Knosys
Annual Report
Financial year ending
30th June 2021
Table of Contents
Chariman’s Letter to Shareholders
CEO’s Letter to Shareholders
Board of Directors
Financial Statements
Director’s report
Auditors independence declaration
General information
Statement of profit or loss and other comprehensive income for the year ended 30 June 2021
Statement of financial position as at 30 June 2021
Statement of changes in equity for the year ended 30 June 2021
Statement of cash flows for the year ended 30 June 2021
Notes to the financial statements 30 June 2021
Directors’ declaration 30 June 2021
Independent auditor’s report to members
Additional information for listed companies
4-6
7-13
14-17
18 - 61
20-31
32
33
34
35
36
37
38-61
62
63-67
68-69
2
Annual Report 2020-2021 Chairman’s Letter
to Shareholders
Address: Level 8, 31 Queen St, Melbourne VIC 3000
Post: GPO Box 314 Melbourne VIC 3001
Phone: +61 (0) 3 9046 9700 | Email: hello@knosys.co
ABN: 96 604 777 862 | ASX: KNO
29 October 2021
Dear Shareholders,
I have pleasure in presenting to you the 2021 Annual Report on behalf of the Board of Knosys Limited.
The 2021 financial year was a busy year for Knosys, and I am pleased to report that the Company has taken
significant early steps in building a global technology company with a multi-SaaS offering.
Over the past year, our revenue growth was driven by both acquisitions and underlying organic growth.
Revenue increased by 46% to $4.6m in the 2021 financial year, including 22% organic revenue growth from
the KIQ Knowledge Management business and 24% acquisition revenue growth, reflecting a three-month
contribution from GreenOrbit.
In the 2021 financial year, we successfully deployed a standalone Knowledge IQ system with ANZ Bank New
Zealand, and we re-signed several large Enterprise customers throughout the year.
We were very pleased to report that our underlying operations were profitable in the 2021 financial year,
generating net profit before transaction costs and income tax of $16K. Acquisition costs of $559K were
incurred throughout the year, and the consolidated net loss after income tax was $543K. This was a
significant improvement on the net loss of $908K in the 2020 financial year.
In the 2021 financial year, we welcomed Kathrin Mutinelli and Neil Wilson to the Knosys Board to expand the
Board’s capabilities to oversee the next phase of growth. Neil Wilson has extensive business experience in
the IT and software sectors and Kathrin Mutinelli brings additional capabilities in corporate strategy.
We expanded our capital base in the 2021 financial year, with a placement in December 2020, raising $3m
(before costs) resulting in the issue of 21,428,571 shares. In March 2021, 36,978,000 shares were issued as
purchase consideration to the vendors on completion of the $5m GreenOrbit acquisition. We appreciate the
support received from existing and new shareholders in these capital initiatives.
With the acquisition of GreenOrbit in March 2021, we have significantly expanded our customer base,
broadened the mix of enterprise and mid-market customers and we have diversified our geography from
APAC into key global markets, including the US and Europe.
The acquisition of LIBERO, which was completed in August 2021, will further diversify our customer base into
tertiary institutions and public libraries, as well as expand our presence in Germany and other European
markets.
www.knosys.co
5
Annual Report 2020-2021Chairman’s letter to shareholders
Once again, our business model and SaaS product offering have proven to be resilient throughout the COVID-
19 pandemic. We continue to benefit from global industry trends driving digital transformation and the push
towards superior online engagement with both employees and customers.
During the year, partly as a result of the changes brought about by our acquisitions, the Board and senior
management brought an even sharper focus to bear on corporate strategy. Whilst strong cost control and
working for both organic growth and via acquisitions the Knosys business strategy, is now deliberately
emphasizing growth as the core objective. The suite of products we can now offer the market is opening up
new opportunities for cross-selling, upselling and geographic expansion for our offerings as a whole.
In the 2022 financial year, we will accelerate investment in customer acquisition and cross-selling to drive
future growth and we continue to assess complementary acquisitions to support our market positioning as a
SaaS solution provider helping businesses manage information and knowledge.
We have a solid base of recurring revenue, a sound cash balance and we are well positioned to continue
growing in the years ahead.
On behalf of the Directors, I would like to thank all shareholders for their continuing support and wish them all
the best in these challenging times.
Hon. Alan Stockdale AO
Chairman
www.knosys.co
6
Annual Report 2020-2021Chairman’s letter to shareholders
CEO’s Letter to the
Shareholders
Address: Level 8, 31 Queen St, Melbourne VIC 3000
Post: GPO Box 314 Melbourne VIC 3001
Phone: +61 (0) 3 9046 9700 | Email: hello@knosys.co
ABN: 96 604 777 862 | ASX: KNO
29 October 2021
Dear Shareholders,
It is my pleasure to present the Knosys Annual Report for the 12 months ended 30 June 2021 (FY21).
The year was successful and transformational for Knosys through the effective execution of our growth
strategy to become one of the largest Australian-based providers of information management and
knowledge-based solutions across the globe.
Today, with over 60 IT professionals, Knosys is the partner of choice for over 380 enterprise and mid-market
clients across a diverse range of industries including banking, health, telecommunications and retail to
name a few.
In FY21, the Company hit several key financial objectives including increasing income and annualised revenue
to deliver a positive EBITDA and NPAT (before transaction costs).
In March 2021, Knosys completed the acquisition of GreenOrbit and in August 2021, the acquisition of LIBERO
was completed. This delivered on Knosys’ strategic objectives of expanding its solution portfolio, scaling its
operations internationally and diversifying its customer base.
FY21 also saw the continuation of the COVID-19 pandemic and the associated economic and business
uncertainty. Knosys continued its focused response, supporting our people as they worked from home whilst
continuing to deliver uninterrupted services to our customers across the globe. I would like to take the
opportunity to thank all of our people who have performed incredibly well under extraordinary conditions.
Knosys enters the 2022 financial year with optimism of an exciting and successful year ahead. Knosys now has
a solid foundation in place, with over 380 customers across 14 countries and an annualised recurring revenue
(ARR) of over $8m. In addition, we remain focused on continued organic growth, exploiting acquisition
synergies and exploring potential opportunities for expansion into adjacent and new markets.
www.knosys.co
8
Annual Report 2020-2021CEO’s Letter to Shareholders
www.knosys.co
9
Annual Report 2020-2021CEO’s Letter to Shareholders
Knosys achieved growth in all key financial metrics in the 2021 financial year:
In FY21, Knosys generated revenue of $4.6m, up 46% from $3.1m in FY20. This significant revenue growth was
driven by organic growth of 22% and acquisition growth of 24%. The organic growth included the
professional services contract with ANZ Bank New Zealand to deploy a standalone KnowledgeIQ system in
country. The acquisition revenue of $757K, reflected a three-month contribution from the GreenOrbit
acquisition, which was completed on 30 March 2021.
Issued capital increased to $16.1m in FY21, up from $8.3m in FY20. The company issued 21,428,571 shares, at
an issue price of $0.14, via a placement in December 2020 and February 2021 to a microcap fund and to
sophisticated and professional investors, raising $3m (before costs) for working capital and investment in
www.knosys.co
10
Annual Report 2020-2021CEO’s Letter to Shareholders
sales and marketing. In March 2021, 36,978,000 shares, at a deemed issue price of $0.135, were issued as
purchase consideration to the vendors on completion of the $5m GreenOrbit acquisition.
Annual Recurring Revenue (ARR) and the number of Knosys customers continues to grow year on year
organically and via acquisition.
www.knosys.co
11
Annual Report 2020-2021CEO’s Letter to Shareholders
Review of Operations
Overview
In the digital world, businesses are facing three common challenges: information overload, information silos
and compliance. Knosys develops software to empower organisations, providing them with new ways to
find, use and share information and knowledge, allowing them to better deliver such to their customers,
employees and stakeholders.
Our range of software-as-a-service (SaaS) solutions boost productivity, collaboration and connectivity in the
digital workplace, delivering information that is easy to access and secure, but more importantly with
relevance and clarity.
Board Expansion
Knosys made changes to its Board of Directors during the year to reflect its focus on accelerating the
expansion of its business. In the 1st half of FY20, Kathrin Mutinelii and Neil Wilson were appointed as Non-
Executive Directors. Both have contributed significantly to the development of the next three year business
strategy and will play an important role, with the rest of the Board, in overseeing the growth plans and
execution going forward.
Our Solutions
Our focus is on developing solutions that enable businesses to make the most of information and knowledge
assets that sit within their organisation. This currently includes knowledge management, intranet and library
management solutions.
Knowledge Management
Knosys has a market leading, Enterprise solution, KnowledgeIQ, which is designed to provide customers
and their staff with personalised information that will transform business productivity and engagement. The
Knosys solution is also available to mid-market customers through KIQ Cloud, which is a cloud-based service
offering mid-market customers an easier onboarding process, lower total cost of ownership and faster
implementation compared to our Enterprise solution.
KIQ Cloud is an omni-channel knowledge management solution designed to simplify and centralise the
organising and sharing of knowledge. KIQ Cloud makes it easy for teams and individuals to find the right
information, exactly when they need it, and provides direction for work-flows, processes and compliance.
The cloud service is perfect for businesses that operate customer contact centres, service desks, frontline
offices or online self-service channels.
Employee Experience
Knosys provides Employee Experience solutions, under the GreenOrbit brand, which is all about empowering
employees in the digital workplace by providing the best employee tools to communicate, collaborate and
engage through an intelligent intranet. These intranet solutions facilitate efficient and secure internal
communications and information sharing. Clients include both SMEs and blue-chip organisations.
Library Management
Knosys provides Library Management solutions, following the acquisition of LIBERO. This solution delivers a
new digital experience to employees and in managing library asset collections and interactions with library
customers and members. The software solution allows multiple sites to share collections of items, allows
employees and customers to better search for items, analyses usage patterns and automates processes to
streamline engagement with digital users. Clients are predominately public libraries or tertiary
education institutions.
www.knosys.co
12
Annual Report 2020-2021CEO’s Letter to Shareholders
Marketing Activities
In FY21, Knosys engaged a marketing agency to assist in its re-branding strategy and to further refine the
customer value propositions. A new VP of Global Sales and Marketing and a new Digital Marketing Manager
started in January 2021, as well as three new sales representatives who started in March 2021 – two in the US
and one in Singapore.
The new Company website was launched in May 2021, with an updated brand tagline ‘Connecting People
and Information’ and an updated vision to ‘empower organisations to make smart connections with
their information’.
Future Focus
Knosys is now accelerating its growth strategy, focused on continuing to build out its product portfolio in
order to provide a complete set of proprietary information and knowledge related solutions for its clients.
The primary objective is to maximise shareholder value by increasing the growth of high-margin annuity-
based income. Knosys’ growth strategy is based on the following key pillars:
1. Expand usage by existing customers – new features driving uplift in more users, more sites and more
geographies plus cross sell
2. New customer growth in global markets – focus on increased penetration in existing markets
3. Expand proprietary intellectual property – invest in client driven advanced product development
programs targeting high-demand modules
4. Merger & Acquisition - continue to drive the Company’s acquisition strategy to expand on capabilities
and increase shareholder value through annual recurring revenue growth
In FY22, Knosys will accelerate investment in customer acquisition and cross-selling to drive future revenue
growth. This increased investment in sales and marketing will be funded by existing cash resources and is
expected to accelerate revenue growth in FY22.
Over the past year, we have built the foundations of our global multi-SaaS offering and we commence the
new financial year with a healthy cash balance and a strong recurring revenue base. We enter FY22 with
optimism and a strong sales pipeline, as we focus on further accelerating revenue growth and integrating our
acquisitions. We will continue to assess further complementary acquisitions which support our market
positioning as a SaaS solution provider, helping businesses manage information and knowledge.
Thanks for your support over the past year and we look forward to an exciting year of growth ahead.
John Thompson
Managing Director
www.knosys.co
13
Annual Report 2020-2021CEO’s Letter to Shareholders
Board
of Directors
Hon. Alan Stockdale AO
Non-Executive Chairman
Hon. Alan Stockdale AO served as Treasurer in the Victorian
Government from 1992 to 1999 and his responsibilities
included the Government reform agenda and general
financial management. As Treasurer, Alan was responsible
for the privatisation of $A30 billion of Government business
enterprises. He was also Minister for IT and Multimedia
from 1996 to 1999, promoting Victoria as a leader in the
application of multimedia and new information technologies.
In the private sector, Alan was employed by Macquarie
Bank for a total of six years, co-leading the Macquarie team
that successfully bid to acquire Sydney Airport. Taking on a
number of other corporate advisory roles, he was involved in
a wide range of infrastructure transactions, especially in the
power, gas and transport sectors in Australia and overseas.
Alan has developed a career as a company Chairman and
director of a number of ASX-listed companies and of various
unlisted companies and not-for-profit organisations. He is
Chairman of X2M Connect Limited and has been Chairman
of Axon Instruments Inc (incorporated in the USA and listed
on the ASX), Symex Holdings Limited, Senetas Corporation
Limited and a director of Marriner Financial Limited - all
companies listed on the ASX. He was previously a consultant
to Metro Trains, a consultant to Maddocks Lawyers, a
member of the Advisory Board of Lazard Australia and
Chairman of the Medical Research Commercialisation Fund.
He was Federal President of the Liberal Party from 2008 to
2014. Alan holds a Bachelor of Laws and a Bachelor of Arts,
both completed at the University of Melbourne, is a Barrister
of the Supreme Courts of Victoria and NSW and the High
Court of Australia and was a Fellow of the Australian Institute
of Company Directors. Alan is based in Victoria and has been
a director of Knosys since 30 April 2015.
15
Annual Report 2020-2021Board of Directors Peter Pawlowitsch
Non-Executive Director
Kathrin Mutinelli
Non-Executive Director
Peter Pawlowitsch is an accountant by profession with
extensive experience as a director and officer of ASX-
listed entities. He brings to the team experience in
operational management, business administration and
project evaluation in the IT, hospitality and mining sectors
during the last 15 plus years. Peter is an executive director
of Dubber Corporation Limited (appointed a director on
26 September 2011), non-executive director of Family Zone
Cyber Safety Ltd (appointed 24 September 2019), VRX
Silica Ltd (appointed 12 February 2010) and Novatti Group
Limited (appointed 19 June 2015) and he was a non-executive
director of Rewardle Holdings Limited (30 May 2017 to 2
January 2019), all ASX-listed companies.
Peter holds a Bachelor of Commerce from the University of
Western Australia, is a current member of CPA Australia, a
Fellow of Governance Institute of Australia and also holds a
Masters of Business Administration from Curtin University.
Peter is based in Perth and has been a director since
16 March 2015.
Kathrin Mutinelli is an MBA qualified director with over
15 years of strategic, performance-driven management
consulting experience. Kathrin is a strategist whose
career has focussed on organisational growth, specifically
in Australia and across the APAC in multinational and
culturally diverse environments. Advising leaders of global
organisations on strategy such as Lockheed Martin, Sikorsky,
Gulfstream and Australian companies on capital requirements
to fund growth such as WorkPac, The Blue Space, AirBolt
and Alii. Kathrin is currently Managing Director at
SeventyTwo Capital and is developing a team of specialists
to support Australia’s most ambitious tech entrepreneurs
and business owners to realise their growth ambitions by
creating actionable strategies and connecting them to
strategically aligned investors.
Kathrin was formerly a Director at Deloitte and holds an
MBA from RMIT and has extensive experience in developing
and implementing business strategies and driving corporate
value creation as a senior executive and a consultant.
Kathrin is based in Brisbane has been a director since
1 September 2020.
16
Annual Report 2020-2021Board of Directors Neil Wilson
Non-Executive Director
John Thompson
Managing Director
Neil Wilson is an experienced business leader and
entrepreneur with corporate, start-up, founder and public
company experience, having held the position of Managing
Director and Chief Executive Officer of Oakton Limited
(ASX:OKN), until its acquisition by Dimension Data in 2014.
He is a practitioner in the digital and technology domain and
has extensive experience in general management and CEO
management across private and public company scenarios.
Neil was CEO of the Victoria Racing Club (VRC) for three
years and was appointed the VRC Chairman in November
2020. He is currently Chairman of Nexon and CharterX and is
a Member of the Advisory boards for Clipboard, nimbus, Alex
Solutions and InfoCentric. He is also a board member of the
Collingwood Football Club. Neil holds a Bachelor of Business,
is a CPA and a Member of the Australian Computer Society.
Neil is based in Melbourne and has been a director since
1 December 2020.
John Thompson (BEng Hons, MBA) has held the role of
CEO since 18 July 2016. Mr. Thompson brings a wealth of
leadership experience having worked for more than 20
years at the helm of renowned technology companies. Most
recently, Mr. Thompson spent 11 years as CEO of Sigtec and
5 years as CEO of Wavenet International, in addition to 5
years with CS Communications and Systems in New York
and London. Mr. Thompson received a first class honours
degree in Engineering from the Queensland University of
Technology and a Master of Business Administration from
the City University Business School in London. Mr. Thompson
has a strong record of driving sales and revenue and has
extensive experience as a capable CEO providing pivotal
leadership expertise across UK, US, Australia and New
Zealand markets for multi-national, listed, IPO and start-up
technology companies. John is based in Melbourne and has
been a director since 26 September 2018.
17
Annual Report 2020-2021Board of Directors Financial
Statements
Consolidated
Knosys Limited
ABN 96 604 777 862
Financial Statements
Consolidated
30 June 2021
Knosys Limited
ABN 96 604 777 862
Financial Statements
Consolidated
30 June 2021
19
Annual Report 2020-2021
Knosys Limited
Directors' report
30 June 2021
Dividends
30 June 2021.
matters mentioned above.
Knosys Limited
Directors' report
30 June 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of Knosys Limited (referred to hereafter as the 'company' or 'parent entity') and the
entities it controlled at the end of, or during, the year ended 30 June 2021.
Directors
No dividends were paid or declared during the financial year.
Significant changes in the state of affairs
The following persons were directors of Knosys Limited during the period from 1 July 2020 to the date of this report, unless
otherwise stated:
In December 2020 Knosys raised $3.0m in additional capital (before costs) through a placement of fully paid ordinary shares
at an issue price of $0.14, which was at a premium to the prior days closing price.
Hon. Alan Stockdale - Non-executive Chairman
Mr John Thompson - Managing Director
Peter Pawlowitsch - Non-executive Director
Kathrin Mutinelli - Non-executive Director (Appointed 1 September 2020)
Neil Wilson - Non-executive Director (Appointed 1 December 2020)
During the year Knosys acquired all the issued shares in GreenOrbit Pty Ltd (“GO”), a leading SaaS Intelligent Intranet
software provider. At the General Meeting of Shareholders held on 27 January 2021, Shareholders approved the issue of
36,978,000 shares to the vendor of GreenOrbit, as consideration for the acquisition. The acquisition completed on 30 March
2021 and the GO business has contributed to the consolidated revenues and net result of the group for the three months to
Review of operations
There were no significant changes in the state of affairs of the consolidated entity during the financial year, other than those
The 2021 financial year has been one of stepped change, with the acquisition of Greenorbit Pty Ltd (“GreenOrbit” or “GO”)
on 30 March 2021, and continued revenue growth in Knosys business revenues.
Matters subsequent to the end of the financial year
• Total operating revenue for the consolidated entity increased by 46% to $4,594,082 (2020 revenue: $3,137,317);
o 22% of this growth was generated organically from the existing KIQ knowledge management business
o 24% of this growth was due to the 3 month contribution from the GO business from acquisition date
The Coronavirus (COVID-19) pandemic is ongoing and, while the impact has not been financially negative for the
consolidated entity up to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation continues to be challenging and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing, lockdowns, quarantine measures, travel restrictions
• Profit before transaction costs and income tax was $15,525 (2020 loss: $908,391)
and any economic stimulus that may be provided.
• The consolidated entity incurred transaction costs related to the acquisition of businesses of $559,363 (2020: Nil)
• The loss for the consolidated entity after providing for income tax was $543,838 (2020 loss: $908,391);
• Net cash inflow from operating activities was $580,114 (2020 outflow: $477,607); and
• The consolidated entity had net assets of $10,017,838 at 30 June 2021 (2020: $2,591,180)
• The consolidated entity held cash and cash equivalents of $6,532,415 (2020: $2,335,909). Subsequent to year-
end, total cash balances were $7.8 million at 31 July 2021, after the collection of certain annual licence fees and
other June 2021 receivables.
The consolidated entity is the owner of KnowledgeIQ (“KIQ”) knowledge management solution and GreenOrbit intranet
solution. It is a global information technology company offering a range of software solutions designed to boost
productivity, collaboration and connectivity in the digital workplace. The consolidated entity’s business model is software-
as-a-service (“SaaS”), with a recurring subscription fee payable by clients on a per User basis, complemented by
implementation fees and customer support services.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and, while the impact has not been financially negative for
the consolidated entity for the year to June 2021, it is not practicable to estimate the impact of the pandemic, positive or
negative, for this period or after the reporting date. The situation continues to develop and is dependent on a variety of
measures imposed by the Australian Government and other countries, including the rollout of vaccines. The consolidated
entity has noted that some prospective new customers have been deferring decisions to contract Knosys products because
of concerns about the pandemic and its economic and business effects. This trend is still evident to some extent. Against
this background, Knosys’ Board and management consider that the results for the year and the success in the company’s
M&A plans are encouraging in respect of the business outlook when, eventually, the pandemic is under control around the
world.
Principal activities
During the financial period the principal continuing activities of the consolidated entity were computer software development
and licencing.
On 1 July 2021, the Company announced to ASX that the consolidated entity had executed a conditional asset and share-
sale agreement to acquire the LIBERO business from Libero Software Pty Ltd and Insight Informatics Pty Ltd for a $5m
purchase price, comprising $4m Cash and $1m in Knosys shares. Acquisition completion, subject to the satisfaction of certain
agreed conditions, is expected to be no later than 31 August 2021.
No other matter or circumstance has arisen since 30 June 2021 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
Knosys expects a continued expansion of the market and the adoption of its range of software solutions designed to boost
productivity, collaboration and connectivity in the digital workplace. The Company is again well placed to expand its
customer base and add to its offerings through internal developments and further acquisition of technologies.
The Company will receive the benefit of a full year contribution to revenues and net results from the GO business in the
year to 30 June 2022. The Company also expects, conditional on transaction completion, to receive the benefit of a part
year contribution to revenue and net results from the Libero business.
The consolidated entity has a significant sales pipeline in its global markets. The Company will continue to invest in sales
and marketing capability in the year to June 2022 in order to enable the Company to pursue the multiple enterprise and
mid-market opportunities in its sales pipeline, with the aim of converting them into subscription based contracts.
Further information on likely developments in the operations of the consolidated entity and the expected results of operations
have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to
the consolidated entity.
Environmental regulation
law.
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
2
3
20
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Directors
otherwise stated:
Knosys Limited
Directors' report
30 June 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
Dividends
the 'consolidated entity') consisting of Knosys Limited (referred to hereafter as the 'company' or 'parent entity') and the
entities it controlled at the end of, or during, the year ended 30 June 2021.
No dividends were paid or declared during the financial year.
The following persons were directors of Knosys Limited during the period from 1 July 2020 to the date of this report, unless
Hon. Alan Stockdale - Non-executive Chairman
Mr John Thompson - Managing Director
Peter Pawlowitsch - Non-executive Director
Kathrin Mutinelli - Non-executive Director (Appointed 1 September 2020)
Neil Wilson - Non-executive Director (Appointed 1 December 2020)
Review of operations
Significant changes in the state of affairs
In December 2020 Knosys raised $3.0m in additional capital (before costs) through a placement of fully paid ordinary shares
at an issue price of $0.14, which was at a premium to the prior days closing price.
During the year Knosys acquired all the issued shares in GreenOrbit Pty Ltd (“GO”), a leading SaaS Intelligent Intranet
software provider. At the General Meeting of Shareholders held on 27 January 2021, Shareholders approved the issue of
36,978,000 shares to the vendor of GreenOrbit, as consideration for the acquisition. The acquisition completed on 30 March
2021 and the GO business has contributed to the consolidated revenues and net result of the group for the three months to
30 June 2021.
There were no significant changes in the state of affairs of the consolidated entity during the financial year, other than those
matters mentioned above.
The 2021 financial year has been one of stepped change, with the acquisition of Greenorbit Pty Ltd (“GreenOrbit” or “GO”)
on 30 March 2021, and continued revenue growth in Knosys business revenues.
Matters subsequent to the end of the financial year
• Total operating revenue for the consolidated entity increased by 46% to $4,594,082 (2020 revenue: $3,137,317);
o 22% of this growth was generated organically from the existing KIQ knowledge management business
o 24% of this growth was due to the 3 month contribution from the GO business from acquisition date
• Profit before transaction costs and income tax was $15,525 (2020 loss: $908,391)
The Coronavirus (COVID-19) pandemic is ongoing and, while the impact has not been financially negative for the
consolidated entity up to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation continues to be challenging and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing, lockdowns, quarantine measures, travel restrictions
and any economic stimulus that may be provided.
• The consolidated entity incurred transaction costs related to the acquisition of businesses of $559,363 (2020: Nil)
• The loss for the consolidated entity after providing for income tax was $543,838 (2020 loss: $908,391);
• Net cash inflow from operating activities was $580,114 (2020 outflow: $477,607); and
• The consolidated entity had net assets of $10,017,838 at 30 June 2021 (2020: $2,591,180)
• The consolidated entity held cash and cash equivalents of $6,532,415 (2020: $2,335,909). Subsequent to year-
end, total cash balances were $7.8 million at 31 July 2021, after the collection of certain annual licence fees and
other June 2021 receivables.
The consolidated entity is the owner of KnowledgeIQ (“KIQ”) knowledge management solution and GreenOrbit intranet
solution. It is a global information technology company offering a range of software solutions designed to boost
productivity, collaboration and connectivity in the digital workplace. The consolidated entity’s business model is software-
as-a-service (“SaaS”), with a recurring subscription fee payable by clients on a per User basis, complemented by
implementation fees and customer support services.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and, while the impact has not been financially negative for
the consolidated entity for the year to June 2021, it is not practicable to estimate the impact of the pandemic, positive or
negative, for this period or after the reporting date. The situation continues to develop and is dependent on a variety of
measures imposed by the Australian Government and other countries, including the rollout of vaccines. The consolidated
entity has noted that some prospective new customers have been deferring decisions to contract Knosys products because
of concerns about the pandemic and its economic and business effects. This trend is still evident to some extent. Against
this background, Knosys’ Board and management consider that the results for the year and the success in the company’s
M&A plans are encouraging in respect of the business outlook when, eventually, the pandemic is under control around the
world.
Principal activities
and licencing.
During the financial period the principal continuing activities of the consolidated entity were computer software development
On 1 July 2021, the Company announced to ASX that the consolidated entity had executed a conditional asset and share-
sale agreement to acquire the LIBERO business from Libero Software Pty Ltd and Insight Informatics Pty Ltd for a $5m
purchase price, comprising $4m Cash and $1m in Knosys shares. Acquisition completion, subject to the satisfaction of certain
agreed conditions, is expected to be no later than 31 August 2021.
No other matter or circumstance has arisen since 30 June 2021 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
Knosys expects a continued expansion of the market and the adoption of its range of software solutions designed to boost
productivity, collaboration and connectivity in the digital workplace. The Company is again well placed to expand its
customer base and add to its offerings through internal developments and further acquisition of technologies.
The Company will receive the benefit of a full year contribution to revenues and net results from the GO business in the
year to 30 June 2022. The Company also expects, conditional on transaction completion, to receive the benefit of a part
year contribution to revenue and net results from the Libero business.
The consolidated entity has a significant sales pipeline in its global markets. The Company will continue to invest in sales
and marketing capability in the year to June 2022 in order to enable the Company to pursue the multiple enterprise and
mid-market opportunities in its sales pipeline, with the aim of converting them into subscription based contracts.
Further information on likely developments in the operations of the consolidated entity and the expected results of operations
have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to
the consolidated entity.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
2
3
21
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Information on directors
Name:
Title:
Hon. Alan Stockdale AO
Non-Executive Chairman
Experience and expertise:
Hon. Alan Stockdale AO served as Treasurer in the Victorian Government from 1992
to 1999 and his responsibilities included the Government reform agenda and general
financial management. As Treasurer, Alan was responsible for the privatisation of $A30
billion of Government business enterprises. He was also Minister for IT and Multimedia
from 1996 to 1999, promoting Victoria as a leader in the application of multimedia and
new information technologies.
In the private sector, Alan was employed by Macquarie Bank for a total of six years,
co-leading the Macquarie team that successfully bid to acquire Sydney Airport. Taking
on a number of other corporate advisory roles, he was involved in a wide range of
infrastructure transactions, especially in the power, gas and transport sectors in
Australia and overseas. Alan has developed a career as a company Chairman and
director of a number of ASX-listed companies and of various unlisted companies and
not-for-profit organisations. He is Chairman of X2M Connect Limited and has been
Chairman of Axon Instruments Inc (incorporated in the USA and listed on the ASX),
Symex Holdings Limited, Senetas Corporation Limited and a director of Marriner
Financial Limited - all companies listed on the ASX. He was previously a consultant to
Metro Trains, a consultant to Maddocks Lawyers, a member of the Advisory Board of
Lazard Australia and Chairman of the Medical Research Commercialisation Fund. He
was Federal President of the Liberal Party from 2008 to 2014. Alan holds a Bachelor
of Laws and a Bachelor of Arts, both completed at the University of Melbourne, is a
Barrister of the Supreme Courts of Victoria and NSW and the High Court of Australia
and was a Fellow of the Australian Institute of Company Directors. Alan is based in
Victoria and has been a director of Knosys since 30 April 2015.
Directorships held in other listed
entities in the last 3 years
Nil.
Interests in shares
Interests in options
1,000,000 ordinary shares
Nil Options
Name:
Title:
Peter Pawlowitsch
Non-Executive Director
Experience and expertise:
Peter Pawlowitsch is an accountant by profession with extensive experience as a
director and officer of ASX-listed entities. He brings to the team experience in
operational management, business administration and project evaluation in the IT,
hospitality and mining sectors during the last 15 plus years. Peter is an executive
director of Dubber Corporation Limited (appointed a director on 26 September 2011),
non-executive director of Family Zone Cyber Safety Ltd (appointed 24 September
2019), VRX Silica Ltd (appointed 12 February 2010) and Novatti Group Limited
(appointed 19 June 2015) and he was a non-executive director of Rewardle Holdings
Limited (30 May 2017 to 2 January 2019), all ASX-listed companies.
Peter holds a Bachelor of Commerce from the University of Western Australia, is a
current member of CPA Australia, a Fellow of Governance Institute of Australia and
also holds a Masters of Business Administration from Curtin University.
Peter is based in Perth and has been a director since 16 March 2015.
Directorships held in other listed
entities in the last 3 years
Dubber Corporation Limited (ASX:DUB)
Family Zone Cyber Safety Ltd (ASX:FZO)
VRX Silica Limited (ASX:VRX)
Novatti Group Limited (ASX:NOV)
Rewardle Holdings Limited (ASX:RXH)
Interests in shares
Interests in options
2,181,578 ordinary shares
Nil Options
4
22
Knosys Limited
Directors' report
30 June 2021
Information on directors (cont.)
Name:
Title:
Kathrin Mutinelli
Non-Executive Director
Experience and expertise:
Kathrin Mutinelli is, is an MBA qualified director with over 15 years of strategic,
performance-driven management consulting experience. Kathrin is a strategist whose
career has focussed on organisational growth, specifically in Australia and across the
APAC in multinational and culturally diverse environments. Advising leaders of global
organisations on strategy such as Lockheed Martin, Sikorsky, Gulfstream and
Australian companies on capital requirements to fund growth such as WorkPac, The
Blue Space, AirBolt and Alii. Kathrin is currently Managing Director at SeventyTwo
Capital and is developing a team of specialists to support Australia’s most ambitious
tech entrepreneurs and business owners to realise their growth ambitions by creating
actionable strategies and connecting them to strategically aligned investors.
Kathrin was formerly a Director at Deloitte and holds an MBA from RMIT and has
extensive experience in developing and implementing business strategies and driving
corporate value creation as a senior executive and a consultant. Kathrin is based in
Brisbane has been a director since 1 September 2020.
Directorships held in other listed
Nil
entities in the last 3 years
Interests in shares
Interests in options
700,000 ordinary shares
Nil Options
Name:
Title:
Neil Wilson
Non-Executive Director
Experience and expertise:
Neil Wilson is an experienced business leader and entrepreneur with corporate, start-
up, founder and public company experience, having held the position of Managing
Director and Chief Executive Officer of Oakton Limited (ASX:OKN), until its acquisition
by Dimension Data in 2014. He is a practitioner in the digital and technology domain
and has extensive experience in general management and CEO management across
private and public company scenarios.
Neil was CEO of the Victoria Racing Club (VRC) for three years and was appointed the
VRC Chairman in November 2020. He is currently Chairman of Nexon and CharterX
and is a Member of the Advisory boards for Clipboard, nimbus, Alex Solutions and
InfoCentric. He is also a board member of the Collingwood Football Club. Neil holds a
Bachelor of Business, is a CPA and a Member of the Australian Computer Society. Neil
is based in Melbourne and has been a director since 1 December 2020.
Directorships held in other listed
Nil
entities in the last 3 years
Interests in shares
Interests in options
750,000 ordinary shares
Nil Options
5
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Information on directors
Name:
Title:
Hon. Alan Stockdale AO
Non-Executive Chairman
Name:
Title:
Kathrin Mutinelli
Non-Executive Director
Knosys Limited
Directors' report
30 June 2021
Information on directors (cont.)
Experience and expertise:
Hon. Alan Stockdale AO served as Treasurer in the Victorian Government from 1992
Experience and expertise:
Kathrin Mutinelli is, is an MBA qualified director with over 15 years of strategic,
performance-driven management consulting experience. Kathrin is a strategist whose
career has focussed on organisational growth, specifically in Australia and across the
APAC in multinational and culturally diverse environments. Advising leaders of global
organisations on strategy such as Lockheed Martin, Sikorsky, Gulfstream and
Australian companies on capital requirements to fund growth such as WorkPac, The
Blue Space, AirBolt and Alii. Kathrin is currently Managing Director at SeventyTwo
Capital and is developing a team of specialists to support Australia’s most ambitious
tech entrepreneurs and business owners to realise their growth ambitions by creating
actionable strategies and connecting them to strategically aligned investors.
Kathrin was formerly a Director at Deloitte and holds an MBA from RMIT and has
extensive experience in developing and implementing business strategies and driving
corporate value creation as a senior executive and a consultant. Kathrin is based in
Brisbane has been a director since 1 September 2020.
Directorships held in other listed
entities in the last 3 years
Nil
Interests in shares
Interests in options
700,000 ordinary shares
Nil Options
Name:
Title:
Neil Wilson
Non-Executive Director
Experience and expertise:
Neil Wilson is an experienced business leader and entrepreneur with corporate, start-
up, founder and public company experience, having held the position of Managing
Director and Chief Executive Officer of Oakton Limited (ASX:OKN), until its acquisition
by Dimension Data in 2014. He is a practitioner in the digital and technology domain
and has extensive experience in general management and CEO management across
private and public company scenarios.
Neil was CEO of the Victoria Racing Club (VRC) for three years and was appointed the
VRC Chairman in November 2020. He is currently Chairman of Nexon and CharterX
and is a Member of the Advisory boards for Clipboard, nimbus, Alex Solutions and
InfoCentric. He is also a board member of the Collingwood Football Club. Neil holds a
Bachelor of Business, is a CPA and a Member of the Australian Computer Society. Neil
is based in Melbourne and has been a director since 1 December 2020.
Directorships held in other listed
entities in the last 3 years
Nil
Interests in shares
Interests in options
750,000 ordinary shares
Nil Options
5
23
to 1999 and his responsibilities included the Government reform agenda and general
financial management. As Treasurer, Alan was responsible for the privatisation of $A30
billion of Government business enterprises. He was also Minister for IT and Multimedia
from 1996 to 1999, promoting Victoria as a leader in the application of multimedia and
new information technologies.
In the private sector, Alan was employed by Macquarie Bank for a total of six years,
co-leading the Macquarie team that successfully bid to acquire Sydney Airport. Taking
on a number of other corporate advisory roles, he was involved in a wide range of
infrastructure transactions, especially in the power, gas and transport sectors in
Australia and overseas. Alan has developed a career as a company Chairman and
director of a number of ASX-listed companies and of various unlisted companies and
not-for-profit organisations. He is Chairman of X2M Connect Limited and has been
Chairman of Axon Instruments Inc (incorporated in the USA and listed on the ASX),
Symex Holdings Limited, Senetas Corporation Limited and a director of Marriner
Financial Limited - all companies listed on the ASX. He was previously a consultant to
Metro Trains, a consultant to Maddocks Lawyers, a member of the Advisory Board of
Lazard Australia and Chairman of the Medical Research Commercialisation Fund. He
was Federal President of the Liberal Party from 2008 to 2014. Alan holds a Bachelor
of Laws and a Bachelor of Arts, both completed at the University of Melbourne, is a
Barrister of the Supreme Courts of Victoria and NSW and the High Court of Australia
and was a Fellow of the Australian Institute of Company Directors. Alan is based in
Victoria and has been a director of Knosys since 30 April 2015.
Directorships held in other listed
Nil.
entities in the last 3 years
Interests in shares
Interests in options
1,000,000 ordinary shares
Nil Options
Name:
Title:
Peter Pawlowitsch
Non-Executive Director
Experience and expertise:
Peter Pawlowitsch is an accountant by profession with extensive experience as a
director and officer of ASX-listed entities. He brings to the team experience in
operational management, business administration and project evaluation in the IT,
hospitality and mining sectors during the last 15 plus years. Peter is an executive
director of Dubber Corporation Limited (appointed a director on 26 September 2011),
non-executive director of Family Zone Cyber Safety Ltd (appointed 24 September
2019), VRX Silica Ltd (appointed 12 February 2010) and Novatti Group Limited
(appointed 19 June 2015) and he was a non-executive director of Rewardle Holdings
Limited (30 May 2017 to 2 January 2019), all ASX-listed companies.
Peter holds a Bachelor of Commerce from the University of Western Australia, is a
current member of CPA Australia, a Fellow of Governance Institute of Australia and
also holds a Masters of Business Administration from Curtin University.
Peter is based in Perth and has been a director since 16 March 2015.
Directorships held in other listed
entities in the last 3 years
Dubber Corporation Limited (ASX:DUB)
Family Zone Cyber Safety Ltd (ASX:FZO)
VRX Silica Limited (ASX:VRX)
Novatti Group Limited (ASX:NOV)
Rewardle Holdings Limited (ASX:RXH)
Interests in shares
Interests in options
2,181,578 ordinary shares
Nil Options
4
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Information on directors (cont.)
Name:
Title:
John Thompson
Managing Director
Experience and expertise:
John Thompson (BEng Hons, MBA) has held the role of CEO since 18 July 2016. Mr.
Thompson brings a wealth of leadership experience having worked for more than 20
years at the helm of renowned technology companies. Most recently, Mr. Thompson
spent 11 years as CEO of Sigtec and 5 years as CEO of Wavenet International, in
addition to 5 years with CS Communications and Systems in New York and London.
Mr. Thompson received a first class honours degree in Engineering from the
Queensland University of Technology and a Master of Business Administration from
the City University Business School in London. Mr. Thompson has a strong record of
driving sales and revenue and has extensive experience as a capable CEO providing
pivotal leadership expertise across UK, US, Australia and New Zealand markets for
multi-national, listed, IPO and start-up technology companies. John is based in
Melbourne and has been a director since 26 September 2018.
Directorships held in other listed
entities in the last 3 years
Nil
Interests in shares
Interests in options
3,667,857 ordinary shares
Nil Options
Company Secretary and Chief Financial Officer
Stephen Kerr (BCom, CA, CS, FGIA) has held the role of CFO and Company Secretary since July 2015. Stephen Kerr is a
qualified chartered accountant and chartered company secretary. He is an experienced CFO and governance professional,
having held senior finance positions in private and publicly listed company environments across Australia and New Zealand
for over 20 years. Stephen holds a Bachelor of Commerce from the University of Melbourne and is a current member of
Chartered Accountants Australia and New Zealand and a Fellow of the Governance institute of Australia.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') held from 1 July 2020 to the year ended 30 June
2021, and the number of meetings attended by each director were:
Full board
Hon. Alan Stockdale
Peter Pawlowitsch
John Thompson
Kathrin Mutinelli
Neil Wilson
Held: represents the number of meetings held during the time the director held office.
12
12
12
10
7
Attended
Held
12
12
12
10
7
Knosys Limited
Directors' report
30 June 2021
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
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. 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 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 executive remuneration
framework is structured to be market competitive and complementary to the strategy of the consolidated entity.
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.
No such advice was sought for the financial year ended 30 June 2021. 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.
ASX listing rules require the aggregate non-executive directors’ remuneration be determined periodically by a general
meeting. The current maximum aggregate remuneration payable to non-executive directors of the consolidated entity in any
financial year is $500,000.
Executive remuneration
The consolidated entity aims to reward executives with a level and mix of remuneration based on their position and
responsibility, which has both fixed and variable components.
The executive remuneration and reward framework has four components:
● base pay, superannuation and non-monetary benefits
● short-term performance incentives
● share-based payments
● other remuneration such as long service leave
The combination of these comprises the executive's total remuneration.
6
24
7
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Information on directors (cont.)
Name:
Title:
John Thompson
Managing Director
Experience and expertise:
John Thompson (BEng Hons, MBA) has held the role of CEO since 18 July 2016. Mr.
Thompson brings a wealth of leadership experience having worked for more than 20
years at the helm of renowned technology companies. Most recently, Mr. Thompson
spent 11 years as CEO of Sigtec and 5 years as CEO of Wavenet International, in
addition to 5 years with CS Communications and Systems in New York and London.
Mr. Thompson received a first class honours degree in Engineering from the
Queensland University of Technology and a Master of Business Administration from
the City University Business School in London. Mr. Thompson has a strong record of
driving sales and revenue and has extensive experience as a capable CEO providing
pivotal leadership expertise across UK, US, Australia and New Zealand markets for
multi-national, listed, IPO and start-up technology companies. John is based in
Melbourne and has been a director since 26 September 2018.
Directorships held in other listed
Nil
entities in the last 3 years
Interests in shares
Interests in options
3,667,857 ordinary shares
Nil Options
Company Secretary and Chief Financial Officer
Stephen Kerr (BCom, CA, CS, FGIA) has held the role of CFO and Company Secretary since July 2015. Stephen Kerr is a
qualified chartered accountant and chartered company secretary. He is an experienced CFO and governance professional,
having held senior finance positions in private and publicly listed company environments across Australia and New Zealand
for over 20 years. Stephen holds a Bachelor of Commerce from the University of Melbourne and is a current member of
Chartered Accountants Australia and New Zealand and a Fellow of the Governance institute of Australia.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') held from 1 July 2020 to the year ended 30 June
2021, and the number of meetings attended by each director were:
Hon. Alan Stockdale
Peter Pawlowitsch
John Thompson
Kathrin Mutinelli
Neil Wilson
Held: represents the number of meetings held during the time the director held office.
Full board
Attended
Held
12
12
12
10
7
12
12
12
10
7
Knosys Limited
Directors' report
30 June 2021
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
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. 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 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 executive remuneration
framework is structured to be market competitive and complementary to the strategy of the consolidated entity.
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.
No such advice was sought for the financial year ended 30 June 2021. 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.
ASX listing rules require the aggregate non-executive directors’ remuneration be determined periodically by a general
meeting. The current maximum aggregate remuneration payable to non-executive directors of the consolidated entity in any
financial year is $500,000.
Executive remuneration
The consolidated entity aims to reward executives with a level and mix of remuneration based on their position and
responsibility, which has both fixed and variable components.
The executive remuneration and reward framework has four components:
● base pay, superannuation and non-monetary benefits
● short-term performance incentives
● share-based payments
● other remuneration such as long service leave
The combination of these comprises the executive's total remuneration.
6
25
7
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board, based on individual performance and 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 (for example motor vehicle
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 with the targets of those executives
responsible for meeting those targets. STI payments are granted to executives based on specific targets and/or key
performance indicators ('KPI's') being achieved. These targets are discussed in further detail in the description of service
agreements which forms part of this Remuneration Report.
Knosys Limited
Directors' report
30 June 2021
Details of remuneration
Amounts of remuneration
directors of Knosys Limited:
● Alan Stockdale - Non-Executive Chairman
● Peter Pawlowitsch - Non-Executive Director
● John Thompson – Managing Director
● Kathrin Mutinelli – Non-Executive Director
● Neil Wilson – Non-Executive Director
The long-term incentives ('LTI') include long service leave and share-based payments. Options are awarded to executives,
vesting over a period of three years based on elapsed time and/or achievement of long-term incentive measures.
And the following persons:
● Stephen Kerr - Company Secretary and Chief Financial Officer
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 during the year to 30 June 2021 consisted of the following
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the consolidated entity. A portion of cash bonus
and incentive payments are dependent on defined revenue and earnings targets being met. The remaining portion of the
cash bonus and incentive payments are at the discretion of the Board.
In considering the performance of the consolidated entity and benefits for shareholder wealth, the remuneration committee
have regard to the following indices in respect of the current financial year and the previous financial years.
Profit / (loss) before transaction
costs and income tax expense
Profit / (loss) attributable to
owners of the parent entity
Dividends paid
Operating revenue growth
Change in operating result
Change in share price
Return on capital employed
2021
$
15,525
2020
$
(908,391)
2019
$
(771,912)
2018
$
(806,067)
2017
$
(2,085,018)
(543,838)
(908,391)
(771,912)
(806,067)
(2,085,018)
-
46.4%
40.1%
75%
(8.6%)
-
7.8%
(17.7%)
(16%)
(30%)
-
10.8%
4.2%
25%
(31%)
-
224.7%
61.3%
(57%)
(69%)
-
9.9%
(47.8%)
(40%)
(80%)
Profit is one of the financial performance targets considered in setting the Short Term Incentive (STI). Profit amounts have
been calculated in accordance with Australian Accounting Standards (AASB’s). Operating result is operating profit or loss as
reported in the statement of profit or loss.
Short-term benefits
Post-
Share-
employment
Long-term
based
benefits
benefits
payments
Cash salary Cash
Non-
Super-
Long service Equity-
and fees bonus
monetary annuation
leave
$
$
$
$
$
settled
$
Total
$
74,304
47,945
41,857
32,083
-
-
-
-
-
-
-
-
4,446
4,555
3,976
-
-
-
-
-
-
-
35,000
35,000
78,750
52,500
80,833
67,083
298,801
57,500
15,112
24,000
6,773
-
402,186
189,242
37,000
30,275
20,608
12,915
-
290,040
684,232
94,500
45,387
57,585
19,688
70,000
971,392
Short-term benefits
Post-
Share-
employment
Long-term
based
benefits
benefits
payments
Cash salary
Cash
Non-
Super-
Long service Equity-
and fees
bonus monetary annuation
leave
settled
Total
$
$
$
$
$
$
$
54,795
36,530
-
-
-
-
5,205
3,470
- 14,789
- 14,789
74,789
54,789
305,595
30,000
9,428
24,000
6,539 36,974
412,536
182,410
18,000
24,483
20,773
7,171 14,789
267,625
579,329
48,000
33,911
53,448
13,710 81,341
809,739
2021
Non-Executive Directors:
Alan Stockdale
Peter Pawlowitsch
Kathrin Mutinelli
Neil Wilson
Executive Director:
John Thompson
Other Key Management
Personnel:
Stephen Kerr
2020
Non-Executive Directors:
Alan Stockdale
Peter Pawlowitsch
Executive Director:
John Thompson
Other Key Management
Personnel:
Stephen Kerr
8
26
9
Annual Report 2020-2021Directors’ report 30 June 2021
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the consolidated entity. A portion of cash bonus
and incentive payments are dependent on defined revenue and earnings targets being met. The remaining portion of the
cash bonus and incentive payments are at the discretion of the Board.
In considering the performance of the consolidated entity and benefits for shareholder wealth, the remuneration committee
have regard to the following indices in respect of the current financial year and the previous financial years.
Profit / (loss) before transaction
costs and income tax expense
Profit / (loss) attributable to
owners of the parent entity
Dividends paid
Operating revenue growth
Change in operating result
Change in share price
Return on capital employed
2021
2020
2019
2018
$
$
$
$
2017
$
15,525
(908,391)
(771,912)
(806,067)
(2,085,018)
(543,838)
(908,391)
(771,912)
(806,067)
(2,085,018)
-
46.4%
40.1%
75%
(8.6%)
-
7.8%
(17.7%)
(16%)
(30%)
-
10.8%
4.2%
25%
(31%)
-
224.7%
61.3%
(57%)
(69%)
-
9.9%
(47.8%)
(40%)
(80%)
Profit is one of the financial performance targets considered in setting the Short Term Incentive (STI). Profit amounts have
been calculated in accordance with Australian Accounting Standards (AASB’s). Operating result is operating profit or loss as
reported in the statement of profit or loss.
Knosys Limited
Directors' report
30 June 2021
remunerations.
executive.
Knosys Limited
Directors' report
30 June 2021
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board, based on individual performance and the overall performance of the consolidated entity and comparable market
Details of remuneration
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the
The short-term incentives ('STI') program is designed to align the targets of the business with the targets of those executives
responsible for meeting those targets. STI payments are granted to executives based on specific targets and/or key
performance indicators ('KPI's') being achieved. These targets are discussed in further detail in the description of service
agreements which forms part of this Remuneration Report.
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 during the year to 30 June 2021 consisted of the following
directors of Knosys Limited:
● Alan Stockdale - Non-Executive Chairman
● Peter Pawlowitsch - Non-Executive Director
● John Thompson – Managing Director
● Kathrin Mutinelli – Non-Executive Director
● Neil Wilson – Non-Executive Director
The long-term incentives ('LTI') include long service leave and share-based payments. Options are awarded to executives,
vesting over a period of three years based on elapsed time and/or achievement of long-term incentive measures.
And the following persons:
● Stephen Kerr - Company Secretary and Chief Financial Officer
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2021
$
$
$
$
Cash salary Cash
and fees bonus
Non-
Super-
monetary annuation
Long service Equity-
settled
$
leave
$
Non-Executive Directors:
Alan Stockdale
Peter Pawlowitsch
Kathrin Mutinelli
Neil Wilson
Executive Director:
John Thompson
Other Key Management
Personnel:
Stephen Kerr
74,304
47,945
41,857
32,083
-
-
-
-
-
-
-
-
4,446
4,555
3,976
-
-
-
-
-
-
-
35,000
35,000
298,801
189,242
57,500
15,112
24,000
6,773
-
402,186
37,000
30,275
20,608
12,915
-
290,040
Total
$
78,750
52,500
80,833
67,083
684,232
94,500
45,387
57,585
19,688
70,000
971,392
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2020
Cash salary
and fees
$
Cash
bonus monetary annuation
Super-
Non-
$
$
$
Long service Equity-
settled
$
leave
$
Total
$
Non-Executive Directors:
Alan Stockdale
Peter Pawlowitsch
Executive Director:
John Thompson
Other Key Management
Personnel:
Stephen Kerr
54,795
36,530
-
-
-
-
5,205
3,470
- 14,789
- 14,789
74,789
54,789
305,595
30,000
9,428
24,000
6,539 36,974
412,536
182,410
18,000
24,483
20,773
7,171 14,789
267,625
579,329
48,000
33,911
53,448
13,710 81,341
809,739
8
9
27
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
For the financial year, the actual proportions of fixed remuneration and of remuneration linked to performance are as
follows:
2021
Fixed remuneration
At risk - STI
At risk - LTI
Knosys Limited
Directors' report
30 June 2021
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Non-Executive Directors:
Alan Stockdale (Chairman)
Peter Pawlowitsch
Kathrin Mutinelli
Neil Wilson
Managing Director:
John Thompson
Other Key Management
Personnel:
Stephen Kerr
100%
100%
57%
48%
86%
87%
-%
-%
-%
-%
14%
(22% available)
13%
(21% available)
0%
0%
43%
52%
0%
0%
2020
Fixed remuneration
At risk - STI
At risk - LTI
Non-Executive Directors:
Alan Stockdale (Chairman)
Peter Pawlowitsch
Managing Director:
John Thompson
Other Key Management
Personnel:
Stephen Kerr
80%
73%
84%
88%
-%
-%
7%
(21% available)
7%
(24% available)
20%
27%
9%
5%
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:
John Thompson
Chief Executive Officer
18 July 2016
No fixed term
Annual base salary for the year ending 30 June 2021 of $329,595 including
superannuation. Remuneration to be reviewed annually by the Board, 6 month
termination notice by either party, STI performance bonus of up to $90,000 (including
statutory superannuation) based on financial and non-financial KPI’s, including
achievement of budget, over achievement of budget, new sales orders, leadership,
customer relations, investor relations, and product development. Non-disclosure, non-
solicitation and non-compete clauses apply. An amount of $57,500 relating to
performance in the 2021 year was assessed as a bonus entitlement for the 2021
financial year.
Chief Financial Officer and Company Secretary
Stephen Kerr
9 June 2015
No fixed term
Annual base salary for the year ending 30 June 2021 of $251,120 including
superannuation, employment is for four days per week during normal working hours on
days agreed with the CEO and reasonable additional hours during these days in order
to perform responsibilities and duties. For the first five month period of the year ended
30 June 2021, Mr Kerr’s employment was three days per week and his base salary was
accordingly lower than the above on a pro-rata basis during that period. Remuneration
is to be reviewed annually by the Board, 3 month termination notice by either party, STI
performance bonus of up to $60,000 (including statutory superannuation) based on
financial and non-financial KPI’s, non-disclosure, non-solicitation and non-compete
clauses. An amount of $37,000 relating to performance in the 2021 year was assessed
as a bonus entitlement in the 2021 financial year.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
Grant date
January 2021
30 June 2021.
The terms and conditions of each issue of loan funded shares affecting remuneration of directors and other key management
personnel in this financial year or future reporting years are as follows:
Number of shares
Expiry date
Issue price at issue date
1,000,000
February 2026
17.5 cents
7.0 cents
Fair value
per loan
share
1,000,000 loan shares were granted to directors Kathrin Mutinelli and Neil Wilson in January 2021 and were fully vested at
Participants acquire loan funded shares using a loan provided by the consolidated entity. The loan is interest-free and
limited recourse in accordance with the loan terms. The loan shares are restricted securities. The loan terms require the
loan to be repaid before a participant can receive any proceeds from the sale of their shares.
Refer Note 25 in the notes to the financial statements, for further details and general terms of the loan funded shares.
Options
There were no options granted to directors and other key management personnel in this financial year .
Shares issued on the exercise of options
the exercise of options granted.
No ordinary shares of Knosys Limited were issued during the year ended 30 June 2021 and up to the date of this report on
10
11
28
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Stephen Kerr
Chief Financial Officer and Company Secretary
9 June 2015
No fixed term
Annual base salary for the year ending 30 June 2021 of $251,120 including
superannuation, employment is for four days per week during normal working hours on
days agreed with the CEO and reasonable additional hours during these days in order
to perform responsibilities and duties. For the first five month period of the year ended
30 June 2021, Mr Kerr’s employment was three days per week and his base salary was
accordingly lower than the above on a pro-rata basis during that period. Remuneration
is to be reviewed annually by the Board, 3 month termination notice by either party, STI
performance bonus of up to $60,000 (including statutory superannuation) based on
financial and non-financial KPI’s, non-disclosure, non-solicitation and non-compete
clauses. An amount of $37,000 relating to performance in the 2021 year was assessed
as a bonus entitlement in the 2021 financial year.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
The terms and conditions of each issue of loan funded shares affecting remuneration of directors and other key management
personnel in this financial year or future reporting years are as follows:
Fair value
per loan
share
Grant date
January 2021
Number of shares
Expiry date
Issue price at issue date
1,000,000
February 2026
17.5 cents
7.0 cents
1,000,000 loan shares were granted to directors Kathrin Mutinelli and Neil Wilson in January 2021 and were fully vested at
30 June 2021.
Participants acquire loan funded shares using a loan provided by the consolidated entity. The loan is interest-free and
limited recourse in accordance with the loan terms. The loan shares are restricted securities. The loan terms require the
loan to be repaid before a participant can receive any proceeds from the sale of their shares.
Refer Note 25 in the notes to the financial statements, for further details and general terms of the loan funded shares.
Options
There were no options granted to directors and other key management personnel in this financial year .
Shares issued on the exercise of options
No ordinary shares of Knosys Limited were issued during the year ended 30 June 2021 and up to the date of this report on
the exercise of options granted.
11
29
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
Knosys Limited
Directors' report
30 June 2021
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
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.
Ordinary shares
Alan Stockdale
Peter Pawlowitsch
Kathrin Mutinelli
Neil Wilson
John Thompson
Stephen Kerr
Balance at Received
as part of
remuneration
the start of
the year
Additions
Forfeited
Balance at
the end of
the year
1,250,000
2,231,578
-
-
4,092,857
2,246,759
9,821,194
-
-
500,0001
500,0001
-
-
1,000,000
-
200,000
200,000
250,000
200,000
107,143
957,143
(250,000)1
(250,000)1
-
-
(625,000)1
(250,000)1
(1,375,000)
1,000,000
2,181,578
700,000
750,000
3,667,857
2,103,902
10,403,337
1. Shares issued or forfeited as loan funded shares in the current year.
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Options over ordinary shares
Stephen Kerr
Balance at Expired
the start of
the year
Balance at Balance at Balance at
the end of
the end of
the end of
the year
the year
the year
- unvested
- vested
500,000
500,000
(500,000)
(500,000)
-
-
-
-
-
-
There were no other transactions with key management personnel and their related parties
This concludes the remuneration report, which has been audited.
Options
At the date of this report, the unissued ordinary shares of Knosys Limited under option are as follows:
Date of expiry
24 Dec 2021
unlisted
Exercise price
$0.12
Number under option
2,000,000
Each option carries no rights other than the right, once vested, to subscribe for one fully paid ordinary share at the exercise
price. No options were exercised during the period.
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.
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.
30
Non-audit services
The Board is responsible for the maintenance of audit independence. Specifically, the Board Charter ensures the
independence of the auditor is maintained by:
•
•
limiting the scope and nature of non-audit services that may be provided; and
requiring that permitted non-audit services must be pre-approved by the Chairman of the Board.
During the year William Buck, the Group’s auditor, has performed certain other services in addition to the audit and review
of the financial statements. The Board has considered the non-audit services provided during the year by the auditor and in
accordance with the advice provided by the Board, is satisfied that the provision of those non-audit services during the year
by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Group and have been
reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor; and
• The non-audit services provided do not undermine the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards) as they did not
involve reviewing or auditing the auditors own work, acting in a management or decision-making capacity for the
consolidated entity, acting as an advocate for the consolidated entity or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the consolidated entity, William Buck, for audit and non-audit services
provided during the year are set out in note 18.
Auditor's independence declaration
the following page.
Auditor
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
William Buck Audit (VIC) 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 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________
Hon. Alan Stockdale AO
Director
25 August 2021
Melbourne
12
13
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Directors' report
30 June 2021
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
The Board is responsible for the maintenance of audit independence. Specifically, the Board Charter ensures the
independence of the auditor is maintained by:
•
•
limiting the scope and nature of non-audit services that may be provided; and
requiring that permitted non-audit services must be pre-approved by the Chairman of the Board.
During the year William Buck, the Group’s auditor, has performed certain other services in addition to the audit and review
of the financial statements. The Board has considered the non-audit services provided during the year by the auditor and in
accordance with the advice provided by the Board, is satisfied that the provision of those non-audit services during the year
by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Group and have been
reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor; and
• The non-audit services provided do not undermine the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards) as they did not
involve reviewing or auditing the auditors own work, acting in a management or decision-making capacity for the
consolidated entity, acting as an advocate for the consolidated entity or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the consolidated entity, William Buck, for audit and non-audit services
provided during the year are set out in note 18.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
the following page.
Auditor
William Buck Audit (VIC) 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 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________
Hon. Alan Stockdale AO
Director
25 August 2021
Melbourne
13
31
Annual Report 2020-2021Directors’ report 30 June 2021
Knosys Limited
Contents
30 June 2021
Contents
General information
Registered office
Part Level 8
31 Queen Street
Melbourne VIC 3000
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Knosys Limited
16
17
18
19
20
44
45
The financial statements cover Knosys Limited as a consolidated entity consisting of Knosys Limited and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Knosys
Limited's functional and presentation currency.
Knosys Limited is listed on the Australian Securities Exchange (ASX:KNO) and is incorporated and domiciled in Australia.
Principal place of business
Part Level 8
31 Queen Street
Melbourne VIC 3000
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue on 25 August 2021, in accordance with a resolution of directors. The
directors have the power to amend and reissue the financial statements.
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF KNOSYS LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2021
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
A. A. Finnis
Director
Melbourne, 25 August 2021
15
32
Annual Report 2020-2021Auditors independence declaration
Knosys Limited
Contents
30 June 2021
Contents
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Knosys Limited
16
17
18
19
20
44
45
General information
The financial statements cover Knosys Limited as a consolidated entity consisting of Knosys Limited and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Knosys
Limited's functional and presentation currency.
Knosys Limited is listed on the Australian Securities Exchange (ASX:KNO) and is incorporated and domiciled in Australia.
Registered office
Part Level 8
31 Queen Street
Melbourne VIC 3000
Principal place of business
Part Level 8
31 Queen Street
Melbourne VIC 3000
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue on 25 August 2021, in accordance with a resolution of directors. The
directors have the power to amend and reissue the financial statements.
15
33
Annual Report 2020-2021General information
Knosys Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Knosys Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Revenue
Research and development tax refund
Other income
Expenses
Revenue
Licence fee and support expense
Payments to suppliers for research and development activities
Research and development tax refund
Employee benefits expense
Other income
Depreciation and amortisation expense
Legal and accounting expense
Expenses
Travel and accommodation expense
Licence fee and support expense
Finance costs
Payments to suppliers for research and development activities
Administration and corporate expense
Employee benefits expense
Depreciation and amortisation expense
Legal and accounting expense
Profit / (Loss) before acquisition costs and income tax
Travel and accommodation expense
Finance costs
Transaction costs related to acquisition of businesses
Administration and corporate expense
Loss before income tax
Profit / (Loss) before acquisition costs and income tax
Income tax expense
Transaction costs related to acquisition of businesses
Loss after income tax expense for the year attributable to owners of the
Knosys Limited
Loss before income tax
Income tax expense
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Loss after income tax expense for the year attributable to owners of the
Foreign currency translation
Knosys Limited
Total comprehensive loss for the year attributable to owners of Knosys
Limited
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Loss per share for loss attributable to the owners of the parent
Basic and diluted loss per share
Total comprehensive loss for the year attributable to owners of Knosys
Limited
Note
Consolidated
2021
$
2020
$
3
4,594,082
3,137,317
Note
Consolidated
619,094
2021
72,564
$
649,313
2020
120,621
$
3
4
4
4
5
4
5
4,594,082
(615,753)
(60,959)
619,094
(3,505,224)
72,564
(188,363)
(110,638)
(26,676)
(615,753)
(15,398)
(60,959)
(747,204)
(3,505,224)
(188,363)
(110,638)
(26,676)
(15,398)
(559,363)
(747,204)
(543,838)
15,525
3,137,317
(438,948)
(154,024)
649,313
(2,990,229)
120,621
(189,905)
(119,672)
(172,517)
(438,948)
(19,119)
(154,024)
(731,228)
(2,990,229)
(189,905)
(119,672)
(908,391)
(172,517)
(19,119)
-
(731,228)
(908,391)
15,525
-
(908,391)
-
(559,363)
(543,838)
(543,838)
-
(908,391)
(908,391)
-
-
(1,543)
(543,838)
-
(908,391)
(545,381)
(908,391)
27
(1,543)
Cents
(0.32)
-
Cents
(0.62)
(545,381)
(908,391)
Loss per share for loss attributable to the owners of the parent
Basic and diluted loss per share
27
Cents
(0.32)
Cents
(0.62)
Accrued research and development tax refund receivable
Buildings – Right-of-use asset
Accrued research and development tax refund receivable
Knosys Limited
Statement of financial position
As at 30 June 2021
Knosys Limited
Statement of financial position
Assets
As at 30 June 2021
Current assets
Cash and cash equivalents
Trade receivables
Prepayments & sundry receivables
Assets
Total current assets
Current assets
Non-current assets
Cash and cash equivalents
Intangible assets and goodwill
Trade receivables
Plant and equipment
Prepayments & sundry receivables
Total non-current assets
Total current assets
Total assets
Non-current assets
Intangible assets and goodwill
Buildings – Right-of-use asset
Plant and equipment
Liabilities
Total non-current assets
Current liabilities
Trade and other payables
Total assets
Provisions
Lease liability
Contract liabilities
Liabilities
Total current liabilities
Current liabilities
Non-current liabilities
Trade and other payables
Provisions
Provisions
Lease liability
Lease liability
Contract liabilities
Total non-current liabilities
Total current liabilities
Total liabilities
Non-current liabilities
Provisions
Net assets
Lease liability
Total non-current liabilities
Equity
Total liabilities
Issued capital
Share based payments reserve
Foreign currency translation reserve
Net assets
Accumulated losses
Total equity
Equity
Issued capital
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Note
Consolidated
2021
$
2020
$
Note
6
7
8
6
9
8
9
10
7
10
11
12
13
14
11
12
12
13
13
14
Consolidated
6,532,415
2021
1,934,803
$
500,000
221,200
9,188,418
2,335,909
2020
1,711,032
$
495,958
77,452
4,620,351
6,532,415
4,926,215
1,934,803
184,986
500,000
221,200
96,072
2,335,909
1,711,032
-
295,986
495,958
127,040
77,452
5,207,273
9,188,418
4,620,351
423,026
14,395,691
5,043,377
4,926,215
184,986
96,072
5,207,273
-
295,986
127,040
423,026
14,395,691
670,254
364,809
5,043,377
500,608
134,853
2,893,063
4,198,778
223,479
132,401
1,490,640
2,211,329
670,254
500,608
93,093
134,853
85,982
2,893,063
179,075
4,198,778
4,377,853
364,809
223,479
35,023
205,845
132,401
1,490,640
240,868
2,211,329
2,452,197
12
13
10,017,838
93,093
2,591,180
35,023
85,982
179,075
205,845
240,868
15
25
16,149,271
4,377,853
2,452,197
8,312,409
394,634
556,216
10,017,838
(1,543)
2,591,180
-
(6,524,524)
(6,277,445)
15
25
10,017,838
2,591,180
16,149,271
8,312,409
394,634
(1,543)
556,216
-
(6,524,524)
(6,277,445)
10,017,838
2,591,180
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
The above statement of financial position should be read in conjunction with the accompanying notes
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
34
The above statement of financial position should be read in conjunction with the accompanying notes
17
17
Annual Report 2020-2021Statement of profit or loss and other comprehensive incomeFor the year ended 30 June 2021
Knosys Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Licence fee and support expense
Payments to suppliers for research and development activities
Research and development tax refund
Revenue
Other income
Expenses
Employee benefits expense
Depreciation and amortisation expense
Legal and accounting expense
Travel and accommodation expense
Finance costs
Administration and corporate expense
Note
Consolidated
2021
$
2020
$
3
4,594,082
3,137,317
619,094
72,564
649,313
120,621
(615,753)
(60,959)
(438,948)
(154,024)
4
(3,505,224)
(2,990,229)
(188,363)
(110,638)
(26,676)
(15,398)
(747,204)
(189,905)
(119,672)
(172,517)
(19,119)
(731,228)
4
5
(543,838)
(908,391)
-
-
-
Profit / (Loss) before acquisition costs and income tax
15,525
(908,391)
Transaction costs related to acquisition of businesses
(559,363)
Loss before income tax
Income tax expense
Loss after income tax expense for the year attributable to owners of the
Knosys Limited
(543,838)
(908,391)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Total comprehensive loss for the year attributable to owners of Knosys
Limited
(1,543)
-
(545,381)
(908,391)
Loss per share for loss attributable to the owners of the parent
Basic and diluted loss per share
27
Cents
(0.32)
Cents
(0.62)
Knosys Limited
Statement of financial position
As at 30 June 2021
Knosys Limited
Statement of financial position
Assets
As at 30 June 2021
Current assets
Cash and cash equivalents
Trade receivables
Accrued research and development tax refund receivable
Prepayments & sundry receivables
Assets
Total current assets
Current assets
Non-current assets
Cash and cash equivalents
Intangible assets and goodwill
Trade receivables
Buildings – Right-of-use asset
Accrued research and development tax refund receivable
Plant and equipment
Prepayments & sundry receivables
Total non-current assets
Total current assets
Total assets
Non-current assets
Intangible assets and goodwill
Buildings – Right-of-use asset
Plant and equipment
Liabilities
Total non-current assets
Current liabilities
Trade and other payables
Total assets
Provisions
Lease liability
Contract liabilities
Liabilities
Total current liabilities
Current liabilities
Non-current liabilities
Trade and other payables
Provisions
Provisions
Lease liability
Lease liability
Contract liabilities
Total non-current liabilities
Total current liabilities
Total liabilities
Non-current liabilities
Provisions
Net assets
Lease liability
Total non-current liabilities
Equity
Total liabilities
Issued capital
Share based payments reserve
Foreign currency translation reserve
Net assets
Accumulated losses
Total equity
Equity
Issued capital
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Note
Consolidated
2021
$
2020
$
Note
6
7
Consolidated
6,532,415
2021
1,934,803
$
500,000
221,200
9,188,418
2,335,909
2020
1,711,032
$
495,958
77,452
4,620,351
8
6
9
10
7
8
9
10
11
12
13
14
11
12
12
13
13
14
6,532,415
4,926,215
1,934,803
184,986
500,000
96,072
221,200
5,207,273
9,188,418
14,395,691
4,926,215
184,986
96,072
5,207,273
670,254
14,395,691
500,608
134,853
2,893,063
4,198,778
670,254
93,093
500,608
85,982
134,853
2,893,063
179,075
4,198,778
4,377,853
2,335,909
-
1,711,032
295,986
495,958
127,040
77,452
423,026
4,620,351
5,043,377
-
295,986
127,040
423,026
364,809
5,043,377
223,479
132,401
1,490,640
2,211,329
364,809
35,023
223,479
205,845
132,401
1,490,640
240,868
2,211,329
2,452,197
12
13
93,093
10,017,838
85,982
179,075
35,023
2,591,180
205,845
240,868
15
25
4,377,853
16,149,271
394,634
10,017,838
(1,543)
(6,524,524)
2,452,197
8,312,409
556,216
2,591,180
-
(6,277,445)
15
25
10,017,838
16,149,271
394,634
(1,543)
(6,524,524)
2,591,180
8,312,409
556,216
-
(6,277,445)
10,017,838
2,591,180
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
The above statement of financial position should be read in conjunction with the accompanying notes
17
accompanying notes
16
The above statement of financial position should be read in conjunction with the accompanying notes
17
35
Annual Report 2020-2021Statement of financial position as at 30 June 2021
Knosys Limited
Statement of changes in equity
For the year ended 30 June 2021
Knosys Limited
Statement of changes in equity
Consolidated
For the year ended 30 June 2021
Balance at 1 July 2019
Loss after income tax expense for the year
Consolidated
Total comprehensive loss for the year
Balance at 1 July 2019
Transactions with owners in their capacity as owners:
Loss after income tax expense for the year
Equity based payments (Note 25)
Total comprehensive loss for the year
Transfer from share-based payments reserve to
accumulated losses on expiry of share-based
Transactions with owners in their capacity as owners:
remuneration instruments
Equity based payments (Note 25)
Balance at 30 June 2020
Transfer from share-based payments reserve to
accumulated losses on expiry of share-based
remuneration instruments
Consolidated
Balance at 30 June 2020
Balance at 1 July 2020
Loss after income tax expense for the year
Foreign currency translation
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
8,312,409
695,229
(5,593,830)
3,413,808
Issued
capital
$
-
Reserves
-
$
Accumulated
(908,391)
losses
$
-
8,312,409
-
695,229
(908,391)
(5,593,830)
Total
(908,391)
equity
$
(908,391)
3,413,808
-
-
-
-
-
85,763
(908,391)
-
(908,391)
85,763
-
(908,391)
(908,391)
Payment of transaction costs related to acquisition of businesses
(224,776)
224,776
-
-
8,312,409
85,763
556,216
-
(6,277,445)
85,763
2,591,180
-
Issued
capital
$
8,312,409
8,312,409
Issued
capital
$
-
-
(224,776)
Reserves
$
556,216
224,776
Accumulated
losses
$
(6,277,445)
-
Total
equity
$
2,591,180
556,216
(6,277,445)
2,591,180
Reserves
-
(1,543)
$
Accumulated
(543,838)
losses
-
$
Total
(543,838)
equity
(1,543)
$
Balance at 1 July 2020
Total comprehensive loss for the year
8,312,409
-
556,216
(1,543)
(6,277,445)
(543,838)
2,591,180
(545,381)
Loss after income tax expense for the year
Transactions with owners in their capacity as owners:
Foreign currency translation
Contributions of equity, net of transaction costs (Note 15)
-
-
7,836,862
-
(1,543)
-
(543,838)
-
-
(543,838)
(1,543)
7,836,862
Total comprehensive loss for the year
Equity based payments (Note 25)
-
-
(1,543)
135,177
(543,838)
-
(545,381)
135,177
Transactions with owners in their capacity as owners:
Transfer from share-based payments reserve to
accumulated losses on expiry of share-based
Contributions of equity, net of transaction costs (Note 15)
remuneration instruments
7,836,862
-
-
(296,759)
-
296,759
7,836,862
-
Equity based payments (Note 25)
-
135,177
-
135,177
Transfer from share-based payments reserve to
Balance at 30 June 2021
accumulated losses on expiry of share-based
remuneration instruments
16,149,271
393,091
(6,524,524)
10,017,838
-
(296,759)
296,759
-
Balance at 30 June 2021
16,149,271
393,091
(6,524,524)
10,017,838
Knosys Limited
Statement of cash flows
For the year ended 30 June 2021
Knosys Limited
Statement of cash flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Research and development tax refund
Interest received
Interest paid
Cash flows from operating activities
Grant revenue
Receipts from customers
Payments to suppliers and employees
Net cash from operating activities
Research and development tax refund
Interest received
Cash flows from investing activities
Cash received on acquisition of business
Interest paid
Grant revenue
Payments for plant and equipment
Net cash from operating activities
Net cash from investing activities
Cash flows from investing activities
Cash received on acquisition of business
Cash flows from financing activities
Payments for plant and equipment
Repayment of lease liability
Proceeds from issue of shares
Net cash from investing activities
Share issue transaction costs
Net cash from financing activities
Cash flows from financing activities
Repayment of lease liability
Payment of transaction costs related to acquisition of businesses
Proceeds from issue of shares
Net increase (decrease) in cash and cash equivalents
Share issue transaction costs
Cash and cash equivalents at the beginning of the financial year
Net cash from financing activities
Cash and cash equivalents at the end of the financial year
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Consolidated
Note
2021
$
2020
$
Note
24
24
4,908,218
3,580,406
Consolidated
(4,997,663)
(4,733,645)
2021
615,052
$
19,905
(15,398)
50,000
4,908,218
(4,997,663)
580,114
615,052
19,905
(15,398)
1,482,025
50,000
(559,363)
(32,148)
580,114
2020
573,355
$
35,349
(19,119)
86,047
3,580,406
(4,733,645)
(477,607)
573,355
35,349
(19,119)
86,047
-
-
(29,069)
(477,607)
890,514
(29,069)
1,482,025
(559,363)
(32,148)
(118,954)
3,000,000
890,514
(155,168)
-
-
-
-
(29,069)
(68,733)
(29,069)
2,725,878
(68,733)
(118,954)
3,000,000
4,196,506
(155,168)
2,335,909
(68,733)
(575,409)
2,911,318
-
-
2,725,878
6,532,415
(68,733)
2,335,909
4,196,506
2,335,909
(575,409)
2,911,318
6,532,415
2,335,909
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
The above statement of cash flows should be read in conjunction with the accompanying notes
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
The above statement of cash flows should be read in conjunction with the accompanying notes
36
19
19
Annual Report 2020-2021Statement of changes in equityFor the year ended 30 June 2021
Knosys Limited
Statement of cash flows
For the year ended 30 June 2021
Knosys Limited
Statement of cash flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Research and development tax refund
Interest received
Interest paid
Cash flows from operating activities
Grant revenue
Receipts from customers
Payments to suppliers and employees
Net cash from operating activities
Research and development tax refund
Interest received
Cash flows from investing activities
Interest paid
Cash received on acquisition of business
Grant revenue
Payment of transaction costs related to acquisition of businesses
Payments for plant and equipment
Net cash from operating activities
Net cash from investing activities
Cash flows from investing activities
Cash received on acquisition of business
Payment of transaction costs related to acquisition of businesses
Cash flows from financing activities
Payments for plant and equipment
Repayment of lease liability
Proceeds from issue of shares
Net cash from investing activities
Share issue transaction costs
Net cash from financing activities
Cash flows from financing activities
Repayment of lease liability
Proceeds from issue of shares
Net increase (decrease) in cash and cash equivalents
Share issue transaction costs
Cash and cash equivalents at the beginning of the financial year
Net cash from financing activities
Cash and cash equivalents at the end of the financial year
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Consolidated
Note
2021
$
2020
$
Note
24
24
Consolidated
4,908,218
(4,997,663)
2021
615,052
$
19,905
(15,398)
50,000
4,908,218
(4,997,663)
580,114
615,052
19,905
(15,398)
1,482,025
50,000
(559,363)
(32,148)
580,114
3,580,406
(4,733,645)
2020
573,355
$
35,349
(19,119)
86,047
3,580,406
(4,733,645)
(477,607)
573,355
35,349
(19,119)
-
86,047
-
(29,069)
(477,607)
890,514
(29,069)
1,482,025
(559,363)
(32,148)
(118,954)
3,000,000
890,514
(155,168)
-
-
(29,069)
(68,733)
-
(29,069)
-
2,725,878
(68,733)
(118,954)
3,000,000
4,196,506
(155,168)
2,335,909
(68,733)
-
(575,409)
-
2,911,318
2,725,878
6,532,415
(68,733)
2,335,909
4,196,506
2,335,909
(575,409)
2,911,318
6,532,415
2,335,909
The above statement of cash flows should be read in conjunction with the accompanying notes
19
The above statement of cash flows should be read in conjunction with the accompanying notes
19
37
Annual Report 2020-2021Statement of cash flowsFor the year ended 30 June 2021 Knosys Limited
Notes to the financial statements
30 June 2021
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, revised or amending 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.
From 1 July 2020 the following new accounting standards have been adopted by the consolidated entity:
profit or loss.
Foreign operations
The revised Conceptual Framework for Financial Reporting
AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
The consolidated entity has assessed that these new or amended Accounting Standards and Interpretations will not have
any material effect on the financial statements of the company for this reporting period.
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').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
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.
Legal 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 legal parent entity is disclosed in Note 21.
Principles of consolidation
A controlled entity is any entity controlled by an accounting acquirer. Control exists where an entity has the capacity and
power to govern the decision-making in relation to the financial and operating policies of an investee and also participate in
the variable returns of that investee.
All inter-group balances and transactions between entities in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting policies of controlled entities have been changed where
necessary to ensure consistencies with those policies adopted by the parent entity.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Knosys Limited's presentation currency. The
consolidated entity operates in functional currencies relative to the specific geographical location of the entity within the
consolidated entity.
38
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
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
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
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.
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
Business combinations
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based
on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement
period ends on either the earlier of
(i) 12 months from the date of the acquisition or
(ii) when the acquirer receives all the information possible to determine fair value.
20
21
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
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
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.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based
on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement
period ends on either the earlier of
(i) 12 months from the date of the acquisition or
(ii) when the acquirer receives all the information possible to determine fair value.
21
39
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Note 1. Significant accounting policies (continued)
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 initially recognised as deferred revenue in the form of a separate
refund liability
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.
The consolidated entity earns revenues from its software services. Of these, a portion relates to licensing and support of its
software, which is performed over a period of time and for which revenue is recognised over a period of time due to the
customer only having a right of access over the software throughout the contract period. For software implementation
services provided to the customer, which is specified in the customer contract, revenue is recognised over time as that
implementation is performed.
Research and development tax refund income
Research and development tax refund income is measured on an accruals basis when the refund can be reliably
determined.
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.
Refer to Note 26 segment note for a disaggregation of revenue per geographical location.
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, 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 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.
or adjusted for any remeasurement of lease liabilities.
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.
40
22
23
Knosys Limited
Notes to the financial statements
30 June 2021
Trade and other receivables
settlement within 30 days.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provisions for impairment, doubtful debts and rebates. Trade receivables are generally due for
In relation to the financial assets carried at amortised cost, AASB 9 requires an expected credit loss model to be applied.
The expected credit loss model requires the Group to account for expected credit losses and changes in those expected
credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial asset. AASB 9
requires the Group to measure the loss allowance at an amount equal to lifetime expected credit loss (“ECL”) if the credit
risk on the instrument has increased significantly since initial recognition. If the credit risk on the financial instrument has not
increased significantly since initial recognition the Group is required to measure the loss allowance for that financial
instrument at an amount equal to the ECL within the next 12 months. The Group has adopted the simplified approach to
recognizing an ECL for trade and other receivables. Based on the nature of the Groups’ business there have been no credit
losses recorded in the previous financial periods and thus no ECL has been recorded.
The amount of the impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income within other expenses.
When a trade receivable, for which an impairment allowance had been recognised, becomes uncollectible in a subsequent
period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited
against other expenses in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Plant and equipment
Recognition and measurement
Depreciation
adjusted if appropriate.
Right-of-use assets
Items of plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment loss. If
significant parts of an item of plant and equipment have different useful lives, then they are accounted for as separate items
of plant and equipment. Any gain or loss on disposal of an item of plant and equipment is recognised in profit or loss.
Depreciation is calculated to write off the costs of the items of plant and equipment over their estimated useful lives and is
generally recognised in profit and loss. Depreciation methods and useful lives are reviewed at each reporting period and
The estimated useful life of plant and equipment for current and comparative periods is 3 years.
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 payment 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. When 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
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with a term of 12 months or leases of low-value assets. Lease payments on these assets are expenses to profit or
loss as incurred.
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provisions for impairment, doubtful debts and rebates. Trade receivables are generally due for
settlement within 30 days.
In relation to the financial assets carried at amortised cost, AASB 9 requires an expected credit loss model to be applied.
The expected credit loss model requires the Group to account for expected credit losses and changes in those expected
credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial asset. AASB 9
requires the Group to measure the loss allowance at an amount equal to lifetime expected credit loss (“ECL”) if the credit
risk on the instrument has increased significantly since initial recognition. If the credit risk on the financial instrument has not
increased significantly since initial recognition the Group is required to measure the loss allowance for that financial
instrument at an amount equal to the ECL within the next 12 months. The Group has adopted the simplified approach to
recognizing an ECL for trade and other receivables. Based on the nature of the Groups’ business there have been no credit
losses recorded in the previous financial periods and thus no ECL has been recorded.
The amount of the impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income within other expenses.
When a trade receivable, for which an impairment allowance had been recognised, becomes uncollectible in a subsequent
period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited
against other expenses in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Plant and equipment
Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment loss. If
significant parts of an item of plant and equipment have different useful lives, then they are accounted for as separate items
of plant and equipment. Any gain or loss on disposal of an item of plant and equipment is recognised in profit or loss.
Depreciation
Depreciation is calculated to write off the costs of the items of plant and equipment over their estimated useful lives and is
generally recognised in profit and loss. Depreciation methods and useful lives are reviewed at each reporting period and
adjusted if appropriate.
The estimated useful life of plant and equipment for current and comparative periods is 3 years.
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 payment 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. When 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 a term of 12 months or leases of low-value assets. Lease payments on these assets are expenses to profit or
loss as incurred.
23
41
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services
received by the Group during the reporting period, which remains unpaid. The balance is recognised as a current liability
with the amount being normally paid within 30 days of recognition of the liability.
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.
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 expensed as they have not
satisfied the requirement for capitalisation under AASB 138 – Intangible assets.
Impairment of non-financial assets
At each reporting date, the consolidated entity’s Directors review the carrying values of the consolidated entity’s tangible and
intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less cost to sell and value in use, is
compared to the assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to
the statement of profit or loss and other comprehensive income.
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.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be wholly
settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are
settled.
24
42
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be wholly settled within 12 months of the reporting date
are measured as the present value of expected future payments to be made in respect of services provided by employees
up to the reporting date 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 national corporate bonds with terms to maturity and currency that match, as closely as possible,
the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Black-Scholes option pricing model or the Binomial Option Valuation model each of which 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.
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.
Revenue billed in advance
Revenue billed in advance represents contract liabilities that the consolidated entity is obliged to transfer 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.
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.
25
43
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
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 payment 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
guarantees, lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the following right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is
fully written down.
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.
Share based payments
Loss per share
Basic loss per share is calculated as net profit/loss attributable to members of the Company, adjusted to exclude any costs
of servicing equity (other than dividends), divided by the weighted average number of ordinary shares on issue during the
relevant period.
Diluted Loss per share is calculated as net profit/loss attributable to members of the Company, adjusted for:
• costs of servicing equity (other than dividends);
• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses;
• and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares;
• divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element, during the relevant period.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended and that have not been
adopted by the consolidated entity for the annual reporting period ended 30 June 2021 are listed below. The consolidated
entity has assessed that these new or amended Accounting Standards and Interpretations will not have a material effect on
the financial statements of the company for the reporting period commencing 1 July 2021.
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Standard
Mandatory date for
annual reporting
periods beginning on
or after
Standard to be
adopted by the
company for the
reporting period
beginning
AASB 2020-1 Amendments to Australian Accounting Standards
1 January 2023
1 July 2023
– Classification of liabilities as Current or Non-Current
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 following key judgements are relevant to these financial statements:
Estimation of accrued research and development tax refund
As at 30 June 2020 the consolidated entity had accrued $495,958 in accrued research and development tax refund credits
in-respect of the 2020 tax return. The directors of the consolidated entity engaged an industry expert to prepare and lodge
this return. This amount plus an additional $119,094 was receipted into the bank in April 2021 in regard to the 2020 tax
return and R&D claim. Based upon the methodology adopted by the industry expert, the consolidated entity has accrued a
research and development tax refund receivable of $500,000 for the 2021 financial year. Key matters considered by the
directors in calculating this accrual included the following:
- The historical success of lodging and receipting such claims;
- The quantum of eligible research and development spend made during the period; and
- A consideration of any potential change in the assessment of eligibility criteria as gazetted by the Federal government.
As stated in Note 1, the consolidated entity has issued options and loans shares to directors, executives and staff as part
of their remuneration arrangements and has issued options and shares to third parties in consideration for consultancy
services received. Management judgements and estimates are required in determining the cost of these equity-settled
transactions which have been measured by taking 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.
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.
Business combinations
As discussed in Note1, 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 Group 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
26
27
44
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Standard
Mandatory date for
annual reporting
periods beginning on
or after
Standard to be
adopted by the
company for the
reporting period
beginning
AASB 2020-1 Amendments to Australian Accounting Standards
– Classification of liabilities as Current or Non-Current
1 January 2023
1 July 2023
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 following key judgements are relevant to these financial statements:
Estimation of accrued research and development tax refund
As at 30 June 2020 the consolidated entity had accrued $495,958 in accrued research and development tax refund credits
in-respect of the 2020 tax return. The directors of the consolidated entity engaged an industry expert to prepare and lodge
this return. This amount plus an additional $119,094 was receipted into the bank in April 2021 in regard to the 2020 tax
return and R&D claim. Based upon the methodology adopted by the industry expert, the consolidated entity has accrued a
research and development tax refund receivable of $500,000 for the 2021 financial year. Key matters considered by the
directors in calculating this accrual included the following:
- The historical success of lodging and receipting such claims;
- The quantum of eligible research and development spend made during the period; and
- A consideration of any potential change in the assessment of eligibility criteria as gazetted by the Federal government.
Share based payments
As stated in Note 1, the consolidated entity has issued options and loans shares to directors, executives and staff as part
of their remuneration arrangements and has issued options and shares to third parties in consideration for consultancy
services received. Management judgements and estimates are required in determining the cost of these equity-settled
transactions which have been measured by taking 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.
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.
Business combinations
As discussed in Note1, 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 Group 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
27
45
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Determination of lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive
to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination
options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Potential
future cash outflows have not been included in the lease liability because it is not reasonably certain that the leases will be
extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances
occurs which affects this assessment and that is within the control of the lessee.
Knosys Limited
Notes to the financial statements
30 June 2021
Note 5. Income tax expense
Income tax expense
Current Tax benefit
Deferred tax - origination and reversal of temporary differences
Deferred tax assets not recognised
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience and historical collection rates.
Aggregate income tax expense
Unrecognised deferred tax assets
Unused tax losses for which no deferred tax asset has been recognised
527,010
921,461
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.
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 26% (30 June 2020 27.5%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Note 3. Revenue
Sales revenue
Licence and support fees
Rendering of services
Revenue
Consolidated
2021
$
2020
$
3,771,143
822,939
2,945,267
192,050
Entertainment expenses
Research and development costs
Share based payments expense
Sundry items
Non-assessable R&D refund
Deferred tax assets not recognised
4,594,082
3,137,317
Income tax expense
All of the consolidated entities revenue is recognised over time
Note 4. Expenses
Note 6. Current assets - trade and other receivables
Loss before income tax includes the following specific expenses:
Transaction costs related to acquisition of businesses
559,363
-
Trade receivables
The aging analysis of trade receivables is as follows:
Transaction costs incurred relate to the acquisition of Greenorbit Pty Ltd, which completed
on 30 March 2021, and also to the conditional asset and share-sale agreement to acquire
the LIBERO business which was signed on 30 June 2021 and is expected to complete by
31 August 2021.
Consolidated
2021
$
2020
$
Employee benefits expense
Superannuation expense - Accumulation fund
238,921
227,308
Share based payments expense
135,177
85,763
accounts for trade receivables.
Neither past
Past due but not impaired
Total
$
1,934,803
1,711,032
due nor impaired
< 30 days
30-60 days
61-90 days
90+ days
$
1,839,491
133,390
$
-
1,425,644
$
69,462
139,898
25,850
$
-
$
-
12,100
2021
2020
As at 30 June 2021 no trade receivables were impaired (2020: Nil)
Refer Note 1 – Trade and other receivables, which explains how the consolidated entity manages and
Consolidated
2021
$
2020
$
9,442
(23,316)
13,874
(73,674)
(25,049)
98,723
-
-
(543,838)
(908,391)
(141,398)
(249,807)
3,133
288,889
35,146
(38,679)
(160,965)
2,975
303,085
23,585
-
(178,561)
(13,874)
13,874
(98,723)
98,723
-
-
Consolidated
2021
$
2020
$
1,934,803
1,711,032
28
29
46
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 5. Income tax expense
Income tax expense
Current Tax benefit
Deferred tax - origination and reversal of temporary differences
Deferred tax assets not recognised
Aggregate income tax expense
Unrecognised deferred tax assets
Unused tax losses for which no deferred tax asset has been recognised
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 26% (30 June 2020 27.5%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Research and development costs
Share based payments expense
Sundry items
Non-assessable R&D refund
Deferred tax assets not recognised
Income tax expense
Note 6. Current assets - trade and other receivables
Trade receivables
The aging analysis of trade receivables is as follows:
Consolidated
2021
$
2020
$
9,442
(23,316)
13,874
(73,674)
(25,049)
98,723
-
-
527,010
921,461
(543,838)
(908,391)
(141,398)
(249,807)
3,133
288,889
35,146
(38,679)
(160,965)
2,975
303,085
23,585
-
(178,561)
(13,874)
13,874
(98,723)
98,723
-
-
Consolidated
2021
$
2020
$
1,934,803
1,711,032
Total
$
1,934,803
1,711,032
Neither past
due nor impaired
$
1,839,491
133,390
Past due but not impaired
< 30 days
$
-
1,425,644
30-60 days
$
69,462
139,898
61-90 days
$
25,850
-
90+ days
$
-
12,100
2021
2020
As at 30 June 2021 no trade receivables were impaired (2020: Nil)
Refer Note 1 – Trade and other receivables, which explains how the consolidated entity manages and
accounts for trade receivables.
29
47
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 7. Prepayments and sundry receivables
Prepayments
Other receivables
Note 8. Intangibles
Goodwill – Refer Note 28
Accumulated impairment
Impairment of intangibles
Consolidated
2021
$
2020
$
207,749
13,451
77,452
-
221,200
77,452
Consolidated
2021
$
2020
$
4,926,215
-
4,926,215
-
-
-
All intangible assets are assessed at each reporting period for indicators of impairment. The consolidated entity operates
as a single operating segment and cash generating unit being a developer and licensor of computer software. Intangible
assets with an indefinite useful life are assessed for impairment under this cash generating unit.
The recoverable amount of the cash-generating unit is determined based on value-in-use calculations. Value-in-use is
calculated based on the present value of cash flow projections for the next five years. The cash flows are discounted using
estimated discount rate based on Capital Asset Pricing Model adjusted to incorporate risks associated with the software
development sector.
Management has based the value-in-use calculations on five-year budget forecasts of the software developer and licencing
business. Revenue has been projected on the below mentioned assumptions. Costs are calculated taking into account
historical gross margins as well as estimated weighted inflation rates over the period which is consistent with inflation rates
applicable to the locations in which the unit operates. Discount rates are post-tax and reflect risks associated with the
software development business.
The following assumptions were used in the value-in-use-calculations:
a. Revenue growth for years 1 is based on the Board approved budget of the consolidated entity, which includes the
impact of a full 12 months of revenue generation from the GreenOrbit business. A revenue growth rate of 10% has been
estimated for years 2 to 5 of the model. This is a conservative estimate in the future growth of the business.
b. Projected cash flows have been discounted using a post-tax discount rate of 15% (2020: N/A).
c. An annual growth rate of 2.5% (2020: N/A) has been estimated in the calculation of terminal value.
Based on the above assumptions, the recoverable amount of the cash generating unit has been determined to exceed its
carrying amount as at 30 June 2021 and accordingly, no impairment loss has been recognised.
Sensitivity to changes in assumptions
The impairment model is most sensitive to the following assumptions:
- Revenue forecasts assumption;
- Employment costs; and
- Discount rate.
No reasonable possible change in assumptions would result in an impairment charge being recognised.
Refer Note 1 – Trade and other payables, which explains how the consolidated entity manages and accounts for trade and
30
48
31
Knosys Limited
Notes to the financial statements
30 June 2021
Note 9. Right of use asset
Buildings – right-of-use
Accumulated depreciation
Consolidated
2021
$
2020
$
406,980
(221,994)
406,980
(110,994)
184,986
295,986
The consolidated entity leases its Melbourne based head office under an agreement of four years duration. The lease has
an annual 3.75% escalation clause. The consolidated entity leased two serviced offices under specific agreements. These
agreements had short-term month to month lease arrangements and are of low-value, so have been expensed as incurred
and not capitalised as right-of-use assets and are not considered material to the consolidated entity.
Note 10. Plant and equipment
Reconciliations of the carrying values of each class of property, plant and equipment at the beginning and end of the current
and previous financial years, for the consolidated entity, are as follows:
Carrying value at 1 July 2019
Additions
Depreciation
Carrying value at 30 June 2020
Cost as at 30 June 2020
Accumulated depreciation at 30 June 2020
Carrying value at 30 June 2020 / 1 July 2020
Acquired via business combination - Refer Note 28
Additions
Depreciation
Carrying value at 30 June 2021
Cost as at 30 June 2021
Accumulated depreciation at 30 June 2021
Carrying value at 30 June 2021
Note 11. Current liabilities - trade and other payables
Furniture &
fittings
$
Office equipment
Consolidated
Total
$
120,519
25,835
(47,274)
99,080
161,013
(61,933)
99,080
4,240
-
(56,786)
46,534
165,253
(118,719)
46,534
$
56,364
3,234
(31,638)
27,960
137,183
(109,223)
27,960
27,908
14,298
(20,628)
49,538
179,339
(129,801)
49,538
176,883
29,069
(78,912)
127,040
298,196
(171,156)
127,040
32,148
14,298
(77,414)
96,072
344,592
(248,520)
96,072
Consolidated
2021
$
2020
$
203,556
466,698
84,442
280,367
670,254
364,809
Trade payables
Other payables
2021
2020
other payables.
The table below summarises the maturity profile of the consolidated entities current trade and other payables.
Total
$
203,556
84,442
On demand
< 3 months
3 to 12 months
$
-
-
$
203,556
84,442
$
-
-
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 9. Right of use asset
Buildings – right-of-use
Accumulated depreciation
Consolidated
2021
$
2020
$
406,980
(221,994)
406,980
(110,994)
184,986
295,986
The consolidated entity leases its Melbourne based head office under an agreement of four years duration. The lease has
an annual 3.75% escalation clause. The consolidated entity leased two serviced offices under specific agreements. These
agreements had short-term month to month lease arrangements and are of low-value, so have been expensed as incurred
and not capitalised as right-of-use assets and are not considered material to the consolidated entity.
Note 10. Plant and equipment
Reconciliations of the carrying values of each class of property, plant and equipment at the beginning and end of the current
and previous financial years, for the consolidated entity, are as follows:
Carrying value at 1 July 2019
Additions
Depreciation
Carrying value at 30 June 2020
Cost as at 30 June 2020
Accumulated depreciation at 30 June 2020
Carrying value at 30 June 2020 / 1 July 2020
Additions
Acquired via business combination - Refer Note 28
Depreciation
Carrying value at 30 June 2021
Cost as at 30 June 2021
Accumulated depreciation at 30 June 2021
Carrying value at 30 June 2021
Note 11. Current liabilities - trade and other payables
Trade payables
Other payables
Furniture &
fittings
$
120,519
25,835
(47,274)
99,080
161,013
(61,933)
99,080
4,240
-
(56,786)
46,534
165,253
(118,719)
46,534
Office equipment
$
56,364
3,234
(31,638)
27,960
137,183
(109,223)
27,960
27,908
14,298
(20,628)
49,538
179,339
(129,801)
49,538
Consolidated
Total
$
176,883
29,069
(78,912)
127,040
298,196
(171,156)
127,040
32,148
14,298
(77,414)
96,072
344,592
(248,520)
96,072
Consolidated
2021
$
2020
$
203,556
466,698
84,442
280,367
670,254
364,809
The table below summarises the maturity profile of the consolidated entities current trade and other payables.
2021
2020
Total
$
203,556
84,442
On demand
$
-
-
< 3 months
$
203,556
84,442
3 to 12 months
$
-
-
Refer Note 1 – Trade and other payables, which explains how the consolidated entity manages and accounts for trade and
other payables.
31
49
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 15. Equity - issued capital (continued)
Movements in ordinary share capital
Details
Legal parent
Balance at start of year
Date
No. of shares
No. of shares
Legal Parent
Legal Parent
2021
2020
148,835,576
143,235,576
5,600,000
-
Knosys Limited
Notes to the financial statements
30 June 2021
Note 12. Provisions
Provision for employee benefits - current
Consolidated
2021
$
2020
$
-
-
-
-
-
-
-
Provision for employee benefits – current
500,608
223,479
Provision for employee benefits – non-current
Provision for employee benefits – non-current
93,093
35,023
acquisition of Greenorbit Pty Ltd
Issue of loan funded shares to directors, executives and staff
29 Nov 2019
Issue of share capital to shareholders pursuant to placement
24 Dec 2020
20,778,571
Issue of share capital to shareholders pursuant to placement
Issue of share capital to shareholder on completion of
15 Feb 2021
31 Mar 2021
650,000
36,978,000
Note 13. Lease liabilities
Lease Liability - current
Lease liability – current
Lease Liability – non-current
Lease liability – non-current
Note 14. Current liabilities – Contract liabilities
Contract liabilities
Reconciliation of the values at the beginning and end of the current and previous financial
year are set out below:
Opening balance
Amounts billed in advance during the year, where the performance obligations were and will
be satisfied over the FY21 and FY22 years
Balances acquired on acquisition of business refer Note 28
Transfer to revenue – performance obligations satisfied
Balance at end of year
207,242,147
148,835,576
Consolidated
2021
$
2020
$
Details
Date
2021
$
2020
$
134,853
132,401
Consolidated entity
As at start of the financial year
8,312,409
8,312,409
85,982
205,845
Issue of share capital to shareholders pursuant to placement
Issue of share capital to shareholders pursuant to placement
Issue of share capital to shareholder on completion of
24 Dec 2020
15 Feb 2021
31 Mar 2021
2,909,000
91,000
4,992,030
(155,168)
16,149,271
8,312,409
Consolidated
2021
$
2020
$
2,893,063
1,490,640
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
acquisition of Greenorbit Pty Ltd
Costs of issuing shares
Balance as at end of the financial year
Ordinary shares
1,490,640
1,329,915
Movements in options on issue
2,309,172
1,417,162
(2,323,911)
1,706,889
-
(1,546,164)
2,893,063
1,490,640
share shall have one vote.
Details
Legal parent
Balance at start of year
Options expired / lapsed
Balance at end of year
Date
No. of options
No. of options
Legal Parent
Legal Parent
2021
2020
3,550,000
(1,550,000)
9,508,334
(5,958,334)
2,000,000
3,550,000
Note 15. Equity - issued capital
Ordinary shares - fully paid
Consolidated
2021
$
2020
$
16,149,271
8,312,409
2,000,000 options (all of which are vested) are exercisable at $0.12 and expire on 24 December 2021.
300,000 options (all of which were vested and exercisable at $0.29) expired on 1 July 2020.
1,250,000 options (all of which were vested exercisable at $0.25) expired on 1 October 2020.
All options are unlisted and were subject to a range of vesting conditions.
Capital risk management
reduce the cost of capital.
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
50
32
33
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 15. Equity - issued capital (continued)
Movements in ordinary share capital
Details
Legal parent
Balance at start of year
Issue of loan funded shares to directors, executives and staff
Issue of share capital to shareholders pursuant to placement
Issue of share capital to shareholders pursuant to placement
Issue of share capital to shareholder on completion of
acquisition of Greenorbit Pty Ltd
Date
No. of shares
Legal Parent
2021
No. of shares
Legal Parent
2020
29 Nov 2019
24 Dec 2020
15 Feb 2021
31 Mar 2021
148,835,576
-
20,778,571
650,000
36,978,000
143,235,576
5,600,000
-
-
-
Balance at end of year
207,242,147
148,835,576
Details
Consolidated entity
As at start of the financial year
Date
2021
$
2020
$
8,312,409
8,312,409
Issue of share capital to shareholders pursuant to placement
Issue of share capital to shareholders pursuant to placement
Issue of share capital to shareholder on completion of
acquisition of Greenorbit Pty Ltd
Costs of issuing shares
24 Dec 2020
15 Feb 2021
31 Mar 2021
2,909,000
91,000
4,992,030
(155,168)
-
-
-
-
Balance as at end of the financial year
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.
16,149,271
8,312,409
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.
Movements in options on issue
Details
Legal parent
Balance at start of year
Options expired / lapsed
Balance at end of year
Date
No. of options
Legal Parent
2021
No. of options
Legal Parent
2020
3,550,000
(1,550,000)
9,508,334
(5,958,334)
2,000,000
3,550,000
2,000,000 options (all of which are vested) are exercisable at $0.12 and expire on 24 December 2021.
300,000 options (all of which were vested and exercisable at $0.29) expired on 1 July 2020.
1,250,000 options (all of which were vested exercisable at $0.25) expired on 1 October 2020.
All options are unlisted and were subject to a range of vesting conditions.
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.
33
51
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 16. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to two financial risks: credit risk and liquidity risk. The consolidated entity's
overall risk management program, which is managed at Board level, focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity
uses different methods to measure different types of risk to which it is exposed. These methods include ageing analysis for
credit risk and cash flow forecasting for liquidity 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 consolidated entity has a code of credit, including obtaining agency credit information, confirming
references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate
credit risk. 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.
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. All amounts payable are within agreed
terms. All third party payment terms are less than 60 days (2020: less than 60 days).
The consolidated entity manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and
forecast cash flows and matching the maturity profiles of financial assets and liabilities. All liabilities are to be settled within
12 months except for lease liabilities which are to be settled as per the following categories:
Lease liabilities
Payable at the reporting date:
Within 6 months
6 to 12 months
1 to 5 years
Consolidated
2021
$
2020
$
62,721
66,092
92,018
65,383
67,018
205,845
Knosys Limited
Notes to the financial statements
30 June 2021
Note 18. Remuneration of auditors
Assurance services – William Buck
Audit or review of the financial statements
Other services – William Buck
Taxation advice
Acquisition due diligence services
Note 19. Contingent liabilities
Melbourne premises.
Note 20. Related party transactions
Legal parent entity
Knosys Limited is the legal parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 22.
Key management personnel
During the financial year the following fees were paid or payable for services provided by William Buck Audit (VIC) Pty Ltd
(“William Buck”), the auditor of the company, its network firms and unrelated firms:
Consolidated
2021
$
2020
$
40,300
33,600
9,463
10,000
7,500
-
At reporting date there is a bank guarantee of $113,712 in place (2020: $113,712), which relates to the rental of the
At reporting date there is a bank guarantee of SGD20,814 in place (2020: SGD20,814), which relates to a documentary
letter of credit issued by the entity’s banker as a performance guarantee for a customer contract.
The consolidated entity has no other contingent liabilities at reporting date.
220,831
338,246
Disclosures relating to key management personnel are set out in Note 17 and the remuneration report in the directors' report.
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations. The consolidated entity monitors the materiality of foreign
exchange transactions and balances and manages any material exposures to foreign exchange rate fluctuations. At
balance date there were no material foreign currency risks.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reasonably approximate their fair value.
Note 17. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and key management personnel of the consolidated entity is set out below:
Short-term employee benefits
Share based payments
Post-employment benefits
Consolidated
2021
$
843,807
70,000
57,585
2020
$
674,950
81,341
53,448
971,392
809,739
52
34
35
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 18. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by William Buck Audit (VIC) Pty Ltd
(“William Buck”), the auditor of the company, its network firms and unrelated firms:
Assurance services – William Buck
Audit or review of the financial statements
Other services – William Buck
Taxation advice
Acquisition due diligence services
Note 19. Contingent liabilities
Consolidated
2021
$
40,300
2020
$
33,600
9,463
10,000
7,500
-
At reporting date there is a bank guarantee of $113,712 in place (2020: $113,712), which relates to the rental of the
Melbourne premises.
At reporting date there is a bank guarantee of SGD20,814 in place (2020: SGD20,814), which relates to a documentary
letter of credit issued by the entity’s banker as a performance guarantee for a customer contract.
The consolidated entity has no other contingent liabilities at reporting date.
Note 20. Related party transactions
Legal parent entity
Knosys Limited is the legal parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 22.
Key management personnel
Disclosures relating to key management personnel are set out in Note 17 and the remuneration report in the directors' report.
35
53
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 21. Legal parent entity information
Set out below is the supplementary information about the legal parent entity.
Statement of profit or loss and other comprehensive income
Profit/(Loss) after income tax
Total comprehensive income / (loss)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share based payments reserve
Accumulated losses
Total equity
Legal Parent
2021
$
2020
$
(377,631)
364,157
(377,631)
364,157
Legal Parent
2021
$
2020
$
5,350,307
2,450,960
17,503,501
9,841,627
surrounding regions.
99,396
27,809
99,396
27,809
23,284,393 15,447,531
556,216
(6,189,929))
394,634
(6,274,9232)
17,404,105
9,813,818
software in USA
Contingent liabilities
The legal parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Greenorbit Software Limited – Acquired 30 March 2021
United Kingdom
100%
Capital commitments - Property, plant and equipment
The legal parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the legal parent entity are consistent with those of the consolidated entity, as disclosed in Note 1.
The group does not designate any interests in subsidiaries as being subject to the requirements of accounting standards
specifically applicable to financial statements.
Knosys Limited
Notes to the financial statements
30 June 2021
Note 22. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of Knosys Limited and the following
wholly-owned subsidiaries in accordance with the accounting policy described in Note 1:
Name
Principal place of business /
Country of incorporation
Ownership interest
2021
%
2020
%
Knosys Solutions Pty Ltd
Australia
100%
100%
Knosys Asia Pte Ltd (incorporated 7 August 2019)
Singapore
100%
100%
Principal activities – Operating company for the Knosys
knowledge management
business,
providing
operational infrastructure, employees, sales resources,
Knosys Platform research, development and customer
support.
Knosys Products Pty Ltd
Australia
Principal activity – Holder of the Knosys Platform
intellectual property.
Principal activity – Provider of sales and marketing
resources to sell Knosys Platform in Singapore and
Greenorbit Pty Ltd – Acquired 30 March 2021
Australia
Principal activity – Australian operating company of the
GreenOrbit business, providing operational
infrastructure, employees, sales resources, research,
development and customer support
Greenorbit Inc. – Acquired 30 March 2021
United States
Principal activity – Provider of sales and marketing
resources to sell and support the GreenOrbit intranet
Principal activity – Provider of sales and marketing
resources to sell and support the GreenOrbit intranet
software in UK
Greenorbit Software Pvt Ltd – Acquired 30 March 2021
India
Principal activity – Provider of customer support to
GreenOrbit customers and software development
services to the GreenOrbit business
100%
100%
100%
100%
100%
-
-
-
-
36
37
54
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 22. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of Knosys Limited and the following
wholly-owned subsidiaries in accordance with the accounting policy described in Note 1:
Name
Principal place of business /
Country of incorporation
Knosys Solutions Pty Ltd
Principal activities – Operating company for the Knosys
knowledge management
providing
operational infrastructure, employees, sales resources,
Knosys Platform research, development and customer
support.
business,
Australia
Knosys Products Pty Ltd
Principal activity – Holder of the Knosys Platform
intellectual property.
Australia
Knosys Asia Pte Ltd (incorporated 7 August 2019)
Principal activity – Provider of sales and marketing
resources to sell Knosys Platform in Singapore and
surrounding regions.
Singapore
Greenorbit Pty Ltd – Acquired 30 March 2021
Principal activity – Australian operating company of the
GreenOrbit business, providing operational
infrastructure, employees, sales resources, research,
development and customer support
Australia
Greenorbit Inc. – Acquired 30 March 2021
Principal activity – Provider of sales and marketing
resources to sell and support the GreenOrbit intranet
software in USA
United States
Greenorbit Software Limited – Acquired 30 March 2021
Principal activity – Provider of sales and marketing
resources to sell and support the GreenOrbit intranet
software in UK
United Kingdom
Greenorbit Software Pvt Ltd – Acquired 30 March 2021
Principal activity – Provider of customer support to
GreenOrbit customers and software development
services to the GreenOrbit business
India
Ownership interest
2020
2021
%
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
37
55
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 23. Events after the reporting period
The impact of the Coronavirus (COVID-19) pandemic is ongoing and, while the impact has not been financially negative for
the consolidated entity up to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after
the reporting date. The situation continues to be challenging and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing, lockdowns, quarantine measures, travel restrictions
and any economic stimulus that may be provided.
On 1 July 2021, the Company announced to ASX that the consolidated entity had executed a conditional asset and share-
sale agreement to acquire the LIBERO business from Libero Software Pty Ltd and Insight Informatics Pty Ltd for a $5m
purchase price, comprising $4m Cash and $1m in Knosys shares. Acquisition completion, subject to the satisfaction of certain
agreed conditions, is expected to be no later than 31 August 2021.
No other matter or circumstance has arisen since 30 June 2021 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 24. 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
Share based payments expense
Transaction costs related to acquisition of businesses
Change in operating assets and liabilities (the changes in 2021 include the movements in
balances acquired via the acquisition of Greenorbit Pty Ltd during the financial period):
Decrease/(Increase) in trade receivables
Increase in revenue billed in advance
(Increase) in accrued research and development tax refund receivable
(Increase) in prepayments and other debtors
(Decrease)/Increase in trade and other payables
Increase in provision for employee benefits
Net cash used in operating activities
Consolidated
2021
$
(543,838)
2020
$
(908,391)
188,364
135,177
559,363
189,905
85,763
-
(37,473)
(14,739)
(4,042)
45,260
167,261
84,781
580,114
18,521
160,725
(75,711)
(28,565)
(10,942)
91,088
(477,607)
Knosys Limited
Notes to the financial statements
30 June 2021
Note 25. Share-based payments
Loan funded share plan and loan funded shares
A loan funded share plan (LFSP) has been established by the consolidated entity, whereby the consolidated entity may, at
the discretion of the Board, issue loan funded fully paid ordinary shares in the company to personnel of the consolidated
entity. Participants acquire loan funded shares using a loan provided by the consolidated entity. The loan is interest-free and
limited recourse in accordance with the loan terms and the LFSP rules. The LFSP rules require the loan to be repaid before
a participant can receive any proceeds from the sale of their shares. The Board has the discretion to impose such vesting
conditions in relation to the loan funded shares as it deems appropriate. These may include conditions relating to continued
employment or service, performance (of the participant, the consolidated entity or the share price) and the occurrence of
specific events. The consolidated entity has also issued loan funded fully paid ordinary shares in the company to directors
and executives on the same terms as the LFSP. The issuing of these loan funded shares gives rise to an ongoing employment
benefit expense each financial period and this is accounted for in accordance with the accounting policy on employee
benefits, as detailed in Note 1. The expense is included in the share-based payment expense amount listed in Note 4.
As at 30 June 2021 the following loan funded shares had been granted:
Grant date
date
price
30 June
during the
Sold during
during the
30 June
end of the
Loan Expiry
Issue
Balance at
Issued
Forfeited
Balance at
Vested at
Issue
date
2020
Number
period
Number
the period
Number
period
Number
2021
Number
period
Number
28/11/2017 19/02/2018 27/11/2022
$0.06 1,200,000
30/01/2018 19/02/2018 18/02/2023
$0.10 1,600,000
26/11/2018 24/12/2018 26/11/2023
24/12/2018 24/12/2018 24/12/2023
$0.08
$0.08
250,000
550,000
27/11/2019 29/11/2019 29/11/2024 $0.101 6,500,000
27/11/2019 29/11/2019 29/11/2024 $0.101 1,125,000
-
-
-
-
-
-
27/01/2021 15/02/2021 14/02/2026 $0.175
29/01/2021 15/02/2021 14/02/2026 $0.175
04/06/2021 29/06/2021 28/06/2026 $0.075
-
-
-
1,000,000
500,000
725,000
-
-
-
-
-
-
-
-
-
-
1,625,000
600,000
-
-
-
-
-
-
-
1,200,000
1,200,000
1,600,000 1,600,000
250,000
550,000
250,000
550,000
4,875,000
1,625,000
525,000
525,000
1,000,000
1,000,000
500,000
725,000
-
-
$0.110
$0.102
Total
11,225,000
2,225,000
2,225,000
11,225,000 6,750,000
Weighted average issue price
$0.095
The 2,225,000 loan shares granted to participants during the period were sourced from forfeited loan shares, transferred
from the relevant participants.
Loan shares issued to Directors and executives
During the period 1,000,000 Loan Shares were granted to Directors on 27 January 2021 and vested on 1 March 2021 and
have been valued independently at issued date. Details are as follows:
Number of
Loan
Shares
1,000,000 Vested on 1 March 2021.
Service based vesting date
Fair value
per share at
Total fair
value at
issue date
issue date
$0.070
$70,000
The valuation model inputs used by the independent valuer were as follows:
Loan Expiry Share price
Issue Marketability
Expected Dividend
Risk-free
Grant date
date
at grant date price
27/01/2021
14/02/2026
$0.195
$0.175
Discount
0.00%
volatility
82%
yield
0.00%
interest rate
0.37%
38
39
56
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 25. Share-based payments
Loan funded share plan and loan funded shares
A loan funded share plan (LFSP) has been established by the consolidated entity, whereby the consolidated entity may, at
the discretion of the Board, issue loan funded fully paid ordinary shares in the company to personnel of the consolidated
entity. Participants acquire loan funded shares using a loan provided by the consolidated entity. The loan is interest-free and
limited recourse in accordance with the loan terms and the LFSP rules. The LFSP rules require the loan to be repaid before
a participant can receive any proceeds from the sale of their shares. The Board has the discretion to impose such vesting
conditions in relation to the loan funded shares as it deems appropriate. These may include conditions relating to continued
employment or service, performance (of the participant, the consolidated entity or the share price) and the occurrence of
specific events. The consolidated entity has also issued loan funded fully paid ordinary shares in the company to directors
and executives on the same terms as the LFSP. The issuing of these loan funded shares gives rise to an ongoing employment
benefit expense each financial period and this is accounted for in accordance with the accounting policy on employee
benefits, as detailed in Note 1. The expense is included in the share-based payment expense amount listed in Note 4.
As at 30 June 2021 the following loan funded shares had been granted:
Grant date
Issue
date
Loan Expiry
date
Issue
price
Balance at
30 June
2020
Number
Issued
during the
period
Number
Sold during
the period
Number
Forfeited
during the
period
Number
Balance at
30 June
2021
Number
Vested at
end of the
period
Number
$0.06 1,200,000
28/11/2017 19/02/2018 27/11/2022
$0.10 1,600,000
30/01/2018 19/02/2018 18/02/2023
250,000
$0.08
26/11/2018 24/12/2018 26/11/2023
550,000
$0.08
24/12/2018 24/12/2018 24/12/2023
27/11/2019 29/11/2019 29/11/2024 $0.101 6,500,000
27/11/2019 29/11/2019 29/11/2024 $0.101 1,125,000
-
27/01/2021 15/02/2021 14/02/2026 $0.175
-
29/01/2021 15/02/2021 14/02/2026 $0.175
-
04/06/2021 29/06/2021 28/06/2026 $0.075
11,225,000
Total
$0.095
Weighted average issue price
-
-
-
-
-
-
1,000,000
500,000
725,000
2,225,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,625,000
600,000
-
-
-
2,225,000
1,200,000
1,200,000
1,600,000 1,600,000
250,000
550,000
1,625,000
525,000
1,000,000
-
-
11,225,000 6,750,000
$0.102
250,000
550,000
4,875,000
525,000
1,000,000
500,000
725,000
$0.110
The 2,225,000 loan shares granted to participants during the period were sourced from forfeited loan shares, transferred
from the relevant participants.
Loan shares issued to Directors and executives
During the period 1,000,000 Loan Shares were granted to Directors on 27 January 2021 and vested on 1 March 2021 and
have been valued independently at issued date. Details are as follows:
Number of
Loan
Shares
1,000,000 Vested on 1 March 2021.
Service based vesting date
Fair value
per share at
issue date
$0.070
Total fair
value at
issue date
$70,000
The valuation model inputs used by the independent valuer were as follows:
Loan Expiry Share price
Issue Marketability
Grant date
27/01/2021
date
at grant date price
14/02/2026
$0.195
$0.175
Discount
0.00%
39
Expected Dividend
volatility
yield
0.00%
82%
Risk-free
interest rate
0.37%
57
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 25. Share-based payments (continued)
Loan Shares issued to employees
During the period 1,225,000 Loan Shares were issued to employees. These Loan Shares were issued in at two separate
dates and each allotment will vest in three tranches, subject to time-based vesting conditions and have been valued
independently at issued date. Details of the vesting of each tranche are as follows:
Loan Funded Shares granted on 29 January 2021
Tranche
Tranche 1
Tranche 2
Tranche 3
Total
Number of
Loan
Shares
Service based vesting date
250,000 To vest on 11 July 2021.
125,000 To vest on 11 January 2022.
125,000 To vest on 11 July 2022.
500,000
Loan Funded Shares granted on 4 June 2021
Tranche
Tranche 1
Tranche 2
Tranche 3
Total
Number of
Loan
Shares
Service based vesting date
362,500 To vest on 4 December 2021.
181,250 To vest on 4 June 2022.
181,250 To vest on 4 December 2022.
725,000
The valuation model inputs used by the independent valuer were as follows:
Fair value
per share at
issue date
$0.074
$0.081
$0.087
Fair value
per share at
issue date
$0.039
$0.044
$0.049
Total fair
value at
issue date
$18,500
$10,125
$10,875
$39,500
Total fair
value at
issue date
$14,138
$7,975
$8,882
$30,995
Loan Expiry Share price
Issue Marketability
Grant date
29/01/2021
04/06/2021
date
at grant date price
14/02/2026
28/06/2026
$0.165
$0.125
$0.175
$0.175
Discount
0.00%
0.00%
Expected Dividend
volatility
yield
0.00%
0.00%
Risk-free
interest rate
0.378%
0.705%
82%
80%
As at 30 June 2020 the following loan funded shares had been granted:
Grant date
Issue
date
Loan Expiry
date
Issue
price
Balance at
30 June
2019
Number
Issued
during the
period
Number
Sold during
the period
Number
Forfeited
during the
period
Number
Balance at
30 June
2020
Number
Vested at
end of the
period
Number
28/11/2017 19/02/2018 27/11/2022
30/01/2018 19/02/2018 18/02/2023
26/11/2018 24/12/2018 26/11/2023
24/12/2018 24/12/2018 24/12/2023
27/11/2019 29/11/2019 29/11/2024 $0.101
27/11/2019 29/11/2019 29/11/2024 $0.101
Total
Weighted average issue price
$0.06 1,200,000
$0.10 2,050,000
$0.08 1,000,000
$0.08 1,375,000
-
-
5,625,000
$0.083
-
-
-
-
6,500,000
1,125,000
7,625,000
-
-
-
-
-
-
-
-
450,000
750,000
825,000
-
-
2,025,000
1,200,000
1,200,000
1,600,000 1,600,000
250,000
550,000
1,625,000
562,500
11,225,000 5,785,500
$0.089
250,000
550,000
6,500,000
1,125,000
$0.095
For the loan funded shares issued during the 2020 financial year, the valuation model inputs used to determine the fair value
at each vesting date, were as follows:
Grant date
27/11/2019
Loan Expiry Share price
date
29/11/2024
at issue date
$0.087
Issue
price
$0.101
Marketability
Discount
0.00%
Expected Dividend
volatility
72%
yield
0.00%
Risk-free
interest rate
0.76%
58
40
41
Knosys Limited
Notes to the financial statements
30 June 2021
Note 25. Share-based payments (continued)
Employee share option plan
An employee share option plan (ESOP) was established by the consolidated entity, whereby the consolidated entity, at the
discretion of the Board, granted options over ordinary shares in the company to personnel of the consolidated entity. The
options were issued for nil consideration and were granted in accordance with time based and/or performance targets
established by the Board. The granting of these options gave rise to an ongoing employment benefit expense each financial
period and this is accounted for in accordance with the accounting policy on employee benefits, as detailed in Note 1. The
expense is included in the share-based payment expense amount listed in Note 4.
As at 30 June 2021 there were no options granted under the ESOP:
Option
Option
Exercise
Balance at
Issued
Exercised
forfeited
Balance at
Issue date
Expiry date
price
30 June
during the
during the
during the
30 June
2020
Number
period
Number
period
Number
period
Number
2021
Number
25/10/2016 01/10/2020
$0.25
Total
Weighted average exercise price
1,250,000
1,250,000
$0.25
As at 30 June 2020 the following options had been granted under the ESOP:
Expired or
-
-
1,250,000
1,250,000
Expired or
Option
Option
Exercise
Balance at
Issued
Exercised
forfeited
Balance at
Issue date
Expiry date
price
30 June
during the
during the
during the
30 June
2019
Number
period
Number
period
Number
period
Number
2020
Number
25/10/2016 01/10/2020
$0.25
Total
Weighted average exercise price
1,250,000
1,250,000
$0.25
-
-
-
-
1,250,000
1,250,000
$0.25
1,250,000
1,250,000
$0.25
Vested and
exercisable
at end of
the period
Number
-
-
-
-
-
-
Vested and
exercisable
at end of
the period
Number
-
-
-
-
Options issued to Directors and senior management
As at 30 June 2021 there we no options over ordinary shares in Knosys Limited issued to Directors and senior management
(30 June 2020 - Nil).
Note 26. Segment information
Identification of reportable operating segments
The consolidated entity has one operating segment, being a developer and licensor of computer software, however it operates
across multiple geographical regions. The operating segments are based on the internal reports that are reviewed and used
by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance
and in determining the allocation of resources. There is no aggregation of operating segments.
Geographical information
Australia
United States
New Zealand
Rest of World
Sales to external
customers
Geographical
non-current assets
June 2021 June 2020 June 2021 June 2020
$
$
$
$
2,330,046
5,207,273
423,025
2,644,284
318,307
1,255,992
375,499
-
499,391
307,880
-
-
-
-
-
-
4,594,082
3,137,317
5,207,273
423,025
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 25. Share-based payments (continued)
Employee share option plan
An employee share option plan (ESOP) was established by the consolidated entity, whereby the consolidated entity, at the
discretion of the Board, granted options over ordinary shares in the company to personnel of the consolidated entity. The
options were issued for nil consideration and were granted in accordance with time based and/or performance targets
established by the Board. The granting of these options gave rise to an ongoing employment benefit expense each financial
period and this is accounted for in accordance with the accounting policy on employee benefits, as detailed in Note 1. The
expense is included in the share-based payment expense amount listed in Note 4.
As at 30 June 2021 there were no options granted under the ESOP:
Option
Issue date
Option
Expiry date
Exercise
price
Balance at
30 June
2020
Number
Issued
during the
period
Number
Exercised
during the
period
Number
Expired or
forfeited
during the
period
Number
Balance at
30 June
2021
Number
Vested and
exercisable
at end of
the period
Number
25/10/2016 01/10/2020
$0.25
Total
Weighted average exercise price
1,250,000
1,250,000
$0.25
-
-
-
-
1,250,000
1,250,000
-
-
-
-
-
-
As at 30 June 2020 the following options had been granted under the ESOP:
Option
Issue date
Option
Expiry date
Exercise
price
Balance at
30 June
2019
Number
Issued
during the
period
Number
Exercised
during the
period
Number
Expired or
forfeited
during the
period
Number
Balance at
30 June
2020
Number
Vested and
exercisable
at end of
the period
Number
25/10/2016 01/10/2020
$0.25
Total
Weighted average exercise price
1,250,000
1,250,000
$0.25
-
-
-
-
-
-
1,250,000
1,250,000
$0.25
1,250,000
1,250,000
$0.25
Options issued to Directors and senior management
As at 30 June 2021 there we no options over ordinary shares in Knosys Limited issued to Directors and senior management
(30 June 2020 - Nil).
Note 26. Segment information
Identification of reportable operating segments
The consolidated entity has one operating segment, being a developer and licensor of computer software, however it operates
across multiple geographical regions. The operating segments are based on the internal reports that are reviewed and used
by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance
and in determining the allocation of resources. There is no aggregation of operating segments.
Geographical information
Australia
United States
New Zealand
Rest of World
Sales to external
customers
Geographical
non-current assets
June 2021 June 2020 June 2021 June 2020
$
$
$
$
2,644,284
318,307
1,255,992
375,499
2,330,046
-
499,391
307,880
5,207,273
-
-
-
423,025
-
-
-
4,594,082
3,137,317
5,207,273
59
423,025
41
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 26. Segment information (continued)
Concentration of key customers
The concentration of customers for the 2021 year was as follows:
•
•
•
A major customer in Australia and New Zealand in the finance sector represented 45.4% of operating revenue
A major customer in Australia in the Telecommunications sector represented 26.5% of operating revenue
A major customer in Singapore in the telecommunications sector represented 6.7% of operating revenue
The concentration of customers for the 2020 year was as follows:
•
•
•
A major customer in Australia and New Zealand in the finance sector represented 44.4% of operating revenue
A major customer in Australia in the Telecommunications sector represented 38.2% of operating revenue
A major customer in Singapore in the telecommunications sector represented 9.8% of operating revenue
Knosys Limited
Notes to the financial statements
30 June 2021
Note 28. Business combinations (continued)
Cash
Trade receivables
Prepayments and other assets
Plant and equipment
Trade and other payables
Contract liabilities
Provisions
Net assets acquired
Note 27. Loss per share
Consolidated
2021
$
2020
$
Goodwill acquired on acquisition*
Purchase consideration, being the issue of 36,978,000 Knosys Limited shares at 13.5c per share
Loss after income tax attributable to the owners the parent
(545,381)
(908,391)
Number
Number
* The consolidated entity is in the process of conducting a valuation of the split between identifiable and unidentifiable
intangible assets, the results of which will be reflected in the financial statements in due course. Under accounting
standards the consolidated entity has a period of up to 12 months from acquisition date to complete this exercise. For the
purpose of the financial report for the year ended 30 June 2021 the entire balance has been recognised as Goodwill.
Weighted average number of ordinary shares used in calculating basic and diluted
earnings per share
168,997,547 146,509,893
Acquisition costs
Basic loss per share
The 2,000,000 (2020: 3,550,000) options issued could potentially dilute basic earnings per
share in the future, but were not included in the calculation of diluted earnings per share
because they are anti-dilutive for the periods presented.
Cents
Cents
(0.32)
(0.62)
Contingent Assets and Contingent Liabilities
No contingent assets or liabilities were assumed by the Group as a result of the acquisition of GreenOrbit.
Revenue and profit contribution
Since the date of acquisition estimated revenue contributed by GreenOrbit for the three months to 30 June 2021 was
$757,000, with a small net loss contribution of $87,000. Based on pre and post acquisition analysis of GreenOrbit, the annual
revenue contribution to the consolidated entity from GreenOrbit was estimated to be $2.8m if the acquisition had occurred
on 1 July 2020. Based on the nature of the business combination from which GreenOrbit was acquired, it was not possible
to determine the profit impact to the Group if the acquisition had occurred on 1 July 2020.
Transactions costs of approximately $425,000 associated with the acquisition have been expensed and are included in
Transaction costs in the income statement.
30 Mar 2021
$
1,482,025
186,298
189,008
14,298
(138,234)
(1,417,162)
(250,418)
65,815
4,992,030
4,926,215
Note 28. Business combinations
Acquisition of the Greenorbit Pty Ltd (“GreenOrbit”)
On 30 March 2021 the consolidated entity acquired 100% of the issued capital of Greenorbit Pty Ltd, which owns three
subsidiary companies, Greenorbit Inc, in USA, Greenorbit software Limited in UK and Greenorbit Software Pvt Ltd in India.
GreenOrbit is a leading provider and operator of intranet solutions which facilitate efficient and secure internal
communications and information sharing for over 260 clients, with more than 340,000 licensed users across more than 20
countries. The Company issued 36,978,000 fully paid ordinary shares to the vendor of GreenOrbit as consideration for the
acquisition. Based on the market value of Knosys Limited shares on the date of completion, the acquisition value of
GreenOrbit was $4,992,030.
Identifiable assets acquired and liabilities assumed
The fair value of the identifiable assets and liabilities of GreenOrbit as at the date of the acquisition have been provisionally
determined as follows:
42
43
60
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Notes to the financial statements
30 June 2021
Note 28. Business combinations (continued)
Cash
Trade receivables
Prepayments and other assets
Plant and equipment
Trade and other payables
Contract liabilities
Provisions
Net assets acquired
Purchase consideration, being the issue of 36,978,000 Knosys Limited shares at 13.5c per share
Goodwill acquired on acquisition*
30 Mar 2021
$
1,482,025
186,298
189,008
14,298
(138,234)
(1,417,162)
(250,418)
65,815
4,992,030
4,926,215
* The consolidated entity is in the process of conducting a valuation of the split between identifiable and unidentifiable
intangible assets, the results of which will be reflected in the financial statements in due course. Under accounting
standards the consolidated entity has a period of up to 12 months from acquisition date to complete this exercise. For the
purpose of the financial report for the year ended 30 June 2021 the entire balance has been recognised as Goodwill.
Acquisition costs
Transactions costs of approximately $425,000 associated with the acquisition have been expensed and are included in
Transaction costs in the income statement.
Contingent Assets and Contingent Liabilities
No contingent assets or liabilities were assumed by the Group as a result of the acquisition of GreenOrbit.
Revenue and profit contribution
Since the date of acquisition estimated revenue contributed by GreenOrbit for the three months to 30 June 2021 was
$757,000, with a small net loss contribution of $87,000. Based on pre and post acquisition analysis of GreenOrbit, the annual
revenue contribution to the consolidated entity from GreenOrbit was estimated to be $2.8m if the acquisition had occurred
on 1 July 2020. Based on the nature of the business combination from which GreenOrbit was acquired, it was not possible
to determine the profit impact to the Group if the acquisition had occurred on 1 July 2020.
43
61
Annual Report 2020-2021Notes to the financial statements 30 June 2021
Knosys Limited
Directors' declaration
30 June 2021
In the directors' opinion:
● the attached financial statements and notes comply with the Corporations Act 2001, the Australian Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
● the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
● the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
30 June 2021 and of its performance for the financial year ended on that date; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________
Hon. Alan Stockdale AO
Director
25 August 2021
Melbourne
44
62
Annual Report 2020-2021Directors’ declaration 30 June 2021
Knosys Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Knosys Limited (the Company) and its controlled
entities (the Group), which comprises the consolidated statement of financial position as at
30 June 2021, the consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and other explanatory information, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
63
Annual Report 2020-2021Independent auditor’s report to members
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
RECOGNITION OF REVENUE UNDER SERVICE CONTRACTS
How our audit addressed it
Our audit procedures included:
• Examining management’s revenue
recognition model to ensure compliance with
AASB 15;
• Testing of customer invoicing under the
contract; and
• Tracing through to new service contracts to
understand material terms and conditions,
including any particular seller warranties or
indemnities given and their potential impact
upon the revenue recognition model.
We have also assessed the adequacy of
disclosures in the notes to the financial report.
Area of focus
Refer also to notes 1, 3 and 14
The Group has service contracts with Its customers.
These service contracts have invoicing and payment
milestones included within their terms, which may or
may not be directly aligned with the performance of
services under the contract in accordance with AASB
15 Revenue from Contracts with Customers.
In order to accrue revenue appropriately in the
correct accounting period, management has
developed a model to recognise revenue when the
performance obligation is satisfied in each contract.
This includes identifying the specific performance
obligations within each customer agreement on
commencement.
There is a requirement for judgement in determining
which period to which the revenue should be
attributed. In designing the model management has
considered:
• Compliance with AASB 15 – Revenue from
contracts with customers;
• When the performance obligation is identified
and satisfied in respect to each component of
each contract; and
• The potential for any post-contract servicing work
to be performed at the conclusion of the contract
and whether an additional performance obligation
exists.
Based on the above revenue recognition was a key
area of focus for our audit.
64
Annual Report 2020-2021Independent auditor’s report to members
ACQUISITION OF THE GREENORBIT GROUP OF ENTITIES
Area of focus
Refer also to notes 1 and 28
The Group acquired the GreenOrbit group of
entities (“GreenOrbit”) on 30 March 2021 for a total
consideration of $5.0 million.
Accounting for this transaction is complex and
required significant judgements and estimates by
management on the initial entries recorded,
specifically to determine the fair value of assets and
liabilities acquired in the context of Australian
Accounting Standards, noting that they have been
described as provisional in the financial report.
As such this matter has been determined as a key
area of focus for our audit.
SHARE BASED PAYMENTS
Area of focus
Refer also to notes 1 and 25 and the Remuneration Report
The Group has issued loan funded shares for its
key management personnel and employees. The
plan includes a service-based vesting period for
shares issued to employees.
The loan funded shares arrangement, which form
part of the plan required significant judgements and
estimations by management, including the
following:
• Determination of the grant date of each
arrangement, and the evaluation of the fair
value of the underlying share price of the
company as at that grant date;
• The evaluation of the vesting charge taken to
the profit and loss in-respect of the accrual of
service conditions attached to those share-
based payment arrangements; and
• The evaluation of key inputs into the binomial
model, including the significant judgement of
the forecast volatility of the loan funded shares
over its exercise period.
The results of these share-based payment
arrangements materially affect the disclosures of
these financial statements, including the vesting
charge that affects disclosures of key management
personnel remuneration.
How our audit addressed it
Our audit procedures included:
• Assessing that the acquired entity meets the
definition of a business under AASB 3 –
Business Combinations;
• Reviewing the sale and purchase agreement
to understand the key terms and conditions of
the acquisition, including the date that control
passed to the Group; and
• Assessing the Group’s determination of fair
values of assets acquired by performing
specific audit procedures on opening
balances at acquisition date.
We have also assessed the adequacy of the
Group’s disclosures in respect of the acquisition in
the financial report.
How our audit addressed it
Our audit procedures included:
• Determining the grant dates and evaluating
what were the most appropriate dates based
on the terms and conditions of the share-
based payment arrangements;
• Evaluating the fair values of share-based
payment arrangements by agreeing
assumptions to third party evidence;
• Evaluating the progress of the vesting of
share-based payments within the service
period; and
• For the specific application of the binomial
model, we assessed the experience of the
expert used to advise the value of the
arrangements. We also assessed the
reasonableness of the assumptions detailed
in their report.
We have also assessed the adequacy of
disclosures in the notes to the financial report.
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Annual Report 2020-2021Independent auditor’s report to members
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2021 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 Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to fraud
or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
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Annual Report 2020-2021Independent auditor’s report to members
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of Knosys Limited, for the year ended 30 June 2021, 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.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Director
Melbourne, 25 August 2021
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Annual Report 2020-2021Independent auditor’s report to members
Knosys Limited
Additional information for listed companies
Corporate Governance Statement
The company’s corporate governance statement can be found on the company website at
https://www.knosys.co/investor-centre/
Shareholder information as at 23 September 2021
Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
Above 100,001
Number Number
Holders Ordinary
Shares
26
57
80
4,801
211,298
657,214
323 13,213,309
225 200,034,076
711 214,138,698
The number of shareholdings held in less than marketable parcels is 50, with a total of
72,880 ordinary shares, amounting to 0.03% of issued capital.
Substantial shareholders listed in the company’s register:
Shareholder
Number
Ordinary
shares
%
Knosys Limited
Additional information for listed companies
20 Largest Shareholders — Ordinary Shares
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
SKIPTAN PTY LTD
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