THRED LIMITED
ANNUAL FINANCIAL REPORT
30 June 2020
1
Thred Limited
Corporate directory
30 June 2020
Directors
David Wheeler - Non-executive Director and Chairman
Sol Majteles - Non-executive Director
Joe Graziano - Non-executive Director
Company secretary
Joe Graziano
Registered office & principal place
of business
c/o Blackwall Legal
Postal address
Share registry
Auditor
Solicitors
Securities Exchange
Level 26, 140 Saint Georges Terrace, Perth WA 6000
GPO Box 2704, Perth WA 6001
Ph: +61 (0)4 116 495 51
Fax: +61 (0)8 6169 2501
Email: contact@thred.im
Web: http://thred.im/
Advance Share
110 Stirling Highway, Nedlands, WA 6009
Postal address: PO Box 1156, Nedlands, WA 6909
Ph: +61 (0)8 9389 8033
Fax: +61 (0)8 9262 3723
Web: www.advancedshare.com.au
Bentleys
London House, Level 3, 216 St Georges Terrace, Perth WA 6000
Ph: +61 (0)8 9226 4500
Fax: +61 (0)8 9226 4300
Web: www.bentleys.com.au
Blackwall Legal
Level 26, 140 St Georges Terrace, Perth WA 6000
Australian Securities Exchange
Level 40, Central Park, 152-158 St Georges Terrace, Perth WA 6000
Ph within Australia: 131 ASX (131 279) or +61 (0)2 9338 0000
Fax: +61 (0)2 9227 0885
Web: www.asx.com.au
Stock exchange listing
Thred Limited shares are listed on the Australian Securities Exchange (ASX code: THD)
2
Thred Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Thred Limited
36 124 541 466
For the year ended 30 June 2020
For the year ended 30 June 2019
2. Results for announcement to the market
Revenues from ordinary activities
Profit from ordinary activities after tax attributable to the owners of
Thred Limited
Profit for the year attributable to the owners of Thred Limited
$
1868.8% to
1,034,116
132.1%
to
132.1% to
455,060
455,060
up
up
up
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Comments
The profit for the Group after providing for income tax amounted to $455,060 (30 June 2019: loss of $1,415,506).
Refer to Director's Report in the attached Annual Report.
3. Net tangible assets
Net tangible assets per ordinary security
4. Dividends
Reporting
period
Cents
Previous
period
Cents
0.12
0.10
Current period
There were no dividends paid, recommended or declared during the current financial period.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
5. Dividend reinvestment plans
Not applicable.
3
Thred Limited
Appendix 4E
Preliminary final report
6. Control gained over entities
Name of entities (or group of entities)
AR Technologies Pty Ltd
Date control gained
9 June 2020
Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax
during the period (where material)
Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) for the
whole of the previous period (where material)
$
-
-
7. Loss of control over entities
Not applicable.
8. Details of associates and joint venture entities
Name of associate / joint venture
Reporting entity's percentage
holding
Contribution to profit/(loss)
(where material)
Reporting
period
%
Previous
period
%
Reporting
period
$
Previous
period
$
AR Technologies Pty Ltd
100.0%
18.9%
-
15,479
Group's aggregate share of associates and joint venture
entities' profit/(loss) (where material)
Profit/(loss) from ordinary activities before income tax
Income tax on operating activities
-
-
15,479
-
9. Foreign entities
Details of origin of accounting standards used in compiling the report:
Not applicable.
10. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unqualified opinion has been issued.
4
Thred Limited
Appendix 4E
Preliminary final report
11. Attachments
Details of attachments (if any):
The Annual Report of Thred Limited for the year ended 30 June 2020 is attached.
5
Thred Limited
Directors' report
30 June 2020
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter
as the 'Group') consisting of Thred Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended 30 June 2020.
Directors
The following persons were Directors of Thred Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
David Wheeler - Non-executive Director and Chairman
Hersh Solomon Majteles - Non-executive Director
Joe Graziano - Non-executive Director (appointed 1 August 2018)
Information on Directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
David Wheeler
Non-executive Director and Chairman (appointed 30 August 2017, appointed as
Chairman 11 September 2017)
Fellow AICD, Member Turnaround Management Australia
Mr Wheeler has more than 30 years of Senior Executive Management, Corporate
Advisory and Directorship experience. He is a foundation Director and Partner of
Pathways Corporate a boutique Corporate Advisory firm that undertakes assignments
on behalf of family offices, private clients, and ASX listed companies.
Ragnar Metals Limited, Eneabba Gas Limited, Protean Energy Limited, Avira Resources
Limited and UltraCharge Limited.
Former directorships (last 3 years): Antilles Oil and Gas NL, Ausmex Mining Group Limited, Castillo Copper Limited and 333D
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Limited.
Member and Chair of Remuneration & Nomination Committee
25,000,000
Hersh Solomon Majteles
Non-executive Director
Mr Majteles is a commercial lawyer and has been in private legal practice since 1972.
Mr Majteles has over 35 years’ experience in business, corporate, property and
commercial law and practice. Since 1983 he has been a Director of a number of publicly
listed companies involved in the mining and exploration for gold, base metals, coal,
uranium, oil and gas and in the bio tech sector.
Scout Security Limited
Member and served for a period as Chair of the Remuneration & Nomination
Committee.
22,739,856
Joe Graziano
Non-executive Director (appointed 1 August 2018)
Bachelor of Commerce, Accounting & Economics
Mr Graziano is a Chartered Accountant with over 25 years’ experience in corporate
advisory and consulting to listed and unlisted companies in sectors including mining
services, resources and exploration, and banking and finance.
Tyranna Resources Ltd, Kin Mining NL and Migme Ltd
Other current directorships:
Former directorships (last 3 years): Metals Australia Limited
Special responsibilities:
Other current directorships:
Former directorships (last 3 years): Castillo Copper Limited
Special responsibilities:
Interests in shares:
Member of Remuneration & Nomination Committee
10,000,000
6
Thred Limited
Directors' report
30 June 2020
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr Joe Graziano held the position of Company Secretary at the end of the financial year. Please refer to information on
directors of this Directors’ Report for further information on Mr Graziano.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2020, and the
number of meetings attended by each Director were:
David Wheeler
Hersh Solomon Majteles
Joe Graziano
Full Board
Nomination and
Remuneration Committee
Attended
Held
Attended
Held
4
4
4
4
4
4
-
-
-
-
-
-
Held: represents the number of meetings held during the time the Director held office.
At the date of this report, the Audit, Nomination, and Finance and Operations Committees comprise the full Board of
Directors. The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the
establishment of these separate committees. Accordingly, all matters capable of delegation to such committees are
considered by the full Board of Directors.
Principal activities
The Directors continue to assess other potential asset development or acquisition opportunities.
Review of operations
The profit for the Group after providing for income tax amounted to $455,060 (30 June 2019: loss of $1,415,506).
The net assets of the Group were $2,220,349 (30 June 2019: $1,769,215). The Group's cash and cash equivalents has increased
from $2,115,493 at 30 June 2019 to $2,288,868 as at 30 June 2020.
During the year, the Group continues to consider various recapitalisation strategies and assess potential opportunities to
reinstate the Group to normal trading. Several projects have been reviewed in the technology sector ranging from early stage
to more advanced stage projects closer to commercialisation. The Board will continue to seek more advanced and
commercially viable opportunities that will create value for shareholders.
On 9 June 2020, the Group acquired 100% of former subsidiary AR Technologies Pty Ltd (ARTech), the owner of the Sweep
Business.
7
Thred Limited
Directors' report
30 June 2020
On 30 January 2020, the World Health Organisation declared the coronavirus outbreak ('COVID-19') a "Public Health
Emergency of International Concern" and on March 10, 2020, declared COVID-19 a pandemic. The operations of the Company
could be negatively impacted by the regional and global outbreak of COVID-19 and may impact the Company's results and its
ability to source funding for the next reporting year.
As at the date of this report, the full effect of the outbreak remains uncertain. The effects are likely to be significant but
cannot be reliably estimated or quantified. The Company will monitor the ongoing developments and be proactive in
mitigating the impact on its operations.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have not been
included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the Group.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
Environmental regulation
The Group's operations are not subject to significant environmental regulations in the jurisdictions it operates in, namely
Australia.
The Directors have considered the enacted National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which
introduced a single national reporting framework for the reporting and dissemination of information about the greenhouse
gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current stage of development,
the Directors have determined that the NGER Act has no effect on the Company for the current, nor subsequent, financial
year. The Directors will reassess this position as and when the need arises.
Indemnity and insurance of officers
The Company has entered an Indemnity, Insurance and Access Deed with each Director. Pursuant to the Deed:
"The Director is indemnified by the Company against any liability incurred in that capacity as an officer of the Company to the
maximum extent permitted by law subject to certain exclusions."
The Company must keep a complete set of Company documents until the later of:
●
●
The date which is seven years after the Director ceases to be an officer of the Company; and
The date after a final judgment or order has been made in relation to any hearing, conference, dispute, enquiry or
investigation in which the Director is involved as a party, witness or otherwise because the Director is or was an officer
of the Company (Relevant Proceedings).
The Director has the right to inspect and copy a Company document in connection with any relevant proceedings during the
period referred to above.
8
Thred Limited
Directors' report
30 June 2020
Subject to the next sentence, the Company must maintain an insurance policy insuring the Director against liability as a
director and officer of the Company while the Director is an officer of the Company and until the later of:
●
●
The date which is seven years after the Director ceases to be an officer of the Company; and
The date any Relevant Proceedings commenced before the date referred to above have been finally resolved.
The Company may cease to maintain the insurance policy if the Company reasonably determines that the type of coverage is
no longer available.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Shares under option
There were no unissued ordinary shares of Thred Limited under option outstanding at the date of this report.
Shares issued on the exercise of options
There were no ordinary shares of Thred Limited issued on the exercise of options during the year ended 30 June 2020 and up
to the date of this report.
Options expired
The following options has expired during the reporting period:
Grant date
05/12/2016
02/05/2017
30/04/2017
Date of expiry
27/02/2020
09/05/2020
09/05/2020
Exercise price
Number
under options
$0.05
$0.05
$0.02
20,000,000
20,000,000
9,500,000
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
9
Thred Limited
Directors' report
30 June 2020
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and appropriate
for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation
of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board
of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance
practices:
●
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
capital management
The remuneration policy has been tailored to increase the direct positive relationship between shareholders' investment
objectives and Directors' and Executives' performance. Currently, this may be facilitated through the issue of options to
Directors and Executives to encourage the alignment of personal and shareholder interests. The Company believes this policy
will be effective in increasing shareholder wealth. The Board's policy for determining the nature and amount of remuneration
for Board members and Senior Executive of the Company is as follows:
Non-executive directors remuneration
The Company's Constitution provides that Directors are entitled to be remunerated for their services as follows:
●
The total aggregate fixed sum per annum to be paid to the Directors (excluding salaries of executive Directors) from time
to time will not exceed the sum determined by the Shareholders in general meeting and the total aggregate fixed sum
will be divided between the Directors as the Directors shall determine and, in default of agreement between them, then
in equal shares.
The Directors' remuneration accrues from day to day.
The total aggregate fixed sum per annum which may be paid to non-executive Directors is $300,000. This amount cannot
be increased without the approval of the Company's Shareholders.
●
●
The Directors are entitled to be paid reasonable travelling, accommodation and other expenses incurred by them respectively
in or about the performance of their duties as Directors.
Executive remuneration
The Company’s remuneration policy for executive directors and senior management is designed to promote superior
performance and long-term commitment to the Company. Executives receive a base remuneration which is market related
and may receive performance-based remuneration. The Board reviews Executive packages annually by reference to the
Company's performance, executive performance, and comparable information from industry sectors and other listed
companies in similar industries. Executives are also entitled to participate in employee share and option schemes. An
Incentive Option Plan was approved by shareholders on 10 April 2017.
Fixed Remuneration
Other than statutory superannuation contribution, no retirement benefits are provided for Executive and Non-Executive
Directors of the Company. To align Directors' interests with shareholder interests, the Directors are encouraged to hold shares
in the company.
10
Thred Limited
Directors' report
30 June 2020
Performance Based Remuneration – Short-term and long-term incentive structure
The Board will review short-term and long-term incentive structures from time to time. Any incentive structure will be aligned
with shareholders' interests.
●
●
Short-term incentives - No short-term incentives in the form of cash bonuses were granted to Directors during the year.
Long-term incentives - The Board has a policy of granting incentive options to executives with exercise prices above
market share price. As such, incentive options granted to executives will generally only be of benefit if the executives
perform to the level whereby the value of the Group increases sufficiently to warrant exercising the incentive options
granted.
The executive Directors will be eligible to participate in any short term and long-term incentive arrangements operated or
introduced by the Company (or any subsidiary) from time to time
Consolidated entity performance and link to remuneration
As the Group is in the early stages of development and commercialisation, the Board did not consider earnings during the
current and previous financial years when determining the nature and amount of remuneration of KMP.
Use of remuneration consultants
During the financial year, the Company did not engage any remuneration consultants.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term benefits
Post-
employmen
t benefits
Long-term
benefits
Share-based
payments
2020
David Wheeler
Hersh Solomon Majteles
Joe Graziano
2019
David Wheeler
Hersh Solomon Majteles
Joe Graziano
Rob James*
*
Resigned 1 August 2018
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long service
leave
$
Equity-
settled
$
Total
$
84,000
44,930
36,000
164,930
-
-
-
-
Short-term benefits
-
-
-
-
-
4,165
-
4,165
Post-
employmen
t benefits
-
-
-
-
-
-
-
-
84,000
49,095
36,000
169,095
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long service
leave
$
93,000
37,874
33,000
3,000
166,874
-
-
-
-
-
-
-
-
-
-
-
7,371
-
-
7,371
-
-
-
-
-
11
Equity-
settled
$
Total
$
93,000
45,245
33,000
3,000
174,245
-
-
-
-
-
Thred Limited
Directors' report
30 June 2020
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
David Wheeler
Non-executive Director and Chairman
29 August 2017
Mr Wheeler's appointment as a Non-executive Director will terminate on the date he
retires by rotation under the Company’s Constitution but will continue for further terms
if he is re-elected at future annual general meetings.
Mr Wheeler was elected Chair by the Board of Directors on 11 September 2017. In
consideration for his services as a Chair and member of any Board committee, Mr
Wheeler is paid a set a monthly fee inclusive of superannuation if applicable.
Hersh Solomon Majteles
Non- executive Director
14 March 2016
Mr Majteles’s stepped down as Chair on 18 July 2017 and his appointment as a Non-
executive Director will terminate on the date he retires by rotation under the
Company’s Constitution but will continue for further terms if he is re-elected at future
annual general meetings.
In consideration for his services as a Non-executive Director and member of any Board
committee, Mr Maijteles is paid a set a monthly fee inclusive of superannuation if
applicable.
Joe Graziano
Non-executive Director
1 August 2018
Mr Graziano's appointment as a Non-executive Director will terminate on the date he
retires by rotation under the Company’s Constitution but will continue for further terms
if he is re-elected at future annual general meetings.
In consideration for his services as a Non-executive Director and member of any Board
committee, Mr Graziano is paid a set a monthly fee inclusive of superannuation if
applicable.
Share-based compensation
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during the year
ended 30 June 2020.
Options
There were no options over ordinary shares issued to Directors and other key management personnel as part of compensation
that were outstanding as at 30 June 2020.
There were no options over ordinary shares granted to or vested by Directors and other key management personnel as part
of compensation during the year ended 30 June 2020.
12
Thred Limited
Directors' report
30 June 2020
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at
the start of
the year
Received
as part of
remuneration Additions
Ordinary shares
David Wheeler
Hersh Solomon Majteles
Joe Graziano
25,000,000
22,739,856
10,000,000
57,739,856
-
-
-
-
Loans from/ to key management personnel and their related parties
The Group had no loans with key management personnel as at year end.
Disposals/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
25,000,000
22,739,856
10,000,000
57,739,856
Other transactions with key management personnel and their related parties
During the year, payments were made to key management personnel and their related parties for director fees and rent.
Refer to note 27 for details on related party transactions.
This concludes the remuneration report, which has been audited.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
David Wheeler
Chairman
28 August 2020
13
To the Board of Directors
Auditor’s Independence Declaration under Section 307C of the
Corporations Act 2001
As lead audit partner for the audit of the financial statements of Thred Limited for the
financial year ended 30 June 2020, I declare that to the best of my knowledge and belief,
there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours Faithfully,
BENTLEYS
Chartered Accountants
DOUG BELL CA
Partner
Dated at Perth this 28th day of August 2020
Thred Limited
Contents
30 June 2020
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Thred Limited
Corporate Governance Statement
Shareholder information
16
18
19
20
21
48
49
53
60
15
Thred Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue from continuing operations
Other income
Interest income
Expenses
Employment costs
Write off of assets - receivable
Loss on acquisition
Compliance costs
Development expenses
Information technology costs
Legal expenses
Professional fees
Impairment of loan to associate
Other expenses
Finance costs
Note
2020
$
2019
$
5
6
7
13
29
-
5,453
984,881
49,235
-
47,073
(169,095)
(5,998)
(10,554)
(34,420)
(15,063)
(302)
(43,780)
(145,590)
(126,312)
(20,125)
(7,817)
(219,482)
-
-
(107,760)
(109,455)
(891)
(78,869)
(244,409)
-
(55,000)
(361)
Profit/(loss) before income tax expense from continuing operations
455,060
(763,701)
Income tax expense
Profit/(loss) after income tax expense from continuing operations
Loss after income tax expense from discontinued operations
8
9
-
-
455,060
(763,701)
-
(651,805)
Profit/(loss) after income tax expense for the year attributable to the owners of
Thred Limited
455,060
(1,415,506)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Thred
Limited
Total comprehensive income for the year is attributable to:
Continuing operations
Discontinued operations
(3,926)
(7,450)
(3,926)
(7,450)
451,134
(1,422,956)
451,134
-
(1,422,956)
-
451,134
(1,422,956)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes
16
Thred Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Note
2020
$
2019
$
Cents
Cents
Earnings per share for profit/(loss) from continuing operations attributable to the
owners of Thred Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from discontinued operations attributable to the owners
of Thred Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss) attributable to the owners of Thred Limited
Basic earnings per share
Diluted earnings per share
10
10
10
10
10
10
0.03
0.03
(0.04)
(0.04)
-
-
0.03
0.03
(0.04)
(0.04)
(0.08)
(0.08)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes
17
Thred Limited
Statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of Thred Limited
Non-controlling interest
Total equity
Note
2020
$
2019
$
11
13
14
15
16
17
19
2,288,868
17,503
39,190
2,345,561
2,115,493
55,231
3,525
2,174,249
2,345,561
2,174,249
96,353
28,859
125,212
405,034
-
405,034
125,212
405,034
2,220,349
1,769,215
35,758,537
760,579
(34,298,770)
2,220,346
3
35,758,537
764,505
(34,753,830)
1,769,212
3
2,220,349
1,769,215
The above statement of financial position should be read in conjunction with the accompanying notes
18
Thred Limited
Statement of changes in equity
For the year ended 30 June 2020
Issued
capital
$
Reserves
$
Retained
profits
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 July 2018
35,758,537
771,955
(33,338,324)
3
3,192,171
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
-
-
-
-
(1,415,506)
(7,450)
-
(7,450)
(1,415,506)
-
-
-
(1,415,506)
(7,450)
(1,422,956)
Balance at 30 June 2019
35,758,537
764,505
(34,753,830)
3
1,769,215
Issued
capital
$
Reserves
$
Retained
profits
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 July 2019
35,758,537
764,505
(34,753,830)
3
1,769,215
Profit after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
-
-
-
-
455,060
(3,926)
-
(3,926)
455,060
-
-
-
455,060
(3,926)
451,134
Balance at 30 June 2020
35,758,537
760,579
(34,298,770)
3
2,220,349
The above statement of changes in equity should be read in conjunction with the accompanying notes
19
Thred Limited
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for research and development
R&D incentives received
Other receipts
Interest paid
Note
2020
$
2019
$
-
(577,454)
-
828,426
217,392
(1,371,795)
(109,455)
-
250,972
10,000
(7,817)
(1,263,858)
-
-
6
6
Net cash from/(used in) operating activities
12
253,155
(1,263,858)
Cash flows from investing activities
Payments for property, plant and equipment
Cash balance on acquisition of AR Technologies Pty Ltd
Proceeds from disposal of subsidiary
Interest received
Loans to associates
Net cash from/(used in) investing activities
Cash flows from financing activities
Repayment of borrowings
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
29
-
733
-
37,978
(115,055)
(6,210)
-
111,891
47,073
-
(76,344)
152,754
(3,436)
(3,436)
-
-
173,375
2,115,493
(1,111,104)
3,226,597
Cash and cash equivalents at the end of the financial year
11
2,288,868
2,115,493
The above statement of cash flows should be read in conjunction with the accompanying notes
20
22
22
25
26
27
28
28
29
30
32
33
34
34
35
35
36
36
37
37
37
39
40
40
41
42
44
45
46
46
47
47
47
Thred Limited
Notes to the financial statements
30 June 2020
Note 1. General information
Note 2. Significant accounting policies
Note 3. Critical accounting judgements, estimates and assumptions
Note 4. Operating segments
Note 5. Revenue
Note 6. Other income
Note 7. Employment costs
Note 8. Income tax
Note 9. Discontinued operations
Note 10. Earnings per share
Note 11. Cash and cash equivalents
Note 12. Cash flow information
Note 13. Trade and other receivables
Note 14. Other assets
Note 15. Trade and other payables
Note 16. Borrowings
Note 17. Issued capital
Note 18. Options
Note 19. Reserves
Note 20. Share-based payments
Note 21. Parent entity information
Note 22. Interests in subsidiaries
Note 23. Interests in associates
Note 24. Key management personnel disclosures
Note 25. Financial risk management
Note 26. Fair value measurement
Note 27. Related party transactions
Note 28. Remuneration of auditors
Note 29. Asset Acquisition - AR Technologies Pty Ltd
Note 30. Contingent liabilities
Note 31. Commitments
Note 32. Events after the reporting period
21
Thred Limited
Notes to the financial statements
30 June 2020
Note 1. General information
The financial statements cover Thred Limited as a Group consisting of Thred Limited and the entities it controlled at the end
of, or during, the year. The financial statements are presented in Australian dollars, which is Thred Limited's functional and
presentation currency.
Thred Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Level 26, 140 Saint Georges Terrace, Perth WA 6000
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 28 August 2020.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the Group.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group has adopted AASB 16 Leases from 1 July 2019 retrospectively but has not restated comparatives for the 2019
reporting period as permitted under the specific transition provisions in the standard. AASB 16 replaces AASB 117 Leases
along with three interpretations. Under the new standard, right of use assets are recognized along with the related lease
liability in connection with all operating leases except for those identified as low-value or having a lease term of less than 12
months. There is no significant impact in the financial statements on the adoption of AASB 16.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other
comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial
instruments.
22
Thred Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements,
are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 21.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Thred Limited ('Company' or
'parent entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. Thred Limited and its subsidiaries
together are referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses
incurred by the Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the
fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit
or loss.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Thred Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
23
Thred Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the
associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in
the Group's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from associates
reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-
term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf
of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and recognises
any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained
investment and proceeds from disposal is recognised in profit or loss.
Financial instruments
Financial assets are classified under AASB 9 into measurement classifications on the basis of two criteria which are the
business model within which the financial asset is managed and the contractual cash flow characteristics of the financial
asset.
The financial assets and liabilities of the Group are classified into the following financial statement captions in the statement
of financial position as follows:
●
●
●
Loans and receivables – separately disclosed as cash and cash equivalents, trade and other receivables and loans;
Financial liabilities measured at amortised cost – separately disclosed as trade and other payables
Investments – Investments are classified as Fair value through Other Comprehensive Income ('FVTOCI') as they are equity
instruments not held for trading
Share capital – separately disclosed as share capital
●
Judgement is required when determining the appropriate classification of the Group’s financial instruments. Details on the
accounting policies for measurement of the above instruments are set out in the relevant note.
The Group recognises a financial asset or liability when it becomes a party to the contract. Financial assets are no longer
recognised in the statement of financial position when contractual cash flows expire or when the Group no longer retains
control of substantially all the risks and rewards under the instrument. Financial liabilities are derecognised if the Group's
obligations specified on the contract expire or are discharged or cancelled.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Impairment of financial asset
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative
effect on the estimated future cash flows of that asset.
24
Thred Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2020. The Group has not yet
assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed
below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes
model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime
expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate
for each group. These assumptions include recent sales experience and historical collection rates.
Fair value measurement hierarchy
The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based on the
lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in
active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs other than
quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3:
Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value
and therefore which category the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining
the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business
for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based
on the Group's current understanding of the tax law. Where the final tax outcome of these matters is different from the
carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such
determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
25
Thred Limited
Notes to the financial statements
30 June 2020
Note 4. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into two operating segments based on the principal geographical locations and regulatory
environments - Hong Kong and Australia. These operating segments are based on the internal reports that are reviewed and
used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance
and in determining the allocation of resources. There is no aggregation of operating segments.
The information reported to the CODM is on a monthly basis.
Intersegment transactions
All intersegment transactions are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable
that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are
eliminated on consolidation.
Operating segment information
2020
Revenue
Interest income
Other income
Total segment revenue
Intersegment eliminations
Total revenue
Segment net loss
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Hong Kong
$
Australia
$
Total
$
-
-
-
182,861
984,881
1,167,742
(133,626)
(133,626)
588,686
588,686
-
5,823,420
3,770,245
125,212
182,861
984,881
1,167,742
(133,626)
1,034,116
455,060
455,060
-
455,060
5,823,420
(3,477,859)
2,345,561
3,895,457
(3,770,245)
125,212
26
Thred Limited
Notes to the financial statements
30 June 2020
Note 4. Operating segments (continued)
2019
Revenue
Sales to external customers
Interest income
Total segment revenue
Intersegment eliminations
Total revenue
Segment loss
Loss before income tax expense
Income tax expense
Loss after income tax expense
Loss on disposal of discontinued operation
Loss before income tax expense
Income tax expense
Loss after income tax expense
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Hong Kong
$
Australia
$
Total
$
-
-
-
5,453
186,175
191,628
(139,102)
(139,102)
(624,599)
(624,599)
-
5,518,582
3,537,146
262,512
5,453
186,175
191,628
(139,102)
52,526
(763,701)
(763,701)
-
(763,701)
(651,805)
(651,805)
-
(651,805)
5,518,582
(3,344,333)
2,174,249
3,799,658
(3,394,624)
405,034
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Note 5. Revenue
From continuing operations
Sales revenue
2020
$
2019
$
-
5,453
27
Thred Limited
Notes to the financial statements
30 June 2020
Note 5. Revenue (continued)
Accounting policy for revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises
revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the
goods or services promised.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Note 6. Other income
Cash boost due to Covid-19
Research and development rebate
Reversal of accrued expenditure
Other income
2020
$
2019
$
10,000
828,426
146,455
984,881
-
-
-
-
Other income
Other income is recognised when it is received or when the right to receive payment is established.
Note 7. Employment costs
Directors fees
Superannuation
PAYG withholding shortfall
2020
$
2019
$
164,930
4,165
-
169,438
7,371
42,673
169,095
219,482
28
Thred Limited
Notes to the financial statements
30 June 2020
Note 8. Income tax
Income tax expense
Current tax
Deferred tax
Adjustment recognised for prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Decrease in deferred tax assets
Increase in deferred tax liabilities
Deferred tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit/(loss) before income tax expense from continuing operations
Loss before income tax expense from discontinued operations
Tax at the statutory tax rate of 27.5%
Deferred tax asset not brought to account
Income tax expense
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Tax losses
Provisions and accruals
Capital raising costs
Total deferred tax assets not recognised
2020
$
2019
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
455,060
-
(763,701)
(651,805)
455,060
(1,415,506)
125,142
(389,264)
(125,142)
389,264
-
-
2020
$
2019
$
4,392,035
13,869
275,995
4,517,177
36,676
275,995
4,681,899
4,829,848
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised in
the statement of financial position as the recovery of this benefit is uncertain.
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
29
Thred Limited
Notes to the financial statements
30 June 2020
Note 8. Income tax (continued)
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
●
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Note 9. Discontinued operations
Description
On 25 March 2019 following the approval by shareholders at a general meeting the Company completed the sale of the Sweep
Business to its subsidiary AR Technologies Pty Ltd (‘ARTech’), with ARTech at the same time issuing shares to Project Savvy
Pty Ltd (‘Project Savvy’), a company formed by the ARTech’s management team (including former director Ms Robyn Foyster
and former company secretary Mr Damon Sweeny) for the purpose of investing in the Sweep Business, to give Project Savvy
an 80% holding in ARTech. As a result, the Company lost control in ARTech and constitutes a discontinued operation. The
consideration for the disposal was:
●
●
ARTech will pay the Company $700,000 (exclusive of GST) for the Sweep Business in quarterly payments; and
The quarterly payments will comprise payments equal to 10% of quarterly trading revenues of the Sweep Business which
have been received during the quarter (if any) payable within 5 business days of the end of each quarter, commencing
with the March 2019 quarter.
Following the disposal, the Company retained a 18.9% holding in ARTech, for further information refer to note 23. During the
year, the Company re-acquired the 81.1% holding in ARTech, refer to note 29 for further detail.
The details of the sale of subsidiary’s assets and liabilities as at the date of sale (25 March 2019) were as follows:
30
Thred Limited
Notes to the financial statements
30 June 2020
Note 9. Discontinued operations (continued)
Financial performance information
Research and development expenses
Information technology costs
Occupancy costs
Public relations, marketing and advertising
Travel and accommodation
Other expenses
Employment costs
Total expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Gain on disposal before income tax
Income tax expense
Gain on disposal after income tax expense
Loss after income tax expense from discontinued operations
Cash flow information
Net cash used in operating activities
Net cash used in investing activities
Net decrease in cash and cash equivalents from discontinued operations
Carrying amounts of assets and liabilities disposed
Cash and cash equivalents
Trade and other receivables
Other current assets
Plant and equipment
Total assets
Trade and other payables
Provisions
Other liabilities
Total liabilities
Net liabilities
31
2019
$
(663,673)
(51,966)
(36,704)
(15,528)
(16,337)
(2,072)
4,944
(781,336)
(781,336)
-
(781,336)
129,531
-
129,531
(651,805)
2019
$
(843,821)
(6,210)
(850,031)
2019
$
8,109
28,495
19,010
6,210
61,824
67,495
3,860
120,000
191,355
(129,531)
Thred Limited
Notes to the financial statements
30 June 2020
Note 9. Discontinued operations (continued)
Details of the disposal
Consideration received or receivable (a)
Carrying amount of net liabilities disposed
Gain on disposal before income tax
Gain on disposal after income tax
2020
$
2019
$
-
-
-
-
-
129,531
129,531
129,531
Accounting policy for discontinued operations
A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose
of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately on the face of the statement of profit or loss and other comprehensive
income.
Note 10. Earnings per share
Earnings per share for profit/(loss) from continuing operations
Profit/(loss) after income tax attributable to the owners of Thred Limited
2020
$
2019
$
455,060
(763,701)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
1,789,390,870 1,789,390,870
Weighted average number of ordinary shares used in calculating diluted earnings per share
1,789,390,870 1,789,390,870
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from discontinued operations
Loss after income tax attributable to the owners of Thred Limited
Cents
Cents
0.03
0.03
(0.04)
(0.04)
2020
$
2019
$
-
(651,805)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
1,789,390,870 1,789,390,870
Weighted average number of ordinary shares used in calculating diluted earnings per share
1,789,390,870 1,789,390,870
32
Thred Limited
Notes to the financial statements
30 June 2020
Note 10. Earnings per share (continued)
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss)
Profit/(loss) after income tax attributable to the owners of Thred Limited
Cents
Cents
-
-
(0.04)
(0.04)
2020
$
2019
$
455,060
(1,415,506)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
1,789,390,870 1,789,390,870
Weighted average number of ordinary shares used in calculating diluted earnings per share
1,789,390,870 1,789,390,870
Basic earnings per share
Diluted earnings per share
Accounting policy for earnings per share
Cents
Cents
0.03
0.03
(0.08)
(0.08)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Thred Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Note 11. Cash and cash equivalents
Current assets
Cash at bank
Cash on deposit
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year
as shown in the statement of cash flows as follows:
Balances as above
Balance as per statement of cash flows
33
2020
$
2019
$
288,868
2,000,000
115,493
2,000,000
2,288,868
2,115,493
2,288,868
2,288,868
2,115,493
2,115,493
Thred Limited
Notes to the financial statements
30 June 2020
Note 11. Cash and cash equivalents (continued)
Accounting policy for cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Note 12. Cash flow information
Reconciliation of profit/(loss) after income tax to net cash from/(used in) operating activities
Profit/(loss) after income tax expense for the year
Adjustments for:
Interest revenue recognised as investing activities
Gain on disposal of subsidiary
Reversal of accrued expenditure
Write off of loans
Loss on asset acquisition
Provision for doubtful debt
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease in other current assets
Increase in trade and other payables
Decrease in other provisions
Increase in borrowings
2020
$
2019
$
455,060
(1,415,506)
(37,978)
-
(146,455)
126,312
10,554
5,998
34,878
(29,715)
-
(133,204)
(32,295)
(47,073)
(129,531)
-
-
-
-
211,939
(9,687)
135,177
(9,177)
-
Net cash from/(used in) operating activities
253,155
(1,263,858)
Note 13. Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Goods and services tax receivable
2020
$
2019
$
9,145
(5,998)
3,147
6,864
7,492
5,999
-
5,999
6,864
42,368
17,503
55,231
Allowance for expected credit losses
The Group has recognised a loss of $5,998 (2019: $nil) in profit or loss in respect of the expected credit losses for the year
ended 30 June 2020.
34
Thred Limited
Notes to the financial statements
30 June 2020
Note 13. Trade and other receivables (continued)
Accounting policy for trade and other receivables
Trade receivables are recognised initially at the value of the invoice sent to the counterparty and are subsequently measured
using a forward looking 'expected credit loss' (ECL) model. Trade receivables are usually settled within 60 days. Collectability
of trade and other receivables are reviewed on an ongoing basis.
The Group has applied the general approach to measuring expected credit losses, which uses a lifetime expected loss
allowance.
Under the general approach, at each reporting period, the Group assesses whether the financial instruments are credit-
impaired, and if:
●
the credit risk of the financial instrument has increased significantly since initial recognition, the Group measures the
loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses; or
there is no significant increase in credit risk since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses
●
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Note 14. Other assets
Current assets
Prepayments
Security deposits
Note 15. Trade and other payables
Current liabilities
Trade payables
Accruals
Employment related payables
Other payables
2020
$
2019
$
32,940
6,250
3,525
-
39,190
3,525
2020
$
2019
$
33,673
62,680
-
-
271,666
79,969
100,654
(47,255)
96,353
405,034
Refer to note 25 for further information on financial risk management.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
35
Thred Limited
Notes to the financial statements
30 June 2020
Note 16. Borrowings
During the year, the Group has taken out a loan to finance the annual insurance premium cost. The loan is for 10 months and
incurred 7.15% interest.
Current liabilities
Insurance premium funding loan
Refer to note 25 for further information on financial risk management.
2020
$
2019
$
28,859
-
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Note 17. Issued capital
2020
Shares
2019
Shares
2020
$
2019
$
Issued share capital
1,789,390,870 1,789,390,870
35,758,537
35,758,537
There is no movement in issued share capital during the year and in prior year.
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time and are entitled to one vote per share
at meetings of the Company.
Capital risk management
The Directors' objectives when managing capital are to ensure that the Group can maintain a capital base to maintain investor,
creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the
availability of liquid funds in order to meet its short-term commitments.
The focus of the Group's capital risk management is the current working capital position against the requirements of the
Group in respect to its operations, software developments programmes, and corporate overheads. The Group's strategy is to
ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate
capital raisings as required.
The working capital position of the Group were as follows:
Cash and cash equivalents
Trade and other receivables
Other current assets
Trade and other payables
Borrowings
Working capital position
36
2020
$
2019
$
2,288,868
17,503
39,190
(96,353)
(28,859)
2,115,493
55,231
3,525
(405,034)
-
2,220,349
1,769,215
Thred Limited
Notes to the financial statements
30 June 2020
Note 17. Issued capital (continued)
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Note 18. Options
Consolidated Consolidated Consolidated Consolidated
2020
Reserves
2019
Reserves
2020
$
2019
$
Options on issue
-
49,500,000
-
842,251
Refer to note 20 for further details on movements during the year.
Option holders cannot participate in any new share issues by the Company without exercising their options.
Note 19. Reserves
Foreign currency translation reserve
Option reserves
2020
$
2019
$
(81,672)
842,251
(77,746)
842,251
760,579
764,505
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Option reserve
The option reserve records items recognised as expenses on the value of directors and employee equity issues.
Note 20. Share-based payments
During the year, no share-based payments has been made (2019: nil).
37
Thred Limited
Notes to the financial statements
30 June 2020
Note 20. Share-based payments (continued)
Set out below are summaries of options granted:
Number of
options
2020
Weighted
average
exercise price
2020
Number of
options
2019
Weighted
average
exercise price
2019
Outstanding at the beginning of the financial year
Expired on 28 February 2020 ($0.05)
Expired on 9 May 2020 ($0.02)
Expired on 9 May 2020 ($0.05)
49,500,000
(20,000,000)
(9,500,000)
(20,000,000)
$0.0442
$0.0000
$0.0000
$0.0000
49,500,000
-
-
-
$0.0442
$0.0000
$0.0000
$0.0000
Outstanding at the end of the financial year
-
$0.0000
49,500,000
$0.0000
The weighted average share price during the financial year was $0.0442 (2019: $0.0442).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0 years (2019:
0.77 years).
The fair value of the options granted to employees is deemed to represent the value of the employee services received over
the vesting period.
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not
determine whether the Group receives the services that entitle the employees to receive payment. No account is taken of
any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
38
Thred Limited
Notes to the financial statements
30 June 2020
Note 21. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Option reserves
Accumulated losses
Total equity
Parent
2020
$
2019
$
309,912
(1,414,991)
309,912
(1,414,991)
Parent
2020
$
2019
$
2,345,561
2,174,250
2,345,561
2,174,250
123,912
262,513
123,912
262,513
52,552,356
842,251
(51,172,958)
52,552,356
842,251
(51,482,870)
2,221,649
1,911,737
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
39
Thred Limited
Notes to the financial statements
30 June 2020
Note 22. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 2:
Legal subsidiaries
Name
ThredIt Limited
Thred Innovations Limited
AR Technologies Pty Ltd*
Principal place of business /
Country of incorporation
Hong Kong
Hong Kong
Australia
Ownership interest
2019
2020
%
%
100.0%
80.0%
100.0%
100.0%
80.0%
18.9%
*
During the year, the Company obtained control of ARTech, refer to note 29 for further detail.
Note 23. Interests in associates
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are
material to the Group are set out below:
Name
Principal place of business /
Country of incorporation
Ownership interest
2019
2020
%
%
AR Technologies Pty Ltd
Australia
100.0%
18.9%
During the financial year, the Company obtained control of AR Technologies Pty Ltd and has therefore consolidated the entity
in the Group for the year ended 30 June 2020. Refer to note 29 for further detail.
40
Thred Limited
Notes to the financial statements
30 June 2020
Note 23. Interests in associates (continued)
Summarised financial information for the previous financial year
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net liabilities
Summarised statement of profit or loss and other comprehensive income
Expenses
Loss before income tax
Other comprehensive income
Total comprehensive income
2019
$
70,561
695,805
766,366
80,473
700,000
780,473
(14,107)
(181,514)
(181,514)
-
(181,514)
The Group's share in AR Technologies Pty Ltd's net liabilities as at 30 June 2020 is nil (2019: Net liabilities $34,306). The
Group's share of loss for the year ended 30 June 2020 is nil (2019: $34,306 loss).
Due to its net liabilities position in the previous financial year, no value was recognised on the investment. The share of loss
in associate was also not recognised as the value of investment was nil.
Note 24. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Post-employment benefits
2020
$
2019
$
164,930
4,165
166,874
7,371
169,095
174,245
41
Thred Limited
Notes to the financial statements
30 June 2020
Note 25. Financial risk management
The main risk the Group is exposed to through its financial instruments are market risk, credit risk and liquidity risk consisting
of interest rate, foreign currency risk and equity price risk.
The Board of directors has overall responsibility for the establishment and oversight of the risk management framework. The
Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in
accordance with the Group's risk profile. This includes assessing, monitoring and managing risks for the Group and setting
appropriate risk limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the establishment
of a formal system for risk management and associated controls. Instead, the Board approves all expenditure, is intimately
acquainted with all operations and discuss all relevant issues at the Board meetings. The operational and other compliance
risk management have also been assessed and found to be operating efficiently and effectively.
Market risk
Foreign currency risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to
movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the
AUD functional currency of the Group.
The Group has no material exposure to foreign exchange risk.
The following table illustrates sensitivities to the Group's exposures to fluctuation of foreign exchange rates. The table
indicates the impact on how profit and equity values reported at balance sheet date would have been affected by changes in
the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the
movement in a particular variable is independent of other variables.
2020
Against HKD
2019
Against HKD
AUD strengthened
Effect on
profit before
tax
% change
Effect on
equity
% change
AUD weakened
Effect on
profit before
tax
Effect on
equity
10%
-
2,748
(10%)
-
(2,748)
AUD strengthened
Effect on
profit before
tax
% change
Effect on
equity
% change
AUD weakened
Effect on
profit before
tax
Effect on
equity
10%
-
14,252
(10%)
-
14,252
Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices. The Group does not presently hold material amounts subject to price risk. As such the Board considers price
risk as a low risk to the Group.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The
Group is also exposed to earnings volatility on floating rate instruments.
Due to the low amount of debt exposed to floating interest rates, interest rate risk is not considered a high risk to the Group.
Movement in interest rates on the Group's financial liabilities and assets is not material.
42
Thred Limited
Notes to the financial statements
30 June 2020
Note 25. Financial risk management (continued)
The following table illustrates sensitivities to the Group's exposures to changes in interest rates. The table indicates the impact
on how profit and equity values reported at balance sheet date would have been affected by changes in the relevant risk
variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular
variable is independent of other variables.
Cash and cash equivalents
50
11,441
11,441
(50)
(11,441)
(11,441)
Basis points increase
Effect on
profit before
tax
Basis points
change
Effect on
equity
Basis points
change
Basis points decrease
Effect on
profit before
tax
Effect on
equity
Basis points increase
Effect on
profit before
tax
Basis points
change
Effect on
equity
Basis points
change
Basis points decrease
Effect on
profit before
tax
Effect on
equity
2020
2019
Cash and cash equivalents
50
10,574
10,574
(50)
(10,574)
(10,574)
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss to the Group. The objective of the Group is to minimise the risk of loss from
credit risk. Although revenue from operations is minimal, the Group trades only with creditworthy third parties. In addition,
receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is insignificant.
The Group's maximum credit risk exposure is limited to the carrying value of its financial assets as indicated on the statement
of financial position.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
The Group has adopted a forward looking expected credit loss model. The Group uses the general approach to impairment,
as applicable under AASB 9: Financial Instruments. Under the general approach, at each reporting period, the Group assesses
whether the financial instruments are credit-impaired, and if:
●
●
the credit risk of the financial instrument has increased significantly since initial recognition, the Group measures the
loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses; or
there is no significant increase in credit risk since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses.
The Group has a credit risk exposure with AR Technologies Pty Ltd (an associate), which as at 30 June 2020 owed the Group
$115,055. This loan was impaired during the year as management is uncertain the loan is recoverable.
Allowance for expected credit losses
The Group has recognised a loss of $5,998 (2019: $nil) in profit or loss in respect of the expected credit losses for the year
ended 30 June 2020.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable.The Group's approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's
reputation.
43
Thred Limited
Notes to the financial statements
30 June 2020
Note 25. Financial risk management (continued)
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and
marketable securities are available to meet the current and future commitments of the Group.
Typically, the Group ensures that it has sufficient cash to meet expected operational expenses for a period of 60 days,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
2020
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - fixed rate
Bank loans
Total non-derivatives
2019
Non-derivatives
Non-interest bearing
Trade payables
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
96,353
28,859
125,212
-
-
-
-
-
-
-
-
-
96,353
28,859
125,212
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
405,034
405,034
-
-
-
-
-
-
405,034
405,034
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 26. Fair value measurement
Accounting policy for fair value measurement
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities.
44
Thred Limited
Notes to the financial statements
30 June 2020
Note 26. Fair value measurement (continued)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing the
asset or liability at the measurable date. Fair value for measurement and / or disclosure purposes in these consolidated
financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of
AASB 2, leasing transactions that are within the scope of AASB 117, and measurements that have some similarities to fair
value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136.
Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value
measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are
described as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant
inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant
inputs are not based on observable market data, the asset or liability is included in Level 3.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to
measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset
or liability being measured.
Cash and cash equivalents, trade and other receivables and trade and other payables have been excluded from the above
analysis as their fair values are equal to the carrying values due to its nature.
Note 27. Related party transactions
Parent entity
Thred Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 22.
Associates
Interests in associates are set out in note 23.
Key management personnel
Disclosures relating to key management personnel are set out in note 24 and the remuneration report included in the
Directors' report.
45
Thred Limited
Notes to the financial statements
30 June 2020
Note 27. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Other transactions:
Rent paid to Pathway Corporate Pty Ltd (1)
Chairman fees paid to Pathway Corporate Pty Ltd (1)
Director fees paid to Pathway Corporate Pty Ltd (1)
Company secretarial fee paid to Pathway Corporate Pty Ltd (1)
2020
$
2019
$
23,000
84,000
36,000
36,000
-
93,000
33,000
21,000
(1) Pathway Corporate Pty Ltd is a company of which Mr David Wheeler and Mr Joe Graziano are directors, charged the
Company, rent, company secretarial fee and director fee. No balance was outstanding as at 30 June 2020 (2019: nil).
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
During the year, the Company has provided a loan to its associate, AR Technologies Pty Ltd of $126,312 including interest of
$11,257 on the loan. The balance of $126,312 was outstanding as at 30 June 2020 but has been impaired as management is
uncertain on its recoverability.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 28. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Bentleys, the auditor of the
Company:
Audit services - Bentleys
Audit or review of the financial statements
2020
$
2019
$
37,200
38,093
Note 29. Asset Acquisition - AR Technologies Pty Ltd
During the year, the Company acquired 100% former subsidiary AR Technologies Pty Ltd ('ARTech') for $1 in consideration.
The Company had disposed of 81.1% of its interest in ARTech in March 2019 for $700,000 payable in quarterly installments.
The Company entered into a loan facility with ARTech for $105,000 at 10% interest per annum and advanced a further $10,000
under the facility. The consideration and loan facility had been fully provided for in the previous financial year.
As at 9 June 2020, the Company had not received any payment for the sale of its 81.1% or any repayments under the loan
facility. As such, it was agreed that the Company could reacquire the 81.1% interest for $1 in consideration in satisfaction of
the outstanding liabilities.
46
Thred Limited
Notes to the financial statements
30 June 2020
Note 29. Asset Acquisition - AR Technologies Pty Ltd (continued)
It is considered that the acquisition of ARTech is not a business combination, but rather an acquisition of assets given the
dormant status of ARTech.
The fair value of the identifiable assets and liabilities of the entities as at the date of acquisition are as follows:
2020
$
1
1
-
733
3,235
6,250
(20,772)
(10,554)
Purchase consideration comprises:
Cash
Total consideration
Net liabilities acquired:
Cash and cash equivalents
Trade and other receivables
Security deposit
Trade and other payables
Fair value of net liabilities acquired
Note 30. Contingent liabilities
There are no contingent liabilities as at 30 June 2020 (2019: Nil).
Note 31. Commitments
The Group has no material commitments as at 30 June 2020 (2019: nil).
Note 32. Events after the reporting period
No matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
47
Thred Limited
Directors' declaration
30 June 2020
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2020
and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
David Wheeler
Chairman
28 August 2020
48
Independent Auditor's Report
To the Members of Thred Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Thred Limited (“the Company”) and its
subsidiaries (“the Consolidated Entity”), which comprises the consolidated statement of
financial position as at 30 June 2020, the consolidated statement of profit or loss and
other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity is in accordance with
the Corporations Act 2001, including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as
at 30 June 2020 and of its financial performance for the year then ended;
and
(ii)
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards
as disclosed in Note 2.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Consolidated Entity in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report
in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independent Auditor’s Report
To the Members of Thred Limited (Continued)
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matter
How our audit addressed the key audit matter
Recognition of Research & Development Tax
Incentive
Our procedures included, amongst others:
(Refer to note 6)
Under the Research and Development (“R&D”) tax
incentive scheme, the Consolidated Entity receives
a 43.5% refundable tax offset of eligible
expenditure. An R&D submission was filed with
AusIndustry and the incentive was received in full
during the year. .
This area is a key audit matter due to the inherent
subjectivity that is involved in the Consolidated Entity
obtaining an understanding of the objectives and
activities in the R&D program;
reviewing the lodgement documents and related
working papers utilised by the expert engaged by
the Consolidated Entity;
assessing the capabilities of the expert engaged
by the Consolidated Entity;
comparing the eligible expenditure used in
the receivable calculation to the expenditure
recorded in the general ledger; and
making judgements in relation to estimation and
assessing the adequacy of the disclosures in
recognition of the R&D tax incentive income.
the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 30 June 2020, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Independent Auditor’s Report
To the Members of Thred Limited (Continued)
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 Note 2, the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
−
−
−
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Consolidated Entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Consolidated Entity’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Consolidated Entity to cease to
continue as a going concern.
Independent Auditor’s Report
To the Members of Thred Limited (Continued)
−
−
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Consolidated Entity audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2020.
The directors of the Company are responsible for the preparation and presentation of the remuneration report
in accordance with s 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.
Auditor’s Opinion
In our opinion, the Remuneration Report of Thred Limited, for the year ended 30 June 2020, complies with
section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
DOUG BELL CA
Partner
Dated at Perth this 28th day of August 2020
Thred Limited
Corporate Governance Statement
30 June 2020
Corporate governance statement
The Board is responsible for establishing the Company’s corporate governance framework. In establishing its corporate governance framework, the Board has
referred to the 3rd edition of the ASX Corporate Governance Councils’ Corporate Governance Principles and Recommendations.
The Corporate Governance Statement discloses the extent to which the Company follows the recommendations. The Company will follow each recommendation
where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company’s corporate
governance practices will follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In
compliance with the “if not, why not” reporting regime, where, after due consideration, the Company’s corporate governance practices will not follow a
recommendation, the Board has explained its reasons for not following the recommendation and disclosed what, if any, alternative practices the Company will
adopt instead of those in the recommendation.
The Company’s governance-related documents can be found on its website at www.thred.im under the section marked "For Investors" under the heading
“Overview”.
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should have and disclose a charter which:
(a)
YES
sets out the respective roles and responsibilities of the board,
the chair and management; and
includes a description of those matters expressly reserved to
the board and those delegated to management.
(b)
The Company has established the respective roles and
responsibilities of its Board and management, and those
matters expressly reserved to the Board and those delegated
to management, and has documented this in its Board
Charter.
The responsibilities of the Board include but are not limited to:
(a) setting and reviewing strategic direction and planning;
reviewing financial and operational performance;
(b)
identifying principal risks and reviewing risk management
(c)
strategies; and
(d) considering and reviewing significant capital investments
and material transactions.
In exercising its responsibilities, the Board recognises that
there are many stakeholders in the operations of the
Company, including employees, shareholders, co-ventures,
the government and the community.
The Board carefully considers the character, experience,
education and skillset, as well as interests and associations of
potential candidates for appointment to the Board and
conducts appropriate checks to verify the suitability of the
candidate, prior
their election. The Company has
appropriate procedures in place to ensure that material
information relevant to a decision to elect or re-elect a director,
is disclosed in the notice of meeting provided to shareholders.
to
The Company has a written agreement with each of the
Directors. The material terms of any employment, service or
consultancy agreement the Company, or any of its child
entities, has entered into with its Chief Executive Officer, any
of its directors, and any other person or entity who is a related
party of the Chief Executive Officer or any of its directors will
be disclosed in accordance with ASX Listing Rule 3.16.4
(taking into consideration the exclusions from disclosure
outlined in that rule).
The Company Secretary is accountable to the Board for
facilitating the Company’s corporate governance processes and
the proper functioning of the Board. Each Director is entitled to
access the advice and services of the Company Secretary.
In accordance with the Company’s Constitution, the appointment
or removal of the Company Secretary is a matter for the Board as
a whole. Details of the Company Secretary’s experience and
qualifications are set out in the Annual Report.
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a person, or
putting forward to security holders a candidate for election, as a
director; and
(b) provide security holders with all material information relevant to a
decision on whether or not to elect or re-elect a director.
YES
Recommendation 1.3
A listed entity should have a written agreement with each director and
senior executive setting out the terms of their appointment.
YES
Recommendation 1.4
The company secretary of a listed entity should be accountable directly
to the board, through the chair, on all matters to do with the proper
functioning of the board.
YES
53
Thred Limited
Corporate Governance Statement
30 June 2020
PRINCIPLES AND RECOMMENDATIONS
(i)
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which includes requirements for the board:
to set measurable objectives for achieving gender diversity;
and
to assess annually both the objectives and the entity’s
progress in achieving them;
(b) disclose that policy or a summary or it; and
(c) disclose as at the end of each reporting period:
(ii)
(i)
the measurable objectives for achieving gender diversity set
by the board in accordance with the entity’s diversity policy
and its progress towards achieving them; and
(ii) either:
(A)
the respective proportions of men and women on the
board, in senior executive positions and across the
whole organisation (including how the entity has
defined “senior executive” for these purposes); or
the entity’s “Gender Equality Indicators”, as defined in
the Workplace Gender Equality Act 2012.
(B)
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of the board, its committees and individual directors;
and
(b) disclose
to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
accordance with that process.
in relation
COMPLY
(YES/NO)
NO
(not followed in
full)
EXPLANATION
The Company is committed to creating a diverse working
environment and promoting a culture which embraces diversity
and has adopted a written policy. Given the size of the Company
and scale of its operations, however, the Board is of the view
that the setting measurable objectives for achieving gender
diversity is not required at this time. Further as the Company has
not established measureable objectives for achieving gender
diversity, the Company has not reported on progress towards
achieving them.
NO
Whilst the Company has a written policy, the Board recognises
that as a result of the Company’s size and the stage of the
entity’s life as a public listed technology company, the
assessment of
the directors’ and executives’ overall
performance and its own succession plan is conducted on an
informal basis. Whilst this is at variance with the ASX
Recommendations, the Directors consider that at the date of this
report an appropriate and adequate process for the evaluation
of Directors is in place.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of its senior executives; and
Refer above.
NO
(b) disclose
in relation
to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
accordance with that process.
Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
(i)
has at least three members, a majority of whom are
independent directors; and
is chaired by an independent director,
(ii)
and disclose:
(iii)
(iv)
(v)
(b)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
if it does not have a nomination committee, disclose that fact and
the processes it employs to address board succession issues and
to ensure that the board has the appropriate balance of skills,
experience, independence and knowledge of the entity to enable
it to discharge its duties and responsibilities effectively.
YES
A Nomination Committee operated during FY18. The Committee
was comprised of 3 Independent Non-Executive Directors.
The charter of the Committee is disclosed in the Corporate
Governance Policies on the Company’s website.
The full board now perform the duties of the Committee.
Attendance is reported in the annual report.
Recommendation 2.2
A listed entity should have and disclose a board skill matrix setting out
the mix of skills and diversity that the board currently has or is looking to
achieve in its membership.
NO
(not followed in
full)
The details of the skill set of the current Board members are set
out in the description of each Director in the Annual Report. The
Board believes that the current skill mix is appropriate given the
Company’s size and the stage of the entity’s life as a publicly
listed technology company.
54
Thred Limited
Corporate Governance Statement
30 June 2020
PRINCIPLES AND RECOMMENDATIONS
Recommendation 2.3
A listed entity should disclose:
(a)
(b)
the names of the directors considered by the board to be
independent directors;
if a director has an interest, position, association or relationship of
the type described in Box 2.3 of the ASX Corporate Governance
Principles and Recommendation (3rd Edition), but the board is of
the opinion that it does not compromise the independence of the
director, the nature of the interest, position, association or
relationship in question and an explanation of why the board is of
that opinion; and
the length of service of each director
(c)
Recommendation 2.4
A majority of the board of a listed entity should be independent directors.
Recommendation 2.5
The chair of the board of a listed entity should be an independent
director and, in particular, should not be the same person as the CEO of
the entity.
Recommendation 2.6
A listed entity should have a program for inducting new directors and
providing appropriate professional development opportunities for
continuing directors to develop and maintain the skills and knowledge
needed to perform their role as a director effectively.
COMPLY
(YES/NO)
YES
EXPLANATION
Mr Sol Majteles has been an Independent Non-Executive
Director of the Company since 18 January 2008 (apart from the
period from April 2015 when Promesa engaged Lavan Legal (in
which Mr Majteles is a salaried partner) to provide material
professional services to the Company, with payment delayed
until settlement of the RTO of Thredit in June 2016.
Mr Joe Graziano has been an Independent Non-Executive
Director of the Company since being appointed on 1 August
2018.
YES
YES
NO
The Board comprises three Directors of whom two are
considered to be an Independent Director. The Board considers
that all Directors bring an independent judgement to bear on
Board decisions and that the Board’s expertise and experience
adds considerable value to the Company.
Mr David Wheeler (Chair) was an Independent Non-Executive
Director of the Company from his appointment on 30 August 2017
until taking on a more executive role in May 2018. Mr Wheeler is
considered to be the most appropriate person to Chair the Board
because of his public company experience.
The Board recognises that as a result of the Company’s size and
the stage of the entity’s life as a publicly listed technology
company, the Board has not put in place a formal program for
inducting new directors. However, it does provide a package of
background information on commencement and provides ready
interaction with the Company’s personnel to gain a stronger
understanding of the business. Similarly, the Company does not
at this stage provide professional development opportunities for
Directors. More formal processes for both of these areas will be
considered in the future as the Company develops.
The Company is committed to promoting good corporate
conduct grounded by strong ethics and responsibility. The
Company has established a Code of Conduct (Code), which
addresses matters relevant to the Company’s legal and ethical
obligations to its stakeholders. It may be amended from time to
time by the Board, and is disclosed on the Company’s website.
The Code applies to all Directors, employees, contractors and
officers of the Company.
Thred was not a Company required by ASX Listing Rule 12.7 to
have an Audit Committee although it is included in the ASX
Recommendations. The Board has not established an audit
committee at this point in the Company’s development. It is
considered that the size of the Board along with the level of
activity of the Company renders this impractical and the full
Board considers in detail all of the matters for which the directors
are responsible. The Board has adopted an Audit Committee
Charter which describes the role, composition, functions and
responsibilities of the Audit Committee and is disclosed on the
Company’s website.
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its directors, senior executives and
YES
employees; and
(b) disclose that code or a summary of it.
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
YES
(i)
(ii)
has at least three members, all of whom are non-executive
directors and a majority of whom are independent directors;
and
is chaired by an independent director, who is not the chair
of the board,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the relevant qualifications and experience of the members
of the committee; and
in relation to each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
if it does not have an audit committee, disclose that fact and the
processes it employs that independently verify and safeguard the
integrity of its financial reporting, including the processes for the
appointment and removal of the external auditor and the rotation
of the audit engagement partner.
(b)
55
Thred Limited
Corporate Governance Statement
30 June 2020
PRINCIPLES AND RECOMMENDATIONS
Recommendation 4.2
The board of a listed entity should, before it approves the entity’s
financial statements for a financial period, receive from its CEO and
CFO a declaration that the financial records of the entity have been
properly maintained and that the financial statements comply with the
appropriate accounting standards and give a true and fair view of the
financial position and performance of the entity and that the opinion has
been formed on the basis of a sound system of risk management and
internal control which is operating effectively.
COMPLY
(YES/NO)
YES
Recommendation 4.3
A listed entity that has an AGM should ensure that its external auditor
attends its AGM and is available to answer questions from security
holders relevant to the audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
(a) have a written policy for complying with its continuous disclosure
obligations under the Listing Rules; and
(b) disclose that policy or a summary of it.
YES
YES
Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and its governance
to investors via its website.
YES
EXPLANATION
In accordance with ASX Recommendation 4.2 the Chief
Executive Officer (or their equivalent) and Chief Financial Officer
(or their equivalent) are required to provide assurances that the
written declarations under s295A of the Corporations Act (and
for the purposes of ASX Recommendation 4.2) are founded on
a sound framework of risk management and internal control and
that the framework is operating effectively in all material respects
in relation to financial reporting risks. Both the Chief Executive
Officer and Chief Financial Officer provide such assurances at
the time the s295A declarations are provided to the Board.
The Company’s external audit function is performed by Bentleys
Audit and Corporate (Bentleys). Representatives of Bentleys will
attend the Annual General Meeting and be available to answer
shareholder questions regarding the audit.
The Company operates under the continuous disclosure
requirements of the ASX Listing Rules and has adopted a policy,
which is disclosed on the Company’s website. The Continuous
Disclosure Policy sets out policies and procedures for the
its continuous disclosure
Company’s compliance with
obligations under the ASX Listing Rules, and addresses
financial markets communication, media contact and continuous
disclosure issues. It forms part of the Company’s corporate
policies and procedures and is available to all staff.
The Company Secretary manages the policy. The policy will
develop over time as best practice and regulations change and
the Company Secretary will be responsible for communicating
any amendments.
The Company keeps investors informed of its corporate
governance, financial performance and prospects via its website
– www.thred.im.
Investors can access copies of all
announcements to the ASX, notices of meetings, annual reports
and financial statement, and investor presentations via the ‘For
Investors’ section and can access general information regarding
the Company and the structure of its business in its ‘Overview’
section.
56
Thred Limited
Corporate Governance Statement
30 June 2020
PRINCIPLES AND RECOMMENDATIONS
Recommendation 6.2
A listed entity should design and implement an investor relations
program to facilitate effective two-way communication with investors.
COMPLY
(YES/NO)
YES
EXPLANATION
The Board aims to ensure that shareholders are informed of all
major developments affecting the Company’s state of affairs. In
accordance with the ASX Recommendations, information is
communicated to shareholders as follows:
the annual
relevant
information about the operations of the Company during the
year, changes in the state of affairs of the entity and details
of future developments, in addition to the other disclosures
required by the Corporations Act 2001;
the half yearly financial report lodged with the ASX and ASIC
and sent to all shareholders who request it;
report which
financial
includes
notifications relating to any proposed major changes in the
Company which may impact on share ownership rights that
are submitted to a vote of shareholders;
notices of all meetings of shareholders;
publicly released documents including full text of notices of
meetings and explanatory material made available on the
Company’s website at www.thred.im; and
disclosure of the Corporate Governance practices and
communications strategy on the entity’s website.
the Company and
While the Company aims to provide sufficient information to
Shareholders about
it
understands that Shareholders may have specific questions and
require additional information. To ensure that Shareholders can
obtain all relevant information to assist them in exercising their
rights as Shareholders, the Company has made available a
telephone number and relevant contact for Shareholders to
make their enquiries.
its activities,
Recommendation 6.3
A listed entity should disclose the policies and processes it has in place
to facilitate and encourage participation at meetings of security holders.
YES
The Board encourages full participation of shareholders at the
Annual General Meeting to ensure a high level of accountability and
identification with the Company’s strategy and goals. Important
issues are presented to the shareholders as single resolutions. The
external auditor of the Company is also invited to the Annual
General Meeting of shareholders and is available to answer any
questions concerning the conduct, preparation and content of the
auditor’s report. Pursuant to section 249K of the Corporations Act
2001 the external auditor is provided with a copy of the notice of
meeting and related communications received by shareholders.
YES
The Company provides its investors the option to receive
communications from and send communications to, the Company
and the share registry electronically.
YES
Due to the size of the Board, the Company does not have a
separate Risk Committee. The Board is responsible for the
oversight of the Company’s risk management and control
framework. The Board has adopted a Risk Management Policy,
which is disclosed on the Company’s website.
Recommendation 6.4
A listed entity should give security holders the option to receive
communications from, and send communications to, the entity and its
security registry electronically.
Principle 7: Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of
which:
(i) has at least three members, a majority of whom are
independent directors; and
(ii) is chaired by an independent director, and disclose:
(iii) the charter of the committee;
(iv) the members of the committee; and
(v) as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b)
if it does not have a risk committee or committees that satisfy (a)
above, disclose that fact and the process it employs for overseeing
the entity’s risk management framework.
57
Thred Limited
Corporate Governance Statement
30 June 2020
PRINCIPLES AND RECOMMENDATIONS
Recommendation 7.2
The board or a committee of the board should:
(a)
review the entity’s risk management framework with management
at least annually to satisfy itself that it continues to be sound, to
determine whether there have been any changes in the material
business risks the entity faces and to ensure that they remain
within the risk appetite set by the board; and
(b) disclose in relation to each reporting period, whether such a review
has taken place.
COMPLY
(YES/NO)
YES
Recommendation 7.3
A listed entity should disclose:
(a)
(b)
if it has an internal audit function, how the function is structured and
what role it performs; or
if it does not have an internal audit function, that fact and the
processes it employs for evaluating and continually improving the
effectiveness of its risk management and internal control
processes.
Recommendation 7.4
A listed entity should disclose whether, and if so how, it has regard to
economic, environmental and social sustainability risks and, if it does,
how it manages or intends to manage those risks.
YES
YES
EXPLANATION
the Company’s operations
The Board recognises that there are inherent risks associated
with
including commercial,
technological legal and other operational risks. The Board
endeavours to mitigate such risks by continually reviewing the
activities of the Company in order to identify key business and
operational risks and ensuring that they are appropriately
assessed and managed. No formal report in relation to the
Company’s management of its material business risks is
presented to the Board. The Board reviews the risk profile of the
Company and monitors risk informally throughout the year.
The Company does not have an internal audit function. This is
the case due to the size of the Company and the stage of life of
the entity. To evaluate and continually improve the effectiveness
of the Company’s risk management and internal control
processes, the Board relies on ongoing reporting and discussion
of the management of material business risks as outlined in the
Company’s Risk Management Policy.
in relation
As already outlined above
to various ASX
Recommendations, the Company constantly monitors and
reviews the key risks that affect the Company and the
management of those risks. The risks which the Company has
identified that it has a material exposure to are its ability to raise
funds within an acceptable time frame and on terms acceptable
to it (“Capital Risk”); and that its existing projects, or any other
projects that it may acquire in the future, will be able to be
economically exploited (“Economic Risk”). The manner in which
the Company manages those risks, in the case of Capital Risk,
to monitor the market and investment appetite and to raise
further required capital in a timely manner such that the
Company’s operations are adequately funded; in the case of
Economic Risk, to adopt a diversified portfolio approach and to
also adopt a focused approach, seeking to lay off risk where
possible. More information about the Company’s management
of risk can be found in the prospectus released 12 December
2016.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(i)
(ii)
has at least three members, a majority of whom are
independent directors; and
is chaired by an independent director,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
if it does not have a remuneration committee, disclose that fact and
the processes it employs for setting the level and composition of
remuneration for directors and senior executives and ensuring that
such remuneration is appropriate and not excessive.
(b)
YES
A Nomination Committee operated during FY18. The Committee
was comprised of 3 Independent Non-Executive Directors.
The charter of the Committee is disclosed in the Corporate
Governance Policies on the Company’s website.
The full board now perform the duties of the Committee.
Attendance is reported in the annual report.
Recommendation 8.2
A listed entity should separately disclose its policies and practices
regarding the remuneration of non-executive directors and the
remuneration of executive directors and other senior executives and
ensure that the different roles and responsibilities of non-executive
directors compared to executive directors and other senior executives
are reflected in the level and composition of their remuneration.
YES
58
Details of the Company’s policies on remuneration are set out in
the Company’s “Remuneration Report” in each Annual Report
published by the Company. This disclosure will include a
summary of the Company’s policies regarding the deferral of
performance-based
reduction,
cancellation or
the performance-based
remuneration in the event of serious misconduct or a material
misstatement in the Company’s financial statements.
clawback of
remuneration
and
the
Thred Limited
Corporate Governance Statement
30 June 2020
PRINCIPLES AND RECOMMENDATIONS
Recommendation 8.3
A listed entity which has an equity-based remuneration scheme
should:
(a) have a policy on whether participants are permitted to enter into
transactions (whether through the use of derivatives or otherwise)
which limit the economic risk of participating in the scheme; and
(b) disclose that policy or a summary of it.
COMPLY
(YES/NO)
N/A
EXPLANATION
The Company’s Security Trading Policy includes a statement
prohibiting directors, officers and employees from dealing at any
time in financial products such as warrants, futures or other
financial products issued over THD markets, but does not
specifically prohibit entering into transactions (whether through
the use of derivatives or otherwise) which limit the economic risk
of their security holding in the Company or of participating in
unvested entitlements under any equity based remuneration
schemes.
Security Trading Policy
In accordance with ASX Listing Rule 12.9, the Company has
adopted a trading policy which sets out the following
information:
a) closed periods
in which directors, employees and
contractors of the Company must not deal in the
Company’s securities;
b) trading in the Company’s securities which is not subject to
the Company’s trading policy; and
c) the procedures for obtaining written clearance for trading
in exceptional circumstances.
The Company’s Security Trading Policy is available on the
Company’s website.
59
Thred Limited
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 27 August 2020
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Celtic Capital Pty Ltd < The Celtic Capital A/C >
Mr Gavin Jeremy Dunhill
Mr Nathan Ryan Wagner
Mr Ananda Kathiravelu
Jdk Nominees Pty Ltd < Kenny Capital A/C >
Jamber Investments Pty Ltd < The Amber Schwarz Fam A/C >
Samisa Pty Ltd < Samisa Family A/C >
Mr Kobi Ben Shabath
Mr Jonathon Barry Miller
Sarodan Pty Ltd < Sarodan Family A/C >
Global Megacorp Pty Ltd
Gotha Street Capital Pty Ltd < Blue Sky No 2 A/C >
Mr Michael Horgan Cerbara
Rimoyne Pty Ltd
Sandton Capital Pty Ltd
Monarch Asset Management P/L < Price Super >
Cowoso Capital Pty Ltd < The Cowoso Super Fund A/C >
Mr Robert Lee Cunningham
Pathways Capital Pty Ltd < Wheeler Super Fund A/C >
Mr Keith Stuart Liddell + Mrs Shelagh Jane Liddell
Unquoted equity securities
There are no unquoted equity securities. All unlisted options has expired.
60
Total
Holders
Number
of holders
of ordinary
shares
36
11
13
199
810
8,375
31,399
89,266
10,933,784
1,778,328,026
1,069
1,789,390,870
1,069
1,789,390,870
Ordinary shares
% of total
Number held
169,000,000
87,000,000
79,813,001
68,403,383
50,500,000
50,000,000
36,925,302
30,583,334
28,710,516
22,621,936
22,254,470
22,250,000
21,210,000
20,379,186
19,000,000
18,000,000
16,750,000
15,000,000
15,000,000
14,300,001
shares
issued
9.44
4.86
4.46
3.82
2.82
2.79
2.06
1.71
1.60
1.26
1.24
1.24
1.19
1.14
1.06
1.01
0.94
0.84
0.84
0.80
807,701,129
45.14
Thred Limited
Shareholder information
30 June 2020
Substantial holders
Substantial holders in the Company are set out below:
Mr Jason Peterson
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
Number held
shares
issued
169,000,000
9.44
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
There are no other classes of equity securities.
Restricted securities
Class
Fully paid ordinary shares
Number
of shares
10,000,000
61