–
2 O 2 3 A N N U AL R E P ORT
CONTENTS
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report
Shareholding details
Corporate information
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15
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49
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56
57
CORPORATE PROFILE
Orbital UAV provides integrated propulsion systems and flight critical
components for tactical unmanned aerial vehicles (UAVs).
Our design thinking and patented technology enable us to meet the long
endurance and high reliability requirements of the UAV market. We have
offices in Australia and the United States to serve our prestigious client base.
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The Directors present their report together with the financial report of Orbital Corporation Limited (the Company or Orbital) and of the Group,
being the Company and its subsidiaries for the year ended 30 June 2023 and the auditor's report thereon.
Reference
Contents of Directors’ Report
Page
1.
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3.
4.
5.
6.
7.
8.
9.
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12.
13.
14.
15.
16.
17.
18.
Operating and Financial Review
Directors
Company Secretary
Directors’ Meetings
Principal Activities
Dividends
Events Subsequent to Balance Sheet Date
Proceedings on Behalf of the Company
Likely Developments and Expected Results
Environmental Regulation and Performance
Directors’ Interests
Share Options
Auditor Independence and Non-Audit Services
Indemnification
Corporate Governance Statement
Rounding Off
Remuneration Report
Lead Auditor’s Independence Declaration
2
4
5
5
5
5
5
5
5
5
5
6
6
6
6
6
7
15
ANNUAL REPORT 2023 1
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
1. OPERATING AND FINANCIAL REVIEW
John Welborn
Chairman
Non-Executive Director
Todd Alder
Managing Director and Chief Executive Officer
Dear Shareholders,
On behalf of the Board of Directors (‘the Board’), we are pleased to present the annual report of Orbital Corporation (‘Orbital’ or ‘the Company’)
and its subsidiaries (‘the Group’) for the year ended 30 June 2023 (‘FY23’).
Overview
FY23 highlights
•
•
•
•
•
•
Delivery of $22.5 million revenue and other income
Net Profit after tax of $0.02 million
Successful Equity and Options issue to raise $5 million in new equity
Renegotiated milestones for WA government legacy loan
Improved Net Asset position to $7 million
Extension of development contracts for multiple engine platforms
Orbital achieved operational revenue of $16.8 million in FY23, with $12.4 million through the multiple engine model solution for customer
Insitu Inc., a wholly owned subsidiary of the Boeing Company (‘Boeing Insitu’). Engineering development revenues of $4.4 million supported
further development of additional engine models for other key clients and readies the Company for new production lines commencing in
the coming financial year.
Included in other income is $4.8 million which was achieved through the successful delivery of key milestones associated with the
Company’s WA Government Loan agreement and $0.7 million Research and Development grants received against the new engine model
development program.
Customer diversification
During the year, the Company continued to progress its customer diversification strategy and announced:
•
•
•
•
•
engine shipment programs with Insitu Pacific for the supply of the ‘Integrator UAS’ to the Australian Army for expansion of its LAND
129 Phase 3 program,
the extension of the development program with its major Singapore client to progress toward production readiness,
production unit testing with Skyways UAS for its bid to supply the US Navy with ship-to-ship and ship-to-shore uncrewed capabilities,
supply of upgraded prototype engines with Textron Systems for the Aerosonde® unmanned aircraft system.
new production agreement with Finance International Pty Ltd to supply units into a south-east Asian defence organisation.
These new or expanded relationships demonstrate Orbital’s superior heavy fuel engine capability for uncrewed aerial vehicles (‘UAVs’)
and notably broadens customer relationships across the world.
Equity and Options Offer
In November 2022 the Company announced a $5 million equity and options offer to existing and new shareholders. The offer was well
supported and a total of 25,000,000 new shares and 17,500,000 new options were issued pursuant to the prospectus. Major shareholders,
UIL Limited and First Sentier Investors, along with all Company Directors participated in the equity raise which occurred in two tranches in
November 2022 and January 2023. Funds raised from the offer continue to support new engine development programs and to provide
general working capital.
ANNUAL REPORT 2023 2
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Financial results
The Company reported financial results for the year ended 30 June 2023, with revenue from continuing operations of $16.8M (2022:
$15.7M), other income of $5.7M (2022: 2.5M) and a net profit after tax of $0.02M (2022: loss of $11.1M).
The Company reported a balance sheet with cash, deposits and receivables of $5.2M (2022: $4.0M), net current assets of $2.2M (2022: net
current liabilities $5.0M) and net assets of $6.9 MM (2022: $2.2M).
Net cash outflow from operating activities during the period was $3.5M (2022: $4.1M) as production delays has deferred delivery of orders to
Boeing Insitu into the coming financial year.
The annual report for the year ended 30 June 2023 contains an independent auditor’s report which highlights the existence of a material
uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. For further information, refer to Note 1.J
to the financial statements, together with the auditor’s report.
WA Government loan
In January 2023, the Company agreed to a deed of variation with the WA Government, replacing previous repayment schedules and refining
milestone deliverables better aligned to industry success. Repayment amounts continue to reduce the loan principal where Orbital
demonstrates, to the satisfaction of the Minister, that the relevant milestones set out in the deed of variation have been met by Orbital on or
before the repayment dates. In FY23, operational milestones were achieved such that $4.5m of loan repayments were offset, reducing the
outstanding loan balance to $3.8M. The Company anticipates achieving further milestones such that the loan will be fully offset by the end of
December 2024.
Shareholder returns
Closing share price ($)1
Market capitalisation ($m)
Basic EPS (cents) from continuing
operations
1 as at 30 June
Outlook
2023
0.175
20.52
0.02
2022
0.23
20.93
2021
0.83
64.46
(12.92)
(14.74)
2020
0.75
58.2
2.40
2019
0.30
23.2
(7.63)
Entering financial year 2024 (‘FY24’), production from the two established Boeing Insitu engine model lines will resume until those orders
have been completed. Upon maturity of the engineering programs for customers Textron, Finance International Pty Ltd and one of Singapore’s
largest defence companies, production of two new lines of engines is expected to commence in the second half of FY24.
Continued investment in new products and delivering against customers evolving needs allows Orbital to drive future revenue performance
and client expansion targets. The lasting support of the WA Government, through grant allocations against the legacy loan and a clear
pathway to successful achievement of milestones, continues to strengthen the Company balance sheet position and competitive advantage
in heavy fuel propulsion for the defence industry.
The Chairman and Managing Director would like to thank the ongoing commitment of the Company’s shareholders and staff.
ANNUAL REPORT 2023 3
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
2. DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
Mr John Paul Welborn, BCom, FCA, FAIM, MAICD, MAusIMM, JP
Chairman
Joined the Board in June 2014 and appointed as Chairman in March 2015. Mr Welborn is the Managing Director and Chief Executive Officer
of Equatorial Resources Limited, an ASX listed (ASX: EQX) iron ore exploration and development company.
Mr Welborn is a Chartered Accountant with a Bachelor of Commerce degree from the University of Western Australia and is a Fellow of the
Institute of Chartered Accountants in Australia and New Zealand and holds memberships of the Australian Institute of Company Directors
(AICD) and the Australasian Institute of Mining and Metallurgy (AusIMM).
Mr Welborn is a former international rugby union player with extensive experience in the resources sector as a senior executive and in
corporate management, finance and investment banking. He has served on the Boards of charitable organisations and is a former
Commissioner of Tourism Western Australia.
Mr Welborn also serves as a Director of Equatorial Resources Limited (appointed August 2010), and as a Non-Executive Director of Apollo
Minerals Ltd (appointed February 2021) and Fenix Resources Limited (appointed November 2021).
Mr Todd Alder, BEc (Acc), CPA, ACIS
Managing Director and Chief Executive Officer
Joined Orbital as Chief Financial Officer and Company Secretary in December 2016 and appointed as Managing Director and Chief Executive
Officer in August 2017. Mr Alder’s experience includes successful start-ups, acquisitions and the implementation of lean concept business
transformations. Mr Alder is an accomplished leader focused on financial discipline, strategy alignment and operational efficiency.
His previous role was Chief Financial Officer and Company Secretary at Toro Energy Limited, where he was responsible for financial and
management accounting, company secretarial functions, investor relations and information technology. Mr Alder has also worked with
Capgemini Consulting (previously Ernst & Young) and Origin Energy Limited.
Mr Steve Gallagher, B.E (Hons), B.Com, MAICD
Non-Executive Director
Joined the Board in April 2017. Mr Gallagher is Principal of Agere Pty Ltd, an advisory and investment company drawing on his capability
and professional networks established over 30 years as a CEO, director, and Executive GM of global businesses with companies including
Vix Technology Ltd, Siemens AG, Landis & Gyr AG and CCRTT Ltd..
Mr Gallagher has operated in various business sectors including industrial automation, building technology and power systems, having spent
15 years living and working in Asia (China, Hong Kong and Singapore) and Europe (Switzerland).
Mr Gallagher is currently a Non-Executive Director and Chair of ICM Mobility Ltd (an investment holding company for mobility services
companies in transportation including Vix Technology Ltd, Littlepay Ltd, Kuba Payments Ltd, Snapper Services Ltd, Unwire Ltd), Transact1
Pty Ltd (a financial services provider for cash management optimisation), DTI Ltd (ASX listed passenger information and surveillance
business).
Mr Gallagher is also the chairman of the Company’s Audit and Risk Committee.
Mr Kyle Abbott, B.Com (Hons 1st), CA
Non-Executive Director
Joined the Board in May 2018. Mr Abbott is an experienced aerospace and defense industry executive. Mr Abbott was Managing Director of
Western Australian Specialty Alloys (WASA) from 1996 to 2015. During this period WASA grew from a Western Australian specialised alloy
manufacturer to become a major supplier to the global aerospace industry, with key customers in the United States, the United Kingdom and
Japan. In 2000, Mr Abbott managed the successful sale of WASA to United States-based Precision Castparts Corporation (PCC), an S&P
500 company. PCC was subsequently acquired by Berkshire Hathaway in 2015.
Mr Abbott is also a member of the Company’s Audit and Risk Committee.
ANNUAL REPORT 2023 4
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
3.
COMPANY SECRETARY
Mr Thomas Spencer, B.Bus, CPA
Mr Thomas Spencer was appointed as Chief Financial Officer and Company Secretary in October 2022. Mr Spencer is a seasoned finance
executive with multinational experience leading strategy development, governance and commercial initiatives across a spectrum of
industries. He is a qualified CPA and holds a Bachelor of Business degree and is a member of the Australian Institute of Company Directors.
In his previous CFO roles with NeuroScientific Biopharmaceuticals, McRae Investments and GMP Securities, Mr Spencer was responsible
for commercial operations, financial integrity, investment acquisitions and dispositions for institutional and private equity owned portfolios.
4.
DIRECTORS’ MEETINGS
The number of Directors’ meetings and the number of meetings attended by each of the Directors of the Company during the financial
year are shown below.
Director
J P Welborn
T M Alder
S Gallagher
K Abbott
Directors Meetings
Audit and Risk Committee Meetings
No. of meetings
attended
No. of meetings held1
No. of meetings
attended
No. of meetings held2
7
8
7
7
8
8
8
8
-
-
4
4
-
-
4
4
1 Number of meetings held during the time the Director held office during the year.
2 The Audit and Risk Committee was established in March 2019.
5.
PRINCIPAL ACTIVITIES
Orbital’s focus is on the revolutionary design, proven manufacturing processes and rigorous testing to deliver superiority in UAV propulsion
systems and flight critical components.
The Company drives its UAV-focused strategy from its operations in WA, Australia and Oregon, USA. Our intellectual property, know-how
and industry experience, enable us to meet the long endurance and high reliability requirements of the rapidly evolving UAV market.
Working with our international customers and supply chain, we continue to design, develop and manufacture world-leading propulsion
system solutions and associated technologies to meet the changing demands and increasing mission parameters of tactical UAVs.
6.
DIVIDENDS
No dividend has been paid or proposed in respect of the current financial year.
7.
EVENTS SUBSEQUENT TO BALANCE SHEET DATE
There were no reportable events subsequent to the balance sheet date of 30 June 2023.
8.
PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
9.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Information as to the likely developments in the operations of the Group is set out in the operating and financial review above.
10. ENVIRONMENTAL REGULATION AND PERFORMANCE
The Directors do not believe that the Group has significant environmental obligations. The Group’s policy is to comply with any applicable
environmental regulations that are in force during the reporting period.
11. DIRECTORS’ INTERESTS
The relevant interest of each Director in the share capital of the Company shown in the Register of Directors’ Shareholdings as at 30
June 2023 is as follows:
ANNUAL REPORT 2023 5
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Director
J P Welborn
T M Alder
S Gallagher
K Abbott
Total
12. SHARE OPTIONS
Ordinary
Shares
1,991,667
1,471,639
216,668
85,000
3,764,974
Performance
Rights
-
374,400
-
-
374,400
The Company issued 17,500,000 options as part of the capital raising activities completed in February 2023. Options were issued for nil cash
consideration and were valued at $1,033,205 using the Black Scholes method of calculation at grant date of 7 February 2023. A volatility rate
of 99.8% and a risk-free rate of 3.16% was used in the calculation. The options are exercisable at $0.35 on or before the date that is 3 years
after the date of issue.
13. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and
experience with the Company and/or the Group are important. For the year ended June 2023, the Group engaged with
PricewaterhouseCoopers in non-audit services that included Tax & Government Grant advice. Refer to Note F.6 in the Financial Statements
for summary of fees paid. The Board of Directors has considered the position and, in accordance with advice received from the Audit and
Risk Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
14.
INDEMNIFICATION
Indemnification and insurance of officers
To the extent permitted by law, the Company indemnifies every officer of the Company against any liability incurred by that person:
(a)
(b)
in his or her capacity as an officer of the Company; and
to a person other than the Company or a related body corporate of the Company
unless the liability arises out of conduct on the part of the officer which involves a lack of good faith.
During the year, the Company paid a premium in respect of a contract insuring all Directors, Officers and employees of the Company (and/or
any subsidiary companies of which it holds greater than 50% of the voting shares) against liabilities that may arise from their positions within
the Company and its controlled entities, except where the liabilities arise out of conduct involving a lack of good faith. The Directors have not
included details of the nature of the liabilities covered or the amount of the premium paid in respect of the insurance contract as disclosure
is prohibited under the terms of the contract.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, PricewaterhouseCoopers, as part of the terms of its audit
engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to
indemnify PricewaterhouseCoopers during or since the financial year.
15. CORPORATE GOVERNANCE STATEMENT
The Board of Orbital Corporation Limited is responsible for corporate governance. The Board has prepared the Corporate Governance
Statement in accordance with the fourth edition of the ASX Corporate Governance Council’s Principles and Recommendations, which is
available on the Company’s website at www.orbitaluav.com under the About Us/Corporate Governance section.
16. ROUNDING OFF
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March
2016, and in accordance with that Instrument, amounts in the financial report and Directors’ Report have been rounded off to the nearest
thousand dollars unless otherwise indicated.
ANNUAL REPORT 2023 6
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
REMUNERATION REPORT - AUDITED
KEY MANAGEMENT PERSONNEL AND SUMMARY OF ORBITAL’S FIVE-YEAR PERFORMANCE
Key management personnel (“KMP”)
This Remuneration Report outlines the remuneration in place and outcomes achieved for KMPs during the year ended 30 June 2023.
KMPs are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group,
directly or indirectly, including any Director, whether executive or otherwise, of the parent company.
The names and positions of the individuals who were KMP during 2023 are set out in Table 1.
Table 1 – KMP
Executive
Executive Director
Todd M Alder (Chief Executive Officer and Managing Director)
Non-Executive Directors
John P Welborn (Chairman)
Steve Gallagher (Chairman of the Audit & Risk Committee)
Kyle Abbott (Member of the Audit & Risk Committee)
Senior Executives
David Bonomini1 (Chief Financial Officer & Company Secretary)
Thomas Spencer2 (Chief Financial Officer & Company Secretary)
Mikael Bergman3 (Chief Technical Officer)
1 Mr. Bonomini resigned as CFO & Company Secretary on 31 October 2022
2 Mr. Spencer was appointed as CFO & Company Secretary on 31 October 2022
3 Mr. Bergman became a KMP on 05 May 2022 and resigned on 01 December 2022
Table 2 – Five-year performance
The table below outlines Orbital’s performance over the last five years against key metrics.
Closing share price ($)
Market capitalisation ($m)
Basic EPS (cents) from operations
2023
0.175
20.52
0.02
2022
0.23
20.93
2021
0.83
64.46
(12.92)
(14.74)
2020
0.75
58.2
2.40
2019
0.30
23.2
(7.63)
Short term incentives were paid in 2020 and 2018. No short term incentives were paid in 2023, 2022, 2021 and 2019.
REMUNERATION OVERVIEW
The Group’s remuneration strategy is designed to attract, motivate and retain employees in a globally competitive market. The Board structures
remuneration so that it rewards those who perform, is valued by executives, and is strongly aligned to the Company’s strategic direction and the
creation of returns to shareholders.
Total Fixed Remuneration (“TFR”) is determined by the scope of the executive’s role and their level of knowledge, skills and experience.
Executive members of the KMP may receive a short-term incentive (“STI”) approved by the Board as reward for exceptional performance in a
specific matter of importance. No STI was awarded during the year ended 30 June 2023 (2022: nil).
Long-term incentives (“LTI”) consisting of performance rights that vest based on attainment of pre-determined performance goals are awarded
to selected executives.
The remuneration of Non-Executive Directors of the Company consists only of Directors’ fees. Director fees were not reviewed or adjusted during
the 2023 financial year.
Remuneration Report at 2022 AGM
The 2022 Remuneration Report received positive shareholder support at the 2022 AGM with more than 75% of votes cast in favour.
Remuneration strategy
The Group’s remuneration strategy is designed to attract, motivate and retain employees and Non-Executive Directors by identifying and
rewarding high performers and recognising the contribution of each employee to the continued growth and success of the Group.
To this end, key objectives of the Company’s reward framework are to ensure that remuneration practices:
• Are aligned to the Group’s business strategy;
• Offer competitive remuneration, benchmarked against the external market;
• Provide strong linkage between individual and Group performance and rewards; and
• Align the interests of executives with shareholders through measuring the Company’s market capitalisation or share price.
ANNUAL REPORT 2023 7
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Key changes to remuneration structure in 2023
There were no changes to the remuneration structure of executives or Directors during the 2023 financial year.
REMUNERATION GOVERNANCE
Board of Directors
The Board reviews and approves remuneration packages and policies applicable to Directors, the Company Secretary and the senior executives
of the Group.
Data is obtained from independent surveys to ensure that compensation throughout the Group is set at market rates having regard to experience
and performance. In this regard, formal performance appraisals are conducted at least annually for all employees. Compensation packages may
include a mix of fixed compensation, performance-based compensation and equity-based compensation.
Remuneration approval process
The Board approves the remuneration arrangements of the CEO and executives and all awards made under the LTI plan. The Board also sets
the aggregate remuneration of Non-Executive Directors which is then subject to shareholder approval.
The Board approves, having regard to the recommendations made by the CEO, the STI bonus plan and any discretionary bonus payments.
Remuneration structure
In accordance with best practice corporate governance, the structure of Non-Executive Directors and executive remuneration is separate and
distinct.
Services from remuneration consultants
From 1 July 2011, all proposed remuneration consultancy contracts (within the meaning of section 206K of the Corporations Act 2001) are
subject to prior approval by the Board or Human Resources.
No consultants were engaged during the year ended 30 June 2023 (2022: nil).
CHIEF EXECUTIVE OFFICER AND EXECUTIVE KMP REMUNERATION
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the
Group and aligned with market practice. The Group undertakes an annual remuneration review to determine the total remuneration positioning
against the market.
Structure
Orbital Corporation’s remuneration structure for the CEO and executive KMP is comprised of one component that is fixed, being Total Fixed
Remuneration (TFR), and two components that are variable, being short-term incentives (STI) and long-term incentives (LTI).
The STI is an annual “at risk” component of remuneration for executives. It is payable based on performance against key performance indicators
(KPIs) set at the beginning of the financial year. STIs are structured to remunerate executives for achieving annual Company targets and their
own individual performance targets. The net amount of any STI after allowing for applicable taxation, is payable in cash.
LTI targets are set as a percentage of fixed remuneration, converted to performance rights with vesting conditions subject to the Company’s
share price performance. Vesting of performance rights is subject to share price targets with the overall value exposed to the upside or downside
of the share price movement, therefore closely aligning with shareholder interests.
The proportion of fixed remuneration and variable remuneration (potential short-term and long-term incentives) established for each executive
is approved by the Board and for the year ended 30 June 2023 was as follows:
CEO
Other executives
Fixed Remuneration (50%)
Target STI (20%)
Target LTI (30%)
Fixed Remuneration (69%)
Target STI (14%)
Target LTI (17%)
Fixed Remuneration
Variable Remuneration
The remuneration structure for the 2023 financial year is explained below:
ANNUAL REPORT 2023 8
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Summary of executive KMP remuneration for the 2023 financial year
Total Fixed Remuneration (“TFR”)
TFR consists of base compensation, which is calculated on a total cost basis and includes any fringe benefits tax charges related to employee
benefits including motor vehicles, as well as employer contributions to superannuation funds.
Executive contracts of employment do not include any guaranteed base pay increases. TFR is reviewed annually by the Board. The process
consists of a review of Company, business division and individual performance, relevant comparative remuneration internally and externally and,
where appropriate, external advice independent of management.
The fixed component of executives’ remuneration is detailed in the Statutory Table on page 13.
Variable Annual Reward - Short-term incentive (“STI”)
Under the STI, all executives have the opportunity to earn an annual incentive award which is delivered in cash. The STI recognises and rewards
annual performance.
How is performance measured?
The STI performance measures were chosen as they reflect the core drivers of short-term performance and provide a framework for delivering
sustainable value to the Group, its shareholders and customers. Minimum Group performance targets need to be achieved before STI is eligible.
Key performance indicators (“KPIs”) are measured covering financial and non-financial measures of performance. For each KPI, a target and
stretch objective is set. A summary of the measures and weightings are set out below:
CEO
Other Executives
Financial
Revenue
70%
0%
Non-financial
Group KPIs
30%
100%
Revenue is the measure against which management and the Board assess the short-term performance of the Group. If the revenue measure
is met, performance against non-financial KPIs are used to determine the STI that the executive is entitled to, as follows:
•
•
Individual performance rating in respect of the quality of work performed in all essential areas of responsibility;
Individual cultural rating in respect of the extent to which demonstrated behaviour aligns with the Values of the Group.
How much can executives earn?
The maximum STI for the Chief Executive Officer is 40 per cent of fixed remuneration. The maximum STI for other executives is 20
per cent of fixed remuneration.
The minimum STI that may be awarded to the Chief Executive Officer and other executives is nil where the Company performance
factor is zero.
When is it paid?
The STI award is determined after the end of the financial year following a review of performance over the year against the STI performance
measures by the Executive Team. The Board approves the final STI award based on this assessment of performance.
ANNUAL REPORT 2023 9
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Actual STI performance for the year ending 30 June 2023
The following table outlines the proportion of the maximum STI earned in relation to the 2023 financial year. There were no STI amounts paid
to KMPs for the year ended 30 June 2023.
Maximum STI opportunity
(Percentage of fixed remuneration)
Percentage of
maximum STI earned
Todd M Alder
David Bonomini
Thomas Spencer
Mikael Bergman
Long-term incentive (“LTI”)
40%
20%
20%
20%
0%
0%
0%
0%
Under the LTI, the grant of performance rights and share acquisition performance rights were made to executives to align remuneration with the
creation of shareholder value over the long-term.
How is it paid?
Executives are eligible to receive performance rights and share acquisition performance rights; that is, being the right to receive a given number
of ordinary shares in the Group if a nominated performance milestone is achieved.
2020 Performance Rights Plan – Long-term incentives
The Company introduced a Performance Rights Plan (“2020 LTI Plan”) which was approved by shareholders on 24 November 2020.
Performance rights were issued to the Managing Director and CEO (“CEO LTIs”) and other executives (“Executive LTIs”) and employees under
the 2020 LTI Plan in two tranches, with each tranche subject to a separate performance milestone linked to the volume weighted average share
price (“VWAP”) of the Company and tested over a three-year period as follows:
Tranche
Performance condition
Expiry
date
Grant date
(CEO LTIs)
Grant date
(Exec LTIs)
Fair
value/right
(CEO LTIs)
Fair
value/right
(Exec LTIs)
Vesting of
rights
1
The Company having a 90-day
30
4
28-Oct
98 cents
97 cents
50 per
VWAP of at least $1.50 per
September
December
2020
cent
share between 01 October
2023
2020
2020 and 30 September 2023.
2
The Company having a 60-day
30
4
28-Oct
73 cents
76 cents
50 per
VWAP of at least $2.50 per
September
December
2020
cent
share between 01 October
2023
2020
2020 and 30 September 2023.
The allocation of performance rights to KMPs was as follows:
Executive
Title
Performance rights
issued Tranche 1
Performance rights
issued Tranche 2
Mr T.Alder
Mr G.Cathcart 1
Mr D.Bonomini 1
Mr M.Johnston 1
Total
Managing Director and CEO
Chief Technical Officer
Chief Financial Officer
Chief Operating Officer
234,000
77,500
70,000
66,749
448,249
140,400
46,500
42,000
40,049
268,949
Total
374,400
124,000
112,000
106,798
717,198
1 During year ended 30 June 2023, the performance rights issued to Mr Bonomini lapsed as he resigned during the year.(2022: Mr G Cathcart and Mr M
Johnston holdings lapsed due to resignation).
ANNUAL REPORT 2023 10
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
When is performance measured?
Performance rights may vest at any time during the three-year period to 30 September 2023, subject to the abovementioned performance
milestones. Performance rights lapse if the employment of the executive is terminated with cause, or by resignation, prior to vesting.
Performance rights may vest prior to the satisfaction of the vesting conditions upon a change of control event, or if the Board allows early exercise
on cessation of employment or in light of specific circumstances.
No performance rights vested under the 2020 LTI Plan for the year ended 30 June 2023.
How is performance measured?
Awards are subject to the market capitalisation of the Group. The performance rights link the rewards payable to KMPs to the creation of
shareholder value by increasing the share price of the Company. The Company’s share price at the date of calling the AGM to approve the CEO
LTIs was $1.14 per share. The vesting of performance rights will only occur where the Company’s share price increases to $1.50 and
$2.50 per share as set out in the abovementioned tables.
Actual LTI performance for the year ending 30 June 2023
During the financial year, no rights vested under the 2020 LTI Plan or for any other earlier plans issued in previous financial years.
OTHER EQUITY PLANS
Orbital has a history of providing employees with the opportunity to participate in ownership of shares in the Company using equity to support
a competitive base remuneration position.
Employee Share Plan
Eligible employees are offered shares in the Company, at no cost to the employees, to the value of $1,000 per annum under the terms of the
Company’s Employee Share Plan. There are no performance conditions, because the plan is designed to align the interests of participating
employees with those of shareholders. No Directors or KMPs participated in the share plan in 2023 (2022: Nil).
CONTRACTS FOR KMP
All KMP have a contract for employment. The table below contains a summary of the key contractual provisions of the contracts of employment
for the KMP.
Fixed Remuneration
Contract Duration
Termination notice
period (Company)1, 2
Termination notice
period (Executive)
Current KMP
T Alder
T Spencer
Former KMP
D Bonomini
G Cathcart 3
M Johnston
M Bergman
$390,000
$280,000
$297,372
$291,856
$290,000
$280,000
Unlimited
Unlimited
Unlimited
Unlimited
Unlimited
Unlimited
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
1 Termination provisions – Orbital may choose to terminate the contract immediately by making a payment in lieu of notice equal to the fixed remuneration the
executive would have received during the ‘Company Notice Period’. In the event of termination for serious misconduct or other nominated circumstances,
executives are not entitled to this termination payment. Any payments made in the event of a termination of an executive contract will be consistent with the
Corporations Act 2001 (Cth).
2 On termination of employment, executives will be entitled to the payment of any fixed remuneration calculated up to the termination date and any leave
entitlement accrued up to the termination date. Unvested LTI awards are forfeited upon termination for serious misconduct or employee initiated termination and
at Board discretion if termination is initiated by the Company.
3 In the event of the Group terminating the employment of Mr G Cathcart (Chief Technical Officer), other than by reason of serious misconduct or material breach
of service agreement, an equivalent of three months salaries is payable, in addition to:
•
•
two weeks’ salaries for each completed year of service to ten years of service
one half of a week of salaries for each year of service beyond ten years of service
ANNUAL REPORT 2023 11
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
NON-EXECUTIVE DIRECTORS REMUNERATION
Objective
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain Directors of the highest
calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed against fees paid to Non-
Executive Directors of comparable companies. The Board considers advice from external consultants when undertaking the review process.
The Company’s constitution and the ASX listing rules specify that the Non-Executive Directors’ fee pool shall be determined from time to time
by a general meeting. The latest determination was at the 2001 Annual General Meeting (AGM) held on 25 October 2001 when shareholders
approved an aggregate fee pool of $400,000 per year. The Board will not seek any increase for the Non-Executive Director pool at the 2023
AGM.
Fees
Non-Executive Directors do not receive retirement benefits other than statutory superannuation contributions, where required, nor do they
participate in any incentive programs.
The Chairman of the Board receives a fee of $121,095 (2022: $120,548) and the Non-Executive Directors receive a base fee of $60,000 (2022:
$60,000).
The remuneration of Non-Executive Directors for the year ended 30 June 2023 and 30 June 2022 is detailed in Table 1 of this report on page
13.
The maximum annual aggregate fee pool limit is $400,000 and was approved by shareholders.
OTHER TRANSACTIONS WITH KMP AND THEIR RELATED PARTIES
There were no other transactions with KMPs and their related parties, such as purchases, sales and investments, for the year ended 30 June
2023.
REPORTING NOTES
Reporting in Australian dollars
In this report, the remuneration and benefits reported are in Australian dollars. This is consistent with the functional and presentational currency
of the Company.
ANNUAL REPORT 2023 12
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Statutory tables
Table 1 - Compensation of Non-Executive Directors and executive KMP's for the year ended 30 June 2023 and 2022
Short Term Benefits
Post-
Employment
Long-
term
Benefits
Share
Based
Payments
Total
s
e
e
F
s
'
r
o
t
c
e
r
i
D
&
y
r
a
a
S
l
s
e
s
u
n
o
B
h
s
a
C
Non-executive Directors
J Welborn
Chairman and Director (Non-executive)
S Gallagher
Director (Non-executive)
K Abbott
Director (Non-executive)
Total Consolidated, all Non-executive
directors
Executive Director
T Alder
Managing Director and Chief
Executive Officer
Executive Key Management Personnel
D Bonomini (1)
Chief Financial Officer
G Cathcart (2)
Chief Technical Officer
M Johnson (3)
Chief Operating Officer
M Bergman (4)
Chief Technical Officer
T Spencer (5)
Chief Financial Officer
Total Consolidated, Executive Key
Management Personnel
Total Consolidated, Non-executive
directors, Executive directors, and
Executive Key Management Personnel
$
$
2023
109,589
2022
109,589
2023
60,000
2022
60,000
2023
60,000
2022
60,000
2023
229,589
2022
229,589
2023
364,708
2022
366,432
2023
122,386
2022
273,270
2023
-
2022
327,442
2023
-
2022
179,329
2023
198,009
2022
31,329
2023
146,947
2022
-
2023
832,050
2022
1,177,802
2023
1,061,639
2022
1,407,391
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. Mr. Bonomini ceased as a KMP on 31 October 2022
2. Mr. Cathcart ceased as a KMP on 8 October 2021
3. Mr. Johnston ceased as a KMP on 18 February 2022
4. Mr. Bergman became a KMP on 05 May 2022
5. Mr. Spencer became a KMP on 31 October 2022
t
y
r
a
e
n
o
m
-
n
o
N
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
n
o
i
t
a
u
n
n
a
r
e
p
u
S
l
r
e
y
o
p
m
E
s
n
o
i
t
u
b
i
r
t
n
o
C
l
t
a
o
T
s
t
n
e
m
e
l
t
i
t
n
E
e
v
a
e
L
$
$
$
109,589
11,506
109,589
10,959
60,000
60,000
60,000
60,000
-
-
-
-
229,589
11,506
229,589
10,959
-
-
-
-
-
-
-
-
n
a
P
l
s
t
h
g
R
i
e
c
n
a
m
r
o
f
r
e
P
$
-
-
-
-
-
-
-
-
n
o
i
t
a
r
e
n
u
m
e
r
f
o
n
o
i
t
r
o
p
o
r
P
t
d
e
a
e
r
l
e
c
n
a
m
r
o
f
r
e
p
%
-
-
-
-
-
-
-
-
n
o
i
t
a
r
e
n
u
m
e
R
l
a
t
o
T
$
121,095
120,548
60,000
60,000
60,000
60,000
241,095
240,548
364,708
25,292
33,954
58,004
481,958
12%
366,432
23,568
27,727
95,170
512,897
19%
122,386
10,700
(22,410)
(57,715)
52,961
-109%
273,270
23,568
5,615
27,964
330,417
-
-
-
-
-
8%
0%
327,442
9,304
(298,414)
(20,951)
17,381
-121%
-
-
-
-
-
0%
179,329
16,395
(30,760)
(18,045)
146,919
-12%
198,009
18,774
(3,123)
31,329
3,133
3,123
146,947
14,592
12,608
-
-
-
-
-
-
-
213,660
37,585
174,147
-
832,050
69,358
21,029
289
922,726
1,177,802
75,968
(292,709)
84,138
1,045,199
1,061,639
80,864
21,029
289
1,163,821
1,407,391
86,927
(292,709)
84,138
1,285,747
0%
0%
0%
0%
0%
8%
0%
7%
ANNUAL REPORT 2023 13
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Table 2 – Summary of CEO and Executive
Type of equity
Grant date
Expiry date
Awarded
but not
vested
Vested
% of total
vested
Lapsed
T Alder
Director and Chief Executive
Officer
D Bonomini
Chief Financial Officer
Equity rights
27 October 2017
10 August 2020
255,000
-
-
255,000
Equity rights
27 October 2017
10 August 2020
Equity rights
23 May 2018
10 August 2020
Equity rights
4 December 2020
30 September 2023
Equity rights
4 December 2020
30 September 2023
Equity rights
23 May 2018
10 August 2020
Equity rights
28 October 2020
30 September 2023
Equity rights
28 October 2020
30 September 2023
-
-
234,000
140,400
-
70,000
42,000
340,000
647,250
-
-
100%
100%
-
-
19,391
100%
-
-
-
-
-
-
-
-
-
70,000
42,000
Fair
value
of
equity
($) 1
0.278
0.365
0.316
0.808
0.538
0.209
0.841
0.614
1.
2.
In accordance with AASB2 Share-based Payments, the fair value of variable pay rights as at the grant date has been determined by applying the Monte Carlo | trinomial
valuation model. For the assumptions used in the valuation of the rights, please refer to note F.2. The amount included as remuneration is not related to or indicative of the
benefit (if any) that individual executives may ultimately realise should these equity instruments vest.
Mr. Bonomini resigned as Chief Financial Officer on 31 October 2022.
Table 3 – KMP share and equity holdings
Details of shares and rights help by KMP including their personally related entities for the 2023 financial year are as follows:
Type of equity
(1)
Opening
holding at
1 July 2022
Rights allocated in
2023
Rights lapsed in
2023
Net Changes
other (2)
Closing
holding at
30 June 2023 (3)
Non-executive Directors
J Welborn
S Gallagher
K Abbott
Executive Directors
T Alder
Executives
D Bonomini (4)
Shares
Options
Shares
Options
Shares
Options
991,667
-
116,668
-
35,000
-
Equity Rights
Shares
Options
1,361,650
434,389
-
Equity Rights
Shares
131,391
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
500,000
100,000
50,000
50,000
25,000
(987,250)
1,037,250
25,000
(112,000)
(19,391)
19,391
-
-
1,991,667
500,000
216,668
50,000
85,000
25,000
374,400
1,471,639
25,000
-
19,391
1. Opening holding represents amounts carried forward in respect of KMP.
2. Net Other Changes includes KMP participation in the equity and options placement during the year and partial conversion of T Alder and D Bonomini performance rights into ordinary shares
upon meeting performance conditions.
3. Closing equity rights holdings represent unvested rights held at the end of the reporting period.
4. Mr. Bonomini resigned as Chief Financial Officer on 31 October 2022.
Signed in accordance with a resolution of the Directors:
End of Remuneration Report
J P Welborn
Chairman
T M Alder
Managing Director and Chief Executive Officer
Dated at Perth, Western Australia this 21 September 2023
ANNUAL REPORT 2023 14
AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
As lead auditor for the audit of Orbital Corporation Limited for the year ended 30 June 2023, I declare
that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Orbital Corporation Limited and the entities it controlled during the
period.
Ian Campbell
Partner
PricewaterhouseCoopers
Perth
21 September 2023
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
ANNUAL REPORT 2023 15
FINANCIAL STATEMENTS
CONTENTS
Financial statements
Consolidated statement of profit or loss and other
comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
1.A About these statements
A. Current year performance
A.1 Operating segments
A.2 Revenue
A.3 Other income
A.4 Expenses
A.5 Taxes
A.6 Earnings per share (EPS)
B. Growth assets
B.1 Plant and equipment
B.2 Intangible assets
C. Working capital management
C.1 Inventories
C.2 Trade and other receivables
C.3 Cash and cash equivalents
C.4 Other financial assets
C.5 Trade and other payables
C.6 Deferred revenue
C.7 Leases
D. Debt and capital
D.1 Borrowings
D.2 Share capital
D.3 Option Reserves
D.4 Reserves
E. Other assets and liabilities
E.1 Provisions
F. Other notes
F.1 Key management personnel compensation
F.2 Related parties
F.3 Share based payments
F.4 Subsidiaries
F.5 Parent entity information
F.6 Auditor remuneration
F.7 Events after the end of the reporting period
F.8 Other accounting policies
F.9 New accounting standards
Directors' declaration
Independent auditor's report
Shareholding details
Corporate information
41
42
42
43
44
45
45
46
47
47
48
48
48
48
49
50
56
57
17
18
19
20
21
25
25
27
28
29
31
32
34
37
38
38
39
39
39
40
ANNUAL REPORT 2023 16
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Notes
A.2
A.3
A.4(d)
A.4(a)
B.2
A.4(b)
E.1
A.4(c)
A.5
Continuing operations
Sale of goods
Engineering services revenue
Royalty and licence revenue
Interest revenue
Total revenue
Other income
Materials and consumables expenses
Reversal/(write down) of excess inventory
Employee benefits expenses
Depreciation expenses
Amortisation of intangibles
Engineering consumables and contractor expenses
Occupancy expenses
Travel and accommodation expenses
Communications and computing expenses
Patent expenses
Insurance expenses
Audit, compliance and listing expenses
Finance costs
Allowance for impairment of other receivables
Warranty expenses
Other expenses
Foreign exchange gains/(losses)
Loss before income tax from continuing operations
Income tax expense
Loss for the year from continuing operations
Other comprehensive income
Items that will not be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total comprehensive profit/(loss) for the year
Attributable to:
Equity holders of the parent
Total comprehensive profit/(loss) for the year
Earnings per share
Basic profit/(loss) for the year attributable to ordinary equity holders of the parent
(cents)
Diluted profit/(loss) for the year attributable to ordinary equity holders of the parent
(cents)
Earnings per share from continuing operations
Basic profit/(loss) for the year attributable to ordinary equity holders of the parent
(cents)
Diluted profit/(loss) for the year attributable to ordinary equity holders of the parent
(cents)
A.6
A.6
A.6
A.6
The accompanying notes form part of the financial statements.
2023
$'000
12,350
4,426
-
26
16,802
5,711
(8,216)
404
(8,648)
(1,046)
(276)
(792)
(718)
(255)
(744)
(191)
(832)
(540)
(214)
-
(236)
(249)
60
20
-
20
2
22
22
22
0.02
0.02
0.02
0.02
2022
$'000
12,641
3,075
5
1
15,722
2,543
(6,511)
(2,980)
(9,641)
(980)
(276)
(526)
(542)
(306)
(981)
(386)
(1,047)
(465)
(670)
(75)
(91)
(580)
731
(7,061)
(4,070)
(11,131)
(495)
(11,626)
(11,626)
(11,626)
(12.92)
(12.92)
(12.92)
(12.92)
ANNUAL REPORT 2023 17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
ASSETS
Current assets
Cash and cash equivalents
Other financial assets
Trade and other receivables
Inventories
Prepayments
Finance lease receivable
Total current assets
Non-current assets
Intangibles
Plant and equipment
Inventories
Right-of-use asset
Finance lease receivable
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade payables and other liabilities
Deferred revenue
Borrowings
Government grants
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Options reserve
Reserves
Accumulated losses
Total equity
Notes
C.3
C.4
C.2
C.1
C.7
B.2
B.1
C.1
C.7
C.7
C.5
C.6
D.1
C.7
E.1
C.7
D.1
E.1
D.2
D.3
D.4
2023
$'000
2,292
751
2,125
5,980
191
430
2022
$'000
2,363
586
1,007
11,074
172
184
11,769
15,386
3,238
1,299
2,238
1,141
253
8,169
19,938
1,979
1,243
1,452
-
752
4,096
9,522
1,083
2,344
51
3,478
13,000
6,938
41,380
1,033
2,594
(38,069)
6,938
3,402
1,705
1,776
341
-
7,224
22,610
3,060
4,046
8,486
113
766
3,892
20,363
-
-
48
48
20,411
2,199
37,683
-
2,605
(38,089)
2,199
The accompanying notes form part of the financial statements.
ANNUAL REPORT 2023 18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
)
s
e
s
s
o
l
d
e
t
l
a
u
m
u
c
c
A
(
e
v
r
e
s
e
r
s
t
i
f
e
n
e
b
y
t
i
u
q
e
e
e
y
o
p
m
E
l
e
v
r
e
s
e
r
n
o
i
t
l
a
s
n
a
r
t
y
c
n
e
r
r
u
c
i
n
g
e
r
o
F
e
v
r
e
s
e
r
n
o
i
t
p
O
y
t
i
u
q
e
l
a
t
o
T
D.4
D.4
D.3
l
a
t
i
p
a
c
e
r
a
h
S
D.2
$'000
$'000
$'000
$'000
$'000
$'000
37,683
(38,089)
2,665
(60)
-
-
-
-
36
20
-
20
-
-
-
-
-
-
-
-
(13)
2,652
-
-
-
-
-
1,033
-
-
2
2
-
-
-
2,199
20
2
22
3,662
1,033
23
6,938
41,380
(38,069)
(58)
1,033
31,265
(26,958)
2,600
435
-
-
-
-
(11,131)
-
-
(11,131)
6,374
44
-
-
-
-
-
-
-
65
-
-
(495)
(495)
-
-
37,683
(38,089)
2,665
(60)
-
-
-
-
-
-
-
7,342
(11,131)
-
(495)
(11,626)
6,374
109
2,199
Issue of ordinary shares, net of costs
3,662
Notes
At 1 July 2022
Loss for the year
Foreign currency translation
Total comprehensive loss for the year
Issue of share options
Share based payments
At 30 June 2023
At 1 July 2021
Loss for the year
Transfer to accumulated losses
Foreign currency translation
Total comprehensive loss for the year
Issue of ordinary shares
Share based payments
At 30 June 2022
The accompanying notes form part of the financial statements.
ANNUAL REPORT 2023 19
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash receipts from R&D rebates
Interest received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Payments for financial instruments
Purchase of plant and equipment
Grant rebates received
Payments for intangible asset
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issues of shares and options
Share issue transaction costs
Principal elements of lease payments
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 July
Effects of exchange rate fluctuations on the balances of cash held in foreign
currencies
Cash and cash equivalents at 30 June
The accompanying notes form part of the financial statements.
Notes
2023
$'000
2022
$'000
12,937
18,918
(16,938)
(22,886)
732
26
(251)
C.3
(3,494)
D.2
(166)
(290)
920
(836)
(372)
5,000
(305)
(807)
3,888
22
2,363
(93)
C.3
2,292
-
1
(127)
(4,094)
-
(505)
-
(1,697)
(2,202)
6,479
(105)
(986)
5,388
(908)
3,116
155
2,363
ANNUAL REPORT 2023 20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1.A About these statements
Orbital Corporation Ltd ("Orbital" or the "Group") is a for-
profit company limited by shares, incorporated and
domiciled in Australia. Its shares are publicly traded on the
Australian Stock Exchange ("ASX"). The registered office
is 4 Whipple Street, Balcatta, Western Australia.
On consolidation, the assets and liabilities of
foreign operations are translated into Australian
dollars at the rate of exchange prevailing at the
reporting date and their statements of profit or loss
are translated at exchange rates prevailing at the
dates of the transactions.
The nature of the operations and principal activities of the
Group are described in the Directors Report and in the
segment information in Note A.1.
The financial statements were authorised for issue in
accordance with a resolution of the Directors on 21
September 2023.The Directors have the power to amend
and reissue the financial report.
1.B Statement of compliance
The financial statements are general purpose financial
statements, which have been prepared in accordance with
the requirements of the Corporations Act 2001 (Cth),
Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards
Board. The financial statements comply with International
Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
The Group has not early adopted any standards,
interpretations or amendments that have been issued but
not yet effective. The adoption of these standards,
interpretations or amendments will not significantly impact
the Group's accounting policies, financial position or
performance.
1.C Currency
The financial statements are presented in Australian
dollars, which is the functional currency of the Company.
Transactions are recorded in the functional currency of the
transacting entity using the spot rate. Monetary assets
and liabilities denominated in foreign currencies are
translated at the functional currency spot rate of exchange
at the reporting date. Differences arising on settlement or
translation of monetary items are recognised in profit or
loss. Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions.
The exchange differences arising on translation for
consolidation are recognised in the Foreign
Currency Translation Reserve (FCTR), via Other
Comprehensive Income (OCI). On disposal of a
foreign operation, the component of FCTR relating
to that particular foreign operation is reclassified to
profit or loss.
1.D Rounding of amounts
The Company is of a kind referred to in ASIC
Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191, dated 24 March
2016, and in accordance with that Instrument,
amounts in the financial report and Directors’
Report have been rounded off to the nearest
thousand dollars unless otherwise indicated.
1.E Basis of preparation
The consolidated financial statements have been
prepared on the historical cost basis.
The financial statements comprise the financial
results of the Group and its subsidiaries as at 30
June each year. Subsidiaries are fully consolidated
from the date of which control is obtained by the
Group and cease to be consolidated from the date
at which the Group ceases to have control.
The financial statements of subsidiaries are
prepared for the same reporting period as the
parent company, using consistent accounting
policies. All intercompany balances and
transactions, including unrealised profits and
losses arising from intra-group transactions, have
been eliminated in full.
Profit or loss and other comprehensive income are
attributed to the equity holders of the parent of the
Group, and to the non-controlling interests, even if
this results in the non-controlling interests having a
deficit balance.
Comparative information has been reclassified
where required for consistency with the current
year's presentation.
1.F Other accounting policies
Significant and other accounting policies that
summarise the measurement basis used and are
relevant to understanding the financial statements
are provided throughout the notes to the financial
statements.
ANNUAL REPORT 2023 21
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1.G Financial and capital risk management
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk
management strategy, policy and key risk parameters. The Board of Directors has oversight of the Group's internal
control system and risk management process. The Group's management of financial and capital risks is aimed at
ensuring that available capital, funding and cash flows are sufficient to meet the Group's financial commitments as
and when they fall due and maintain the capacity to fund its committed project developments. During 2023 the
Group's strategy remained unchanged from 2022, the gearing ratio at 30 June 2023 was 55% (2022: 386%).
Gearing ratios are calculated by dividing net debt (as per note D.1) by total equity.
The below risks arise in the normal course of the Group's business. Risk information can be found in the following
sections:
Section A Foreign currency risk
Section C Liquidity risk
Section C Interest Rate risk
Section C Credit risk
Section D Capital risk
Page 24
Page 35
Page 36
Page 36
Page 41
1.H Key estimates and judgements
In applying the Group's accounting policies, management continually evaluates judgements, estimates and
assumptions based on experiences and other factors, including expectations of future events that may have an
impact on the Group. Significant judgements, estimates and assumptions made by management in the preparation
of these financial statements are found in the following notes:
Page
Note Key estimate/ judgement
30
A.5 Recoverability of deferred tax assets
B.1 Impairment of non-current assets
33
C.1 Recoverable value of inventory 37
41
D.1 Valuation of borrowings
ANNUAL REPORT 2023 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1.J Going Concern
The consolidated financial statements have been prepared on a going concern basis, which assumes the
Group will continue its operations and be able to meet its obligations as and when they become due and
payable.
For the year ended 30 June 2023, the Group recorded an after tax profit of $20,000 and operating cash
outflows of $3,494,000. As at 30 June 2023, the Group had net assets of $6,938,000 and net current assets of
$2,247,000. The Group also had cash outflows from investing activities of $372,000 and cash inflows from
financing activities of $3,888,000.
The going concern assumption is based on the Group’s cash flow projections and existing cash reserves as at
30 June 2023 and covers a period of at least twelve months from the date of this report.
The projections show that the continuing viability of the Group and its ability to continue as a going concern and
meet its debts and commitments as they fall due is dependent upon a number of factors including:
• Successful continued development of new engine models, leading to further committed engineering and
production revenues.
• Achieving the milestones required under the terms of the WA government loan, as described in note D.1,
such that grants are received and repayments are not required within the forecast period.
• Achieving forecasted operational performance and positive operational cash flows from the existing engine
production and engineering programs.
• Reducing overheads through cost saving initiatives.
• Securing funding above and beyond the Group’s existing committed facilities if required.
As a result of these matters, there is a material uncertainty that may cast significant doubt about the Group's
ability to continue as a going concern and therefore that the Group may be unable to realise its assets and
discharge its liabilities in the normal course of business.
The Directors consider that the Group will be successful in the above matters and have therefore prepared the
financial report on a going concern basis.
ANNUAL REPORT 2023 23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
In this section
This section addresses financial performance of the Group for the reporting period including, where applicable, the
accounting policies applied and the key estimates and judgements made. The section also includes the tax position of
the Group for and at the end of the reporting period.
A.1 Operating segments
A.2 Revenue
A.3 Other income
A.4 Expenses
A.5 Taxes
A.6 Earnings per share
Page 25
Page 25
Page 27
Page 28
Page 29
Page 31
Financial risks in this section
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate as a result of changes
in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates to the Group’s
operating activities, in which sales and purchases are denominated in foreign currencies.
The Group manages its exposure to foreign currency risk by regularly monitoring and performing sensitivity analysis on
the Group's financial position and performance as a result of movements in foreign exchange rates. The Group holds
bank accounts in foreign denominated currencies which are converted to Australian dollars through rate orders for
targeted exchange rates. The Group has foreign currency hedging facilities available as part of its bank facilities.
Currently the Group does not directly hedge against its foreign currency exchange risk to a material extent.
Exposure
The Group’s exposure to USD at the reporting date for the years ended 30 June 2023 and 2022 are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
2023
A$'000
2022
A$'000
1,159
832
623
954
95
511
For the year ended 30 June 2023, revenue from external customers denominated in USD was A$7,034,000 (2022:
A$12,180,000).
Sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in USD exchange rates, with all other
variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary
assets and liabilities. There is no impact on changes in foreign currencies on other comprehensive income. The Group’s
exposure to foreign currency changes for all other currencies is not material.
The Group has used the observed range of actual historical rates for the preceding five-year period, with a heavier
weighting placed on recently observed market data, in determining reasonably possible exchange movements as part of
their sensitivity analysis. Past movements in exchange rates are not necessarily indicative of future movements.
2023
2022
Change in
AUD/USD rate
+10%
Increase / (Reduction) on
profit before taxes
(153)
-10%
+10%
-10%
187
(116)
142
ANNUAL REPORT 2023 24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
A. CURRENT YEAR PERFORMANCE
A.1 Operating segments
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
executive management team (the chief operating decision makers) in assessing performance and in determining the
allocation of resources.
Segment performance is evaluated based on Revenue and Earnings Before Interest and Tax ("EBIT") which is
allocated to the reportable segments according to the geographic location in which the item arose or relates to.
The geographical location of the segment assets is based on the physical location of the assets.
Segment information
Year ended 30 June 2023
Consolidated
US
Australia
2023
$'000
2022
$'000
2023
$'000
2022
$'000
2023
$'000
2022
$'000
Segment
revenue
EBIT
Finance expenses
Profit/(loss) before income tax
Assets
Liabilities
Net assets
A.2 Revenue
Revenue
Total external revenue
Timing of revenue recognition
At a point in time
Over time
16,802 15,722
-
-
16,802
15,722
449
(192)
257
(5,921)
(645)
(6,566)
(215)
(22)
(237)
(470)
(25)
(495)
234
(214)
20
(6,391)
(670)
(7,061)
Australia
2023
$'000
2022
$'000
18,498 22,457
11,399 20,199
2,258
7,886
US
Consolidated
2023
$'000
1,440
1,601
(161)
2022
$'000
153
212
(59)
2023
$'000
19,938
13,000
6,938
2022
$'000
22,610
20,411
2,199
Australia
2023
$'000
2022
$'000
16,802 15,722
16,802 15,722
12,376 12,647
3,075
16,802 15,722
4,426
US
Consolidated
2023
$'000
2022
$'000
-
-
-
-
-
-
-
-
-
-
2023
$'000
16,802
16,802
2022
$'000
15,722
15,722
12,376
4,426
16,802
12,647
3,075
15,722
Revenues of approximately $7,440,000 (2022: $11,570,000) were derived from a single external customer.
Recognition and measurement
Revenue is recognised in accordance with the core principle by applying the following steps:
• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligations in the contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the performance obligations in the contract
• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
The specific recognition criteria described below must also be met before revenue is recognised:
ANNUAL REPORT 2023 25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
A.2 Revenue (continued)
· Revenue from rendering of services
The Group's general terms and conditions with customers specify a right to payment for work completed, therefore
performance obligations are satisfied over time. Using the output method for revenue recognition, the Group recognises
revenue based on an appraisal of results achieved or percentage complete.
· Sale of goods
Revenue from the sale of goods is recognised on a per-unit basis as the goods are delivered to the customer premise,
which is deemed to be the time when the performance obligation is performed.
Revenue for goods sold but not delivered is recognised if:
(a) the reason for the bill-and-hold arrangement must be substantive;
(b) the product must be identified separately as belonging to the customer;
(c) the product currently must be ready for physical transfer to the customer:
(d) the entity cannot have the ability to use the product or to direct it to another customer.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional
because only the passage of time is required before the payment is due.
· Interest revenue
Interest revenue is recorded using the effective interest rate method ("EIR"). The EIR is the rate that exactly discounts the
estimated cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net
carrying amount of the financial asset.
Assets and liabilities related to contracts with customers
The Group has recognised the following assets and liabilities related to contracts with customers:
Contract Liabilities
Deferred revenue
Refer to Note C.6 deferred revenue for a breakdown of deferred revenue recognised in the current year.
2023
$'000
2022
$'000
1,243
4,046
ANNUAL REPORT 2023 26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
A.3 Other income
Grant income
Rental income
Research and development grant
Other
Recognition and measurement
· Grant income
2023
$'000
2022
$'000
4,825
2,093
150
732
4
122
134
194
5,711
2,543
In FY23, Orbital achieved the relevant operational milestones and reduced the WA government loan value by $4.5M.
Accounting standards require interest to be imputed while the loan is interest free. The benefit of the loan reduction of
$4.5M and it being interest free $0.3M are recognised as grant income, in accordance with AASB 120 Accounting for
Government Grants. Refer to Note D.1 for further details.
· Research and development grant
In accordance with research and development tax legislation the Group is entitled to a refundable R&D tax offset
accounted for as research and development grant. Government grants are recognised when it is probable that the grant
will be received and all attached conditions will be complied with. When the grant relates to an asset, it is recognised as
a reduction in the related asset. When the grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is intended to compensate, are expensed.
· Other income
The other income represents non-recurring IP sales.
ANNUAL REPORT 2023 27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
A.4 Expenses
(a) Employee benefits expense
(d) Materials and consumable expenses
Salaries and wages
2023
2022
$'000
6,351
$'000
6,831
Defined contribution plans
798
876
Share based payments (Note F.3)
23
109
Annual and long service leave
Other personnel costs
807
669
1,008
817
8,648
9,641
(b) Finance costs
Interest expense
(c) Other expenses
Administration
Marketing and investor relations
Corporate consulting services
Freight
Other
2023
$'000
2022
$'000
214
670
214
670
2023
$'000
119
27
-
66
37
249
2022
$'000
118
100
147
166
49
580
Raw materials and consumables
Change in inventories
2023
$'000
3,122
5,094
8,216
2022
$'000
4,818
1,693
6,511
Recognition and measurement
· Defined contribution plans
Obligations for contributions to defined contribution
superannuation funds are recognised as an expense as
incurred.
The Group contributes to defined contribution plans for
the provision of benefits to Australian employees on
retirement, death or disability. Employee and employer
contributions are calculated on percentages of gross
salaries and wages. Apart from contributions required
under law, there is no legally enforceable right for the
Group to contribute to a superannuation plan.
ANNUAL REPORT 2023 28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
The Group has unused tax losses that arose in Australia,
for which no deferred tax assets have been recognised of
$52,846,066 (2022: $46,875,353) and are available
indefinitely for offsetting against future taxable profits of
the Group and its controlled entities in which those losses
arose.
Under the tax laws of the United States of America,
unused tax losses that cannot be fully utilised for tax
purposes during the current period may be carried forward
into future periods, subject to statutory limitations. At 30
June 2023, the Group had unused tax losses for which no
deferred tax assets have been recognised of
US$13,764,000 (2022: US$13,764,000) of which
US$9,518,000 will expire by 2023.
Recognition and measurement
· Current income tax
Current income tax assets and liabilities are measured at
the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted at the
reporting date in the countries where the Group operates
and generates taxable income.
· Deferred tax
Deferred tax is provided for using the full liability method
on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
A.5 Taxes
The major components of the income tax expense for the
years ended 30 June 2023 and 2022 are:
Deferred income tax expense
Adjustments in respect of prior years
Total income tax expense
2023
$'000
2022
$'000
- (4,393)
- 323
- (4,070)
The reconciliation of the income tax benefits/(expenses)
and accounting profit multiplied by the Australian domestic
tax rate for the years ended 30 June 2023 and 2022 are:
Accounting profit/(loss) before tax
from continuing operations
Accounting profit/(loss)
before income tax
At Australia's statutory income tax
rate of 25.0% (2022: 25.0%)
Adjustments in respect of the
change in statutory income tax rate
Difference in overseas tax rates
Non assessable income
Adjustments in respect of prior years
Deferred tax asset not recognised
Deferred tax asset derecognised
Non-deductible expenses
Income tax expense
Income tax expense reported in the
statement of profit or loss
2023
$'000
20
2022
$'000
(7,061)
20
(5)
(7,061)
1,765
-
-
-
-
(183)
-
188
(107)
(20)
33
323
(2,326)
(4,070)
332
-
(4,070)
-
(4,070)
Deferred tax balances comprise of the following deferred
tax assets/(deferred tax liabilities):
Inventory
Revenue received in advance
Plant and equipment
Provisions and accruals
Intangible asset
ROU leasing assets
ROU leasing liabilities
Foreign exchange gains/losses
Other
Unrecognised temporary differences
Net deferred tax asset
2023
$'000
639
311
25
1,256
(809)
(97)
138
29
61
(1,553)
2022
$'000
747
998
(47)
1,179
(761)
(126)
127
(14)
(254)
(1,849)
-
-
ANNUAL REPORT 2023 29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Key estimate: Recoverability of deferred tax assets
At 30 June 2023, the Group recognised nil (2022: nil) of
deferred tax assets after assessing the likelihood of
offsetting unused tax losses against future taxable
profits.
Offsetting deferred tax balances
Deferred tax assets and liabilities are offset only if there
is a legally enforceable right to offset current tax assets
and liabilities and when they relate to income taxes
levied by the same taxation authority on either the same
taxable entity or different taxable entities that the Group
intends to settle its current tax assets and liabilities on a
net basis.
Tax consolidation
Orbital Corporation Limited and its 100 per cent owned
Australian resident subsidiaries formed a tax
consolidated group with effect from 1 July 2002. Orbital
Corporation Limited is the head entity of the tax
consolidated group. Members of the tax consolidated
group have entered into a tax sharing agreement that
provides for the allocation of income tax liabilities
between the entities should the head entity default on its
tax payment obligations. No amounts were recognised
in the financial statements in respect of this agreement
on the basis that the probability of default was assessed
as remote.
Orbital Corporation Limited and its controlled entities
continue to account for their own current and deferred
tax amounts. The Group has applied the 'separate
taxpayer within Group' approach by reference to the
carrying amount in the separate financial statements of
each entity and the tax values applying under tax
consolidation. In addition to its own current and deferred
tax amounts, Orbital Corporation Limited also
recognised current tax liabilities (or assets) and deferred
tax assets arising from unused tax losses assumed from
its controlled entities in the tax consolidated group.
Deferred tax
Deferred tax liabilities are recognised for all taxable
temporary differences, except:
• When the deferred tax liability arises from the initial
recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit
nor taxable profit or loss
• In respect of taxable temporary differences associated
with investments in subsidiaries, when the timing of the
reversal of the temporary differences can be controlled and
it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred tax assets are recognised for deductible
temporary differences to the extent that it is probable that
taxable profit will be available against which the deductible
temporary differences and carry forward of unused tax
credits and unused tax losses may be utilised, except:
• When the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither accounting profit or loss
• In respect of deductible temporary differences associated
with investments in subsidiaries, deferred tax assets are
recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the
temporary differences may be utilised.
The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be
available or allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the extent
that it is probable that future taxable profits will allow the
deferred tax asset to be recovered. Deferred tax assets
and liabilities are measured at the tax rates that are
expected to apply in the year when the asset is realised or
the liability is settled, based on tax rates and tax laws that
have been enacted or substantively enacted at the
reporting date.
ANNUAL REPORT 2023 30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
A.6 Earnings per share (EPS)
Basic EPS is calculated by dividing the profit for the year
attributable to ordinary equity holders of Orbital Corporation
Limited (“the Parent”) by the weighted average number of
ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit attributable
to ordinary equity holders of the Parent by the weighted
average number of ordinary shares outstanding during the
year, plus the weighted average number of ordinary shares
that would be issued on conversion of all dilutive potential
ordinary shares into ordinary shares.
The following table reflects the income and share data used
in the basic and diluted EPS computations:
Performance rights granted to key management personnel
were deemed potential ordinary shares. Refer to Note F.3
for further details.
There have been no transactions involving ordinary
shares or potential ordinary shares between the reporting
date and the date of authorisation of the financial
statements.
The number of potential ordinary shares not considered
dilutive and contingently issuable are as follows:
Profit/(loss) attributable to ordinary
equity holders of the Parent:
Continuing operations
Discontinued operations
Profit/(loss) attributable to
equity holders of the Parent for
basic earnings
Weighted average number of
ordinary shares for basic EPS
Weighted average number of
ordinary shares adjusted for the
effect of dilution
Options
2023
$'000
2022
$'000
Performance rights
Total
20
-
(11,131)
-
20
(11,131)
2023
Number
2022
Number
104,435,036 86,161,094
104,435,036 86,161,094
Earnings per share
Basic profit/(loss) per share
Diluted profit/(loss) per share
Cents
0.02
0.02
Cents
(12.92)
(12.92)
Earnings per share from continuing operations
Basic profit/(loss) per share
Diluted profit/(loss) per share
Cents
Cents
0.02
0.02
(12.92)
(12.92)
2022
Number
2023
Number
17,500,000
-
430,464 1,549,105
17,930,464 1,549,105
ANNUAL REPORT 2023 31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
B. GROWTH ASSETS
In this section
This section addresses the strategic growth and assets position of the Group at the end of the reporting period
including, where applicable, the accounting policies applied and the key estimates and judgements made.
B.1 Plant and equipment
B.2
Intangible assets
Page 32
Page 34
B.1 Plant and equipment
Plant and
equipment
Leasehold
improvements
Total
$’000
$’000
$’000
Gross carrying amount at cost
At 1 July 2021
Additions
At 30 June 2022
Additions
Grant rebate
At 30 June 2023
13,301
499
13,800
246
(196)
13,850
2,582
15,883
6
505
2,588
16,388
44
-
290
(196)
2,632
16,482
Depreciation and impairment
At 1 July 2021
Depreciation
At 30 June 2022
Depreciation
At 30 June 2023
Net book value
At 30 June 2023
At 30 June 2022
(11,912)
(393)
(12,305)
(452)
(12,757)
(2,324)
(14,236)
(54)
(447)
(2,378)
(14,683)
(48)
(500)
(2,426)
(15,183)
1,093
1,495
206
210
1,299
1,705
Plant and equipment was pledged as security under the
Acknowledgement of Debt entered into with the
Department of Jobs, Tourism, Science and Innovation
and is subject to floating charges. Refer to Note C.7 for
lease disclosure and Note D.1 for further details.
Recognition and measurement
Plant and equipment is stated at cost, net of
accumulated depreciation and accumulated
impairment losses, if any. Such costs include the
cost of replacing part of the plant and equipment.
When significant parts of plant and equipment are
required to be replaced at intervals, the Group
depreciates those parts separately based on their
specific useful lives. Likewise, when a major
inspection is performed, its cost is recognised in the
carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied.
All other repairs and maintenance costs are
expensed as incurred to occupancy expenses in the
statement of profit or loss and other comprehensive
income. An item of plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected from its use or
disposal. Any gain or loss arising on the de-
recognition of the asset, calculated as the difference
between the net disposal proceeds and the carrying
amount of the assets, is included in other income or
other expenses in the statement of profit or loss and
other comprehensive income when the asset is
derecognised.
ANNUAL REPORT 2023 32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
B.1 Plant and equipment (continued)
Impairment of non-financial assets
The Group assesses, at each reporting date, whether
there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the
recoverable amount of the asset or cash generating
unit (“CGU”). The recoverable amount of the asset or
the CGU is the higher of its fair value less costs of
disposal and its value in use. The recoverable amount
is determined for an individual asset, unless the asset
does not generate cash flows that are largely
independent of those from other assets or groups of
assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down to its
recoverable amount.
Impairment losses of continuing operations are
recognised in the statement of profit or loss in expense
categories consistent with the function of the impaired
asset.
In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-
tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. In determining fair value less
costs of disposals, recent market transactions are
taken into account. If no such transactions can be
identified, an appropriate valuation model is used.
These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded
companies or other available fair value indicators.
Key estimate - Impairment of non-current assets
When indicators of impairment are identified, the
Group bases its impairment calculation on detailed
budgets and forecast calculations, which are prepared
separately for each of the Group’s CGUs to which the
individual assets are allocated.
During the year ended 30 June 2021, a strategic
decision was made to cease production in the US and
transition it to Australia. As a result, the CGUs located
in the US became idle and not expected to generate
any future cash flow in the short term, the US assets
were written down to nil value. There were no
indicators of impairment or reversal of impairment in
the year ended 30 June 2023, with remaining assets
expected to be recovered in full from future business
activities.
Depreciation
Depreciation is calculated on a straight-line basis over
the estimated useful life as follows:
Plant and equipment: 3 to 15 years
Leasehold improvements: 3 to 15 years
The residual values, useful lives and methods of
depreciation of plant and equipment are reviewed at
each financial year-end and adjusted prospectively, as
appropriate.
ANNUAL REPORT 2023 33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
B.2 Intangible assets
Consolidated
Year ended 30 June 2023
Cost
Accumulated amortisation and impairment
R&D tax offset recognised
Net carrying amount
Movement
Net carrying amount at the beginning of the year
Additions
Amortisation for the year
R&D tax offset recognised
Net carrying amount at the end of the year
Year ended 30 June 2022
Cost
Accumulated amortisation and impairment
R&D tax offset recognised
Net carrying amount
Movement
Net carrying amount at the beginning of the year
Additions
Amortisation for the year
Net carrying amount at the end of the year
Model 2019
Development
$'000
Model 2021
Development
$'000
Total
$'000
2,611
(1,147)
(1,421)
43
319
-
(276)
43
2,611
(871)
(1,421)
319
595
-
(276)
319
3,919
-
(724)
3,195
6,530
(1,147)
(2,145)
3,238
3,083
836
-
(724)
3,195
3,402
836
(276)
(724)
3,238
3,083
-
-
3,083
5,694
(871)
(1,421)
3,402
1,386
1,697
-
3,083
1,981
1,697
(276)
3,402
The intangible assets comprise of capitalised development costs for the advancement of the modular propulsion
systems. The intangible assets will be amortised using the straight-line method over a finite period of five years from
completion of development.
Recognition and measurement
Intangible assets are measured on initial recognition at cost. Following initial recognition; intangible assets are carried
at cost less amortisation, any impairment losses and research and development tax grants received. Intangible assets
with finite useful lives are amortised on a straight-line basis over their useful lives and tested for impairment whenever
there is an indication that they may be impaired. The amortisation period and method is reviewed at each financial
year end. Model 2021 is in the late stages of development and so amortisation has not yet commenced.
Intangible asset
Internally generated intangible
Research and development
Useful life
Finite (up to five years)
Research costs are expensed as incurred. Development expenditures on individual projects are recognised as an
intangible asset when the Group can demonstrate:
• the technical feasibility of completing the intangible asset so that the asset will be available for use or sale
• its intention to complete and its ability and intention to use or sell the asset
• how the asset will generate future economic developments
• the availability of resources to complete the asset
• the ability to measure reliably the expenditure incurred during the development of the asset
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when the
development is complete and the asset is available for use. It is amortised over the period of expected future benefit.
During the period of development, the asset is tested for impairment annually.
ANNUAL REPORT 2023 34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
C. WORKING CAPITAL MANAGEMENT
In this section
This section addresses inventories, trade and other receivables, cash, other financial assets and trade and other payables of
the Group at the end of the reporting period including, where applicable, the accounting policies applied and the key estimates
and judgements made.
C.1 Inventories
C.2 Trade and other receivables
C.3 Cash and cash equivalents
C.4 Other financial assets
C.5 Trade and other payables
C.6 Deferred revenue
C.7 Leases
Page 37
Page 38
Page 38
Page 39
Page 39
Page 39
Page 40
Financial and capital risks in this section
Liquidity risk management
Liquidity risk arises from the financial liabilities of the Group and the Group's subsequent ability to meet its obligations to repay
financial liabilities as and when they fall due. The liquidity position of the Group is managed to ensure sufficient liquid funds are
available to meet its financial commitments in a timely and cost effective manner.
The Group's liquidity position is managed by the Board of Directors who regularly review cash-flow forecasts prepared by
management, which includes the Group's short and long-term obligations, cash position and forecast liability position to
maintain appropriate liquidity levels. At 30 June 2023, the Group has a total of $2,292,000 of cash at its disposal (2022:
$2,363,000) and a net current asset position $2,247,000 (2022 net current liability: $4,977,000). The remaining contractual
maturities of the Group's financial liabilities are:
At 30 June 2023
Borrowings1
Trade payables and other
liabilities
Lease liabilities
At 30 June 2022
Borrowings
Trade payables and other
liabilities
Lease liabilities
Less than 3
months
$'000
3-12 months
$'000
1-5 years Over 5 years
$'000
$'000
Total
contractual
cashflows
$'000
Carrying amount
(assets)/liabilities
$'000
-
1,500
2,486
- 3,986
1,979
-
-
- 1,979
314
2,293
538
2,038
1,221
3,707
- 2,074
8,039
-
8,486
-
-
- 8,486
3,060
-
-
- 3,060
295
11,841
472
472
-
-
- 767
12,313
-
3,796
1,979
1,835
7,610
8,486
3,060
766
12,312
1 Refer to Note D.1 for details.
ANNUAL REPORT 2023 35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Interest rate risk management
Interest rate risk is the risk that the Group's financial position will fluctuate due to changes in the market interest rates.
The Group's exposure to market interest rates relates primarily to the Group's cash and term deposits with financial
institutions. The primary goal of the Group is to maximise returns on surplus cash, using deposits with maturities of 90
days or less. Management continually monitors the returns on funds invested. The exposure to interest rate risk as at
30 June 2023 is as follows:
Cash and cash equivalents (Note C.3)
Short-term deposits (Note C.4)
2023
2022
$'000 $'000
2,292 2,363
751
586
3,043 2,949
A reasonably possible change in the interest rate (+0.5%/-0.5%) (2022: +0.5%/-0.5%)), with all variables held constant,
would have resulted in a change in post tax profit/(loss) of $11,000/($11,000) (2022: $12,000)/($12,000) and no impact
to other comprehensive income.
Credit risk management
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk from its operating and investing activities, including
trade receivables and short-term deposits with financial institutions. Maximum exposure to credit risk equals to the
carrying amount of these financial assets (as outlined in each applicable note). The significant concentration of credit
risk within the Group relate to receivable balances from the Group's major customer.
The maximum exposure to credit risk for the components of the statement of financial position at 30 June 2023 and
2022 is the carrying amounts as illustrated in Note C.2.
It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures
including an assessment of their independent credit rating, financial position, past experience and industry reputation.
Key individual customer receivable balances are monitored on an ongoing basis. The significant concentrations of
credit risk within the Group relate to receivable balances from the Group's major customer and cash held with
investment grade financial institutions.
The investment of surplus cash in short-term deposits is only invested with a major financial institution to minimise the
risk of default of counterparties.
ANNUAL REPORT 2023 36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
C.1 Inventories
Raw materials
Provision for impairment
Work in progress
Finished goods
Current
Non current
2023
2022
$'000
$'000
8,944 11,946
(2,558)
(2,991)
1,832
3,671
-
224
8,218 12,850
5,980 11,074
2,238 1,776
Recognition and measurement
Inventories are carried at the lower of cost and net realisable value. Costs incurred in bringing each product to its present
location and condition are accounted for as follows:
• Raw materials: weighted average cost
• Finished goods and work in progress: weighted average cost of direct materials and direct manufacturing labour and a
proportion of manufacturing overhead costs
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
Key estimate - Recoverability of inventory
The Group's inventory is predominantly composed of purchased parts used in the construction of engines for sale. The
recoverability of inventory is therefore highly dependent on the level of expected future orders of those engines by the
Group's customers. The estimate of engine sales used in the calculation of the provision recognised at reporting date is
informed by discussions with the Group's customers as to expected volume requirements for the engine programs.
ANNUAL REPORT 2023 37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
C.2 Trade and other receivables
C.3 Cash and cash equivalents
Trade receivables
Other receivables
Impairment of other receivables (a)
2023
2022
$'000
2,101
$'000
1,065
873
866
(849)
(924)
2,125
1,007
(a) At 30 June 2023, the Group has $849,000 (2022:
$924,000) as a provision for impaired receivables in
respect of an amount receivable from Avidsys Pty Ltd as
consideration for the disposal of REMSAFE Pty Ltd on 18
December 2017.
See the "Credit risk management" section on credit risk of
trade receivables, which explains how the Group manages
and measures the quality of trade receivables that are
neither past due nor impaired.
The Group's payment terms on trade receivables range
from 30 - 35 days. The credit risk of trade receivables
neither past due nor impaired was assessed as remote as
historical default rates with associated customers are
negligible.
Recognition and measurement
Trade and other receivables are non-derivative financial
assets with fixed or determinable payments that are not
quoted in an active market.
Trade and other receivables are recognised on initial
recognition at fair value. Subsequent to initial recognition,
trade receivables are measured at amortised cost using
the effective interest rate method, less an allowance for
uncollectible amounts.
Impairment
Trade receivables and contract assets are subject to the
expected credit loss model. The Group applies the AASB 9
simplified approach to measuring expected credit losses
which uses the lifetime expected loss allowance for all
trade receivable and contract assets. The identified
impairment loss was immaterial. While cash and cash
equivalents are also subject to the impairment
requirements of AASB 9, the identified impairment loss
was immaterial.
Fair value
The carrying amount of trade and other receivables
approximates their fair value.
Cash at bank
2023
$'000
2,292
2,292
2022
$'000
2,363
2,363
The reconciliation of net loss after tax to net cash flows from
operations for the years ended 30 June 2023 and 2022 is as
follows:
Profit/(loss) after income tax from continuing
operations
Depreciation & amortisation (Note B.1)
Government loan forgiven
Interest expense
Provision for excess stock
Warranties (Note E.1)
Employee benefits (Note E.1)
Provision for doubtful debt
Share based payment expense (Note F.3)
Net foreign exchange gain
Net cash used in operating activities before
changes in assets and liabilities
2023
2022
$'000
$'000
20 (11,131)
777
723
(4,690)
(1,387)
-
-
(434)
2,868
236
(29)
(75)
23
14
(675)
75
109
2
(416)
(4,170)
(9,820)
Changes in assets and liabilities during the year:
Decrease/(increase) in receivables and
prepayments
(Increase)/decrease in inventories
(Increase)/decrease in deferred tax assets
Increase/(decrease) in payables
(984)
3,234
5,065
(2,951)
-
(3,405)
676
4,070
1,373
5,726
Net cash used in operating activities
(3,494)
(4,094)
Recognition and measurement
Cash and cash equivalents in the statement of financial
position comprise cash at bank and short-term deposits with
an original maturity of three months or less, which are
subject to an insignificant risk as to change in value.
Fair value
The carrying amount of short-term deposits approximates
their fair value.
ANNUAL REPORT 2023 38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
C.4 Other financial assets
C.6 Deferred revenue
Deferred revenue includes revenue allocated to
unsatisfied performance obligations in engineering
services contracts with customers, unsatisfied
performance obligations on sale of goods to customers
and long-term advances received from customers.
A reconciliation of deferred revenue for the years ended
30 June 2023 and 2022 is as follows:
At 1 July
Deferred during the year
Released to the statement of profit or loss
At 30 June
2023
$'000
4,046
7,825
(10,629)
2022
$'000
4,285
6,156
(6,395)
1,243
4,046
Recognition and measurement
Deferred revenue is recognised as a liability when
consideration is received prior to performance obligations
being satisfied with a customer. The deferred revenue is
recognised as income over the periods that the
performance obligations are met.
Short term deposits
2023
$'000
751
751
2022
$'000
586
586
The Group has pledged short term deposits of $751,000
(2022: $586,000) as collateral for financing facilities.
Short-term deposits
Recognition and
measurement
Short-term deposits represent term deposits with financial
institutions for periods greater than 90 days and less than
365 days earning interest at the respective interest rate at
time of lodgement. Short-term deposits are stated at
amortised cost.
Fair
value
The carrying amount of short-term deposits approximates
their fair value.
C.5 Trade and other payables
Trade payables
Other payables
2023
$'000
1,979
-
1,979
2022
$'000
2,846
214
3,060
Recognition and measurement
Trade and other payables are financial liabilities
recognised when goods and services are received prior
to the end of the reporting period, irrespective of whether
or not billed to the Group. Trade and other payables are
recognised on initial recognition at fair value. Subsequent
to initial recognition, trade and other payables are
measured at amortised cost.
Fair
value
The carrying amount of trade and other payables
approximates their fair value.
ANNUAL REPORT 2023 39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
C.7 Leases
The Group leases various premises. Lease terms are
negotiated on an individual basis and contain a range of
different terms and conditions.
Amounts recognised in the balance sheet
Set out below is a summary of the amounts disclosed in the
Consolidated Statement of Financial Position:
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities
include the net present value of variable lease payments
that are based on index or a rate.
Right-of-use assets
Properties
Total right-of-use assets
The recognised right-of-use assets relate to the amount
of the initial measurement of lease liability.
Finance Lease Receivable
A sub lease has been recognised as a Finance Lease
Receivable under AASB 16 Leases. This reduced the
right-of-use asset on adoption.
Current
Non Current
Lease payments are allocated between principal and
finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the
liability for each period. Payments associated with short-
term leases and leases of low-value assets are
recognised on a straight-line basis as an expense in
profit or loss. Short-term leases are leases with a lease
term of 12 months or less.
Lease Liabilities
Current
Non Current
2023
2022
$'000
1,141
1,141
$'000
341
341
2023
2022
$'000
430
253
683
$'000
184
-
184
2023
2022
$'000
752
1,083
1,835
$'000
766
-
766
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following
amounts relating to leases:
Depreciation charge of right-of-use assets
Impairment
Interest expense (included in finance cost)
Interest income
2023
$'000
546
-
57
-
2022
$'000
533
-
77
-
The total cash outflow for leases in 2023 was $807,000
(2022: $871,000).
ANNUAL REPORT 2023 40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
D. DEBT AND CAPITAL
In this section
This section addresses the debt and capital position of the Group at the end of the reporting period including,
where applicable, the accounting policies applies and the key estimates and judgements made.
D.1 Borrowings
D.2 Share capital
D.3 Option reserves
D.4 Reserves
Page 41
Page 42
Page 42
Page 43
Financial and capital risks in this section
Capital risk management
For the purposes of the Group's capital management, capital includes contributed shareholder equity. When
managing capital, management's objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain
a capital structure that ensures the lowest cost of capital, provides a strong capital base so as to maintain
investor, creditor and market confidence and to sustain future development of the business. In order to maintain
or adjust the capital structure, the Group may issue new shares or debt.
D.1 Borrowings
Current
Non-current
2023
$'000
1,452
2,344
3,796
2022
$'000
8,486
-
8,486
Changes in borrowings arising from financing
activities are as follows:
At 1 July 2022
Loan forgiveness grant income
Grant income (loan deferral)
Interest expenses
At 30 June 2023
At 1 July 2021
Loan forgiveness grant income
Grant income (loan deferral)
Interest expenses
At 30 June 2022
$'000
8,486
(4,500)
(325)
135
3,796
9,986
(1,500)
(593)
593
8,486
On 25 January 2010, the Department of Jobs,
Tourism, Science and Innovation ("JTSI") provided
the Group with an interest-free loan of
$14,346,000 under the terms of a Deed
(Acknowledgment of Debt) (“the Deed”). The terms
and conditions attached to the Deed are as
follows:
• The term of the loan was 25 January 2010 to 30 May
2025
• The loan balance $9.9M was reclassified as current
borrowings under the loan terms in place at 30 June
2021 while it was under renegotiation.
• Orbital successfully renegotiated the loan and
received formal confirmation of a Deed of Variation on
31 January 2023.
• The Deed of Variation changed the repayment due
dates so that the term of the loan was reduced to 31
December 2024.
• The repayment offset options provide the potential to
forgive the entire value of the loan. The offset
provisions are contingent on the Company achieving
operational milestones over the remaining period.
• For the year ended June 2023, Orbital achieved
various operational milestones and reduced the loan
by $4.5M.
Accounting standards require interest to be imputed
while the loan is interest free. The benefit of extension
of interest free terms agreed under the Deed of
Variation ($0.3M) is recognised on contract effective
date as grant income, in accordance with AASB 120
Accounting for Government Grants.
The interest-free loan is secured by way of a first
ranking floating debenture over the whole of the assets
and undertakings of the Group.
ANNUAL REPORT 2023 41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
D.2 Share capital
Ordinary shares issued and fully paid
Movement in ordinary shares
At 1 July 2021
Issue of ordinary shares
Share issue transaction costs
Employee Share plan
At 30 June 2022
At 1 July 2022
Issue of ordinary shares
Share issue transaction costs
Employee Share plan
At 30 June 2023
Recognition and measurement
2023
$'000
41,380
Number
77,658,776
12,985,114
-
352,804
90,996,694
90,996,694
25,000,000
-
1,238,610
117,235,304
2022
$'000
37,683
$000's
31,265
6,479
(105)
44
37,683
37,683
3,968
(306)
36
41,380
Share capital is recognised at the fair value of the consideration received. The cost of issuing shares is shown in the
share capital as a deduction, net of tax, from the proceeds. Own equity instruments that are re-acquired are recognised
at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or
cancellation of the Group’s own equity instruments. The Company does not have authorised capital or par value in
respect of its issued shares.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after
creditors and are fully entitled to any proceeds of liquidation.
D.3 Option Reserve
Issued Options
Movement in options
At 1 July 2022
Issue of options
Revaluation
At 30 June 2023
2023
$'000
1,033
Number
-
17,500,000
-
17,500,000
2022
$'000
-
$000's
-
1,033
-
1,033
As part of the new share issue during the year, 17,500,000 new options were issued for nil cash consideration and were
valued at $1,033,205 using the Black Scholes method of calculation at grant date of 7 February 2023. A volatility rate of
99.8% and a risk-free rate of 3.16% was used in the calculation. The options are exercisable at $0.35 on or before the
date that is 3 years after the date of issue.
ANNUAL REPORT 2023 42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
D.4 Reserves
At 1 July 2021
Foreign currency translation
Rights issued pursuant to performance rights plan
At 30 June 2022
At 1 July 2022
Foreign currency translation
Rights issued pursuant to performance rights plan
At 30 June 2023
Nature and purpose of reserves
Employee
benefits
reserve
$000's
2,600
Foreign currency
translation reserve
$000's
435
Total
$000's
3,035
(495)
65
2,605
(495)
-
(60)
(60)
2,605
2
-
2
(13)
(58)
2,594
-
65
2,665
.
2,665
-
(13)
2,652
Foreign currency translation reserve
Used to record foreign exchange differences arising from the translation of the financial statements of foreign entities
from their functional currency to the Group’s presentation currency.
Employee benefits reserve
The employee benefits reserve records the share-based payments provided to key management personnel as part of
their long-term incentive remuneration. Refer to Note F.3 for further details.
ANNUAL REPORT 2023 43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
E. OTHER ASSETS AND LIABILITIES
In this section
This section addresses the other assets and liabilities position of the Group at the end of the reporting period
including, where applicable, the accounting policies applies and the key estimates and judgements made.
E.1 Provisions
Page 44
E.1 Provisions
At 1 July 2022
Arising during the year
Utilised
Expired
At 30 June 2023
Current
Non-current
At 1 July 2021
Arising during the year
Utilised
At 30 June 2022
Current
Non-current
Warranties
$000's
2,633
338
(11)
(91)
2,869
2,869
-
2,869
2,595
157
(119)
2,633
2,633
-
2,633
Employee
benefits
$000's
1,307
681
(710)
-
1,278
1,227
51
1,278
2,007
518
$000's
3,940
1,018
(721)
(91)
4,147
4,096
51
4,147
4,602
675
(1,218)
(1,337)
1,307
1,259
48
1,307
3,940
3,892
48
3,940
Recognition and measurement
Provisions are recognised when the Group has a present obligation, legal or construction, as a result of a past
event, it is probable that an outflow of resources embodying benefits will be required to settle an obligation and
a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a pre-tax discount rate that
reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
Provision for warranties
The Group provides for a provision for warranties for general repairs for two years after its propulsion system
assemblies ("PSA") are sold. The provision for warranties represents the liability for potential warranty claims
against the Group and is recognised at the point in time when a PSA is sold. The valuation of the provision for
warranties is based on the product of the estimated defect rate, the cost of the PSA and the volume of PSAs
sold.
Employee benefits
The Group does not expect its long-service or annual leave benefits to be settled wholly within twelve months of
each reporting date. These liabilities are measured at the present value of the estimated future cash outflow to
be made to the employees using the projected unit credit method. Expected future payments are discounted
using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies
that match, as closely as possible, estimated future cash flows.
Other employee benefits expected to be wholly settled within one year after the end of the period in which the
employees render the related services are classified as short-term benefits and are measured at the amount
due to be paid.
ANNUAL REPORT 2023 44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
F. OTHER NOTES
In this section
This section addresses information on other items which require disclosure to comply with Australian Accounting
Standards and the Corporations Act 2001 (Cth). This section includes Group structure information and other
disclosures.
F.1 Key management personnel compensation
F.2 Related parties
F.3 Share based payments
F.4 Subsidiaries
F.5 Parent entity information
F.6 Auditor remuneration
F.7 Events after the end of the reporting period
F.8 Other accounting policies
F.9 New accounting standards
45
45
46
47
47
48
48
48
48
F.1 Key management personnel compensation
Compensation of key management personnel of the
Group
Short term employee benefits
Post-employment benefits
Long-term employee benefits
Share based payments
2023
$
2022
$
1,061,639 1,407,391
86,927
(292,709)
84,138
1,163,821 1,285,747
80,864
21,029
289
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to
key management personnel. The compensation of key management personnel is included in the employee benefits
expense in the statement of profit or loss and other comprehensive income.
Refer to table 2 and table 3 of the Remuneration report for KMP share and equity holdings, including performance
rights.
F.2 Related parties
Group structure
Note F.4 provides information about the Group’s structure, including details of subsidiaries.
Transactions with directors
There were no transactions with directors during the year. Key management personnel compensation is disclosed in
Note F.1.
No other director or key management personnel entered into a material contract with the Group from the end of the
previous financial year.
ANNUAL REPORT 2023 45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
F.3 Share based payments
Equity-settled share based payment
transactions
2023
$'000
23
23
2022
$'000
109
109
There were no cancellations or modifications to awards in
the 2023 or 2022 financial years. Share-based payment
plans are explained below:
Employee Share Plan No. 1
The Group provides benefits to its employees in the form
of share based payments in which employees render
services for ordinary shares in the Group. Under the plan,
each eligible employee is offered fully paid ordinary
shares to a maximum value of $1,000 per annum.
For the year ended 30 June 2023, 231,969 ordinary
shares (2022: 104,520 ordinary shares) were issued on 9
May 2023 at a market value on the date of issue of
$35,955 (2022: $44,000).
2020 Executive LTI Plan and 2020 CEO LTI Plan
On 28 October 2020 and 04 December 2020, the Group
issued 717,198 performance rights to key management
personnel as part of their long-term incentive plan. The
terms of the performance rights are set out on page 10 of
the Directors' Report. During the year ended 30 June
2023, no performance rights issued under the plan
vested. The share based payment expense recognised
for the year ended 30 June 2023 was $nil (2022:
$64,000).
Movements during the year
The following table illustrates the number of performance
rights during the year:
Outstanding at 1 July
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at 30 June
2023
Number
2022
Number
1,549,105 2,230,420
-
-
(1,006,641)
(240,250)
(112,000)
(441,065)
430,464 1,549,105
The weighted average remaining contractual life of
performance rights outstanding at 30 June 2023 was
0.25 years (2022: 1.25 years).
The following tables list the inputs into the models used
for the plans for the years ended 30 June 2023 and 2022
respectively:
Grant date
Expiry date
Share price at grant date
Fair value ($/right) - Tranche 1
Fair value ($/right) - Tranche 2
Expected volatility
Risk-free interest rate
Remaining contractual life
Model used
2020
Executive
LTI Plan
28/10/2020
2020 CEO
LTI Plan
4/12/2020
30/09/2023 30/09/2023
$1.19
0.970
0.760
70%
$1.18
0.980
0.730
70%
0.12%
0.13%
1.25 years 1.25 years
Monte
Carlo
Monte
Carlo
The expected life of the performance rights is based on
historical data and current expectations and is not
necessarily indicative of exercise patterns that may occur.
The expected volatility of performance rights reflects the
assumption that the historical volatility over a period similar
to the life of the performance rights is indicative of future
trends, which may not necessarily be the actual outcome.
Recognition and measurement
Employees, including key management personnel, of the
Group receive remuneration in the form of share-based
payments, whereby employees render services as
consideration for equity instruments; that is, equity-settled
transactions. The cost of equity-settled transactions is
determined using the fair value of the equity instrument at
the date when the grant is made using an appropriate
valuation model.
The cost arising from share-based payments is recognised
as an employee benefits expense, together with a
corresponding increase in equity over the period in which the
service and, where applicable, the performance conditions,
are fulfilled; that is, the vesting period. The cumulative
expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Group’s best
estimate of the number of equity instruments that will
ultimately vest. The expense or credit in the statement of
profit or loss and other comprehensive income represents
the movement in the cumulative expense recognised as at
the beginning and end of that period.
Service and non-market performance conditions are not
taken into account when determining the grant date fair
value of the awards, but the likelihood of the condition being
met is assessed as part of the Group’s best estimate of the
number of shares that will vest. Market performance
conditions are reflected within the grant date fair value.
ANNUAL REPORT 2023 46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
F.4 Subsidiaries
The ultimate parent company of the Group is Orbital Corporation Limited. The consolidated financial statements of the
Group include:
Class of
shares
Country of
incorporation
Principal
activities
% equity interest
2023
2022
Entity
Orbital Australia Pty Ltd
Orbital Australia Manufacturing Pty Ltd
OEC Pty Ltd
S T Management Pty Ltd
OFT Australia Pty Ltd
Investment Development Funding Pty Ltd
Power Investment Funding Pty Ltd
Kala Technologies Pty Ltd
Orbital Share Plan Pty Ltd
Note
(b)
(c)
(a)
Ordinary
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Orbital Holdings (USA) Inc.
Orbital Fluid Technologies Inc.
Ordinary United States
Ordinary United States
Orbital UAV USA, LLC
Ordinary United States
Production &
Development
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Production &
Development
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(a) Orbital Share Plan Pty Ltd was established on 22 September 2008 and acts as the trustee for Executive Long Incentive Performance Rights Plans.
(b) The Production activities are focussed on the manufacture, assembly and delivery of engines and propulsion systems for unmanned aerial vehicles,
and the continuous improvement of propulsion system and component part costs; product quality; and timing of product delivery.
(c) The Development activities specialise in the development of new UAV propulsion systems and flight critical components, including unmanned aerial
vehicle engineering studies, engine mapping, maintenance certification and engineering technical support across the Group.
F.5 Parent entity information
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Issued capital
Options Reserve
Accumulated losses
Employee benefits reserve
Total equity
Profit/(loss) of the parent
Total comprehensive profit/(loss) of the parent entity
2023
$'000
-
7,625
1,452
2,344
3,830
2022
$'000
-
9,349
8,486
-
863
41,380
37,683
1,033
-
(41,235)
(39,484)
2,652
3,830
4,689
4,689
2,665
863
(9,033)
(9,033)
ANNUAL REPORT 2023 47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
F.6 Auditor remuneration
During the year the following fees were paid or payable for
services provided by PricewaterhouseCoopers Australia
(PwC) as the auditor of the parent entity, Orbital Corporation
Limited, by PwC’s related network firms and by non-related
audit firms:
2023
$
2022
$
Intangible assets
Patents
Patents, licences and technology development and
maintenance costs, not qualifying for capitalisation,
are expensed as incurred.
(a) Auditors of the Group - PwC and related network firms
Fair value measurement
Audit and review of financial reports
273,138
149,360
Tax compliance services
Other services
50,601
179,762
20,400
93,562
344,139
422,684
(b) Other auditors and their related network firms
Tax compliance services
- 26,669
- 26,669
F.7 Events after the end of the reporting period
There were no reportable events after the reporting period
end.
F.8 Other accounting policies
Goods and services tax
Revenue, expenses and assets are recognised net of the
amount of 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
acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amounts of GST
included. The net amount of GST recoverable from, or
payable to, the Australian Taxation Office (“ATO”) is included
as a current asset or liability in the consolidated statement of
financial position.
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 ATO are classified as operating cash flows.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described
as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
► Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities
► Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable
► Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the
financial statements at fair value on a recurring basis,
the Group determines whether transfers have
occurred between levels in the hierarchy by re-
assessing categorisation (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
F.9 New accounting standards
New standards and interpretations
The Group has reviewed new standards and
interpretations and none of the new and amended
accounting standards and interpretations will
significantly affect the Group's accounting policies,
financial position or performance.
ANNUAL REPORT 2023 48
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Orbital Corporation Limited, I state that:
1.
(a)
(b)
(c)
2.
In the opinion of the Directors:
The financial statements and notes and the additional disclosures included in the Directors’ Report designated
as audited, of the Group are in accordance with the Corporations Act 2001,including:
(i)
(ii)
Giving a true and fair view of the financial position of the Group as at 30 June 2023 and of its
performance, as represented by the results of its operations and its cash flows, for the year ended on
that date; and
Complying with Accounting Standards in Australia and the Corporations Act 2001.
The financial statements and notes also comply with International Financial Reporting Standards as disclosed
in note 2(a).
Other than the matters raised in Note 1.J 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 has been made after receiving the declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001, from the Chief Executive Officer and Chief Financial Officer for the
financial year 30 June 2023.
On behalf of the Board,
JP Welborn
Chairman
TM Alder
Managing Director & Chief Executive Officer
Dated at Perth, Western Australia 21 September 2023
ANNUAL REPORT 2023 49
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report
To the members of Orbital Corporation Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Orbital Corporation Limited (the Company) and its controlled
entities (together 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 2023 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated statement of financial position as at 30 June 2023
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the notes to the financial statements, which include significant accounting policies and other
explanatory information
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
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 & 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.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
ANNUAL REPORT 2023 50
INDEPENDENT AUDITOR’S REPORT
Material uncertainty related to going concern
We draw attention to Note 1.J in the financial report, which indicates that the Group had operating
cash outflows of $3,494,000 for the year ended 30 June 2023. The ability of the Group to continue as
a going concern is dependent on a number of factors identified by the Group, including successful
continued development of new engine models, leading to further committed engineering and
production revenues, and meeting cash flow forecasts. These conditions, along with other matters set
forth in Note 1.J, indicate that a material uncertainty exists that may cast significant doubt on the
Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
The Group specialises in designing and manufacturing unmanned aerial vehicle propulsion systems
for its customers. The accounting processes are structured around a Group finance function at its
corporate head office in Perth, where we performed our audit procedures.
Materiality
•
For the purpose of our audit we used overall Group materiality of $172,000, which represents approximately
1% of the Group’s total revenues.
• We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
• We chose Group revenue because, in our view, it is the benchmark against which the performance of the
Group is most commonly measured.
• We utilised a 1% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
• Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
ANNUAL REPORT 2023 51
INDEPENDENT AUDITOR’S REPORT
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 for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be communicated in our
report.
Key audit matter
How our audit addressed the key audit matter
Valuation of Inventories
(Refer to note C.1) $8.2 million
At 30 June 2023 the Group held inventories with a
cost of $10.8 million. These inventories comprise of
raw materials and work in progress which will be
used in the construction of engines by the Group.
At 30 June 2023, the Group recognised a provision of
$2.6 million to reduce the carrying value of certain
items of inventory to its net realisable value, as
required by Australian Accounting Standards.
We focused on this matter due to the significance
of the inventories balance to the Consolidated
Statement of Financial Position and the estimation
required in determining the quantum of the
provision.
In assessing the Group’s valuation of inventories at the
lower of cost or net realisable value we performed the
following procedures, amongst others:
• assessed the application of inventory costing
methodologies and whether this was consistent
with the requirements of Australian Accounting
Standards.
• agreed the cost of a haphazard sample of
inventory items to that shown in third party
invoices.
• on a sample basis, evaluated the direct labour
costs allocated to engines in inventories by
inspecting timesheets and agreeing the labour
cost to payroll data.
• on a sample basis, recalculated the mathematical
accuracy of the determination of the cost of work
in progress items in inventories.
• evaluated whether inventories were carried at the
lower of cost and net realisable value, by
comparing the cost of inventories in each
engine's respective final bill of material against
sale prices in customer contracts.
• on a sample basis, performed substantive
procedures to determine if raw materials and
work in progress included in the inventories sub
ledger were attributed to the correct engine, by
assessing the individual components making up
the final approved bill of materials of each engine.
• assessed management's assumptions on
expected demand for engines by comparing to
quantities under existing signed contracts and
open purchase orders.
ANNUAL REPORT 2023 52
INDEPENDENT AUDITOR’S REPORT
Key audit matter
How our audit addressed the key audit matter
Accounting for the Department of Jobs, Tourism,
Science and Innovation (“JTSI”) loan
(Refer to note D.1)
During the year, the Group renegotiated the terms of
the loan with JTSI, resulting in new repayment terms
and the ability to offset repayments if operational
milestones were met (the ‘Deed of Variation’).
Through the application of Australian Accounting
Standards, the Group recognised $4.8 million in grant
income and $0.1 million in interest expense relating to
the loan for the year ended 30 June 2023.
Accounting for the JTSI loan was determined to be a
key audit matter due to the significance of the loan
balance and grant income recognised to the Group.
• evaluated a sample of individual components of
inventory items that were expected to be utilised
within expected demand by testing
management’s calculation of the number of units
of the relevant component required to complete
those engines.
• evaluated the adequacy of the disclosures made
in Note C.1 in light of the requirements of
Australian Accounting Standards.
In assessing the accounting for the JTSI loan, we
performed the following procedures, among others:
• obtained an understanding of the key terms of the
Deed of Variation.
• obtained an understanding of the accounting
treatment adopted by the Group in accounting for
the revised loan terms.
• assessed the assumptions used by the Group in
determining which portions of the loan had been
or were sufficiently likely to be forgiven by
obtaining supporting evidence of the likelihood of
completing the milestone.
• evaluated management’s calculations of grant
income and interest expense arising from the
loan.
• assessed the reasonableness of interest rate
assumptions utilised by management in
determining the initial fair value of the loan.
• evaluated management calculations in
determining the carrying value and classification
of the loan as at 30 June 2023 by inspecting
correspondence and comparison to the terms in
the Deed of Variation.
• evaluated the adequacy of the disclosures made
in Note D.1 in light of the requirements of
Australian Accounting Standards.
ANNUAL REPORT 2023 53
INDEPENDENT AUDITOR’S REPORT
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2023, 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 through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
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 on the other information that we obtained prior to the date of
this auditor’s report, 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 have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
ANNUAL REPORT 2023 54
INDEPENDENT AUDITOR’S REPORT
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 7 to 14 of the directors’ report for the year
ended 30 June 2023.
In our opinion, the remuneration report of Orbital Corporation Limited for the year ended 30 June 2023
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.
PricewaterhouseCoopers
Ian Campbell
Partner
Perth
21 September 2023
ANNUAL REPORT 2023 55
SHAREHOLDING DETAILS
Class of Shares and Voting Rights
As at 30 June 2023 there were 4,977 shareholders of the ordinary shares of the Company. The voting rights attaching to the ordinary
shares, set out in Article 8 of the Company’s Constitution, subject to any rights or restrictions for the time being attached to any class or
classes of shares, are:
a)
at meetings of members or class of members, each member entitled to vote may vote in person or by proxy or representative;
and
b) on a show of hands every person present who is a member has one vote, and on a poll every person present in person or by
proxy or representative has one vote for each ordinary share held.
Substantial Shareholders and Holdings as at 27 July 2023
UIL Limited
First Sentier Wholesale Developing Companies Fund
Distribution of Shareholdings as at 30 June 2023
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Number of shareholders
Total Shares on Issue
Number of unmarketable parcels
Top 20 Shareholders as at 30 June 2023
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
ANNAPURNA PTY LTD
HUNTER CAPITAL ADVISORS P/L
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
DEBUSCEY PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR TODD MATHEW ALDER
BIRKETU PTY LTD
MR JOHN PAUL WELBORN
MR MICHAEL WILLIAM FORD & MRS NINA BETTE FORD
BNP PARIBAS NOMS PTY LTD
MR KENT MILLER LOGIE
MR JOHN PAUL WELBORN & MS CAROLINE ANNE WELBORN
VULCAN INVESTMENTS PTY LTD
MR GEOFFREY VICTOR DAY
BOND STREET CUSTODIANS LIMITED
MR ADAM GARE
MR ADRIANO DINO CUGOLA
MR DAVID LUIGI TAGLIAFERRI & MRS NICOLA MARIE TAGLIAFERRI
Top 20 Shareholders Total
The 20 largest shareholders hold 66.74% of the ordinary shares of the Company (2022: 68.85%).
On-market share buy-back
There is no current on-market buy-back.
38,094,822
13,025,631
32.61%
11.15%
2,603
1,309
442
528
95
4,977
116,829,173
2,401,841
NUMBER OF
SHARES
HELD
37,997,762
16,767,730
% OF
SHARES
32.52
14.35
3,074,167
3,000,000
2,335,943
1,850,000
1,635,828
1,471,639
1,455,688
1,199,380
1,039,105
996,255
899,603
792,287
600,000
600,000
583,334
575,000
550,000
2.63
2.57
2.00
1.58
1.40
1.26
1.25
1.03
0.89
0.85
0.77
0.68
0.51
0.51
0.50
0.49
0.47
545,000
77,968,721
0.47
66.74
ANNUAL REPORT 2023 56
CORPORATE INFORMATION
ABN 32 009 344 058
REGISTERED AND PRINCIPAL OFFICE
4 Whipple Street
Balcatta, Western Australia 6021
Australia
CONTACT DETAILS
Australia
Telephone: 61 (08) 9441 2311
contact@orbitalcorp.com.au
USA
Address: 210 Wasco Loop, Hood River, OR 97031, USA
info@orbitaluav.com
INTERNET ADDRESS
www.orbitaluav.com
DIRECTORS
J.P. Welborn, Chairman
T.M. Alder, Managing Director and Chief Executive Officer
S.B. Gallagher
F.K. Abbott
COMPANY SECRETARY
T. Spencer
SHARE REGISTRY
Link Market Services Limited
Level 12 QV1 Building
250 St Georges Terrace
Perth, Western Australia 6000
Telephone: 61 (08) 9211 6670
SHARE TRADING FACILITIES
Australian Stock Exchange Limited (Code “OEC”)
AUDITORS
PricewaterhouseCoopers
125 St Georges Terrace
Perth, Western Australia 6000
ANNUAL REPORT 2023 57