
2,422,103
7,931,321
22
*
4,232,026
2,586,916
-
2,613,725
9,432,667
16
-
-
-
1,226,423
817,614
2,044,037
4
* 5,642,702 to be granted subject to the receipt of prior shareholder approval at the
2020 Annual General Meeting
As at 7 October 2020, there are 3,000,000 Performance Rights issued under an
employee incentive scheme.
6. On-Market Buy-back
There is no current on-market buy-back for icetana Limited securities.
-
5,126,436
500,000
5,626,436
7
Continuing
Options
Exercisable
at $0.15532
Exp. 18 Dec
2022
7. Restricted Securities
Category
Number
ASX or
Voluntary
End of Escrow Period
Shares
Shares
34,346,968 ASX
33,373,579 Voluntary The earlier of:
23 December 2021
- 23 December 2020; or
- the 10-Day VWAP exceeding $0.40 and the
aggregate value of Shares traded on ASX during
that 10 trading day period exceeding $1,000,000
Shares
33,373,578 Voluntary The earlier of:
- 23 December 2021; or
- the 10-Day VWAP exceeding $0.50, provided
that
this is at least 15 months after admission to ASX
and the aggregate value of Shares traded on ASX
during that 10 trading day period exceeding
$1,000,000
8. Other ASX Required Information
During the period between admission to the Official List of ASX and the end of the
reporting period, the Company used the cash, and assets in a form readily
convertible to cash, that it had at the time of admission to the ASX, in a way
consistent with its business objectives. This statement is made pursuant to ASX
Listing Rule 4.10.19.