Annual Report 2021 Digital government. Stronger communities. Objective Corporation Limited And Its Controlled Entities — Annual Report 2021 01 Our Mission Financial Highlights Outstanding digital government software driving stronger communities We create software that makes a difference Using Objective software, thousands of public sector organisations are developing policies with impact, accelerating processes and delivering innovative services. We help organisations shift to being completely digital. Where our customers can work from anywhere; with access to information, governance guaranteed, and security assured. Innovation is our lifeblood. We invest significantly in the ongoing development of our products to deliver outstanding solutions to the public sector and regulated industries. The result – stronger national and community outcomes, and accountability that builds trust in government. Revenue Annualised Recurring Revenue $95.1m 36% Growth $74.2m 31% Growth EBITDA Net Profit After Tax Research and Development FY2021 represented a record year for Objective’s investment in R&D $23.1m 47% Growth $25.6m 49% Growth $16.1m 46% Growth 24% of Revenue Cash at Balance Date Dividend $48.4m 9.0CPS 48% Growth* Fully Franked * Cash balance at 30 June 2020 was $51.0 million, net of cash outflow of $18.4 million for acquisition of Itree Pty Limited on 1 July 2020. Contents 01 Financial Highlights 02 Value Proposition 03 Our Purpose 04 Customer Stories 06 Engineering Outstanding Solutions 07 Product Portfolio 08 CEO’s Report 10 Business Line Review 14 Directors’ Report 20 Financial Statements 25 Notes to the Financial Statements 60 Directors’ Declaration 61 62 67 Shareholder Information 68 Corporate Directory Independent Auditor’s Declaration Independent Auditor’s Report 02 03 Value Proposition Our Purpose We create software that makes a difference We help organisations shift to being completely digital. Where our customers can work from anywhere; with access to information, governance guaranteed and security assured. Regulation & Governance Process Transformation Compliance or regulation is never treated as an after-thought, it is embedded in the process, in the DNA of all that we deliver to our customers, yet it allows users to work naturally, in the familiar business applications they use every day. Our suite of solutions digitise and automate common processes in the public sector and financial services industries delivering productivity and efficiency gains, while ensuring governance happens in the background. National & Community Valued Outcomes In delivering on our proposition, we help our customers deliver quantifiable results to their organisations and the broader community they serve. Content & Processes Accountability that builds trust in government. Empowering a digital government to develop policies with impact, accelerate processes and deliver innovative services. Regulation Protecting what matters. Enabling best-practice regulation for fair, safe and sustainable community outcomes. Planning & Building Creating tomorrow’s communities, today. Encouraging responsible development through efficient and effective assessment with engaged communities. The Result Stronger national and community outcomes and accountability that builds trust in government. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 04 Our Business Inside Objective Directors’ Report Financial Statements 05 Helping our customers deliver national and community outcomes Using Objective software, thousands of public sector organisations are developing and enacting policies with impact, accelerating processes and delivering innovative services. Protecting vulnerable children Australia’s state and territory child protection agencies use Objective Reach to find, match and share vital information in a timely manner across multiple jurisdictions. This is helping to trigger vital early action, facilitate better coordination across agencies and inform critical decisions to help improve child safety outcomes. Scan to watch video https://www.objective.com.au/nsw-communities-justice RegTech Solutions Enforcing regulation of new anti-wage theft legislation The first of its kind in Australia, the Victorian government established Wage Inspectorate Victoria in 2021 to investigate and prosecute wage theft offences under the Wage Theft Act 2020. Objective RegWorks enables citizens to obtain advice and report offences, and for the Inspectorate to respond to complaints, and manage investigations and enforcements to tackle wage theft across the state. Scan to read more https://www.objective.com.au/wage-inspectorate-victoria RegTech Solutions Sustaining the planning function through remote working Protecting high risk victims of domestic abuse Beyond the many benefits Objective Trapeze brings to planners at the City of Greater Dandenong, its most critical role to date has been sustaining the planning function of the council through the COVID-19 pandemic and subsequent remote working environment. As a result, the council can continue its important role in stimulating the economy and bringing development on board in a responsible, efficient way. The Glasgow City Council Violence Against Women Partnership is responsible for managing a multi-agency, citywide solution to support high-risk victims of domestic abuse. Local authorities, police, health providers, educators and others use Objective Connect to collaborate and share highly sensitive information to protect those at risk of being harmed. Protecting and promoting Scotland’s natural heritage Through modern, digital work practices, NatureScot has enabled a connected workforce, dispersed across 23 offices. An Objective customer for 16 years, NatureScot embraces new innovations, aspiring to very high standards of information management that enables them to protect and promote Scotland’s natural heritage and the vital contribution it makes to the nation’s prosperity and wellbeing. Digital transformation of building consent approvals From 100% paper based to 100% digital, Waitaki District Council revolutionised its building consent approval process. Council staff, the design community, builders and owners are all benefiting from a more transparent, collaborative approach with accurately completed applications, instant RFI notifications and much faster turnaround times for consents. Scan to watch video https://www.objective.com.au/city-greater-dandenong Scan to watch video https://www.objective.com.au/glasgow-city-council Scan to watch video https://www.objective.com.au/nature-scot Scan to watch video https://www.objective.com.au/waitaki-district-council Planning & Building Solutions Content Solutions Content Solutions Planning & Building Solutions Objective Corporation Limited And Its Controlled Entities — Annual Report 2021 06 Objective Corporation Limited And Its Controlled Entities — Annual Report 2021 07 Engineering Outstanding Solutions Product Portfolio Innovation is our lifeblood. Each year, we invest significantly in the ongoing development of our products and bring new products to life, to deliver outstanding solutions to the public sector and regulated industries. Research & Development in FY2021 Our ambitious development program delivered innovations in all products in our portfolio throughout FY2021. It is underpinned by a technology strategy that spans all engineering and development focusing on the following foundational elements. User Experience We continue to deploy and enhance Objective IQ, our common user interface design language across all products. Objective IQ ensures a consistent, modern experience for end users and accelerates development in our product teams. In FY2021, Objective IQ was extended to public facing applications with simpler layouts and clearer annotations for occasional users. Security Critical to all Objective solutions, in FY2021 we increased investment on all levels of security from operations and processes to infrastructure, development practices and application security. Emerging Technologies As technologies evolve, Objective actively pursues new approaches to old problems; anticipating customers’ use of new applications or delivering innovations beyond what they thought were possible. In FY2021 we delivered Objective Gov365 to provide in-place governance for information held in Microsoft365, improved the process of approving development applications submitted to council leveraging computer vision and developed an advanced association map for visualising complex entity relationships for regulatory processing. Integration Ensuring Objective solutions complement and enhance existing third party business solutions used by customers, such as CRM, GIS or ERP systems increases the value to customers. Through flexibility and repeatability we continue to evolve capabilities to simplify integrations to reduce the cost and complexities associated with custom development and ongoing maintenance while improving stability and performance. Automation Process automation is where significant business transformation begins for Objective customers. Developments in machine learning and image processing allow us to provide customers with new tools for analysing and building automations; from automating planning checklists to identifying training gaps, from applying recordkeeping policies to detecting “at risk” signals in child protection or heavy vehicle inspections. Cloud Objective software is developed with a “cloud-first” approach to enable our customers to leverage the efficiency, scale and flexibility advantages provided by modern, cloud architectures. Some customers favour on premises or private cloud deployments, for these customers, we continue to offer choice. Research and Development investment $23m 24% of Revenue Content Solutions Enterprise Content Management Cloud Content Management Ministerial Correspondence Process Management Information Governance Secure External File Collaboration Information Access Request Management Content Driven Workflow Governance for Microsoft 365 Automated Redaction Planning & Building Solutions Building Plan Assessment Tools Planning and Development Portal Building Consent Process Management Building Consent Process Management RegTech Solutions Regulator Process Management Secure and Sensitive Data Matching Keystone Document Production and Engagement Our Business Inside ObjectiveDirectors’ ReportFinancial Statements 08 Objective Corporation Limited And Its Controlled Entities — Annual Report 2021 09 CEO’s Report Our financial results in FY2021 reflect the continued delivery of our strategic plan Dear fellow shareholders, Thank you for taking the time to read Objective Corporation’s Annual Report for Financial Year 2021 (FY2021). We are really pleased with our performance in FY2021 – delivering outstanding outcomes for our customers, protecting our employees and their families, while facing an uncertain operating environment. Financial Highlights Our financial results in FY2021 reflect the continued delivery of our strategic plan, with strong growth in recurring revenue and earnings underpinning our highest ever investment in innovation. Group revenue for FY2021 grew by 36% to $95.1 million (FY2020: $70.0 million); EBITDA grew by 49% to $25.6 million (FY2020: $17.2 million) and Net Profit After Tax (NPAT) increased by 46% to $16.1 million (FY2020: $11.0 million). The Annualised Recurring Revenue (ARR) balance at 30 June 2021 increased by 31% to $74.2 million ($56.6 million at 30 June 2020). Our transition to subscription revenue reached a further milestone in FY2021 with more than 95% of software revenue contracted on a subscription basis. All new customers are engaged on subscription contracts whilst we continue to support existing customers who wish to remain under a perpetual license model. Recognised revenue in most key subscription product lines grew strongly: ECMaaS (73%); Connect (30%); Keystone (1%); Trapeze (34%); RegWorks (33%)1. Developing outstanding software remains core to our values and integral to our business model. FY2021 represented a record year for Objective’s investment in Research and Development (R&D). We invested $23.1 million in R&D, representing 24% of revenue. In keeping with our long-term accounting policies, no R&D expenditures are capitalised, they are 100% expensed when incurred. On 1 July 2020, Objective Corporation acquired Itree Pty Limited for a net cash consideration of $18.4 million. There is no deferred consideration due. During FY2021, the business was fully integrated into Objective Corporation and Objective RegTech Solutions was established as a line of business (LOB) for segment reporting. Group operating cash flow in FY2021 was $24.7 million and the total cash balance at 30 June 2021 was $48.4 million, an increase of 48% over the balance at 30 June 2020, after adjustment for the acquisition of Itree Pty Limited. The Group has no external borrowings. The financial position of the Group provides significant capacity to further pursue investment opportunities that enhance returns for stakeholders. Company Highlights Significant investment in R&D resulted in the release of new innovations across our entire product suite; delivering new functionality to address evolving customer needs and developing new products to address market opportunities. Customers’ adoption of cloud strategies continues across all segments of the market we address; at all levels of government and in the financial services industry. As organisations emerge from reactive remote-working practices implemented in the early stages of the responses to COVID-19, IT strategic thinking is moving to considered infrastructure and application decisions that support remote and hybrid working as the norm, where there is no difference between office and home. Objective’s product suite, roadmap and organisational structure are positioned squarely to support our customers’ transition to cloud with advancements across the portfolio. Objective Gov365 extends governance to further locations where content is created; beyond Microsoft Teams to Microsoft Exchange and SharePoint. The number of customers actively using Objective Gov365 continues to steadily increase. Microsoft Office edit online capability for Word, PowerPoint and Excel files is now available in numerous products; enabling live authoring of documents by multiple users simultaneously with full governance of authors and versions. For our many customers around the world that have shifted to remote or hybrid work practices, this capability has been embraced with enthusiasm. 1 Change over RegWorks subscription revenue for FY2020, prior to Objective ownership. Revenue 36% $95.1m Annualised Recurring Revenue 31% $74.2m Research and Development 47% $23.1m Tony Walls Chief Executive Officer In Planning and Building Solutions, Objective Build is closing the gap between end users in the building development process (such as citizens, architects, developers and builders) and the role local government authorities play to ensure responsible development – where citizen facing web services share the same data source as councils. This results in streamlined processing of applications with greater transparency to the community. Development continued on Objective Nexus, a new product that delivers modern information management in the cloud. To be launched in market in FY2022, this product addresses existing demand in the market for cloud-first information management opening new opportunities; and provides a path for existing customers evolving their cloud strategies. R&D investment was also channelled into incorporating machine learning and other modern technologies across our product suite. From auto-classification and disposals in records management, to improving accuracy in the submission of development applications; from smart-stamping of plans in Objective Trapeze, to improving the accuracy of speed cameras to keep our roads safer; the application of technological advances to create outstanding software for our customers is a guiding principle in our development philosophy and practice. Beyond developing outstanding software, building deep and long-term relationships with our customers remains core to our culture and purpose, demonstrated by the large number of customers that we have worked with for decades. In FY2021 we formalised this ethos and invested in Customer Success as a specialist discipline with a dedicated team of practitioners to lead a proactive approach to customer experience and augment the successful work of our existing account management, professional services and customer support teams. The results of this are evidenced in the growth in revenue from existing customers, increased adoption of new products, extended use of existing products and a very low churn rate that we are proud of. We continue to demonstrate the effectiveness of the Objective acquisition playbook. Following the acquisition of Itree in July 2020, RegTech Solutions is now fully integrated and a highly valued team in the Objective family, delivering record results for FY2021. Planning and Building Solutions, evolved from earlier acquisitions of Onstream Systems, Alpha Group and Master Business Systems and continues to grow with new wins across all products. We are drawing upon deep domain expertise and industry relationships to develop a new generation of building consent platform with Objective Build, which will be released later in FY2022. In all that we do, we remain committed to our strategy to Attract New Fans. Throughout FY2021 we have demonstrated progress on this across the business. Our global footprint together with deep relationships with customers results in customers referring Objective to other organisations. We continue to evolve digital engagement practices that expose products with global applicability to a global audience with low-touch or no-touch sales involvement and shorten the sales cycle for products that require deeper, personal engagement. In a number of markets we are broadening the applicability of our products to extend beyond the firewall to general public facing interactions, enabling those government agencies to deliver the outstanding digital services expected by citizens. Outlook In its first year in the Objective family, our RegTech business made a solid contribution to our overall results. The market opportunity for RegWorks is developing rapidly and was demonstrated by the number of new customer wins during the year; three of which were the largest in RegWorks’ history. These results illustrate the opportunity that arises from combining businesses with deep domain expertise with Objective’s long history of delivering high quality outcomes for over 1,000 public sector organisations. In FY2022 we expect the momentum of our business to drive a continued material lift in revenue and profitability. Our investment in innovation will deliver important product releases for customers including Objective Build, Objective Nexus, Objective ECM 11 and Objective RegWorks iQ which, in addition to further investment in our existing product suite, will underpin new customer acquisition across all business lines and expansion opportunities for existing customers. In addition to these significant organic growth opportunities, we will continue to actively seek acquisitions that offer additional product or market reach capabilities, where these can be acquired at reasonable valuations. As always, I would like to thank our valued customers, talented employees and supportive shareholders for their continued commitment to our mutual success. Our Business Inside ObjectiveDirectors’ ReportFinancial Statements 10 11 Business Line Review Content Solutions Planning & Building Solutions Sales Revenue FY2021 $61.8m 13% Growth FY2020: $54.7m Financial performance In FY2021, revenue in our Content Solutions business increased by 13% to $61.8 million (FY2020: $54.7 million). Objective Connect and Objective Redact were incorporated into the Content Solutions lines of business during FY2021 and the comparative results have been adjusted accordingly. Demand Common themes driving demand throughout FY2021 in the Content Solutions business included: customers’ transition to the cloud, customers’ continued need to facilitate remote working and ensuring governance extends across the information ecosystem automatically, wherever people work and in the applications of their choice. Delivering outcomes for customers We witnessed significant expansion of usage at many existing customer sites for both Objective ECM and Objective Connect. This reflects not only increased demand from organisations’ need to support remote working, but also the trust our customers place in Objective and the value we deliver through product innovations released throughout FY2021 in direct response to their needs. Objective Connect proved invaluable to customers in their transition to fully remote working, helping them continue to deliver critical services. We witnessed a steep increase in usage within customers world-wide. We continue to invest in the development of this product to ensure the functionality meets the needs of our customers and their communities, while maintaining focus on the security and protection of government information. Attracting new fans In FY2021 we welcomed a number of new customers from all levels of government and related industries; such as defence and intelligence and NGOs. We witnessed a number of state government organisations standardise on Objective ECM, replacing incumbent systems following machinery of government changes where Objective ECM is clearly differentiated and continues to be well positioned following a regular cadence of product innovations released throughout the year. Adoption of the Objective IQ experience for Objective ECM grew steadily across the customer portfolio, a highlight was the Objective IQ rollout to more than 10,000 users across the Scottish Government. Objective Redact continues to meet the needs of security conscious organisations around the world to protect sensitive information in many varied use cases. Sold through a low-touch digital engagement model, online-only purchases grew throughout FY2021 and we also signed a number of enterprise-scale contracts in the USA, UK and Australia in both government and financial services. Engineering #outstanding solutions In late FY2021 we launched Objective ECM 11 which includes enhanced process automation functionality sought by the many customers that utilise workflow in Objective ECM. This now means that ECM 11, delivered via Objective IQ, offers business users more benefits than the desktop version, for example; co-authoring for Microsoft 365 applications, easy visual controls for managers of business processes, enhanced security and a deeply intuitive user experience, designed for every individual throughout an organisation. The Objective IQ experience promotes broad use of the product throughout an organisation, while process automation enhancements promote deeper use. Steady growth in the number of customers adopting Objective Gov365 continued throughout FY2021, as organisations seek governance for the rapid explosion in the use of Microsoft Teams. We released further enhancements to this product throughout FY2021, including governance for Microsoft SharePoint. Engineering #outstanding solutions Investment in the development of Objective Build increased materially throughout FY2021. Objective Build is the result of years of accumulated knowledge and expertise contributed to Objective through AlphaGroup and Master Business Systems together with close relationships developed with industry; including NZ local authorities and the construction industry. A cloud-based, end-to-end planning and consenting automation platform to manage building approvals that ensures safe, responsible development, and supports an industry that contributes significantly to the economies in which we operate. We continued to support our AlphaOne and GoGet customers, with numerous enhancements released, new implementations delivered, and new customers acquired for both platforms. Delivering outcomes for customers New customers came onto the platforms in FY2021, including Kāinga Ora the agency established to transform housing and urban development throughout New Zealand, including building over 3,000 homes for people in need. Kāinga Ora is also a major customer for Objective ECM and Objective Connect, demonstrating the depth of our relationship. Sales Revenue FY2021 $10.7m 33% Growth FY2020: $8.1m Financial performance In FY2021, revenue in the Planning and Building Solutions business increased by 33% to $10.7 million (FY2020: $8.1 million). As of 1 July 2020, the results of Objective Redact products have been removed from the Planning and Building line of business and attributed to Content Solutions. Comparative period figures have been restated on the same basis. Attracting new fans Throughout the second half of FY2021 migration of Objective Trapeze customers to Objective Trapeze Professional, the subscription version of the product that offers significantly greater functionality and value to users, accelerated, with 68 customer upgrades performed. The number of Trapeze Professional users now exceeds the number of users on the previous generation, perpetual right to use version. We also experienced steady growth in new customers for Objective Trapeze; and following deep customer engagement in the UK, released a number of enhancements specific to the UK market. The number of customers in Australia now exceeds 200 Councils. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 12 13 Business Line Review RegTech Solutions Keystone Sales Revenue FY2021 $15.3m Financial performance In FY2021, RegTech Solutions delivered revenue of $15.3 million (FY2020: n/a), this business line was formed following the acquisition of Itree in July 2020. Growing the family Itree’s integration into Objective was completed in H1 and the business is now contributing to overall outcomes by extending the Objective brand name into new agencies and creating opportunities for adoption of RegWorks amongst Objective’s public sector customers. Attracting new fans With growing awareness amongst regulators that an end-to-end solution encompassing public facing portals, mobile enforcement apps and core back office solutions delivers superior outcomes than CRM or generic case management platform. We welcomed a record number of new Objective RegWorks customers, validating our market position as a purpose-built solution for regulation, safety, compliance and enforcement. Spanning multiple Australian states and New Zealand, this group of new customers broadened the reach of Objective RegWorks into new areas of regulation including: industrial relations, workers compensation, the environment, health and community care for families and the disabled. Engineering #outstanding solutions Investment in R&D for Objective RegWorks resulted in a number of innovations delivered throughout the year. The public facing portal adopted the Objective IQ design language and is live at two customers sites: Wage Inspectorate Victoria and New Zealand Ministry of Health. It enables government agencies to offer easy and direct digital engagement with the general public, seamlessly integrating into back-office operations, reporting and audit requirements. The Objective IQ design language was also applied to the RegWorks mobile app, which will further streamline in-field compliance work for customers undertaking checks, infringements and issuing fines. Delivering outcomes for customers Another highlight for FY2021, was the renewal of a 5-year, $18 million contract with Transport for NSW reinforcing the long-term relationship with RegTech Solutions and augmenting the existing relationship that Transport NSW has had with Objective for many years. Throughout the year, Objective Reach was progressively rolled out to eight state and territory agencies with seven states now live. The NSW Department of Communities and Justice, along with state and territory child protection agencies in every Australian state have implemented Objective Reach in a world-first data search, matching and information sharing solution to protect children and families at risk of abuse. Engineering #outstanding solutions To address demand in local government, we released substantial innovation in Geospatial Information System (GIS) integration into the Keystone consultation and engagement portal, delivering the ability to link community consultations with locations. Other enhancements include content merging capabilities, applicable to both the FSI and Government markets, that automates highly time-consuming and error prone manual processes for customers when combining multiple versions of complex documents. Addressing market demand From FY2022, Objective Keystone will be split into two products: Objective Keystone will continue to be targeted to the FSI market, and Objective KeyPlan will target the public sector. This allows for more targeted products and go-to-market strategies, enabling us to articulate value propositions that reflect the specific use cases in these two distinct markets. Sales Revenue FY2021 $7.1m 4% Growth FY2020: $6.8m Financial performance During FY2021, total revenue from our Keystone business increased by 4% to $7.1 million (FY2020: $6.8 million). Delivering outcomes for FSI customers We sustained a market-leading position in the Australian financial services and insurance industry (FSI) for the production of Product Disclosure Statements (PDS) and extended the use case within customers to produce Target Market Determinations (TMD) as customers prepare to respond to new regulatory obligations being introduced in the industry from October 2021. We added a number of new FSI customers throughout the year and extended relationships with existing customers, demonstrating Keystone’s relevance amongst the largest fund management and financial service institutions in Australia. Delivering outcomes for government customers In the public sector, Objective Keystone continues to support the statutory planning process at both state and local government levels. We welcomed new customers in the UK, Australia and New Zealand. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 14 Directors’ Report The Directors of Objective Corporation Limited (‘the Company’) present the Annual Report of the Company and its controlled entities (collectively ‘the Group’) for the year ended 30 June 2021. DIRECTORS The names and details of the Company’s directors in office during the financial year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated: MR TONY WALLS Chairman and Chief Executive Officer Tony founded the business in 1987 and has extensive experience in the IT industry. Tony has a B.Math (Computing Science), a Grad.Dip in Applied Finance (SIA) and is a Fellow of the Australian Institute of Company Directors. MR GARY FISHER Non-Executive Director Gary was appointed a Director of Objective Corporation Limited in March 1991. In October 2007 Gary became a Non-Executive Director. Gary has an extensive background in Finance, IT Management and global product software sales. Gary has a B.Economics and further tertiary education in Law and Business Administration. MR NICK KINGSBURY Independent Non-Executive Director Nick was appointed as a Non-Executive Director in July 2008 and is the Chair of the Audit Committee. Nick is an experienced international software entrepreneur, strategist and venture capitalist. Nick founded, led and then sold a leading UK Business Process Management company. Nick then spent 7 years with the international venture capital company 3i, where he headed up the software sector. From October 2011 to June 2015 he chaired a UK AIM listed cyber security company Accumuli, plc, which was successfully sold to NCC Group. As well as his role with Objective, he is a Partner with the venture capital firm Amadeus Capital Partners and sits on the boards of several early-stage businesses. MR DARC RASMUSSEN Independent Non-Executive Director Darc was appointed as a Non-Executive Director on 8 August 2018. Darc is a seasoned enterprise software professional with over 25 years’ experience successfully building and growing Software as a Service (SaaS) and Cloud based businesses across global markets. Darc spent time working and living in Europe, the USA and Asia/Pacific growing public and private companies including Infor, SAP, IntraPower (Trusted Cloud) and Integrated Research. Darc led the SAP (NYSE:SAP) global CRM Line of Business, building it from start-up to total annual revenues of US$1.5 billion in 2007, establishing SAP as the global leader in the CRM market. He was CEO at Integrated Research (ASX:IRI) and led the company through a whole of business transformation strategy that delivered 70%+ growth in Revenue and Profits along with a tripling of the company’s market capitalisation. During Darc’s tenure IR was named a Gartner “Cool Vendor” and became the global leader in the Unified Communications Performance Management market. Darc is a Non-Executive Director of Gentrack Group Limited (NZX/ASX : GTK) and a member of the Board at Jobsgates Developments Pty Ltd. COMPANY SECRETARY SHARE OPTIONS 15 MR BEN TREGONING Company Secretary Ben was appointed Company Secretary in July 2016. Ben has over 15 years’ experience in financial roles within Financial Services and corporate finance businesses both in Australia and the UK. He is responsible for company secretarial and corporate governance support at Objective. Ben has a B.Commerce and a M.Commerce. PRINCIPAL ACTIVITIES The principal activity of the Group during the year was the supply of information technology software and services. There was no significant change in the nature of the Group’s activities during the year. DIVIDENDS An ordinary final fully franked dividend of $6,551,000 was paid on 16 September 2020. Since the end of the financial year, the directors have recommended the payment of a final fully franked dividend of 9 cents per ordinary share. The aggregate amount of the dividends expected to be paid on 16 September 2021 is $8,461,000. There is no conduit foreign income attributed to the final dividend declared. REVIEW OF OPERATIONS AND FINANCIAL RESULTS A review of the Group operations and the results for the year ended 30 June 2021 is set out on the inside front cover to page 13 of the annual report and forms part of the Directors’ Report. This includes the summary of consolidated results as well as an overview of the Group’s strategy. SIGNIFICANT CHANGES IN STATE OF AFFAIRS There were no significant changes in the state of affairs of the Group during the financial year. SHARE CAPITAL As at 30 June 2021 the Company had 94,010,371 (2020: 93,327,871) fully paid ordinary shares on issue. Voting rights are detailed in Note 18 to the financial statements. Unissued shares under options As at the date of this report, there were 1,908,750 unissued ordinary shares under options. Options on Issue at Balance Date Number Expiry Date Number Expiry Date 2021 2020 Employee options exercisable at $1.00 Employee options exercisable at $1.17 Employee options exercisable at $1.50 Employee options exercisable at $1.80 Employee options exercisable at $2.75 Employee options exercisable at $2.75 Employee options exercisable at $2.75 Employee options exercisable at $7.50 Employee options exercisable at $12.50 Total options on issue Weighted average exercise price – 07/10/2024 80,000 07/10/2024 150,000 24/02/2025 150,000 24/02/2025 – – 29/07/2026 02/01/2027 62,500 29/07/2026 125,000 02/01/2027 200,000 29/07/2028 200,000 29/07/2028 805,000 01/01/2029 1,257,500 01/01/2029 12,500 01/04/2029 25,000 01/04/2029 541,250 01/07/2030 200,000 31/01/2025 1,908,750 $4.99 – – 1,900,000 $2.45 – – Details of the options on issue are contained in Notes 18 and 27 to the financial statements. SHARE OPTIONS Shares issued on exercise of options A total of 835,000 options were issued and 682,500 options were exercised during the financial year ended 30 June 2021. The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of the Company. Since the end of the financial year, the Group issued 143,750 ordinary shares of the Company as a result of the exercise of options under the Employee Incentive Plan, and funded via a combination interest free limited recourse loans provided by the issuing entity to employees under the current Employee Incentive Plan and cash consideration. For accounting purposes, these share loans are treated as part of options to purchase shares, until the loans are repaid or extinguished at which point the shares are recognised. LIKELY DEVELOPMENTS The Company delivered strong growth in profitability in FY2021 reflecting an improving mix of earnings on a stable revenue base. We continued to invest in our product portfolio and our workforce, as well as developing new markets for our products and pursuing non-organic growth opportunities. In FY2021 we also expanded our business through the acquisition of Itree Pty Limited. The Directors have identified opportunities to continue to grow the business in FY2022 and the Company will be pursuing these whilst maintaining a focus on increasing profitability. Through product innovation and the development of outstanding software, we have expanded our addressable market in the regions in which we are well established, and our globally competitive products provide an opportunity for us to expand our presence beyond our current geographic footprint. The Company also retains significant financial capacity to pursue investment opportunities outside of the current product portfolio and customer reach. ENVIRONMENTAL REGULATION The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law. EVENTS AFTER BALANCE SHEET DATE For dividends resolved to be paid after 30 June 2021, refer Note 19. Other than the above, the Directors have not become aware of any matter or circumstance not otherwise dealt with in the report or in the financial statements that has significantly or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. INDEMNIFYING OFFICERS OR AUDITOR During the financial year the Company has paid an insurance premium for a Directors’ and Officers’ insurance policy. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the Directors or Company Secretary as a result of the work performed in their capacity as officers of entities in the Group to the extent permitted by law. The Directors have not disclosed the amount of the premium as such disclosure is prohibited under the terms of the contract. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or any related body corporate against a liability incurred. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 16 Directors’ Report continued 17 CORPORATE GOVERNANCE STATEMENT The Company’s Directors and management are committed to conducting the Group’s business in an ethical manner and in accordance with the highest standards of corporate governance. The Company has adopted and substantially complies with the ASX Corporate Governance Principles and Recommendations (4th Edition) (‘Recommendations’) to the extent appropriate to the size and nature of the Group’s operations. The Company has prepared a Corporate Governance Statement which sets out the corporate governance practices that were in operation throughout the financial year for the Company, identifies any Recommendations that have not been followed, and provides reasons for not following such Recommendations. The Company’s Corporate Governance Statement and policies will be approved at the same time as the Annual Report and will be found on its website: https://www.objective.com/about/investors. DIRECTORS’ INTEREST Directors’ beneficial interest in shares and options at the date of this report were: Director Tony Walls Gary Fisher Nick Kingsbury Darc Rasmussen Total directors’ interest Number of ordinary shares 62,000,000 7,600,000 100,000 30,214 69,730,214 Number of options – – – 200,000 200,000 MEETINGS OF DIRECTORS The number of Directors’ and Audit Committee meetings held during the financial year and the number of meetings attended by each of the Directors are as follows: Director Tony Walls Gary Fisher Nick Kingsbury Darc Rasmussen Directors’ Meeting Audit Committee Meetings Number of Meetings Held Number of Meetings Attended Number of Meetings Held Number of Meetings Attended 12 12 12 12 12 12 12 12 2 n/a 2 2 2 n/a 2 2 AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration in relation to the financial year is included on page 61. AUDITOR’S NON-AUDIT SERVICES The Company has not engaged the Group auditor, Pitcher Partners, to provide non-audit services during the financial year. ROUNDING OF AMOUNTS The Company is an entity to which ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 applies and accordingly, amounts in the financial statements and Directors’ Report have been rounded to the nearest thousand dollars, unless specifically stated to be otherwise. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. The Company was not a party to any such proceedings during the year. REMUNERATION REPORT This remuneration report details the key management personnel (“KMP”) remuneration arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 (Cth) and its Regulations. The table below lists the Executives of the Group for the year ended 30 June 2021 and whose remuneration details are outlined in this Remuneration Report. Directors Tony Walls Gary Fisher Nick Kingsbury Darc Rasmussen Executive key management personnel Ben Tregoning Chairman and Chief Executive Officer Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Chief Financial Officer (CFO) Overview of remuneration approach and framework The Board from time to time reviews the remuneration packages of all Directors and Executive Officers with due regard to performance and other relevant factors. The remuneration policy generally is to ensure the remuneration package properly reflects the person’s duties and responsibilities and that the remuneration is competitive to attract, retain and motivate employees of the highest calibre. Executive Directors and Executives (Executive KMP) The Group aims to reward Executives with a level and mix of remuneration based on their position and responsibility. All Executive KMP remuneration is comprised of the following: – Fixed remuneration made up of contractual base salary, leave entitlements and legislated superannuation guarantee – Variable remuneration in the form of short-term cash incentive and a long-term incentive through the issue of share options at the Board’s discretion. The variable component, such as bonuses, are structured to reward outstanding performance against agreed Key Performance Indicators (“KPIs”) including financial and non-financial metrics aligned with the Group’s business strategy. Ultimately, bonuses and discretionary payments to Executive KMP are at the discretion of the Board. Remuneration and other terms of employment of the Executive KMP are formalised in employment agreements. These agreements may be terminated by either party with between one and three months’ notice. In the event of termination of Mr Tony Walls’ services, Mr Walls is entitled to be paid six months’ salary whilst the CFO is entitled to be paid one months’ salary. Non-Executive Directors Fees and payments to Non-Executive Directors reflect the demands that are made on, and the responsibilities of, the Directors. The Board decides the total amount paid to each Non-Executive Director as remuneration for their services as a Director. Non-Executive Directors receive an annual fee, paid monthly. The fees are not linked to performance of the Company. However, to align Non-Executive Directors’ interest with shareholder interests, the Non-Executive Directors are encouraged to hold shares in the Company and are able to participate in the employee share option plan. There are no retirement and termination benefits for Executive Directors or Executives apart from those that accrue from the relevant laws such as unpaid annual leave, superannuation, long service leave and notice of termination. The Group may consider payments on termination even though legally not required, to protect its rights if it is commercially beneficial to its interests. Voting and comments made at the company’s 25th November 2020 Annual General Meeting (‘AGM’) At the 2020 AGM, 99.9% of the votes received supported the adoption of the remuneration report for the year ended 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. The Group did not engage a remuneration consultant to provide recommendations in respect of the remuneration of KMP. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 18 Directors’ Report continued 19 Group performance Information about the Group’s earnings and movements in shareholder wealth for the past five years up to and including the current financial year are set out in the table below. Measure Revenue ($’000) Net profit after tax ($’000) Basic earnings per share Final dividend (100% franked) Special dividend (unfranked) Share price at 30 June ($) Share buy-backs ($’000) 2021 2020 2019 2018 20171 95,056 16,086 17.2 cps 9.0 cps – 17.47 – 70,040 11,025 11.8 cps 7.0 cps – 7.38 502 62,060 9,050 9.8 cps 5.0 cps 1.0 cps 2.80 35 63,110 7,381 8.0 cps 5.0 cps – 3.50 – 62,599 8,202 9.0 cps 4.0 cps 1.0 cps 2.21 706 1 Does not include the impact of AASB 15. Remuneration received by KMP is set out in the tables below. Short-term Long-term Share based payments Post employment Salary and fees $ 65,259 278,306 45,662 Bonus $ Other $ – – – – – – Leave entitle- ments $ – 2,682 – 278,321 85,275 1,200 5,430 Options $ Super- annuation $ Total $ Value of options as % of remun- eration % Value of options as % of remun- eration % – – 20,288 17,635 – 65,259 21,694 302,682 4,338 70,288 – – – 21,694 409,555 20.8% – – 28.9% 4.3% Short-term Long-term Share based payments Post employment Options $ Super- annuation $ Total $ Value of options as % of remun- eration % Value of options as % of remun- eration % Salary and fees $ 45,062 278,997 45,662 Bonus $ – – – 278,997 50,000 Leave entitle- ments $ – Other $ 23,021 – 18,846 – – 9,916 1,200 – 21,830 37,871 23,985 2021 N Kingsbury T Walls D Rasmussen B Tregoning 2020 N Kingsbury T Walls D Rasmussen B Tregoning The bonuses in the above tables are short-term incentives fully vested to the Executive for that year. The bonuses were based on KPIs linked to company profitability as determined by the Board. The fair value of options has been determined using the Black-Scholes method, taking into account the exercise price, the term of the option, the vesting criteria, the impact of dilution, the non-tradeable nature of the option, the price at grant date of the underlying share and the expected price volatility of that share, the expected dividend yield and the risk free interest rate for the term of the option. The value of the option at grant date is then amortised over the relevant vesting period. The value included in remuneration of key management personnel above relates to the amortised value of options granted that have either vested in the current year or are yet to vest. Other transactions with KMP and their related parties Last year the Group was provided management consulting services and was charged $23,021 by Kingsbury Ventures Limited, a company associated with Nick Kingsbury, a Non-Executive Director of the Company. Additionally, the Group was provided management consulting services and was charged $9,916 by Strategic Outcomes Consulting, a company of which Darc Rasmussen, a Non-Executive Director of the Company, is the beneficial owner. These transactions were conducted on normal commercial terms and conditions. There were no such transactions with KMP and their related parties during the current year. Details of options over ordinary shares granted, vested and lapsed for Directors or other KMP during the year ended 30 June 2021 are set out below: KMP D Rasmussen B Tregoning Weighted average exercise price Number of options at 30 June 2020 200,000 162,500 $2.54 Number granted Number exercised Number lapsed Number of options at 30 June 2021 Number vested and available for exercise at 30 June 2021 – – – – (87,500) $1.86 – – – 200,000 100,000 75,000 $2.75 – $2.75 Shareholdings of Key Management Personnel KMP T Walls G Fisher N Kingsbury D Rasmussen B Tregoning Number of shares at 30 June 2020 62,000,000 8,600,000 200,000 30,214 211,259 Share options exercised Purchase of shares Shares sold Number of shares at 30 June 2021 – – – – 87,500 – – – – – – 62,000,000 (1,000,000) 7,600,000 – – – 200,000 30,214 298,759 Signed in accordance with a resolution of the Board of Directors. – 68,083 21,003 318,846 4,338 97,787 – – – 21,003 397,015 12.6% – – 38.7% 6.0% Tony Walls Director Date: 25 August 2021 Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 20 21 Consolidated Statement of Profit or Loss For the year ended 30 June 2021 Consolidated Statement of Comprehensive Income For the year ended 30 June 2021 Revenue Cost of sales Gross profit Other gains and losses Interest expense and other finance costs Share of loss from joint venture Distribution expenses Research and development expenses Administration and other operating expenses Profit before income tax Income tax expense Profit for the year attributable to shareholders of Objective Corporation Limited Basic earnings per share Diluted earnings per share CONSOLIDATED 2021 $’000 95,056 (5,327) 89,729 (44) (562) (6) (36,175) (23,116) (9,599) 20,227 (4,141) 16,086 2020 $’000 70,040 (3,168) 66,872 (55) (488) – (28,947) (15,737) (8,054) 13,591 (2,566) 11,025 Cents Cents 17.2 16.8 11.8 11.6 Notes 2 & 4 5 5 6 3 3 The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes. Profit for the year Other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Other comprehensive income/(loss) for the year, net of tax Total comprehensive income for the year Total comprehensive income for the year attributable to shareholders of Objective Corporation Limited CONSOLIDATED Notes 2021 $’000 2020 $’000 16,086 11,025 20 78 78 (650) (650) 16,164 10,375 16,164 10,375 The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 22 23 Consolidated Statement of Financial Position As at 30 June 2021 Consolidated Statement of Changes in Equity For the year ended 30 June 2021 Current assets Cash and cash equivalents Trade and other receivables Contract assets Other assets Total current assets Non-current assets Trade and other receivables Property, plant and equipment Right-of-use assets Deferred tax assets Intangible assets Other assets Total non-current assets Total assets Current liabilities Trade and other payables Contract liabilities Lease liabilities Current tax liabilities Provisions Other liabilities Total current liabilities Non-current liabilities Lease liabilities Provisions Other liabilities Total non-current liabilities Total liabilities Net assets Equity Share capital Reserves Retained earnings Total equity As at 30 June 2019 Profit for the year Exchange differences on translation of foreign operations Total comprehensive income/(loss) for the period Transactions with owners in their capacity as owners: Share-based payments Exercise of share options Buy-back of ordinary shares Dividends provided for or paid Total transactions with owners in their capacity as owners As at 30 June 2020 Profit for the year Exchange differences on translation of foreign operations Total comprehensive income for the period Transactions with owners in their capacity as owners: Share-based payments Exercise of share options Buy-back of ordinary shares Dividends provided for or paid Total transactions with owners in their capacity as owners As at 30 June 2021 CONSOLIDATED Notes Share capital $’000 Reserves $’000 4,994 (10,237) 21 20 20 18 20 19 21 20 20 18 20 19 – – – – 454 – – 454 5,448 – – – – 1,495 – – 1,495 6,943 – (650) (650) 439 – (502) – (63) (10,950) – 78 78 500 – – – 500 (10,372) Retained earnings $’000 35,393 11,025 – 11,025 – – – Total $’000 30,150 11,025 (650) 10,375 439 454 (502) (5,573) (5,573) (5,573) 40,845 16,086 – 16,086 – – – (6,551) (6,551) 50,380 (5,182) 35,343 16,086 78 16,164 500 1,495 – (6,551) (4,556) 46,951 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. CONSOLIDATED Notes 2021 $’000 2020 $’000 7 8 9 10 8 11 12 14 13 10 15 9 16 17 25 16 17 25 18 20 21 48,360 12,974 2,693 1,750 65,777 86 4,707 8,365 2,170 35,544 – 50,872 116,649 11,197 40,166 3,010 476 4,960 399 51,048 10,678 1,327 1,834 64,887 527 5,010 9,162 1,778 17,481 6 33,964 98,851 8,485 36,375 2,492 995 3,478 339 60,208 52,164 8,488 645 357 9,490 69,698 46,951 6,943 (10,372) 50,380 46,951 10,253 364 727 11,344 63,508 35,343 5,448 (10,950) 40,845 35,343 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 24 25 Consolidated Statement of Cash Flows For the year ended 30 June 2021 Notes to the Financial Statements For the year ended 30 June 2021 Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Interest paid Income taxes paid, net Net cash inflow from operating activities Cash flows from investing activities Repayment of loans by employees Proceeds from disposal of property, plant and equipment Payment for acquisition of subsidiaries, net of cash acquired 1 Payments for property, plant and equipment Payments for intangible assets Net cash outflow from investing activities Cash flows from financing activities Dividends paid Repayment of lease liabilities Proceeds from issue of shares Payments for shares bought back Net cash outflow from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the financial year CONSOLIDATED Notes 2021 $’000 2020 $’000 106,488 (77,701) 93 (516) (3,668) 24,696 441 48 (18,725) (1,113) (3) (19,352) (6,565) (2,927) 1,495 – (7,997) (2,653) 51,048 (35) 48,360 90,039 (58,539) 498 (485) (2,360) 29,153 91 22 (3,581) (1,171) (58) (4,697) (5,583) (2,008) 425 (502) (7,668) 16,788 34,556 (296) 51,048 22(a) 25 13 22(c) 22(c) 7 1 Made up of the purchase consideration for the acquisition of Objective RegTech Pty Limited in the amount of $23,997,000 net of cash acquired of $5,626,000 and first instalment payment of $353,000 made in settlement of the deferred consideration payable in relation to the acquisition of Master Business Systems Limited, which was acquired in the prior year. The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. Basis of consolidation The consolidated financial statements have been prepared by aggregating the financial statements of all the entities that comprise the Group, being Objective Corporation Limited and its controlled entities. In these consolidated financial statements: – results of each controlled entity are included from the date Objective Corporation Limited obtains control and until such time as it ceases to control an entity; and – all inter-entity balances and transactions are eliminated. Control is achieved where Objective Corporation Limited is exposed to, or has rights to, variable returns from its involvement with an entity and has the ability to affect those returns through its power to direct the activities of the entity. Entities controlled by Objective Corporation Limited are under no obligation to accept responsibility for liabilities of other common controlled entities except where such an obligation has been specifically undertaken. Business combination The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred. Refer Note 25 for further details. Currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency”). The consolidated financial statements are presented in Australian dollars, which is Objective Corporation Limited’s functional and presentation currency. Rounding In accordance with ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191, amounts in the Directors’ Report and Financial Report have been rounded off to the nearest thousand Australian dollars unless otherwise indicated. Comparative information Where applicable, comparative information has been reclassified in order to comply with current period disclosure requirements, the impact of which is not material to the financial report. NOTE 1 BASIS OF PREPARATION This section sets out the basis upon which the Group’s consolidated financial statements are prepared as a whole. Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding of the consolidated financial statements are provided throughout the notes to the consolidated financial statements. All other accounting policies are outlined in Note 32. Statement of compliance Objective Corporation Limited is a limited company incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. This general purpose financial report is prepared in accordance with the Corporations Act 2001 (Cth) and applicable Accounting Standards and Interpretations, and complies with other requirements of the law. Objective Corporation Limited is a ‘for profit’ entity. The financial report includes the consolidated financial statements of Objective Corporation Limited and its controlled entities (‘the Group’). Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards. Basis of preparation The financial report is based on historical cost. In preparing this financial report, the Group is required to make estimates and assumptions about carrying values of assets and liabilities. These estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. The accounting policies adopted are consistent with those of the previous year, unless otherwise stated. Impact of COVID-19 pandemic: The Group has managed, and continues to manage, the risks arising from the COVID-19 global pandemic, with any known impacts being included in the financial statements for the year ended 30 June 2021. The Group’s response includes a financial response plan that incorporates financial forecasts over the near term, which are regularly updated for any material changes in market conditions. As of 30 June 2021, the Group had: – net cash position of $48.4 million, calculated as cash and cash equivalents less borrowings (excluding lease liabilities arising from AASB 16), as disclosed in the statement of financial position; – positive net cash flow from operating activities of $24.7 million, as disclosed in the statement of cash flows; and – net current assets of $5.6 million, calculated as current assets of $65.8 million less current liabilities of $60.2 million, as disclosed in the statement of financial position. On the basis of reviews of the financial forecasts and consideration of the financial position summarised above, as at the date these financial statements are authorised for issue, the directors of the Company consider it is appropriate for the going concern basis to be adopted in the preparation of this consolidated financial statements. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 26 27 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 1 BASIS OF PREPARATION CONTINUED New or revised accounting standards In the current year, the Group has applied the amendments to Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (the Board), that are effective for the Group’s annual reporting period that began on 1 July 2020. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements. – AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework The Group has adopted the amendments included in AASB 2019-1 for the first time in the current year. The amendments include consequential amendments to affected Australian Accounting Standards, Interpretations and other pronouncements to reflect the issuance of the Conceptual Framework for Financial Reporting (Conceptual Framework) by the AASB. – AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material This Standard amends AASB 101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, and makes consequential amendments to several other pronouncements and publications. The Group has adopted these amendments for the first time in the current year. The amendments make the definition of material in AASB 101 easier to understand and are not intended to alter the underlying concept of materiality in Australian Accounting Standards. The concept of ‘obscuring’ material information with immaterial information has been included as part of the new definition. – AASB 2020-4 Amendments to AASs – Covid-19-Related Rent Concessions The Group has adopted the amendments included in AASB 2020-4 for the first time in the current year. The amendments allow lessees to elect to not apply lease modification accounting when rent concessions (including deferrals or abatements) are received as a direct consequence of COVID-19 pandemic. Critical accounting judgments and key sources of estimation uncertainty Critical judgments and key assumptions that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements are detailed in the notes below: Note 2, 4 5 Judgement/Estimation Revenue from contracts with customers Expected credit loss allowance 8, 9, 11, 12, 13 Asset impairment 14 Recoverability of deferred tax assets 11, 12, 13 Useful life for depreciable assets 12, 16 17 6, 14 Lease terms and incremental borrowing rates Employee benefits assumptions Income taxes Estimates and judgements are continually evaluated and are based on historical experience and other factors, including reasonable expectations of future events. The Group has considered the impact of COVID-19 in preparing its consolidated financial statements. Whilst the specific areas of judgement as noted in the table above did not change, the impact of COVID-19 resulted in the application of further judgement within those identified areas. Notes to the financial report The notes to the financial report are organised into the following sections. Financial performance overview: provides a breakdown of individual line items in the statement of financial performance, and other information that is considered most relevant to users of the annual report. Statement of financial position: provides a breakdown of individual line items in the statement of financial position that are considered most relevant to users of the annual report. Capital structure and risk management: provides information about the capital management practices of the Group including the Group’s exposure to various financial risks, explains how these affect the Group’s financial position and performance and what the Group does to manage these risks. Group structure: explains aspects of the Group structure and the impact of this structure on the financial position and performance of the Group. Other: provides information on items which require disclosure to comply with Australian Accounting Standards and other regulatory pronouncements. NOTE 2 SEGMENT INFORMATION Operating and reportable segments The Group applies a ‘management approach’ to identify its segments, based on the information provided to the Group’s chief operating decision-makers (CODM). Accordingly, segment information is prepared on the basis of internal management reporting that is regularly reviewed by the CODM to assess the performance of the segment and make decisions regarding the allocation of resources. Within the Group, the function of the CODM is exercised by the CEO. The CODM assesses the financial performance of the Group on an integrated basis only, and accordingly the Group is managed on the basis of a single segment. Revenue by product group The revenue analysis presented to the CODM on a monthly basis is categorised by product group. This analysis is presented below: Revenue by product group: Objective Content Solutions Objective RegTech Objective Planning Solutions Objective Keystone Total revenue from contracts with customers Product groups Description 2021 $’000 2020 $’000 61,808 15,252 10,747 7,108 94,915 54,710 – 8,087 6,833 69,630 Objective Content Solutions Objective RegTech Includes results from the sale of Objective Enterprise Content Management related products which allow customers to manage information and process governance across the enterprise. Also includes the results from the sale of Objective Connect products which enable customers to collaborate with external organisations with the security, information governance and auditability demanded by government and Objective Redact products which allow users to irreversibly remove sensitive information from any electronic document. Includes results from the sale of Objective RegTech products that are focused on the delivery of government regulation technology solutions, helping governments and regulators to productively carry out the essential work of delivering safety, regulation, compliance and enforcement outcomes that make our communities safer places to live. Objective Planning Solutions Includes results from the sale of Objective Trapeze products which digitally transform development application plan reviews and assessments; and Objective Alpha and Master Business Systems, leading end to end building consenting solutions. Objective Keystone Corporate Includes results from the sale of Objective Keystone products that improve efficiency and deliver governance in the process of authoring, reviewing, engaging with and publishing documents. This segment is not considered an operating group, includes head office and central service groups including treasury function. Revenue represents invoiced sales subsequently adjusted for the deferred component which is recognised over the service period to arrive at revenue. Revenue comprises product or licence sales, subscription services, professional services, training service and interest income. The CODM continues to consider the financial position of the business from a geographical perspective and as such the assets and liabilities of the Group are presented by geographical region for both the year ended 30 June 2021 and the comparative period. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 28 29 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 2 SEGMENT INFORMATION CONTINUED NOTE 3 EARNINGS PER SHARE Revenue by geographic location The Group’s revenue from external customers by geographic location is provided below. In general, a large amount of revenue is generated by customers that are global, from transactions that cross multiple countries and where the source of revenue can be unrelated to the location of the users accessing the software. Basic earnings per share – cents CONSOLIDATED 2021 17.2 2020 11.8 Revenue by location: Australia United Kingdom New Zealand Rest of the world Total revenue There were no customers contributing more than 10% of revenue during the current and comparative period. Reportable segment assets and liabilities by geographic location 30 June 2021 Reportable segment assets Reportable segment liabilities 30 June 2020 Reportable segment assets Reportable segment liabilities Reconciliation of reportable segment assets and liabilities Asia Pacific $’000 64,829 59,853 Asia Pacific $’000 67,807 53,340 Assets Reportable segment assets Intangible assets Deferred tax assets Consolidated total assets Liabilities Reportable segment liabilities Current tax liabilities Consolidated total liabilities CONSOLIDATED 2021 $’000 2020 $’000 73,198 9,483 12,343 32 95,056 Europe $’000 14,106 9,369 Europe $’000 11,785 9,173 52,691 9,178 8,155 16 70,040 Total $’000 78,935 69,222 Total $’000 79,592 62,513 2021 $’000 2020 $’000 78,935 35,544 2,170 116,649 69,222 476 69,698 79,592 17,481 1,778 98,851 62,513 995 63,508 Reconciliation of non-current assets Non-current assets for this purpose consist of property, plant and equipment, intangible assets, deferred taxes and other receivables. Deferred taxes are not allocated to a specific location as they are also managed on a group basis. Non-current assets by location of assets Australia United Kingdom New Zealand Rest of the world Unallocated non-current assets Total non-current assets 2021 $’000 2020 $’000 23,832 8,842 16,017 11 2,170 50,872 8,017 9,002 15,155 12 1,778 33,964 Profit for the year attributable to shareholders of Objective Corporation Limited ($’000) 16,086 11,025 Weighted average number of ordinary shares used in the calculation of basic earnings per share 93,726,374 93,130,533 Diluted earnings per share – cents Profit for the year attributable to shareholders of Objective Corporation Limited ($’000) 16.8 11.6 16,086 11,025 Weighted average number of ordinary shares used in the calculation of diluted earnings per share¹ 95,778,874 94,138,033 1 Calculated by increasing the total weighted average number of shares used in calculating basic earnings per share by outstanding options of 2,052,500. Options granted under the Employee Incentive Plan are included in the determination of diluted earnings per share to the extent to which they are dilutive. NOTE 4 REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers Other revenue: Interest income Sundry revenue Total revenue Disaggregation of revenue from contracts with customers The Group’s revenue disaggregated by pattern of revenue recognition is as follows. Timing of revenue recognition: – products and services transferred at a point in time – products and services transferred over time Total revenue from contracts with customers CONSOLIDATED 2021 $’000 2020 $’000 94,915 69,630 92 49 403 7 95,056 70,040 CONSOLIDATED 2021 $’000 2020 $’000 4,145 90,770 94,915 4,736 64,894 69,630 Recognition and measurement – Revenue from contracts with customers Revenue from contracts with customers is recognised upon transfer of control of the promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Group designs, develops and delivers specialised software solutions to assist predominantly public sector bodies to operate with increased effectiveness, transparency and efficiency through uptake of the Company’s content, collaboration and process management solutions. From these activities, the Group generates the following streams of revenue: – Software licence revenue – Implementation and consulting revenue – Other ancillary fees such as hosting and support service fees – Royalties revenue Each of the above services delivered to customers are considered separate performance obligations, even though for practical expedience they may be governed by a single legal contract with the customer. In recognising revenue, an assessment is performed as to whether control of the goods transfer to a customer over time or at a point in time. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 30 31 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 4 REVENUE FROM CONTRACTS WITH CUSTOMERS CONTINUED Revenue recognition for each of the above revenue streams are as follows: Revenue stream Performance obligation Timing of recognition Software license revenue Right-to-use Access to software Implementation and consulting revenue As defined in the contract Implementation and consulting revenue Other ancillary fees Royalties revenue Provision of hosting services, cloud services, support and maintenance services. Use of Objective intellectual property in products sold by third-parties. Revenue from distinct on-premise licenses is recognised upfront at the point in time when the software is delivered to the customer. Perpetual licenses are initially sold with one year of ongoing software support which is recognised as revenue over time and the option to renew thereafter. Software license revenue offered on a subscription basis is recognised based on an equal daily rate over the term of the contract as the customer simultaneously receives and consumes the benefit of accessing the software. Subscription customers are typically invoiced annually in advance and prior to revenue recognition, which results in contract liabilities. The consideration is payable when invoiced. Professional service revenue billed on a time and materials basis is recognised over time as services are delivered. Revenue from providing services is recognised in the accounting period in which the services are rendered. Revenue is calculated based on time and materials. For fixed-price contracts, revenue is recognised based on the extent of progress towards completion of the performance obligation, on a project-by-project basis. The method used to measure progress depends on the nature of the services. Revenue is recognised on the basis of time and materials incurred to date relative to the total budgeted inputs. The output method on the basis of milestones is used when the contractual terms align the Company’s performance with measurements of value to the customer. Revenue is recognised for services performed to date based on contracted rates and/or milestones that correspond to the amount the Company is entitled to invoice. If contracts include the installation of software license, revenue for the software licence is recognised at a point in time when the software is delivered, the legal title has passed, and the customer has taken delivery of the software license. Over time, depending on circumstances. Royalties revenue is recognised over time as the customer simultaneously receives and consumes the benefit of accessing the information. Royalties revenue is recognised as the amount to which the Group has a right to invoice under the agreed royalty model with the customer. Customers are typically invoiced monthly, and consideration is payable when invoiced, which corresponds directly with the performance completed to date in respect of this stream. Critical accounting estimates and judgements – revenue from contracts with customers Performance obligations The Group’s contracts with customers may include multiple performance obligations. For contracts with multiple components to be delivered, such as, software installation, software licence and upgrade support services, management applies judgement to consider whether those promised goods and services are (i) distinct – to be accounted for as separate performance obligations; (ii) not distinct – to be combined with other promised goods or services until a bundle is identified as distinct or (iii) part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer. Transaction price At contract inception the total transaction price is estimated, being the amount to which the Group expects to be entitled and has rights to under the present contract. This includes an assessment of any variable consideration where the Group’s performance may result in additional revenues based on the achievement of agreed key performance indicators. Such amounts are only included based on the expected value method and only to the extent that it is highly probable that significant reversals in the cumulative amount of revenue recognised will not occur in subsequent periods. The expected value method for estimating variable consideration is generally used where the Group has a large number of contracts with similar characteristics. The Group allocates the transaction price to each performance obligation based on the relative stand-alone selling prices of each distinct product or service. Stand-alone selling prices are determined based on prices charged to customers for individual products and services taking into consideration the size and length of contracts and the Group’s overall go to market strategy. Contract modifications The Group’s contracts may occasionally be amended for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and the Group’s measure of progress for the performance obligation to which it relates, is recognised as an adjustment to revenue in one of the following ways: a. prospectively as an additional separate contract; b. prospectively as a termination of the existing contract and creation of a new contract; c. as part of the original contract using a cumulative catch up; or d. as a combination of b) and c). Critical accounting estimates and judgements – revenue from contracts with customers For contracts for which the Group has decided there is a series of distinct goods and services that are substantially the same and have the same pattern of transfer where revenue is recognised over time, the modification will always be treated under either a) or b). d) may arise when a contract has a part termination and a modification of the remaining performance obligations. The facts and circumstances of any contract modification are considered individually as the types of modifications will vary contract by contract and may result in different accounting outcomes. Judgement is applied in relation to the accounting for such modifications where the final terms or legal contracts have not been agreed prior to the period end as management need to determine if a modification has been approved and if it either creates new or changes existing enforceable rights and obligations of the parties. Depending upon the outcome of such negotiations, the timing and amount of revenue recognised may be different in the relevant accounting periods. Modification and amendments to contracts are undertaken via an agreed formal process. For example, if a change in scope has been approved but the corresponding change in price is still being negotiated, management use their judgement to estimate the change to the total transaction price. Importantly any variable consideration is only recognised to the extent that it is highly probable that no revenue reversal will occur. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 32 33 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 5 PROFIT AND LOSS ITEMS NOTE 6 INCOME TAX EXPENSE CONSOLIDATED (a) Components of income tax expense Expenses: Depreciation expenses – property, plant and equipment Depreciation expenses – right-of-use assets Amortisation expenses – intangible assets Expected credit loss allowance – trade and other receivables Interest expense – lease liabilities Other finance costs Rental payments on short-term leases and low value assets Employee benefits expenses1 Superannuation expenses¹ Share based payment expenses Research and development expenses¹ Other gains and losses: Net foreign exchange losses Net profit on disposal of property, plant and equipment 2021 $’000 (1,930) (2,392) (549) (195) (510) (52) – (52,386) (3,533) (500) (23,116) (56) 12 2020 $’000 (1,473) (1,749) (291) 70 (477) (11) (30) (39,232) (2,679) (439) (15,737) (55) – 1 Research and development expenses are costs incurred in relation to our product development activities and includes $17,214,000 of employee benefits expenses (2020: $12,665,000) and $1,153,000 of superannuation expenses (2020: $858,000) which are also reported under the relevant specific expense groups. Recognition and measurement Employee benefits expense Employee benefits expense includes salaries, wages and other employment related entitlements. Research and development expenses Research and development expenses are incurred for in-house research and development activities in the areas of application technology and engineering. Expenditure on research and development activities is recognised in the consolidated statement of profit or loss as an expense when incurred on the basis that the expected future benefits from these activities are too uncertain to justify carrying the expenditure forward. Interest expense and other finance costs Interest expense and other finance costs are recognised in the period in which they are incurred. Foreign currency transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the exchange difference is recognised in profit or loss. Gain/(loss) on disposal of property, plant and equipment Gains or losses arising from the retirement or disposal of tangible assets are determined as the difference between the estimated net disposal proceeds and the carrying amount of the assets and are recognised in profit or loss on the date of retirement or disposal. Interest income Interest income is earned from financial assets that are held for cash management purposes and recognised as it accrues, taking into account the effective yield on the financial asset. Current tax expense on profits for the year Deferred tax expense related to movements in deferred tax balances Income tax under/(over) provided in prior years Income tax expense CONSOLIDATED 2021 $’000 3,261 836 44 4,141 2020 $’000 3,001 (359) (76) 2,566 Uncertain tax positions There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group’s current understanding of the tax law however significant judgement is required in determining the provision for income tax. Where the final tax outcome of these matters is different from the estimated amounts, such differences will impact the current and, where recognised, deferred tax provisions in the period in which such determination is made. (b) Reconciliation of income tax expense to prima facie tax payable Profit before income tax expense Prima facie income tax expense calculated at the tax rate of 30% Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Amortisation expenses – intangibles Share based payment expenses Other non-allowable deductions Subtotal Different tax rates of subsidiaries operating in other jurisdictions Adjustments for current tax of prior periods Research and development tax credit Previously unrecognised tax losses now recouped Tax losses not recognised as deferred tax assets Income tax expense CONSOLIDATED 2021 $’000 20,227 6,068 68 40 28 6,204 (341) 44 (1,886) – 120 4,141 2020 $’000 13,591 4,077 47 201 65 4,390 (431) (76) (1,301) (16) – 2,566 Recognition and measurement Current and deferred tax is recognised as an expense or income in the consolidated statement of profit or loss, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill. Current tax represents the amount expected to be paid in relation to taxable income for the financial year measured using tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable). Deferred income tax is provided in full, using the balance sheet liability method, on temporary differences arising between the carrying amounts of assets and liabilities for financial reporting and tax purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 34 35 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 6 INCOME TAX EXPENSE CONTINUED NOTE 8 TRADE AND OTHER RECEIVABLES Tax consolidation Objective Corporation Limited (the parent entity) and its wholly owned Australian resident subsidiaries formed a tax-consolidated group pursuant to Australian taxation law with effect from 1 July 2002 and are therefore taxed as a single entity from that date. Objective Corporation Limited is the head entity in the tax-consolidated group. On 1 July 2021, Objective RegTech Pty Limited, a wholly-owned Australian resident subsidiary, joined the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the ‘standalone taxpayer’ approach by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the tax-consolidated group are recognised by the head entity in the tax consolidated group. BALANCE SHEET OVERVIEW NOTE 7 CASH AND CASH EQUIVALENTS Cash and cash equivalents at the end of the financial year are reflected in the related items in the consolidated statement of financial position as follows: Current assets Cash at bank and in hand Short-term bank deposits Total cash and cash equivalents1 CONSOLIDATED 2021 $’000 11,600 36,760 48,360 2020 $’000 45,793 5,255 51,048 1 The cash and cash equivalents disclosed above and in the consolidated statement of cash flows include $1,460,000 (2020: $1,190,000) in short-term bank deposits which are restricted for use and held as security for rental guarantee. Classification as cash equivalents Cash and cash equivalents comprise cash, bank balances and short-term deposits with a maturity of 3 months or less from acquisition. 2021 2020 Current $’000 Non-current $’000 Current $’000 Non-current $’000 Trade receivables Other receivables Sub-total Expected credit loss allowance (a) Loans to employees Total trade and other receivables 12,333 838 13,171 (197) 12,974 – 12,974 – – – – 86 86 10,195 488 10,683 (5) 10,678 – 10,678 (a) Movement in expected credit loss allowance is as follows: Balance at beginning of the year Net remeasurement of expected credit loss allowance Trade receivables written off during the year Foreign currency translation Total expected credit loss allowance at 30 June CONSOLIDATED 2021 $’000 5 195 – (3) 197 – – – – – 527 527 2020 $’000 150 (70) (75) – 5 Recognition and measurement Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less any credit loss allowance. The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Expected credit losses are measured by grouping trade receivables and contract assets based on shared credit risk characteristics and the days past due. A provision matrix is then determined based on the historic credit loss rate for each group of customers, adjusted as appropriate to reflect current conditions and changes to the future credit risk for that customer group. Classification as trade and other 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. Trade receivables are generally due for settlement within 30 days and therefore are all classified as current. Further information relating to loans to employees is set out in Note 27. The ageing of the Group’s trade and other receivables at reporting date together with impairment and other accounting policies for trade and other receivables are outlined in Note 23. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 36 37 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 9 CONTRACT ASSETS AND CONTRACT LIABILITIES Current Contract assets Contract liabilities Changes in contract balances during the current year are: Balance at the beginning of the year Transfer from contract assets to trade receivables Revenue recognised for work performed but not yet billed Transfer from contract liabilities to contract assets¹ Revenue recognised during the year that was included in contract liabilities at the beginning of the year Increase due to cash received, excluding amount recognised during the year Addition from acquisition of subsidiary Foreign currency translation Balance at the end of the year Changes in contract balances during the prior year are: Balance at the beginning of the year Transfer from contract assets to trade receivables Revenue recognised for work performed but not yet billed Transfer from contract assets to contract liabilities¹ Revenue recognised during the year that was included in contract liabilities at the beginning of the year Increase due to cash received, excluding amount recognised during the year Addition from acquisition of subsidiary Foreign currency translation Balance at the end of the year CONSOLIDATED 2021 $’000 2020 $’000 2,693 40,166 1,327 36,375 Contract assets $’000 1,327 (1,327) 2,699 – – – – (6) 2,693 Contract assets $’000 950 (950) 1,334 – – – – (7) 1,327 Contract liabilities $’000 (36,375) – – 1,012 36,375 (40,486) (766) 74 (40,166) Contract liabilities $’000 (24,411) – – (659) 24,411 (35,431) (155) (130) (36,375) 1 In fixed-price contracts, the customer pays the fixed amount based on an agreed payment schedule. If the services rendered by the Group exceed the payment received, a contract asset is recognised. If the payments received exceed the services rendered, a contract liability is recognised. Recognition and measurement A contract asset is recognised when a conditional right to consideration exists and transfer of control has occurred. Contract assets are typically related to unbilled receivable balances which have not yet been invoiced and arises when the Group satisfies a performance obligation before it receives the consideration and are generally related to consultancy or services projects. Contract liabilities primarily consists of billings or payments received in advance of revenue recognition from subscription services, including non-cancellable and non-refundable committed funds and deposits. Customers are typically invoiced for these agreements in regular instalments and revenue is recognised on a straight-line basis over the contractual subscription period or as the performance obligations under contracts with customers are satisfied. Contract liability does not represent the total contract value of annual or multi-year non-cancellable subscription agreements. Similarly, if the Group satisfies a performance obligation before it receives the consideration, typically on IT consulting projects, the Group recognises either a contract asset or a receivable in its consolidated statement of financial position, depending on whether something other than the passage of time is required before the consideration is due. Unsatisfied performance obligations The Group applies the practical expedient in the revenue standard and does not disclose information about the remaining performance obligation on contracts that have an original expected duration of one year or less or where the Group has the right to consideration from a customer in an amount that corresponds directly to the value transferred to customer, typically involving time and material based contracts. The aggregate amount of contract liabilities of the performance obligations that are unsatisfied at 30 June 2021 was $40,166,000 (2020: $36,375,000) and is expected to be recognised as revenue within the next twelve months. NOTE 10 OTHER ASSETS Current assets Prepayments Rental deposits Total other assets Non-current assets Other assets Total other assets CONSOLIDATED 2021 $’000 1,699 51 1,750 – – 2020 $’000 1,807 27 1,834 6 6 Recognition and measurement Prepayments are recognised for amounts paid whereby goods have not transferred ownership to the Group or where services have not yet been provided. Upon receipt of goods or the service the corresponding asset is recognised in the consolidated statement of profit or loss. Rental deposits are bond payments made to the lessor under a lease agreement and may be refunded in whole or in part at the end of the leasing arrangement. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 38 39 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 11 PROPERTY, PLANT AND EQUIPMENT CONSOLIDATED Plant and equipment $’000 Leasehold improvements $’000 Motor vehicles $’000 Capital work in progress $’000 30 June 2021 Gross carrying amount – cost Accumulated depreciation Total property, plant and equipment, net Represented by: Net carrying amount at 1 July 2020 Additions Acquired through business combination Disposals Depreciation expenses Transfers Exchange differences 6,521 (4,106) 2,415 2,033 1,062 282 (1) (993) 18 14 6,008 (3,762) 2,246 2,192 50 236 – (901) 678 (9) Net carrying amount at 30 June 2021 2,415 2,246 30 June 2020 Gross carrying amount – cost Accumulated depreciation Total property, plant and equipment, net Represented by: 4,637 (2,604) 2,033 4,904 (2,712) 2,192 Net carrying amount at 1 July 2019 2,319 2,865 Additions Acquired through business combination Disposals Depreciation expenses Exchange differences Net carrying amount at 30 June 2020 Recognition and measurement 476 23 (20) (757) (8) 2,033 17 4 (2) (684) (8) 2,192 88 (42) 46 89 27 – (35) (36) – 1 46 120 (31) 89 – – 121 – (32) – 89 – – – 696 – – – – (696) – – 696 – 696 1 695 – – – – 696 Total $’000 12,617 (7,910) 4,707 5,010 1,139 518 (36) (1,930) – 6 4,707 10,357 (5,347) 5,010 5,185 1,188 148 (22) (1,473) (16) 5,010 Property, plant and equipment are recorded at historical cost of acquisition less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Critical accounting estimates and judgements – depreciation methods and useful lives Property, plant and equipment comprises of furniture and fittings, office equipment, computer equipment and leasehold improvements. Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as follows: Asset class Plant and equipment Leasehold improvements Motor vehicles Useful life 2–10 years 2–7 years or shorter of lease term 5–8 years Estimates of remaining useful lives, residual values and depreciation methods require significant management judgement, are reviewed annually, and where changes are made, their effects are accounted for on a prospective basis. NOTE 12 RIGHT-OF-USE ASSETS Movements in the net carrying amount of right-of-use assets during the year are presented below: Buildings Gross carrying amount – cost Accumulated amortisation Total right-of-use assets, net Represented by: Net carrying amount at 1 July Additions Acquired through business combination (Note 25) Depreciation of right-of-use assets Foreign exchange differences Net carrying amount at 30 June CONSOLIDATED 2021 $’000 14,132 (5,767) 8,365 9,162 – 1,502 (2,392) 93 8,365 2020 $’000 12,497 (3,335) 9,162 8,314 2,746 – (1,749) (149) 9,162 The Group leases office premises in the ordinary course of its business. The Group’s office premise leases comprise office building leases in multiple cities and countries in which the Group operates. The non-cancellable period of the leases ranges from 2 to 10 years with variable options to extend the lease terms. The lease payments are adjusted every year, based on contractual fixed percentage increases and in certain instances additionally increased by the prevailing consumer price index (“CPI”) at the lease review date. For any new contracts, the Group considers whether a contract is, or contains a lease. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether: – the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group – the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract – the Group has the right to direct the use of the identified asset throughout the period of use. Recognition and measurement At the commencement date, each lease is reflected on the consolidated statement of financial position as a right-of-use asset and a lease liability. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful life of right-of-use assets are determined on the same basis as those of plant and equipment. In addition, the right-of-use asset is periodically assessed for impairment losses, and adjusted for certain remeasurements of the lease liability resulting from lease modifications. The Group has applied the exemption not to recognise the right-of-use assets and lease liabilities for leases of low value assets or short-term leases less than 12 months. Furthermore, the Group has applied the practical expedient to use a single regional discount rate to a portfolio of leases with similar characteristics. Impact of COVID-19 The Group does not foresee a downsizing of its employee base in response to COVID-19 that would render the Group’s existing physical infrastructure redundant. The leases that the Group has entered into are long-term in nature and no material changes in the terms of those leases are expected due to COVID-19. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 40 41 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 13 INTANGIBLE ASSETS 30 June 2021 Gross carrying amount – cost Accumulated amortisation Total intangible assets, net Represented by: Net carrying amount at 1 July 2020 Additions Additions through acquisition of subsidiary Amortisation expenses Foreign exchange differences Net carrying amount at 30 June 2021 30 June 2020 Gross carrying amount – cost Accumulated amortisation Total intangible assets, net Represented by: Net carrying amount at 1 July 2019 Additions Additions through acquisition of subsidiary Amortisation expenses Foreign exchange differences Net carrying amount at 30 June 2020 CONSOLIDATED Intellectual property $’000 Brand names $’000 Other intangibles $’000 Goodwill $’000 Total $’000 2,244 (2,244) – – – – – – – 2,182 (2,182) – – – – – – – 173 – 173 174 – – – (1) 173 174 – 174 3,865 (1,210) 2,655 1,436 3 1,765 (548) (1) 2,655 1,896 (460) 1,436 32,716 – 32,716 15,871 – 38,998 (3,454) 35,544 17,481 3 16,720 18,485 – 125 (548) 123 32,716 35,544 15,871 – 15,871 20,123 (2,642) 17,481 13,229 58 4,765 (291) (280) 178 1,049 12,002 58 640 (291) (20) – 4,125 – (256) – – – (4) 174 1,436 15,871 17,481 Recognition and measurement Intangible assets acquired in a business combination is recognised at fair value at the acquisition date. Intangible assets with finite useful life is stated at cost less accumulated amortisation and impairment losses. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the share of the net identifiable assets acquired in a business combination. Goodwill is not amortised, but tested annually for impairment. Intellectual property The intellectual property was obtained through acquiring Objective Keystone Limited in April 2009 and amortised over its estimated useful life. Other intangible assets Includes customer relationship list arising from the acquisition of Objective Trapeze NZ Limited (previously known as Onstream Systems Limited) and measured at fair value at the date of acquisition and patents. Brand names of $173,000 (2020: $174,000) that have an indefinite life are assessed for recoverability annually. Customer relationship lists that have a defined useful life are amortised and subsequently carried net of accumulated amortisation. The carrying value of other intangible assets is allocated to the Group’s cash generating units (“CGU”) identified as Objective Trapeze NZ Limited. Critical accounting estimates and judgements – amortisation methods and useful lives Intangible assets with finite lives are amortised on a straight-line basis over their estimated useful lives. Useful lives are reassessed each period. The useful lives of intangible assets have been assessed as follows: Asset class Intellectual property Patents Customer relationship list and software Brand names Useful life 10 years 10 years 5–10 years Indefinite useful life Assessments of useful lives and estimates of remaining useful lives require significant management judgement. Brand names are generally assessed as having an indefinite useful life on the basis of brand strength, ongoing expected profitability and continuing support. Critical accounting estimates and judgements – asset impairment The Group tests property, plant and equipment and intangible assets for impairment to ensure they are not carried at above their recoverable amounts: – at least annually for goodwill and intangible assets with indefinite lives; and – where there is an indication that the assets may be impaired (which is assessed at least each reporting date). These tests for impairment are performed by assessing the recoverable amount of each individual asset or, if this is not possible, then the recoverable amount of the cash generating unit (CGU) to which the asset belongs. CGUs are the lowest levels at which assets are grouped and generate separately identifiable cash flows. The recoverable amount is the higher of an asset or a CGU’s fair value less costs of disposal and value in use. The value in use calculations are based on discounted cash flows expected to arise from the asset. Management judgment is required in these valuations to forecast future cash flows and a suitable discount rate in order to calculate the present value of these future cash flows. The carrying value of goodwill is allocated to the Group’s cash generating units (“CGU”) identified as follows: Objective Keystone Objective Planning and Building Solutions¹ Objective RegTech Total goodwill 1 CGU in New Zealand. 2021 $’000 5,973 10,023 16,720 32,716 2020 $’000 5,810 10,061 – 15,871 The recoverable amount of Objective Keystone Limited is determined based on value-in-use calculation. The calculation uses cash flow projections based on a five-year financial budget approved by management, extrapolated perpetually with an estimated general long-term continuous annual growth of not more than 15.0% (2020: 30.0%). The discount rate used of 15.5% (2020: 15.5%) is pre-tax and reflects specific risks related to the relevant operation A terminal value based on the EBITDA exit multiple method was used in the calculation. The recoverable amounts of CGUs in New Zealand are determined based on value in-use calculation. The calculation uses cash flow projections based on a five-year financial budget approved by management, extrapolated perpetually with an estimated general long-term continuous annual growth of not more than 20.0% (2020: 20.0%). The discount rate used of approximately 15.5% (2020: 15.5%) is pre-tax and reflects specific risks related to the relevant operation. The recoverable amounts of Objective RegTech is determined based on value in-use calculation. The calculation uses cash flow projections based on a five-year financial budget approved by management, extrapolated perpetually with an estimated general long-term continuous annual growth of not more than 25.0%. The discount rate used of approximately 15.5% is pre-tax and reflects specific risks related to the relevant operation. The current financial forecasts used in the calculation is determined by management based on past performance and its expectations for market development and includes a number of initiatives designed to drive incremental sales and increased margins as well as reduce the costs of doing business. Management have assessed that the CGUs are sensitive to reasonably possible changes in the cash flow forecasts covering a period of five year and believe that any reasonably foreseeable changes in any of the above key assumptions would not cause the carrying amount of goodwill to exceed the recoverable amount. Impact of COVID-19 The restrictions implemented in response to the COVID-19 pandemic have triggered significant disruptions to a number of businesses globally. Governments and central banks have responded with monetary and fiscal interventions to stabilise overall economic conditions. The internal cash flow forecasts used for impairment assessments have given consideration to these impacts. Given the uncertainty as to the extent and duration of restrictions and the overall impact on economic activity, the impact assessment of COVID-19 is a continuing process. The Directors believe that the Company is well placed to manage its financing and other business risks satisfactorily and have a reasonable expectation that the forecasted outcome will not be significantly impacted by the COVID-19 pandemic. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 42 43 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 14 NET DEFERRED TAX ASSETS (a) Deferred tax balances as disclosed in the consolidated statement of financial position Deferred tax assets arising on deductible temporary differences Deferred tax liabilities arising on taxable temporary differences Total net deferred tax assets (b) Movement in deferred tax balances CONSOLIDATED 2021 $’000 2,247 (77) 2,170 2020 $’000 1,812 (34) 1,778 CONSOLIDATED Opening balance $’000 Charged to profit or loss $’000 Acquisition of subsidiary $’000 Others $’000 Closing balance $’000 At 30 June 2021 Property, plant and equipment Unrealised foreign exchange Employee benefits provision Rent incentive provision Deferred expenditures for tax purposes Intangibles Accrued expenses Unused tax losses Other individually insignificant balances Total net deferred assets At 30 June 2020 Property, plant and equipment Unrealised foreign exchange Employee benefits provision Rent incentive provision Accrued expenses Deferred expenditures for tax purposes Unused tax losses Other individually insignificant balances Total net deferred assets (c) Tax losses 122 (34) 1,057 412 – – – 164 57 1,778 (101) (45) 848 471 – – 329 81 1,583 42 34 162 (126) 115 49 (1,130) – 18 (836) 222 11 209 (59) – – – (24) 359 (29) – 377 – – (126) 1,130 – 41 1,393 – – – – – – – – – – – (1) – – – – (164) – (165) 1 – – – – – (165) – (164) Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit CONSOLIDATED 2021 $’000 5,127 1,122 135 – 1,595 286 115 (77) – – 116 2,170 122 (34) 1,057 412 – – 164 57 1,778 2020 $’000 4,500 944 Potential tax assets of approximately $1,122,000 (2020: $944,000) attributable to unused tax losses carried forward by foreign owned subsidiaries have not been recognised as the availability of future taxable profits against which the assets can be utilised is not considered to be probable at 30 June 2021. The benefit for tax losses will only be obtained if the relevant member entities: (i) derive future assessable income of a nature and amount sufficient to enable the benefit from the deductions for the losses to be realised; or (ii) continue to comply with the conditions of deductibility imposed by tax legislation and no change in tax legislation adversely affects the relevant entities in realising the benefit from the deductions for the losses. Recognition and measurement Deferred tax assets are recognised when temporary differences arise between the tax bases of assets and liabilities and their respective carrying amounts which give rise to a future tax benefit, or when a benefit arises due to unused tax losses. In both cases, deferred tax assets are recognised only to the extent that it is probable that future taxable amounts will be available to utilise those temporary differences or tax losses. Deferred tax liabilities are recognised when such temporary differences will give rise to taxable amounts that are payable in future periods. Deferred tax assets and liabilities are recognised at the tax rates expected to apply when the assets are recovered or the liabilities are settled under enacted or substantively enacted tax law. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when there is a legally enforceable right to offset and an intention to either settle on a net basis, or realise the asset and settle the liability simultaneously. Current and deferred taxes attributable to amounts recognised directly in equity are also recognised directly in equity. Critical accounting estimates and judgements – recoverability of deferred tax assets The Group exercises judgement in determining whether deferred tax assets, particularly in relation to tax losses, are probable of recovery. Factors considered include the ability to offset tax losses within the groups of entities in different tax jurisdictions, the nature of the tax loss, the length of time that tax losses are eligible for carry forward to offset against future taxable profits and whether future taxable profits are expected to be sufficient to allow recovery of deferred tax assets. The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. The tax expense and deferred tax balances assume certain tax outcomes and values of assets in relation to the application of tax legislation as it applies to the Group’s entities. Judgement is required in determining the provisions for income taxes and in assessing whether deferred tax balances are to be recognised in the statement of financial position. Changes in tax legislation or the interpretation of tax laws by tax authorities may affect the amount of provision for income taxes and deferred tax balances recognised. NOTE 15 TRADE AND OTHER PAYABLES Trade payables and accruals Goods and services tax payable, net Dividends payable Total trade and other payables CONSOLIDATED 2021 $’000 7,463 3,637 97 11,197 2020 $’000 4,972 3,402 111 8,485 Recognition and measurement Trade and other payables are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. Payables are stated at their amortised cost. Accruals comprised largely of accruals for staff costs, advertising and promotion expenses and miscellaneous operating expenses. Other creditors and accruals are expected to be settled or recognised as income within one year or are repayable on demand. Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of purchase of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from or payable to the taxation authority is included as a current asset or liability. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from or payable to the taxation authority are classified as operating cash flows. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 44 45 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 16 LEASE LIABILITIES Current lease liabilities Non-current lease liabilities Total lease liabilities CONSOLIDATED 2021 $’000 3,010 8,488 11,498 2020 $’000 2,492 10,253 12,745 Lease payments not recognised as a liability The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. Recognition and measurement The Group measures the lease liability at the present value of the lease payments unpaid at lease commencement date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group’s average incremental borrowing rate used is 4.14%. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. Critical accounting estimates and judgements – lease term The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors considered may include the importance of the asset to the Group’s operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in circumstances. NOTE 17 PROVISIONS Current Employee benefits Total current provisions Non-current Employee benefits Other provisions Total non-current provisions Total provisions CONSOLIDATED 2021 $’000 4,960 4,960 512 133 645 2020 $’000 3,478 3,478 234 130 364 5,605 3,842 Recognition and measurement A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made as to the amount of the obligation. The amount recognised is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. A provision is made for benefits accruing to employees in respect of annual leave and long service leave. Liabilities expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to the reporting date. Critical accounting estimates and judgements – employee benefits assumptions In estimating the value of employee benefits, consideration is given to expected future salary and wage levels (including on-cost rates), experience of employee departures and periods of service. The assumptions are reviewed periodically and given the nature of the estimate, reasonably possible changes in assumptions are not considered likely to have a material impact. Where a provision is measured using the cash flows estimated to settle the obligation, the cash flows are discounted using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Discount rates are reviewed periodically and given the nature of the estimate, reasonably possible changes are not considered likely to have a material impact. NOTE 18 ISSUED CAPITAL Share capital 94,010,371 fully paid ordinary shares (2020: 93,327,871) Movement: Opening balance Issue of shares¹ Share options exercised by employees² Share buy-backs³ Closing balance CONSOLIDATED 2021 2020 Number of shares $’000 Number of shares $’000 93,327,871 5,448 92,879,112 4,994 225,000 457,500 – 500 995 – – 548,759 (100,000) – 454 – 94,010,371 6,943 93,327,871 5,448 Represents issue of ordinary shares as a result of options exercised under the Group’s Employee Incentive Plan and in cash. 1 2 Represents proceeds from share issues associated with limited recourse loans issued under the current Employee Incentive Plan. 3 The payment for share buy-backs are recognised in a share buy-back reserve within equity. Share capital Holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds of liquidation. The ordinary shares have no par value and the Company does not have a limited amount of authorised capital. Capital raising costs are deducted from contributed equity. Options issued during the year under the Employee Incentive Plan The Company issues employee share options pursuant to the Employee Incentive Plan. Under the terms and conditions of the current Employee Incentive Plan, selected employees are granted the right to acquire shares at a nominated exercise price subject to agreed service and performance criteria (i.e. vesting conditions) being satisfied. On satisfaction of the vesting conditions the shares are issued to the employee with the exercise price being financed by a limited recourse loan. No amount is paid or payable by the employee on receipt of these shares. Dividends declared and paid on the issued shares are for the benefit of the employee. The employee is not permitted to deal in the shares until the limited recourse loan has been repaid. The value of the limited recourse loans and issue price of the shares are not recorded as loans receivable or share capital of the Company until repayment or part repayment of the loans occur. The Employee Incentive Plan shares are entitled to dividends. The dividends are applied to reduce the loans and increase share capital in accordance with both the current terms of the Employee Inventive Plan and AASB 2 Share-based Payment. Specific terms of the option and loan agreement previously offered to employees, but no longer in effect, result in loans to these employees being recognised as a loan receivable until fully repaid and the value of the shares acquired included in share capital. Each option entitles the holder to the right to acquire one ordinary share at the nominated exercise price during the period commencing on the vesting date of the options. Refer Note 27 for further details. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 46 47 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 19 DIVIDENDS AND FRANKING CREDITS (a) Dividends Dividend type 2021 Final¹ 2020 Final 2019 Final 2019 Special Cents per share Franking Total amount $’000 Date paid/payable 9.00 7.00 5.00 1.00 100% 100% 100% Nil 8,461 6,551 4,644 929 16 September 2021 16 September 2020 16 September 2019 16 September 2019 1 The final dividend for the year ended 30 June 2021 has not been recognised in this financial report because it was resolved to be paid after 30 June 2021. (b) Franking credits NOTE 21 RETAINED EARNINGS Summary of movement in consolidated retained earnings Balance at 1 July Profit for the year Dividends paid for or provided (Note 19(a)) Balance at 30 June The balance of franking credit account at balance date adjusted for the payment of current tax liability NOTE 20 RESERVES 2021 $’000 2,514 2020 $’000 2,227 NOTE 22 CASH FLOW INFORMATION (a) Reconciliation of profit for the year to net cash inflow from operating activities At 30 June 2021 Opening balance Share-based payment Share buy-backs Translation of foreign operations Closing balance At 30 June 2020 Opening balance Share-based payment Share buy-backs Translation of foreign operations Closing balance CONSOLIDATED Share buy-back reserve $’000 Share-based payments reserve $’000 Foreign currency translation reserve $’000 Total $’000 (10,812) – – – 1,365 500 – – (1,503) (10,950) – – 78 500 – 78 (10,812) 1,865 (1,425) (10,372) (10,310) – (502) – 926 439 – – (10,812) 1,365 (853) (10,237) – – (650) (1,503) 439 (502) (650) (10,950) Share buy-back reserve The share buy-back reserve represents the value of the Company’s shares which were purchased and subsequently cancelled. The cancellation of the shares creates a non-distributable reserve. During the financial year, the Company bought back and cancelled nil of its ordinary shares (2020: 100,000 at a total cost of $502,000). Foreign currency translation reserve Exchange differences arising on translation of the financial statements of the Group’s foreign controlled entities into Australian dollars are in other comprehensive income and accumulated in a separate reserve within equity. Share-based payments reserve The share-based payments reserve is used to recognise the share-based payments expense resulting from the value of share options issued to key management personnel and employees under the Group’s Employee Incentive Plan. Further information about share-based payments to employees is made in Note 27. Profit for the year Adjustments: Depreciation and amortisation expenses Depreciation of right-of-use assets Non-cash employee benefits expense – share based payments Net gain on disposal of property, plant and equipment Net unrealised foreign exchange differences Credit loss allowance – trade and other receivables Share of loss from joint venture Change in operating assets and liabilities: (Increase)/decrease in trade and other receivables Decrease/(increase) in other operating assets Increase in contract assets Increase in trade and other payables Increase in contract liabilities (Decrease)/increase in current tax balances Decrease/(increase) in deferred tax assets Increase in provisions Increase in other operating liabilities Net cash inflow from operating activities (b) Non-cash investing activities During the current year, the Group entered into the following non-cash investing activities which are not reflected in the consolidated statement of cash flows: Motor vehicle financed under hire purchase agreement CONSOLIDATED 2021 $’000 26 2020 $’000 – CONSOLIDATED 2021 $’000 40,845 16,086 (6,551) 50,380 2020 $’000 35,393 11,025 (5,573) 40,845 CONSOLIDATED 2021 $’000 2020 $’000 16,086 11,025 2,479 2,392 500 (12) 42 195 6 (1,206) 337 (1,367) 1,058 3,024 (529) 1,002 646 43 1,764 1,748 439 – 13 (70) – 693 (178) (377) 1,402 11,809 400 (195) 680 – 24,696 29,153 Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 48 49 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 22 CASH FLOW INFORMATION CONTINUED The below table summarises the Group’s exposure to credit risk at the end of the reporting period: (c) Reconciliation of movements in liabilities to cash flows arising from financing activities 30 June 2021 Opening balance at 1 July 2020 Cash flows from financing activities Dividends declared¹ Additions arising from new leases, net of interest Additions through acquisition of subsidiary (Note 25) Foreign exchange movement Total liabilities from financial activities 30 June 2020 Opening balance at 1 July 2019 Cash flows from financing activities Dividends declared¹ Additions arising from new leases, net of interest Additions through acquisition of subsidiary Foreign exchange movement Total liabilities from financial activities CONSOLIDATED Dividends payable $’000 Lease liabilities $’000 111 (6,565) 6,551 – – – 97 121 (5,583) 5,573 – – – 12,745 (2,927) – 27 1,502 151 11,498 11,935 (2,008) – 2,858 134 (174) Total 12,856 (9,492) 6,551 27 1,502 151 11,595 12,056 (7,591) 5,573 2,858 134 (174) 111 12,745 12,856 1 Dividends payables are included as part of the Trade and other payables balance on the consolidated statement of financial position. NOTE 23 FINANCIAL RISK MANAGEMENT AND FAIR VALUES Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of the Group’s business. The Group’s exposure to these risks and the financial risk management policies and practices used by the Group to manage these risks are described below. (a) Credit risk Financial assets which potentially subject the Group to credit risk consist principally of cash, short-term deposits and trade debtors. The Group’s deposits and cash are placed with major financial institutions with sound credit ratings. Trade debtors are presented net of the allowance for expected credit losses. Credit risk with respect to trade debtors is limited due to the large number of customers comprising the Group’s customer base are government organisations or their diverse dispersion across different industries and geographical areas. Accordingly, the Group has no significant concentration of credit risk. The Group manages credit risks by monitoring credit ratings and limiting the aggregate risk to any individual counterparty. The recoverability of trade debtors at 30 June 2021 has been assessed to consider the impact of the COVID-19 pandemic and no material recoverability issues have been identified. CONSOLIDATED 2021 $’000 48,360 13,171 10,418 1,258 774 721 2020 $’000 51,048 10,683 10,413 32 54 184 13,171 10,683 Cash and cash equivalents¹ Trade and other receivables, at gross Ageing analysis of trade and other receivables is as follows: Fully performing debts Past due more than 30 days² Past due more than 60 days² Past due more than 90 days² Total 1 The Group held cash and cash equivalents with banks and financial institution counterparties which are rated A+ to F1, based on Fitch ratings. 2 The Group did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers based on recent collection practices. Trade receivables past due and not impaired at 30 June 2021 is $2,753,000 (2020: $270,000). Different customers have different credit terms which may vary by their contracts. (b) Currency risk The Group is exposed to foreign currency risk primarily as a result of operations in the Asia Pacific region, the United Kingdom, Singapore and the United States of America. The Group also has transactional currency exposures arising from sales and purchases that are denominated in currencies other than the functional currency of the operations to which they relate. The currencies giving rise to foreign currency risk are primarily denominated in Pounds Sterling (“GBP”), United Stated dollars (“USD”), New Zealand dollars (“NZD”) and Singapore dollars (“SGD”). Foreign currency risk is defined as the fair value of future cash flows of a financial instrument fluctuating because of changes in foreign exchange rates. The sensitivity analysis provided does not include the currency risk of financial assets and liabilities of the controlled entities denominated in the controlled entity’s functional currency or their conversion into the functional currency of Objective Corporation Limited on consolidation as outside the scope of the definition. The conversion of these financial assets and liabilities on consolidation may result in a gain or loss to the Group. The Group’s exposure is to the movement in foreign exchange rates is partly mitigated by a natural hedge arising from operations in these countries. The Group regularly monitors its foreign currency exposure which includes considering the level of cash in foreign currency and cash flow forecasting. The summary quantitative data about the Group’s exposure to foreign currency risk is as follows: 30 June 2021 Cash and cash equivalents Trade and other receivables 30 June 2020 Cash and cash equivalents Trade and other receivables GBP ’000 10 20 GBP ’000 1 18 NZD ’000 11 1,442 NZD ’000 9 1,955 SGD ’000 1 – SGD ’000 1 – USD ’000 187 63 USD ’000 144 10 Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 50 51 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 23 FINANCIAL RISK MANAGEMENT AND FAIR VALUES CONTINUED Sensitivity analysis The table below summarises the instantaneous change in the Group’s profit after tax and total equity that would arise had the Australian dollar strengthened/weakened by 10% against the respective foreign currencies to which the Group has significant exposure at the end of the reporting period, assuming all other risk variables remained constant. The 10% sensitivity is based on reasonably possible changes, over a financial year. 30 June 2021 Great British pounds New Zealand dollars Singapore dollars United States dollars Total Great British pounds New Zealand dollars Singapore dollars United States dollars Total 30 June 2020 Great British pounds New Zealand dollars Singapore dollars United States dollars Total Great British pounds New Zealand dollars Singapore dollars United States dollars Total CONSOLIDATED Movement in exchange rate % Sensitivity of profit after tax $’000 Sensitivity of total equity $’000 +10% +10% +10% +10% –10% –10% –10% –10% +10% +10% +10% +10% –10% –10% –10% –10% 2 92 – 16 110 (2) (113) – (19) (134) 1 124 1 9 135 (1) (152) (1) (12) (166) 2 92 – 16 110 (2) (113) – (19) (134) 1 124 1 9 135 (1) (152) (1) (12) (166) (c) Liquidity risk Liquidity risk management requires maintaining sufficient cash by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Group’s reputation. The tables below present the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. 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. 30 June 2021 Trade and other payables Lease liabilities Contingent consideration Total non-derivatives 30 June 2020 Trade and other payables Lease liabilities Contingent consideration Total non-derivatives CONSOLIDATED Less than 1 year $’000 1–5 years $’000 5+ years $’000 Total contractual cashflows $’000 Carrying amount of liabilities $’000 11,197 3,407 392 14,996 8,485 2,889 392 11,766 – 7,966 392 8,358 – 8,981 784 9,765 – 1,112 – 1,112 – 2,261 – 2,261 11,197 12,485 784 24,466 8,485 14,131 1,176 23,792 11,197 11,498 756 23,451 8,485 12,745 1,110 22,340 As the Group is in a net financial assets position, the Directors are of the opinion that the Group will be able to pay off its debts as and when they are due and payable. Capital management The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of business. The Board monitors the return on capital and the level of dividends to ordinary shareholders. There were no significant changes in the Group’s approach to capital management during the year. Fair values measurement of financial instruments The fair values of trade debtors, deposits and cash and trade creditors and accruals approximate their carrying amounts due to the short-term maturities of these assets and liabilities. Financial instruments carried at fair value The Group’s financial instruments are measured at fair value at the end of the reporting period on a recurring basis, categorized into three-level fair value hierarchy as defined in AASB 13 Fair Value Measurement. The level into which a fair value measurement is classified and determined with reference to the observability and significance of the inputs used in the valuation technique as follows: – Level 1 valuations: Fair values measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date – Level 2 valuations: Fair values measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available – Level 3 valuations: Fair values measured using significant unobservable inputs The following table sets out how the fair value of the financial liabilities measured at fair value are determined: Financial liabilities Fair value at 30 June 2021 $’000 Fair value at 30 June 2020 $’000 Fair value hierarchy Valuation technique Contingent consideration for business combination 784 1,176 Level 3 Discounted cash flow Significant unobservable input Probability adjusted non– financial terms During the year ended 30 June 2021, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3 of the fair value hierarchy classifications. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 52 53 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 24 SUBSIDIARIES The consolidated financial statements incorporate the assets, liabilities and financial results of the following subsidiaries in accordance with the accounting policies of the Group. GROUP STRUCTURE NOTE 25 BUSINESS COMBINATIONS Name of subsidiary Country of Incorporation Objective Corporation Solutions NZ Limited Objective Trapeze NZ Limited Omega Group Holdings Limited Alpha 88 Limited Master Business Systems Limited Objective RegTech Pty Limited Objective Corporation Singapore Pte Limited Objective Corporation North America Inc Objective Corporation USA Inc Objective Alpha UK Limited Objective Corporation UK Limited Objective Keystone Limited New Zealand New Zealand New Zealand New Zealand New Zealand Australia Singapore United States of America United States of America United Kingdom United Kingdom United Kingdom Ownership 2021 100% n/a¹ n/a¹ 100% n/a¹ 100% 100% 100% 100% 100% 100% 100% 2020 100% 100% 100% 100% 100% – 100% 100% 100% 100% 100% 100% 1 On 1 July 2020, the Company completed the amalgamation of all its subsidiaries in New Zealand to streamline the Group’s compliance activities in New Zealand. Objective Corporation Solutions NZ Limited has assumed the operations of all the amalgamating entities from 1 July 2020. (a) Acquisitions in the current year On 1 July 2020, the Group acquired 100% of the issued capital of Objective RegTech Pty Limited (formerly known as Itree Pty Limited), which is focused on the delivery of government regulation technology solutions and services to customers in Australia and New Zealand. The acquisition of the business was strategic as it enhances the Group’s product offering. The purchase consideration was $23,997,000. The acquired net identifiable assets were $1,651,000 (excluding cash and bank balances acquired of $5,626,000), giving rise to goodwill of $16,720,000. Details of the purchase consideration, the net identifiable assets acquired and goodwill arising from the acquisition of Objective RegTech Pty Limited at the acquisition date are as follows: Cash payments Less: cash and bank balances acquired Purchase consideration, net of cash and bank balances acquired Assets acquired and liabilities assumed Trade and other receivables Other current assets Property, plant and equipment Right-of-use assets Identifiable intangible assets Deferred tax assets Trade and other payables Contract liabilities Lease liabilities Provisions Other liabilities Fair value of net assets acquired Goodwill arising on acquisition $’000 23,997 (5,626) 18,371 821 708 518 1,502 1,765 1,395 (1,097) (767) (1,502) (1,117) (575) 1,651 16,720 The goodwill is attributable to key employees, future growth opportunities and synergies from combining operations with Objective RegTech Pty Limited. The goodwill is not deductible for tax purposes. Revenue and profit contribution From the date of acquisition to 30 June 2021, the acquired entity contributed a total revenue of $15,252,000. The business has been integrated into the Group’s existing activities and it is not practicable to precisely identify the impact on the Group profit in the year. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 54 55 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 25 BUSINESS COMBINATIONS CONTINUED (b) Acquisition in the prior year The Group obtained control of the following entities and businesses in the prior year. The class of shares held is ordinary unless otherwise stated. Name of entity Master Business Systems Limited Type of acquisition Percentage acquired Date acquired Shares 100% 29 November 2019 On 29 November 2019, the Group acquired 100% of the issued capital of Master Business Systems Ltd, which is focused on the delivery of GoGet, an end to end building consent solution, to customers in New Zealand. The acquisition of the business was strategic as it enhances the Group’s product offering. The purchase consideration was $4,859,000, settled in part by an upfront cash payment of $3,793,000 and offset by an estimated cash refund of $44,000 in relation to working capital adjustment to be received in November 2020. The remaining balance of $1,110,000 is recorded as deferred contingent consideration and carried in the consolidated statement of financial position at net present value under other financial liabilities. Of the net deferred consideration payable, $339,000 is current and $727,000 is non-current as at 30 June 2020. During the current year, the first instalment payment of $353,000 was made in settlement of the deferred consideration payable in relation to the acquisition of Master Business Systems Limited and interest expenses of $43,000 was recognised. Of the net deferred consideration payable at 30 June 2021, $399,000 is current and $357,000 is non-current. The contingent consideration will be payable if specific employment related conditions are met by the business in the three years post acquisition. Where acquisitions include an element of purchase price contingent on future performance, management has estimated the fair value of this deferred contingent consideration, at the time of acquisition, based on an appropriate estimate of future outcomes, on which the purchase price is determined, discounted to present value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. The acquired net identifiable assets were $734,000, giving rise to goodwill of $4,125,000. Details of the purchase consideration, the net identifiable assets acquired and goodwill arising from the acquisition of Master Business Systems Limited at the acquisition date are as follows: Cash paid to vendor (NZ$4,015,000) Working capital adjustment Deferred contingent consideration Acquisition date fair value of the total consideration Assets acquired and liabilities assumed Cash and bank balances Trade receivables Current tax receivable Other assets Property, plant and equipment Identifiable intangible assets Trade and other payables Contract liabilities Lease liabilities Provisions Acquisition date fair value of net assets acquired Goodwill arising on acquisition $’000 3,793 (44) 1,110 4,859 212 321 12 6 148 640 (171) (155) (134) (145) 734 4,125 The goodwill is attributable to key employees, future growth opportunities and synergies from combining operations with Master Business Systems Limited. The goodwill is not deductible for tax purposes. From the date of acquisition to 30 June 2020, the acquired entity contributed a total revenue of $1,656,000 and a net profit after tax of $665,000 to the Group. If the business had been acquired at the beginning of the year, it is estimated that Group turnover in 2020 would have been approximately $1,182,000 higher. The business has been integrated into the Group’s existing activities and it is not practicable to identify the impact on the Group profit in the year. Recognition and measurement As stated in Note 1, business combinations are accounted for using the acquisition method, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises of the fair values of the assets transferred (including cash), the liabilities incurred and the equity interests issued by the Group (if any). Other than acquisitions under common control, identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognised directly in profit or loss as a bargain purchase. For acquisitions occurring while under common control and for consolidation purposes, the assets and liabilities acquired continue to reflect the carrying values in the accounting records of the consolidated group prior to the business combination occurring. Critical accounting estimates and judgements – purchase price allocation For the business combinations undertaken by the Group, the Group allocates the costs of the acquisition to the assets acquired and the liabilities assumed based on their estimated fair value on the date of acquisition. This process is commonly referred to as the purchase price allocation. As part of the purchase price allocation, the Group is required to determine the fair value of any identifiable intangible assets acquired. The determination of the fair value of the intangible assets acquired involves certain judgement and estimates. These judgements can include, but are not limited to, the cash flows that an asset is expected to generate in the future. The fair values of the identifiable intangible assets were determined by the Group with inputs from the independent appraisers using mainly the income approach. Future cash flows are predominantly based on the historical pricing and expense levels, taking into consideration the relevant market size and growth factors, and involves making a number of assumptions including growth rates, royalty rates and product life cycles. The resulting cash flows are then discounted at a rate reflecting specific risks related to the relevant operation. A change in the amount allocated to identifiable intangible assets would have an offsetting effect on the amount of goodwill recognised from the acquisition and would change the amount of amortisation expense recognised related to those identifiable intangible assets. NOTE 26 PARENT ENTITY DISCLOSURES (a) Summary statement of financial position Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Share capital Reserves Retained earnings Total equity (b) Summary statement of profit or loss and other comprehensive income Profit for the year Total comprehensive income for the year 2021 $’000 49,652 28,602 78,254 45,969 4,140 50,109 6,943 (8,948) 30,150 28,145 2021 $’000 5,550 5,550 2020 $’000 53,287 22,531 75,818 42,827 5,840 48,667 5,448 (9,448) 31,151 27,151 2020 $’000 6,865 6,865 (c) Contingent liabilities The parent entity, Objective Corporation Limited (the “Company”) has entered into commercial property leases as Lessee. In the event the Company ceases to be the Lessee under the lease or occupy the premises, whether by virtue of default and termination of the lease or otherwise, the Company may be subject to claims for payment of liquidated damages based on a percentage of the lease incentives initially received under the lease. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 56 57 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 26 PARENT ENTITY DISCLOSURES CONTINUED Additionally, a performance guarantee has been provided by the Company to Objective Corporation UK Limited (subsidiary) with regards to the provision of software support services for customers. The Company continues to support its subsidiaries in their operations, by way of financial support. (d) Company details The registered office and principal place of business of the Company is: Level 30, 177 Pacific Highway, North Sydney NSW 2060, Australia. NOTE 27 SHARE BASED PAYMENTS Employee Incentive Plan Objective Corporation Limited has an Employee Incentive Plan which was approved at the 2003 Annual General Meeting of the Company. The Plan is described as follows: Offers Under the Plan the Board may offer to any employee either options to acquire shares or loans to acquire shares in the Company. Tony Walls, Chief Executive Officer and Gary Fisher, Non-Executive Director will not be participating in the Plan. The options expire ten years after the date of grant and vest upon grant; however, they are not exercisable until one year after grant and released in four equal tranches on each anniversary of grant date. If a participant under the Plan ceases to be employed by the Company, any unexercised option will be forfeited immediately. Price The Board has discretion to grant options for a fee and set the exercise price and term of the options. Quotation Options issued under the Plan will not be quoted on the ASX. Where the Company issues options and the options are exercised, the Company will apply to have the issued shares quoted on the ASX. Maximum number of shares or options The Company must not issue shares or options to any employee if to do so would contravene applicable laws or result in any employee holding an interest in more than 5% of the shares in the Company. Sales restrictions Options issued under the Plan are not transferable. Shares acquired under the Plan are not transferable unless any loan to acquire the shares has been repaid in full. New shares All shares issued on the exercise of options will rank equally with all existing shares from the date of issue. Dividends All shares acquired pursuant to the Plan rank equal in all respects and will be entitled to any dividends declared by the Company. Any dividends paid on shares acquired under the Plan will be offset against the loan balance outstanding to acquire shares under the Plan. Options issued under the Plan are not entitled to dividends. Restrictions The Board may impose vesting and performance conditions before which options cannot be exercised or the shares sold. The options issued pursuant to the Plan will usually lapse and the loans to acquire shares will usually become repayable if the holder ceases to be an employee. Participation in future issues Under the Employee Option Plan’s rules, the number of shares over which an option is granted and or the exercise price of the options may be altered in the event of a reconstruction of the Company’s share capital or a bonus or rights issue of shares to shareholders. Shares acquired under the Plan will rank equal in all respects with existing shares. Loans The Board has discretion to provide a loan for the acquisition of shares in the Company under terms and conditions as set out in the loan agreement. Fair value of share options granted in the year Fair value of share options granted during the year ended 30 June 2021 are provided in the table below: Number of options granted 635,000 200,000 Grant date Expiry date 01/07/2020 01/07/2030 04/01/2021 31/01/2025 Fair value at grant date ($) $0.44 $1.40 Option exercise price ($) $7.50 $12.50 Risk free interest rate (%) 0.91% 0.32% Expected volatility (%) 18.60% 19.55% Dividend yield (%) 2.17% 2.17% The fair values of options are determined using Black-Scholes option pricing model and applying a 10-year time period to expiration. Assumptions for expected volatility and dividend yield were based on historic data. Inputs for risk free rate and grant date share price was determined by the prevailing prices on the day of issue. No new share options were granted in the prior year. Movement in share options during the year The following reconciles the share options outstanding at the beginning and end of the current year: Grant date Expiry date 07/10/2014 24/02/2015 29/07/2016 02/01/2017 29/07/2018 01/01/2019 01/04/2019 01/07/2020 04/01/2021 07/10/2024 24/02/2025 29/07/2026 02/01/2027 29/07/2028 01/01/2029 01/04/2029 01/07/2030 31/01/2025 Weighted average exercise price Option exercise price ($) $1.00 $1.17 $1.50 $1.80 $2.75 $2.75 $2.75 $7.50 $12.50 Balance 1 July 2020 80,000 150,000 62,500 125,000 200,000 1,257,500 25,000 – – 1,900,000 $2.45 Granted Exercised Forfeited/ cancelled Balance 30 June 2021 – – – – – – – 635,000 200,000 835,000 $8.70 (80,000) – (62,500) (125,000) – (402,500) (12,500) – – (682,500) $2.26 – – – – – – – – – – – – 150,000 – – 200,000 855,000 12,500 635,000 200,000 2,052,500 $5.05 The following reconciles the share options outstanding at the beginning and end of the prior year: Grant date Expiry date 07/10/2014 24/02/2015 29/07/2016 02/01/2017 15/01/2018 29/07/2018 01/01/2019 01/04/2019 07/10/2024 24/02/2025 29/07/2026 02/01/2027 15/01/2028 29/07/2028 01/01/2029 01/04/2029 Weighted average exercise price Option exercise price ($) $1.00 $1.17 $1.50 $1.80 $3.00 $2.75 $2.75 $2.75 Balance 1 July 2019 80,000 150,000 125,000 500,000 23,759 200,000 1,320,000 50,000 2,448,759 $2.34 Granted Exercised Forfeited/ cancelled Balance 30 June 2020 – – – – – – – – – – – – (62,500) (375,000) (23,759) – (62,500) (25,000) (548,759) $1.97 – – – – – – – – – – 80,000 150,000 62,500 125,000 – 200,000 1,257,500 25,000 1,900,000 $2.45 The share options outstanding at the end of the year had a weighted average remaining contractual life of 5.70 years (2020: 6.25 years). Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 58 59 Notes to the Financial Statements continued For the year ended 30 June 2021 NOTE 28 RELATED PARTY DISCLOSURES The parent entity in the Group is Objective Corporation Limited. Details of transactions between the Group and other related parties are disclosed below. NOTE 30 CONTINGENT LIABILITIES (a) Loans to key management personnel There are no loan balances outstanding from key management personnel at the end of the financial year (2020: Nil). (b) Key management personnel remuneration Total remuneration paid or payable to directors and key management personnel is set out below: Contingent liabilities, capable of estimation, arise in respect of the following categories: Bank guarantees Total contingent liabilities CONSOLIDATED 2021 $’000 1,460 1,460 2020 $’000 1,190 1,190 Short-term employee benefits Long-term employee benefits Post-employment benefits Share-based payments expense Total remuneration paid or payable CONSOLIDATED 2021 2020 754,023 732,855 8,112 47,726 37,923 40,676 46,344 61,856 847,784 881,731 Details of remuneration and the Objective Corporation Limited equity holdings of Directors and other key management personnel are shown in the Remuneration Report on pages 17 to 19. (c) Other transactions with directors or other key management personnel Other transactions entered into during the financial year with directors of Objective Corporation Limited and other key management personnel of the Group and with their closely related entities which are within normal customer or employee relationships on terms and conditions no more favourable than those available to other customers, employees or shareholders included: – contracts of employment (refer Remuneration Report) and reimbursement of expenses; – equity holdings and acquisition of shares in Objective Corporation Limited under the employee share plans; and – dividends from shares in Objective Corporation Limited. (d) Other related parties Last year the Group was provided management consulting services and was charged $23,021 by Kingsbury Ventures Limited, a company associated with Nick Kingsbury, a Non-Executive Director of the Company. Additionally, the Group was provided management consulting services and was charged $9,916 by Strategic Outcomes Consulting, a company of which Darc Rasmussen, a Non-Executive Director of the Company, is the beneficial owner. These transactions were conducted on normal commercial terms and conditions. No material amounts were receivable from, or payable to, other related parties as at 30 June 2021 (2020: nil), and no material transactions with other related parties occurred during the year. NOTE 29 COMMITMENTS Commitments in relation capital expenditure contracted but not provided for in the consolidated financial statements are payable as follows: Capital expenditure commitments CONSOLIDATED 2021 $’000 – 2020 $’000 – Bank guarantees are issued to contract counterparties in the normal course of business as security for the performance by Group entities of various contractual obligations. Additionally, a performance guarantee has been provided by the Company to Objective Corporation UK Limited (subsidiary) with regards to the provision of software support services for customers. As at 30 June 2021, the Directors do not consider it is probable that a claim will be made against the Group under any of the guarantees. Objective (the Company) has been advised that the New Zealand Commerce Commission (NZCC) has completed its investigation into Objective’s potential breach of section 47 of the Commerce Act 1986 on the acquisition of Master Business Systems Limited – refer our announcement to the ASX on 26 May 2020. Objective continues to assist the NZCC with further information on a voluntary basis and no Statement of Claim has been received to date. In the absence of any claim, Objective is not able to determine its response or defence and is not able to reliably estimate any financial effect or timing. NOTE 31 AUDITOR’S REMUNERATION Pitcher Partners Audit and review of financial statements Total remuneration of Pitcher Partners Non-Pitcher Partners Audit and review of financial statements Tax compliance services Total remuneration of non-Pitcher Partners NOTE 32 OTHER ACCOUNTING POLICIES CONSOLIDATED 2021 $ 2020 $ 90,017 90,017 29,724 13,041 42,765 79,833 79,833 28,057 12,280 40,337 Accounting standards and interpretations issued but not operative at 30 June 2021 At the date of authorisation of these finance statements, a number of amendments, new standards and interpretations have been issued, including those issued by the IASB but not yet issued by the AASB, which are not yet effective for the financial year ended 30 June 2021. Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the Group’s financial statements. NOTE 33 SUBSEQUENT EVENTS Dividends For dividends resolved to be paid after 30 June 2021, refer to Note 19. NOTE 34 APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by the board of directors and authorised for issue on 25 August 2021. Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 60 Directors’ Declaration Independent Auditor’s Declaration 61 The Directors of the Company declare that: 1. The attached financial statements and notes set out on pages 14 to 59 are in accordance with the Corporations Act 2001 (Cth); and a) Comply with Australian Accounting Standards and the Corporations Regulations 2001; b) As stated in Note 1, the consolidated financial statements also comply with International Financial Reporting Standards; and c) Give a true and fair view of the financial position of the Group as at 30 June 2021 and its performance for the year ended on that date. 2. The Chief Executive Officer and Chief Financial Officer have each declared that: a) The financial records of the Group for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001 (Cth); b) The financial statements and notes for the financial year comply with the Australian Accounting Standards; and c) The financial statements and notes for the financial year give a true and fair view. 3. In the Directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of Directors. Tony Walls Director Date: 25 August 2021 Level 16, Tower 2 Darling Park 201 Sussex Street Sydney NSW 2000 Postal Address GPO Box 1615 Sydney NSW 2001 p. +61 2 9221 2099 e. sydneypartners@pitcher.com.au AUDITOR'S INDEPENDENCE DECLARATION TO THE DIRECTORS OF OBJECTIVE CORPORATION LIMITED In relation to the independent audit for the year ended 30 June 2021, to the best of my knowledge and belief there have been: (i) (ii) no contraventions of the auditor independence requirements of the Corporations Act 2001; and no contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards). This declaration is in respect of Objective Corporation Limited and the entities it controlled during the year. R M SHANLEY Partner 25 August 2021 PITCHER PARTNERS Sydney Adelaide Brisbane Melbourne Newcastle Perth Sydney Page 65 Pitcher Partners is an association of independent firms. An independent New South Wales Partnership. ABN 35 415 759 892. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. pitcher.com.au Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 62 Independent Auditor’s Report 63 Level 16, Tower 2 Darling Park 201 Sussex Street Sydney NSW 2000 Postal Address GPO Box 1615 Sydney NSW 2001 p. +61 2 9221 2099 e. sydneypartners@pitcher.com.au OBJECTIVE CORPORATION LIMITED ABN 16 050 539 350 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF OBJECTIVE CORPORATION LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of Objective Corporation Limited “the Company” and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (a) (b) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year then ended; and 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the Directors of the Company, would be in the same terms if given to the Directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Adelaide Brisbane Melbourne Newcastle Perth Sydney Pitcher Partners is an association of independent firms. An independent New South Wales Partnership. ABN 35 415 759 892. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. pitcher.com.au Page 66 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 year. 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 Revenue from contracts with customers (Refer to Note 4 in the Notes to the Financial Statements). Due to the nature of the Group’s business, its contracts with customers can contain multiple performance obligations. recognition is dependent on Revenue significant judgements, where a contract includes multiple performance obligations, in respect of: • identifying performance obligations; • determining when a performance obligation is satisfied; • determination of total transaction price; and • allocation of the transaction price to each performance obligation. to the We focused on this area as a key audit matter due in importance of measurement of the Group’s performance and the significant judgements surrounding the timing of revenue recognition. revenue Impairment of Intangible Assets (Refer to Note 13 in the Notes to the Financial Statements). At 30 June 2021 the consolidated statement of financial position of the Group includes goodwill amounting to $32.716 million subject to annual impairment testing. In assessing impairment of intangible assets, management have estimated value in use for each Cash Generating Unit (CGU) – Objective Keystone, Objective Planning and Building Solutions and Objective RegTech. The value in use model for impairment includes significant management judgement in respect of assumptions and estimates including discount rates, estimated future cash flows, terminal value, and foreign currency rates. This is considered a key audit matter due to the degree of subjectivity involved in assessing the quantum of potential impairment and Pitcher Partners is an association of independent firms. ABN 35 415 759 892. An independent New South Wales Partnership. How our audit addressed the Key Audit Matter Our procedures included, amongst others: • Assessing the Group’s policy in respect of identifying transaction price and total performance obligations, allocation of the transaction price to each performance obligation; • Documenting, understanding and evaluating the design of relevant controls in the assessment process for determining the timing of revenue recognition; • Inspecting a sample of contracts with customers and considered the appropriateness of the significant judgements in determining the allocation of the transaction price to the performance obligations; • Testing a sample of revenue transactions to customer contracts, work records, milestone progress acknowledgements and receipts from customer, where applicable; in • Reviewing and analysing general journals that impact revenue; and • Considering the adequacy of the financial report disclosures. Our procedures included, amongst others: • Assessing management’s determination of CGUs based on our understanding of the nature of the Group’s business and the economic environment; • Documenting, understanding and evaluating the design of relevant controls over management’s determination of CGUs based on our understanding of the nature of the Group’s business and the economic environment; Reviewing and challenging significant in respect of the key assumptions and estimates used to determine the recoverable value of the assets of each CGU (value in use model); judgements by management • Testing the mathematical accuracy of the value in use model; • Assessing the historical accuracy of forecasting; • Performing sensitivity analysis on key assumptions and estimates in the value in use models including discount rates, future cash flows, terminal value, and foreign currency rates; and Page 67 Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 64 65 Independent Auditor’s Report continued Key Audit Matter intangibles in the financial report. Intangibles are 30% of total assets. How our audit addressed the Key Audit Matter • Considering the adequacy of the financial report disclosures. Acquisition Accounting Refer to Note 13 in the Notes to the Financial Statements. On 1 July 2020 the Group acquired iTree Pty Limited which has been renamed to Objective RegTech Pty Limited. The accounting for this business combination resulted in the initial recognition of goodwill of $16.720 million. This is considered a key audit matter due to the inherent subjectivity involved in assessing the significance of intangibles to the financial report. Our procedures included, amongst others: • Documenting, understanding and evaluating the design of relevant controls in respect to acquisition accounting; • Reviewing accounting policies of the acquired subsidiary to ensure compliance with the Group’s policies; • Examining identify the asset purchase agreement intangible assets acquired based on our understanding of the business acquired; to • Assessing fair value of net assets acquired against net assets reported in the audited financial statements of iTree Pty Limited at 30 June 2020; • Testing accuracy of the goodwill calculation based on our understanding of the acquired business; and • Considering the adequacy of the financial report disclosures and confirming that the correct accounting treatment has been applied. Other Information – The annual report is not complete at the date of the audit report. The Directors are responsible for the other information. The other information comprises the information included in the Directors report, which was obtained as at the date of our audit report, and any additional other information included in the Company’s annual report for the year ended 30 June 2021 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 accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information above 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. When we read the other information not yet received as identified above, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and use our professional judgment to determine the appropriate action to take. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Pitcher Partners is an association of independent firms. ABN 35 415 759 892. An independent New South Wales Partnership. Pitcher Partners is an association of independent firms. ABN 35 415 759 892. An independent New South Wales Partnership. Page 67 Page 69 Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 66 67 Independent Auditor’s Report continued Shareholder Information • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 15 to 17 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Objective Corporation Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. R M SHANLEY Partner 25 August 2021 PITCHER PARTNERS Sydney Pitcher Partners is an association of independent firms. ABN 35 415 759 892. An independent New South Wales Partnership. Page 69 Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below: The shareholder information set out below was compiled from Objective Corporation Limited’s register of shareholders as at 10 September 2021. A. TWENTY LARGEST HOLDERS OF ORDINARY SHARES Rank Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 TBW TRUSTEES LIMITED BNP PARIBAS NOMINEES PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CITICORP NOMINEES PTY LIMITED NATIONAL NOMINEES LIMITED ANACACIA PTY LTD UBS NOMINEES PTY LTD MIRRABOOKA INVESTMENTS LIMITED MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED WEM SUPER PTY LTD CS THIRD NOMINEES PTY LIMITED MR BEN TREGONING MR DAVID GORDON ARRAS PTY LTD TRUEBELL CAPITAL PTY LTD AMCIL LIMITED BRISPOT NOMINEES PTY LTD CS FOURTH NOMINEES PTY LIMITED MR JEREMY GODDARD Units held % of listed units 62,000,000 65.729 8,077,100 3,861,823 2,732,506 1,667,030 1,506,811 1,245,991 1,235,537 614,444 597,450 535,000 527,441 323,759 300,000 294,832 290,000 274,075 266,412 251,821 250,000 8.563 4.094 2.897 1.767 1.597 1.321 1.310 0.651 0.633 0.567 0.559 0.343 0.318 0.313 0.307 0.291 0.282 0.267 0.265 Total: Top 20 holders of issued capital Total remaining holders balance 86,852,032 7,474,589 92.074 7.926 B. SUBSTANTIAL HOLDERS The names of Objective Corporation Limited’s substantial holders and the number of shares in which each has a relevant interest, are listed below: TBW TRUSTEES LIMITED BNP PARIBAS NOMINEES PTY LTD C. DISTRIBUTION OF SHAREHOLDINGS A distribution schedule of the number of holders of shares is set out below: Range 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total Units held Voting power 62,000,000 8,077,100 65.729 8.563 No. of holders No. of units % of issued shares 1,520 582,736 619 114 140 1,436,862 897,965 3,800,776 0.618 1.523 0.952 4.029 25 87,608,282 2,418 94,326,621 92.878 100.000 Our Business Inside ObjectiveDirectors’ ReportFinancial StatementsObjective Corporation Limited And Its Controlled Entities — Annual Report 2021 68 Corporate Directory Registered Office Level 30 177 Pacific Highway North Sydney NSW 2060 Australia Tel: +61 2 9955 2288 Company Website www.objective.com.au ASX Code OCL ABN 16 050 539 350 Directors Tony Walls Gary Fisher Nick Kingsbury Darc Rasmussen Company Secretary Ben Tregoning Stock Exchange Listing The Company’s shares are listed on the ASX. Electronic Announcements Shareholders who wish to receive a copy of announcements made to the ASX are invited to provide their email address to the Company. This can be done by emailing us at enquiries@objective.com or writing to us at our registered office.
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