ANNUAL REPORT 2022
Digital government.
Stronger communities
and nations.
Our Business
CEO’s Report
Directors’ Report
Financial Statements
ABOUT US
Our Mission
Outstanding digital government software
driving stronger communities and nations.
People
Customers
450
Around the World
1,000+
Organisations World-wide
Locations
14
Development Labs
5
Reading
Edinburgh
Marietta, GA
Washington DC
Singapore
Wellington
Palmerston North
Sydney
Wollongong
Brisbane
Melbourne
Adelaide
Canberra
Perth
1
FY2022 Financial Highlights
Contents
Revenue
$107m
Annualised
Recurring Revenue
$85m
12% Growth
15% Growth
EBITDA1
Net Profit After Tax1
$31m
20% Growth
$21m
30% Growth
Cash
Research + Development
$64m
$25m
$48m at 30 June 2021
24% of Revenue
1
Excluding NZCC Settlement.
1
Financial Highlights
2 Our People
4 Major Innovations
6 Our Customers
8 CEO’s Report
11 Business Line Review
14 Directors’ Report
21 Financial Statements
26 Notes to the Financial Statements
64 Directors’ Declaration
65
Independent Auditor’s Declaration
66
Independent Auditor’s Report
70 Shareholder Information
71 Corporate Directory
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 2
Our Business
CEO’s Report
Directors’ Report
Financial Statements
OUR PEOPLE
We create software that
makes a difference
To help government shift to being completely digital.
Where our customers can work from anywhere;
with access to information, governance guaranteed
and security assured.
“It’s really heart-warming all the work
we do day to day, dealing with our
clients, actually has an impact on
the people who surround us; not
only at home but also at work and
society generally.”
Will, Customer Success Manager, READING
“What I love about working at
Objective is the work culture and the
environment. The people are very
open to suggestions on whatever
work you are doing.”
Devina, Software Engineer, SYDNEY
“My team’s biggest achievement is
that we’re moving into the UK Market
and opening up more doors in terms
of the customers that we can serve
and the people that we can help.”
Dan, Pre-Sales Manager,
RegTech, WOLLONGONG
“What I love about working at
Objective is the fact that I’ve been
able to transfer all the skills that I
gained as a customer, and now share
that with all of our customers.”
Marty, Customer Success Director,
Objective Trapeze, SYDNEY
Aligning on our Mission
As we emerged from lockdowns around the world,
promoting connections amongst our global teams
was important. We sent camera crews to each of
our development labs to capture “day in the life of”
insights and the voices of our people from each
office. Our customers also openly shared their
stories about how Objective solutions are helping
them deliver important community and national
outcomes. A 12-month communication program
culminated in five in-person staff events around the
globe showcasing all of these stories and aligning
everyone to our shared Mission.
Employee engagement
Beyond cutting code, delivering solutions or
supporting customers, you’ll also find us at regular
hackathons, hosted weekly lunches, innovation
Fridays, monthly company updates, monthly
manager meet-ups, even running in the City to Surf.
We host annual awards based on our values, a CEO
Leadership award and Rookie of the Year award. We
have sleek office spaces, with great tech for easy
collaboration from any and every location. And we
measure employee engagement, which we’re happy
to report is increasing year on year.
Flexible and remote working
Flexible work practices are not new for us, we’ve
always supported teams across geographies. We
have Product Managers in the north of New Zealand
on software coded in the UK, we’ve delivered large
implementation projects completely remotely in the
midst of lockdowns with a team that spanned the
globe. Providing an environment where people can
work from anywhere and contribute seamlessly
is as important to us as a company as it is to
each individual.
Meet some of the amazing people
that make Objective what it is.
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3
We are now 450 people around
the world. A diverse team, who
together share values and a
commitment to our mission that
drives the success of Objective
and our customers. We enjoy a
culture founded on the desire to
help our customers deliver their
community and national outcomes,
that is propelled by passion,
teamwork and respect. We foster
this culture through a range of
programs and practices and we’re
dedicated to making Objective a
great place to work.
Attracting and retaining the best talent
It’s no secret, recruiting has been tough in the tech
sector this year, in fact in most industries; so we got
creative in attracting the best and brightest to join us.
In addition to our dedicated talent acquisition team,
we’ve run digital campaigns, nurtured relationships
with local universities and broadened our job
advertisement reach to capture a wider audience.
As people join Objective, we set them up for
success from the outset, every new recruit attends
an induction event in head office hosted by our
CEO. It’s an opportunity to experience the Objective
culture first-hand, meet the leadership team, people
from each business line and to establish long
lasting relationships.
Over time, we keep our people engaged with
interesting career paths and growth opportunities.
Our boomerang program encourages people to
try a different job for three months, open roles are
promoted internally before they hit the market,
we offer a leadership development program and
encourage further study.
“What do I love about working at
Objective? That’s simple; the people.”
Tracy, Technical Product Manager, PERTH
“I’m really proud that we’ve built a
great team that can create a new
product for Objective.”
Victor, Principal Software Engineer,
Objective Build, PALMERSTON NORTH
Fundraising and community sponsorships
Fundraising activities are regular occurrences here
at Objective, and in almost every case, initiated
by members of our team, taking the lead for causes
they’re passionate about. During the year, we raised
money for: the RSPCA, Ukraine appeal, East Coast
floods appeal, Breast Cancer research, Legacy and
more. Every dollar raised by our people is matched
by Objective to donate to charity. It’s not only financial
contributions, we also encourage people to volunteer
their time, offering a paid day each year to work for
charity and not-for-profit causes.
We also sponsor grass roots community sports such
as the Manawatū Jets basketball team in New Zealand
and youth girls participation in football at the Eastlake
Football Club in Canberra.
Our Values
How we treat ourselves, each other and our customers.
Integrity
We respect each other. We do as
we say. We do the right thing.
Expertise
We are experts, thought leaders
and trusted advisors. We leverage
our experience and expertise. We openly
share our knowledge.
Great People, Great Teams
Our people are empowered to make a
difference. Individuals are brilliant, but
teamwork delivers amazing results.
Tenacity
We believe there is always a solution.
We relentlessly strive for outcomes.
Entrepreneurial Spirit
We aren’t afraid to challenge the status
quo. We take informed risks. We don’t let
structure or process get in the way.
Results Matter
We’re passionate about our customers’ success.
We do what it takes to deliver outcomes.
We measure results and celebrate success.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022
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Our Business
CEO’s Report
Directors’ Report
Financial Statements
MAJOR INNOVATIONS BROUGHT TO MARKET
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.
An effective building application
management platform, helping
the construction sector and local
government thrive.
A complete SaaS based solution
providing records compliance, enterprise
scale information management and
process automation.
Cloud native, Objective Nexus is the next generation of information
and process management that delivers a path to the cloud for
existing customers along with new market opportunities.
This new product aligns closely to the macro factors guiding
public sector IT decisions; streamlining digital services,
transitioning to cloud, advancing automation of processes
and evolving citizen experiences.
Objective Build is now available to New Zealand customers,
and is already processing building consents at a number of
customer sites. Feedback from customers and the wider
construction industry has been overwhelmingly positive.
Our development team in Palmerston North, New Zealand
is continuing to evolve this product directing effort into
improvements to the application, approval, and inspection
process. This market underpins an industry that represents
over 6% of the GDP of New Zealand.
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55
Ongoing investment in research
& development (R&D) resulted in the
launch of new products and significant
releases across the portfolio.
In FY2022 we invested $25 million, 24% of
our total revenue, in R&D and our ambitious
development program delivered. With new
products in market, we’re sustaining the
momentum of our flywheel of innovation;
producing outstanding software to generate
outstanding customer experiences.
Federated information governance
to tame the data sprawl. Discover,
organise and manage enterprise
information, from one place.
Software designed specifically
for regulation, compliance and
enforcement. Helping regulators
make informed, consistent decisions,
increase productivity and improve
safety outcomes.
Objective RegWorks is now available with the Objective
IQ interface, the design language that aligns it with
all Objective products. Intuitive navigation, enhanced
iconography, a new colour palette and improved visibility
of controls provides a highly interactive user experience.
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Declined due to outstanding compliance issues that are the subject of ongoing investigations
Built for complex environments with terabytes of data,
Objective 3Sixty connects information sources across an
enterprise to discover, organise and manage information from
a single control centre. It allows users to visualise and tag
information, manage records in-place or transfer documents
to long-term retention, from wherever it resides.
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Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 6
6
Our Business
CEO’s Report
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Financial Statements
OUR CUSTOMERS
Driving stronger
communities and
nations
Using Objective software, thousands of
public sector and financial services
organisations are developing policies
with impact, accelerating processes and
delivering innovative services.
HUB24
Better financial futures with document process
transformation
Three years of business growth at HUB24 meant that the
disclosure documentation had increased dramatically, and
the burden was slowing them down. Objective Keystone
delivered transformational change, to the administration and
reporting platform for financial advisors, with HUB24 now
able to bring new products and offers to market in half the
amount of time than before.
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Wage Inspectorate Victoria
Improving compliance and enforcement of
workplace laws in Victoria through holistic
oversight delivered by Objective RegWorks
Wage Inspectorate Victoria (WIV) investigates and enforces
Victoria’s wage theft laws and oversees child employment,
long service leave, and owner-drivers laws.
Objective RegWorks provides WIV with a joined-up view of
their business; enabling staff to see patterns emerging in the
enquiries and reports they receive, all of which helps focus
their resources in the right place. In their first 12 months
of operations, WIV has investigated hundreds of matters,
progressed some through to court and helped hundreds
of thousands of Victorians recoup monies owed to them.
Waitaki District Council
Paper to digital transformation generates positive
results for both the Council and their customers
Prior to Objective Trapeze, assessing building consents
at Waitaki District Council was completely paper-based –
comparing versions of plans, combining documents,
reorganising pages and manually stamping each page was
a tedious, time-consuming reality. Going digital has delivered
notable time and cost savings, allowing the council to
process consents faster with improved accuracy, delivering
positive outcomes for the community.
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Central Hawke’s Bay District Council
Streamlining building consent application
and processing
Faced with a booming construction industry and incredible
volumes of building consents flowing in, Central Hawke’s
Bay District Council was looking for an innovative approach
to manage the demand placed on their Planning and
Building team.
Objective Build is delivering a much more streamlined and
transparent process for building consent applications;
from lodging, inspections right through to the final Code
Compliance Certificate.
For the council’s customers, it’s easier, more intuitive and faster.
For the Planning and Building team Objective Build provides
a consistent way of receiving the data, which makes it more
efficient and means the council can be more responsive and
meet the needs of their customers. More often.
“Objective Build provides a more seamless process for
our customers, it’s easier, more intuitive and faster.
And for our staff it makes it more efficient and means
we can be more responsive to meet the needs of
our customers.”
Josh Lloyd
Community, Infrastructure & Development Manager
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Highlands and Island Enterprise
Fuelling digital collaboration in the Scottish
space industry
In Scotland, Highlands and Islands Enterprise (HIE) is
breaking new ground in the Scottish space industry with
the recent launch of their Space Hub Sutherland project.
The project aims to deliver a vertical launch spaceport on
Scotland’s North Coast – generating social and economic
benefits for the region.
A complex, and innovative project, Objective Connect
became the digital control room for the project’s many
stakeholders and documents – allowing the various teams
to track revisions, removing communication bottlenecks,
and ensuring a single source of truth is always maintained.
Counties Manukau Health
Accurate documents increase level of patient care
Managing more than 1,790 controlled documents for clinical
processes and corporate policies, maintaining accuracy in
regular review cycles has a direct impact on the quality of care
and medical outcomes for thousands of patients.
With Objective ECM, Counties Manukau Health implemented
a new notification and review process that streamlines
controlled document maintenance – ultimately resulting in
better outcomes for patients.
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Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 8
8
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CEO’S REPORT
Fellow shareholders,
As we close out financial year
2022 (FY2022), I reflect that
personal and professional lives
are finally beginning to return
to (the new) normal. I’ve also
been amazed by the unrelenting
enthusiasm and tenacity
demonstrated by our people to
keep delivering outstanding digital
government software.
FY2022 was an important year for Objective. From
a financial performance perspective, we sailed past
$100 million revenue for the first time, our annualised
recurring revenue (ARR) grew by 15% to over
$85 million and our profitability grew to $21 million,
or 30% up on FY2021. Our record investment of
$25 million in research and development (R&D)
brought major new product innovations to market,
we also added additional capabilities through
acquisition and we maintained a very robust balance
sheet that allows us to pursue to new opportunities.
Like all of the tech sector, we also found ourselves
in a war for talent and delays in filling open roles
impacted our ability to deliver on our ambitious
development program, which then translated to
delays in bringing our new products to market. So it
is a testament to the grit and tenacity of our teams
that both Objective Build and Objective Nexus were
launched in late FY2022.
These new products complement and extend our
existing product portfolio that continues to present
a compelling value proposition, and we welcomed
many new customers across every business line.
While these are really solid financial results, our net
ARR growth didn’t quite meet our expectations. We
were undoubtedly impacted by difficulty in engaging
with customers during periods of lockdown and
illness, but we simply didn’t execute on some of our
plans as expected and we ended the year shy of our
20% net ARR growth target.
Highlights of FY2022
It’s difficult to know where to begin summarising
the highlights of FY2022. None is more important or
significant than the other and the list is long.
New Zealand Police
I’ll begin with the signing of a new customer in
New Zealand Police, as this project is the ultimate
representation of our Mission in action, to deliver
outstanding software driving stronger communities
and nations.
In May 2022, the New Zealand Police selected
Objective for its Arms Information System and
Objective RegWorks will manage the registration and
licensing of all firearms in New Zealand. Establishing
this registry is one of the outcomes of the Royal
Commission into the attack on a Christchurch
mosque in 2019. We are deeply aware of the
significance of this project and proud to be working
with the team from New Zealand Police to deliver
such important national outcomes for the people
of New Zealand.
This was a competitive, multi-phase, tender process
that resulted in a five year, circa $13 million contract,
setting yet another record for the largest RegWorks
customer win, so far.
Launch of Objective Build
Still in New Zealand, we were extremely excited to
see the fruition of our deep investment in Objective
Build, in market and recently live at Central Hawke’s
Bay District Council. Feedback from both the
Council and those working in the construction
industry has been overwhelmingly positive.
$14 billion worth of construction applications
were processed through our existing platforms
of AlphaOne and GoGet, in New Zealand during
FY2022; with Objective Build now live, the
improvements to the application, approval and
inspection process will deliver significant benefits
to this important sector of the economy.
The final resolution of the investigation by the New
Zealand Commerce Commission into our acquisition
of Master Business Systems provides certainty
to customers and employees about our future
investment in Objective Build and the strategy to
push it forward.
9
Launch of Objective Nexus
Changing work practices over the past two years,
have brought into sharp relief the importance of staff
being able to securely access the information they
need, no matter where they’re working. This practice
is one of the benefits we’re delivering to our Content &
Process customers with the launch of Objective Nexus
– although it wasn’t the original impetus. We invested
heavily in the development of Objective Nexus over
the past two years to ensure our key information and
process management solution is delivered entirely as an
evergreen cloud solution – aligning our products closely
with macro factors guiding public sector IT decisions;
streamlining digital services which includes transitioning
to cloud, advancing automation of processes and
evolving citizen experiences. Gartner discusses these
trends in their Worldwide Government IT Spending
Forecast and related reports1 and we are witnessing
them play out in our day to day.
Embracing these trends, existing customers are starting
to move to Objective Nexus. The South Australian Fire
and Emergency Services Commission (SAFECOM), an
existing Objective ECM customer who has a strategy to
“modernise their IT systems, reduce their infrastructure
footprint and move workloads to the cloud” will shift
500 users to Objective Nexus. Taronga Zoo, a long-term
Objective Connect customer, will now implement
Objective Nexus to improve records and information
management practices, provide users with efficient
access and effective use of information while complying
with state-based legislation.
This program of work demonstrates that our
development strategy is on track and meeting market
needs, as is our ability to execute and bring new
products to market. It also highlights the value of the
relationships we have with our customers – when
customers choose additional products from our
portfolio to help them meet their evolving goals, we
are committed to ensure the trust they place in us is
returned in software that delivers outstanding outcomes
for them today, and into the future.
Acquisition of Simflofy and launch of
Objective 3Sixty
In March 2022 we welcomed North American based
software company, Simflofy to our family. Simflofy’s
technology tames the serious data sprawl prevalent
in today’s organisations, by connecting their business
systems, content management repositories and file
stores so that users can find information wherever
it is held. And from there, take action on that
information. Actions such as finding personally
identifiable information (that might need to be
redacted or protected), find duplicate documents or
records that might need consolidating, classifying
or disposal.
We call this Federated Information Governance,
and the technology complements and extends our
existing Content and Process suite, by accelerating
the development of Objective 3Sixty, an alternate
approach to the repository centric information
management framework we have built around
Objective ECM.
Objective 3Sixty is now available in all of our
geographic markets and the acquisition also opens
up new market opportunities for Objective – a
footprint of government, financial services and
insurance (FSI) and Fortune 500 organisations in
North America via established channel partners.
To accelerate the reach of Objective 3Sixty and other
Objective products in North America, we will actively
seek to strengthen our partners go-to-market whilst
also building out our direct engagement capability.
As with all of our acquisitions, we are investing in the
business to capture the significant opportunities we
see, but with the knowledge that it will take time to
fully play out.
ARR
15%
$85m
NPAT
30%
$21m
1 Gartner Forecasts Worldwide Government IT Spending to Grow 5% in 2022 – Press Release.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 10
Our Business
CEO’s Report
Directors’ Report
Financial Statements
CEO’S REPORT CONTINUED
FY2023 Outlook
As I observe the economic factors impacting
the tech sector more broadly than Objective’s
performance alone, I get an uncanny sense of
déjà vu. If you’ve followed us over time, you’ll know
this is not our first rodeo. We made it through the
dot.com crash in 2000, the GFC in 2008 and
numerous other “pullbacks”, “downturns” over
the years, with a disciplined approach to financial
management, and a focus on growth and
profitability. In fact, historically we’ve performed
better in downturns than boom times.
The linchpin to our success is our people. We are
fortunate to have some of the best and brightest
minds in the industry working here at Objective.
Living through the turmoil of repeated lockdowns
and altered work habits has had an impact on all of
us. In recognition of this impact, we’ve worked hard
throughout the year to ensure we are all aligned on
Objective’s Mission. We’ve implemented programs
to reinforce our values, build stronger connections
and attract new talent.
Our employee engagement
remains very strong, and at its core
it’s because our people know that
their work here makes a difference
in the communities that they live in.
Ensuring we have a stable team to deliver on
our plans and goals also requires investment in
their remuneration, particularly in a competitive
talent market. We’ve increased our investment
in our employees; to keep pace with the strength
of tech salaries and additional hiring to support
our growth plans.
Over numerous financial years, we’ve been actively
driving our revenue model to subscription-based
revenue, so that now, 95% of our software revenue
is recurring. This certainty of revenue gives us the
confidence to invest for the long term and ensure
that we look beyond the current financial year when
making decisions on product development, go to
market strategy and acquisitions.
Content & Process ARR growth is already looking
stronger in FY2023, although we do not expect
to see any meaningful ARR growth generated
by Objective 3Sixty until the second half. We will
prioritise ARR growth over growth in services or
perpetual right to use licence revenue. This strategy
also drives our product development decisions.
We’re investing in developing products that can
be deployed faster, with less services required at
implementation. We know this will subdue services
revenue growth in the near term, which is great for
customers, and it also makes our business more
scalable and more profitable in the future.
All new customers are contracting on subscription
models, whether they choose cloud or on-premise
deployments, and we expect to end perpetual right
to use licences for Objective ECM by June 2023 for
all customers.
Across the RegTech portfolio we expect to
see ongoing robust growth. We have invested
substantially in this business line over the past
two years and the revenue and ARR growth has
exceeded our expectations. FY2023 should see
our first RegWorks IQ implementations in the UK,
which we believe will have strong opportunities in
the years ahead.
With the NZCC matter finalised and our first
Objective Build customer go live in early July,
we have some catch up cricket in Planning and
Building in FY2023. I’m super pleased to report
that we already have 20 Councils signed up for
implementation just eight weeks into the new
financial year. This demand is a testament to the
work done by all the Build stakeholders over the
past two years. #Outstanding. We are also pushing
ahead with one of our favourite products in Objective
Trapeze. It has become the de facto standard in
council planning departments across Australia and
New Zealand and will be expanded with additional
capabilities in the year ahead.
The focus on profitability and cash generation that
is at the centre of our business model means that
we start FY2023 with a very strong balance sheet
position. We maintain our access to a wide range of
capital funding to invest in our existing business and
pursue corporate development. As tech valuations
temper we’re looking for greater impact acquisition
opportunities that fit our proven model.
We are sure that revenue and profit will grow in
FY2023 but there are a few one-off factors, such
tech salary growth, NZCC delays, starting ARR and
driving down customer service costs that will be a
light headwind. We see these effects as transitory
and some may even be mitigated during the
year ahead.
We have a resilient growth model, a great team and
an outstanding future. As always, we’re excited and
fully engaged in the opportunities ahead. Thanks
again for all your support.
This is an excerpt from the Letter to Our Shareholders, published to the ASX on 29 August 2022.
To access the full document, scan the QR code or click here
Operating Cash Flow
$31m
Dividends
11cps
Cash Balance
$64m
Tony Walls
CEO, Objective Corporation
11
Portfolio
BUSINESS LINE REVIEW
Content & Process
FY2022 Highlights
• Achieved a significant milestone as we welcomed
the first customers of Objective Nexus following
launch in 2HY2022. Conceptually evolved
from Objective ECM, Objective Nexus is a next
generation SaaS based platform providing
records compliance, enterprise scale information
management and process automation. Objective
Nexus offers a cloud only approach that
facilitates a transition for existing customers
and expands our addressable market for new
customer opportunities.
• Continued to support our existing Objective
ECM customers as they expand their usage of
Objective products driven by employee growth
and identification of new use cases, most notably
at Scottish Government and Kāinga Ora in New
Zealand. Demonstrating our flexible approach to
supporting customers on their transition to cloud,
we converted ACT Government from an
on-premise Objective ECM solution to a fully
hosted and managed environment.
• Went live at numerous customer sites with
Objective Gov365, allowing these organisations
to extend governance to where content is created
within the Microsoft Office 365 suite, including
Microsoft Teams, Microsoft Exchange and
Microsoft SharePoint.
• Acquisition and integration of Simflofy in 2HY2022
accelerated the development of Objective
3Sixty. The opportunity to implement federated
governance solutions for our customers,
supported by Objective’s strong brand name,
materially expands our addressable market in
Australia, New Zealand and United Kingdom.
We have also gained access to strong partner
and customer relationships in the North American
market which we will further develop to expand
Objective’s overall presence in these markets.
• Objective Connect continued to grow revenue
at over 20% driven by increased utilisation of
the product across large enterprises. Our team
released a new version of the Objective Connect
mobile app that enhances the collaboration
experience for the mobile workforce and
also expanded the capabilities provided by
the Objective Connect Public API which is
increasingly driving new customer acquisition.
• Objective Keystone R&D focused on enhancing
the functionality for public sector customers,
particularly in relation to integration with council
spatial data sets, development of a native
Geographic Information System (GIS) portal
and numerous enhancements to stakeholder
engagement functionality. These innovations
will support the separation of the go-to-market
strategy for public sector under the Keyplan
brand, whilst the Keystone brand remains
focused on the Financial Services market.
Revenue FY2022
$74.2m
8% Growth
FY2021: $68.9m
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 12
Our Business
CEO’s Report
Directors’ Report
Financial Statements
BUSINESS LINE REVIEW CONTINUED
RegTech
Portfolio
FY2022 Highlights
• New Zealand Police selected Objective RegWorks
for its Arms Information System, a nationwide
firearms registration and licensing solution that
will assist in the regulation of over 2 million
firearms in New Zealand. This five-year contract
totalling approximately NZ$13 million sets another
record for the biggest RegTech customer win.
• Deployment of Objective RegWorks at
CareSouth, a New South Wales-based
NGO that is committed to building stronger
communities with a focus on children, young
people, and families. The five-year partnership
will see CareSouth use Objective RegWorks
to streamline multiple processes, empower
staff, and improve governance as part of their
mission to build stronger communities. This is an
extension of the use case for Objective RegWorks
and demonstrates the breadth of the market
opportunity for the software.
• Completion of Objective Reach national
deployment, with the solution now live in all eight
Australian States & Territories and utilised by child
protection agencies in a world-first data search,
matching and information sharing solution to
protect children and families at risk of abuse.
• Completed the rollout of the Objective IQ design
language to Objective RegWorks and continued
investment in improvements to the scalability of
RegWorks that reduces the timeframe for future
implementations and supports the growth in new
customer accounts.
• Reorganised and streamlined the methods by
which we deliver implementation engagements
to align with other Objective products, enabling
the sharing of services resources across business
lines and consistency of customer experience.
• Commenced market development in the UK for
Objective RegWorks amongst existing Objective
customer base and new prospects.
• Throughout FY2022 we made a significant
investment in the RegTech team across R&D,
Consulting Services and go-to-market functions
in order to ensure the continuity of delivery
to existing customers and support growth in
the business.
Revenue FY2022
$20.4m
34% Growth
FY2021: $15.3m
13
Planning & Building
FY2022 Highlights
• Launch and first go-live for Objective Build,
a cloud-based, end-to-end planning and
consenting automation platform to manage
building approvals through councils. The market
response to Objective Build has been strong
with the “first five” customers committed to
the new platform, all of whom share our vision
for the product: to ensure safe, responsible
development, and support an industry that
contributes significantly to the economies in
which we operate.
• Challenges of a tight labour market for
engineering talent in New Zealand restricted
the ability to grow the R&D team, delaying
the delivery schedule for Objective Build.
This impacted our ability to deliver the
planned ARR growth in FY2022 and extended
the pre-revenue development period. The
enthusiastic market response to Objective Build
following launch underpins our commitment to
continue the rate of R&D investment to deliver
further modules that will drive future ARR growth.
• The finalisation of the New Zealand Commerce
Commission (NZCC) investigation has brought
certainty for Objective’s customers and
employees. This underpins the significant and
ongoing investment in innovation and go to
market capability in our Planning & Building
business line.
• Continued growth of Trapeze customer base
to over 200 councils in Australia and more than
350 customers globally, demonstrates increasing
adoption of Objective Trapeze as the market
standard in ANZ amongst local governments
and the service providers who interact with
them. Overall customer growth for FY2022 was
however slower than expected due to customers’
work from home restrictions that restricted
the ability for us to meet customers in person,
especially in the UK.
Portfolio
Revenue FY2022
$11.8m
10% Growth
FY2021: $10.7m
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 14
Our Business
CEO’s Report
Directors’ Report
Financial Statements
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 2022.
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 seven 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 technology businesses.
Mr Darc Rasmussen
Independent Non‑Executive Director
Darc was appointed as a Non-Executive Director in 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).
Mr Stephen Bool
Non‑Executive Director
Stephen joined the Board in January 2022, after 17 years with
Objective Corporation Limited in senior leadership positions,
most recently as Chief Operating Officer over the past five years.
In that time, Stephen made important contributions across the
entire organisation, helping shape the culture and operating
structures that support our current business success. Prior to
joining Objective, Stephen had served in senior leadership roles
at US multinational Software and Consulting Services companies
including PeopleSoft (Oracle), and SPL WorldGroup (Oracle)
during a career that spans over 30 years in the industry. Stephen
holds a Bachelor Degree in Computer Science and Master
Degree in Business Administration.
Company Secretary
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.
DIRECTORS’ REPORT 15
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 $8,489,000 was paid on 16 September 2021.
Since the end of the financial year, the directors have recommended the payment of a final fully franked dividend of 5 cents per
ordinary share and a final unfranked dividend of 6 cents per ordinary share. The aggregate amount of the dividends expected to
be paid on 14 September 2022 and 19 September 2022 is $10,434,000. 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 2022 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 2022 the Company had 94,856,118 (2021: 94,010,371) fully paid ordinary shares on issue.
Share options and rights
Unissued shares under options and rights
As at the date of this report unissued ordinary shares in the Company under share based payment arrangements are:
Options on Issue
Employee options exercisable at $1.17
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
Employee options exercisable at $14.85
Total options on issue
Weighted average exercise price
Rights on Issue
Rights exercisable at $nil
Rights exercisable at $nil
Rights exercisable at $nil
Total rights on issue
Weighted average exercise price
2022
2021
Number
Expiry Date
Number
Expiry Date
125,000
24/02/2025
150,000
24/02/2025
–
29/07/2028
200,000
29/07/2028
593,750
01/01/2029
805,000
01/01/2029
–
01/04/2029
12,500
01/04/2029
412,500
01/07/2030
541,250
01/07/2030
200,000
31/01/2025
200,000
31/01/2025
100,000
30/04/2027
–
–
1,431,250
$6.19
1,908,750
$4.99
2022
2021
Number
Expiry Date
Number
Expiry Date
50,000
22/12/2026
21/03/2027
28/02/2027
4,000
5,000
59,000
$nil
–
–
–
–
n/a
–
–
–
Details of the options and rights on issue under each share based payment arrangement are contained in Notes 18 and 27 to the
financial statements.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 16
Our Business
CEO’s Report
Directors’ Report
Financial Statements
DIRECTORS’ REPORT
Shares issued on exercise of options
During the year ended 30 June 2022, a total of 100,000 options
were granted and 638,750 options were exercised and converted
to 638,750 ordinary shares in the Company. 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.
Refer Note 18 for further details.
Since the end of the financial year, the Group issued
82,500 ordinary shares of the Company as a result of
the exercise of 82,500 options at various prices under the
Employee Incentive Plan, and funded via a combination of
interest free limited recourse loans provided by the issuing
entity to employees under the current Employee Incentive Plan
and cash consideration of $148,750 and $137,500 respectively.
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 FY2022
reflecting revenue growth across all lines of business. 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 2022 we also expanded
our business through the acquisition of Simflofy, Inc.
The Directors have identified opportunities to continue to grow
the business in FY2023 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
On 12 August 2022, the Company settled in full the pecuniary
penalty, in the amount of NZ$1,540,000, as determined by
The New Zealand High Court for breach of section 46 of the
New Zealand Commerce Act 1986. Payment of the penalty
brings this matter to a close.
For dividends resolved to be paid after 30 June 2022, 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.
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: http://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
Stephen Bool
Total directors’ interest
17
Number of
ordinary
shares
62,000,000
5,600,000
100,000
180,214
125,000
Number of
options
–
–
–
50,000
–
68,005,214
50,000
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
Stephen Bool
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
6
12
12
12
12
6
2
n/a
2
2
n/a
2
n/a
2
2
n/a
Auditor’s independence declaration
A copy of the auditor’s independence declaration in relation to the financial year is included on page 65.
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 18
Our Business
CEO’s Report
Directors’ Report
Financial Statements
DIRECTORS’ REPORT
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 2022 and whose remuneration details are outlined
in this Remuneration Report.
Directors
Tony Walls
Gary Fisher
Nick Kingsbury
Darc Rasmussen
Stephen Bool
Chairman and Chief Executive Officer
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director (appointed 1 January 2022)
Executive key management personnel
Ben Tregoning
VP Corporate Services and 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 month’s 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 26th November 2021 Annual General Meeting (AGM)
At the 2021 AGM, 99.5% of the votes received supported the adoption of the remuneration report for the year ended 2021. 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.
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 ($’000)
Basic earnings per share
Dividends
Share price at 30 June ($)
Share buy-backs ($’000)
2022
2021
2020
2019
2018 1
106,505
19,563
20.7 cps
11.0 cps
13.73
–
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
6.0 cps
2.80
35
63,110
7,381
8.0 cps
5.0 cps
3.50
–
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
(SBP)
Salary
and fees
$
Bonus
$
Other
$
Leave
entitlements
$
Options
$
POST
EMPLOY-
MENT
Super-
annuation
$
% per-
formance
related
%
Total
$
Value of
SBP as %
of remun‑
eration
%
2022
N Kingsbury
T Walls
G Fisher
D Rasmussen
S Bool
66,362
276,432
–
45,662
31,818
–
–
–
–
–
–
–
–
–
–
–
(313)
–
–
–
–
–
–
9,017
–
–
66,362
23,568
299,687
–
4,566
1,591
–
59,245
33,409
–
–
–
–
–
B Tregoning
328,508
85,692
1,200
1,940
26,536
23,568
467,444
18.3%
2021
N Kingsbury
T Walls
G Fisher
D Rasmussen
B Tregoning
65,259
278,306
–
45,662
278,321
–
–
–
–
–
–
–
–
–
2,682
–
–
85,275
1,200
5,430
–
–
–
20,288
17,635
–
65,259
21,694
302,682
–
4,338
21,694
–
70,288
409,555
–
–
–
–
20.8%
–
–
–
15.2%
–
5.7%
–
–
–
28.9%
4.3%
The bonuses in the above tables are short-term incentives fully vested to the Executive for that year. The cash bonuses are determined by
the Board based on overall company performance and achievement of financial and operational targets within individual areas of control.
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 20
Our Business
CEO’s Report
Directors’ Report
Financial Statements
Details of options over ordinary shares granted, vested and lapsed for Directors or other KMP during the year ended 30 June 2022 are
set out below:
KMP
D Rasmussen
B Tregoning
Weighted average exercise price
Number of
options at
30 June 2021
Number
exercised
Number of
options at
30 June 2022
Number
vested and
available for
exercise at
30 June 2022
200,000
130,000
$3.07
(150,000) 1
(63,750) 2
$2.75
50,000
66,250
$3.67
–
–
n/a
Amount
paid on
shares
412,500
175,312
n/a
Amount
unpaid on
shares
–
–
n/a
1 The value of options exercised during the year was $16.29 per share and is calculated as the market price of the Company’s shares on the ASX as at the close
of trading on the date the options were exercised, after deducting any exercise price.
2 The value of options exercised during the year was $12.56 per share and is calculated as the market price of the Company’s shares on the ASX as at the close
of trading on the date the options were exercised, after deducting any exercise price.
No new options were granted to KMP during the year ended 30 June 2022 (2021: nil).
Shareholdings of Key Management Personnel
KMP
T Walls
G Fisher
N Kingsbury
D Rasmussen
S Bool
B Tregoning
Number of
shares at
30 June 2021
62,000,000
7,600,000
200,000
30,214
–
Share options
exercised
Shares held
at date of
appointment
Shares sold
Number of
shares at
30 June 2022
–
–
–
150,000
–
–
–
–
–
125,000
–
62,000,000
(2,000,000)
5,600,000
(100,000)
–
–
100,000
180,214
125,000
162,509
298,759
63,750
–
(200,000)
Signed in accordance with a resolution of the Board of Directors.
Tony Walls
Director
Date: 26 August 2022
DIRECTORS’ REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 30 JUNE 2022
21
Revenue
Cost of sales
Gross profit
Other gains and losses
Interest expense and other finance costs
Share of profit/(loss) from joint venture
Distribution expenses
Research and development expenses
Administration and other operating expenses
NZCC settlement
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
2022
$’000
106,505
(5,621)
100,884
34
(472)
24
(39,425)
(25,019)
(11,181)
(1,440)
23,405
(3,842)
19,563
2021
$’000
95,056
(5,327)
89,729
(44)
(562)
(6)
(36,175)
(23,116)
(9,599)
–
20,227
(4,141)
16,086
Cents
Cents
20.7
20.4
17.2
16.8
Notes
2 & 4
5
17
5
6
3
3
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 22
Our Business
CEO’s Report
Directors’ Report
Financial Statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
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
2022
$’000
2021
$’000
19,563
16,086
20
(642)
(642)
78
78
18,921
16,164
18,921
16,164
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
23
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
CONSOLIDATED
Notes
2022
$’000
2021
$’000
7
8
9
10
8
11
12
14
13
10
15
9
16
17
25
16
17
25
18
20
21
63,794
17,638
2,972
2,007
86,411
33
4,258
6,712
2,270
48,360
12,974
2,693
1,750
65,777
86
4,707
8,365
2,170
40,726
35,544
6
54,005
140,416
11,998
48,690
3,333
312
6,959
394
–
50,872
116,649
11,197
40,166
3,010
476
4,960
399
71,686
60,208
5,884
889
–
6,773
78,459
61,957
11,310
(10,807)
61,454
61,957
8,488
645
357
9,490
69,698
46,951
6,943
(10,372)
50,380
46,951
The above statement of consolidated financial position should be read in conjunction with the accompanying notes.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 24
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Financial Statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED
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
Share options exercised
Dividends provided for or paid
Shares issued under acquisition
Treasury shares acquired and issued
Total transactions with owners in their capacity as owners
As at 30 June 2021
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
Share options exercised
Dividends provided for or paid
Shares issued under acquisition
Treasury shares acquired and issued
Total transactions with owners in their capacity as owners
Notes
Share capital
$’000
Reserves
$’000
5,448
(10,950)
21
20
20
18
19
18
18
21
20
20
18
19
18
18
–
–
–
–
1,495
–
–
–
1,495
6,943
–
–
–
–
1,188
–
2,900
279
4,367
–
78
78
500
–
–
–
–
500
(10,372)
–
(642)
(642)
486
–
–
–
(279)
207
As at 30 June 2022
11,310
(10,807)
Retained
earnings
$’000
40,845
16,086
–
16,086
–
–
(6,551)
–
–
(6,551)
50,380
19,563
–
19,563
–
–
(8,489)
–
–
(8,489)
61,454
Total
$’000
35,343
16,086
78
16,164
500
1,495
(6,551)
–
–
(4,556)
46,951
19,563
(642)
18,921
486
1,188
(8,489)
2,900
–
(3,915)
61,957
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
25
CONSOLIDATED
Notes
2022
$’000
2021
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Dividends 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
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
22(a)
25
13
22(c)
22(c)
121,526
(86,610)
133
17
(418)
(4,108)
30,540
53
145
(3,673)
(1,213)
–
106,488
(77,701)
93
–
(516)
(3,668)
24,696
441
48
(18,725)
(1,113)
(3)
(4,688)
(19,352)
(8,459)
(3,144)
1,187
(10,416)
15,436
48,360
(2)
(6,565)
(2,927)
1,495
(7,997)
(2,653)
51,048
(35)
48,360
7
63,794
1 Made up of the purchase consideration for the acquisition of Simflofy, Inc in the amount of $4,024,000 (USD 2,885,000) net of cash acquired of $755,000
(USD 546,000) and second instalment payment of $404,000 (NZD 420,000) made in settlement of the deferred consideration payable in relation to the
acquisition of Master Business Systems Limited, which was acquired in FY2020. The comparative amount is made up of the purchase consideration for
the acquisition of Objective RegTech Pty Limited in the amount of $18,371,000 net of cash acquired of $5,626,000 and first instalment payment of $353,000
(NZD 420,000) made in settlement of the deferred consideration payable in relation to the acquisition of Master Business Systems Limited.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 26
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Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
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.
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 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.
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 2021. Their adoption has not had any material
impact on the disclosures or on the amounts reported in these
financial statements.
AASB 2021‑3 Amendments to Australian Accounting
Standards – Covid‑19‑Related Rent Concessions beyond
30 June 2021
In April 2021, the AASB issued AASB 2021-3 Amendments
to Australian Accounting Standards – Covid‑19‑ Related Rent
Concessions beyond 30 June 2021. When the AASB published
the amendments to AASB 16 in June 2020, a lessee was
permitted to apply the practical expedient to rent concessions
for which any reduction in lease payments affected payments
originally due on or before 30 June 2021. Due to the ongoing
nature of the COVID-19 pandemic, the April 2021 amendment
extends the practical expedient to apply to such payments
originally due on or before 30 June 2022.
27
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
11, 12, 13
12, 16
17
6, 14
Recoverability of deferred tax assets
Useful life for depreciable assets
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.
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:
Content & Process
RegTech
Planning & Building
Total revenue from contracts with customers
2022
$’000
2021
$’000
74,220
20,367
11,779
106,366
68,916
15,252
10,747
94,915
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 28
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CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 2 Segment information (continued)
Product groups
Description
Content & Process
RegTech
Planning & Building
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. It also 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.
Includes results from the sale of Objective RegWorks and Objective Reach 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.
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.
Corporate
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 2022 and the comparative period.
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.
Revenue by location:
Australia
United Kingdom
New Zealand
Rest of the world
Total revenue
CONSOLIDATED
2022
$’000
2021
$’000
80,801
11,266
13,826
612
106,505
73,198
9,483
12,343
32
95,056
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 2022
Reportable segment assets
Reportable segment liabilities
30 June 2021
Reportable segment assets
Reportable segment liabilities
Asia Pacific
$’000
Europe
$’000
Total
$’000
80,106
68,391
17,314
9,756
97,420
78,147
64,829
59,853
14,106
9,369
78,935
69,222
Reconciliation of reportable segment assets and liabilities
Assets
Reportable segment assets
Intangible assets
Deferred tax assets
Consolidated total assets
Liabilities
Reportable segment liabilities
Current tax liabilities
Consolidated total liabilities
29
2022
$’000
2021
$’000
97,420
40,726
2,270
78,935
35,544
2,170
140,416
116,649
78,147
312
78,459
69,222
476
69,698
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
Note 3 Earnings per share
Basic earnings per share – cents
2022
$’000
2021
$’000
24,286
8,026
13,179
6,244
2,270
54,005
23,832
8,842
16,017
11
2,170
50,872
CONSOLIDATED
2022
20.7
2021
17.2
Profit for the year attributable to shareholders of Objective Corporation Limited ($’000)
19,563
16,086
Weighted average number of ordinary shares used in the calculation of basic earnings per share
94,423,179
93,726,374
Diluted earnings per share – cents
Profit for the year attributable to shareholders of Objective Corporation Limited ($’000)
20.4
16.8
19,563
16,086
Weighted average number of ordinary shares used in the calculation of diluted earnings per share 1
95,936,929
95,778,874
1 Calculated by increasing the total weighted average number of shares used in calculating basic earnings per share by outstanding options of 1,513,750.
Options granted under the Employee Incentive Plan and the Employee Equity Plan are included in the determination of diluted earnings per share to the extent
to which they are dilutive.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 30
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Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
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
2022
$’000
2021
$’000
106,366
94,915
138
1
92
49
106,505
95,056
CONSOLIDATED
2022
$’000
2021
$’000
4,684
101,682
106,366
4,145
90,770
94,915
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.
31
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
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.
Implementation and
consulting revenue
As defined in the contract 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.
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.
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 32
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CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 4 Revenue from contracts with customers (continued)
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.
Note 5 Profit and loss items
Expenses:
Depreciation expenses – property, plant and equipment
Depreciation expenses – right-of-use assets
Amortisation expenses and impairment – intangible assets
Expected credit loss (allowance)/reversal – trade and other receivables
Interest expense – lease liabilities
Other finance costs
Employee benefits expenses
Superannuation expenses
Share based payment expenses
NZCC settlement
Other gains and losses:
Net foreign exchange gains/(losses)
Net profit on disposal of property, plant and equipment
33
CONSOLIDATED
2022
$’000
2021
$’000
(1,877)
(2,441)
(1,206)
160
(421)
(51)
(1,930)
(2,392)
(549)
(195)
(510)
(52)
(57,309)
(52,386)
(4,127)
(486)
(1,440)
17
16
(3,533)
(500)
–
(56)
12
Recognition and measurement
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.
Employee benefits expense
Employee benefits expense includes salaries, wages and other employment related entitlements.
Superannuation
Contributions made by the Group to employee superannuation funds, which are defined contribution plans are charged as an expense
when incurred.
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 34
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CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 5 Profit and loss items (continued)
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.
NOTE 6 INCOME TAX EXPENSE
(a) Components of income tax expense
Current tax expense on profits for the year
Deferred tax (credit)/expense related to movements in deferred tax balances
Income tax under/(over) provided in prior years
Income tax expense
CONSOLIDATED
2022
$’000
4,261
(99)
(320)
3,842
2021
$’000
3,261
836
44
4,141
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
Tax effect of cash contributions to employee share trust
Recoupment in the current year of previously unrecognised tax losses
Tax losses not recognised as deferred tax assets
Income tax expense
CONSOLIDATED
2022
$’000
23,405
7,022
276
147
472
7,917
(422)
(320)
(2,111)
(1,145)
(77)
–
3,842
2021
$’000
20,227
6,068
68
150
28
6,314
(451)
44
(1,886)
–
–
120
4,141
35
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.
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 2020, Objective RegTech Pty Limited, a wholly-owned Australian resident subsidiary, joined the tax-consolidated group.
Tax expense/credit, 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.
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 equivalents 1
CONSOLIDATED
2022
$’000
2021
$’000
18,092
45,702
63,794
11,600
36,760
48,360
1 The cash and cash equivalents disclosed above and in the consolidated statement of cash flows include $1,460,000 (2021: $1,460,000) 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 three months or less from acquisition.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 36
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 8 Trade and other receivables
CONSOLIDATED
2022
2021
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
(a) Movement in expected credit loss allowance is as follows:
16,835
843
17,678
(40)
17,638
–
17,638
–
–
–
–
33
33
12,333
838
13,171
(197)
12,974
–
12,974
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
2022
$’000
197
(160)
–
3
40
–
–
–
–
86
86
2021
$’000
5
195
–
(3)
197
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.
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 assets 1
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
37
CONSOLIDATED
2022
$’000
2021
$’000
2,972
48,690
2,693
40,166
Contract
assets
$’000
2,693
(2,693)
2,985
–
–
–
–
(13)
2,972
Contract
liabilities
$’000
(40,166)
–
–
5,064
40,166
(53,680)
(699)
625
(48,690)
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.
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 liabilities 1
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
Contract
assets
$’000
1,327
(1,327)
2,699
–
–
–
–
(6)
Contract
liabilities
$’000
(36,375)
–
–
1,012
36,375
(40,486)
(766)
74
2,693
(40,166)
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 38
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 9 Contract assets and contract liabilities (continued)
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 2022 was $48,690,000
(2021: $40,166,000) 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
2022
$’000
1,955
52
2,007
6
6
2021
$’000
1,699
51
1,750
–
–
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.
Note 11 Property, plant and equipment
CONSOLIDATED
Plant and
equipment
$’000
Leasehold
improvements
$’000
Motor
vehicles
$’000
Capital work
in progress
$’000
30 June 2022
Gross carrying amount – cost
Accumulated depreciation
Total property, plant and equipment, net
Represented by:
Net carrying amount at 1 July 2021
Additions
Additions recognised on business combination (Note 25)
Disposals
Depreciation expenses
Transfers
Exchange differences
7,454
(4,955)
2,499
2,415
1,166
–
(112)
(939)
–
(31)
6,391
(4,664)
1,727
2,246
415
–
–
(919)
–
(15)
Net carrying amount at 30 June 2022
2,499
1,727
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
Additions recognised on business combination (Note 25)
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
72
(40)
32
46
22
–
(16)
(19)
–
(1)
32
88
(42)
46
89
27
–
(35)
(36)
–
1
46
–
–
–
–
–
–
–
–
–
–
–
–
–
–
696
–
–
–
–
(696)
–
–
39
Total
$’000
13,917
(9,659)
4,258
4,707
1,603
–
(128)
(1,877)
–
(47)
4,258
12,617
(7,910)
4,707
5,010
1,139
518
(36)
(1,930)
–
6
4,707
Recognition and measurement
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 40
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 11 Property, plant and equipment (continued)
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
Useful life
Plant and equipment
2 – 10 years
Leasehold improvements
2 – 7 years or shorter of lease term
Motor vehicles
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 – new leases
Acquired through business combination (Note 25)
Depreciation of right-of-use assets
Foreign exchange differences
Net carrying amount at 30 June
CONSOLIDATED
2022
$’000
2021
$’000
14,847
(8,135)
6,712
8,365
910
–
(2,441)
(122)
6,712
14,132
(5,767)
8,365
9,162
–
1,502
(2,392)
93
8,365
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.
41
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.
Note 13 Intangible assets
30 June 2022
Gross carrying amount – cost
Accumulated amortisation
Total intangible assets, net
Represented by:
Net carrying amount at 1 July 2021
Additions
Additions recognised on business combination (Note 25)
Amortisation expenses and impairment
Foreign exchange differences
Net carrying amount at 30 June 2022
30 June 2021
Gross carrying amount – cost
Accumulated amortisation
Total intangible assets, net
Represented by:
Net carrying amount at 1 July 2020
Additions
Additions recognised on business combination (Note 25)
Amortisation expenses and impairment
Foreign exchange differences
Net carrying amount at 30 June 2021
CONSOLIDATED
Intellectual
property
$’000
Brand
names
$’000
Other
intangibles
$’000
Goodwill
$’000
Total
$’000
2,162
(2,162)
–
–
–
–
–
–
–
2,244
(2,244)
–
–
–
–
–
–
–
169
–
169
173
–
–
–
(4)
169
173
–
173
174
–
–
–
(1)
173
4,547
(2,417)
2,130
2,655
–
693
(1,206)
(12)
2,130
3,865
(1,210)
2,655
1,436
3
1,765
(548)
(1)
2,655
38,427
–
38,427
45,305
(4,579)
40,726
32,716
35,544
–
6,237
–
(526)
–
6,930
(1,206)
(542)
38,427
40,726
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
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 42
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 13 Intangible assets (continued)
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 and measured at fair value at the date of
acquisition and patents. Brand names of $169,000 (2021: $173,000) 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 and patents
Useful life
10 years
Customer relationship list and software
1 – 10 years
Brand names
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 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 CGUs identified as follows:
Objective Keystone
Objective Planning and Building 1
Objective RegTech
Objective 3Sixty
Total goodwill
1 CGU in New Zealand.
43
2022
$’000
5,756
9,714
16,720
6,237
38,427
2021
$’000
5,973
10,023
16,720
–
32,716
The recoverable amount of Objective Keystone 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 with an estimated general long-term
continuous annual growth of not more than 15.0% (2021: 15.0%). The discount rate used of 15.5% (2021: 15.5%) is pre-tax and reflects
specific risks related to the relevant operation. A terminal value based on the EBITDA exit multiple of 5x 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 with an estimated general long-term continuous
annual growth of not more than 20.0% (2021: 20.0%). The discount rate used of approximately 15.5% (2021: 15.5%) is pre-tax and reflects
specific risks related to the relevant operation. A terminal value based on the EBITDA exit multiple of 5x was used in the calculation.
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 with an estimated general long-term continuous
annual growth of not more than 25.0% (2021: 25.0%). The discount rate used of approximately 15.5% (2021: 15.5%) is pre-tax and reflects
specific risks related to the relevant operation. A terminal value based on the EBITDA exit multiple of 5x was used in the calculation.
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.
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
CONSOLIDATED
2022
$’000
2,298
(28)
2,270
2021
$’000
2,247
(77)
2,170
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 44
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 14 Net deferred tax assets (continued)
(b) Movement in deferred tax balances
CONSOLIDATED
Opening
balance
$’000
Charged to
profit or loss
$’000
Acquisition
of subsidiary
$’000
Other
$’000
Closing
balance
$’000
30 June 2022
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
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
(c) Tax losses
135
–
1,595
286
115
(77)
–
–
116
2,170
122
(34)
1,057
412
–
–
–
164
57
1,778
(43)
33
178
(34)
(30)
49
6
–
(60)
99
42
34
162
(126)
115
49
(1,130)
–
18
–
–
–
–
–
–
–
–
–
–
(29)
–
377
–
–
(126)
1,130
–
41
(836)
1,393
–
–
1
–
–
–
–
–
–
1
–
–
(1)
–
–
–
–
(164)
–
(165)
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit
CONSOLIDATED
2022
$’000
4,760
997
92
33
1,774
252
85
(28)
6
–
56
2,270
135
–
1,595
286
115
(77)
–
–
116
2,170
2021
$’000
5,127
1,122
Potential tax assets of approximately $997,000 (2021: $1,122,000) 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 2022. 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.
45
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
2022
$’000
6,870
5,001
127
2021
$’000
7,463
3,637
97
11,998
11,197
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.
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 46
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 16 Lease liabilities
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
CONSOLIDATED
2022
$’000
3,333
5,884
9,217
2021
$’000
3,010
8,488
11,498
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 4.19% (2021: 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
NZCC settlement 1
Total current provisions
Non-current
Employee benefits
Other provisions
Total non-current provisions
Total provisions
CONSOLIDATED
2022
$’000
5,519
1,440
6,959
493
396
889
2021
$’000
4,960
–
4,960
512
133
645
7,848
5,605
1 NZCC settlement relates to provision raised in relation to the agreed settlement with the New Zealand Commerce Commission. The New Zealand High Court
has issued its decision on the amount of the pecuniary penalty the Company is to pay for breach of section 46 of the New Zealand Commerce Act 1986.
The Company and the New Zealand Commerce Commission had recommended a penalty of NZ$1,540,000. The Court has agreed to the proposed penalty,
which was subsequently paid in full on 12 August 2022.
47
Recognition and measurement
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
94,856,118 fully paid ordinary shares (2021: 94,010,371)
Movement:
Opening balance
Issue of shares 1
Shares issued under acquisition (Note 25)
Share options exercised by employees 2
Shares issued to OCL Trust
Closing balance
CONSOLIDATED
2022
2021
Number
of shares
$’000
Number
of shares
$’000
94,010,371
6,943
93,327,871
5,448
135,000
186,997
503,750
20,000
230
2,900
958
279
225,000
–
457,500
–
500
–
995
–
94,856,118
11,310
94,010,371
6,943
1 Represents issue of ordinary shares as a result of options exercised under the Group’s Employee Incentive Plan and in cash.
2 Represents proceeds from share issues associated with limited recourse loans issued under the Objective Employee Incentive Plan and the Objective
Employee Equity Plan (Refer Note 20).
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 48
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 18 Issued capital (continued)
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.
The OCL Trust Employee Equity Plan
On 22 December 2021, the Group established The Objective Corporation Limited Employee Share Trust (OCL Trust) and appointed
Certane CT Pty Ltd to administer the Group’s employee share schemes as the Trustee of the Trust for the purposes of holding certain
shares in the Company on trust for the benefit of the participants in the Objective Employee Incentive Plan and Objective Employee
Equity Plan.
The OCL Trust is consolidated, as the substance of the relationship is that the trust is controlled by the Group. Through contributions
to the OCL Trust, the Group typically purchases shares in the Company. Shares acquired are held by the OCL Trust, are disclosed as
Treasury shares and are deducted from total equity.
Refer Note 27 for further details.
Note 19 Dividends and franking credits
(a) Dividends
Dividend type
Cents per share
Franking
2022 Final Franked 1
2022 Final Unfranked 1
2021 Final
2020 Final
5.00
6.00
9.00
7.00
100%
Nil
100%
100%
Total amount
$’000
4,743
5,691
8,489
6,551
Date paid/payable
14 September 2022
19 September 2022
16 September 2021
16 September 2020
1 The final franked dividend and final unfranked dividend for the year ended 30 June 2022 has not been recognised in this financial report because it was
resolved to be paid after 30 June 2022.
(b) Franking credits
The balance of franking credit account at balance date adjusted for the payment of current tax liability
2022
$’000
1,350
2021
$’000
2,514
49
Note 20 Reserves
Treasury shares reserve
CONSOLIDATED
Share
buy-back
reserve
Share-based
payments
reserve
Foreign
currency
translation
reserve
No. of shares
$’000
$’000
$’000
$’000
Total
$’000
30 June 2022
Opening balance
Share-based payment
Shares in the Company purchased by OCL
Trust
Translation of foreign operations
Closing balance
30 June 2021
Opening balance
Share-based payment
Translation of foreign operations
Closing balance
–
–
20,000
–
20,000
–
–
–
–
–
–
(279)
–
(279)
–
–
–
–
(10,812)
–
–
–
1,865
486
–
–
(10,812)
2,351
(1,425)
(10,372)
–
–
(642)
(2,067)
486
(279)
(642)
(10,807)
(10,812)
–
–
(10,812)
1,365
500
–
1,865
(1,503)
(10,950)
–
78
500
78
(1,425)
(10,372)
Treasury shares reserve
Treasury shares are ordinary shares in the Company held by OCL Trust in respect of equity incentive plan awards to employees.
OCL Trust is a controlled entity and holds shares in the Company. As a result, the OCL Trust’s shareholding in the Company is
disclosed as Treasury shares and deducted from total equity (in the Treasury Shares Reserve). When treasury shares are sold
or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the
transaction, if any, is transferred to/from retained earnings.
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.
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 50
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
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
Note 22 Cash flow information
(a) Reconciliation of profit for the year to net cash inflow from operating activities
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/(reversal) – trade and other receivables
Share of (profit)/loss from joint venture, net of dividends received
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase/(decrease) in other operating assets
Increase in contract assets
Increase in trade and other payables
Increase in contract liabilities
Decrease in current tax balances
(Increase)/decrease in deferred tax assets
Increase in provisions
Increase in other operating liabilities
Net cash inflow from operating activities
CONSOLIDATED
2022
$’000
50,380
19,563
(8,489)
61,454
2021
$’000
40,845
16,086
(6,551)
50,380
CONSOLIDATED
2022
$’000
2021
$’000
19,563
16,086
3,084
2,441
486
(17)
(27)
(160)
(6)
(4,505)
(217)
(278)
621
7,856
(165)
(100)
1,921
43
2,479
2,392
500
(12)
42
195
6
(1,206)
337
(1,367)
1,058
3,024
(529)
1,002
646
43
30,540
24,696
51
(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
(c) Reconciliation of movements in liabilities to cash flows arising from financing activities
CONSOLIDATED
2022
$’000
21
2021
$’000
26
30 June 2022
Opening balance at 1 July 2021
Cash flows from financing activities
Dividends declared (Note 19)
Additions arising from new leases, net of interest
Additions recognised on business combination (Note 25)
Foreign exchange movement
Total liabilities from financial activities
30 June 2021
Opening balance at 1 July 2020
Cash flows from financing activities
Dividends declared (Note 19)
Additions arising from new leases, net of interest
Additions recognised on business combination (Note 25)
Foreign exchange movement
Total liabilities from financial activities
CONSOLIDATED
Dividends
payable 1
$’000
Lease
liabilities
$’000
97
(8,459)
8,489
–
–
–
127
111
(6,565)
6,551
–
–
–
97
11,498
(3,144)
–
1,015
–
(152)
9,217
12,745
(2,927)
–
27
1,502
151
11,498
Total
$’000
11,595
(11,603)
8,489
1,015
–
(152)
9,344
12,856
(9,492)
6,551
27
1,502
151
11,595
1 Dividends payables are included as part of the Trade and other payables balance on the consolidated statement of financial position.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 52
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
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 2022 has been assessed to consider the impact of the COVID-19 pandemic and no material
recoverability issues have been identified.
The below table summarises the Group’s exposure to credit risk at the end of the reporting period:
Cash and cash equivalents 1
Trade and other receivables, at gross
Ageing analysis of trade and other receivables is as follows:
Fully performing debts
Past due more than 30 days 2
Past due more than 60 days 2
Past due more than 90 days 2
Total
CONSOLIDATED
2022
$’000
63,794
17,678
15,610
1,287
80
701
2021
$’000
48,360
13,171
10,418
1,258
774
721
17,678
13,171
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 considered and did not identify 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 2022 is $2,068,000 (2021: $2,753,000). 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.
53
The summary quantitative data about the Group’s exposure to foreign currency risk is as follows:
30 June 2022
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Other liabilities
30 June 2021
Cash and cash equivalents
Trade and other receivables
GBP
’000
58
8
–
–
10
20
NZD
’000
16
1,376
21
1,440
11
1,442
SGD
’000
2
18
–
–
1
–
USD
’000
273
–
405
187
63
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 2022
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 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
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%
4
181
1
43
229
(5)
(222)
(2)
(53)
(282)
2
92
–
16
110
(2)
(113)
–
(19)
(134)
4
181
1
43
229
(5)
(222)
(2)
(53)
(282)
2
92
–
16
110
(2)
(113)
–
(19)
(134)
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 54
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 23 Financial risk management and fair values (continued)
(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 2022
Trade and other payables
Lease liabilities
Contingent consideration
Total non-derivatives
30 June 2021
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
11,998
3,610
410
16,018
11,197
3,407
392
14,996
–
6,255
–
6,255
–
7,966
392
8,358
–
–
–
–
–
1,112
–
1,112
11,998
9,865
410
22,273
11,197
12,485
784
24,466
11,998
9,217
394
21,609
11,197
11,498
756
23,451
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
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term shareholder
value and ensure that the Group can fund its operations and continue as a going concern. The Group’s capital and debt include
ordinary share capital and financial liabilities, supported by financial assets.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure
in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to
shareholders and share issues.
During the current year, the Group issued $2,900,000 in ordinary shares to pay for obligations under an acquisition agreement
(Note 25(a)). The total equity of the Group at 30 June 2022 was $61,957,000 (2021: $46,951,000) and total cash and cash equivalents
at 30 June 2022 were $63,794,000 (2021: $48,360,000).
The Group is not subject to any externally imposed capital requirements.
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.
55
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 2022
$’000
Fair value at
30 June 2021
$’000
Fair value
hierarchy
Valuation
technique
Contingent consideration for business combination
410
784
Level 3
Discounted
cash flow
Significant
unobservable
input
Probability
adjusted non-
financial terms
During the year ended 30 June 2022, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3 of the fair
value hierarchy classifications.
A reconciliation of the movements in recurring fair value measurements allocated to Level 3 and the end of the measurement period
of the hierarchy is provided below.
Opening balance
Cash payments
Unwinding interest 1
Foreign exchange differences 1
Closing balance
CONSOLIDATED
2022
$’000
784
(404)
42
(12)
410
2021
$’000
1,176
(354)
43
(81)
784
1 The effect on consolidated profit or loss is due to unwinding of interest and a portion of foreign exchange, as indicated in the above reconciliation.
Note 24 Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and financial results of the following subsidiaries and other
controlled entities in accordance with the accounting policies of the Group.
Name of subsidiary
Objective Corporation Solutions NZ Limited
Objective Corporation Singapore Pte Limited
Objective Corporation North America Inc 1
Alpha 88 Limited
Objective Corporation UK Limited
Objective Keystone Limited
The Objective Corporation Limited Employee Share Trust
1
Includes ownership interest in Simflofy, Inc through a forward triangular merger.
Country of Incorporation
New Zealand
Singapore
United States of America
New Zealand
United Kingdom
United Kingdom
Australia
OWNERSHIP
2022
100%
100%
100%
100%
100%
100%
n/a
2021
100%
100%
100%
100%
100%
100%
n/a
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 56
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
GROUP STRUCTURE
Note 25 Business combinations
(a) Acquisitions in the current year
On 17 March 2022, the Group acquired 100% of the issued capital of Simflofy, Inc. The acquisition of the business was strategic as it
enhances the Group’s product offering. The purchase consideration was $6,169,000.
The acquired net identifiable liabilities undertaken were $68,000 (excluding cash and bank balances acquired of $755,000), giving rise
to goodwill of $6,237,000.
The acquisition accounting for this transaction is provisional at the date of this report and is permitted under AASB 3: Business
Combinations, any adjustments made to these provisional numbers will be reflected in subsequent financial reporting periods.
Finalisation is expected no later than 16 March 2023. At that time, final accounting for the business combination will be reflected
in the consolidated financial statements on a retrospective basis.
Details of the purchase consideration, provisional assets and liabilities recognised as a result of the transaction at the acquisition date
are as follows:
Shares issued under acquisition
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
Identifiable intangible assets
Trade and other payables
Contract liabilities
Current tax liabilities
Provisions
Fair value of net liabilities undertaken
Goodwill arising on acquisition
$’000
2,900
4,024
(755)
6,169
55
3
693
(20)
(662)
(2)
(135)
(68)
6,237
The goodwill is attributable to key employees, future growth opportunities and synergies from combining operations with Simflofy, Inc.
The goodwill is not deductible for tax purposes.
Revenue and profit contribution
From the date of acquisition to 30 June 2022, the acquired entity contributed a total revenue of $600,000. If the business had been
acquired at the beginning of the year, it is estimated that Group turnover in 2022 would have been approximately $2,057,000 higher.
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.
(b) Acquisition in the prior 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 and the cash consideration paid, net of cash and bank balance acquired was $18,371,000.
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.
57
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
Last year 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.
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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 58
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
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
2022
$’000
53,786
25,960
79,746
45,852
4,398
50,250
11,310
(8,741)
26,927
29,496
2022
$’000
5,267
5,267
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
(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.
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.
59
Note 27 Share based payments
Objective Corporation Limited operates two share-based
payment plans:
– Objective Employee Incentive Plan
– Objective Employee Equity Plan
Employee Incentive Plan
The Objective Employee Incentive Plan (EIP) was approved at
the 2003 Annual General Meeting of the Company. The EIP is
described as follows:
Offers
Under the EIP, 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 EIP.
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 EIP 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 EIP 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 EIP are not transferable. Shares
acquired under the EIP 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 EIP rank equal in all respects
and will be entitled to any dividends declared by the Company.
Any dividends paid on shares acquired under the EIP will be
offset against the loan balance outstanding to acquire shares
under the EIP. Options issued under the EIP 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 EIP 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 EIP’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 EIP 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.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 60
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 27 Share based payments (continued)
Fair value of share options granted under the EIP in the year
No share options were granted under the EIP during the year ended 30 June 2022.
Fair value of share options granted under the EIP during the year ended 30 June 2021 are provided in the table below:
Number of
options granted
635,000 1
200,000 2
Grant date
Expiry date
01/07/2020
01/07/2030
04/01/2021
31/01/2025
1 Share price at grant date was $6.90 per unit.
2 Share price at grant date was $12.42 per unit.
Fair value
at grant
date
($)
$0.44
$1.40
Option
exercise
price
($)
$7.50
$12.50
Risk free
interest
rate
(%)
0.91%
0.32%
Expected
volatility
(%)
18.60%
19.55%
Dividend
yield
(%)
2.17%
2.17%
The fair values of options are determined using Black-Scholes option pricing model. Assumptions for expected volatility and dividend yield
were based on historic data. Inputs for risk free rate and grant date share price was determined by the prevailing prices on the day of issue.
Movement in share options under the EIP during the year
The following reconciles the share options outstanding under the EIP at the beginning and end of the current year:
Grant date
24/02/2015
29/07/2018
01/01/2019
01/04/2019
01/07/2020
04/01/2021
Option
exercise
price
($)
$1.17
$2.75
$2.75
$2.75
$7.50
$12.50
Expiry date
24/02/2025
29/07/2028
01/01/2029
01/04/2029
01/07/2030
31/01/2025
Weighted average exercise price
Weighted average share price at date of exercise
Exercisable at the end of the year
Balance
1 July 2021
150,000
200,000
855,000
12,500
635,000
200,000
2,052,500
$5.05
385,000
Granted
Exercised
Forfeited/
cancelled
Balance
30 June 2022
–
–
–
–
–
–
–
–
(25,000)
(150,000)
(241,250)
(12,500)
(210,000)
–
(638,750)
$4.20
$17.21
–
–
–
–
–
–
–
–
125,000
50,000
613,750
–
425,000
200,000
1,413,750
$5.42
411,250
The following reconciles the share options outstanding under the EIP at the beginning and end of the prior year:
Grant date
07/10/2014
24/02/2015
29/07/2016
02/01/2017
29/07/2018
01/01/2019
01/04/2019
01/07/2020
04/01/2021
Expiry date
07/10/2024
24/02/2025
29/07/2026
02/01/2027
29/07/2028
01/01/2029
01/04/2029
01/07/2030
31/01/2025
Option
exercise
price
($)
$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
Granted
Exercised
Forfeited/
cancelled
Balance
30 June 2021
–
–
–
–
–
–
–
635,000
200,000
835,000
(80,000)
–
(62,500)
(125,000)
–
(402,500)
(12,500)
–
–
(682,500)
$2.26
$12.29
–
–
–
–
–
–
–
–
–
–
–
–
150,000
–
–
200,000
855,000
12,500
635,000
200,000
2,052,500
$5.05
385,000
Weighted average exercise price
$2.45
$8.70
Weighted average share price at date of exercise
Exercisable at the end of the year
492,500
The share options outstanding under the EIP at the end of the year had a weighted average remaining contractual life of 6.0 years
(2021: 7.3 years).
61
Employee Equity Plan
The Objective Employee Equity Plan (EEP) was approved at the 2021 Annual General Meeting of the Company and is governed by the
EEP Rules.
Under the EEP, the Company may grant Rights, Options and restricted shares (i.e., shares subject to disposal restrictions until vesting
conditions are met) (collectively, Awards). Rights and Options granted under the EEP are indeterminate rights for tax purposes as the
Board has the discretion to settle Rights and Options granted under the Plan in cash.
Under the EEP, there are 59,000 Rights (granted for no consideration to Participants with vesting subject to a service-based vesting
condition) that remain outstanding at balance date. Subject to vesting condition being met, the Rights become exercisable to acquire
Company shares (or a cash payment of equivalent value, at the Board’s discretion). As at the date of this annual report, the exercise
price of Rights granted under the EEP is nil.
Awards granted during the current year under the EEP has been classified as an equity-settled share-based payment arrangement.
The fair value at grant date of equity-settled share-based payment transactions is expensed over the vesting period with a
corresponding increase in equity, taking into account the best available estimate of the number of shares expected to vest under
the service and performance conditions.
Fair value of share options granted in the year
Fair value of share options granted during the year ended 30 June 2022 are provided in the table below:
Number of
options granted
Grant date
Expiry date
Fair value
at grant
date
($)
Exercise
price
($)
Risk free
interest
rate
(%)
Expected
volatility
(%)
Dividend
yield
(%)
100,000 1
30/04/2022
30/04/2027
$2.20
$14.85
0.32%
19.55%
2.17%
1 Share price at grant date was $14.85 per unit.
The EEP was not in place during the year ended 30 June 2021.
The fair values of awards are determined using Black-Scholes option pricing model. Assumptions for expected volatility and dividend
yield were based on historic data. Inputs for risk free rate and grant date share price was determined by the prevailing prices on the
day of issue.
Movement in share options under the EEP during the year
The following reconciles the share options outstanding under the EEP at the beginning and end of the current year:
Grant date
30/04/2022
Weighted average exercise price
Exercisable at end of the year
Expiry date
Exercise
price
($)
Balance
1 July 2021
Granted
Exercised
Forfeited/
cancelled
Balance
30 June 2022
30/04/2027
$14.85
–
–
–
–
100,000
100,000
$14.85
–
–
–
–
–
–
–
–
–
100,000
100,000
$14.85
–
Fair value of share rights granted in the year
Fair value of share rights granted during the year ended 30 June 2022 are provided in the table below:
Rights on Issue
Rights exercisable at $nil
Rights exercisable at $nil
Rights exercisable at $nil
Total rights on issue
Weighted average exercise price
2022
2021
Number
Expiry Date
Number
Expiry Date
50,000
22/12/2026
21/03/2027
28/02/2027
4,000
5,000
59,000
$nil
–
–
–
–
n/a
–
–
–
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 62
Our Business
CEO’s Report
Directors’ Report
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
Note 27 Share based payments (continued)
Recognition and measurement
The Group provides benefits to employees (including Directors) in the form of share-based payment transactions, whereby employees
render services in exchange for shares or rights over shares (equity-settled transactions). The Group has two plans in place that
provides these benefits. It is the Employee Incentive Plan and the Employee Equity Plan.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are
granted. The fair value is determined by using a Black & Scholes model. The cost of equity-settled transactions is recognised in the
consolidated statement of profit or loss, together with a corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled
to the award (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the consolidated statement profit or loss is the product of
(i) the grant date fair value of the award; (ii) the current best estimate of the number of awards that will vest, taking into account such
factors as the likelihood of employee turnover during the vesting period; and (iii) the expired portion of the vesting period.
The charge to the consolidated statement of profit or loss for the period is the cumulative amount as calculated above, less the amounts
already charged in previous periods. There is a corresponding credit to equity.
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.
(a) Key management personnel remuneration
Total remuneration paid or payable to directors and key management personnel is set out below:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments expense
Total remuneration paid or payable
CONSOLIDATED
2022
$
2021
$
835,674
754,023
1,627
53,293
35,553
8,112
47,726
37,923
926,147
847,784
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 18 to 20.
(b) 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.
(c) Other related parties
No material amounts were receivable from, or payable to, other related parties as at 30 June 2022 (2021: 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
2022
$’000
–
2021
$’000
–
Note 30 Contingent liabilities
Contingent liabilities, capable of estimation, arise in respect of the following categories:
Bank guarantees
Total contingent liabilities
63
CONSOLIDATED
2022
$’000
1,460
1,460
2021
$’000
1,460
1,460
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 2022, the Directors do not consider it is probable that a claim will be made against the Group under any of the guarantees.
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
2022
$
2021
$
99,539
99,539
30,195
5,329
35,524
90,017
90,017
29,724
13,041
42,765
Accounting standards and interpretations issued but not operative at 30 June 2022
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 2022.
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
NZCC Settlement
On 12 August 2022, the Company settled in full the pecuniary penalty, in the amount of NZ$1,540,000, as determined by The New Zealand
High Court for breach of section 46 of the New Zealand Commerce Act 1986. Payment of the penalty brings this matter to a close.
Dividends
For dividends resolved to be paid after 30 June 2022, 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 26 August 2022.
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 64
Our Business
CEO’s Report
Directors’ Report
Financial Statements
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1. The attached financial statements and notes set out on pages 14 to 64 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 2022 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 Company 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: 26 August 2022
INDEPENDENT AUDITOR’S DECLARATION
65
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
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 2022 to the best of my
knowledge and belief there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act
AUDITOR'S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF OBJECTIVE CORPORATION LIMITED
2001; and
b) no contraventions of APES 110 Code of Ethics for Professional Accountants
(including Independence Standards).
In relation to the independent audit for the year ended 30 June 2022 to the best of my
knowledge and belief there have been:
This declaration is in respect of Objective Corporation Limited and the entities it controlled
during the year.
a) no contraventions of the auditor independence requirements of the Corporations Act
2001; and
b) no contraventions of APES 110 Code of Ethics for Professional Accountants
(including Independence Standards).
Mark Godlewski
Partner
Pitcher Partners
Sydney
This declaration is in respect of Objective Corporation Limited and the entities it controlled
during the year.
26 August 2022
Mark Godlewski
Partner
26 August 2022
Pitcher Partners
Sydney
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Page 66
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
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Page 66
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
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022
66
Our Business
CEO’s Report
Directors’ Report
Financial Statements
INDEPENDENT AUDITOR’S REPORT
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 2022, 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) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) “the Code” that are relevant to our
audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We 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.
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.
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 67
67
OBJECTIVE CORPORATION LIMITED
ABN 16 050 539 350
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OBJECTIVE CORPORATION LIMITED
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.
Revenue recognition is dependent on
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.
We focused on this area as a key audit matter
due to the importance of revenue in
measurement of the Group’s performance and
the significant judgements surrounding the
timing of revenue recognition.
Impairment of Intangible Assets
(Refer to Note 13 in the Notes to the Financial
Statements).
At 30 June 2022 the consolidated statement of
financial position of the Group includes
goodwill amounting to $38.427 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, Objective RegTech and Objective
3Sixty.
The value in use model includes significant
management judgement in respect of key
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
potential impairment and materiality of
intangibles in the financial report.
How our audit addressed the Key Audit Matter
Our procedures included, amongst others:
• Documenting and evaluating the design of relevant controls
in the assessment process for determining the timing of
revenue recognition;
• Selecting a sample of revenue contracts, reviewing the
contract to identify the key provisions and circumstances that
indicate that all performance obligations have been satisfied
for revenue recognised under AASB 15 Revenue from
Contracts with Customers;
• Testing a sample of revenue transactions to agree the total
transaction price to customer contracts, work in progress
records, milestone acknowledgements and receipts from
customers, where applicable;
• Testing a sample of deferred revenue (contract liabilities and
contract assets) to agree the amounts recorded to invoice
and recalculating the amount of the contract asset or contract
liability at year-end; 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 and evaluating the design of relevant controls
over management’s determination of CGUs; Reviewing and
challenging significant judgements by management in
respect of the key assumptions and estimates used to
determine the recoverable value of the assets of each CGU
(value in use model);
• 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, estimated future cash flows, terminal value, and
foreign currency rates; and
• Considering the adequacy of the financial report disclosures.
Page 68
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
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022
68
Our Business
CEO’s Report
Directors’ Report
Financial Statements
INDEPENDENT AUDITOR’S REPORT
OBJECTIVE CORPORATION LIMITED
ABN 16 050 539 350
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OBJECTIVE CORPORATION LIMITED
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 Company’s directors report for the year ended 30 June 2022, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
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.
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Page 69
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
69
OBJECTIVE CORPORATION LIMITED
ABN 16 050 539 350
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OBJECTIVE CORPORATION LIMITED
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 18 to 20 of the Directors’ report for the year ended 30
June 2022. In our opinion, the Remuneration Report of Objective Corporation Limited, for the year ended 30 June
2022, complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
MARK GODLEWSKI
Partner
26 August 2022
PITCHER PARTNERS
Sydney
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Page 70
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
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022 70
Our Business
CEO’s Report
Directors’ Report
Financial Statements
SHAREHOLDER INFORMATION
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
9 September 2022.
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
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
ANACACIA PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
MIRRABOOKA INVESTMENTS LIMITED
WEM SUPER PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TRUEBELL CAPITAL PTY LTD
ARRAS PTY LTD
MR DAVID GORDON
MR ADRIAN RUDMAN
WARBONT NOMINEES PTY LIMITED
ESTATE OF MRS JOAN CAMERON FISHER
MR DARC RASMUSSEN
MR BEN TREGONING
Units held
% of listed
units
62,000,000
65.44
5,824,115
5,618,541
3,678,843
2,627,494
1,376,030
853,227
817,149
661,886
564,444
535,000
450,690
340,000
300,000
300,000
200,000
176,162
164,250
150,000
138,750
6.15
5.93
3.88
2.77
1.45
0.90
0.86
0.70
0.60
0.56
0.48
0.36
0.32
0.32
0.21
0.19
0.17
0.16
0.15
Total: Top 20 holders of issued capital
Total remaining holders balance
86,776,581
7,965,040
91.60
8.40
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
MARLAINE LIMITED
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
5,300,000
65.44
5.60
No. of holders
No. of units
% of issued
shares
1,643
601,826
673
134
144
24
1,563,594
1,030,102
4,278,015
87,268,084
0.64
1.65
1.09
4.52
92.10
2,618
94,741,621
100.00
Objective Corporation Limited And Its Controlled Entities — Annual Report 2022
71
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
ABN
16 050 539 350
Directors
Tony Walls
Gary Fisher
Nick Kingsbury
Darc Rasmussen
Stephen Bool
Company Secretary
Ben Tregoning
Stock Exchange Listing
The Company’s shares are listed on the ASX.
ASX Code
OCL
Share Registry
BoardRoom
Grosvenor Place
Level 12, 225 George Street
Sydney NSW 2000
GPO Box 3993
Sydney NSW 2001
Tel: 1300 737 760 (in Australia)
Tel: +61 2 9290 9600 (International)