MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 0
MSL Solutions Limited
ANNUAL FINANCIAL REPORT
30 June 2022
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 1
Chairman’s Report ................................................................................................................................................ 02
Board of Directors ................................................................................................................................................ 04
Directors’ Report .................................................................................................................................................. 07
Auditor’s Independence Declaration .................................................................................................................... 25
Financial Statements ............................................................................................................................................ 26
Directors Declaration ............................................................................................................................................ 80
Independent Auditor’s Report .............................................................................................................................. 81
Shareholder information ...................................................................................................................................... 85
Corporate Directory .............................................................................................................................................. 87
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 2
Chairman’s Report
Dear Shareholders,
I am pleased to present MSL Solutions’ financial results for the year ending 30 June 2022 (FY22).
Our results for the financial year highlight the full year benefits of the SwiftPOS acquisition, the OrderMate
acquisition (Sept 2021), strategic enterprise contract wins across our key domestic and international markets,
whilst maintaining the strong cost controls across the business.
In FY22, MSL demonstrated growth in all key metrics, revenue grew 37% to $33.93m (FY21: $24.67m),
recurring revenue grew by 18% to $20.10m (FY21: $17.09m), EBITDA increased by 70% to $5.31m (FY21:
$3.12m), EBITDA margin increased to 15.6% (FY21: 12.6%), and the cash balance increased by 73% to $9.39m
($5.43m) with the company having no interest bearing debt.
The year’s results reflect the organisation structural reform in prior years, key acquisitions which have enabled
the business to target large enterprise contract wins elevating MSL to the preferred POS technology provider
across the Australian and New Zealand Stadia and Arena market such as Stadiums Queensland, Eden Park and
AAMI Park whilst maintaining its leading position in the broader hospitality sector.
OrderMate, acquired in September 2021, contributed total revenues of $5.3 m and an EBITDA contribution of
$1.2m for the 9 months of this financial year. Both acquisitions of OrderMate and SwiftPOS in FY21
demonstrate the value MSL can unlock through our proprietary technologies. While OrderMate and SwiftPOS
service and target different customer segments, a collective product development approach will enable
increased speed to market and greater returns on investment. We will continue to investigate earnings
accretive new opportunities, through strategic integrations and partnerships with a focus on digital and
payments opportunities.
MSL Verteda (UK) and Golfbox (Denmark).
MSL Verteda continues to grow its footprint in the UK through both the Kappture technology (Reseller
agreement) and more recently strong interest and deployments of SwiftPOS technologies including Brighton
Pier, Angus Steak House franchise and Thames Valley theme park.
MSL has focussed a large part of its resources and capital into the POS strategy with success. Despite this
focus, our golf revenues in both Australia and internationally through GolfBox (Denmark) have continued to
grow. During the same period, we have progressed the consolidation of our Australian golf management
systems with the recent release of Simple Golf Management and related golf scoring apps. We have recruited
a new CEO of Golfbox, commencing September 2022. The strong position of MSL will allow us, during FY23, to
have a renewed focus on expanding both our market footprint and our technologies to grow our golf business
operations. We remain a client focused company in a business-to-business services market and we continue to
develop and deploy innovative tools that assist our clients with efficiency but also provide access to services
like in-seat ordering which can increase venue operators’ flexibility and revenue potential.
Through the leadership of our CEO, Pat Howard, the senior leadership team continues to evolve as we seek
further growth across multiple markets and segments. The FY22 results are a reflection of the collective MSL
team’s dedication and commitment and we owe a significant round of thanks for their contribution during the
year.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 3
The MSL Board also continues to evolve with Dr Sarah Kelly joining the Board in March 2022.
In particular, I am grateful for the contribution, expert guidance and support of my colleagues on the Board,
without which the achievements of the past 3 years would not have been possible.
Tony Toohey
Executive Chairman
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 4
Board of Directors
Tony Toohey – Executive Director and Chairman
Tony Toohey was appointed as an Executive Director and Chairman on 1st September 2019.
Tony is a highly accomplished senior executive with over 35 years in the gaming, hospitality, leisure and
technology industries with a proven track record of success in creating sustainable competitive advantage and
a strong platform for continuing growth.
Tony is the former Managing Director, CEO & Executive Chairman of ASX listed Intecq & eBet Limited. Intecq &
eBet Limited was acquired by Tabcorp in December 2016 for $128 million. Tony served as GM Business
Development Gaming Tabcorp from 2016 until July 2018.
Interest in Shares and Options
Mr Toohey and associated entities held 769,370 Ordinary Shares and 3,075,000 Performance Rights in MSL
Solutions Limited as at 30 June 2022.
Earl Eddings - Non-Executive Director
Earl Eddings joined the Board on 30th April 2019. Currently Managing Director of The Riskcom Group, Earl
served as a Chairman and Director of Cricket Australia from 2008 – 2021. He was a Director of Cricket Victoria
from 2006-2015 and held the position of Deputy Chairman from 2008-2015. Earl was also Director of the Kerry
Packer Foundation and Director of the International Cricket Council. He is a Fellow of the Governance Institute
of Australia and Graduate of the AICD. Previously he was Managing Director for WSP Asia Pacific and Managing
Director of ASX Listed Greencap before selling to Wesfarmers.
Earl Eddings is a member of the Company’s Audit & Risk Committee and the Nomination & Remuneration
Committee.
Interest in Shares and Options
Mr Eddings and associated entities held 2,465,992 Ordinary Shares in MSL Solutions Limited as at 30 June
2022.
Dr Richard Holzgrefe - Non-Executive Director
Richard Holzgrefe was appointed as a non-executive Director on 18th December 2007. He brings corporate
experience across multiple industry sectors to the Company.
He joined MSL from VLRQ Pty Ltd where he served as a Director from 1998 to 2004. He was a Director of
Kenlynn Property Syndicates Pty Ltd from 1997 to 2000, and co-founded The BOH Dental Group in 1976. He
left in 1997 to pursue interests in the Property and Retirement Living sectors.
He was Chairman of Verton Technologies Aust Pty Ltd from 2017-2021 and is a Director of Holmac Holdings Pty
Ltd.
Richard holds a Bachelor of Dental Science degree from the University of Queensland.
Richard Holzgrefe is a member of the Company’s Audit & Risk Committee and the Nomination & Remuneration
Committee.
Interest in Shares and Options
Dr Holzgrefe and associated entities held 16,823,351 Ordinary Shares in MSL Solutions Limited as at 30 June
2022.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 5
Dr Sarah Kelly OAM - Non-Executive Director
Sarah Kelly joined the Board on 31st March 2022 bringing over 20 years’ experience within the sports, tourism,
professional services and education sectors.
Sarah is an Associate Professor in Law and Marketing at the University of Queensland and an experienced
commercial lawyer.
Sarah currently serves as a non-executive director on several boards including as Deputy Chair of the Brisbane
Lions AFL Football Club, Deputy Chair of Tourism and Events Qld, ASX-listed company Australian Family
Lawyers and as a member of the Brisbane 2032 Games organising board.
Dr Kelly provides mentorship to sports technology start-up companies and current projects are focussed upon
esports, women’s sport, sponsorship strategy, sports integrity and mega event legacy. She is the Queensland
Chapter Leader for the Minerva Network, a national social enterprise concerned with providing mentoring to
professional sportswomen. In 2021, she was awarded an Order of Australia Medal for her services to sports
administration and to tertiary education.
Interest in Shares and Options
Dr Kelly and associated entities held Nil Ordinary Shares in MSL Solutions Limited as at 30 June 2022.
David Trude - Non-Executive Director
David Trude joined the Board on 9th March 2017 bringing over 40 years’ experience as a senior corporate
executive within the banking and securities industries.
He was formerly Managing Director, Australian Chief Executive Officer/Country Manager of Credit Suisse,
Australia for 10 years from 2001.
He has served as Chairman of Baillieu Holst Limited since 2010 having been a Board member since 2007, is
Chairman of Waterford Retirement Village, Hansen Technologies Limited and East West Line Parks Pty Limited,
a member of the Board of Chi-X Australia Pty Ltd and non-executive Director of Acorn Capital Investment Fund
Limited, an ASX listed entity.
David holds a Bachelor of Commerce Degree from the University of Queensland, is a Senior Associate of the
Financial Services Institute of Australasia, a member of the Australian Institute of Company Directors and
Master Member of the Stockbrokers and Financial Advisers Association.
David Trude is the Chair of the Company’s Nomination & Remuneration Committee.
Interest in Shares and Options
Mr Trude and associated entities held 1,144,370 Ordinary Shares in MSL Solutions Limited as at 30 June 2022.
David Usasz - Non-Executive Director
David Usasz joined the Board on 5th February 2020.
David has over 40 years’ experience in business in Australia and Hong Kong, including over 20 years as a
partner of PriceWaterhouseCoopers (and its predecessor organisations). He has been involved in tax, mergers
and acquisitions advice and corporate advisory consultancy specialising in corporate reorganisations. He has
previously held the positions of Non-Executive Chairman on ASX-listed Queensland Mining Corporation,
GARDA Diversified Property Fund and GARDA Capital Group and Smiles Inclusive Limited and Non-Executive
Director of ASX-listed entity Cromwell Property Group. David was also a Non-Executive Director of Queensland
Investment Corporation (QIC) and URBIS Group and a Board Member of the Princess Alexandra Hospital
Research Foundation between 1991-2004.
David holds a Bachelor of Commerce from the University of Queensland and is a Fellow of Chartered
Accountants Australia and New Zealand.
David Usasz is the Chair of the Company’s Audit & Risk Committee.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 6
Interest in Shares and Options
Mr Usasz and associated entities held 4,450,000 Ordinary Shares in MSL Solutions Limited as at 30 June 2022.
Company Secretary
Andrew Ritter was appointed as Company Secretary on 27th March 2017. Mr Ritter has over 20 years’ of
international finance experience with various listed global IT & Telco organisations. Andrew is a Chartered
Accountant, holds a Bachelor of Commerce degree, a Graduate Diploma of Applied Corporate Governance and
is a Fellow of the Governance Institute of Australia and the International Institute of Chartered Secretaries and
Administrators.
Assistant Company Secretary
David Marshall was appointed Assistant Company Secretary on 5th February 2020. Mr Marshall is the Chief
Financial Officer of the Group.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 7
Directors’ Report
The Directors of MSL Solutions Limited (‘MSL’ or ‘the Company’) submit their report together with the
consolidated financial report of the Company, comprising the Company and its controlled entities (together
‘the Group’) for the year ended 30 June 2022 and the audit report thereon.
Directors
The names of the Directors of the Company in office during the year and to the date of this report are:
Principal activities
MSL's POS system connects customers to venues using mobile and contactless entry, ordering, and payment
solutions. It extends POS beyond traditional terminals by utilising its own technology on a single integrated
system. This system then provides analytics that customers can use to reduce costs and drive increased
revenue.
MSL Solutions Limited (ASX: MSL) is the leading SaaS technology provider to the sports, leisure, and hospitality
sectors. We help some of the world’s most iconic venues – stadiums & arenas, pubs & member clubs, sporting
associations, golf federations, restaurants & cafes, and more – to deliver outstanding customer experiences
during every engagement.
MSL’s three core pillars are:
•
Point of Sale - Fully integrated POS platforms, purpose-built for venues. Our SwiftPOS and OrderMate
solutions support complementary sectors, broadening customers’ ability to pick the right option for
their venue.
•
Golf - MSL provides technology platforms to manage national federations, golf clubs, golf
professionals and tournaments.
•
Digital Solutions - Mobile applications that are in the hands of the customer: whether its’ our own,
OrderAway, or our partners’ apps.
MSL is a trusted solution provider to more than 8,000+ clients, spanning five continents with offices in
Australia, Denmark and the United Kingdom. To discover more about MSL, please visit www.mslsolutions.com.
Name
Director since
Non-Executive
Dr Richard Holzgrefe
18th December 2007
Mr David Trude
9th March 2017
Mr Earl Eddings
30th April 2019
Mr David Usasz
5th February 2020
Dr Sarah Kelly OAM
31st March 2022
Executive
Mr Anthony (Tony) Toohey (Chairman)
1st September 2019
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 8
Financial Results
MSL continues to achieve profitable performances on the back of revenue growth attributed to both organic
growth and acquisitions. Each of reported Revenue, EBITDA and cash balance exceeded the upper range
provided in its Business Update of 30th May 2022.
Revenue of $33.93 m is 37% higher than prior year (FY21: $24.67 m) with $5.22 m, or 22% from the acquisition
of OrderMate and $4.04 m, or 16% from real organic growth.
Recurring Revenue of $20.10 m grew by 18% (FY21: $17.09 m) of which $2.67 m, or 16% was from the acquisition
of OrderMate. MSL has experienced real growth in the recurring revenues from its SwiftPOS and OrderMate
products which has reduced the impact of reduction in revenue from legacy/third party products at lower
margins. Although reducing, reductions in recurring revenue from legacy/third party products will continue to
impact recurring revenue into FY23.
Sales or point in time revenue for FY22 was $13.84 m which is an 82% increase from the prior year (FY21: $7.58
m). This has been driven by MSL’s ability, especially with the SwiftPOS product, to access larger value, higher
margin stadium and enterprise hospitality customers. The backlog and pipeline leading into FY23 in both APAC
and UK continues to see growing opportunities in this market.
EBITDA of $5.31 m for the 12 months followed an EBITDA of $3.12 m in the prior financial year, a 70% increase.
The EBITDA margin for FY22 of 15.6% (FY21: 12.6%) continues to grow as MSL exits legacy/third party products
and drives growth in its higher value, higher margin markets with its own products.
Net Profit after Tax for FY22 is $816 k compared to $886 k in FY21 with available R&D Tax offsets and losses still
available for future tax years.
Cash generated from operations before income tax (excluding government subsidies) was $4.5 million (FY21:
$4.5 m) and, together with strong capital management, resulted in a year end cash balance of $9.39 m (FY21:
$5.43 m) and no interest-bearing debt (FY21: $2.25 m) following the issue of an interest free $4.5 m convertible
note and support of MSL shareholders who participated in a Share Purchase Plan during the year raising $4.46
m after costs.
Operational Review
On 30th September 2021, the Group acquired 100% of the equity of hospitality point-of-sale systems business,
OrderMate.
The acquisition has seen MSL expand its footprint from its established market in the stadium, arena, pubs and
clubs’ market into the adjacent and complementary restaurant and takeaway food vertical.
The OrderMate business has generated $5.3 m in revenue and $1.2m in EBITDA for the period from 1st
October 2021 to 30 June 2022 which is 20%+ revenue growth under acquisition on a like-for-like basis.
The markets in which MSL’s Golf segment operates continued to see growth in participation during the year
boosted by a resurgence in the sport in Australia, lifting membership numbers for Golf Australia. The Company’s
European subsidiary, Golfbox, continued to improve its profitability, despite the pandemic, through ongoing
contracts with long-term partner federations in Norway, Switzerland and Denmark, among others.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 9
Key Financial Results
The table below provides a summary of the FY22 results, with a comparison to the prior year’s performance:
*EBITDA excludes the effects of significant non-recurring items of income and expenditure which may have an
impact on the quality of earnings such as credit loss provision relating to sales and revenue from prior periods,
gains resulting from acquisition and lease accounting and proceeds from disposal of assets (net of costs).
Dividends
No dividends were paid to shareholders during the financial year, and no dividend has been declared or paid
subsequent to the end of the financial year.
Significant changes in state of affairs
There were no significant changes in the state of affairs of the Company during the financial year, other than
those disclosed in this report.
Subsequent events
There are no matters which have arisen since the end of the reporting period which may materially affect
operations of MSL, the results of those operations, or the state of affairs of MSL in future years.
1H FY22
2H FY22
FY22
FY21
A$'000
A$'000
A$'000
A$'000
Recurring Revenue
9,366
10,729
20,095
17,090
Sales Revenue
7,543
6,293
13,836
7,576
Revenue from ordinary activities
16,909
17,022
33,931
24,666
Other income
3
(3)
-
26
Cost of sales
(4,840)
(3,485)
(8,325)
(6,023)
Gross margin
12,072
13,534
25,606
18,669
Operating expenses
(9,890)
(10,411)
(20,301)
(15,551)
EBITDA before Government Subsidies*
2,182
3,123
5,305
3,118
EBITDA margin %
12.9%
18.3%
15.6%
12.6%
COVID-19 related Government subsidies
34
-
34
1,045
EBITDA*
2,216
3,123
5,339
4,163
Depreciation and amortisation
(2,527)
(3,000)
(5,527)
(4,505)
Gain on reversal of earnout provisions
-
1,191
1,191
-
Net fair value loss on earnout provisions
-
(651)
(651)
-
Gain on disposal of Right of Use Asset
-
56
56
-
Gain on sale of Marina Focus (net of costs)
87
11
98
-
Expected credit loss - prior period
-
-
-
327
EBIT
(224)
730
506
(15)
Net finance income/(costs)
Non-Cash
(489)
400
(89)
29
Cash
(47)
(266)
(313)
(457)
Total Net finance income/(costs)
(536)
134
(402)
(428)
NPBT
(760)
864
104
(443)
Income tax benefit
(97)
809
712
1,329
NPAT
(857)
1,673
816
886
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 10
Future developments, prospects and opportunities
MSL enters FY23 in a position of strength. The trajectory of MSL’s financial performance continues to reflect the
Company’s international growth boosted by a high-profile client base. The new contract announced in July 2022
with Stadiums Queensland for the provision of 880 SwiftPOS terminals and mobile enhanced devices across The
Gabba and Suncorp Stadium in a five-year deal reinforced MSL’s prospects in the year ahead especially within
the stadium and arena markets in APAC and the UK.
For FY23, the Company expects to continue to achieve overall Revenue and EBITDA growth with improved
EBITDA margin as it acquires higher value enterprise customers and increases the proportion of Recurring
Revenue from its SwiftPOS and OrderMate products as lower margin legacy/third party products reduce.
The Company’s momentum will continue to benefit from the growing market for enterprise software-as-a-
service (SaaS) products among hospitality and venue businesses. The digitisation trend across businesses of all
sizes servicing patrons and attendees in pubs, clubs, entertainment venues and stadiums show no sign of slowing
after the COVID-19 pandemic accelerated uptake, complementing the growth outlook from the Company’s
internal initiatives.
With a strong cash position, no interest-bearing debt and robust recurring revenues, the Company remains
focused on delivering organic growth while exploring acquisition and partnership opportunities that offer the
capacity to strengthen the Company’s technology platform and product mix.
Environmental issues
The Directors have considered climate related risks and do not currently consider that there is an associated
material risk to the Group’s operations and the amounts recognised in the financial statements. The Group
continues to monitor climate related and other emerging risks and the potential impact on the financial
statements.
Directors’ meetings
The number of Directors’ meetings (including meetings of committees of Directors) and number of meetings
attended by each of the Directors of the Company during the financial year are:
Corporate Governance Statement
A copy of the Company’s Corporate Governance Statement is available on the Company’s website at
https://mslsolutions.com/investors/
Eligible
Attended
Eligible
Attended
Eligible
Attended
Richard Holzgrefe
17
17
3
3
2
2
David Trude
17
17
0
0
2
2
Earl Eddings
17
17
3
3
2
2
David Usasz
17
17
3
3
0
0
Tony Toohey
17
17
0
0
0
0
Sarah Kelly
5
4
0
0
0
0
Audit & Risk
Committee
Board
Nomination & Remuneration Committee
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 11
Remuneration report - audited
The information provided in the remuneration report relates to the Company for the year ended 30 June 2022
and has been audited as required by section 308(3C) of the Corporations Act (2001).
The directors present the MSL Solutions Limited FY22 remuneration report, outlining key aspects of our
remuneration policy and framework, and remuneration awarded. This report is structured as follows:
1. Remuneration Highlights
2. Key management personnel covered in this report
3. Remuneration policy and link to performance
4. Elements of remuneration
5. Link between remuneration and performance
6. Remuneration expenses for executive KMPs
7. Contractual arrangements with executive KMPs
8. Non-executive director arrangements
9. Additional Statutory information
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 12
1.
Remuneration Highlights
Performance Highlights
Revenue from ordinary activities of
$33.9m (up 37.6% on FY21)
Revenue from ordinary activities was $33.9 m in FY22, up 37.6% on last
year’s revenue of $24.7 m. This was a result of real growth in the SwiftPOS
product and revenue and from the acquisition of OrderMate (completed 30
September 2021).
Net Profit after Tax (NPAT) of $0.8 m
(down $70k or 8% on FY21)
NPAT of $0.8 m was down $70k in FY22. Accordingly, the business
generated positive Operating Cashflow of $4.1 m during the year compared
to $5.7 m in FY21. Operating cash before income tax and government
subsidies was $4.5 m in FY22 compared to $4.5 m in FY21.
Remuneration Highlights
Executive Chairman Remuneration
Tony Toohey
CEO Remuneration
Patrick Howard
CFO Remuneration
David Marshall
FY22 remuneration agreement:
•
$2,300 per day – 1 ½ days per week (ex GST) on average
Total FY22 annualised remuneration was $374k, as:
•
base salary of $350k
•
leave & other benefits of $24k.
Total FY22 annualised remuneration was $324K, as:
•
base salary of $300k
•
leave & other benefits of $24k.
LTI Incentive Plan
Options and Performance Rights held by Directors and Key Management
Personnel as at 30 June 2022:
Options (vested and exercisable)
Nil (FY21: 300,000)
Performance Rights (unvested)
6,875,001 (FY21: 8,850,000)
Performance Rights
(subject to Shareholder Approval) Nil (FY21: 1,000,000)
Non-Executive Director Fees
Total Non-Executive Director remuneration for FY22 was $255,000 and
within the maximum aggregate amount of $400,000 approved by
shareholders.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 13
2.
Key management personnel covered in this report
2.1
Non-executive and executive directors
Non-Executive Directors
Mr Earl Eddings
Dr Richard Holzgrefe
Dr Sarah Kelly OAM
Mr David Trude
Mr David Usasz
Executive Directors
Mr Tony Toohey Executive Chairman
2.2
Other key management personnel (KMP)
Key Management Personnel (KMP)
Mr Patrick Howard
Chief Executive Officer
Mr David Marshall
Chief Financial Officer
3.
Remuneration policy and link to performance
The remuneration committee is made up of independent non-executive directors and was formed post the
successful listing of MSL Solutions Limited on the Australian Securities Exchange. It is the role of the committee
to review and determine the remuneration policy and structure annually to ensure it remains aligned to
business needs, and meets the Company’s remuneration principles. From time to time, the committee may
also engage external remuneration consultants to assist with this review.
In particular, the Board aims to ensure that remuneration practices are:
•
competitive and reasonable, enabling the Company to attract and retain key talent,
•
aligned to the Company’s strategic and business objectives and the creation of shareholder value,
•
transparent and easily understood, and
•
acceptable to shareholders.
Figure 1: Remuneration Framework
Element
Purpose
Performance
Potential value
Changes for FY22
Fixed
remuneration
(FR)
Provide competitive
market salary including
superannuation and
non-monetary benefits
Nil
Positioned at median
market rate
Reviewed in line with
market positioning
Short Term
Incentive
(STI)
Cash based reward for
in-year performance
EBITDA for
business unit
and Group
CEO: 30% of FR
Execs: 10%-30% of FR
Nil
Long Term
Incentive
(LTI)
Alignment to long-term
shareholder value
Increase in
shareholder
value
CEO: 20% of FR
Execs: 5-20% of FR
Nil issued in FY22
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 14
3.1
Balancing short-term and long-term performance in FY22
Supporting the achievement of forecast financial targets, good cash management, and increasing shareholder
value, balanced with the value of retaining key talent, the performance hurdles within the remuneration
elements for FY20 were altered.
•
STI payment structure was modified to promote cross business collaboration, ownership of in-year
business performance, and to preserve and promote cash returns to the business. The incentive was
moved to a self-funding model where payments start to accrue once Management EBITDA targets have
been achieved. Each dollar of Management EBITDA (as defined by the Directors) earned over the
company Management EBITDA target, is split evenly between the Company and the Incentive Pool. STI
payments became capped to ensure maximum company return.
•
LTI performance hurdles were altered in balance to the STI change. Tenure and performance hurdles
were changed to promote more meaningful targets for key personnel, tenure, and long-term
shareholder return.
•
During the year, Share Equivalent Rights were issued to non-management personnel, promoting tenure
and recognition for all levels of personnel, and share price performance.
The Board will continue to review the target remuneration mix for the CEO, KMP and other management
personnel to ensure remuneration packages are consistent with the mix used by other public listed companies
in the Software sector.
3.2
Assessing performance
The remuneration committee is responsible for determining the performance requirements and calculation
mechanism used to provide STI and LTI rewards based on performance. To assist in this assessment, the
committee receives detailed reports on performance from management which are based on independently
verifiable data such as financial measures and data from independently run surveys, such as the Australian
Information Industry Association salary survey produced by Aon Hewitt.
In the event of serious misconduct or a material mis-statement in the Company’s financial statements, the
remuneration committee can cancel or defer performance-based remuneration.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 15
4.
Elements of remuneration
4.1
Fixed annual remuneration (FR)
Executives generally receive their fixed remuneration as cash. FR is reviewed annually, or on promotion. It is
benchmarked against market data for comparable roles in companies in a similar industry, using the Australian
Information Industry Association salary survey produced by Aon Hewitt including consideration for employees
residing in different markets. The committee aims to position executives at or near the median, with flexibility
to take into account capability, experience, and value to the organisation and performance of the individual.
For all executives, superannuation is included in FR.
4.2
Short-term incentives
STI’s are set as a percentage of FR, in accordance with industry benchmarks, to drive achievement of annual
targets, without encouraging undue risk-taking. Current STI’s for the CEO and Executives have been based on
achievement of the Management EBITDA (as defined by the Directors) targets, and have been set at 10% to
30% of FR.
Figure 2: Structure of the Short Term Incentive Plan
4.3
Long-term incentives
Executive KMP and other management personnel participate, at the Board’s discretion, in the Company’s long-
term incentive plan (“LTIP”), which may be in the form of options or performance rights. The Board considers
performance hurdles as part of the vesting considerations. LTIs are allocated by the Board and assessed on an
annual basis to promote long term shareholder return.
The Board maintains that the Group’s target remuneration mix for the CEO, KMP and other management
personnel is appropriate and consistent with the mix used by other public listed companies in the Software
sector, including the use of grants for the purpose of LTI. The Board will consider allocating LTI grants in early
FY23, in line with these targets.
Feature
Description
Maximum
opportunity
CEO and other executives: 10% - 30% of fixed remuneration (FR).
Performance
metrics
The STI metrics align with our strategic priority of consistent achievement of financial
targets.
Applicability
Metric
Target
Weighting
Reason for selection
Management
EBITDA
Group
100%
Reflects profitable growth in line with
forecast.
Payment
Any STI award is payable in a mix of cash and equity in the first month after release of the
audited results for the financial year.
Calculation
Less than 100% of target – no STI earned.
At 100% of target – STI starts to accrue as per below
Incentive payments are self-funding and begin to accrue once the company has achieved
target Management EBITDA (as defined by the Directors) achievement of the FY22 audited
results. Each dollar of Management EBITDA earned over the company Management
EBITDA target, will be split evenly between the Company and the Incentive Pool. This
incentive pool will then be divided between the eligible employees on a pro-rata basis
capped at the amount the employee is eligible for.
Board
discretion
The Board has discretion to adjust remuneration outcomes up or down as they see fit to
prevent any inappropriate reward outcomes, including reducing (down to zero, if
appropriate) any STI award.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 16
Figure 3: Structure of the LTIP
Feature
Description
Opportunity /
Allocation
The value of LTIP will be determined based on an independent market salary survey.
Performance hurdle
/ Vesting Conditions
Have a mixture of tenure at vesting periods and performance hurdles as detailed in
Section 9.2 below.
Vesting Date and
Forfeiture
Performance rights granted during FY21 have expiry dates from 21 July 2021 to 21 July
2024.
Performance rights will be forfeited on cessation of employment unless the Board
determines otherwise (e.g. retirement due to injury, disability, death or redundancy).
5.
Link between remuneration and performance
5.1
Statutory performance indicators
MSL aims to align our executive remuneration to our strategic and business objectives and the creation of
shareholder wealth. The Company’s annual financial performance and indicators of shareholder wealth for the
current financial period are listed below. As the Company listed in May 2017, these performance measures
have not been included for prior financial periods. However, these measures are not necessarily consistent
with the measures used in determining the variable amounts of remuneration to be awarded to KMPs. As a
consequence, there may not always be a direct correlation between the statutory key performance measures
and the variable remuneration awarded.
Figure 4: Statutory Performance Indicators
Earnings before Interest, Taxation, Depreciation & Amortisation (EBITDA) is a measure used for assessing
statutory performance since the Group recognises computer software and customer contracts from
acquisitions and capitalised software development costs as intangible assets that are amortised to the income
statement.
EBITDA provides a normalised view of the operations closely aligned to cash generation by excluding the
effects of significant non-recurring items of income and expenditure which may have an impact on the quality
of earnings such as restructuring and transaction costs, material credit loss provision increases relating to sales
and revenue from prior periods, impacts from fair value movements through the income statement (including
impairment of goodwill), gains resulting from acquisition accounting and proceeds from disposal of assets (net
of costs).
The Company’s share price on listing was $0.25 per share, and the share price as at 30 June 2022 was $0.14
per share, up 4% from $0.135 per share as at 30 June 2021.
FY22
FY21
FY20
FY19
FY18
EBITDA ($'mil)
5.3
4.2
(0.1)
(5.6)
3.5
NPAT
0.8
0.9
(16.4)
(17.9)
(0.4)
Dividends per share (cps)
Nil
Nil
Nil
Nil
Nil
Earnings per share (cps)
0.2
0.3
(5.6)
(7.2)
(0.1)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 17
6.
Remuneration expenses for Executive KMPs
The following table shows details of the remuneration expense recognised for the Group’s key management
personnel for the current and previous financial year measured in accordance with the requirements of the
accounting standards.
Figure 5: Executive remuneration
7.
Contractual arrangements with Executive KMPs
Component
CEO
CFO
Fixed Remuneration
$350,000
$300,000
Contract Duration
Ongoing contract
Ongoing contract
Notice by the individual/Company
6 months
3 months
Termination of employment (without
cause)
Entitlement to pro-rata STI for the year (if applicable).
The Board has discretion to award a greater or lower amount.
Termination of employment (with cause)
or by the individual
STI is not awarded, and all unvested LTI will lapse.
Different contractual terms apply to the following individuals:
Tony Toohey
Services are provided under a Services Contract that
incorporates the Executive Chairman duties. Mr Toohey has a
notice period of 30 days, and is responsible for appropriate
insurances.
8.
Non-executive Director arrangements
Non-executive directors receive a fixed Board fee inclusive of superannuation and no additional fees for chairing or
participating on Board committees (refer to the table below).
The Chairman does not receive additional fees for participating in or chairing committees, and Non-executive
directors do not receive performance-based pay or any other allowances.
Fees are reviewed annually by the Board taking into account comparable roles and market data provided by the
Board’s independent remuneration adviser. The current base fees were increased during 2022.
Name
Year
Cash Salary
Non-monetary
benefits
Annual & long
service leave
Post
employee
benefits
Other
Cash bonus
Shares
Total
%
performance
related
Executive Directors
$
$
$
$
$
$
$
$
Tony Toohey
2022
196,650
-
-
-
-
-
122,600
319,250
38%
2021
281,750
-
-
-
-
-
76,334
358,084
21%
Other Key Management
Patrick Howard
2022
350,000
-
23,909
23,568
-
-
105,818
503,295
21%
2021
277,509
-
10,107
21,694
-
-
91,484
400,795
23%
David Marshall
2022
300,000
-
15,385
23,568
-
-
109,250
448,203
24%
2021
303,846
-
14,527
21,694
-
-
29,867
369,934
8%
TOTAL
2022
846,650
-
39,294
47,136
-
-
337,668
1,270,748
27%
TOTAL
2021
863,105
-
24,634
43,388
-
-
197,685
1,128,813
18%
Fixed remuneration
Variable remuneration
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 18
The maximum annual aggregate directors’ fee pool limit of $400,000 was approved by shareholders at the
Company’s annual general meeting on 29 November 2021 and has not increased.
Base fees
Chair
$60,000
Other Non-executive Directors
$60,000
Additional fees
Audit committee – Chair
Nil
Audit committee – Member
Nil
Remuneration committee – Chair
Nil
Remuneration committee – Member
Nil
All non-executive directors have entered into a service agreement with the Company in the form of a letter of
appointment. The letter summarises the Board policies and terms, including remuneration, relevant to the
officeholding of director.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
P a g e | 19
Figure 6: Non-executive director remuneration
1 Dr Sarah Kelly OAM was appointed as a Non-Executive Director on 31 March 2022.
Name
Year
Cash Salary
Non-monetary
benefits
Annual & long
service leave
Post
employee
benefits
Other
Cash bonus
Shares
Total
%
performance
related
Non-executive Directors
$
$
$
$
$
$
$
$
Richard Holzgrefe
2022
60,000
-
-
-
-
-
-
60,000
0%
2021
48,000
-
-
-
-
-
-
48,000
0%
Earl Eddings
2022
60,000
-
-
-
-
-
-
60,000
0%
2021
48,000
-
-
-
-
-
-
48,000
0%
David Trude
2022
54,545
-
-
5,455
-
-
-
60,000
0%
2021
43,836
-
-
4,164
-
-
-
48,000
0%
David Usasz
2022
60,000
-
-
-
-
-
-
60,000
0%
2021
48,000
-
-
-
-
-
-
48,000
0%
Sarah Kelly1
2022
13,636
-
-
1,364
-
-
-
15,000
0%
2021
-
-
-
-
-
-
-
-
0%
TOTAL
2022
248,181
-
-
6,819
-
-
-
255,000
0%
2021
187,836
-
-
4,164
-
-
-
192,000
0%
Fixed remuneration
Variable remuneration
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
20 | P a g e
9.
Additional statutory information
9.1
Performance based remuneration granted & forfeited during the year
Figure 7 shows for each KMP how much of their STI cash bonus was awarded and how much was forfeited. It
also shows the value of options that were granted and forfeited during FY22.
Figure 7: Performance based remuneration granted and forfeited during the year
9.2
Terms and conditions of the share-based payment arrangements
The terms and conditions of each grant of Share Performance Rights affecting remuneration in the current or a
future reporting period are as follows:
The number of Share Performance Rights issued to key management personnel is shown in figure 8. The Share
Performance Rights carry no dividend or voting rights until exercised. When exercisable, each Share
Performance Right is convertible into one ordinary share of MSL Solutions Limited.
The fair value of the performance rights granted on 6 December 2018 at a value of $0.2158 was $927,940.
These rights have a performance hurdle of a cumulative annual growth rate of total shareholder return of 10%
over the vesting period. 60,000 of these rights vested on 30 June 2022.
The fair value of the performance rights granted on 24 September 2019 at a value of $0.1112 was $166,800.
These rights were approved at the Company’s AGM on 27 November 2019 with the following conditions:
Tranche 1 has vested and 225,000 performance rights were exercised in FY22.
The fair value of the performance rights granted on 23 September 2019 at a value of $0.0740 was $74,000.
These performance righted vested and were exercised in FY22.
KMP
Position
Total Opportunity
Forfeited
Awarded
Total Opportunity Forfeited
Awarded
Tony Toohey
Exec Chairman
n/a
n/a
n/a
-
-
-
Patrick Howard
CEO
100,000
0%
0%
-
-
-
David Marshall
CFO
100,000
0%
0%
-
-
-
1 Short Term Incentives have been accrued at 100% as at 30 June 2022, however, as they are based on financial performance
a final determination on the awarding of the STI's will not occur until finalisation of the year end audit.
2 Long Term Incentive grants are typically granted on an annual basis. The last grant was in June 2021 and there were
no further grants prior to 30 June 2022.
Short Term Incentive1
Long Term Incentive2
Grant Date
Vesting Date
Expiry date
Exercise price
Value per right at
grant date
% Vested
06-Dec-18
30-Jun-20
30-Jul-22
$0.00
$0.2158
1%
24-Sep-19
13-Dec-22
01-Sep-24
$0.00
$0.1112
15%
23-Sep-19
19-Aug-21
23-Sep-23
$0.00
$0.0740
100%
23-Sep-19
23-Sep-23
23-Sep-23
$0.00
$0.1300
0%
21-Jul-20
21-Jul-21/22/23
21-Jul-23
$0.00
$0.0550
30%
30-Jun-21
01-Jul-21
21-Jul-21
$0.00
$0.1350
100%
30-Jun-21
01-Jan-22
21-Jan-22
$0.00
$0.1350
100%
30-Jun-21
30-Jun-22/23/24
21-Jul-24
$0.00
$0.1350
9%
25-Oct-21
15-Feb-23
15-Feb-23
$0.00
$0.2250
0%
Tranche
Number
1
225,000
2
425,000
3
425,000
4
425,000
Performance Condition by expiry date
MSL's share price (30d VWAP) equals or exceeds $0.25
MSL's share price (30d VWAP) equals or exceeds $0.30
MSL's share price (30d VWAP) equals or exceeds $0.35
MSL's share price (30d VWAP) equals or exceeds $0.40
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
21 | P a g e
The fair value of the performance rights granted on 23 September 2019 at a value of $0.1300 was $78,000.
The fair value of the performance rights granted on 21 July 2020 at a value of $0.0550 was $292,508. During
FY22, 1,739,444 performance rights vested and 1,611,666 were exercised.
The fair value of the performance rights granted on 30 June 2021 with a vesting date of 1 July 2021 and at a
value of $0.1350 was $67,500. During FY22, these performance rights vested and were exercised.
The fair value of the performance rights granted on 30 June 2021 with a vesting date of 1 January 2022 and at
a value of $0.1350 was $33,750. During FY22, these performance rights vested and were exercised.
The fair value of the performance rights granted on 30 June 2021 with vesting dates on each of 30 June 2022,
30 June 2023 and 30 June 2024 and at a value of $0.1350 was:
•
$175,500 for those which vest on tenure conditions only
•
$81,000 for those rights with the following performance hurdle:
o
50% based on the achievement of the Company’s Management EBITDA (as defined by the
Directors) for each of the 3 vesting years; and
o
50% based on the CEO’s recommendation to the Company’s Nomination and Remuneration
Committee and remain subject to the 3 year vesting period; and
•
$405,000 for those rights with a performance hurdle based on the achievement of the Company’s
budget Management EBITDA (as defined by the Directors) for each of the 3 vesting periods.
o
These include the 1,000,000 rights issued to Tony Toohey which were subject to and were
approved by Shareholders at the Annual General Meeting of 29 November 2021.
During FY22, 450,000 of these performance rights vested.
The fair value of the performance rights granted on 25 October 2021 with a vesting date of 15 February 2023
at a value of $0.2250 was $67,500.
9.3
Rights to deferred shares
There are no rights to deferred shares for either Directors, key management personnel, or staff.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
22 | P a g e
9.4
Reconciliation of performance rights and ordinary shares held by KMP
Figure 8: Performance Rights held by Directors and KMP
No amounts are unpaid on any shares issued on the exercise of Performance Rights.
Figure 9: Shareholdings held by Directors and KMP
The above table includes consolidated holdings as held by the Directors and key management personnel. None
of the shares above are held nominally by the directors or any of the other key management personnel.
9.5
Loans given to/from key management personnel
During the financial year there were no loans made to directors of MSL Solutions Limited and other key
management personnel of the group, including their close family members and entities related to them.
9.6
Reliance on external remuneration consultants
During FY20, Crichton and Associates was engaged to provide a review of the executive remuneration for
executives and Key Management Personnel and a cost of $9,748.
9.7
Voting of shareholders at last year’s annual general meeting
The Company’s annual general meeting was held on 29 November 2021. A resolution was put to shareholders
to pass the adoption of the Company’s remuneration report, which was passed. Proxy votes received were
99.08% in favour of the resolution.
This is the end of the audited remuneration report.
Indemnifying Directors and Officers
During the financial year, the Company paid a premium of $89,274 inclusive of stamp duty to insure the
Directors and Officers of the Company. The terms of the insurance contract prevent additional disclosure.
Name
Balance at the
start of the year
Granted during
the year
Balance at the
end of the year
Unvested
#
Fair Value
Tony Toohey
2,700,000
1,000,000
625,000
47,020
$
3,075,000
3,075,000
Patrick Howard
3,700,000
-
1,900,000
163,500
$
1,800,000
1,800,000
David Marshall
2,450,000
-
449,999
44,750
$
2,000,001
2,000,001
8,850,000
1,000,000
2,974,999
255,270
$
6,875,001
6,875,001
Vested and exercised during the
year
Name
Balance at the start of
the year
Purchased during the
year
Disposed during the
year
Issued on exercise of
Performace Rights
Balance at the end
of the year
Held in escrow
Richard Holzgrefe
16,790,364
382,987
350,000
-
16,823,351
-
David Trude
1,000,000
144,370
-
-
1,144,370
-
Earl Eddings
3,096,622
169,370
800,000
-
2,465,992
-
David Usasz
4,000,000
450,000
-
-
4,450,000
-
Sarah Kelly
-
-
-
-
-
-
Tony Toohey
-
144,370
-
625,000
769,370
-
Patrick Howard
650,000
51,089
-
1,900,000
2,601,089
-
David Marshall
-
-
-
449,999
449,999
-
25,536,986
1,342,186
1,150,000
2,974,999
28,704,171
-
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
23 | P a g e
In addition, the Company has entered into Deeds of Access, Insurance Indemnity which ensure the Directors
and Officers of the Company will incur, to the extent permitted by law, no monetary loss as a result of
defending the actions taken against them as Directors and Officers.
Proceedings on behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings. The Company was not a party to any such proceedings during the year.
Non-audit services
The Board of Directors, in accordance with advice from the Audit and Risk Committee, is satisfied that the
provision of non-audit services during the year is compatible with the general standard of independence for
auditors imposed by the Corporations Act (2001). The Company’s auditor did not provide any non-audit
services during the financial year.
During the year the following fees were paid or payable for services provided by the auditor of the parent
entity and its related practices:
Grant Thornton Audit Pty Ltd
During the year the following fees were paid or payable for services provided by the auditor of the parent
entity, its related practices and non-related audit firms:
Grant Thornton Audit Pty Ltd were first appointed the company auditor for the FY20 year.
Jun-22
Jun-21
A$'000
A$'000
Audit and review of financial statements
205,100
178,414
Total remuneration for audit and other assurance services
205,100
178,414
Total Remuneration Australia
205,100
178,414
Network firms
1. Audit and other assurance services
United Kingdom
Jun-22
Jun-21
A$'000
A$'000
Audit and review of financial statements
69,540
59,335
Total remuneration for audit and other assurance services
69,540
59,335
Denmark
Jun-22
Jun-21
A$'000
A$'000
Audit and review of financial statements
19,152
18,754
Total remuneration for audit and other assurance services
19,152
18,754
Total Remuneration of network firms
88,692
78,089
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
24 | P a g e
Lead Auditor’s Independence Declaration
The lead Auditor’s independence declaration can be found on the page following this Directors’ report and
forms part of the Directors’ report for the year ended 30 June 2022.
Rounding
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that Class Order, amounts in the financial report and Directors’
report have been rounded off to the nearest thousand dollars, unless otherwise stated.
Signed in accordance with a resolution of the Directors:
Tony Toohey
David Usasz
Executive Director and Chairman
Non-Executive Director
Dated at Brisbane this 18th day of August 2022.
Grant Thornton Audit Pty Ltd
King George Central
Level 18
145 Ann Street
Brisbane QLD 4000
GPO Box 1008
Brisbane QLD 4001
T +61 7 3222 0200
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
Auditor’s Independence Declaration
To the Directors of MSL Solutions Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of MSL Solutions Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief,
there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
CDJ Smith
Partner – Audit & Assurance
Brisbane, 18 August 2022
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
26 | P a g e
Financial Statements
Consolidated Statement of Profit or Loss & Other Comprehensive Income
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
Note
Jun-22
Jun-21
A$'000
A$'000
Revenue
4a
33,931
24,666
Other income
4a
-
26
Cost of sales
(8,325)
(6,024)
Gross margin
25,606
18,668
Sales and marketing expenses
(4,312)
(3,770)
Customer support and technical services
(4,494)
(3,957)
Research and development expenses
(5,472)
(3,518)
General and administration expenses
(5,947)
(2,906)
Gain on contingent consideration
1,191
-
Gain of disposal of right-of-use asset
56
-
Gain on sale of business (net of costs)
98
-
Other gains and expenses (net)
(44)
(15)
Net Impairment losses on financial and contract assets
2
(12)
Depreciation expense
8a
(203)
(75)
Amortisation expense - Intangible assets
8b
(4,704)
(3,863)
Amortisation expense - Right-of-use assets
8c
(620)
(567)
Net fair value loss on earnout provisions
12d
(651)
-
Finance costs
5
(402)
(428)
Profit / (loss) before income tax
104
(443)
Income tax benefit/(expense)
712
1,329
Profit / (Loss) for the year
816
886
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
305
5
Other comprehensive income for the year
305
5
Total comprehensive profit / (loss) for the year
1,122
891
Loss attributable to:
Owners of MSL Solutions Limited
1,122
891
1,122
891
Total comprehensive profit / (loss) for the period attributable to:
Owners of MSL Solutions Limited
1,122
891
1,122
891
EARNINGS PER SHARE FROM LOSS FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE COMPANY
Basic earnings per share (cents)
0.2
0.3
Diluted earnings per share (cents)
0.3
0.3
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
27 | P a g e
Consolidated Statement of Financial Position
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
Note
Jun-22
Jun-21
A$'000
A$'000
ASSETS
Current assets
Cash and cash equivalents
7c
9,385
5,427
Trade and other receivables
7a
3,405
4,680
Contract assets
7a
363
336
Other current assets
1,103
784
Total current assets
14,256
11,227
Non-current assets
Receivables
7b
706
809
Contract assets
7b
254
363
Property, plant and equipment
8a
127
193
Right of Use Asset
8c
3,087
3,623
Intangible assets
8b
25,083
20,464
Other non-current assets
31
31
Total non-current assets
29,288
25,483
Total assets
43,544
36,710
LIABILITIES
Current liabilities
Trade and other payables
7d
3,300
3,826
Lease Liability
7e
497
435
Borrowings
7f
-
1,000
Provisions
8e
1,952
1,670
Income tax payable
44
410
Deferred Consideration
7g
784
1,065
Contract liabilities
4b
4,667
5,414
Total current liabilities
11,244
13,820
Non-current liabilities
Borrowings
7f
3,860
1,250
Lease Liability
7e
3,131
3,634
Deferred tax liability
8d
-
224
Deferred Consideration
7g
1,320
2,225
Provisions
8e
92
109
Total non-current liabilities
8,403
7,442
Total liabilities
19,647
21,262
Net assets
23,897
15,448
EQUITY
Contributed equity
9a
73,432
66,686
Reserves
9b
3,917
3,100
Accumulated losses
9c
(53,452)
(54,338)
Total equity
23,897
15,448
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
28 | P a g e
Consolidated Statement of Changes in Equity
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
Contributed
equity
Retained
earnings
Foreign
currency
translation
reserve
Convertible
Note Equity
Reserve
Share-based
payment
reserve
Total
equity
$'000
$'000
$'000
$'000
$'000
$'000
Balance as at 30 June 2020
66,186
(55,224)
2,538
-
385
13,885
Total comprehensive loss for the period
Profit for the period
-
886
-
-
-
886
Other comprehensive income
-
-
5
-
-
5
Total comprehensive loss for the period
-
886
5
-
-
891
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction costs
500
-
-
-
-
500
Dividends paid
-
-
-
-
-
-
Share-based payments expense
-
-
-
-
172
172
Total transactions for the period
500
-
-
-
172
672
Balance as at 30 June 2021
66,686
(54,338)
2,543
-
557
15,448
Total comprehensive loss for the period
Profit for the period
-
816
-
-
-
816
Other comprehensive income
-
-
305
-
-
305
Total comprehensive loss for the period
-
816
305
-
-
1,121
Shares issued under share purchase plan
4,458
-
-
-
-
4,458
Shares issued for the acquisition price for OrderMate Pty Ltd
2,000
-
-
-
-
2,000
Shares issued on exercise of vested performance rights
288
-
-
-
(288)
-
Share performance rights which did not vest
-
70
-
-
(70)
-
Dividends paid
-
-
-
-
-
-
Convertible note equity reserve
-
-
-
511
-
511
Share-based payments expense
-
-
-
-
359
359
Total transactions for the period
6,746
70
-
511
1
7,328
Balance as at 30 June 2022
73,432
(53,452)
2,848
511
558
23,897
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
29 | P a g e
Consolidated statement of cash flows
The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.
Jun-22
Jun-21
Notes
A$'000
A$'000
Cash flows from operating activities
Receipts from customers
37,723
27,940
Payments to suppliers, employees and others
(32,906)
(22,875)
Restructure Costs
-
(235)
Finance costs
(336)
(359)
Interest received
23
38
4,504
4,509
Income tax paid
(452)
(59)
Government grants and tax incentives
34
1,278
Net cash flows used in operating activities
10
4,086
5,728
Cash flows from investing activities
Capital expenditure
(119)
(79)
Purchase of intangibles
(862)
(1,044)
Acquisition of subsidiaries, net of cash & cash equivalents
(4,884)
(4,250)
Loans to other entities
214
424
Proceeds for disposal of assets
200
200
Deferred consideration payment
(646)
-
Net cash flows used in investing activities
(6,097)
(4,749)
Cash flows from financing activities
Proceeds from borrowings
4,232
2,561
Repayment of borrowings
(2,250)
(1,448)
Proceeds from issue of share capital
4,500
-
Principal element of lease payments
(469)
(458)
Net cash flows provided by financing activities
6,013
655
Net cash inflow / (outflow) for the half-year
4,002
1,634
Cash at beginning of the year
5,427
3,806
Effect of foreign exchange
(44)
(13)
Cash at end of the year
7c
9,385
5,427
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
30 | P a g e
Notes to the consolidated financial statements
The financial statements were approved for issue by the directors on 18th August 2022. The Directors have the
power to amend and re-issue the financial statements.
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 orientated entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
(‘IASB’).
1. Changes in accounting policies
The Group has adopted all the new or amended Accounting Standards and interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
2. Segment information
a) Description of segments and principal activities
The Group has structured its segments on a geographical basis consisting of Asia Pacific, United Kingdom and
Denmark, which is consistent with the prior year. The Group’s executive management team, consisting of the
Executive Director & Chairman, Chief Executive Officer, the Chief Financial Officer, Executive General Manager
– Product and Support, Executive General Manager – Research and Development and National Sales Manager
examine the Group’s performance on a geographic basis.
The following are the identified reportable segments:
Asia Pacific: services the stadia and arena and registered clubs (including golf clubs) and golf associations in
the Asia Pacific region.
United Kingdom: services the stadia and arena and registered clubs in the United Kingdom.
Denmark: services golf clubs and global golf associations.
This is consistent with the prior year comparatives.
Management primarily uses a measure of revenue and adjusted earnings before interest, tax, depreciation and
amortisation (EBITDA) to assess the performance of the business on a monthly basis. Information about their
key performance indicators is detailed below.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
31 | P a g e
b) Segment revenue and Segment Adjusted EBITDA
*EBITDA excludes the effects of significant non-recurring items of income and expenditure which may have an
impact on the quality of earnings such as credit loss provision relating to sales and revenue from prior periods,
gains resulting from acquisition and lease accounting and proceeds from disposal of assets (net of costs).
Year ended 30 June 2022
APAC
UK
Denmark
Total
A$'000
A$'000
A$'000
A$'000
Revenue from external customers
23,155
7,128
3,648
33,931
Timing of revenue
Over Time
13,148
3,776
3,171
20,095
At a point in time
10,007
3,352
477
13,836
Other revenue
-
-
-
-
EBITDA before corporate overheads
7,895
734
935
9,564
Corporate overheads
(4,259)
EBITDA before government subsidies
5,305
Government subsidies
34
EBITDA
5,339
Year ended 30 June 2021
APAC
UK
Denmark
Total
A$'000
A$'000
A$'000
A$'000
Revenue from external customers
15,660
5,571
3,435
24,666
Timing of revenue
Over Time
10,126
3,772
3,192
17,090
At a point in time
5,534
1,799
243
7,576
Other revenue
26
-
-
26
EBITDA before corporate overheads
6,332
239
808
7,379
Corporate overheads
(4,261)
EBITDA before government subsidies
3,118
Government subsidies
1,045
EBITDA
4,163
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
32 | P a g e
c) Segment Adjusted EBITDA reconciliation to profit/(loss) before tax
Sales between segments are carried out at arm’s length and are eliminated on consolidation. The revenue
from external parties is measured in the same ways as in the consolidated statement of profit or loss and other
comprehensive income.
Refer to Note 5 for further details on the above significant items (excluding depreciation and amortisation).
3. Business Combinations
On 30 September 2021, the Group acquired 100% of the equity of hospitality point-of-sale systems business,
OrderMate Pty Ltd and OrderMate IP Holding Pty Ltd (both “OrderMate”). The consideration paid for the
acquisition was $7.575m ($5.575m in cash and $2m in MSL shares).
Founded in 2001 and based in Melbourne, OrderMate has developed a range of technologies for POS systems
for new and established hospitality venues, including cloud POS, self-service kiosks, table and online ordering,
inventory management and integration. These assets will provide MSL with long-term flexibility in the
Company’s technology roadmap.
The acquisition has seen see MSL expand its footprint from its established market in the stadium, arena, pubs
and clubs’ market into the adjacent and complementary restaurant and takeaway food vertical. OrderMate
has a customer footprint of more than 2,400 locations in Australia, New Zealand and the United Arab Emirates.
The acquisition broadens MSL’s customer network from ~6,000 venues to more than ~8,000 venues,
processing over $7B in transactions each year.
The OrderMate business has generated $5.3m in revenue and $1.2m in EBITDA for the period from the 1
October 2021 to 30 June 2022. These results include one-off revenue of $0.4m in the period.
Pro forma revenue and profits for the combined entities if the acquisition date had been at the start of the
reporting period is estimated at a revenue of $35.3m and EBITDA of $5.4m for the year ending 30 June 2022.
These estimates were calculated by extrapolating the revenue and EBITDA performance for the OrderMate
business for the 1 October 2021 to 30 June 2022 period to the year estimate and adding this to the yearly
result for the rest of the Group.
Refer to note 8b for further details on intangible assets acquired.
Jun-22
Jun-21
A$'000
A$'000
EBITDA before government subsidies
5,305
3,118
Proceeds from sale of Marina Focus (net of cost)
98
-
Gain on disposal of Right of Use Asset
56
-
COVID-19 related government subsidies
34
1,045
Gain on reversal of earnout provisions
1,191
-
Expected credit loss - prior period
-
327
Finance costs (net)
(402)
(428)
Net fair value loss on earnout provisions
(651)
-
Depreciation & amortisation
(5,527)
(4,505)
Profit / (loss) before income tax
104
(443)
Reconciliation of segment adjusted EBITDA to Profit /(Loss) before
income tax
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
33 | P a g e
OrderMate Acquisition (30 September 2021)
A$'000
Amount settled in cash
5,575
Shares issued on acquisition (9,756,098 shares at 20.5c per share)
2,000
Fair value of Consideration
7,575
Net Tangible Assets
(238)
Goodwill on acquisition
3,264
Intangible Assets - Customer Relationships
3,493
Intangible Assets - Software
1,478
Intangible Assets - Brands and Trademarks
225
Deferred Tax Liability
(647)
Fair value of Consideration
7,575
Cash
617
Trade and other receivables
53
Inventory
130
Other current assets
55
Total current assets
855
Right-of-use assets
448
Property, plant and equipment
54
Total non current assets
502
Total assets
1,357
Trade and other payables
107
Employee benefits
298
Tax liabilities
386
Other current liabilities
236
Total current liabilities
1,027
Lease liabilities
448
Employee benefits
120
Total non current liabilities
568
Total liabilities
1,595
Net tangible assets / (liabilities) acquired
(238)
Acquisition costs charged to expenses
74
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
34 | P a g e
4. Revenue from contracts with customers
a) Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in time in the
following major product lines and geographical regions:
Revenues from external customers comes from the sale of software, hardware, professional services,
advertising, subscription annuities and customer contract annuities. The revenue from these services relate to
the sale of the Group’s own internally generated software in addition to third party suppliers of software and
hardware. Recurring revenue is recognised over the time period to which it relates and non-recurring revenue
recognised at a point in time.
Jun-22
Jun-21
A$'000
A$'000
Recurring Revenue
Customer contracts annuities
7,112
8,468
Subscription annuities
12,983
8,622
Total - Recurring revenue
20,095
17,090
Non-recurring revenue
Software Fees and Royalties
3,329
1,988
Hardware Fees
7,381
3,364
System Installations
2,527
2,109
Booking Fees
223
-
Advertising
16
22
Other
360
93
Total - Non-recurring revenue
13,836
7,576
Revenue from Operating Activities
33,931
24,666
Other Income
Interest Income
-
26
Total
-
26
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
35 | P a g e
b) Assets and liabilities related to contract with customers
The Group has recognised the following assets and liabilities related to contracts with customers:
i.
Significant changes in contract assess and liabilities
Contract assets relate to internally funded customer deals that have been recognised as revenue in prior
periods and reduce over the current year as payments received against these deals.
Contract liabilities relate to the post sales contracted support and subscription services that have been
invoiced but yet to be fulfilled. IT consulting contracts comprise those contracts where work remains to be
completed that has been invoiced.
ii.
Revenue recognised in relation to contract liabilities
The following table shows how much of the revenue recognised in the current reporting period relates to
carried-forward contract liabilities:
Jun-22
Jun-21
A$'000
A$'000
Current contract asset relating to fulfilled contracts
370
342
Loss allowance
(7)
(6)
Total current contract assets
363
336
Non-current contract asset relating to fulfilled contracts
260
372
Loss allowance
(6)
(9)
Total non-current contract assets
254
363
Total contract assets
617
699
Current Contract liabilities - post sales support
4,387
5,380
Current Contract liabilities - customer monies held
280
34
Total current contract liabilities
4,667
5,414
Total contract liabilities
4,667
5,414
Jun-22
Jun-21
A$'000
A$'000
Revenue recognised that was included in the contract liability
balance at the beginning of the period
Post sales support
5,380
4,895
Customer monies held
3
21
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
36 | P a g e
5. Other significant income and expense items
The Group has identified the following items included in the Consolidated Statement of Profit and Loss and
other comprehensive income, which are material due to the significance of their nature and/or amount:
*Employee benefits expenses are included in the Consolidated Statement of Profit and Loss and Other
Comprehensive Income in Sales and marketing expenses, Customer support and technical services, Research
and development expenses, General and administration expenses
Jun-22
Jun-21
A$'000
A$'000
Accounting gains included in other income
Interest Income
-
26
-
26
Significant expense items
Expected credit loss - prior period
-
327
Foreign exchange gains / (losses)
(44)
(15)
(44)
312
Employee benefits expenses*
Salaries and wages including on costs
(14,558)
(11,676)
Superannuation and pension contributions
(950)
(795)
Annual and long service leave expense
(50)
(178)
Share based payments
(291)
(138)
Government stimulus
34
1,045
(15,815)
(11,742)
Jun-22
Jun-21
A$'000
A$'000
Non-cash finance income / (costs)
Convertible note finance costs
(150)
-
Contract assets finance income
61
29
Total non-cash finance income / (costs)
(89)
29
Cash finance income / (costs)
Right of use asset finance costs
(275)
(278)
Bank interest finance costs
(61)
(188)
Bank interest finance income
23
9
Total cash finance income / (costs)
(313)
(457)
Net finance income / (costs)
(402)
(428)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
37 | P a g e
6. Income tax expense/(benefit)
a) Income tax expense/(benefit)
b) Numerical reconciliation of income tax expense to prima facie tax payable
i.
Recognition and measurement
MSL Solutions Limited and its wholly-owned Australian subsidiaries have formed a tax consolidated group, and
accordingly these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities
are set off in the consolidated financial statements.
The income tax expense or benefit for the year represents the current year’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted for permanent differences, and any net movements in
deferred tax assets and liabilities attributable to temporary differences and unused tax losses.
The current income tax benefit is calculated on the basis of the tax laws enacted at the end of the reporting
period in the countries where the Company’s subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Jun-22
Jun-21
A$'000
A$'000
Income tax expenses/(benefit)
Current tax (benefit) expense
63
191
Deferred tax (benefit) expense
(548)
(1,493)
Adjustments for current tax expense of prior period
(78)
(27)
Adjustments for deferred tax expense of prior period
(149)
-
Total income tax expense/(benefit)
(712)
(1,329)
Decrease (increase) in deferred tax assets
(1,271)
(1,496)
(Decrease) increase in deferred tax liabilities
723
3
Total deferred tax expense/(benefit)
(548)
(1,493)
Jun-22
Jun-21
A$'000
A$'000
Profit/(loss) from continuing operations before income tax
104
(443)
Tax at the Australian tax rate of 25% (FY21 - 26%)
26
(115)
- Adjustment to recognise amounts taxed in overseas
(74)
-
- Adjustment to contingent consideration
(264)
-
- Other
418
670
106
555
- Adjustments for deferred tax in prior periods
(48)
(35)
- Recognition of deferred tax relating to prior year
(100)
(1,151)
- Utilisation of deferred tax relating to prior year
-
(808)
- Movement in deferred tax relating to current year
-
444
- R&D offset for current year
(590)
(332)
- Other
(80)
(2)
Total income tax expense/(benefit)
(712)
(1,329)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
38 | P a g e
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in foreign operations where the Company is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable
future.
Current and deferred tax is recognised in the profit or loss, except to the extent that it relates to items
recognised in other comprehensive income, or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity respectively.
ii.
Estimates and judgements
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant
judgement is required in determining the provision for income taxes. There are certain transactions and
calculations undertaken during the ordinary course of business for which the ultimate tax determination is
uncertain at the time of the transaction/calculation. The Group estimates its tax liabilities based on the
Group’s understanding of the taxation legislation in each jurisdiction it operates, and where the final tax
outcome of these matters is different from the amounts that were initially recorded, any difference will impact
the current and/or deferred income tax assets and liabilities in the period the initial determination was made.
In addition, the Group recognises deferred tax assets relating to carried forward tax losses to the extent there
are sufficient taxable temporary differences relating to the same taxation authority and the same subsidiary
against which the unused tax losses can be utilised. However, utilisation of the tax losses also depends on the
ability of the entity to satisfy the necessary tests relating to utilisation of tax losses.
For the incentives and deductions available for eligible research and development expenditure, the Group has
exercised judgement and calculated an estimate of the eligible expenditure in both Australia and the United
Kingdom and included the estimated tax credit and additional tax deduction in its tax calculations for the
reporting period.
iii.
Franking Credits
There are NIL franking credits available for use in subsequent reporting periods.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
39 | P a g e
7. Financial assets and liabilities
The Group holds the following financial assets and liabilities:
The Group’s exposure to various risks associated with the financial instruments is discussed in Note 12. The
maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of
financial assets mentioned above.
Financial assets
Assets at fair
value through
profit and
loss
Financial
assets at
amortised
cost
Total
2022
Notes
$'000
$'000
$'000
Trade and other receivables
7a & 7b
-
4,111
4,111
Cash and cash equivalents
7c
-
9,385
9,385
Financial assets
Assets at fair
value through
profit and
loss
Financial
assets at
amortised
cost
Total
2021
Notes
$'000
$'000
$'000
Trade and other receivables
7a & 7b
-
5,489
5,489
Cash and cash equivalents
7c
-
5,427
5,427
Financial Liabilities
Liabilities at
fair value
through profit
and loss
Liabilities at
amortised
cost
Total
2022
Notes
$'000
$'000
$'000
Trade and other payables
7d
-
3,300
3,300
Lease liability
7e
-
3,628
3,628
Borrowings
7f
-
3,860
3,860
Deferred Consideration
7g
2,104
-
2,104
Financial Liabilities
Liabilities at
fair value
through profit
and loss
Liabilities at
amortised
cost
Total
2021
Notes
$'000
$'000
$'000
Trade and other payables
7d
-
3,826
3,826
Lease liability
7e
-
4,069
4,069
Borrowings
7f
-
2,250
2,250
Deferred Consideration
7g
3,290
-
3,290
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
40 | P a g e
a) Current financial assets
The movement in the allowance for expected credit loss is as follows:-
The aging of receivables and the allowance for expected credit loss is as follows:-
i.
Classification as trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary
course of business. Loans and other receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. If collection of the amounts is expected in one year or less,
they are classified as current assets. If not, they are presented as non-current assets. In general, trade
receivables are due for settlement within 30 days, however in some circumstances the Group has granted
extended terms of up to 90 days and for one particular customer a six-month term has been granted.
Accordingly, all trade receivables are all classified as current. The Group’s accounting policies in relation to
trade receivables are outlined in Note 23 and further details on the expected credit loss are outlined in note
12b.
Jun-22
Jun-21
A$'000
A$'000
Trade receivables
3,498
4,790
Loan receivable
-
214
Receivable - Sale of Iseek Golf
194
168
Loss allowance
(287)
(492)
3,405
4,680
Jun-22
Jun-21
A$'000
A$'000
Opening Balance
492
1,070
Additional provision recognised
90
175
Receivables written off during year as uncollectable
(36)
(81)
Unused amounts reversed
(259)
(672)
287
492
Jun-22
Jun-21
Jun-22
Jun-21
A$'000
A$'000
A$'000
A$'000
Not overdue
2,034
2,473
37
25
0 to 3 months overdue
987
1,657
35
115
Over 3 months overdue
477
660
215
352
3,498
4,790
287
492
Trade Receivables Carrying
Amount
Expected Credit Loss
Carrying Amount
Jun-22
Jun-21
A$'000
A$'000
Contract assets
370
342
Loss allowance
(7)
(6)
363
336
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
41 | P a g e
ii.
Fair value of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as
their fair value.
iii.
Impairment and risk exposure
The Group routinely assesses the collectability of its current financial assets. Amounts will be written off
against the expected credit loss when there is no reasonable expectation of recovery. Aged receivables are
assessed on an aging profile and the expected credit loss applied to the aged debtors based on historical
analysis of the Group’s debtors with the highest risk weighting applied to the oldest debtors.
b) Non-current financial assets
i.
Fair value of contract assets
Due to the short-term nature of the majority of the Group’s contract assets, their carrying amount is
considered to be the same as their fair value. These contacts are classified as contracts without significant
financing components.
In addition to contract assets without significant financing the Group carries several contract assets that due to
their long-term nature their fair value is not equivalent to their carrying value. These contracts are classified as
contract assets with significant financing components.
ii.
Impairment and risk exposure
The Group routinely assesses the collectability of its non-current financial assets and has included an
estimated credit loss of $20k for the reporting period. Amounts will be written off against the expected credit
loss when there is no reasonable expectation of recovery.
c) Cash and cash equivalents
i.
Reconciliation to cash flow statement
The figures in the table shown below reconcile to the amount of cash shown in the statement of cash flows at
the end of the financial year, as follows:
ii.
Classification as cash equivalents
Cash and cash equivalents includes term deposits supporting bank guarantees to property bonds of $354k
(FY21: $354k). Refer to Note 23 for the Group’s other accounting policies on cash and cash equivalents.
Jun-22
Jun-21
A$'000
A$'000
Receivable - Sale of Business
720
818
Loss allowance
(14)
(9)
706
809
Jun-22
Jun-21
A$'000
A$'000
Contract assets
260
372
Loss allowance
(6)
(9)
254
363
Jun-22
Jun-21
A$'000
A$'000
Cash and cash equivalents
9,385
5,427
9,385
5,427
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
42 | P a g e
d) Trade and other payables
Trade payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of
trade and other payables are considered to the same as their fair values, due to the short-term nature.
e) Lease liability
The Group leases various offices under non-cancellable leases expiring within 6 months to five years. The
leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are
renegotiated. The non-cash interest expense incurred on lease liabilities for FY22 was $274k (FY21 $278k).
f)
Borrowings
i.
Convertible Note
On 30 September 2021, the Group issued 4,500,000 0% convertible notes, with a face value of $1.00 each, for
total proceeds of $4,500,000. The notes are convertible into ordinary shares of the parent entity, at any time
at the option of the holder, or repayable on 29 September 2024. The conversion rate is $0.2078 per note,
being the 10-day volume weighted average share price of the parent prior to 29 September 2021.
Jun-22
Jun-21
A$'000
A$'000
Current
Trade payables
1,919
1,996
Other payables
1,381
1,830
3,300
3,826
Jun-22
Jun-21
A$'000
A$'000
Current
Lease liability
497
435
Non-Current
Lease liability
3,131
3,634
3,628
4,069
Jun-22
Jun-21
A$'000
A$'000
Current
Secured
Bank bill loan - secured
-
1,000
Total secured current borrowings
-
1,000
Non-current
Secured
Convertible note
3,860
-
Bank bill loan - secured
-
1,250
Total secured non-current borrowings
3,860
1,250
Total borrowings
3,860
2,250
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
43 | P a g e
Total transaction costs were $267k at the date of issue and unamortised transaction costs of $235k have been
offset against the convertible notes payable liability.
The convertible notes are on arms-length terms with a non-related party and are unsecured. The convertible
note is held at amortised cost.
ii.
Bank Debt
Following the placement of a convertible note and the successful completion of a Share Purchase Plan, all bank
debt has been fully paid and all security released during the year.
g) Deferred Consideration
The deferred consideration relates to the present valued and risk weighted valuation of the 12-month
deferred payment reduced by the net tangible liability of the acquired business on acquisition.
The earn-out payment for the SwiftPOS acquisition is the present value of the expected earn-out over a three-
year period based on a gross profit target with a maximum cap of $4.2m.
An amount of $316k for the first year earn out and $330k for the holdback cash payment amount was paid in
FY22.
The earnout for the second and third year have been reviewed at 30 June 2022, resulting in a reduction to the
present value of the deferred consideration of $1,191k ($677k current and $519k noncurrent).
Convertible
Equity
Note
Reserve
TOTAL
A$'000
A$'000
A$'000
Convertible note
3,957
543
4,500
Less Transaction Costs
(247)
(32)
(279)
3,710
511
4,221
Finance Charges
150
-
150
Closing Balance
3,860
511
4,371
Jun-22
Jun-21
A$'000
A$'000
Current
Present value of deferred consideration - Swiftpos
-
290
Present value of earn out - Swiftpos
784
775
784
1,065
Non-Current
Present value of earn out - Swiftpos
1,320
2,225
1,320
2,225
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
44 | P a g e
8. Non-financial assets and liabilities
a) Property, plant and equipment
i.
Depreciation methods and useful lives.
Property, plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
The depreciable amount of all fixed assets and capitalised leased assets is depreciated on a diminishing value
basis over their useful lives to the Group, commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated
useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
•
Plant and equipment
27% - 50%
•
Office Equipment
10% - 33%
•
Motor Vehicles
20% - 30%
•
Leasehold improvements
7.5% - 30%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date. Refer to Note 23 for all other accounting policies relevant to property, plant and equipment.
Leasehold
improvements
Plant and
equipment
Office
Equipment
Motor
Vehicle
Total
$'000
$'000
$'000
$'000
$'000
At 30 June 2020
Cost or fair value
60
1,542
402
-
2,004
Accumulated depreciation
(32)
(1,449)
(334)
-
(1,815)
Net book amount
28
93
68
-
189
Year ending 30 June 2021
Opening net book amount
28
93
68
-
189
Exchange differences
-
-
-
-
-
Additions
-
35
44
-
79
Disposals
-
-
-
-
-
Depreciation charge
(7)
(46)
(22)
-
(75)
Closing net book amount
21
82
90
-
193
At 30 June 2021
Cost or fair value
60
1,577
446
-
2,083
Accumulated depreciation
(39)
(1,495)
(356)
-
(1,890)
Net book amount
21
82
90
-
193
Year ending 30 June 2022
Opening net book amount
21
82
90
-
193
Exchange differences
-
-
-
-
-
Additions
-
-
99
38
137
Disposals
-
-
-
-
-
Depreciation charge
(8)
(49)
(108)
(38)
(203)
Closing net book amount
13
33
81
-
127
At 30 June 2022
Cost or fair value
60
1,577
545
38
2,220
Accumulated depreciation
(47)
(1,544)
(464)
(38)
(2,093)
Net book amount
13
33
81
-
127
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
45 | P a g e
b) Intangible assets
i.
Amortisation methods and useful lives.
The Group amortises intangible assets with a limited useful life using the straight-line method over the
following period/rates:
•
Software – 2.5 to 10 years
•
Brands and trademarks - 3 to 15 years
•
Contracts and customer relationships – 3 to 15 years
See Note 23 for the other accounting policies relevant to intangible assets and impairment policy
ii.
Contracts and customer relationships
The customer contracts were acquired as part of a business combination. They are recognised at their fair
value at the date of acquisition and are subsequently amortised on a straight-line based on the timing of
projected cash flows of the contracts over their estimated useful lives.
iii.
Significant estimate: useful life of Software acquired
Software was acquired as part of a business combination and was recognised at fair value at the date of
acquisition and is subsequently amortised on a straight-line basis over an eight-year period from date of
acquisition. This has been estimated as the weighted average of the expected obsolescence of the acquired
software.
Goodwill
Software
Formation
Expenses
Contracts
and
customer
relationship
s
Brands and
trademarks
Total
$'000
$'000
$'000
$'000
$'000
$'000
At 30 June 2020
Cost or fair value
22,172
11,342
2
24,290
-
57,806
Accumulated impairment
(22,172)
-
-
-
-
(22,172)
Accumulated depreciation
-
(8,009)
-
(14,082)
-
(22,091)
Closing net book amount
-
3,333
2
10,208
-
13,543
Year ending 30 June 2021
Opening net book amount
-
3,333
2
10,208
-
13,543
Disposals
-
-
-
-
-
Exchange differences
-
217
-
23
-
240
Additions - business combinations
3,575
2,027
45
3,852
-
9,499
Additions - internal research and development
-
1,045
-
-
-
1,045
Amortisation
-
(996)
(1)
(2,866)
-
(3,863)
Impairment
-
-
-
-
-
-
Closing net book amount
3,575
5,626
46
11,217
-
20,464
At 30 June 2021
Cost or fair value
3,575
14,631
47
28,143
-
46,396
Accumulated impairment
-
-
-
-
-
-
Accumulated Amortisation
-
(9,005)
(1)
(16,926)
-
(25,932)
Closing net book amount
3,575
5,626
46
11,217
-
20,464
Year ending 30 June 2022
Opening net book amount
3,575
5,626
46
11,217
-
20,464
Disposals
-
-
-
-
-
-
Exchange differences
-
(36)
-
37
-
1
Additions - business combinations
3,264
1,478
-
3,493
225
8,460
Additions - internal research and development
-
862
-
-
-
862
Amortisation
-
(1,696)
(46)
(2,928)
(34)
(4,704)
Impairment
-
-
-
-
-
-
Closing net book amount
6,839
6,234
-
11,819
191
25,083
At 30 June 2022
Cost or fair value
6,839
16,935
46
31,674
225
55,719
Accumulated impairment
-
-
-
-
-
-
Accumulated Amortisation
-
(10,701)
(46)
(19,855)
(34)
(30,636)
Closing net book amount
6,839
6,234
-
11,819
191
25,083
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
46 | P a g e
iv.
Significant estimate: capitalised development
Costs that are directly associated with the development of software are recognised as an intangible asset
when the following criteria are met:
a) The technical feasibility of completing the intangible asset is achieved so that it will be available for
use or sale;
b) The Group intends to complete the intangible asset and then use or sell it;
c) The Group has the ability to use or sell the intangible asset;
d) The Group knows how the intangible asset will generate probable economic benefits. Among other
things, the Company can demonstrate the existence of a market for the output of the intangible asset
or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
e) Adequate technical, financial and other resources are available to complete the development and to
use or sell the intangible asset; and
f)
The Company is able to measure reliably the expenditure attributable to the intangible asset during
its development.
The relevant costs include personnel and other directly attributable costs incurred in the development of
software. Capitalised software development costs are recognised as an intangible asset and amortised over
their estimated useful lives, which is considered to be 60 months. Capitalised software development costs are
amortised from when the products to which they relate become available to use. Research costs are expensed
as incurred and are largely made up of employee labour which is included in research and development costs
in the statement of comprehensive income. Development costs previously recognised as expenses are not
recognised as assets in a subsequent period.
The Group capitalised $862k in FY22 for the development of software that satisfied the conditions above and
commenced amortization during the year.
v.
Impairment tests for goodwill and computer software
As part of the ongoing annual assessment of goodwill and computer software by management the Group
considers the relationship between the net recoverable amount of its cash generating units based upon
discounted cash flows of 5-year forecast EBITDAs and its book value, among other factors, when reviewing for
indicators of impairment.
Management has considered the lowest levels at which the assets produce identifiable cash flows when
determining the composition of the Group’s 5 Cash Generating Units (CGU’s). The CGU’s are defined primarily
on a geographical basis of APAC, UK and Denmark with the additions of the recent acquisitions of SwiftPOS and
OrderMate.
OrderMate was acquired on the 30 September 2021 and includes Goodwill of $3.3m, software intangible
assets of $1.5m, customer contracts of $3.5m and Brands and Trademarks of $0.2m. The SwiftPOS business
generates cash through a different customer segment in the café and restaurant sector. As such the nature of
its revenue and customer base is significantly different from the rest of APAC to categorise it as its own CGU.
Goodwill exists in the SwiftPOS CGU with $3.6m and the OrderMate CGU with $3.3m goodwill respectively.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
47 | P a g e
vi.
Significant estimate: key assumptions used for value in use calculations
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. The
calculations use cash flow projections based on a one-year financial budget approved by the Board and cash
flow projections by management covering a five-year period. Cash flows beyond the five-year period are
extrapolated using the estimated growth rates stated below.
Goodwill acquired through business combinations have been allocated to the following cash-generating units
and tested for impairment per the assumptions below:
Management have considered various scenarios in testing for impairment from a zero growth scenario to a
2.5% growth scenario to recognise synergies that may materialise from the acquired businesses and the post
COVID recovery.
Management has determined the values assigned to key assumptions as follows:
Assumption
Approach used to determine values
Revenue
Average annual growth rate over the five-year
forecast period; based on past performance and
management’s expectations of market
development.
EBITDA
Based on past performance and management’s
expectations for the future.
Annual capital expenditure
Expected cash costs in the CGUs. This is based on
the historical experience of management. No
incremental revenue or cost savings are assumed
in the fair value model as a result of this
expenditure.
Long-term growth rate
Above forecast inflation in each of the countries
the Group operates.
Post-tax discount rates
Reflect specific risks relating to the relevant
segments and the countries in which they operate.
This rate is derived from the Group’s Weighted
Average Cost of Capital (WACC) that takes into
account both debt and equity. The cost of equity is
derived from expected return on investment by
the Group’s investors. The cost of debt is based on
the interest-bearing borrowings the Group is
obliged to service. The segment and geographic
specific risk is incorporated by applying individual
beta factors.
Jun-22
Jun-21
A$'000
A$'000
SwiftPOS
3,575
3,575
OrderMate
3,264
-
Long term growth rate
0%
2.5%
0%
2.5%
Post tax discount rate
10.78%
13.55%
13.55%
13.55%
Long term growth rate
0%
2.5%
-
-
Post tax discount rate
10.78%
13.55%
-
-
2022 Range
2021 Range
OrderMate
SwiftPOS
2022 Range
2021 Range
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
48 | P a g e
As at the reporting date, the Group, based on the information available, does not consider that any reasonable
change in the key assumptions (growth rates and discount rates), after allowing for any consequential impacts
on other key assumptions of any such change, would cause the carrying value of the segments to exceed their
recoverable amounts.
vii.
Significant estimate: impairment charge
There is no impairment charge for the year-ending 30 June 2022.
c) Right-of-use asset
Right-of-use assets relate predominantly to the property leases of the Group in Australia and overseas.
d) Deferred tax balances
i.
Deferred tax assets
Jun-22
Jun-21
A$'000
A$'000
Opening Balance
3,623
2,640
Acquisitions through business combination
553
1,550
Disposals
(469)
-
Less amortisation
(620)
(567)
Closing Balance
3,087
3,623
Jun-22
Jun-21
A$'000
A$'000
The balance comprise temporary differences attributable to:
Tax losses & offsets
452
1,485
Property, plant & equipment
705
-
IPO and transaction related
43
-
Employee benefits
420
-
Lease liabilities
927
-
Other
397
188
Total deferred tax asset
2,944
1,673
Set off against deferred tax liability
(2,944)
(1,673)
Net deferred tax asset
-
-
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
49 | P a g e
The utilisation of the deferred tax asset is dependent on future taxable profits in excess of the profits arising
from the reversal of existing taxable temporary differences. Not withstanding the losses before tax reported in
the preceding periods, the Group is reasonably certain that it will return to taxable profits.
ii.
Deferred tax liabilities
Movements
Tax losses &
offsets
Employee
benefits
Property,
plant &
equipment
IPO and
transaction
related
Lease
liabilities
Other
Total
$'000
$'000
$'000
$'000
$'000
$'000
$'000
As at 1 July 2020
-
-
3
-
-
174
177
(Charged)/Credited
To profit or loss as deferred tax benefit/(expenses)
1,485
-
(3)
-
-
14
1,496
To profit or loss as research and development expenses
-
-
-
-
-
-
-
To equity
-
-
-
-
-
-
-
Acquisition
-
-
-
-
-
-
-
Utilisation of tax losses
-
-
-
-
-
-
-
True up as prior period deferred tax
-
-
-
-
-
-
-
As at 30 June 2021
1,485
-
-
-
-
188
1,673
Movements
Tax losses &
offsets
Employee
benefits
Property,
plant &
equipment
IPO and
transaction
related
Lease
liabilities
Other
Total
$'000
$'000
$'000
$'000
$'000
$'000
$'000
As at 1 July 2021
1,485
-
-
-
-
188
1,673
(Charged)/Credited
To profit or loss as deferred tax benefit/(expenses)
(1,033)
420
705
43
927
209
1,271
To profit or loss as research and development expenses
-
-
-
-
-
-
-
To equity
-
-
-
-
-
-
-
Acquisition
-
-
-
-
-
-
-
Utilisation of tax losses
-
-
-
-
-
-
-
True up as prior period deferred tax
-
-
-
-
-
-
-
As at 30 June 2022
452
420
705
43
927
397
2,944
Jun-22
Jun-21
A$'000
A$'000
Australia
The balance comprises temporary differences attributable to:
Intangible assets
(1,906)
(1,897)
Right of use assets
(791)
-
Other
(247)
-
Total deferred tax liability
(2,944)
(1,897)
Set off against deferred tax asset
2,944
1,673
Net deferred tax liabilities
-
(224)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
50 | P a g e
Offsetting within tax consolidated group
MSL Solutions Limited and its wholly owned Australian subsidiaries form a consolidated tax group, whereby
the entities are taxed as a single entity. Accordingly, the deferred tax assets and deferred tax liabilities have
been offset in the consolidated financial statements.
e) Provisions
Employee benefit obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled
wholly within 12 months after the end of the reporting period, are recognised in other liabilities in respect of
employees' services rendered up to the end of the reporting period and are measured at amounts expected to
be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when leave is
taken and measured at the actual rates paid or payable.
Employee benefit obligations are disclosed on the statement of financial position through inclusion of the
annual leave and long service leave obligation within the provisions liability.
Other employee benefit obligations
Liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after
the end of the reporting period. They are recognised as part of the provision for employee benefits and
measured at the present value of expected future payments to be made in respect of services provided by
Movements
Intangibles
Right-of-use
assets
Other
Total
$'000
$'000
$'000
$'000
As at 1 July 2020
(893)
-
-
(893)
(Charged)/Credited
To profit or loss
(3)
-
-
(3)
To equity
-
-
-
-
Acquisition
(1,001)
-
-
(1,001)
As at 30 June 2021
(1,897)
-
-
(1,897)
Movements
Intangibles
Right-of-use
assets
Other
Total
$'000
$'000
$'000
$'000
As at 1 July 2021
(1,897)
-
-
(1,897)
(Charged)/Credited
To profit or loss
638
(791)
(247)
(400)
To equity
-
-
-
-
Acquisition
(647)
-
-
(647)
As at 30 June 2022
(1,906)
(791)
(247)
(2,944)
Jun-22
Jun-21
A$'000
A$'000
Current
Long service leave
532
473
Annual leave
1,420
1,197
1,952
1,670
Non-Current
Long service leave
92
109
92
109
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
51 | P a g e
employees to the end of the reporting period using the projected unit credit method. Consideration is given to
expected future salaries and wages levels, experience of employee departures and periods of service.
Expected future payments are discounted using high quality corporate bond rates at the end of the reporting
period with terms to maturity and currency that match, as closely as possible, the estimated future cash
outflows.
9. Equity
a) Share capital
During September 2021, the Group issued $2 m of shares to the vendors of OrderMate as part of the
acquisition price for OrderMate. The 9,756,098 shares were valued at $0.205 per share.
During November 2021, the Group issued 21,655,773 shares to eligible shares under a Share Purchase Plan
which raised $4.5m less costs of $42k.
During FY22 3,586,666 share performance rights vested and were exercised into ordinary Shares with fair
value at grant date disclosed in the following table.
i.
Movements in ordinary shares
ii.
Ordinary shares
Ordinary shareholders are entitled to participate in dividends and the proceeds on winding up of the Company
in proportion to the number of and amounts paid on the shares held. Every ordinary shareholder present at a
meeting in person or by proxy is entitled to one vote on a show of hands or by poll.
iii.
Options
Information relating to the MSL Solutions Limited Option Plan, including details of options issued, exercised
and lapsed during the financial year and options outstanding at the end of the reporting period is set out in
Note 19.
30 June 2022
30 June 2022
30 June 2021 30 June 2021
Shares
$'000
Shares
$'000
Share capital
Fully paid
364,269,320
73,432
329,270,783
66,686
364,269,320
73,432
329,270,783
66,686
Number of
shares
Issue price
$'000
Opening Balance 1 July 2020
322,258,160
66,186
Shares issued as part of the acquisition price for SwiftPOS Pty
Limited
7,012,623
$0.071
500
Closing Balance 30 June 2021
329,270,783
66,686
Shares issued on exercise of vested share performance rights
500,000
$0.135
67
Shares issued on exercise of vested share performance rights
2,611,666
$0.062
162
Shares issued as part of the acquisition price for OrderMate
9,756,098
$0.205
2,000
Shares issued under Share Purchase Plan
21,655,773
$0.208
4,500
Costs associated with the Share Purchase Plan
-
-
(42)
Shares issued on exercise of vested share performance rights
225,000
$0.111
25
Shares issued on exercise of vested share performance rights
250,000
$0.135
34
Closing Balance 30 June 2022
364,269,320
73,432
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
52 | P a g e
iv.
Share Performance Rights
Information relating to the MSL Performance Rights Plan, including details of rights issued, vested and lapsed
during the financial year and rights outstanding at the end of the reporting period is set out in Note 19.
b) Other reserves
The following table shows a breakdown of the balance sheet line item ‘other reserves’ and the movements in
these reserves during the year. A description of the nature and purpose of each reserve is provided below the
table.
Share-based payments
The share-based payments reserve is used to recognise:
•
The grant date fair value of performance rights issued to employees
•
The grant date fair value of options issued as part payment for services in relation to capital raisings.
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entities are recognised in other
comprehensive income as described in Note 23 and accumulated in a separate reserve with equity. The
cumulative amount is reclassified to profit or loss when the net investment is disposed of.
Convertible note equity
Convertible note equity note reserve arising on the convertible notes issued on 30 September 2021. Refer to
note 7f.
c) Accumulated losses
Movement in retained earnings were as follows:
Jun-22
Jun-21
A$'000
A$'000
Share based payment reserve
558
557
Foreign currency translation reserve
2,848
2,543
Convertible note equity reserve
511
-
3,917
3,100
Consolidated
$'000
As at 1 July 2021
(54,338)
Total comprehensive income for the period
Profit/(loss) for the year
816
Total comprehensive income for the period
816
Share performance rights which did not vest
70
As at 30 June 2022
(53,452)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
53 | P a g e
10. Cash flow information
a) Reconciliation of profit after income tax to net cash inflow from operating activities
Jun-22
Jun-21
$'000
$'000
Profit after tax
816
886
Adjustments for:
Depreciation and amortisation
5,527
4,505
Gain on contingent consideration
(1,191)
-
Gain on disposal of right-of-use asset
(56)
-
Gain on sale of business
(99)
-
Share based payment expense
288
-
Finance costs
150
-
Other Income
-
(26)
Realised FX loss/(gain)
37
15
Expected credit loss
-
(600)
Change in operating assets and liabilities
Movement in current assets
(Increase)/ decrease in trade receivables
862
334
(Increase)/ decrease in contract assets
(27)
62
(Increase)/ decrease in prepayments
(319)
336
Movement in current liabilities
Increase/(decrease) in trade and other payables
(523)
462
Increase/(decrease) in contract liabilities
(747)
289
Increase/(decrease) in deferred tax
(224)
(492)
Increase/(decrease) in provisions
282
277
Increase/(decrease) in tax provisions
(366)
411
Movement in non-current assets
(Increase)/ decrease in trade and other receivables
(324)
(731)
Cashflow generated from operations
4,086
5,728
Consolidated
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
54 | P a g e
11. Critical estimates, judgements and errors
The preparation of financial statement requires the use of accounting estimates which, by definition, will
seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s
accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of
items which are more likely to be materially adjusted due to estimates and assumptions that may be incorrect.
Detailed information about each of these estimates and judgments is included in notes 1 to 9 together with
information about the basis of calculation for each affected line item in the financial statements. In addition,
this note also explains where there has been actual adjustment this year as a result of an error and of changes
to previous estimates.
a) Significant estimates and adjustments
The areas involving significant estimates or judgements are:
•
Recognition of revenue
•
Collection of long-term receivables
•
Estimation of current tax payable and current tax expense
•
Estimation of research and development tax credits
•
Estimation of capitalised software development expenditure
•
Estimated goodwill impairment
•
Estimated useful life of intangible asset
•
Estimation of contingent purchase consideration in a business combination
•
Recognition of deferred tax asset for carried forward tax losses
Estimates and judgements are continually evaluated. They are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that are
believed to be reasonable under the circumstances.
b) Sources of estimation uncertainty
Revenue recognition
Multiple element contracts entered into by the Group require judgement in the identification and separation
of performance obligations related to software licence fees, post sales customer support and other services.
The Group assesses each customer contract individually into its performance obligations and considers if any
performance obligation should be aggregated where they cannot be separately determined. Revenue is
assigned to each performance obligation based upon the stand-alone fair value of the performance obligation
relevant to the total contract value.
The Group uses the percentage-of-completion method in accounting for its fixed-price contacts to deliver
installation and consultancy services. Use of the percentage-of-completion method requires the Group to
estimate the services performed to date as a proportion of the total services to be performed.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had,
or may have, on the consolidated entity based on known information. This consideration extends to the nature
of the products and services offered, customer, supply chain, staffing and geographical regions in which the
consolidated entity operates. Estimation is also required in relation to government subsidies and in regard to
forecasting their continued impact. The impact of the Coronavirus (COVID-19) pandemic has had the most
impact on the UK business that operates in the stadiums sector. The impact is considered short-term in nature
and the recovery is evident in the FY22 results.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
55 | P a g e
12. Financial risk management
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future
financial performance. Current year profit and loss information has been included where relevant to add
further context.
The Board has overall responsibility for the determination of the Group’s risk management objectives and
policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives and policies to the Group’s
finance function.
The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly
affecting the Group’s competitiveness and flexibility.
The Group’s finance function has been delegated responsibility by the Board for among other issues, managing
financial risk exposure within the Group. The Groups' risk management policies and objectives are therefore
designed to minimise the potential impacts of these risks on the results of the Group where such impacts may
be material.
a) Market risk
i.
Foreign exchange risk
The Group’s policy is, where possible, to allow Group entities to settle liabilities denominated in their
functional currency with cash generated from their own operations in that currency. Where Group entities
have liabilities denominated in a currency other than their functional currency (and have insufficient reserves
of that currency to settle them) cash already denominated in that currency will, where possible, be transferred
from elsewhere within the Group.
The overseas entities, GolfBox and Verteda, have customers and suppliers in the following currencies:
•
Pound Sterling (Verteda’s functional currency)
•
Danish Krone (GolfBox’s functional currency)
The Group’s remaining subsidiaries have a functional currency of Australian dollars. The Group’s presentation
currency is Australian dollars.
As suppliers in any of the above currencies are expected to be repaid in the respective entity’s functional
currencies from local sales, the foreign currency exposure of these suppliers the Group is not exposed to
foreign currency risk.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
56 | P a g e
Exposure
The Groups exposure to foreign currency risk is only relation to transactions in foreign currency that differ
from the respective entity’s functional currencies. The Group’s exposure to foreign currency risk at the end of
the reporting period is expressed in Australian dollar, was as follows:
Amounts recognised in profit or loss and other comprehensive income
During the year, the following foreign-exchange related amounts were recognised in profit or loss and other
comprehensive income:
Sensitivity
As at the reporting date, the Group is no longer materially exposed to currency movements compared to prior
years.
ii.
Price risk
The Group does not have exposure to equity securities price risk arising from investments held by the Group
and classified in the balance sheet as held-for-sale as at 30 June 2022.
USD
2022
$'000
Trade payables
(44)
Net exposure
(44)
USD
2021
$'000
Trade payables
(24)
Net exposure
(24)
Jun-22
Jun-21
A$'000
A$'000
Realised FX gain (loss)
(34)
8
Unrealised FX gain (loss)
(10)
(21)
(44)
(13)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
57 | P a g e
b) Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions as well as
credit exposures to customers including outstanding receivables.
i.
Risk management
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties
of contract obligations that could lead to financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such as processes for the approval of
customers and regular monitoring of counterparty financial stability), ensuring to the extent possible that
customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in
assessing receivables for impairment. Depending on the cash generating unit within the Group, credit terms
are generally immediate payment to 30 days from invoice date.
The maximum exposure to credit risks by class of recognised financial asset at the end of the reporting period
is equivalent to the carrying amount and classification of those financial assets as presented in the financial
statements.
The Group holds no collateral nor has any significant concentrations of credit risk with any single counterparty
or Group of counterparties.
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality.
Credit risk related to balance with banks and other financial institutions is managed by the finance function.
Current policy is that surplus funds are only invested with counterparties with a rating of A. The following table
provides information regarding the credit risk relating to cash holdings:
ii.
Impairment of financial assets
The Group has three types of financial assets that are subject to the expected credit loss model:
•
Trade receivables for sales from all revenue streams;
•
Contract assets for sales from all revenue streams; and
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, the identified
impairment loss was immaterial.
Trade receivables and contract assets
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and other receivables have been grouped based on
shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress
and unbilled software and hardware sales and have substantially the same risk characteristics as the trade
receivables for the same types of contracts.
On that basis, the loss allowance as at 30 June 2022 and 30 June 2021 was determined as follows for both
trade receivables and contract assets. The ECL percentage is applied to the receivables and the contract assets
in their functional currency with the loss allowance then translated to presentation currency.
The Group has considered the recovery in the business post the COVID-19 pandemic. In light of the recovery in
the business and the improved debt collection process, the Group has adopted a less conservative expected
credit loss calculation methodology that was adopted in the prior year at the height of the COVID-19
pandemic.
Cash at bank and short-term bank deposits
Jun-22
Jun-21
A$'000
A$'000
AA
6,728
2,784
A
2,657
2,643
9,385
5,427
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
58 | P a g e
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of fund through an adequate amount of committed credit facilities to meet obligations when due
and to close out market positions.
Management monitors rolling forecasts of the Group’s liquidity reserve as well as cash and cash equivalents on
the basis of expected cash flows. This is generally carried out at the local level in the operating companies of
the Group in accordance with practice set by the Group. In addition, the Group’s liquidity management policy
involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet
these, monitoring balance sheet liquidity ratios against internal requirements and maintaining debt financing
plans.
i.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
ii.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant.
Jun-22
Jun-21
A$'000
A$'000
Current loss allowance
Trade receivables
287
492
Contract assets with significant financing components
7
6
294
498
Non-current loss allowance
Loan receivable non-current
14
9
Contract assets with significant financing components
6
9
20
18
314
516
30 Jun 22
30 Jun 21
$'000
$'000
Floating Rate
- Expiring within one year (bank overdraft)
468
789
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
59 | P a g e
Contractual maturities of financial liabilities
Less than 6
months
6-12 months
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
contractual
cash flows
Carrying
amount (assets)
/liabilities
As at 30 June 2022
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade payables
1,919
-
-
-
-
1,919
1,919
Other payables
1,381
-
-
-
-
1,381
1,381
Deferred consideration
838
-
1,602
-
-
2,440
2,440
Convertible note
-
-
-
4,500
-
4,500
4,500
Lease liabilities
356
362
865
2,064
798
4,445
4,445
Total
4,494
362
2,467
6,564
798
14,685
14,685
Contractual maturities of financial liabilities
Less than 6
months
6-12 months
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
contractual
cash flows
Carrying
amount (assets)
/liabilities
As at 30 June 2021
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Trade payables
1,996
-
-
-
-
1,996
1,996
Other payables
1,830
-
-
-
-
1,830
1,830
Deferred consideration
1,065
-
1,003
1,222
-
3,290
3,290
Lease liabilities
214
221
490
2,403
778
4,106
4,106
Total
5,105
221
1,493
3,625
778
11,222
11,222
Contractual maturities of financial assets
Less than 6
months
6-12 months
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
contractual
cash flows
Carrying
amount (assets)
/liabilities
As at 30 June 2022
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade debtors
3,497
-
-
-
-
3,497
3,497
Contract assets
371
260
-
-
-
631
631
Receivable - Sale of business
100
100
200
750
-
1,150
1,150
Total
3,968
360
200
750
-
5,278
5,278
Contractual maturities of financial assets
Less than 6
months
6-12 months
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
contractual
cash flows
Carrying
amount (assets)
/liabilities
As at 30 June 2021
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade debtors
4,790
-
-
-
-
4,790
4,790
Contract assets
342
372
-
-
-
714
714
Receivable - Sale of business
88
80
158
660
-
986
986
Loan Receivable
214
-
-
-
-
214
214
Total
5,434
452
158
660
-
6,704
6,704
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
60 | P a g e
d) Fair value measurement of financial instruments
i. Fair value hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial
instruments that are recognised and measured at fair value in the financial statements. To provide an indication
about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments
into the three levels prescribed under the accounting standards. An explanation of each level follows underneath
the table.
There were no transfers between levels for recurring fair value measurements during the period. The Group’s
policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting
period.
Level 1 – The fair value of financial instruments traded in active markets (such as publicly traded derivatives and
trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period.
The quoted market price used for financial assets held by the Group is the current bid price. These instruments
are included in level 1.
Level 2 – The fair value of financial instruments that are not traded in an active market (for example, over the
counter derivatives) is determined using valuation techniques which maximize the use of observable market
date and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
Level 3 – If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted equity securities.
ii. Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include:
•
The fair value of remaining financial liabilities is determined using discounted cash flow analysis.
All fair value estimates are included in level 3 as they are contingent consideration payable where the fair values
have been determined based on present values and the discount rates used were adjusted for counterparty or
own credit risk.
iii. Valuation processes
The Group performs the valuations required for financial reporting purposes, including level 3 fair values.
Level 1
Level 2
Level 3
Total
$'000
$'000
$'000
$'000
Financial liabilities
Contingent consideration - earnout provision
-
-
2,104
2,104
Total financial liabilities
-
-
2,104
2,104
Level 1
Level 2
Level 3
Total
$'000
$'000
$'000
$'000
Financial liabilities
Contingent consideration - earnout provision
-
-
3,290
3,290
Total financial liabilities
-
-
3,290
3,290
30-Jun-22
30-Jun-21
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
61 | P a g e
The main level 3 inputs used by the Group are derived and evaluated as follows:
•
Contingent consideration – expected cash inflows are estimated based on the terms of the sale contract
and the entity’s knowledge of the business and how the current economic environment is likely to
impact it.
Changes in level 2 and 3 fair values are analysed at the end of each reporting period.
13. Capital management
a) Risk management
The Group’s objectives when managing capital are to:
•
Safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders, and
•
Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group does not currently have any loan covenants that it is required to meet. However, review of the
current ratio is performed monthly to ensure that it is managed and remains at a reasonable level. This current
ratio is assessed as per normal accounting practices with an adjustment made to take into account the large
deferred revenue balance that the Group carries on an on-going basis.
Level 3
Contingent
consideration
$'000
Balance 01 July 2020
-
Additions
3,290
Balance 30 June 2021
3,290
Earn outs paid
(646)
Gain on earnout provisions
(1,191)
Net fair value loss on earnout provisions
651
Balance 30 June 2022
2,104
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
62 | P a g e
Group structure
This section provides information which will help users understand how the Group structure affects the
financial position and performance of the Group as a whole.
A list of significant subsidiaries is provided in Note 14(a).
14. Interests in other entities
a) Subsidiaries
The Group’s principal subsidiaries at 30 June 2022 are set out below. Unless otherwise stated they have share
capital consisting solely of ordinary shares that are held directly by the Group, and the proportion of
ownership interests held equals the voting rights held by the Group. The country of incorporation or
registration is also their principal place of business.
1OrderMate Pty Ltd and OrderMate IP Holding Pty Ltd were acquired on 30 September 2021
2MPowerMSL UK Limited was deregistered on 4 January 2022
3Rebel Thinking Limited was deregistered on 5 July 2022
4MSL Solutions IP Holding Pty Limited was incorporated on 9 March 2022
5Simple Golf Pty Limited was incorporated on 5 May 2022
b) Interests in associates
There were no interests in associates in FY22 or FY21.
Name
Jun-22
Jun-21
%
%
Parent Entity:
MSL Solutions Limited
Australia
Subsidiaries of parent entity:
Golf Group International Pty Ltd
Australia
100%
100%
Golflink Partners Pty Ltd
Australia
100%
100%
GolfTime International Pty Ltd
Australia
100%
100%
InfoGenesis Pty Ltd
Australia
100%
100%
iSeekgolf Pty Ltd
Australia
100%
100%
MarkeTown Media Pty Ltd
Australia
100%
100%
Micropower Pty Ltd
Australia
100%
100%
PriCap Services Pty Ltd
Australia
100%
100%
Rockit Pty Ltd
Australia
100%
100%
Simbient Golflink Pty Ltd
Australia
100%
100%
SwiftPOS Pty Ltd
Australia
100%
100%
OrderMate Pty Ltd1
Australia
100%
0%
OrderMate IP Holding Pty Ltd1
Australia
100%
0%
GolfBox A/S
Denmark
100%
100%
MPowerMSL UK Limited2
England
0%
100%
MSL Verteda Limited
England
100%
100%
Rebel Thinking Limited
England
100%
100%
Verteda Holdings Limited
England
100%
100%
MSL Solutions IP Holding Pty Limited3
Australia
100%
0%
Simple Golf Pty Limited4
Australia
100%
0%
Equity Holding
Country of
incorporation
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
63 | P a g e
15. Contingent liabilities and contingent assets
There are no contingent assets or liabilities at 30 June 2022
16. Commitments
a) Bank guarantee
The Group hold a number of bank guarantees in relation to office bonds
17. Events occurring after the reporting period
There are no matters which have arisen since the end of the reporting period which may materially
affect operations of MSL, the results of those operations, or the state of affairs of MSL in future
years.
Other disclosures
This section of the notes includes other disclosures that must be disclosed to comply with the accounting
standards and other pronouncements, but that is not immediately related to individual line items in the
financial statements.
18. Related party transactions
a) Key management personnel compensation
Detailed remuneration disclosures are provided in the remuneration report.
b) Transactions with other related parties
i.
Loans receivable from related parties
Nil.
Jun-22
Jun-21
A$'000
A$'000
Bank Guarantee - MSL Solutions Pty Ltd
209
209
Bank Guarantee - Micropower Pty Ltd
145
145
354
354
2022
2021
$AUD
$AUD
Short-term employee benefits
1,094,831
1,050,941
Other long-term benefits
39,294
24,634
Superannuation
53,955
47,552
Share based payments
337,668
197,686
Total
1,525,748
1,320,813
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
64 | P a g e
19. Share-based payments
Options
No options were issued during the period ending 30 June 2022.
300,000 options expired during the period ending 30 June 2022.
All options which expired during the year were issued under an Employee Option Plan which was established to
provide remuneration to key management personnel.
The remaining 1,019,440 options were issued to an entity controlled by Blue Ocean Equities in 2019 as part of
capital raising in November 2019.
Options carry no dividend or voting rights until exercised.
When exercisable, each option is convertible into one ordinary share of MSL Solutions Limited.
The exercise price of option grants to date under the Employee option Plan, was based on a 40% uplift over the
previous traded price at the time of granting the option. The Board deemed that this was a reasonable
estimate of achievable growth as an unlisted entity.
The following table summarises the share options outstanding at the end of the year:
Share Performance Rights
During the period ended 30 June 2022 1,450,000 Share Performance Rights were issued as detailed in the
below table.
3,586,666 Share Performance rights were exercised to shares during the period ended 30 June 2022 as
detailed in the below table.
1,520,000 Share Performance Rights expired during the period ending 30 June 2022.
As at 30 June 2022, 637,778 Share Performance Rights have vested and are exercisable.
The following table summarises the share performance rights issued either under the MSL Performance Rights
Plan approved by Shareholders at the Company’s AGM on 29 November 2021 or as otherwise stated and
outstanding at the end of the year:
Grant Date
Balance at the start of
the year
Granted
Exercised
Expired
Balance at the end
of the year
Vested and
exercisable
Expiry date
Exercise
Price
15-May-17
300,000
-
-
300,000
-
-
15-May-22
0.350
$
14-Jan-20
1,019,440
-
-
-
1,019,440
1,019,440
14-Jan-23
0.1125
$
1,319,440
-
-
300,000
1,019,440
1,019,440
Weighted avg exercise price
0.167
$
-
$
-
$
0.350
$
0.1125
$
0.1125
$
Grant Date
Vesting Date
Balance at the
start of the
year
Vesting Conditions
Granted
Fair value
of current
year grant
Exercised
Forfeited
Balance at
the end of
the year
Vested and
exercisable
Term
Expiry
Date
Exercise
Price
6-Dec-18
30-Jun-20
1,380,000
See Note 1 below
-
-
-
1,320,000
60,000
60,000
3.6 years
30-Jul-22
-
$
24-Sep-19
13-Dec-22
1,500,000
See Note 2 below
-
-
225,000
-
1,275,000
-
5 Years
1-Sep-24
-
$
23-Sep-19
19-Aug-21
1,000,000
See Note 3 below
-
-
1,000,000
-
-
-
4 years
23-Sep-23
-
$
23-Sep-19
23-Sep-23
600,000
See Note 3 below
-
-
-
-
600,000
-
4 years
23-Sep-23
-
$
21-Jul-20
21-Jul-21
5,151,666
See Note 4 below
-
-
1,611,666
100,000
3,440,000
127,778
3 years
21-Jul-23
-
$
30-Jun-21
1-Jul-21
500,000
See Note 3 below
-
-
500,000
-
-
-
1 month
21-Jul-21
-
$
30-Jun-21
1-Jan-22
250,000
See Note 3 below
-
-
250,000
-
-
-
6 months
21-Jan-22
-
$
30-Jun-21
30-Jun-22
1,300,000
See Note 5 below
150,000
20,250
-
100,000
1,350,000
450,000
3 years
21-Jul-24
-
$
30-Jun-21
30-Jun-22
600,000
See Note 6 below
-
-
-
-
600,000
-
3 years
21-Jul-24
-
$
30-Jun-21
30-Jun-22
2,000,000
See Note 7 below
1,000,000
135,000
-
-
3,000,000
-
3 years
21-Jul-24
-
$
25-Oct-21
15-Feb-23
-
See Note 3 below
300,000
67,500
-
-
300,000
-
2.3 years
15-Feb-23
-
$
14,281,666
1,450,000
222,750
3,586,666
1,520,000
10,625,000
637,778
Weighted avg exercise price
-
$
-
$
-
$
-
$
-
$
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
65 | P a g e
Note 1
A Total Shareholder return of 10% Compound Average Growth Rate (CAGR) to be achieved over the vesting period
Note 2
As approved at the Company's AGM on 27 November, 2019, the Performance Rights were issued to the Chairman and Executive Director,
Mr Tony Toohey, with the following conditions:
Tranche
Number
1
225,000
2
425,000
3
425,000
4
425,000
Performance Condition by expiry date
MSL's share price (30d VWAP) equals or exceeds $0.25
MSL's share price (30d VWAP) equals or exceeds $0.30
MSL's share price (30d VWAP) equals or exceeds $0.35
MSL's share price (30d VWAP) equals or exceeds $0.40
The fair value of these Share Performance Rights were calculated as follows:
Input
Assumption
Assumed Grant Date (Date of calculation)
24-Sep-19
Contract Life (To determine Gross Remuneration Value)
5 years
Estimated Life (To determine Accounting Value)
3 years
Estimated Volatility (Standard Deviation – 12 months)
91.90%
Estimated Dividend Yield
0%
Estimated Risk Free Rate (3/5 year average bond rate)
0.71%
Exercise Price (As advised)
$0.00
Estimated Contract Life Value – Total and (per Right)
$187,500
($0.125)
Estimated Accounting Value – Total and (per Right)
$166,800
($0.1112)
During the period ended 30 June 2022, the 225,000 share performance rights in Tranch 1 vested
and were exercised.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
66 | P a g e
Note 3
No Performance Hurdles are required apart from employment as at the vesting dates.
The fair value of these Share Performance Rights are calculated using the closing price
of the quoted MSL ordinary share on day of grant.
Note 4
No Performance Hurdles are required apart from employment as at the vesting dates.
Allocation is split into thirds vesting over a three-year period:
- 1/3rd vesting at 21 July 2021,
- 1/3rd vesting at 21 July 2022,
- 1/3rd vesting at 21 July 2023.
The fair value of these Share Performance Rights are calculated using the closing price
of the quoted MSL ordinary share on day of grant.
Note 5
No Performance Hurdles are required apart from employment as at the vesting dates.
Allocation is split into thirds vesting over a three-year period:
- 1/3rd vesting at 30 June 2022,
- 1/3rd vesting at 30 June 2023,
- 1/3rd vesting at 30 June 2024.
The fair value of these Share Performance Rights are calculated using the closing price
of the quoted MSL ordinary share on day of grant.
Note 6
50% of the Performance rights have a vesting hurdle based on the achievement of
the Company's budget EBITDA for each year and subject to the 3 year vesting period below.
50% of the Performance rights have a vesting hurdle based on the CEO's recommendation
to the Company's Nomination and Remuneration Committee and subject to the 3 year vesting
period below.
Allocation is split into thirds vesting over a three-year period:
- 1/3rd vesting at 30 June 2022,
- 1/3rd vesting at 30 June 2023,
- 1/3rd vesting at 30 June 2024.
The fair value of these Share Performance Rights were calculated as follows:
Input
Assumption
Assumed Grant Date (Date of calculation)
30-Jun-21
Contract Life (To determine Gross Remuneration Value)
3 years
Estimated Life (To determine Accounting Value)
3 years
Estimated Volatility (Standard Deviation – 12 months)
80.26%
Estimated Dividend Yield
0%
Estimated Risk Free Rate (3/5 year average bond rate)
0.14%
Exercise Price (As advised)
$0.00
Estimated Contract Life Value – Total and (per Right)
$81,000 ($0.135)
Estimated Accounting Value – Total and (per Right)
$81,000 ($0.135)
Note 7
No Performance Hurdles are required apart from employment as at the vesting dates.
The Performance rights have a vesting hurdle based on the achievement of
the Company's budget EBITDA for each year and subject to the 3 year vesting period below.
- 1/3rd vesting at 30 June 2022,
- 1/3rd vesting at 30 June 2023,
- 1/3rd vesting at 30 June 2024.
The fair value of these Share Performance Rights were calculated as follows:
Input
Assumption
Assumed Grant Date (Date of calculation)
30-Jun-21
Contract Life (To determine Gross Remuneration Value)
3 years
Estimated Life (To determine Accounting Value)
3 years
Estimated Volatility (Standard Deviation – 12 months)
80.26%
Estimated Dividend Yield
0%
Estimated Risk Free Rate (3/5 year average bond rate)
0.14%
Exercise Price (As advised)
$0.00
Estimated Contract Life Value – Total and (per Right)
$270,000
($0.135)
Estimated Accounting Value – Total and (per Right)
$270,000
($0.135)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
67 | P a g e
20. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent
entity, its related practices and non-related audit firms:
Jun-22
Jun-21
A$'000
A$'000
Audit and review of financial statements
205,100
178,414
Total remuneration for audit and other assurance services
205,100
178,414
Total Remuneration Australia
205,100
178,414
Network firms
Audit and other assurance services
United Kingdom
Jun-22
Jun-21
A$'000
A$'000
Audit and review of financial statements
69,540
59,335
Total remuneration for audit and other assurance services
69,540
59,335
Denmark
A$'000
A$'000
Audit and review of financial statements
19,152
18,754
Total remuneration for audit and other assurance services
19,152
18,754
Total Remuneration of network firms
88,692
78,089
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
68 | P a g e
21. Earnings per share
a) Basic earnings per share
30 Jun 22
30 Jun 21
cents
cents
Total basic earnings per share attributable to the
ordinary equity
0.2
0.3
b) Diluted earnings per share
30 Jun 22
30 Jun 21
cents
cents
Total diluted earnings per share attributable to the
ordinary equity
0.3
0.3
c) Reconciliations of earnings used in calculating earnings per share
30 Jun 22
30 Jun 21
A$'000
A$'000
Basic earnings per share
Profit attributable to the ordinary equity holders of the
company used in calculating basic earnings per share:
From continuing operations
816
886
Non-cash interest savings on convertible note
150
-
Profit after income tax attributable to the owners of MSL
Solutions Limited used in calculating diluted earnings per
share
966
886
d) Weighted average number of shares used as the denominator
30 Jun 22
30 Jun 21
Units
Units
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
353,657,256
326,619,435
Adjustments for calculation of diluted earnings per
share:
- Options
1,281,632
3,781,280
- Share Performance Rights
11,890,040
9,657,598
- Convertible Notes
15,900,431
-
Weighted average number of ordinary shares and
potential ordinary shares used as the denominator in
calculating diluted earnings per share
382,729,359
340,058,313
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
69 | P a g e
22. Parent entity financial information
a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
b) Determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated
financial statements, except as set out below.
i.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries are accounted for at cost in the financial statements of MSL Solutions Limited.
ii.
Tax consolidation legislation
MSL Solutions Limited and its wholly owned Australian controlled entities have implemented the tax
consolidation legislation.
The head entity, MSL Solutions Limited, and the controlled entities in the tax consolidated group account for
tax on a consolidated basis.
MSL Solutions Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising
from unused tax losses and unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated group.
Jun-22
Jun-21
A$'000
A$'000
Current assets
3,154
2,233
Non-current assets
26,340
13,188
Total assets
29,494
15,421
Current liabilities
1,681
2,060
Non-current liabilities
8,842
2,174
Total liabilities
10,523
4,234
Contributed equity
73,432
66,686
Retained losses
(55,532)
(56,062)
Share based payment reserve
560
563
Convertible note equity reserve
511
-
Total Equity
18,971
11,187
Profit/(loss) for the year
530
(3,592)
Total comprehensive income for the year
530
(3,592)
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
70 | P a g e
23. Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated
financial statements to the extent they have not already been disclosed in the other notes above. These
polices have been consistently applied to all the years presented, unless otherwise stated. The financial
statements are for the Group consisting of MSL Solutions Limited and its subsidiaries.
a) Corporate information
MSL Solutions Limited (the Company) is a for profit company limited by shares, incorporated and domiciled in
Australia, whose shares are privately owned. The principal activities of the Group during the financial year
were the investment in development, sale and support of software in the provision of integrated solutions for
membership organisations.
MSL Solutions Limited is a for-profit entity for the purposes of preparing these financial statements.
The financial statements are presented in the Australian currency.
i.
Historical cost convention
Except for cash flow information, the financial statements have been prepared on and accruals basis and are
based on historical costs except where stated.
b) Going Concern assumption
The profit before tax is $104k for period and the net current assets of the Group are $3,012k. The cash flow
forecasts indicate the Group will manage its operating cash flow requirements beyond 12 months from the
date of these financial statements. As with any forecasts there are uncertainties within the assumptions
required to meet the Group’s expectation, however, the Directors consider the revenue and expense
assumptions are achievable.
As at 30 June 2022, the Group had net cash of $9,385k.
On the above basis, the Directors are of the view that the Group continues to be a going concern. The Group
will be able to pay its debts as and when they fall due for a period of at least 12 months from the date of this
report. The preparation of this financial report on a going concern basis is appropriate.
c) Principles of consolidation and equity accounting
i.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group (refer to
Note 3).
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of
the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of profit or loss, statement of comprehensive income, statement of changes in equity and balance
sheet respectively.
ii.
Associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the entity but is not control or joint control of
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
71 | P a g e
these policies. Investments in associates are accounted for in the consolidated financial statements by
applying the equity method of accounting, whereby the investment is initially recognised at cost (including
transaction costs) and adjusted thereafter for post-acquisition change in the Group’s share of net assets of the
associate. In addition, the Group’s share of the profit or loss of the associate is recognised in the profit or loss
in the period in which the investment is acquired.
Profits and losses resulting from the transactions between the Group and the associate are eliminated to the
extent of the Groups interest in the associate.
When the Groups share of losses in an associate equals or exceeds its interest in the associate, the Group
discontinues recognising its share of further losses unless it has incurred legal or constructive obligations or
mad payments on behalf of the associate, When the associate subsequently makes profits, the Group will
resume recognising its share of those profits once its share of the profits equals the share for the losses not
recognised.
iii.
Joint ventures
Interests in joint ventures are accounted for in the consolidated financial statements using the equity method.
Under the equity method of accounting, the Group's share of profits or losses of joint ventures are recognised
in consolidated profit or loss and the Group's share of the movements in other comprehensive income of joint
ventures are recognised in consolidated other comprehensive income. The cumulative movements are
adjusted against the carrying amount of the investment.
iv.
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or
loss, and the Group’s share of movements in other comprehensive income of the investee in other
comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as
a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the
entity, including any other unsecured long-term receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the
extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted
investees have been changed where necessary to ensure consistency with the policies adopted by the Group.
d) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
The Board of Directors monitor the business have identified three reportable segments, based on the type of
customer serviced and products sold to those customer bases. Refer Note 2.
e) Foreign currency translation
i.
Function and presentation currency
The Group’s consolidated financial statements are presented in Australian dollars, which is also the parent
company’s functional currency. For each entity, the Group determines the functional currency and items
included in the financial statements of each entity are measured using functional currency. The consolidated
financial statements are presented in Australia dollar ($), which is MSL Solutions Limited functional and
presentation currency.
ii.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional
currency spot rates at the date the transaction first qualifies for recognition.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
72 | P a g e
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit and loss with the
exception of monetary items that are designated as part of the hedge of the Group’s net investment in a
foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the
cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences
on those monetary items are also recorded in Other Comprehensive Income (OCI).
Non-monetary items that are measured at historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value is determined. The gain or
loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition
of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value
gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
iii.
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the
rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at
exchange rates averaged over the reporting period. The exchange differences arising on translation for
consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that
foreign operation is reclassified to profit or loss.
Any goodwill arising on the acquisitions of a foreign operation and any fair value adjustments to the carrying
amounts of assets or liabilities arising on the acquisition are treated as assets and liabilities of the foreign
operation and translated at the spot rate of exchange at the reporting date
f)
Government subsidies in relation to COVID19
Government subsidies received from various government agencies in response to the COVID19 pandemic have
been recognised as a reduction against employment costs.
g) Income tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred
tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities
(assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation
authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of profit or
loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also
result where amounts have been fully expensed but future tax deductions are available. No deferred income
tax will be recognised from the initial recognition of an asset or liability, excluding a business combination,
where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting
date. Their measurement also reflects the manner in which management expects to recover or settle the
carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax
asset can be utilised.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
73 | P a g e
Current assets and liabilities are offset where a legally enforceable right of set off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set off exists, the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
MSL Solutions Limited and its wholly owned Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation legislation. Each entity in the Group recognises its own current and deferred
tax assets and liabilities. Such taxes are measured using the 'standalone taxpayer' approach to allocation.
Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the
subsidiaries are immediately transferred to the parent entity.
The tax consolidated group has a tax funding arrangement whereby each company in the Group contributes to
the income tax payable by the Group in proportion to their contribution to the Group's taxable income.
Differences between the amounts of net tax assets and liabilities derecognised and
The net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by,
or distribution to the parent entity.
i.
Research and Development Tax Incentive
Companies with the Group may be entitled to claim special tax deductions for investments in qualifying assets
or in relation to qualifying expenditure. At each reporting period, the Group accounts for such allowances as
tax credits. The benefit in excess of the Australian Corporate tax rate of 25% has been recognised as a
reduction to research and development expenses. A deferred tax asset is recognised for unclaimed tax credits
that are carried forward as deferred tax assets.
h) Leases
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs
incurred, and, 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 amortised on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of
the leased asset at the end of the lease term, the amortisation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.
Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of
a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated
termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in
the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss
if the carrying amount of the right-of-use asset is fully written down.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
74 | P a g e
i)
Business Combinations
The acquisition method of accounting is used to account for all business combinations. Consideration is
measured at the fair value of the assets transferred, liabilities incurred, and equity interests issued by the
Group on acquisition date.
Consideration also includes the acquisition date fair values of any contingent consideration arrangements, any
pre-existing equity interests in the acquiree and share-based payment awards of the acquiree that are
required to be replaced in a business combination. The acquisition date is the date on which the Group obtains
control of the acquiree. Where equity instruments are issued as part of the consideration, the value of the
equity instruments is their published market price at the acquisition date unless, in rare circumstances it can
be demonstrated that the published price at acquisition date is not fair value and that other evidence and
valuation methods provide a more reliable measure of fair value. Contingent consideration classified as an
asset or liability is remeasured in each reporting period to fair value, recognising any change to fair value in
profit or loss, unless the change in value van be identified as existing at acquisition date.
Identifiable assets acquired and liabilities and contingent liabilities assumed in business combinations are, with
limited exceptions, initially measured at their fair values at acquisition date. Goodwill represents the excess of
the consideration transferred and the amount of the non-controlling interest in the acquiree over fair value of
the identifiable net assets acquired. If the consideration and non-controlling interest of the acquiree is less
than the fair value of the net identifiable assets acquired, the difference is recognised in profit or loss as a
bargain purchase price, but only after a reassessment of the identification and measurement of the net assets
acquired.
For each business combination, the Group measures non-controlling interests at either fair value or at the non-
controlling interest's proportionate share of the acquiree's identifiable.
Acquisition-related costs are expensed when incurred
Where the Group obtains control of a subsidiary that was previously accounted for as an equity accounted
investment in associate or joint venture, the Group remeasures its previously held equity interest in the
acquiree at its acquisition date fair value and the resulting gain or loss is recognised in profit or loss. Where the
Group obtains control of a subsidiary that was previously accounted for as an available-for-sale investment,
any balance on the available-for-sale reserve related to that investment is recognised in profit or loss as if the
Group had disposed directly of the previously held interest.
Where settlement of any part of the cash consideration is deferred, the amounts payable in future are
discounted to present value at the date of exchange using the Group's incremental borrowing rate as the
discount rate.
Contingent consideration is classified as equity or financial liabilities. Amounts classified as financial liabilities
are subsequently remeasured to fair value at the end of each reporting period, with changes in fair value
recognised in profit or loss.
Assets and liabilities from business combinations involving entities or businesses under common control are
accounted for at the carrying amounts recognised in the Group's controlling shareholder's consolidated
financial statements.
j)
Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information,
including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-
acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the
recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in
use, to the asset’s carrying amount. An excess of the asset’s carrying amount is written off immediately to its
recoverable amount if the assets carrying amount if the assets carrying amount is greater than its recoverable
amount, unless the asset is carried at a revalued amount in accordance with another Standard (eg in
accordance with the revaluation model in AASB 116: Property, Plant and Equipment). An impairment loss or a
revalued asset is treated as a revaluation decrease in accordance with that other Standard.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
75 | P a g e
Where it is not possible to estimate the recoverable amount of an individual asset the Group estimates the
recoverable amount of the cash generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible
assets not yet available for use.
k) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown
within short term borrowings in current liabilities on the balance sheet.
l)
Investments and other financial assets
i.
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity
becomes a party to contractual provisions of the instruments. Trade date accounting is adopted for financial
assets that are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition these instruments are
measured as set out below.
ii.
Financial assets at fair value through profit and loss
A financial asset is classified at fair value through profit and loss when they are held for trading for the purpose
of short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to
avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is
managed by key management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Realised and unrealised gains and losses arising from changes in fair
value are included in profit or loss in the period in which they arise.
Right-of-use assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVPL):
-
They are held within the business model whose objective is to hold the financial assets and collect its
contractual cash flows.
-
The contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method.
m) Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
i.
Plant and equipment
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable amount is assessed based on the expected net
cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts
ii.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised leased assets is depreciated on a
diminishing value basis over their useful lives to the Group commencing from the time the asset is held ready
for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease
or the estimated useful lives of the improvements.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
76 | P a g e
n) Intangible assets
i.
Goodwill
Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a
business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at
date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on
acquisition of associates is included in investment in associates. Goodwill is tested annually for impairment and
carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
ii.
Software
Software used in the business and that is not integral to the computer hardware owned by the Group, is
carried at cost less, where applicable, any accumulated depreciation and impairment losses. The depreciable
amount of software is depreciated on a straight-line basis at a rate between 10% and 40%.
Cost includes the direct costs of acquiring the software. Internal costs incurred in further developing the
software are expensed.
As the Group transitions to a SaaS based company, it will provide access to products via a SaaS platform over a
prolonged term meaning that, the technical feasibility of products can be established at an earlier phase
through pre-defined roadmaps. Costs that are directly associated with the development of this software are
recognised as an intangible asset when the following criteria are met:
a) The technical feasibility of completing the intangible asset is achieved so that it will be available for
use or sale;
b) The Company intends to complete the intangible asset and then use or sell it;
c) The Company is able to use or sell the intangible asset;
d) The Company knows how the intangible asset will generate probable economic benefits. Among other
things, the Company can demonstrate the existence of a market for the output of the intangible asset
or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
e) Adequate technical, financial and other resources are available to complete the development and to
use or sell the intangible asset; and
f)
The Company can reliably measure the expenditure attributable to the intangible asset during its
development.
The relevant costs include personnel and other directly attributable costs incurred in the development of
software. Capitalised software development costs are recognised as an intangible asset and amortised over
their estimated useful lives, which is considered to be 60 months. Capitalised software development costs are
amortised from when the products to which they relate become available to use. Research costs are expensed
as incurred and are largely made up of employee labour which is included in research and development costs
in the statement of comprehensive income. Development costs previously recognised as expenses are not
recognised as assets in a subsequent period.
Amortisation of intangibles is included in the line ‘amortisation’ in the profit or loss.
iii.
Customer Contracts
Customer contracts recognised on acquisition are amortised on a straight-line basis over the life of the
contract, being between 3-15 years. Where a contract holds multiple extension periods, MSL Solutions
recognises these only to the extent where MSL Solutions has the control over whether the contract is
extended, and it is more than probable that the extension will be utilised.
Amortisation of customer contracts is included in the line ‘depreciation and amortisation’ in the profit or loss.
iv.
Brands and trademarks
Brands and trademarks recognised on acquisition are amortised on a straight-line basis over the useful life of
the asset, being between 3-15 years.
v.
Amortisation
Refer to Note 8(b) for details about amortisation methods and periods used by the Group for intangible assets.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
77 | P a g e
o) Trade and other payables
Trade and other payables represent the liabilities for goods and services received by the entity remain unpaid
at the end of the reporting period. The balance is recognised as a current liability with the amounts normally
paid within terms of payment as detailed on invoices received.
p) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measure at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in profit or loss over the period of the borrowings using the effect interest
method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is possible that some or all the facility will be drawn down. In this case, the fee is deferred until
the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will
be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period the
facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to
extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is
measured as the difference between the carrying amount of the financial liability and the fair value of the
equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period.
q) Convertible note
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in
the statement of financial position, net of transaction costs. On the issue of the convertible notes the fair value
of the liability component is determined using a market rate for an equivalent non-convertible bond and this
amount is carried as a non-current liability on the amortised cost basis until extinguished on conversion or
redemption. The increase in the liability due to the passage of time is recognised as a finance cost. The
remainder of the proceeds are allocated to the conversion option that is recognised and included in
shareholders equity as a convertible note reserve, net of transaction costs. The carrying amount of the
conversion option is not remeasured in the subsequent years. The corresponding interest on convertible notes
is expensed to profit or loss
r)
Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or
production or a qualifying asset are capitalised during the period of time that is required to complete and
prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial
period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
s)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result, and that outflow can be reliably
measured.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
78 | P a g e
t)
Employee benefits
i.
Short-term employee benefit obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled wholly within 12 months after the end of the reporting period are recognised in other
liabilities in respect of employees' services rendered up to the end of the reporting period and are measured at
amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are
recognised when leave is taken and measured at the actual rates paid or payable.
ii.
Other long-term employee benefit obligations
Liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after
the end of the reporting period. They are recognised as part of the provision for employee benefits and
measured as the present value of expected future payments to be made in respect of services provided by
employees to the end of the reporting period using the projected unit credit method. Consideration is given to
expected future salaries and wages levels, experience of employee departures and periods of service.
Expected future payments are discounted using national government bond rates at the end of the reporting
period with terms to maturity and currency that match, as closely as possible, the estimated future cash
outflows.
iii.
Equity-settled compensation
The Group operates an employee share and option plan. Share-based payments to employees are measured at
the fair value of the instruments issued and amortised over the vesting period. Share-based payments to non-
employees are measured at the fair value of the instruments issued and are recorded at the date the goods or
services are received.
The corresponding amount is recorded to the option reserve. The fair value of options is determined using the
Black-Scholes and Monte Carlo simulation pricing models. The number of shares and options expected to vest
is reviewed and adjusted at the end of each reporting period such that the amount recognised for services
received as consideration for the equity instruments granted is based on the number of equity instruments
that eventually vest.
u) Contributed equity
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.
v) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at
the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the
reporting period.
w) Earnings per share
i.
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
The profit attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares
•
By the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the year and excluding treasury shares.
ii.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account:
•
The after-income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares, and
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
79 | P a g e
•
The weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
x) Rounding
Amounts in the financial report and directors' report have been rounded off to the nearest thousand dollars,
unless otherwise stated.
y) Goods and Services Tax (GST) and Value Add Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of GST and VAT, except where the amount of
GST and VAT incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST
and VAT is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables are shown inclusive of GST.
Cash flows are presented in the statement of cashflow on a gross basis, except for the GST and VAT
component of investing and financing activities, which are disclosed as operating cash flows.
z)
Comparatives
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
80 | P a g e
Directors Declaration
In the Directors’ opinion:
a) the financial statements and notes set out on pages 26 to 79 are in accordance with the Corporations Act
2001, including:
i.
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
ii.
giving a true and fair view of the consolidated Group’s financial position as at 30 June 2022 and of
its performance for the financial year ended on that date, and
b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable, and
c) at the date of this declaration, there are reasonable ground to believe that the members of the extended
closed group identified in Note 14(a) will be able to meet any obligation or liabilities.
The financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declaration by the chief executive officer and chief financial officer required
by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Tony Toohey
David Usasz
Executive Director and Chairman
Non-Executive Director
Dated at Brisbane this 18th day of August 2022.
Grant Thornton Audit Pty Ltd
King George Central
Level 18
145 Ann Street
Brisbane QLD 4000
GPO Box 1008
Brisbane QLD 4001
T +61 7 3222 0200
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
Independent Auditor’s Report
To the Members of MSL Solutions Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of MSL Solutions Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes
in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for
the year ended on that date; and
b 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.
© 2022 Grant Thornton Australia Limited. 2
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Revenue recognition – Note 4
The Group recognises revenue across eight separate
revenue streams. The revenue recognition process and
policies differ for each stream depending on the nature
of the products and services provided to the customer
in accordance with AASB 15 Revenue from Contracts
with Customers. Significant estimation and judgement
are used regarding timing and revenue to be
recognised.
We have determined that revenue is a key audit focus
area due to the material nature of the balance, the
volume of transactions and the importance of the
revenue balance to the current stakeholders.
Our procedures included, amongst others:
• Obtaining an understanding of the key processes
and controls used in recording revenue and
appropriately documenting these in our workings;
• Reviewing the recognition policies to ensure
compliance with accounting standards;
• Sampling revenue transactions statistically and
testing whether revenue recognition is appropriate by
agreeing to a sales contract or other support,
assessing the identification of performance
obligations, and evaluating the timing of revenue
recognition; and
• Evaluating the adequacy of related disclosures in the
financial report.
Acquisition of Ordermate – Note 3
The Group acquired 100% of the share capital of
Ordermate Holdings Pty Ltd and Ordermate IP Pty Ltd
on 30 September 2021.
Business combinations involve a level of judgement in
evaluating the Group’s purchase price allocation,
including the assessment of identifiable intangible
assets arising on acquisition in accordance with AASB
3 Business Combinations.
As a result, this area has been determined to be a key
audit matter.
Our procedures included, amongst others:
• Considering the legal documents and Management’s
position paper to obtain an understanding of the
transaction;
• Assessing the acquisition against the criteria of a
business combination and the associated accounting
treatment;
• Assessing Management’s determination of the fair
value of the assets and liabilities acquired, including
reviewing the recognition and measure of separately
identifiable intangible assets;
• Assessing the fair value of the purchase
consideration;
• Testing the Group’s accounting for the transaction,
including checking the mathematical accuracy of the
calculations and associated journal entries; and
• Evaluating the adequacy of the disclosures included
in the financial report.
© 2022 Grant Thornton Australia Limited. 3
Intangible assets impairment – Note 8 b)
The Group has $25.1m of intangible assets, primarily
contacts, customer relationships, and internal and
external developed software and goodwill. The Group
acquired $3.3m of goodwill through the acquisition of
Ordermate Holdings Pty Ltd in the current period.
AASB 136 Impairment of Assets requires that an entity
assesses at the end of each reporting period whether
there is any indication that an asset may be impaired.
Annual assessments are also required when the Group
holds goodwill.
This area is a key audit matter due to the inherent
subjectivity involved in Management’s judgements
estimating the recoverable amount as part of
evaluating for impairment.
Our procedures included, amongst others:
• Obtaining Management’s impairment model and
assessing the methodology used against the
requirements of AASB 136;
• Assessing Management’s determination of the
Group’s Cash Generating Units (CGUs) based on
our understanding of the business;
• Evaluating the appropriateness of key assumptions
and inputs used in the calculations by obtaining
corroborating evidence;
• Undertaking a sensitivity analysis on key inputs;
• Testing the mathematical accuracy of the model; and
• Evaluating the adequacy of the disclosures relating
to intangible assets in the financial report.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
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 Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.pdf. This
description forms part of our auditor’s report.
© 2022 Grant Thornton Australia Limited. 4
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 13 to 24 of the Directors’ report for the year
ended 30 June 2022.
In our opinion, the Remuneration Report of MSL Solutions Limited, for the year ended 30 June 2022 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
CDJ Smith
Partner – Audit & Assurance
Brisbane, 18 August 2022
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
85 | P a g e
Shareholder information
The shareholder information set out below was applicable as at 9 August 2022.
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
There were 91 holders of less than a marketable parcel of ordinary shares, totalling 122,997.
Equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
913
364,269,320
100.00
385
16,447,920
4.52
300
346,793,977
95.20
104
362,260
0.10
80
660,136
0.18
Total Holders
Units
% Units
44
5,027
0.00
Name
Ordinary Shares
%
1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
55,389,708
15.21
2
BNP PARIBAS NOMINEES PTY LTD
27,328,817
7.50
3
PORTFOLIO SERVICES PTY LTD
13,333,333
3.66
4
HOLZRC PTY LTD
13,000,000
3.57
5
MICROEQUITIES ASSET MANAGEMENT PTY LTD
11,377,533
3.12
6
CCK WEALTH PTY LTD
10,498,271
2.88
7
LOVAT PTY LTD
8,754,131
2.40
8
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
6,311,752
1.73
9
WALLIS-MANCE PTY LIMITED
5,784,725
1.59
10
PORTFOLIO SERVICES PTY LTD
5,620,120
1.54
11
INDCORP CONSULTING GROUP PTY LIMITED
5,000,000
1.37
12
THE DALY FT PTY LTD
4,950,000
1.36
13
MORBRIDE PTY LTD
4,450,000
1.22
14
CHARLOTTE B PTY LTD
4,000,000
1.10
15
MR GRAHAME ERIC DAY
3,650,682
1.00
16
MS ELIZABETH W.A.C. VAN POPPEL
3,650,681
1.00
17
DOG FUNDS PTY LTD
3,534,370
0.97
18
MSD CALABRO PTY LTD
3,475,610
0.95
19
RANGER HAUTOT HOLDINGS PTY LTD
3,475,610
0.95
20
GLG HOLDINGS PTY LTD
3,428,571
0.94
197,013,914
54.08
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
86 | P a g e
Restricted equity securities
The Company currently has 14,431,181 shares that are subject to escrow arrangements.
4,675,083 shares that were issued to the vendors of SwiftPOS Pty Ltd as part consideration for the acquisition.
One half of the shares will be released on each of the next two anniversaries being 17 November 2022 and 17
November 2023.
9,756,098 shares that were issued to the vendors of OrderMate Pty Ltd and OrderMate IP Holding Pty Ltd as
part consideration for the acquisition. 4,634,144 shares will be released on the first anniversary being 30
September 2022 and 5,121,954 shares which will be released on the second anniversary being 30 September
2023.
Unquoted equity securities
There is one option holders with total accumulated holdings of 1,019,440 options over fully paid ordinary
shares.
There are 10,625,000 performance rights issued to various employees under the Company’s Performance
Rights Plan, which are subject to specified vesting conditions.
Substantial holders
Substantial holders in the Company are set out below:
Voting rights
The voting rights attaching to each class of equity securities are as follows:
•
Ordinary shares: On a show of hands every member present at a meeting in person or by proxy shall
have one vote and upon a poll each share shall have one vote; and
•
Options and Performance Rights: No voting rights.
Other information
There is currently no on-market buy-back of the Company’s securities.
The Company has used its cash (and assets in a form readily convertible to cash) that it had at the time of
listing in a way consistent with its stated business objectives.
Name
Ordinary Shares
%
1
MICROEQUITIES ASSET MANAGEMENT PTY LTD
44,740,301
12.28
2
DAVID PENNER
23,800,000
6.53
3
PORTFOLIO SERVICES PTY LIMITED
18,953,453
5.20
MSL SOLUTIONS LIMITED and CONTROLLED ENTITIES
Annual financial report – 30 June 2022
ACN 120 815 778
87 | P a g e
Corporate Directory
Registered Address
MSL Solutions Limited
ACN 120 815 778
Level 1, 307 Queen Street
Brisbane, QLD 4000
MSL Information Line
1800 679 701 (Within Australia)
+61 7 3512 3510 (Outside Australia)
http://www.mslsolutions.com
Directors
Tony Toohey
Earl Eddings
Dr Richard Holzgrefe
Dr Sarah Kelly OAM
David Trude
David Usasz
Chief Executive Officer
Patrick Howard
Company Secretary
Andrew Ritter
Assistant Company Secretary
David Marshall
Legal Advisor
Talbot Sayer Lawyers
ABN 93 168 129 075
Level 27, Riverside Centre
123 Eagle Street
Brisbane, QLD 4000
GPO Box 799, Brisbane QLD 4001
T: +61 7 3160 2900
Auditor
Grant Thornton Audit Pty Ltd
ABN 91 130 913 594
King George Central
Level 18
145 Ann Street
Brisbane, QLD 4000
GPO Box 1008 Brisbane QLD 4001
T: +61 7 3222 0200
Share Registry
Computershare
GPO Box 2975, Melbourne Vic 3001
T: 1300 552 270
F: +61 3 9473 2500
https://www-au.computershare.com/Investor