Spectur Limited
Appendix 4E
Preliminary Financial Report- For the year ended 30 June 2018
(Previous corresponding period: Year ended 30 June 2017)
Results for announcement to the market
1. Results for announcement to the market
30 June 2018
Current Year
$
Percentage
Change
Up /(Down)
Change
Up /(Down)
$
30 June 2017
Previous
Corresponding
Year
$
Revenue from ordinary activities
2,476,501
86%
1,143,820
1,332,681
Loss from ordinary activities after tax
(3,319,043)
(678%)
(2,892,542)
(426,501)
Net Loss for the period attributable to members
(3,319,043)
(678%)
(2,892,542)
(426,501)
Commentary on the above figures is included in the attached Annual Financial Report for the year ended 30 June
2018.
2.
3.
4.
5.
6.
7.
Statement of Profit and Loss and other comprehensive income
Refer to attached Annual Financial Report – 30 June 2018.
Statement of financial position
Refer to attached Annual Financial Report – 30 June 2018.
Statement of cash flows
Refer to attached Annual Financial Report – 30 June 2018.
Statement of changes in equity / retained earnings
Refer to attached Annual Financial Report – 30 June 2018.
Dividend payments
Refer to attached Annual Financial Report – 30 June 2018.
The Company does not propose to pay any dividends in the current year.
Dividend reinvestment plans
The Company does not have a dividend reinvestment plan.
This Appendix 4E Annual Report is provided to the ASX under Listing Rule 4.3 and should be read in
conjunction with the accompanying Financial Report for the year ended 30 June 2018.
8.
Net tangible assets per security
Loss per share
Cents per ordinary share
Current Year
(30 June 2018)
7.61 cents
Previous
Corresponding Year
(30 June 2017)
3.31 cents
9.
Details of entities over which control has been gained or lost
Not applicable
10.
Details of Associates and joint ventures
Not applicable
11.
Other significant information
Not applicable
12.
Foreign entities – Accounting Standards
Not applicable.
13.
Results for the period
Refer to the Directors report in the attached Annual Report.
14.
Statement on the financial statements
The financial statements are based on audited accounts.
15.
Unaudited accounts
Not applicable.
16.
Status of audit
The Financial Report for the year ended 30 June 2018 has been audit reviewed and is not subject to
dispute or qualification.
This Appendix 4E Annual Report is provided to the ASX under Listing Rule 4.3 and should be read in
conjunction with the accompanying Financial Report for the year ended 30 June 2018.
Spectur Limited
ACN 140 151 579
Annual Financial Report
30 June 2018
SPECTUR LIMITED
CONTENTS
Corporate Information
Chairman’s Review
Directors’ Report
Auditor’s Independence Declaration
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
Corporate Governance Statement
Additional Securities Information
PAGE
2
3
5
19
20
21
22
23
24
49
50
54
66
1
SPECTUR LIMITED
CORPORATE INFORMATION
ACN 140 151 579
Directors
Mr Charles Richard Wallace Wilkins
Mr Peter William Holton
Mr Stephen Paul Bodeker
Mr Andrew Mark Hagen
Company Secretary
Suzie Jayne Foreman
Registered Address
Unit 2, 6 Merino Entrance
Cockburn Central WA 6164
Telephone:
1300 802 960
Principal Place of Business
Unit 2, 6 Merino Entrance
Cockburn Central WA 6164
Telephone:
1300 802 960
Solicitors
Jackson McDonald
Level 17, 225 St Georges Terrace
Perth WA 6000
Bankers
ANZ Bank
127/816 Beeliar Drive
Success WA 6164
Auditors
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
Share Registry
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth, WA 6000
PO Box 2226
Strawberry Hills, New South Wales 2012
Telephone: 1300 288 664 (within Australia)
Email: hello@automic.com.au
2
SPECTUR LIMITED
Chairman’s Review
Dear Fellow Shareholder,
It is my pleasure to present the 2018 Annual Report for Spectur Limited ("Spectur", ASX:SP3).
The past year has seen Spectur achieve important new milestones, as the Company continues to build on its
plans of becoming the leading supplier of remote security monitoring systems and cloud-based technology
solutions within the Australian market.
Delivering on the strategy outlined in the Prospectus has seen the expansion of Spectur’s offices in
Queensland, New South Wales and Victoria by the second half of the year, enabling the Company to provide
a presence to directly service its client base and accelerate sales from these regions.
It is pleasing to see the Company exceeding its targeted revenue to almost double that of the prior year as it
builds momentum from its IoT platform sales, rentals and recurring revenue streams. Recurring revenues have
more than doubled since the prior year, providing the Company with a continuing income stream from which it
can pursue its growth strategy.
The commercialisation of Spectur’s internally developed products has widened our product offering and allowed
the Company to provide more tailored product solutions to meet the needs of our clients.
We continue to focus on internal product development, and the recent trials of Artificial Intelligence and Machine
Learning tools will be integrated into our existing IoT/VaaS systems, providing Spectur with the ability to supply
more technically advanced systems into a broader and more discerning market.
Spectur has traditionally focused on servicing the construction and civil engineering industry security
requirements. This year we expanded our product sales into transport, mining, critical infrastructure, military
and government sectors, including a number of Tier 1 clients. Further growth potential exists with expansion
into the new industries as our technology expands.
Moving our business into the R&D and commercialisation phase led to several changes during the year, most
notably the appointment of experienced staff to implement the development and commercialisation of the
Company’s expanding product range. In addition, Mr Andrew Hagen was appointed on a consultancy basis to
lead the go-to-market strategy for a range of industries and geographies. We believe these and other
appointments will continue to serve our Company well through this next phase of our development.
Looking forward, our strategy is to build on our sales success of the past year. We are aiming to capitalise on
our existing client relationships by providing larger contracted camera unit deployments as well as opening up
opportunities by entering into new industries to drive our IoT platform sales and analysing international
expansion strategies. What we have learnt throughout the year is that entering new markets and industries can
be a challenging and time-consuming process however, once entered, can open up substantial revenue
opportunities.
Spectur is also consolidating its financial position by reviewing strategies to further improve cashflow through
a combination of increased sales, reducing overhead and operating expenses, and improving installation and
maintenance efficiencies.
In the next few months, we are planning a ‘soft’ entry into the US market once market feasibility studies assess
the potential risk/rewards as being favourable to Spectur. Now that our server systems have been adapted for
virtually infinite scaling, we are confident that a large growth in our IoT platform will not be a limiting factor.
We anticipate 2019 will continue with the solid growth experienced in the current year and provide the Company
with a sound financial platform as we focus on moving towards cost reduction programs and cash flow break
even in the medium term; from Spectur’s Australian operations.
3
SPECTUR LIMITED
Chairman’s Review (continued)
I would like to thank the Board, in particular, Peter Holton, our Managing Director, senior management and SP3
staff for their efforts over the past year. Similarly, as the Chairman of the Board, I would like to thank SP3
shareholders for their continued support and confidence in the Company as it delivers on its growth strategy.
Sincerely,
Richard Wilkins
Executive Chairman
4
SPECTUR LIMITED
DIRECTORS’ REPORT
The Board of Directors of Spectur Limited present their report on Spectur Limited (“Company” or “Spectur”) for the year
ended 30 June 2018.
DIRECTORS AND OFFICERS
The names of directors and officers who held office during or since the end of the year and until the date of this report are
as follows.
Charles Richard Wallace Wilkins
Executive Chairman
Director since incorporation
Peter William Holton
Managing Director
Appointed on 9 March 2017
Stephen Paul Bodeker
Non-Executive Director
Appointed on 9 June 2017
Andrew Mark Hagen
Non-Executive Director
Appointed on 9 June 2017
Suzie Jayne Foreman
Company Secretary
Appointed on 9 June 2017
CURRENT DIRECTORS AND OFFICERS
Mr Charles Richard Wallace Wilkins
Director
Qualifications: Diploma of Electronic Engineering, Kilkenny Technical College, Adelaide
Richard Wilkins is the founding Director and Shareholder of Spectur. Richard has extensive industry experience in
electronic engineering, telecommunications and radio communications. His experience spans from product design and
technical development through to overseeing the commissioning and maintenance of major communications networks.
Richard began his career in the Royal Australian Navy, joining the radio (air) technical branch and finished in charge of the
Electronics School of Avionics for pilots, navigators and technical staff. Richard entered the private sector where he headed
Standard Telephones and Cables’ maintenance team for microwave and mobile communications on the rail network
between Newman and Port Hedland. He was subsequently engaged by the Natural Gas Pipeline Authority of South
Australia (as it was then known) to oversee the commissioning and ongoing maintenance of the microwave and mobile
communications network for the gas pipeline between Moomba and Adelaide. Richard successfully operated his own
businesses, Radiolab, CR Labs and RF Innovations, which developed innovative electronic and communications products
and serviced communications networks for government departments as well as major resources and telecommunications
companies. He was integrally involved in the design and development of a high power paging transmitter which was
ultimately sold to Telstra, Victoria’s state-wide emergency services and to European markets under a license agreement.
Richard, in his role as managing director, designed self-powered train wheel bearing temperature monitors and a low power
active prototype radar system for collision avoidance, specifically for mine–site loading areas.
Richard remains actively involved in the day-to-day management and technical operations of Spectur, as well as working
with the Board to set its strategy for ongoing business development, managing R&D and providing general support to the
Managing Director.
During the three year period to the end of the financial year, Mr Wilkins has not held any other listed public directorships.
Mr Peter William Holton
Director
Qualifications: Bsc Hons Degree - Social and Political Science, Kingston University, London, United Kingdom
Peter Holton has over 20 years’ senior management experience in product sales, distribution and marketing in Australia
and Europe. He has been directly responsible for managing and increasing product lines and sales via direct sales,
distribution and licensing. Peter has previously developed and led sales teams for market leading companies both in
Australia and in Europe. He was the sales manager of Surf Sales Ltd where he helped introduced the O’Neill brand into
the UK market. He subsequently became the sales and marketing director of ATB Sales Ltd, setting up the launch of the
high-end Marin mountain bike brand in the UK.
Peter was also involved in financing the development of the 49er sailing dinghy developed by Australian 18-foot skiff
legends, Frank and Julian Bethwaite. He held the European marketing rights to this boat which was ultimately selected by
the International Olympic Committee for a new high sailing performance category at the 2000 Olympic Games held in
Sydney.
Peter subsequently migrated to Australia where he established and operated successful coffee equipment sales and service
business, Supreme Coffee Machines, as its managing director. Peter joined Spectur as Business Development Manager
in 2012 and became the Managing Director in 2017.
During the three year period to the end of the financial year, Mr Holton has not held any other listed public directorships.
5
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
CURRENT DIRECTORS AND OFFICERS (continued)
Mr Stephen Paul Bodeker
Non-Executive Director
Qualifications: Bachelor of Accounting Science from the University of South Africa, Associate General Accountant (South
Africa), Certified Practising Accountant, Chartered Management Accountant
Mr Bodeker is an accomplished senior finance executive with over 20 years’ experience in the corporate sector, working
within several industries including professional services, logistics, manufacturing, health services and media. He has held
senior finance roles in organisations including KPMG, Nestor Healthcare, Britvic PLC, Carbon Conscious Limited (now
Alterra Limited) and Silver Chain Group. He is currently the Chief Financial Officer of Speqs Pty Ltd.
Mr Bodeker’s experience spans external and internal audit, financial control, staff management, taxation, financial
modelling, cost control, risk management, company secretarial and corporate governance.
Mr Bodeker is an associate member of the South African Institute of Chartered Accountants, a practicing CPA, a member
of the Chartered Institute of Management Accountants and a fellow of the Governance Institute of Australia.
During the three-year period to the end of the financial year, Mr Bodeker has not held any other listed public directorships.
Mr Andrew Mark Hagen
Non-Executive Director
Qualifications: Bachelor of Commerce (Property and Finance) from Curtin University
Mr Hagen has substantial experience in business development, management, marketing and sales. Mr Hagen worked in
the property development industry as a director of Tuart Properties, a privately held property development business since
2003 and worked as a Development Manager for ASX listed as well as government owned property development firms
such as Brookfield Ltd, Mirvac Ltd, Peet Ltd, Cedar Woods Ltd and LandCorp over the course of 17 years.
More recently, Mr Hagen co-founded Cycliq Group Ltd (ASX:CYQ), held the position of CEO for over five years and still
remains a substantial shareholder. He was responsible for creating and developing the business direction, sourcing seed
funding, key relationship management, co-developing products, team building and promotion of the brand. Mr Hagen
managed early stage sales and established Cycliq's international sales distribution network. In his role as CEO, he oversaw
Cycliq's senior management team including its Australian and international operations.
Mr Hagen is also the director of Breakwater (WA) Pty Ltd, a private project management company.
During the three-year period to the end of the financial year, Mr Hagen served as a Director of Cycliq Group Limited, an
ASX listed entity.
Ms Suzie Jayne Foreman
Company Secretary
Qualifications: Bachelor of Commerce (Honours) from the University of Sheffield, Chartered Accountant
Ms Foreman is a Chartered Accountant with over 20 years of experience within the UK and Australia, including 11 years
combined experience with a Big 4, and a boutique advisory firm, specialising in the areas of audit and corporate services.
Ms Foreman has extensive experience as a Chief Financial Officer and Company Secretary for ASX listed and start-up
companies. Ms Foreman is skilled in cash flow, enterprise risk management, financial reporting, audit, and company
secretarial work.
Ms Foreman is currently the Company Secretary and Chief Financial Officer for Jameson Resources Ltd (ASX:JAL) and
has previously held several Company Secretary and/or Chief Financial Officer positions for ASX listed entities.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the year was to develop, manufacture and sell Remote Solar 3G/4G based
Security Camera IoT platforms, associated products and services.
SIGNIFICANT EVENTS DURING THE YEAR
Initial Public Offering
On 19 June 2017, the Company lodged a Prospectus for an initial public offer with ASIC to raise up to $4,500,000 via the
issue of 22,500,000 fully paid ordinary shares at an issue price of $0.20 per share (before costs); and an additional $55,000
via the issue of 5,500,000 options at an issue price of $0.01 each (before costs), collectively “(The Offers”). The Offers
closed fully subscribed and Spectur was admitted to the official list of the ASX on 28 July 2017.
6
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
Business Asset Acquisition
On 6 November 2017, Spectur announced that Spectur also completed a strategic entry into the Queensland market via
the acquisition of the solar-powered security surveillance business assets of leading Queensland seller of video surveillance
and cloud-based camera systems, Forrestbridge Pty Ltd trading as ‘SolarCam.’ The purchase price for the business assets
was $100,000 plus GST, to be paid evenly over a 36-month period.
The acquisition provided the opportunity for Spectur to leverage off existing ‘SolarCam’ distributor networks that service
various clients, including local and federal government departments to increase sales and market share of its products and
services within the Australian market.
In conjunction with the Sale Agreement, Mark Williamson (through Forrestbridge) was retained as Spectur’s Queensland
State Manager under a 2-year Consultancy Agreement. Mark was granted 500,000 Performance Rights by Spectur. Each
Performance Right entitles the holder to receive one fully paid ordinary share in Spectur, subject to performance milestones
being satisfied over a 3-year period, designed to create a net benefit for Spectur if achieved. Mark Williamson is to remain
as a consultant for the duration of the period for the Performance Rights to vest.
Placement
On 29 November 2017 the Company announced that it had undertaken a share placement to raise $2,196,000 before
costs. The Placement comprised the issue of 6,100,000 fully paid ordinary shares at $0.36 per share with 1,525,000 free
attaching options (each exercisable at $0.20, on or before 31 December 2020) on a 1:4 basis of each fully paid ordinary
share subscribed. The shares were issued on 8 December 2017 under the Company’s 15% capacity under Listing Rule
7.1. The options were issued under a prospectus dated 5 December 2017, and were approved at a shareholder meeting
held on 17 January 2018.
Security Purchase Plan
The Company also raised an additional $684,000 before costs through a Security Purchase Plan (SPP) offer of shares and
options. The SPP comprised an offer of 1,900,000 fully paid ordinary shares at $0.36 per share with 475,000 free attaching
options (each exercisable at $0.20, on or before 31 December 2020) on a 1:4 basis of each fully paid ordinary share
subscribed.
Funds from the Placement and SPP are to be utilised for fast tracking the development and commercialisation of the
Company’s gas detection, light detection and ranging camera system (LIDAR) and thermal camera technologies, as well
as the continued expansion into the new distribution markets of Victoria, Queensland and New South Wales. Funds will
also be allocated towards design and manufacture of trailer mounted rental models, as well as conducting market analysis
for potential international expansion.
OPERATING AND FINANCIAL REVIEW
Results of Operations
For the year ended 30 June 2018, Spectur reported total revenue of $2.48M, up 86% on the corresponding prior year
revenue of $1.3M, underpinned by customer retention and growth in the customer base.
During the year ended 30 June 2018, Spectur invested in product development, bringing into commercialisation its portable
trailer mounted and thermal camera range.
Spectur’s balance sheet remains strong with minimal debt of $0.25M and a strong cash balance of $3.5M at year end (2017:
$136,206).
The comprehensive loss of the Company for the year ended 30 June 2018, after providing for income tax amounted to
$3.3M (2017: $426,501). The loss for the year is reduced to $2.0M after adding back the effect of non-cash equity settled
expenses.
Margins improved from the half yearly financials to finish just below 50% for the full year, highlighting the effort from the
team during the second half of the year. The board mandated a focus on improving margins and the Managing Director
achieved a solid result over such a short period.
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has
been made.
EMPLOYEES
The Company had 31 employees as at 30 June 2018 (2017: 7 employees).
7
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
LOSS PER SHARE
Basic loss per share (cents per share)
(7.61)
(3.31)
30 June 2018
30 June 2017
SUBSEQUENT EVENTS AFTER THE REPORTING DATE
The Directors are not aware of any other matter or circumstance that has arisen since 30 June 2018 which significantly
affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs
of the Company, in future financial years.
LAWS AND REGULATIONS
Spectur’s operations are subject to various laws and regulations under the relevant government legislation. Full compliance
with these laws and regulations is regarded as a minimum standard for all operations to achieve the objectives of the
Company. Instances of environmental non-compliance by an operation are identified either by internal investigations,
external compliance audits or inspections by relevant government agencies. There have not been any known breaches of
laws and regulations by the Company during the year and up to the date of this report.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person who is or
has been a director or officer of the Company for any liability caused as such a director or officer and any legal costs
incurred by a director or officer in defending an action for any liability caused as such a director or officer.
The Company has a Directors and Officers insurance policy in place.
DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of Committees of Directors) held during the year and the number
of meetings attended by each Director were as follows:
Director
2018
Richard Wilkins
Peter Holton
Stephen Bodeker
Andrew Hagen
Directors’ meetings
No. eligible to attend
6
6
6
6
No. attended
6
6
6
6
Remuneration Committee meetings
No. attended
-
-
3
3
No. eligible to attend
-
-
3
3
In addition to the above meetings, the board executed 18 circular resolutions during the year.
SECURITIES ON ISSUE
Total shares, options and convertible securities of the Company on issue as at the date of this report are as follows:
Number of fully paid
ordinary shares
Number of options over
ordinary shares
Number of performance
rights
49,080,025
18,419,933
21,500,000
Directors’ holdings of shares and performance rights during the financial period have been disclosed in the Remuneration
Report. Option or performance rights holders do not have any right, by virtue of their option / performance rights, to
participate in any share issue of the Company.
Shares under option or issued on exercise of options
At the date of this report, unissued ordinary shares or interests of the Company under option are:
Type
Listed SP3O
Unlisted
Unlisted
Unlisted
Total
Number of shares under
option
Exercise price of
option
Expiry date of option
6,994,933
9,275,000
2,000,000
150,000
18,419,933
$0.20
$0.20
$0.50
$0.37
31 December 2020
31 December 2020
31 December 2020
31 December 2020
There were 25 shares issued during the year as a result of an exercise of Options.
8
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
Performance Rights
As at the date of this report, the following performance rights (“PR’s”) in the Company were on issue.
Type
Date of Expiry
Tranche 1
Tranche 2
Tranche 3
Tranche A
Earlier of 31 December in
the year the PR’s vest or 30
January 2022
Earlier of 31 December in
the year the PR’s vest or 30
January 2022
Earlier of 31 December in
the year the PR’s vest or 30
January 2022
6 November 2018
No. of Performance
Rights on Issue
7,000,000
Vesting Conditions
The total Revenue for the year ended 30 June 2018
being at least $1.75 million
7,000,000
The total Revenue for the year ended 30 June 2019
being at least $3.5 million
7,000,000
The total Revenue for the year ended 30 June 2020
being at least $7.0 million
Tranche B
6 November 2019
166,666
Tranche C
6 November 2010
166,668
166,666
Agreed internal sales revenue targets for year 1
and Mark Williamson remaining as a consultant
Agreed internal sales revenue targets for year 2
and Mark Williamson remaining as a consultant
Agreed internal sales revenue targets for year 3
and Mark Williamson remaining as a consultant
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such proceedings during the year.
FUTURE DEVELOPMENTS
The Company remains committed to building shareholders’ value, through Spectur:
•
Increasing its market share by growth within Australia from opening offices in Victoria, Queensland and New South
Wales;
• Potentially exporting overseas by targeting US and other markets (pending international certifications and market
analysis);
Targeting new industries with the focus on large scale and highly regulated industries;
•
• Bringing new products and service extensions to market by continued research and development,
• Seeking to acquire or partner with synergistic technology and operating businesses that can assist with growth;
•
and
Focusing on improving cashflow through a combination of increased sales and reducing input costs and
overheads.
DIVERSITY
The Company believes that the promotion of diversity on its Board and within the organisation generally is good practice
and is committed to managing diversity as a means of enhancing the Company’s performance. There are currently no
women on the Board, or in key management. Further information is set out in the Corporate Governance section on page
53 of this report, which will focus on the participation of women on Boards and set out objectives for gender diversity.
NON-AUDIT SERVICES
No non-audit services were provided by the Company’s auditor, HLB Mann Judd during the year (2017: $10,000). The
directors are satisfied that the provision of non-audit services in the prior year was compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service
provided means that the auditor independence was not compromised.
AUDITOR INDEPENDENCE
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the Company
with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on
page 19 and forms part of this Directors’ report for the year ended 30 June 2018.
9
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
DIRECTORS INTERESTS
Interests in the shares, options and convertible securities of the Company and related bodies corporate
The following relevant interests in shares and options of the Company or a related body corporate were held by the Directors
as at the date of this report.
Directors
Charles Richard Wallace Wilkins
Peter William Holton
Stephen Paul Bodeker
Andrew Mark Hagen
Total
Number of fully
paid ordinary
shares
1,673,056
1,711,944
36,501
25,000
3,446,501
Number of options
over ordinary shares
Number of
performance rights
2,007,639
2,017,361
252,875
500,000
4,777,875
10,000,000
10,000,000
-
-
20,000,000
REMUNERATION REPORT (AUDITED)
A. Introduction
This report, which forms part of the Directors’ report, outlines the remuneration arrangements in place for the key
management personnel (“KMP”) of Spectur Limited for the financial year ended 30 June 2018. The information provided in
this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for KMP who are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including
any Director (whether executive or otherwise) of the Company.
Key Management Personnel
The KMP of the Company during or since the end of the financial year were as follows:
Directors
Mr Charles Richard Wallace Wilkins
Mr Peter William Holton
Mr Stephen Paul Bodeker
Mr Andrew Mark Hagen
Executives
Dr Nicholas Le Marshall
Position
Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Position
Technology and
Development Manager
Period of Employment (to present)
22 October 2009
9 March 2017
9 June 2017
9 June 2017
Period of Employment (to present)
1 July 2017
Comments on Remuneration Report at Spectur’s most recent AGM
The Company received a 97.0% of “yes” votes on its remuneration report for the 2017 financial year. The Company did not
receive any specific feedback from shareholders at the 2017 Annual General Meeting on its remuneration practices.
B. Remuneration Policy
The Spectur Board is committed to transparent disclosure of its remuneration strategy and this report details the Company’s
remuneration objectives, practices and outcomes for KMP, which includes Directors and senior executives, for the period
ended 30 June 2018. Any reference to “Executives” in this report refers to KMPs who are not Non-Executive Directors.
B. 1 Remuneration Policy Framework
The key objective of Spectur’s remuneration policy is to be a key enabler for the Company in achieving its strategic goal of
continuing to build a successful remote security monitoring system and cloud-based technology solutions company. It has
been designed to reward executives and employees fairly and responsibly in accordance with the market in which the
Company operates, and to ensure that Spectur:
➢ Provides competitive rewards that attract, retain and motivate executives and employees of the highest calibre,
who can successfully deliver, particularly as the Company moves through a rapid growth phase;
➢ Sets demanding levels of expected performance that have a clear linkage to an executive’s remuneration;
➢ Benchmarks remuneration against appropriate comparator peer groups to make the Company competitive in the
human resources market, through an offering of both short and long-term incentives and competitive base salaries;
➢ Provides a level of remuneration structure to reflect each executive’s respective duties and responsibilities;
➢ Aligns executive incentive rewards with the creation of value for shareholders; and
➢ Complies with legal requirements and appropriate standards of governance.
10
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
B.2 Remuneration Committee
The Board implemented a Remuneration Committee during the year which was responsible for determining and reviewing
compensation arrangements for the Directors and Executives and making recommendations to the board.
B.3 Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive Director and executive remuneration
is separate and distinct.
B.4 Policy for Executive Remuneration
The Company maintains its existing performance management procedures for key management personnel by having each
key manager undertake an annual performance appraisal with the Managing Director based on individual and business
performance expectations and other circumstances. The Executive Chairman and Managing Director’s performance is in
turn reviewed by the Remuneration Committee.
The Company’s remuneration policy is to provide a fixed remuneration component and a short and long term performance
based component. The Board believes that this remuneration policy is appropriate in aligning executives’ objectives with
shareholder and business objectives.
Executive Remuneration consists of the following key elements:
-
-
Fixed remuneration or base salaries; and
Variable remuneration, being the “at risk” component related to performance comprising;
i)
ii)
Short Term Incentives (STI);
Long Term Incentive (LTI).
The proportion of fixed remuneration and variable remuneration is established for each Executive Director by the
Remuneration and Committee with reference to market comparator data and the scope of each of the individual executive’s
role and approved by the Board in accordance with the Remuneration Policy and the provisions of the STI and LTI Plans.
These elements are both described in detail below.
C. Remuneration Components
C.1 Fixed Remuneration
Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other non-
cash benefits. Fixed remuneration was reviewed by the Remuneration Committee and approved by the Board having regard
to remuneration paid to executives of relevant comparable peer group of companies taking into account company and
individual performance. The Company sought to position its fixed remuneration in line with comparably sized ASX listed
companies within the same sector. Size is determined by market capitalization at the time of comparison.
Executives receive an employer superannuation contribution made into a complying superannuation fund at the required
Superannuation Guarantee rate (Currently 9.5%,) of base salary. In line with prevalent market practice, executives may
receive other benefits including vehicle benefits and provision of a mobile telephone.
C.2 Variable Remuneration
C.2.1 STI Plan Applicable to the Reporting Period - 2018
The STI plan was implemented by the Remuneration Committee and approved by the Board during the year. Following a
review conducted mid-year, the remuneration committee noted that the remuneration of Spectur executives fell significantly
below the fixed remuneration component of that paid to executives of peer comparator companies. A STI scheme was
designed to provide an incentive mechanism to bring the base remuneration of key executives in line with peer group
companies if agreed KPI’s were met.
STI bonuses were paid to the executives upon achievement of certain stretched specified revenue milestones during the
financial year. The bonuses were paid in accordance with the terms of a short-term incentive scheme approved by the
remuneration committee and by the board. 100% of the bonus vested during the year, no percentage was forfeited during
the year as the service and performance criteria were met. No part of the bonus is payable in future periods. STI bonuses
were paid as follows:
Richard Wilkins
Peter Holton
Bonus Incentive 1
$
10,000
25,000
Bonus Incentive 2
$
10,000
25,000
Total
$
20,000
50,000
11
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
C.3 STI Plan for the 2019 Reporting Period
The Board and executive management team are currently reviewing the STI plan for the 2019 year taking into account the
Company’s cash flow and financial performance. Having regard to the operations of the Company, the Board may approve
an STI plan based upon KPI’s, including measures such as successful commercialisation of the Company’s products and
services, (e.g. specified levels of commercial sales of the solar camera systems within budgeted timeframes and costs),
development activities, production and sales levels, operational cash flows, corporate activities (e.g. recruitment of key
personnel) and business development activities (e.g. joint ventures and business development).
C.4.1 LTI Plan During the Reporting Period
The LTI plan in operation for the executive directors during the year was a performance rights plan which was implemented
pre-IPO and links remuneration incentives by way of Performance Rights to Company performance targets. No
Performance Rights were issued to key management personnel during the period. Any value recorded in the remuneration
table in E.1, under “share based payments” received for key management personnel during the period relates to rights
granted in prior periods, to which the value on the date of grant has been brought to account over the applicable vesting
period, in accordance with relevant accounting standards.
The Board has also previously chosen to issue Options (where appropriate) to some executives and employees as a key
component of the incentive portion of their remuneration, in order to attract and retain the services of the executives and to
provide an incentive linked to the performance of the Company. Executives Directors also hold option incentives in the
Company acquired as part of their pre-IPO subscription.
C.4.2 LTI Plan for Future Reporting Periods
The Board may grant Options to executives with exercise prices at and/or above market share price (at the time of
agreement). 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 Company increases sufficiently to warrant exercising the Incentive Options granted.
Other than service-based vesting conditions, there are no additional performance criteria on the Incentive Options granted
to executives, as given the speculative nature of the Company’s activities and the small management team responsible for
its running, it is considered the performance of the executives and the performance and value of the Company are closely
related. The Company prohibits executives entering into arrangements to limit their exposure to Incentive Options granted
as part of their remuneration package. No options were issued to executives during 2018.
C.5 Policy for and Components of Non-Executive Remuneration During the Reporting Period
Remuneration Policy
Non-Executive Director Fees
The overall level of annual Non-Executive Director fees was approved by shareholders in accordance with the requirements
of the Company’s Constitution and the Corporations Act. The maximum aggregate pool of Directors’ fees payable to all of
the Company’s Non-Executive Directors is $250,000 per annum. This aggregate amount was approved by shareholders at
the 2017 Annual General Meeting.
Equity Compensation
In accordance with Australian practice and shareholder preference, the Company’s current policy is not to grant any further
equity-based compensation to Non-Executive Directors. Accordingly, no equity incentives were offered to Non-Executive
Directors in the reporting period to 30 June 2018. Andrew Hagen and Steve Bodeker were issued options pre-IPO under
the Spectur employee incentive scheme. Andrew Hagen and Steven Bodeker also hold options which were subscribed for
as part of the IPO option offer and subsequent SPP offer on the same terms as offered to all shareholders.
12
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
C.5 Policy for and Components of Non-Executive Remuneration During the Reporting Period (continued)
Remuneration Structure
Non-Executive Directors receive a fixed remuneration of base fees plus statutory superannuation, presently set at $35,000
per annum. These fees cover main board activities only. Non-Executive Directors may receive additional remuneration for
other services provided to the Company. In addition to these fees, Non-Executive Directors are entitled to reimbursement
of reasonable travel, accommodation and other expenses incurred in attending meetings of the Board, committee or
shareholder meetings whilst engaged by Spectur. Non-Executive Directors do not earn retirement benefits other than
superannuation and are not entitled to any compensation on termination of their directorships.
The annual Board and committee fees were reviewed during the reporting period to 30 June 2018 and have remained
unchanged since this review. A further review will be conducted in the next financial period in accordance with the annual
review of salaries performed by the Remuneration Committee.
The current Board and additional committee fee structure for Non-Executive Directors is as per the table below:
Board
Chair
N/A
Member
$35,000
Remuneration Committee
Member
Chair
-
-
Fees for Non-Executive Directors are not linked to the performance of the Company; however, to align directors’ interests
with shareholder interests, the directors may hold shares in the Company as governed by the Company’s Securities Trading
Policy.
C.6 Remuneration Governance Including Use Of Remuneration Consultants
(i) The role of the Board
The Board is responsible for ensuring Spectur’s remuneration strategy is aligned with Company performance and
shareholder interests and is equitable for participants. The Remuneration Committee (“RC”) is responsible for reviewing
and making recommendations to the Board on remuneration matters. The members of the Committee, are:
Chairman – Steve Bodeker
Member – Andrew Hagen
Member and Secretary – Suzie Foreman
The Chairman of the Committee, Steve Bodeker, is an independent director.
Employee Incentive Plan
Spectur implemented an Employee Incentive Plan (“Plan”) during the prior year. Under the Plan, Spectur may grant to
Eligible Employees options to subscribe for Shares or performance rights entitling the holder to be issued Shares on terms
and conditions set by the Board at its discretion.
The objectives of the Plan are:
(i)
(ii)
(iii)
(iv)
to establish a method by which eligible participants can participate in the future growth and profitability of
Spectur;
to provide an incentive and reward for eligible participants for their contributions to Spectur;
to attract and retain a high standard of managerial and technical personnel for the benefit of Spectur; and
to align the interests of eligible participants more closely with the interests of shareholders, by providing
an opportunity for eligible participants to hold an equity interest in Spectur.
There were 150,000 options issued under the Employee Incentive Plan during the year (2017: 2,850,000). There were no
shares or other equity benefits issued under the Employee Incentive Plan during the year (2017: Nil).
13
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
Employment Contracts
As of the date of this report, remuneration and other terms of employment of Directors and Other Key Management
Personnel are formalised in employment contracts and service agreements. The major provisions of the agreements related
to remuneration are set out below.
Executive Directors
Richard Wilkins
Peter Holton
Non-Executive Directors
Stephen Bodeker
Base salary/fee
Terms of agreement
Notice period
$190,000 plus
vehicle allowance
$190,000 plus
vehicle allowance
Commencement date – 1
July 2017 for period of 2
years
Commencement date – 1
July 2017 for period of 2
years
6 months in writing by either
party
6 months in writing by either
party
$35,000
Commencement date – 9
June 2017
Andrew Hagen
$35,000
Commencement date – 9
June 2017
Other KMP
Nick Le Marshall
$180,000 – first 12
months
$200,000 – after 12
months
Commencement date -1
July 2017 for period of 2
years
Upon written advice of intention
or in accordance with the
Constitution of the Company or
the Corporations Act 2001
Upon written advice of intention
or in accordance with the
Constitution of the Company or
the Corporations Act 2001
With cause no notice, without
cause as follows:
<1 year – 1 week
1-3 years – 2 weeks
3-5 years – 3 weeks
> 5 years – 4 weeks
If over 45 years of age + 2
additional weeks after 2 years.
Relationship between Remuneration of KMP and Company Performance
The Board anticipates that the Company will retain earnings (if any) and other cash resources for the development of its
solar cameras and associated products and services activities. The Company does not currently have a policy with respect
to the payment of dividends and returns of capital however this will be reviewed on an annual basis.
Director’s remuneration is set by reference to payments made by other companies of similar size and industry, and by
reference to the skills and experience of Directors. During the initial growth phase of the Company the key measurable
driver to the Company’s performance was sales revenue. A limited component of executives’ remuneration was linked to
revenue growth. Directors and executives also hold performance rights and options whose performance is linked to
shareholder wealth (via the Company’s share price).
The earnings of the Company for the previous 3 financial periods are summarised below:
Sales Revenue
Gross profit
EBITDA
Loss after income tax
2018
$
2,476,501
1,231,150
(3,764,137)
(3,319,043)
2017
$
1,332,681
775,897
(607,237)
(426,501)
2016
$
935,320
534,285
(208,202)
(66,971)
14
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
Relationship between Remuneration of KMP and Company Performance (continued)
The factors that are considered to affect total shareholder return (TSR) are summarised below:
Share price ($)
Dividend declared ($)
Loss per share (cents)
2018
0.28
-
(7.61)
2017
N/A
-
(3.31)
2016
N/A
-
(0.60)
The remuneration of KMP is aligned to Company performance via remuneration incentives issued in previous years and
potential LTI and STI incentives. Director Performance rights are aligned to revenue growth and options to share price
targets.
E.1 Remuneration of Key Management Personnel
There were no material changes to base salaries paid to key management personnel during the period.
Details of the nature and amount of each element of the emoluments received by or payable to each of the Key Management
Personnel (KMP) of Spectur Limited for the financial years specified are as follows:
Short-term benefits
Bonus
Payments
$
Super-
annuation
$
Salary &
fees
$
205,000
205,000
38,325
97,417
180,000
725,742
20,000
50,000
-
-
-
70,000
19,000
20,425
-
3,325
17,100
59,850
Share-based
payments(ii)
$
611,111
611,111
-
-
Total
$
855,111
886,536
38,325
100,742
-
1,222,222
197,100
2,077,814
Percentage
performance
related
%
73.8
74.6
-
-
-
-
2018
Directors
Richard Wilkins(i)
Peter Holton(i)
Stephen Bodeker
Andrew Hagen (iii)
Other KMP
Nick Le Marshall
Total
Notes:
(i)
(ii)
Salary and fees includes $15,000 for a vehicle allowance paid to Peter Holton and Richard Wilkins.
The share-based payments related to the value of performance rights which were issued to Richard Wilkins and Peter Holton as
part of the IPO process. In accordance with AASB 2, the performance rights issued to the Executives have been valued based
on factors such as the underlying share price, the expected vesting date and vesting probability in achieving the specified
revenue hurdles at the reporting date.
It should be noted that the Executives have not received this amount and the performance rights may have no actual financial
value unless the required performance hurdles are achieved. Stock may also be issued to the recipient at a share issue price
lower than valued and recognised in the financial report. Note that the valuation does not reflect the value of the equity benefits
received for tax purposes.
(iii) Mr Hagen was paid $35,000 for director fees and $62,417 to Breakwater (WA) Pty Ltd for business development activities during
2018.
2017
Directors
Richard Wilkins1
Peter Holton2
Stephen Bodeker3
Andrew Hagen3
Japheth Dela Torre
Other KMP
Nick Le Marshall5
Suzie Foreman6
Total
Short-term benefits
Salary &
fees
$
Super-
annuation
$
Termination
payments
$
Share-
based
payments
$
195,000
185,000
2,154
2,358
34,000
126,585
1,533
546,630
-
-
204
-
-
-
-
204
-
-
-
-
-
-
-
-
-
2,500
2,500
-
5,000
500
10,500
Total
$
195,000
185,000
4,858
4,858
34,000
131,585
2,033
557,334
Percentage
performance
related
%
-
-
-
-
-
-
-
-
15
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
E.1 Remuneration of Key Management Personnel (continued)
1 Richard Wilkins became a full time employee only on 1 July 2017. Prior to this, he provided consulting and management services through
a related entity, Space Nominees Pty Ltd (Space Nominees). During the year, a total of $195,000 was recognised as an expense by the
Company for consulting and management services, associated services and reimbursements. As at 30 June 2017, $5,500 was payable to
Space Nominees for the abovementioned services.
2 Peter Holton became a full time employee only on 1 July 2017. Prior to this, he provided consulting and management services through
a related entity, Chelsea Brook Pty Ltd (Chelsea Brook). During the year, a total of $185,000 was recognised as an expense by the
Company for consulting and management services, associated services and reimbursements. As at 30 June 2017, $5,500 was payable to
Chelsea Brook for the abovementioned services.
3 Stephen Bodeker and Andrew Hagen were appointed as Non-Executive Directors on 9 June 2017. Their remuneration was effective
from that date.
4 Dr Nick Marshall became a full time employee only on 1 July 2017. Prior to this, he provided technical and development services through
a related entity, Burtek Pty Ltd (Burtek). During the year, a total of $126,585 was recognised as an expense by the Company for technical
and development services, associated services and reimbursements. As at 30 June 2017, $8,348 was payable to Burtek.
5 Ms Foreman’s remuneration is set out in the Company Secretarial and Corporate Services agreement between Spectur and Athena
Corporate Pty Ltd, a related entity to Ms Foreman. As at 30 June 2017, $1,533 was payable to Athena Corporate Pty Ltd.
No member of key management personnel appointed during the period received a payment as part of his or her
consideration for agreeing to hold the position.
Options
Details of employee share option plans granted as compensation for the current financial year
For details on the valuation of the options, including models and assumptions used, please refer to Notes 6 and 21. There
were no material alterations to the terms and conditions of options granted as remuneration since their grant date.
Terms and conditions of share-based plans in existence affecting key management personnel during the financial year or
future financial years included options issued under the Employee Incentive Plan. The below table details all options issued
under the Employee Incentive Plan, noting some options have been issued to employees or consultants that are not KMPs.
Date options
granted
Number of
shares under
option
Exercise
price of
option
Value per
option at grant
date
Value of options
at grant date
09/06/2017
19/02/2018
Total
2,800,000
150,000
2,850,000
$0.20
$0.37
$0.01
$0.20
$28,500
$30,165
Expiry date
of option
31/12/2020
31/12/2020
Share options granted to KMP
During the financial year there were no equity securities granted to key management personnel of the Company and the
entities they controlled as part of their remuneration.
There were no shares issued during the year as a result of the exercise of an Option or Performance Rights to KMP. No
Options or Performance Rights lapsed during the year.
16
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
Key management personnel equity holdings
Fully paid ordinary shares
Balance at
beginning
of year
Number
Granted as
compensation
Number
Received
on exercise
of options
Number
Net change
other1
Number
Balance at
end of year
Number
Balance held
nominally
Number
2,157,500
1,592,500
-
-
-
-
-
-
-
-
-
-
-
-
-
92,057
119,444
36,501
25,000
2,249,557
1,711,944
36,501
25,000
1,673,056
1,711,944
36,501
25,000
31,501
31,501
31,501
30 June 2018
Directors
Richard Wilkins2
Peter Holton
Stephen Bodeker
Andrew Hagen
Executives
Nick Le Marshall
1 Acquired pursuant to the IPO, the director placement offer or SPP offer - December 2017
2 576,501 fully paid ordinary shares are held by Mr Wilkins de-facto spouse Judith van Ross, 11,501 of which were acquired during the
year as part of the share purchase plan offer. Mrs van Ross is defined as a related party pursuant to AASB124 and S608 of the Corporations
Act, which includes a close member of the family of an individual as a related party and is required to be disclosed within financial reports.
Balance at
beginning
of year
Number
Granted as
compensation
Number
Received on
exercise of
options
Number
Net change
other
Number*
Balance at
end of year
Number
Balance held
nominally
Number
204,000
150,000
-
-
-
-
1,953,5001
1,442,5002
2,157,500
1,592,500
1,592,500
1,592,500
30 June 2017
Directors
Richard Wilkins
Peter Holton
1 The net change include issue of 9,250 shares equivalent to the amount paid for the partly-paid shares bought back on 27 January 2017;
increase in number of shares as a result of share subdivision by 1,919,250 and subscription of 25,000 new shares.
2 The net change include issue of 9,250 shares equivalent to the amount paid for the partly-paid shares bought back on 27 January 2017
and increase in number of shares as a result of share subdivision by 1,433,250 shares.
Share options
30 June 2018
Directors
Richard Wilkins
Peter Holton
Stephen Bodeker
Andrew Hagen
Executives
Nick Le Marshall
Balance at
beginning of
year
Number
2,000,000
2,000,000
250,000
250,000
500,000
Granted as
compensation
Number
Exercised
Number
Net change
other1
Number
Balance at end of
year
Number
-
-
-
-
-
-
-
-
-
-
7,639
17,361
2,875
250,000
2,007,639
2,017,361
252,875
500,000
2,875
502,875
1 The net change for Richard Wilkins, Peter Holton and Stephen Bodeker are options acquired pursuant to the director placement offer and
Share Purchase Plan Offer– December 2017. Andrew Hagen acquired 250,000 options under the IPO option offer.
17
SPECTUR LIMITED
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (continued)
Balance at
beginning of
year
Number
Granted as
compensation
Number
Exercised
Number
Net change
other
Number
Balance at end of
year
Number
-
-
-
-
-
-
-
250,000
250,000
500,000
-
-
-
-
-
2,000,0001
2,000,0001
-
-
2,000,000
2,000,000
250,000
250,000
-
500,000
30 June 2017
Directors
Richard Wilkins
Peter Holton
Stephen Bodeker
Andrew Hagen
Executives
Nick Le Marshall
1 These options were subscribed by the respective directors’ nominees at $0.05 per option raising $20,000.
For details of the employee share option plan and of share options granted during the 2017 financial year, please refer to
Notes 6 and 21. All share options issued to KMP were made in accordance with the provisions of the employee incentive
plan except for options issued to Richard Wilkins and Peter Holton.
Performance Rights
30 June 2018
Directors
Richard Wilkins
Peter Holton
30 June 2017
Directors
Richard Wilkins
Peter Holton
Balance at beginning
of year
Number
Granted as
compensation for
services
Number
Balance at end of
year
Number
Vested and
Exercisable1
Number
10,000,000
10,000,000
-
-
10,000,000
10,000,000
3,333,333
3,333,333
Balance at beginning
of year
Number
Granted as
compensation for
services
Number
Balance at end of
year
Number
Vested and
Exercisable
Number
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
-
-
The 10,000,000 performance rights held by each executive have the following vesting conditions:
a. Tranche 1 – 33 1/3% - The total Revenue for the year ended 30 June 2018 being at least $1.75 million;
b. Tranche 2 – 33 1/3% - The total Revenue for the year ended 30 June 2019 being at least $3.5 million; and
c. Tranche 3 – 33 1/3% - The total Revenue for the year ended 30 June 2020 being at least $7 million.
Total Revenue is determined by reference to Spectur’s audited financial statements for each respective financial year.
Performance rights or shares issued upon conversion are subject to a 24 month ASX imposed escrow period from IPO.
Signed in accordance with a resolution of the directors.
Mr Charles Richard Wallace Wilkins
Director
Dated this 31 August 2018
18
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Spectur Limited for the year ended 30 June
2018, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
31 August 2018
N G Neill
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
19
SPECTUR LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Notes
30 June 2018
$
30 June 2017
$
Continuing operations
Revenue
Cost of sales
Gross profit
Interest income
Other income
3(a)
2,476,501
(1,245,351)
1,231,150
68,674
986
Research and development expenses
3(b)
(313,661)
Employee benefits
General and administrative expenses
Marketing and advertising
Property expenses
Depreciation and amortisation
Interest expense
Share-based payment expense
Loss before income tax benefit
Income tax benefit
Loss for the year
4
Other comprehensive income, net of income
tax
(1,795,502)
(1,084,555)
(336,029)
(174,022)
(51,524)
(7,662)
(1,292,504)
(3,754,649)
435,606
1,332,681
(556,784)
775,897
-
2,569
(525,502)
(382,211)
(321,113)
(85,679)
(42,698)
(20,227)
(3,599)
(28,500)
(631,063)
204,562
(3,319,043)
(426,501)
-
-
Total comprehensive loss for the year
(3,319,043)
(426,501)
Loss attributable to members of the
Company
(3,319,043)
(426,501)
Basic loss per share (cents per share)
7
(7.61)
(3.31)
The accompanying notes form part of these financial statements.
20
SPECTUR LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Net Equity
Notes
30 June 2018
$
30 June 2017
$
8
9
10
11
12
13
14
15
14
5
6
3,487,070
1,028,304
907,528
5,422,902
577,298
858,569
1,435,867
6,858,769
1,343,833
81,938
142,217
1,567,988
175,925
175,925
1,743,913
5,114,856
136,206
593,351
176,011
905,568
53,731
2,861
56,592
962,160
471,020
-
-
471,020
-
-
471,020
491,140
8,220,651
1,717,498
(4,823,293)
5,114,856
1,936,890
58,500
(1,504,250)
491,140
The accompanying notes form part of these financial statements.
21
SPECTUR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Issued
Capital
Reserves
Accumulated
Losses
Total Equity
$
$
$
$
Balance at 1 July 2017
1,936,890
58,500
(1,504,250)
491,140
Loss for the year
Total comprehensive loss for the year
-
-
Shares issued during the year (net of costs)
7,580,005
Shares issue costs
(1,296,244)
-
-
-
-
Options issued during the year
Performance rights issued during the year
-
-
312,863
1,346,135
(3,319,043)
(3,319,043)
(3,319,043)
(3,319,043)
-
-
-
-
7,580,005
(1,296,244)
312,863
1,346,135
Balance as at 30 June 2018
8,220,651
1,717,498
(4,823,293)
5,114,856
Balance at 1 July 2016
Loss for the year
Total comprehensive loss for the year
Shares issued during the year
Shares issue costs
Options issued during the year
Performance rights issued during the year
Issued
Capital
$
1,128,000
-
-
861,800
(52,910)
Reserves
Accumulated
Losses
Total Equity
$
-
-
-
-
-
$
$
(1,077,749)
50,251
(426,501)
(426,501)
(426,501)
(426,501)
-
-
-
-
861,800
(52,910)
30,000
28,500
-
-
30,000
28,500
Balance as at 30 June 2017
1,936,890
58,500
(1,504,250)
491,140
The accompanying notes form part of these financial statements.
22
SPECTUR LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Cash flows from operating activities
Payments to suppliers and employees
Receipts from customers
Interest received
Interest paid
Finance and related charges
R & D tax incentive received
Note
30 June 2018
$
30 June 2017
$
(4,848,064)
(2,102,461)
2,497,683
1,274,210
65,686
(1,909)
(5,753)
212,792
Net cash used in operating activities
8.1
(2,079,565)
Cash flows from investing activities
Payments for intangible assets
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue and subscription of shares
Proceeds from issue of options for cash
Payment for share issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
8.2
8.2
Net increase in cash and equivalents held
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
8
(875,754)
(576,947)
(1,452,701)
7,380,005
55,000
(809,738)
301,842
(43,979)
6,883,130
3,350,864
136,206
3,487,070
-
(3,599)
-
153,772
(678,078)
-
(33,801)
(33,801)
865,390
30,000
(31,500)
-
(13,480)
850,410
138,531
(2,325)
136,206
The accompanying notes form part of these financial statements.
23
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
(a)
These financial statements are general purpose financial statements, which have been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and comply with other requirements
of the law.
The financial statements comprise the financial statements of the Company. For the purposes of preparing the financial
statements, the Company is a for-profit entity.
The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated.
The financial statements are for Spectur Limited. Spectur Limited does not have any subsidiaries.
The financial statements have been prepared on a historical cost basis. Historical cost is based on the fair values of the
consideration given in exchange for goods and services.
The Company is a listed public company, incorporated and operating in Australia.
Adoption of new and revised standards
(b)
Standards and Interpretations applicable to 30 June 2018
In the year ended 30 June 2018, the Directors have reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Company and effective for the current annual reporting period.
As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards
and Interpretations on the Company and, therefore, no material change is necessary to Company accounting policies.
Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all Standards and Interpretations in issued but are not yet adopted for the year ended
30 June 2018. As a result of this review the Directors have determined that the following Standards and Interpretations
will have a material effect on Group accounting policies in future financial periods, namely:
• AASB 16 Leases
• AASB 15 Revenue from contracts with Customers
The Company has elected not to early adopt these Standards and Interpretations
AASB 15 Revenue from Contracts with Customers
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised,
including in respect of multiple element arrangements. It replaces existing revenue recognition guidance, AASB 111
Construction Contracts, AASB 118 Revenue and AASB 1004 Contributions. AASB 15 is effective from annual reporting
periods beginning on or after 1 January 2018, with early adoption permitted.
The core principle of AASB 15 is that it requires identification of discrete performance obligations within a transaction and
associated transaction price allocation to these obligations. Revenue is recognised upon satisfaction of these performance
obligations, which occur when control of goods or services is transferred, rather than on transfer of risks and rewards.
Revenue received for a contract that includes a variable amount is subject to revised conditions for recognition, whereby
it must be highly probable that no significant reversal of the variable component may occur when the uncertainties around
its measurement are removed.
The Company has commenced the process of evaluating the impact of the new standard on existing revenue streams and
will first apply AASB 15 in the financial year beginning 1 July 2018.
24
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b)
Adoption of new and revised standards (continued)
AASB 16 Leases
AASB 16 replaces the AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease,
Interpretation 115 Operating Leases-Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving
the Legal Form of a Lease. AASB 16 removes the classification of leases as either operating leases or finance leases- for
the lessee - effectively treating all leases as finance leases. Most leases will be capitalised on the balance sheet by
recognising a lease liability for the present value obligation and a 'right-of-use' asset. The right of use assets is calculated
based on the lease liability plus initial direct costs, prepaid lease payments and estimated restoration costs less lease
incentives received. This will result in an increase in the recognised assets and liabilities in the statement of financial
position as well as a change in expense recognition, with interest and deprecation replacing operating lease expense.
There are exemptions for short-term leases and leases of low-value items.
Lessor accounting remains similar to current practice, i.e. lessors continue to classify leases as finance and operating
leases.
This standard will primarily affect the accounting for the Group's operating lease. As at 30 June 2018, the Company has
$299,000 of non-cancellable operating lease commitments, predominantly relating to a property lease. The Company is
considering the available options to account for this transition, but the Company expects a change in reported earnings
before interest, tax, depreciation and amortisation (EBITDA) and increase in lease assets and liabilities recognition. The
lease standard is also expected to impact on deferred tax balances. This will however be dependent on the lease
arrangements in place when the new standard is effective. The Group has commenced the process of evaluating the
impact of the new lease standard.
AASB 16 is effective from annual reporting periods beginning on or after 1 January 2019, with early adoption permitted for
entities that also adopt AASB 15. A lessee can choose to apply the standard using a full retrospective or a modified
retrospective approach.
Other than the above, the Directors have determined that there is no material impact of the Standards and Interpretations
in issue not yet adopted on the Company and, therefore, no material change is necessary to Company accounting policies.
(c)
The financial report was authorised for issued in accordance with a resolution of the Directors on 31 August 2018.
Statement of compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to International
Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial
statements and notes thereto, complies with International Financial Reporting Standards (IFRS).
Significant accounting estimates and judgements
(d)
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values
of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in
which the estimate is revised if it affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods.
Impairment of intangibles with indefinite useful lives:
The Company determines whether intangibles with indefinite useful lives are impaired at least on an annual basis. This
requires an estimation of the recoverable amount of the cash generating units to which the intangibles with indefinite useful
lives are allocated.
Share-based payment transactions:
The Company 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 using internal valuation models in
conjunction with the market price of the share-based payments.
Going concern
(e)
The financial report has been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realization of assets and settlements of liabilities in the ordinary course of business.
25
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Segment reporting
(f)
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the board of Directors of Spectur.
(g)
Both the functional and presentation currency of Spectur is Australian dollars.
Foreign currency translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate
of exchange ruling at the balance date. All exchange differences in the financial report are taken to profit or loss with the
exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or
loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when
the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of
the fair value gain or loss.
Revenue recognition
(h)
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances, rebates and amounts collected on behalf of third parties.
Sale of goods
Revenue is recognised when the goods are delivered and titles have passed, at which time all the following conditions are
satisfied:
•
•
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership
nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
•
•
•
Rendering of services
Revenue from the rendering of services is recognised by reference to the stage of completion of the contract. The stage
of completion of the contract is determined as follows:
• Contract income is recognised by reference to the total actual costs incurred at the end of the reporting period
relative to the proportion of the total costs expected to be incurred over the life of the contract;
• Servicing fees are recognised by reference to the proportion of the total cost of providing the service for the
product sold; and
• Revenue from time and material contracts are recognised at the contractual rates as labour hours are delivered
and direct expenses are incurred.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company
and the amount of revenue can be reliably measured. Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that assets’ net carrying amount on initial recognition.
Leases
(i)
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are
consumed. In the event that lease incentives are received to enter into operating leases, such incentives are recognised
as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis,
except where another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed.
26
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income tax
(j)
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
•
•
when the deferred income tax liability arises from the initial recognition of 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 profit nor
taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
•
•
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
27
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
Revenues, expenses and assets are recognised net of the amount of GST except:
Other taxes
•
•
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
Impairment of tangible and intangible assets other than goodwill
(l)
The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in
use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or Company’s of assets and the asset's value in use cannot be estimated to be close to its fair
value.
In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment
losses relating to continuing operations are recognised in those expense categories consistent with the function of the
impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation
decrease).
An assessment is also made at each balance date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount
that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or loss unless the asset is carried at its revalued amount, in which case the reversal
is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate
the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
Cash and cash equivalents
(m)
Cash comprises cash at bank and in hand, net of bank overdrafts. Cash equivalents are short term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes
in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as
defined above.
28
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Trade and other receivables
(n)
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using
the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement
within periods ranging from 15 to 45 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by
reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Company
will not be able to collect all amounts due according to the original contractual terms. Factors considered by the Company
in making this determination include known significant financial difficulties of the debtor, review of financial information and
significant delinquency in making contractual payments to the Company. The impairment allowance is set equal to the
difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted
at the original effective interest rate. Where receivables are short-term discounting is not applied in determining the
allowance.
The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When
a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period,
it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against
other expenses in the statement of comprehensive income.
(o)
Inventories are valued at the lower of cost and net realisable value.
Inventories
Costs incurred in bringing each product to its present location and condition is accounted for as follows:
•
•
Raw materials – purchase cost on a first-in, first-out basis; and
Finished goods and work-in-progress – cost of direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
Property, plant and equipment
(p)
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost
includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.
Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and
equipment as a replacement only if it is eligible for capitalisation.
Depreciation is calculated on diminishing value basis using the following rates:
Motor vehicle
Plant equipment
Office equipment
Camera equipment
25%
10% to 50%
10% to 50%
33.33%
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount
being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The
recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the
asset belongs, unless the asset's value in use can be estimated to approximate fair value. An impairment exists when the
carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating
unit is then written down to its recoverable amount. For plant and equipment, impairment losses are recognised in the
statement of comprehensive income in the cost of sales line item. However, because land and buildings are measured at
revalued amounts, impairment losses on land and buildings are treated as a revaluation decrement.
29
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property, plant and equipment (continued)
(p)
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset
is derecognised.
Intangible assets
(q)
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation is
charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is
reviewed at the end of each annual reporting period, with any changes in these accounting estimates being accounted for
on a prospective basis.
Internally generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-
generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as
incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and
only if, all of the following have been demonstrated:
•
•
•
•
•
•
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probable future economic benefits;
The availability of adequate technical, financial and other resources to complete development and to use or sell
the intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria listed above. Subsequent to initial recognition, internally-
generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on
the same basis as intangible assets acquired separately.
The following useful lives are used in the calculation of amortisation:
Patents
Trademarks
Goodwill
Product development
8 years following grant of patent
10 years following grant of trademark
3 years following acquisition
5 years following commercial use
Trade and other payables
(r)
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided
to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to
make future payments in respect of the purchase of these goods and services. Trade and other payables are presented
as current liabilities unless payment is not due within 12 months.
Borrowings
(s)
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for
liquidity services and amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate for an equivalent non-
convertible note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or
maturity of the note. The remainder of the proceeds is allocated to the conversion option. This is recognised and included
in shareholders’ equity, net of income tax effects.
30
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued
Borrowings (continued)
(s)
Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed,
is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Provisions
(t)
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.
When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the
risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.
Share-based payment transactions
(u)
Equity settled transactions
The Company provides benefits to employees (including senior executives) of the Company in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
Equity settled transactions (continued)
The Company has the following plan in place:
•
the Employee Incentive Plan (EIP), which provides benefits to Directors, senior executives and employees and is
governed by the Employee Incentive Plan Rules.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by internal valuation using a Black-Scholes
model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to
the price of the shares of Company (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the Company’s best estimate of the number of equity instruments
that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect
of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income
charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of
that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
31
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued
Share-based payment transactions(continued)
(u)
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were
a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per
share.
Cash settled transactions:
The Company also provides benefits to employees in the form of cash-settled share-based payments, whereby employees
render services in exchange for cash, the amounts of which are determined by reference to movements in the price of the
shares of Company.
The cost of cash-settled transactions is measured initially at fair value at the grant date using the Black-Scholes formula
taking into account the terms and conditions upon which the instruments were granted. This fair value is expensed over
the period until vesting with recognition of a corresponding liability. The liability is remeasured to fair value at each balance
date up to and including the settlement date with changes in fair value recognised in profit or loss.
Cash settled transactions: (continued)
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. Incremental costs directly attributable to the issue of new
shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the purchase
consideration.
Dividends
(v)
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Earnings per share
(w)
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs
of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
32
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 2: SEGMENT REPORTING
The Company only operated in one segment, being design, development, manufacture and selling Remote Solar 3G/4G
based Security Camera networks and associated products and services.
NOTE 3: REVENUE AND EXPENSES
(a) Revenue
Sales
Equipment sales
Server access and data plan and monitoring
Equipment rentals
Other (installation, parts etc)
Total
(b) Research and Development expenses*
Consulting and development fees
Supplies
Total
30 June 2018
$
30 June 2017
$
1,529,449
403,798
388,971
154,283
2,476,501
236,958
76,703
313,661
890,364
278,266
92,746
71,305
1,332,681
506,585
18,917
525,502
* Research and Development expenses relate to direct expenses only and it should be noted that a portion of Other Costs
may be considered R&D expenses for tax purposes.
NOTE 4: INCOME TAX
(a) Income tax benefit
30 June 2018
$
30 June 2017
$
435,606
204,562
(b) Numerical reconciliation between tax-benefit and pre-tax net loss
(Loss) from ordinary activities
Income tax using the Company’s domestic tax rate of 27.5% (2017:27.5%)
Effect of items that are not assessable/deductible in determining taxable loss:
- Non-deductible expenses
- Non-assessable income
- Other deductible expenses
Tax losses for which no deferred tax asset was recognised
Income tax benefit relating to R&D claim
Income tax benefit attributable to entity
(3,754,649)
(1,032,528)
766,605
(118,190)
(271,052)
655,165
(435,606)
(435,606)
(631,063)
(173,542)
167,626
4,347
(19,104)
20,673
(204,562)
(204,562)
(c) Unrecognised deferred tax
Tax losses for which no deferred tax
asset has been recognised
Losses available for offset against future
taxable income
Total
Potential tax benefits at 27.5%
30 June 2018
$
30 June 2017
$
2,382,419
2,382,419
655,165
75,173
75,173
20,673
The benefit of deferred tax assets not brought to account will only be brought to account if:
•
•
•
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Company in realising the benefit.
33
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 4: INCOME TAX (continued)
(d) Income tax recognised in profit or loss
Current tax expense/(income)
Deferred tax expense/(income)
Tax losses not recognised
Income tax benefit relating to R&D claim
Net income tax benefit
(e) Income tax recognised directly in equity
Current tax expense/(income)
Deferred tax expense/(income)
Tax losses not recognised
Net income tax benefit
NOTE 5: ISSUED CAPITAL
30 June 2018
$
30 June 2017
$
(493,401)
(161,764)
655,165
(435,606)
(435,606)
(31,547)
10,874
20,673
(204,562)
(204,562)
30 June 2018
$
30 June 2017
$
(180,844)
144,675
36,169
-
-
-
-
-
As at 30 June 2018, the Company had the following issued share capital:
30 June 2018
30 June 2017
Number
$
Number
$
Fully paid ordinary shares
49,000,025
49,000,025
8,220,651
8,220,651
17,500,000
17,500,000
1,936,890
1,936,890
Movement of issued share capital:
Balance at beginning of year
Shares issued on IPO - 20c (i)
Placement (including Director offer) at
36c
Share Purchase Plan Offer at 36c
Shares issued on exercise of options
Buy-back of partly paid shares
Issue of new shares in exchange for
partly paid shares bought back
Share subdivision – 10 for 1 share
10c seed capital raising
16c seed capital raising
2nd 16c seed capital raising
Share issue costs
Balance at end of year
17,500,000
23,500,000
6,100,000
1,900,000
25
-
-
-
-
-
-
-
49,000,025
1,936,890
4,700,000
2,196,000
684,000
5
-
-
-
-
-
-
(1,296,244)
8,220,651
2,998,625
-
1,128,000
-
-
-
-
(1,900,000)
19,000
10,058,625
2,500,000
3,323,750
500,000
-
17,500,000
-
-
-
(19,000)
19,000
-
250,000
531,800
80,000
(52,910)
1,936,890
(i)
Included in this amount are 1,000,000 Fully paid ordinary shares issued to the Company’s lead manager pursuant to
the Lead Manager Mandate and payable upon IPO.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
34
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 6: RESERVES
Nature and purpose of reserves
Options Reserve
This reserve is used to record the value of options subscribed for or provided to investors, employees and consultants.
Refer to note 21 for further details of these plans
Performance Rights Reserve
This reserve is used to record the value of performance rights provided to employees, Directors and consultants as part
of their remuneration. Refer to note 21 for further details of these plans
As at 30 June 2018, the Company had the following reserve accounts:
30 June 2018
Number
$
30 June 2017
Number
$
Options
Performance Rights
18,499,933
21,500,000
39,999,933
371,363
1,346,135
1,717,498
8,850,000
20,000,000
28,850,000
58,500
-
58,500
OPTION RESERVE MOVEMENT
Movement of Company options:
Balance at beginning of year
Issued during the year to an employee
at nil consideration before the EIP
Options issued on a 1:4 basis under
share offers during the year
Cancellation of options
Issued during the year for cash
consideration
Issued during the year to employees
under the EIP
Issued during the year to consultants
Options exercised
Balance at end of year
30 June 2018
30 June 2017
Number
$
Number
$
8,850,000
58,500
-
1,999,958
-
-
-
-
200,000
50,000
-
(250,000)
-
-
-
-
5,500,000
55,000
6,000,000
30,000
150,000
2,000,000
(25)
18,499,933
7,480
250,383
-
371,363
2,050,000
800,000
-
8,850,000
20,500
8,000
-
58,500
I.
II.
III.
IV.
V.
The Company issued 5,500,000 options to subscribers under the IPO Prospectus for $0.01 each. The options are
exercisable at $0.20 on or before 31 December 2020
During the year the Company issued 1,999,958 options at nil consideration, on a 1:4 basis to shares subscribed
for under the Placement, Director offer and Share Purchase Plan Offer. The options are exercisable at $0.20 each
on or before 31 December 2020.
On 19 January 2018, the Company issued 2,000,000 options to its lead manager for services provided pursuant
to their mandate regarding the Placement and Share Purchase Plan. The options are exercisable at $0.50 each
on or before 31 December 2020, and were valued in accordance with AASB 2
150,000 options were issued at nil consideration to employees of the Company subject to the conditions of the
offer and the Employee Incentive Plan. The options have been valued in accordance with AASB 2 and the value
represents the amount brought to account in the financial period based upon the vesting conditions.
25 Options were exercised at $0.20 each (2017: nil) and nil lapsed during the year ended 30 June 2018 (2017:
nil).
35
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 6: RESERVES (continued)
PERFORMANCE RIGHTS MOVEMENT
Performance rights
Movement of issued performance rights:
Balance at beginning of year
Value of all performance rights brought
to account during the year
Issue of performance
consultants / directors
Balance at end of year
rights
to
30 June 2018
30 June 2017
Number
$
Number
$
21,500,000
21,500,000
20,000,000
-
-
-
-
1,346,135
-
1,500,000
21,500,000
1,346,135
20,000,000
20,000,000
-
-
20,000,000
20,000,000
-
-
-
-
-
-
On 20 March 2017, the following Performance Rights were issued to the respective directors. On 26 April 2017, the Board
of Directors approved the resolution to amend the Tranche 3 vesting condition.
a. 10,000,000 Performance Rights to Mr. Charles Richard Wilkins, and
b. 10,000,000 Performance Rights to Mr. Peter Holton,
The performance rights have the following vesting conditions (which were updated on 26 April 2017):
(i) Tranche 1 – 33 1/3% - The total Revenue for the year ended 30 June 2018 being at least $1.75 million;
(ii) Tranche 2 – 33 1/3% - The total Revenue for the year ended 30 June 2019 being at least $3.5 million; and
(iii) Tranche 3 – 33 1/3% - The total Revenue for the year ended 30 June 2020 being at least $7 million.
A further 1,000,000 performance rights were issued to Spectur's lead manager on IPO, which are split 1/3 and have the
same vesting conditions at the 20,000,000 Directors performance rights issued above.
On 6 November 2017, 500,000 performance rights were issued to Spectur's Queensland state manager Mark Williamson
as part of Mark's consultancy arrangement for remaining with Spectur following the Forestbridge acquisition. The
performance rights vest upon the achievement of agreed annual internal sales revenue targets (for years 1-3).
All performance rights have been valued in accordance with AASB 2, which takes into account factors such as the
underlying share price, the expected vesting date and vesting probability in achieving the specified revenue hurdles at the
reporting date. The 500,000 performance rights were valued at $0.31 each being the underlying share price at the time of
grant, and have been brought to account over their vesting period. The director and lead manager performance rights
issued were valued at $0.10 each, being the underlying share price at the time of their grant.
At the reporting date, the Company considers that it is probable that all of the performance milestones for performance
shares on issue will be met (this being the best available estimate) and as such a value of $2,255,000 has been assigned
to the performance rights as at the reporting date and this has been brought to account over the vesting period in
accordance with AASB 2 Share based payments with $1,346,135 being expensed in the current financial year. The
Company continuously reassess the probability of each performance milestone being achieved up until the expiry of the
performance rights.
NOTE 7: LOSS PER SHARE
Basic loss per share
Basic loss per share (cents per share)
30 June 2018
Cents per
share
30 June 2017
Cents per
share
(7.61)
(3.31)
36
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 7: LOSS PER SHARE (continued)
Losses used in the calculation of basic loss per share is as follows:
Losses
30 June 2018
$
30 June 2017
$
(3,319,043)
(426,501)
Weighted average number of ordinary shares
The weighted average number of ordinary shares used in the calculation of basic and diluted loss per share is as follows:
Weighted average number of ordinary shares for the purpose of
basic loss per share
30 June 2018
Number
30 June 2017
Number
43,631,511
12,866,362
Share options and performance rights are not considered dilutive, as their impact would be to decrease the net loss per
share.
NOTE 8: CASH AND CASH EQUIVALENTS
Reconciliation to the Statement of Cash Flows:
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank, net of
outstanding bank overdrafts.
Cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the statement of
financial position as follows:
Cash at hand and in bank
Credit Cards
Cash in bank – share subscriptions held on trust1
Short term deposits
Net cash and cash equivalents
30 June 2018
$
30 June 2017
$
465,068
(33,382)
-
3,055,384
3,487,070
111,206
-
25,000
-
136,206
1 Cash in bank includes $nil (2017: $25,000) which relates to equity application funds held on behalf of investors for unissued
securities. A corresponding current liability was recorded for $nil (2017: $25,000) as funds owed to investors until such time
as shares had been validly issued under the prospectus dated 19 June 2017.
At 30 June 2018, the Company had a credit card facility of $50,000 (2017: $0) and does not attract any interest if paid within
the required period.
Term deposits are taken for periods between one and three months, depending on the immediate cash requirements of the
Company, and earn interest at the respective short-term deposit rates
37
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 8: CASH AND CASH EQUIVALENTS (continued)
8.1 Reconciliation of loss after tax to net cash outflow from operating activities:
Loss for the year
Adjustment for non-cash income and expense items
Depreciation and amortisation
Accrued R&D refund receivable
R&D refund received
Loss on disposal of property and equipment
Share-based payment expense
Provisions
Change in assets and liabilities
Increase in trade and other receivables
Increase in inventories
Increase in trade and other payables
Net cash outflow from operating activities
30 June 2018
$
(3,319,043)
30 June 2017
$
(426,502)
72,743
(427,376)
204,562
683
1,292,504
142,217
(211,986)
(731,517)
897,648
(2,079,565)
20,227
(204,562)
153,772
3,111
28,500
-
(319,153)
(176,011)
242,540
(678,078)
8.2 Reconciliation of liabilities arising from cash flows from financing activities
Balance as at 1 July 2017
Proceeds from financing activities
Repayments
Interest paid
Balance as at 30 June 2018
NOTE 9: TRADE AND OTHER RECEIVABLES
Trade receivables (i)
Allowance for impairment
GST
Prepayments
IPO prepayments
Advances to suppliers
Other
R&D refund receivable
Total
30 June 2018
$
-
301,842
(48,928)
4,949
257,863
30 June 2017
$
13,480
-
(13,480)
-
-
30 June 2018
$
30 June 2017
$
399,693
(14,953)
384,740
36,944
170,310
-
-
8,934
427,376
1,028,304
130,345
-
130,345
38,753
6,827
191,699
21,165
-
204,562
593,351
(i)
the average credit period on sales of goods and rendering of services is 56 days. An allowance has been made
for estimated irrecoverable trade receivable amounts arising from the past sale of goods and rendering of services,
determined by reference to past default experience
IPO prepayments represents amounts paid and payable as part of the IPO process. The IPO was completed in the current
year and these were transferred to capital raising fees upon issuance of the shares.
38
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 9: TRADE AND OTHER RECEIVABLES (continued)
Ageing of past due but not impaired trade receivables
30 – 60 days
60 – 90 days
90 – 120 days
Total
Movement in allowance for doubtful debts
Balance at the beginning of the year
Impairment losses recognised on receivables
Amounts recovered during the year
Impairment losses reversed
Total
30 June 2018
$
30 June 2017
$
102,371
19,915
30,407
152,693
32,036
528
16,982
49,546
30 June 2018
$
30 June 2017
$
-
14,953
-
-
14,953
-
-
-
-
-
In determining the recoverability of a trade receivable, the Company considers any changes in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due
to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision
required in excess of the allowance for impairment.
Ageing of impaired trade receivables
30 – 60 days
60 – 90 days
90 – 120 days
Total
NOTE 10: INVENTORIES
Raw materials – cost
Work in progress – cost
Finished goods - cost
Total
30 June 2018
$
30 June 2017
$
-
-
14,953
14,953
-
-
-
-
30 June 2018
$
30 June 2017
$
576,318
16,553
314,657
907,528
102,636
-
73,375
176,011
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition is accounted for as follows:
• Raw materials – purchase cost on a first-in, first-out basis; and
• Work in progress – purchase cost on a first-in, first-out basis; and
•
Finished goods – cost of direct materials and labour and a proportion of manufacturing overheads based on normal
operating capacity
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
39
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Camera
equipment
$
Improve-
ments
Plant and
equipment
$
Office
equipment
$
$
Motor
Vehicles
Total
$
$
Balance at 1 July 2017
Additions
Disposals
Depreciation charge for the year
18,355
274,156
-
(12,913)
-
18,607
-
(2,353)
8,131
50,494
(320)
(6,366)
11,300
92,913
(363)
(17,507)
15,945
140,777
-
(13,558)
53,731
576,947
(683)
(52,697)
Balance at 30 June 2018
279,598
16,254
51,939
86,343
143,164
577,298
Balance at 1 July 2016
Additions
Disposal
Depreciation charge for the year
Balance at 30 June 2017
13,092
12,021
(749)
(6,009)
18,355
-
-
-
-
-
6,643
2,985
-
(1,497)
14,567
3,924
-
(7,191)
8,310
20,620
(8,111)
(4,874)
42,612
39,550
(8,860)
(19,571)
8,131
11,300
15,945
53,731
Plant and equipment
The carrying value of plant and equipment held under chattel mortgage contracts at 30 June 2018 is $30,268 (2017: $nil).
Additions during the year include $31,800 (2017: $nil) of plant and equipment held under chattel mortgage contracts.
Motor Vehicles
The carrying value of motor vehicles held under chattel mortgage contracts at 30 June 2018 is $132,433 (2017: $nil).
Additions during the year include $140,777 (2017: $nil) of motor vehicles held under chattel mortgage contracts.
NOTE 12: INTANGIBLES
Carrying value
Cost
Accumulated amortisation
Carrying value as at 30 June
2017
Cost
Accumulated amortisation
Carrying value as at 30 June
2018
Reconciliation
Carrying value as at 1 July 2017
Additions
Amortisation
Impairment
Carrying value as at 30 June
2018
Patents
Product
Development
$
$
-
-
-
739,339
-
739,339
-
739,339
-
-
739,339
Goodwill
Total
$
-
-
-
100,000
(19,444)
80,556
-
100,000
(19,444)
-
80,556
$
3,517
(656)
2,861
879,271
(20,702)
858,569
2,861
875,754
(20,046)
-
858,569
3,517
(656)
2,861
39,932
(1,258)
38,674
2,861
36,415
(602)
-
38,674
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation is
charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is
reviewed at the end of each annual reporting period, with any changes in these accounting estimates being accounted for
on a prospective basis.
40
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 12: INTANGIBLES (continued)
Patents
Patents that have lapsed or are forfeited and are not rolled into new patents, have been impaired and moved to an expense
in the year the patents lapsed/expired.
Internally generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-
generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as
incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and
only if, all of the following have been demonstrated:
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
•
•
•
• How the intangible asset will generate probable future economic benefits;
•
The availability of adequate technical, financial and other resources to complete development and to use or sell
the intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
•
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria listed above.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation
and accumulated impairment losses, on the same basis as intangible assets acquired separately.
The following useful lives are used in the calculation of amortisation:
Patents
Product development
Goodwill
8 Years
5 Years
3 Years
Impairment of tangible and intangible assets other than goodwill
The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or Company’s of assets and the asset's value in use cannot be estimated to be close to its fair value. In
such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered
impaired and is written down to its recoverable amount.
Goodwill
Goodwill acquired is initially measured at cost .
Following initial recognition, goodwill is measured at cost less amortisation and any impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (Company of cash-generating
units), to which the goodwill relates. When the recoverable amount of the cash-generating unit (Company of cash-generating
units) is less than the carrying amount, an impairment loss is recognised. When goodwill forms part of a cash-generating
unit (Company of cash-generating units) and an operation within that unit is disposed of, the goodwill associated with the
operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of
the operation. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of
and the portion of the cash-generating unit retained.
Impairment losses recognised for goodwill are not subsequently reversed.
41
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 13: TRADE AND OTHER PAYABLES
Accounts payable (i)
Accruals
Advances from customers
Unearned revenue
Share subscriptions received
Other payables
Total
30 June 2018
$
30 June 2017
$
668,232
190,866
-
406,807
-
77,928
1,343,833
267,139
31,330
10,972
104,622
25,000
31,957
471,020
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms.
NOTE 14: BORROWINGS AND OTHER FINANCIAL LIABILITIES
30 June 2018
30 June 2017
Current loans
Secured loans
Unsecured loans
Total current loans
Non-current loans
Secured loans
Unsecured loans
Total non-current loans
Total loans
$
33,998
47,940
81,938
128,703
47,222
175,925
257,863
$
-
-
-
-
-
-
-
Secured Loans
These loans are secured by Plant & Equipment as well as Motor Vehicles. The interest rates on these loans are fixed and
range between 4.97% to 5.87% and interest is repayable within a period of 6 to 45 months from the reporting date. Total
monthly repayments are $5,934.
NOTE 15: PROVISIONS
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.
When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the
risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.
Warranties
Provisions for the expected cost of warranty obligations under local sale of goods legislation are recognised at the date of
sale of the relevant products, at the Directors’ best estimate of the expenditure required to settle the Company’s obligation.
The Company does not currently have a track record of any material warranty expense and are therefore expensing this
as and when it is incurred.
42
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 15: PROVISIONS (continued)
Equipment Rental Costs
The provision for equipment rental costs relates to the estimated cost of work to be carried out in relation to the removal
and refurbishment of rental equipment at the end of the rental agreement term. The provision represents the best estimate
of the present value of the expenditure required to settle the obligation at the reporting date. Future costs are reviewed
annually and any changes in the estimate are reflected in the present value of the equipment rental provision at each
reporting date.
30 June 2018
Warranties
Equipment Rental
$
$
Annual Leave
Total
$
$
Balance as at 30 June 2017
Provided during the year
Utilised
Unused amounts reversed
Balance as at 30 June 2018
-
-
-
-
-
-
44,992
(12,292)
-
32,700
-
148,932
(39,415)
-
109,517
-
193,924
(51,707)
-
142,217
NOTE 16: SIGNIFICANT EVENTS AFTER THE REPORTING DATE
There has been no additional matter or circumstance that has arisen after balance date that has significantly affected, or
may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial periods.
NOTE 17: DIVIDENDS
The directors of the Company have not declared any dividend for the years ended 30 June 2018 and 2017.
NOTE 18: COMMITMENTS
As at 30 June 2018, the Company had the following commitments:
Lease commitments
Not longer than 1 year
Longer than 1 year and shorter than 5 years
Total
The lease commitments refer to the lease of the following premises:
I.
II.
III.
IV.
Unit 2/6 Merino Entrance, Cockburn Central WA 6164
Unit 2/6 Merino Entrance, Cockburn Central WA 6164
20 Enterprise Way, Sunshine West VIC 3020
100 Walker Street North Sydney
30 June 2018
$
30 June 2017
$
149,500
149,500
299,000
114,313
216,452
330,765
NOTE 19: FINANCIAL INSTRUMENTS
a) Overview
The Company's principal financial instruments comprise receivables, payables, cash and bank overdrafts. The main risks
arising from the Company's financial instruments are credit risk, liquidity risk, interest rate risk and foreign currency risk.
This note presents information about the Company's exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have been no
significant changes since the previous financial year to the exposure or management of these risks.
The Company manages its exposure to key financial risks in accordance with the Company's risk management policy. Key
financial risks are identified and reviewed annually and policies are revised as required. The overall objective of the
Company's risk management policy is to recognise and manage risks that affect the Company and to provide a stable
financial platform to enable the Company to operate efficiently.
43
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 19: FINANCIAL INSTRUMENTS (continued)
a) Overview (continued)
The Company does not enter into derivative transactions to mitigate the financial risks. In addition, the Company's policy is
that no trading in financial instruments shall be undertaken for the purposes of making speculative gains. As the Company's
operations change, the Directors will review this policy periodically going forward.
The Directors have overall responsibility for the establishment and oversight of the risk management framework. The
Directors review and approve policies for managing the Company's financial risks as summarised below.
Categories of financial instruments
Financial assets
Cash on hand and in bank
Trade and other receivables
Total
Financial liabilities
Trade and other payables
Borrowings
Total
30 June 2018
$
30 June 2017
$
3,487,070
1,028,304
4,515,374
1,343,833
257,863
1,601,696
136,206
593,351
729,557
471,020
-
471,020
b) Capital risk management
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return
to stakeholders through the optimisation of the debt and equity balance. The Company’s overall strategy remains unchanged
from prior years. The capital structure of the Company consists of debt, cash and cash equivalents and equity, comprising
issued capital, reserves and retained earnings (accumulated losses). Operating cash flows are used to maintain and expand
operations, as well as to make routine expenditures such as tax, and general administrative outgoings.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the
risks associated with each class of capital.
c) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Company only transacts with entities that are rated the equivalent of investment grade and above. This information is
supplied by independent rating agencies where available and, if not available, the Company uses publicly available financial
information and its own trading record to rate its major customers.
The Company does not have any significant credit risk exposure to any single counterparty or any Company of
counterparties having similar characteristics.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. This arises principally from cash and cash equivalents and trade and other receivables.
44
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 19: FINANCIAL INSTRUMENTS (continued)
c) Credit Risk (continued)
There are no significant concentrations of credit risk within the Company. The carrying amount of the Company's financial
assets represents the maximum credit risk exposure, as represented below:
Cash on hand and in bank
Trade and other receivables
Total
30 June 2018
$
30 June 2017
$
3,487,070
1,028,304
4,515,374
136,206
593,351
729,557
Trade and other receivables are comprised primarily of trade receivables, R&D and GST refunds due. Where possible the
Company trades only with recognised, creditworthy third parties. The Company only extends credit to tier 1 companies and
all other sales are on a cash basis..
With respect to credit risk arising from cash and cash equivalents, the Company's exposure to credit risk arises from default
of the counter party, with a maximum exposure equal to the carrying amount of these instruments.
d) Interest Rate Risk
The Company's exposure to the risk of changes in market interest rates relates primarily to the bank overdrafts with floating
interest rate.
These financial assets with variable rates expose the Company to cash flow interest rate risk. All other financial assets and
liabilities, in the form of receivables and payables are non-interest bearing.
At the reporting date, the interest rate profile of the Company's interest-bearing financial instruments was:
Interest-bearing financial instruments
Bank balances
Credit cards
Term deposits
Total
30 June 2018
$
30 June 2017
$
-
(33,382)
3,055,384
3,022,002
25,000
-
-
25,000
The Company currently does not engage in any hedging or derivative transactions to manage interest rate risk.
Interest rate sensitivity
A 1% (100 basis points) movement in interest rates at the reporting date would have increased (decreased) equity and
profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant. The analysis is performed on the same basis for 2017.
30 June 2018
Credit cards
Term deposits
30 June 2017
Bank overdraft
Profit or loss
100bp
Increase
100bp
Decrease
334
(30,554)
(30,220)
(334)
30,554
30,220
250
(250)
45
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 19: FINANCIAL INSTRUMENTS (continued)
e) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible, that the Company will always have sufficient liquidity to meet
its liabilities when due by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets and liabilities.
The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There are no
netting arrangements in respect of financial liabilities.
30 June 2018
Financial Liabilities
Bank overdraft
Trade and other payables
Loans payable
Total
30 June 2017
Financial Liabilities
Bank overdraft
Trade and other payables
Loans payable
Total
f) Foreign Exchange Risk
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
-
1,343,834
48,032
1,391,866
-
-
33,884
33,884
-
-
175,946
175,946
-
-
-
-
-
1,343,834
257,862
1,601,696
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
-
471,020
-
471,020
-
-
-
-
-
-
-
-
-
-
-
-
-
471,020
-
471,020
The Company's has an exposure to foreign exchange rates given that the Company purchases materials and parts from
overseas suppliers as part of the manufacturing process of the solar camera systems. A fluctuation in foreign exchange
rates may affect the cost base of the solar camera systems. The carrying amounts of the Company’s foreign currency
denominated monetary liabilities as at the reporting date expressed in Australian dollars are as follows:
30 June 2018
$
30 June 2017
$
US dollar denominated balances
47,180
-
Foreign currency sensitivity analysis
The sensitivity analysis below details the Company’s sensitivity to an increase/decrease in the Australian Dollar against the
United States Dollar. The sensitivity analysis includes only outstanding foreign currency denominated monetary items. A
100 basis point is the sensitivity rate used when reporting foreign currency risk internally to management and represents
management’s assessment of the possible change in foreign exchange rates.
At reporting date, if foreign exchange rates had been 100 basis points higher or lower and all other variables held constant,
the Company’s loss will increase/decrease by $872 (2017: $Nil); and net assets will increase/decrease by $872 (2017:
$Nil).
The Company’s sensitivity to foreign exchange rates has not changed significantly from prior year.
g) Fair values
The net fair value of financial assets and financial liabilities approximates their carrying value. The methods for estimating
fair value are outlined in the relevant notes to the financial statements.
46
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 20: CONTINGENT LIABILITIES
The Company had no contingent liabilities as at the reporting date.
NOTE 21: SHARE-BASED PAYMENTS
a) Recognised Share-based Payment Expense
From time to time, the Company provides Incentive Options to officers, employees, consultants and other key advisors as
part of remuneration and incentive arrangements. The number of options granted, and the terms of the options granted
are determined by the Board. Shareholder approval is sought where required. During the past two years, the following
equity-settled share-based payments have been recognised:
Expense arising from equity-settled share-based payment transactions
Net share based payment expense recognised in the profit or loss
b) Summary of Options Granted as Share-based Payments
30 June 2018
$
30 June 2017
$
1,292,504
1,292,504
28,500
28,500
The following table illustrates the number and weighted average exercise prices (WAEP) of Incentive Options granted as
share-based payments at the beginning and end of the financial year:
Outstanding at beginning of year
Granted by the Company during the year
Granted by the Company during the year
Cancelled during the year
Cancelled during the year
30 June 2018
30 June 2017
Number
WAEP
Number
WAEP
2,850,000
150,000
$0.20
$0.37
-
-
-
-
-
-
200,000
2,850,000
$1.00
$0.20
50,000
$(1.50)
(50,000)
$(1.50)
(200,000)
$(1.00)
Outstanding at end of year
3,000,000
$0.21
2,850,000
$0.20
Exercisable at the end of year
3,000,000
-
-
-
c) Option Pricing Model
The fair value of the equity-settled share options granted is estimated as at the date of grant using an internal valuation
methodology taking into account the terms and conditions upon which the options were granted. In conjunction to the
internal valuation model, the Board gave consideration to the market price for options being issued at arm’s length during
and since the end of the reporting date.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Exercise price (cents)
Grant date share price
Options - $0.37
0%
69%
1.90%
3
37
41
As at 30 June 2018, management has provided the best estimate of the number of options expected to vest. The options
have been valued in accordance with AASB 2 Share Based Payments and bought to account over their vesting periods.
The length of the expected vesting period is between 12 and 24 months, and a value of $7,479 has been expensed for
the year.
47
SPECTUR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 22: RELATED PARTY DISCLOSURES
The Group’s related parties include Key Management and others as described below.
Transactions with Key Management Personnel
The aggregate compensation made to Directors and other Key Management Personnel of the Company is set out below:
Short-term employee benefits
Share-based payment
Total
30 June 2018
$
30 June 2017
$
855,592
1,222,222
2,077,814
546,834
10,500
557,334
The amount of share based payments is calculated in accordance with AASB 2
More detailed information concerning the remuneration of key management is shown in the Remuneration report page 15.
NOTE 23: AUDITOR’S REMUNERATION
The auditor of Spectur Limited is HLB Mann Judd.
Audit or review of the financial statements
Other services – Investigating Accountants’ Report
Total
30 June 2018
30 June 2017
$
$
18,500
-
18,500
29,000
10,000
39,000
The audit fees paid and accrued in 2017 relate to the audits of the Company’s financial statements for the years ended 30
June 2017, 2016 and 2015; and for the half year ended 31 December 2016.
48
SPECTUR LIMITED
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of Spectur Limited (“Spectur” or the “Company”):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i.
ii.
giving a true and fair view of the Company’s financial position as at 30 June 2018 and of its
performance for the year then ended in accordance with the accounting policies described in the notes
to the financial statements; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
b.
c.
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 financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the board of Directors.
______________________________
Charles Richard Wallace Wilkins
Director
Dated this 31 August 2018
.
49
Independent Auditor’s Report to the Members of Spectur Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Spectur (“the Company”) which comprises the statement of
financial position as at 30 June 2018, the statement of comprehensive income, the statement of
changes in equity and the statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Company’s financial position as at 30 June 2018 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Company 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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current 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.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
50
Key Audit Matter
How our audit addressed the key audit
matter
Recognition and recoverability of intangible asset
Note 12
The company has recorded intangible assets of
$739,339 as at 30 June 2018 which relate to various
internally generation asset projects.
Recognition and recoverability of intangible assets
relating to these projects was considered to be a key
audit matter due to its importance to users of the
financial statements and the degree of audit effort
directed towards this area.
Going concern
Note 1(e)
The company recorded a loss of $3,319,043 and had
cash outflows from operating and investing activities
of $3,532,266. As at 30 June 2018 the company had
cash and cash equivalents of $3,487,070.
The going concern basis of accounting was a key audit
matter due to the significance to users of the financial
report and the significant judgement involved with
forecasting cash flows.
Our procedures included but were not
limited to:
‐ Reviewing amounts capitalised as
intangible assets during the year to ensure
such items met the recognition criteria
within Australian accounting standards;
‐ Considering the existence of any
indicators of impairment under AASB 136
‘Impairment of Assets’.
‐ Ensuring that appropriate disclosures are
made within the financial report.
Our procedures included but were not
limited to the following:
‐ We considered the appropriateness of
the going concern basis of accounting by
evaluating the underlying assumptions in
cash flow projections prepared by the
Group including sensitivity analysis.
‐ Our responsibilities in respect of the
going concern basis of accounting are
included below under Auditor’s
responsibilities for the audit of the
financial report; and
‐ We examined the disclosures made in the
financial report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s annual financial report for the year ended 30 June 2018, 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.
51
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due
to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company
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 Company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with 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 Company’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 Company’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 Company to cease to continue as a going concern.
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.
52
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
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 18 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of Spectur Limited for the year ended 30 June 2018 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
31 August 2018
N G Neill
Partner
53
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance summary discloses the extent to which the Company will follow the recommendations set by
the ASX Corporate Governance Council in its publication Corporate Governance Principles and Recommendations (3rd
Edition) (Recommendations). The Recommendations are not mandatory, however the Recommendations that have not
been followed have been identified and reasons have been provided for not following them.
The Company’s Corporate Governance Plan has been posted on the Company’s website at www.spectur.com.au.
ASX Principle and Recommendation
Compliance
(Yes/No)
Explanation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should disclose:
(a) the respective roles and responsibilities of its
board and management; and
(b) those matters expressly reserved to the board
and those delegated to management.
Yes
Spectur has adopted a Board Charter which
discloses the roles and responsibilities of the
Board and senior management.
for
(and any
the Board
the Board Charter,
Under
is
responsible
the overall operation and
future
stewardship of Spectur
subsidiaries), including charting the direction,
strategies and financial objectives for Spectur,
monitoring the implementation of those policies,
and
financial
strategies and
monitoring
regulatory
requirements and ethical standards.
objectives,
with
compliance
Recommendation 1.2
A listed entity should:
Yes
(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.
The Board Charter is available on Spectur’s
website.
Spectur will conduct background checks of
candidates for new Director positions prior to their
for election by
appointment or nomination
to good
Shareholders,
character, experience, education, qualifications,
criminal history and bankruptcy.
including checks as
Spectur does not propose to conduct specific
checks prior to nominating an existing Director for
re-election by Shareholders at a general meeting
on the basis that this is not considered necessary
given that each Director was required to submit to
the ASX ‘good fame and character’ assessment
during Spectur’s admission to the Official List of
ASX. Any changes to that assessment are
required to be notified by all directors to the
board.
As a matter of practice, Spectur will include in its
notices of meeting a brief biography and other
material information in relation to each Director
who stands for election or re-election, including
professional
relevant
for
experience of
consideration by Shareholders.
and
the nominated Director
qualifications
Recommendation 1.3
Yes
A listed entity should have a written agreement with
each director and senior executive setting out the
terms of their appointment.
Spectur engages or employs its Directors and
other
senior management under written
agreements setting out key terms and otherwise
governing their engagement or employment by
Spectur.
Each Executive Director is employed pursuant to
a written employment agreement and each Non-
Executive Director
is engaged under an
engagement letter.
54
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Compliance
(Yes/No)
Explanation
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.
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which
for
includes
requirements
the board or a relevant
committee of 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 of it; and
(c) disclose as at the end of each reporting period
the measurable objectives for achieving gender
the board or a relevant
diversity set by
committee of the board in accordance with the
entity’s diversity policy and its progress towards
achieving them, and either:
(1) 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
(2) if the entity is a “relevant employer” under
the Workplace Gender Equality Act, the
entity’s most
“Gender Equality
Indicators”, as defined in and published
under that Act.
recent
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, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in accordance
with that process.
Yes
The Company Secretary reports directly, and is
accountable, to the Board through the Chairperson
in relation to all governance matters.
The Company Secretary advises and supports the
Board members on general governance matters,
implements adopted governance procedures, and
coordinates circulation of meeting agendas and
papers.
No
Given Spectur’s size and its stage of development,
Spectur has not adopted a formal diversity policy at
this stage.
Spectur has a policy to select the best available
officers and staff for each relevant position in a non-
discriminatory manner based on merit.
Notwithstanding this, the Board respects and
values the benefits that diversity (e.g. gender, age,
ethnicity, cultural background, disability and
martial/family status etc.) brings in relation to
thereby
expanding Spectur’s perspective and
improving corporate performance,
increasing
Shareholder value and maximising the probability
of achieving Spectur’s objectives.
The Board is committed to developing a diverse
workplace where appointments or advancements
are made on a fair and equitable basis.
Yes
Spectur has adopted in its Board Charter a process
for evaluation of the Board and its committees.
The Chairman of the board is responsible for
ensuring that a formal review of the performance of
the board, committees and individual directors
occurs regularly. The Chairman is responsible for
determining
this
evaluation takes place.
the process under which
The board conducts the performance evaluation of
the Chair.
improve
Insights gained from these evaluations are used to
the board’s efficiency and
further
performance. Formal reviews of individual directors
will be undertaken post year end, following their 12
month employment period..
No review of committees were undertaken, as the
remuneration committee was only formed during
the year.
55
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically
its senior
the performance of
evaluating
executives; and
(b) disclose in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in accordance
with that process.
Compliance
(Yes/No)
Yes
Explanation
The Remuneration Policy provides that the Board
will undertake performance evaluation of
the
Directors and on at least an annual basis. The CEO
performs the review of senior management.
the performance of
The remuneration committee is responsible for
evaluating
the executive
directors and evaluates their performance via an
ongoing process of assessment and a formal
annual review.
the
formal
review,
During
the executive’s
performance is measured against their role’s
assessment criteria and KPI’s. Such performance
evaluation was undertaken prior to the release of
this report.
Principal 2: Structure the Board to add value
Recommendation 2.1
No
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of
whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the
the committee met
number of
throughout the period and the individual
attendances of the members at those
meetings; or
times
(b) 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, knowledge, experience,
independence and diversity to enable it to
discharge
responsibilities
effectively.
its duties and
Spectur does not have a nomination committee at
this stage. The Board considers that, given the
current size and scope of Spectur’s operations,
efficiencies or other benefits would not be gained
by establishing a separate nomination committee.
The full Board, which comprises 2 Executive
Directors and 2 Non-Executive Directors, considers
the matters and issues that would otherwise be
addressed by a nomination committee
in
accordance with Spectur’s Nomination and
Remuneration Policy.
Under the Board Charter, candidacy for the Board
is based on merit against objective criteria with a
view to maintaining an appropriate balance of skills
and experience.
individually assessed by
As a matter of practise, candidates for the office of
Director are
the
Chairperson and the Managing Director before
appointment or nomination to ensure that they
possess the relevant skills, experience or other
qualities considered appropriate and necessary to
provide value and assist in advancement of
Spectur’s operations.
The Board intends to reconsider the requirement
for, and benefits of, a separate nomination
committee as Spectur’s operations grow and
evolve.
Recommendation 2.2
A listed entity should have and disclose a board skills
matrix setting out the mix of skills and diversity that
the board currently has or is looking to achieve in its
membership.
No
Spectur does not currently have a skills or diversity
matrix in relation to the Board members.
The Board considers that such a matrix is not
necessary given the current size and scope of
Spectur’s operations. The Board may adopt such
a matrix at a later time as Spectur’s operations
grow and evolve.
56
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
Compliance
(Yes/No)
Yes
ASX Principle and Recommendation
Recommendation 2.3
A listed entity should disclose:
(a) the names of the directors considered by the
board to be independent directors;
(b) if a director has an interest, position, association
or relationship of the type described in the
Corporate Governance Recommendations 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
(c)
the length of service of each director.
Explanation
The Board reviewed the independence of each of
the Directors in office during the reporting period
and determined that Non-executive Director Mr
Steven Bodeker and Mr Andrew Hagen were
independent directors.
Independence can only be satisfied if a director is
free of any business or relationship that could
materially interfere with or could reasonably be
the
to materially
perceived
independent exercise of their judgement.
interfere with
Mr Andrew Hagen provided consulting services to
Spectur during the year, however Mr Hagen has
not served as a member of management. The
Board have determined that the provision of
services does not pose an interference with Mr
Hagen’s independence as a Director. Mr Hagen is
therefore deemed to be independent. This will be
reviewed on an ongoing basis.
the Directors'
Details of
interests, positions,
associations and relationships are provided in the
Remuneration Report section of the Annual Report.
The length of service of each Director is as follows:
•
•
•
•
Richard Wilkins – since 22 October 2009;
Peter Holton – since 9 March 2017;
Stephen Bodeker – since 9 June 2017; and
Andrew Hagen – since 9 June 2017.
Recommendation 2.4
A majority of the board of a listed entity should be
independent directors.
No
The Board is not comprised of a majority of
independent Directors.
There are currently 2 Directors who satisfy the
criteria for independence for the purposes of ASX
Recommendation 2.3, being Stephen Bodeker and
independent directors
Andrew Hagen. The
represent half of the Board.
However, given the size and scope of Spectur's
operations, the Board considers that it has relevant
experience in industrial technology, sales and is
otherwise appropriately structured to discharge its
duties in a manner that is in the best interests of
Spectur and its Shareholders from both a long-term
strategic and operational perspective.
The Board Charter provides that it is preferable that
the majority of the Board be independent Non-
the Board
Accordingly,
Executive Directors.
intends
independent Non-
further
to appoint
Executive Directors as suitably qualified candidates
are identified and when Spectur’s operations
warrant such appointments.
The Board does not consider that the Chairman of
Spectur, Richard Wilkins, is independent with the
criteria
in ASX
for
Recommendation 2.3.
independence outlined
57
Recommendation 2.5
No
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.
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Compliance
(Yes/No)
Explanation
Recommendation 2.5 (continued)
Recommendation 2.6
No
A listed entity should have a program for inducting
new directors and provide appropriate professional
development opportunities for directors to develop
and maintain the skills and knowledge needed to
perform their role as directors effectively.
The Board does not consider that an independent
non-executive chair is necessary given Spectur’s
current size and scope of operations. As it develops
and its operations expand, the Board will review
this position.
The Managing Director, Peter Holton, is the chief
executive officer and is not the Chairperson, which
is in compliance with Recommendation 2.5.
Spectur does not currently have a formal induction
program for new Directors nor does it have a formal
professional development program for existing
Directors. The Board does not consider that a
formal induction program is necessary given the
current size and scope of Spectur’s operations.
The Directors have been selected on the basis that
collectively they have experience across business
management, product design and development,
industrial technology (including electronics and
telecommunications), product sales and marketing,
finance and accounting. Mr Bodeker and Mr Hagen
also have experience with management of an ASX
listed company.
to ensure
that all of
in different aspects
All Directors are generally experienced in company
operations, albeit
(e.g.
operations, finance, corporate governance etc.).
its
The Board seeks
Shareholders understand Spectur’s operations.
The Company encourages and supports, Directors
to attend, on behalf of Spectur and otherwise,
professional education, technical and commercial
seminars and industry conferences which enable
them to maintain their understanding of directors
duties, risk and corporate governance, industry
matters and technical advances.
Principal 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its directors, senior
executives and employees; and
(b) disclose that code or a summary of it.
Yes
The Board believes that the success of Spectur has
been and will continue to be enhanced by a strong
ethical culture within the organisation.
Accordingly, Spectur has established a Code of
Conduct which sets out the standards with which
the Directors, officers, managers, employees and
consultants of Spectur (and any future subsidiaries
of Spectur) are expected to comply in relation to the
affairs of Spectur's business and when dealing with
each other, Shareholders and
the broader
community.
The Code also outlines the procedure for reporting
any breaches of the Code and the possible
disciplinary action Spectur may take in respect of
any breaches.
to
their obligations under
the
In addition
Corporations Act in relation to inside information, all
Directors, employees and consultants have a duty
of confidentiality
to
to Spectur
confidential information they possess.
relation
in
58
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Compliance
(Yes/No)
Explanation
In fulfilling their duties, each Director dealing with
corporate governance matters may obtain
independent professional advice at Spectur’s
expense, subject to prior approval of the Managing
Director, whose approval will not be unreasonably
withheld.
Spectur’s Code of Conduct
Spectur’s website.
is available on
No
Spectur has not established a separate audit
committee.
The audit function is performed by the full Board
pursuant to the Audit Policy.
The Board does not consider that a separate audit
committee is necessary given the current size and
scope of Spectur’s operations and its Board.
The Audit Policy is available on Spectur’s website.
Recommendation 3.1 (continued)
Principal 4: Safeguard integrity in corporate reporting
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are
non-executive directors and a majority of
whom are independent directors; and
(2) is chaired by an independent director, who
is not the chair of the board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of
the members of the committee; and
(5) in relation to each reporting period, the
number of
the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
times
(b) if it does not have an audit committee, disclose
that fact and the processes it employs that
independently verify and safeguard the integrity
of
the
processes for the appointment and removal of
the external auditor and the rotation of the audit
engagement partner.
its corporate
reporting,
including
Recommendation 4.2
Yes
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, in
their opinion, 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.
As a matter of practise, Spectur obtains
declarations from its Managing Director and CFO
(or equivalent) and Company Secretary before its
financial statements are approved substantially in
the form referred to in ASX Recommendation 4.2.
59
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Compliance
(Yes/No)
Explanation
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.
Principal 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
disclose that policy or a summary of it.
In accordance with Spectur’s Shareholder
Communications Policy, Spectur will request that
its external auditor attends each annual general
meeting and be available to answer Shareholder
questions about the conduct of the audit and the
preparation and content of the auditor’s report.
Yes
Spectur has adopted a Continuous Disclosure and
Market Communications Policy.
Principal 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.
Recommendation 6.2
A listed entity should design and implement an
investor relations program to facilitate effective two-
way communication with investors.
Yes
Yes
Spectur is a “disclosing entity” pursuant to section
111AR of the Corporations Act and, as such, is
required to comply with the continuous disclosure
requirements of section 674 of the Corporations Act
and Chapter 3 of the ASX Listing Rules.
Spectur is committed to observing its disclosure
obligations under the Corporations Act and its
obligations under the ASX Listing Rules. All
announcements provided to ASX will be posted on
Spectur’s website.
and Market
The Continuous Disclosure
Communications Policy is available on Spectur’s
website.
its corporate
Information about Spectur and
governance,
its various
including copies of
corporate governance policies and charters, is
available on Spectur’s website.
a
by
has
communicating
Spectur
Shareholder
adopted
Communications Policy, the purpose of which is to
facilitate the effective exercise of Shareholders’
effectively with
rights
Shareholders, giving Shareholders ready access to
balanced and understandable information about
Spectur and its corporate strategies and making it
easy for Shareholders to participate in general
meetings of Spectur.
Spectur communicates with Shareholders as
follows:
•
•
•
•
following admission to ASX, through releases
to the market via the ASX;
through Spectur’s website;
through
Shareholders; and
information provided directly
to
at general meetings.
The Shareholder Communications Policy
available on Spectur’s website.
is
60
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
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.
Compliance
(Yes/No)
Yes
Recommendation 6.4
Yes
A listed entity should give security holders the
option to receive communications from, and send
communications to, the entity and its security
registry electronically.
Explanation
Spectur supports Shareholder participation
in
general meetings and seeks to provide appropriate
mechanisms for such participation, including by
ensuring that meetings are held at convenient
to encourage Shareholder
times and places
participation.
In preparing for general meetings of Spectur,
Spectur will draft the notice of meeting and related
explanatory information so that they provide all of
the information that is relevant to Shareholders in
making decisions on matters to be voted on by
them at the meeting. This information will be
presented clearly and concisely so that it is easy to
understand and not ambiguous.
Spectur will use general meetings as a tool to
effectively communicate with Shareholders and will
allow Shareholders a reasonable opportunity to ask
questions of the Board and to otherwise participate
in the meeting.
for encouraging and
Mechanisms
facilitating
Shareholder participation will be reviewed regularly
to encourage the highest level of Shareholder
participation.
Spectur considers
that communicating with
Shareholders by electronic means is an efficient
way to distribute information in a timely and
convenient manner.
receive
Spectur provides new Shareholders with the option
to
from Spectur
electronically and Spectur encourages them to do
so. Existing Shareholders are also encouraged to
request communications electronically.
communications
All Shareholders that have opted to receive
communications electronically will be provided with
notifications by Spectur when an announcement or
other communication (including an annual reports
and notice of meeting) is uploaded to the ASX
announcements platform.
61
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Compliance
(Yes/No)
Explanation
Principal 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:
(1) has at least three members, a majority of
whom are independent directors; an
(2) is chaired by an independent director,
and disclose
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the
number of
the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
times
(b) if
it does not have a risk committee or
committees that satisfy (a) above, disclose that
fact and the processes it employs for overseeing
the entity’s risk management framework.
No
Spectur does not have a separate
management committee.
risk
is
responsible
The Board
management’s
accountability systems
assessed and managed
Spectur’s Risk Management Policy.
for supervising
and
to be
in accordance with
to enable risk
framework
control
of
The Board considers that, given the current size
and scope of Spectur’s operations and that only
two Directors hold executive positions, efficiencies
or other benefits would not be gained by
establishing a
risk management
committee at present.
separate
As Spectur’s operations grow and evolve, the
Board will reconsider
the appropriateness of
forming a separate risk management committee.
a Risk
However, Spectur
Management Policy for Spectur. The purpose of
the policy is to:
has adopted
•
•
•
provide a
framework
assessing, monitoring and managing risk;
identifying,
for
communicate the roles and accountabilities
of participants
the risk management
system; and
in
highlight the status of risks to which Spectur
is exposed, including any material changes to
Spectur’s risk profile.
Further, the Board is responsible for the following
under the policy:
•
•
risk management and oversight of internal
controls;
establishing procedures which provide
assurance that business risks are identified,
consistently assessed and adequately
addressed; and
•
for the overseeing of such procedures.
The Risk Management Policy is available on
Spectur’s website.
62
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
Compliance
(Yes/No)
Yes
ASX Principle and Recommendation
Recommendation 7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework
at least annually to satisfy itself that it continues
to be sound; and
(b) disclose, in relation to each reporting period,
whether such a review has taken place.
Explanation
The Board has responsibility for the monitoring of
risk management and reviews Spectur’s risk
management framework a bi-annual basis to
ensure Spectur’s risk management framework
continues to be effective. The executive directors
identify and monitor major risks in line with the
board defined
risk appetite and ensuring
appropriate systems are in place for management.
Risk are documented in a risk matrix and tabled at
bi-annual board meetings.
A risk management review was undertaken during
the financial period.
Recommendation 7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the
function is structured and what role it performs;
or
(b) 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.
No
Spectur does not currently have an internal audit
function. This function is undertaken by relevant
staff under the direction of the full Board.
Spectur has adopted internal control procedures
pursuant to its Risk Management Policy.
Spectur’s internal controls include the following:
•
•
Spectur has authorisation limits in place for
expenditure and payments;
a Director or senior manager must not
approve a payment to themselves or a related
party, other than standard salary/directors
fees in accordance with their Board approved
remuneration;
• Spectur prepares cash flow forecasts
which include materiality thresholds and
which are regularly reviewed; and
• Spectur
regularly
financial materiality thresholds.
reviews
its other
The Board and senior management are charged
with evaluating and considering improvements to
Spectur’s risk management and internal control
processes on an ongoing basis.
The Board considers that an internal audit function
is not currently necessary given the current size
and scope of Spectur’s operations.
As Spectur’s operations grow and evolve, the
Board will reconsider
the appropriateness of
adopting an internal audit function.
63
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Recommendation 7.4
A listed entity should disclose whether it has any
material exposure to economic, environmental and
social sustainability risks and, if it does, how it
manages or intends to manage those risks.
Compliance
(Yes/No)
Yes
Explanation
is
Spectur’s primary activity
the sale and
distribution of security surveillance products and
services. These activities do not expose Spectur
to any particular economic, environmental or social
faced by all other
sustainability
participants in an open economy.
risks not
Principal 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of
whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the
number of
the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
times
(b) if it does not have a remuneration committee,
disclose that fact and the processes it employs
for setting
level and composition of
remuneration for directors and senior executives
and ensuring
is
appropriate and not excessive.
remuneration
that such
the
The Board will consider on an on-going basis
whether Spectur has any particular exposure to
material economic, environmental and social
sustainability risks and, if identified, Spectur will
include details in its annual report.
Yes
Spectur has established a separate remuneration
committee.
The remuneration committee has 3 members, two
of which are independent directors.
Members of the Remuneration committee are:
Chairman – Steve Bodeker
Member – Andrew Hagen
Member and Secretary – Suzie Foreman
The Chairman of the Committee, Steve Bodeker, is
an independent director.
the
throughout
The number of times the remuneration committee
met
individual
the year and
attendances of the members at those meetings is
detailed in the Remuneration Report to the Annual
Financial Report. Spectur has set out
the
remuneration paid or provided to Directors and
senior executives annually in the remuneration
report contained within this Annual Report to
Shareholders.
The remuneration committee proposes and the
Board approves, all compensation arrangements
for Directors. It is also responsible for setting
performance criteria, performance
indicators,
share option schemes,
incentive performance
schemes, superannuation entitlements, retirement
and termination entitlements and professional
indemnity and liability insurance cover.
The Remuneration Policy Charter is available on
Spectur’s website.
64
SPECTUR LIMITED
CORPORATE GOVERNANCE STATEMENT (continued)
ASX Principle and Recommendation
Recommendation 8.2
A listed entity should separately disclose its policies
and practices regarding the remuneration of non-
remuneration of
executive directors and
executive directors and other senior executives.
the
Compliance
(Yes/No)
Yes
Recommendation 8.3
Yes
listed entity which has an equity-based
A
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.
Explanation
Spectur’s policies and practices regarding the
remuneration of Executive and Non-Executive
Directors and other senior management are set out
in the Remuneration Report contained in this
Annual Report for each financial year.
Spectur has adopted an Employee Incentive Plan.
In accordance with Spectur’s Securities Trading
Policy, the plan does not allow participants to enter
transactions that would limit their economic risk
under the scheme.
Spectur’s Securities Trading Policy sets out the
circumstances in which the Directors, executives,
employees, contractors, consultants and advisors
(Designated Persons) are prohibited from dealing
in Spectur’s Securities.
The policy provides that where a Designated
Person is entitled to equity-based remuneration
arrangements, that Designated Person must not at
any time enter into a transaction (e.g. writing a call
option) that operates or is intended to operate to
limit the economic risk of holdings of unvested
Spectur Securities or vested Spectur Securities
which are subject to a holding lock.
The Securities Trading Policy is available on
Spectur’s website.
65
SPECTUR LIMITED
ADDITIONAL SECURITIES INFORMATION
SHAREHOLDER INFORMATION
The security holder information set out below was applicable as at 3 August 2018.
There are two classes of quoted securities, being fully paid ordinary shares and options.
1) Quoted Securities – (i) Fully Paid Ordinary Shares
a) Distribution of Security Number
Category
(Size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Ordinary Shares
Shareholders
20
110
97
432
88
747
Shares
1,422
326,401
792,979
16,454,888
31,424,335
49,000,025
There are 747 holders of ordinary shares. Each shareholder is entitled to one vote per share held.
b) Marketable parcel
There are no shareholders with less than a marketable parcel (basis price $0.30).
c) Voting rights
On a show of hands every person present who is a member or a proxy, attorney or representative of a member has one
vote and upon a poll every person present who is a member or a proxy, attorney or representative of a member shall have
one vote for each share held
d) Substantial Shareholders
There were two substantial shareholder listed on the Companies register as at 3 August 2018, being
• Gillian Woodford who is the trustee for and , holding
a combined 3,000,000 fully paid ordinary shares, being 6.10% of the fully paid ordinary shares on issue.
• Paul Kehoe who held a relevant interest under s608(1)(b) and (c) of the Corporations Act 2001 as, the power to
exercise, or control the exercise of a right or vote, or dispose securities in PABASA PTY LTD and BASAPA PTY LTD with a combined holding of 3,042,543 fully paid
ordinary shares, being 6.21% of the fully paid ordinary share capital on issue.
e) On market buy-back
There is no on-market buy-back scheme in operation for the company’s quoted shares or quoted options.
66
SPECTUR LIMITED
ADDITIONAL SECURITIES INFORMATION (continued)
SHAREHOLDER INFORMATION (continued)
f) Top 20 security holders
The names of the twenty largest holders of each class of quoted equity security, being fully paid ordinary shares, the number
of equity security each holds and the percentage of capital each holds is as follows:
Number Holder Name
Holding
% Held
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
GILLIAN WOODFORD
CHARLES RICHARD WALLACE WILKINS
PETER WILLIAM HOLTON & SARAH JANE FRANCES HOLTON
BASAPA PTY LTD
MR PETER ANTHONY
MR LEE NICOLA JOHN RINALDI & MRS CAROL ANGUS RINALDI
PABASA PTY LTD
OLDVIEW ENTERPRISES PTY LTD
DRP 2006 SUPER PTY LTD
LONHRO (WA) PTY LTD
MDC FUNDS PTY LTD
SOVRAN RESOURCES PTY LTD
JUDITH VAN ROSS
GILLIAN WOODFORD
STOW COURT PTY LTD
TRI BUDIHASTUTI
COBBLESTONES CORPORATE PTY LTD
CITICORP NOMINEES PTY LIMITED
LEE MILLER INVESTMENTS PTY LTD
RISBEC CORPORATION PTY LTD
Total
Total issued capital – Fully paid ordinary shares
2,450,000
1,592,500
1,589,444
1,562,543
1,500,000
1,185,000
1,125,000
1,109,082
805,890
783,372
740,000
630,000
551,501
550,000
537,001
500,000
465,000
457,870
425,000
396,501
5.00%
3.25%
3.24%
3.19%
3.06%
2.42%
2.30%
2.26%
1.64%
1.60%
1.51%
1.29%
1.13%
1.12%
1.10%
1.02%
0.95%
0.93%
0.87%
0.81%
18,955,704
38.68%
49,000,025
100.00%
67
SPECTUR LIMITED
ADDITIONAL SECURITIES INFORMATION (continued)
SHAREHOLDER INFORMATION (continued)
1) Quoted Securities – (ii) Options exercisable at $0.20 on or before 31 December 2020.
a) Distribution of Security Number
Category
(Size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Options - $0.20
Option holders
5
135
29
81
10
260
Options
2,648
382,029
225,964
3,404,292
3,060,000
7,074,933
There are 260 holders of quoted options. Option holders are not entitled to vote.
b) Marketable parcel
There are no shareholders with less than a marketable parcel (basis price $0.30).
c) Substantial Optionholders
Refer to table below:
d) Top 20 security holders
The names of the twenty largest holders of each class of quoted equity security, being $0.20 options, the number of equity
security each holds and the percentage of capital each holds is as follows:
Position Holder Name
1
2
3
4
5
5
6
7
7
8
9
9
10
10
10
10
BASAPA PTY LTD
MR PETER ANTHONY
MR MICHAEL JAMES BUNN
NICHOLAS LE MARSHALL
GARY LESLIE SARGEANT
MR ZEFNY MOHD IDRIS
MS LAYLA ANNA PAULINE MCNAUGHTON
MR COLIN PRIESTLEY BELTON & MR CRAIG DOUGLAS PENTLAND
MR GREGORY JOHN BROWN
FRY SUPER PTY LTD
MR EDWARD MAX DOZAK
MS ROSEMARY PATERSON
SOVRAN RESOURCES PTY LTD
VADLAMUDI (MEDICAL) PTY LTD
MS CAROLINE SARAH LYTHE & MR BARRI MALCOLM LYTHE
MR JOHN ANDERSON & MRS LYN ANDERSON
Holding
% IC
875,000
12.37%
727,875
10.29%
260,000
250,000
200,000
200,000
180,000
125,000
125,000
120,000
102,875
102,875
100,000
100,000
100,000
100,000
3.67%
3.53%
2.83%
2.83%
2.54%
1.77%
1.77%
1.70%
1.45%
1.45%
1.41%
1.41%
1.41%
1.41%
68
SPECTUR LIMITED
ADDITIONAL SECURITIES INFORMATION (continued)
SHAREHOLDER INFORMATION (continued)
d) Top 20 security holders (continued)
Position Holder Name
10
10
10
10
10
10
11
12
12
13
14
15
16
17
18
19
19
19
20
20
20
20
20
MRS NICOLA SUZANNE BADGER
ANDREW EDWARD SLOAN
MR MARCUS ASHLEY ROBB
MR SAI KUMAR RAMINENI & DR SARADA VADLAMUDI RAMINENI
LEE MILLER INVESTMENTS PTY LTD
JEFFREY WAYNE MARRINER
MR DUNCAN WILLIAM JONES
BHAVDIP SANGHAVI
PROSPERION WEALTH MANAGEMENT PTY LTD
GREEN MOUNTAINS INVESTMENTS LTD
HUA HIN CAPITAL PTY LTD
MR DARREN JOHN COOPER
MISS ANDREA LOUISE MCINTOSH
LONHRO (WA) PTY LTD
ALSTONVILLE NOMINEES PTY LTD
RISBEC CORPORATION PTY LTD
STOW COURT PTY LTD
MR PETER JOHN FERRIS
MRS JANNI MAREI LUCIA
LACHLAN HENRY GEORGE LAWSON
MDC FUNDS PTY LTD
MR BRETT GRAEME WALKER
REDIMA PTY LTD
Total
Total listed options
Holding
% IC
100,000
100,000
100,000
100,000
100,000
100,000
88,625
80,000
80,000
75,000
65,375
63,889
60,000
55,931
55,906
52,875
52,875
52,875
50,000
50,000
50,000
50,000
50,000
1.41%
1.41%
1.41%
1.41%
1.41%
1.41%
1.25%
1.13%
1.13%
1.06%
0.92%
0.90%
0.85%
0.79%
0.79%
0.75%
0.75%
0.75%
0.71%
0.71%
0.71%
0.71%
0.71%
5,301,976
76.12%
7,074,933
100.00%
2) Unquoted Securities – Company Options and Performance Shares
There are two classes of unquoted securities, being Company Options and Performance Rights.
2A) Company Options
a) Distribution of unquoted Options holder numbers
Category
(Size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Ordinary Options
Option holders
Options
-
-
3
19
14
36
-
-
30,000
1,221,250
10,173,750
11,425,000
69
SPECTUR LIMITED
ADDITIONAL SECURITIES INFORMATION (continued)
SHAREHOLDER INFORMATION (continued)
2A) Company Options (continued)
There are 36 holders of Unlisted Company Options.
b) Voting rights
Unlisted options do not entitle the holder to any voting rights.
c) Holders of more than 20% of unquoted options.
There are no holders, holding more than 20% of the unquoted options on issue.
2B) Performance Rights (Tranche 1, Tranche 2 & Tranche 3)
a) Distribution of unquoted Performance Rights (Tranche 1, Tranche 2 & Tranche 3)
Category
Performance Rights
Tranche 1
Performance Rights
Tranche 2
Performance Rights
Tranche 3
(Size of holding)
Shareholders
Shares
Shareholders
Shares
Shareholders
Shares
100,001 and over
5
7,000,000
5
7,000,000
5
7,000,000
There are 5 holders of Performance Rights (Tranche 1, Tranche 2, and Tranche 3).
2C) Performance Rights (Tranche A, Tranche B & Tranche C)
a) Distribution of unquoted Performance Rights (Tranche A, Tranche B & Tranche C)
Category
Performance Rights
Tranche A
Performance Rights
Tranche B
Performance Rights
Tranche C
(Size of holding)
Shareholders
Shares
Shareholders
Shares
Shareholders
Shares
100,001 and over
1
166,667
1
166,667
1
166,666
There is 1 holder of Performance Rights (Tranche A, Tranche B, and Tranche C).
b) Voting rights
Unlisted Performance Rights (Tranche 1, Tranche 2, and Tranche 3) do not entitle the holder to any voting rights.
c) Holders of more than 20% of unquoted Performance Rights (Tranche 1, Tranche 2, Tranche 3)
-
-
-
Performance Rights Tranche 1: Richard Wilkins owns 3,333,333 rights which is equal to 47.62% of the
Performance Rights Tranche 1 on issue. Peter Holton also owns 3,333,333 rights which is equal to 47.62% of the
Performance Rights Tranche 1 on issue.
Performance Rights Tranche 2: Richard Wilkins owns 3,333,334 rights which is equal to 47.62% of the
Performance Rights Tranche 2 on issue. Peter Holton also owns 3,333,333 rights which is equal to 47.62% of the
Performance Rights Tranche 2 on issue.
Performance Rights Tranche 3: Richard Wilkins owns 3,333,333 rights which is equal to 47.62% of the
Performance Rights Tranche 3 on issue. Peter Holton also owns 3,333,334 rights which is equal to 47.62% of the
Performance Rights Tranche 3 on issue.
70
SPECTUR LIMITED
ADDITIONAL SECURITIES INFORMATION (continued)
OTHER ASX INFORMATION
1. Corporate Governance
A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX
Corporate Governance Council during the year is contained on page 54.
This corporate governance statement is current as at the Company’s reporting date and has been approved by the Board
of the Company.
2. Stock exchange on which the Company’s securities are quoted:
The Company’s listed equity securities are quoted on the Australian Stock Exchange.
3. Review of Operations
A review of operations is contained in the Directors’ Report.
4. Consistency with business objectives - ASX Listing Rule 4.10.19
In accordance with Listing Rule 4.10.19, the Company states that it has used the cash and assets in a form readily
convertible to cash that it had at the time of admission in a way consistent with its business objectives. The business
objective is primarily to develop, manufacture and sell Remote 3G/4G based security camera networks and associated
products and services.
The Company believes it has used its cash in a consistent manner to which was disclosed under the prospectus dated 19
June 2017.
5. Restricted Securities
Class
Number Escrowed
Date Escrow Period Ends
Fully Paid Ordinary Shares (FPOS) comprising:
3,661,957 FPOS issued on various dates
Total FPOS escrowed
3,661,957
3,661,957
28/07/2019
n/a
Unquoted Options (all options are exercisable at
$0.20 on or before 31/12/2020) comprising:
8,705,000 options issued on various dates
Total Options escrowed
Performance Rights (PR) comprising:
7,000,000 PR Tranche 1 issued on various dates
7,000,000 PR Tranche 2 issued on various dates
7,000,000 PR Tranche 3 issued on various dates
Total Performance Rights escrowed
8,705,000
8,705,000
7,000,000
7,000,000
7,000,000
21,000,000
28/07/2019
n/a
28/07/2019
28/07/2019
28/07/2019
n/a
71