Spectur Limited
Appendix 4E
Preliminary Financial Report- For the year ended 30 June 2019
(Previous corresponding period: Year ended 30 June 2018)
Results for announcement to the market
1. Results for announcement to the market
30 June 2019
Current Year
$
Percentage
Change
Up /(Down)
Change
Up /(Down)
$
30 June 2018
Previous
Corresponding
Year
$
Revenue from ordinary activities
4,818,130
95%
2,341,629
2,476,501
Loss from ordinary activities after tax
(2,608,167)
21%
710,876
(3,319,043)
Net Loss for the period attributable to members
(2,608,167)
21%
710,876
(3,319,043)
Commentary on the above figures is included in the attached Annual Financial Report for the year ended 30 June
2019.
2.
3.
4.
5.
6.
7.
Statement of Profit and Loss and other comprehensive income
Refer to attached Annual Financial Report – 30 June 2019.
Statement of financial position
Refer to attached Annual Financial Report – 30 June 2019.
Statement of cash flows
Refer to attached Annual Financial Report – 30 June 2019.
Statement of changes in equity / retained earnings
Refer to attached Annual Financial Report – 30 June 2019.
Dividend payments
Refer to attached Annual Financial Report – 30 June 2019.
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 2019.
8.
Net tangible assets per security
Net tangible asset per ordinary share
Current Year
(30 June 2019)
3.68 cents
Previous
Corresponding Year
(30 June 2018)
8.69 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 2019 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 2019.
Spectur Limited
ACN 140 151 579
Annual Financial Report
30 June 2019
Content
Corporate Information
Chairman’s Review
Managing Director’s Review
Directors’ Report
Remuneration 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
Note 1: Basis of Preparation
Note 2: Significant Accounting Policies
Note 3: Significant Accounting Estimates and Judgements
Other Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Securities Information
3
4
5
7
12
20
21
22
23
24
25
28
35
36
53
54
57
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 2 of 61
Corporate information
ACN 140 151 579
Directors
Mr Darren John Cooper
Mr Gerard John Dyson
Mr Stephen Paul Bodeker
Mr Andrew Mark Hagen
Company Secretary
Suzie Jayne Foreman
Registered Address and Principal Place of Business
Unit 2, 6 Merino Entrance
Cockburn Central WA 6164
Telephone: 1300 802 960
Solicitors
Blackwall Legal LLP
Level 26, 140 St Georges Terrace,
Perth, Western Australia 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
GPO Box 5193, Sydney, NSW 2001
Telephone: 1300 288 664 (within Australia)
Email: hello@automic.com.au
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 3 of 61
Chairman’s Review
Dear Fellow Shareholder,
It is my pleasure to present the 2019 Annual Report for Spectur Limited (“Spectur” or the “Company”, ASX:SP3).
The 2019 financial year has been one of change and growth for Spectur.
In October 2018, I assumed the role of Non-Executive Board Chair following the resignation of Richard Wilkins, the previous
Executive Chairman and Co-Founder of Spectur. I was already familiar with the Spectur business, having invested prior
to, and on the Company’s Initial Public Offer. Shareholders will recall that I elected to take my first 6 months’ remuneration
as shares in lieu of cash.
In April 2019, the Board appointed Gerard Dyson as Executive General Manager and incoming Managing Director with
effect from 1 July 2019, with previous Managing Director and Spectur Co-Founder Peter Holton transitioning into a part-
time role with the business following the cessation of his fixed term contract.
In June 2019, the Company undertook a capital raising, via a placement to sophisticated and professional investors, to
raise $1.59 million (before fees), a placement which has strengthened the Company’s balance sheet and provided the
Company with the flexibility to accelerate its strategic objectives. Our new Managing Director Gerard Dyson and I both
participated in the placement, which was finalised post 30 June 2019.
Raised capital will be used to improve the performance of the existing inbound sales channels and also build a new
outbound channel, that will focus on larger, higher value customers. Additional strategic use of capital will be applied to
building a proactive customer outreach program and preparation, research and development of the next generation of
Spectur solutions.
Combined with an increased culture of focus, and corporate and fiscal discipline, your Board believes that Spectur is well-
placed to capitalise on its next wave of growth, and I look forward to bringing you updates on our performance throughout
this new financial year.
In closing, I’d like to take this opportunity to thank both Richard Wilkins and Peter Holton for the significant roles they’ve
both played in laying the foundations for Spectur’s success to date and a pathway for future growth. Both of them remain
as the Company’s largest shareholders and are willing to lend their advice and learnings whenever called upon by the
current Board and management.
And finally, to my fellow Board members, our Company Secretary and the staff of Spectur – on behalf of all shareholders I
extend our thanks for their tireless efforts, passion and commitment.
Darren Cooper
Non-Executive Board Chair
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 4 of 61
Managing Directors’ Review
Dear Fellow Shareholder,
It gives me great pleasure to write to you for the first time in my capacity as Managing Director of Spectur. I have been
leading this great innovative company for approximately 8 weeks and in the engine room since April 2019. In this short
time, I have become even more excited about the opportunities that lie ahead.
Providing more than products
Spectur has always had a tremendous product platform, with best in class performance in the areas of detection, false
alarm reduction and customisation. We deliver value to our customers not just through high-quality products but also crucial
solutions tailored to the specific challenges they face. Whether it is preventing crime, providing an ability to see or sense
what is going on in remote locations, or warning people about potential harm, the Spectur solutions make a truly valuable
difference. Importantly, the value that we create or preserve is typically an order of magnitude greater than the cost of our
solutions, making our value proposition highly desirable. Through the combination of our expertise in the fields Internet of
Things (IoT), camera devices, cloud storage, data management, services and software applications, we don’t just provide
products; we provide solutions.
A recent example of this has been the success of the thermal deterrence solution that we deployed last financial year.
These systems are able to “see” more than 200m in the dark, massively extending the range of detection and deterrence
of intruders into facilities with long perimeters. Combined with our robust connectivity to the internet, cloud storage and
notification and monitoring systems, we can provide 24-hour perimeter security and deterrence for a fraction of the cost of
comparable wired or optical systems. We have received multiple orders with a value greater than $100,000 per solution in
the last six months and expect this momentum to continue to build.
A solid FY19 paves the way for future growth
FY19 delivered revenues in excess of $4.8m, double the result from FY18. Cash consumption has been steadily reducing
and we have a robust strategic plan and a talented team able to continue to improve the performance of the Company.
In Q4 2019, the Company achieved record revenue and cash collection, underpinned by record system sales and rentals.
The increasing revenues also reflect the growing contribution of higher-margin recurring income. As this component of
revenue trends towards 20% of overall revenue, with annualised customer turnover below 17%, we expect increasing
associated stability in our earnings. We look forward to improving upon the success of Q4 FY19 in FY20 and beyond.
Sharpening our sector focus
Approximately 40% of our business comes from the Australian building and construction sector, which continues to face
challenges of varying degrees in each state. With crime and disruption in this space increasing over the same period,
Spectur continues to be able to provide market-leading and cost-effective sales and rental solutions for this market and
anticipates that there remains substantial space for growth in this sector. Our inbound sales organisation is being optimised
to respond to this market.
Our second largest sector is the government and utilities space which currently represents approximately 30% of our
business. We have fewer competitors in this space, the barriers to entry are greater, order sizes are larger, and the
performance of our solutions are more rigorously tested than in building and construction. We will be focusing outbound
sales efforts on growing our penetration in this sector.
Three strategic pillars in FY20
After a solid performance in FY19, we have entered the new financial year with renewed and sharpened strategic and
operational focus which brings confidence for the financial year ahead. In FY20, our strategy has three key pillars
1.
2.
3.
Build our outbound sales organisation and improve performance of existing inbound sales and marketing.
Build our customer outreach program to generate insights that can feed our research & development team,
marketing and sales groups.
Develop our research & development plans to narrow our choices for the next phases of technological expansion.
The first two elements will underpin our journey towards margin growth and cash generation and the third will help us make
the best of a plethora of attractive future growth opportunities.
Within our operations we have taken some actions in recent months to restructure around our strategic direction, reducing
costs and building greater focus on reaching long term profitability soon. This shift to a more prudent and cost-conscious
culture will continue over the next period as we review and challenge our internal costs as well as of those of our suppliers
and partners to ensure we are getting the best value at the lowest possible price.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 5 of 61
Managing Directors’ Review
It is exciting to be leading a business that has attractive avenues for growth in technology, customer sectors and
geographies. Spectur is much more than a security products company. We have a foundation in IoT, video analytics and
reliable solar-powered computing and connectivity platforms. The sky is the limit. Thanks for continuing with us on this
journey.
Sincerely,
Gerard Dyson
Managing Director
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 6 of 61
Directors’ Report
The Board of Directors of Spectur Limited present their report on Spectur Limited (“Company” or “Spectur”) for the year
ended 30 June 2019.
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.
Darren John Cooper
Non-Executive Chairman
Appointed 5 October 2018
Charles Richard Wallace Wilkins
Executive Chairman
Resigned 5 October 2018
Gerard John Dyson
Peter William Holton
Stephen Paul Bodeker
Andrew Mark Hagen
Suzie Jayne Foreman
Managing Director
Managing Director
Non-Executive Director
Non-Executive Director
Company Secretary
Current Directors and Officers
Mr Darren John Cooper
Independent Non-Executive Chairman
Appointed 1 July 2019
Resigned 30 June 2019
Qualifications
B.Bus (Curtin), Masters of Applied Finance (Macquarie), Australian Institute of Company
Directors graduate.
Length of Service
10 months
Experience
Darren Cooper spent in excess of 20 years with various companies in management and
senior executive roles. Darren now holds a number of Board and Strategic Advisory roles
across a range of industries including property, construction, labour hire, professional
services and telecommunications. He is also an investor in and director of a range of
technology & media-based start-up businesses.
Special Responsibilities
Chairman of the Remuneration Committee
Gerard John Dyson
Managing Director
Qualifications
B.Eng (Hons, Civil), B.Com (Mgmt, Mktg), PhD (Geotechnical Engineering) from the
University of Western Australia, Adv Dip Bus from Federation University, Graduate of the
Australian Institute of Company Directors.
Length of Service
2 months as Managing Director
Experience
Gerard Dyson is a seasoned Managing Director and prior to joining Spectur held the role
of Executive Vice President and Regional Managing Director, Americas for Advisian, a
global consulting and advisory firm of Worley Limited (ASX:WOR), from 2015 to 2018.
Dr Dyson has held a number of global, regional and local roles with Worley in Australia,
USA, Canada, Latin America, Asia and the Middle East, including as Group Managing
Director, Infrastructure in 2014 to 2015 and Director of Consulting, Australia & New
Zealand from 2011 to 2014. Dr Dyson has also led sales teams, developed and
implemented strategy and has strong experience in infrastructure, environment, mining,
power and chemicals sectors.
Special Responsibilities
N/A
Mr Stephen Paul Bodeker
Independent Non-Executive Director
Qualifications
Bachelor of Accounting Science from the University of South Africa, associate member
of the South African Institute of Chartered Accountants, practicing CPA, a member of the
Chartered Institute of Management Accountants and a fellow of the Governance Institute
of Australia.
Length of Service
2 years
Experience
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
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 7 of 61
Directors’ Report
Limited (now Alterra Limited) and Silver Chain Group. He is currently the Chief Financial
Officer of Early Start Australia 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.
Special Responsibilities
Remuneration Committee member
Mr Andrew Mark Hagen
Independent Non-Executive Director
Qualifications
Bachelor of Commerce (Property and Finance)
Length of Service
2 years
Experience
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. Mr Hagen is also a director of Track’em and Nicheliving Holdings Limited.
Special Responsibilities
Remuneration Committee member
Directorships of other listed companies
Directorships of other listed companies held by directors currently and in the 3 years immediately before the end of the
financial year are as follows:
Name
Mr Darren John Cooper
Dr Gerard John Dyson
Mr Peter William Holton
Mr Stephen Paul Bodeker
Mr Andrew Mark Hagen
Company
GO2 People Limited
-
-
-
Cycliq Group Limited
Company Secretary for the reporting period
Period of directorship
28 July 2017 - date
-
-
-
29 Nov 2016 – 28 Apr 2017
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 Solutions, IoT platforms, associated products and services.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 8 of 61
Directors’ Report
Operating and Financial Review
Results of Operations
For the year ended 30 June 2019, Spectur reported total revenue of $4.8M, up 95% on the corresponding prior year revenue
of $2.5M, underpinned by customer retention and growth in the customer base.
Gross margins increased to 59% in FY2019 from 50% in the prior year, as the Company worked to improve efficiencies
and reduce input costs.
Loss before Interest, Tax and Depreciation and Amortisation (EBITDA) fell to $2.59M from the prior period loss of $3.76M.
After taking into account one-off restructuring costs for the period the FY19 EBITDA loss was reduced further to $2.1M.
Spectur’s balance sheet remains strong with minimal debt of $200k and a strong cash balance of $1.3M at year end (2018:
$3.5M). Cash assets were strengthened further by the $1.3M remaining placement funds received post year end.
The comprehensive loss for the year ended 30 June 2019, after providing for income tax, amounted to $2.6M (2018:$3.3M).
Dividends
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has
been made.
Significant events during the year
On 5 October 2018, the Company appointed a new non-executive chairman, Mr Darren Cooper, at which time Mr Wilkins,
the Company’s previous executive chairman and founder, stepped down from the role. The Board reviewed its composition
and considered the requirement for strategic, commercial and leadership skills and the need to improve the balance of
independence in the non-executive directors. Mr Darren Cooper fulfilled this requirement with his key role being to:
➢ Clarify and re-focus the key strategies of the Company;
➢ Lead and oversee its east-coast expansion; and
➢ Identify and recruit one or more east coast-based directors, which may potentially include a new east coast-based
chairperson.
On 9 April 2019, the Company announced the appointment of Gerard Dyson as the Company’s new Managing Director
effective 1 July 2019. Mr Holton’s appointment as Managing Director was a fixed term contract expiring 30 June 2019, and
from this date Mr Holton has transitioned to an Executive General Manager role focusing on business development,
relationships with key clients and business advice.
On 26 June 2019, Spectur announced it had secured approximately $1.5 million, after costs, via a two-tranche placement
of shares to institutional and sophisticated investors. The Placement was conducted in two tranches with Tranche 1 raising
approximately $1.1 million (before costs) via the issue of 8,460,344 new shares on 5 July 2019 and Tranche 2 of the
Placement raising approximately $490,000 (before costs) via the issue of 3,770,429 new shares following approval by
shareholders at a General Meeting on 12 August 2019.
Employees
The Company had 20 employees as at 30 June 2019 (2018: 31 employees).
Loss per share
Basic loss per share (cents per share)
(4.82)
(7.61)
30 June 2019
30 June 2018
Subsequent events after the reporting date
As noted above the Company conducted a two Tranche placement to raise approximately $1.1 million (before costs) via
the issue of 8,460,344 new shares.
On 12 August 2019, the Company held a General Meeting to approve Tranche 2 of the Placement shares. Following
approval granted by shareholders 3,770,429 new fully paid ordinary shares were issued raising $490,000 (before costs).
A further 4,000,000 listed options exercisable at $0.20 on or before 31 December 2020 were issued on the 23 rd of August
2019 to PAC Partners (or their nominees) as part consideration for services performed by acting as lead manager for the
Placement.
The Directors are not aware of any other matter or circumstance that has arisen since 30 June 2019 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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 9 of 61
Directors’ Report
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.
Indemnifications 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
2019
Darren Cooper
Richard Wilkins
Peter Holton
Stephen Bodeker
Andrew Hagen
Directors’ meetings
No. eligible to attend
6
1
7
7
7
No. attended
6
1
7
7
6
Remuneration Committee meetings
No. attended
2
-
-
3
3
No. eligible to attend
2
-
-
3
3
In addition to the above meetings, the board executed 9 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
68,633,066
22,419,933
7,333,332
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
11,094,933
9,175,000
2,000,000
150,000
22,419,933
$0.20
$0.20
$0.50
$0.37
31 December 2020
31 December 2020
31 December 2020
31 December 2020
There were 80,000 shares issued during the year as a result of an exercise of Options.
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 2
31 December in the year the
PR’s vest.
No. of Performance
Rights on Issue
7,333,332
Vesting Conditions
The total Revenue for the year ended 30 June 2019
being at least $3.5 million, which is subject to the
lodgement of the FY19 audited financial report.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 10 of 61
Directors’ Report
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 repositioning itself as a premium brand
with midterm goal of brand dominance in the Australian government & utilities sector.
It will seek to implement this in a number of ways, by
• Building an outbound sales organisation and improving the performance of existing inbound sales and marketing,
• Building a customer outreach program to generate insights that feed research & development, marketing and
sales groups,
• Developing research & development plans to shape the next phases of technological expansion, and
•
Focusing on improving cashflow through a combination of the above, whilst 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. On 1st July 2019, Mrs Eleonora Shapiro joined the executive team in the role of Sales and Marketing
Manager and Mrs Suzie Foreman, as Professional Services Manager (in addition to her existing Company Secretary role).
Further information is set out in the Corporate Governance statement detailed on the Company’s website, 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.
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 20 and forms part of this Directors’ report for the year ended 30 June 2019.
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
Darren John Cooper
Gerard John Dyson
Stephen Paul Bodeker
Andrew Mark Hagen
Total
Number of fully paid
ordinary shares
Number of options
over ordinary shares
Number of
performance rights
750,000
500,000
113,424
25,000
1,388,424
150,000
-
252,875
500,000
902,875
-
-
-
-
-
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 11 of 61
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 2019. The information provided in
this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
For the purposes of this report KMP 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:
Current Directors
Mr Darren John Cooper
Mr Gerard John Dyson
Mr Stephen Paul Bodeker
Mr Andrew Mark Hagen
Position
Period of Employment (to present)
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Appointed 5 October 2018
Appointed as EGM 9 April 2019
Appointed as Director 1 July 2019
Previous Directors
Mr Peter William Holton
Mr Charles Richard Wallace Wilkins
Managing Director
Executive Chairman
Resigned 30 June 2019
Resigned 5 October 2018
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 2019. 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 solar power sensing 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.
B.2 Remuneration Committee
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 is responsible for reviewing and
making recommendations to the Board on remuneration matters. The members of the Committee, are:
▪ Chairman – Darren Cooper
▪ Member – Andrew Hagen
▪ Member – Steven Bodeker
▪ Secretary – Suzie Foreman
The Remuneration Committee is delegated responsibility by the Board to make recommendations on:
The remuneration policies and framework;
•
• Non-Executive Director Remuneration;
• Remuneration for the Executive Director, and equity-based compensation for the leadership team and other key
management personnel as recommended by the Executive Director; and
• Executive Director incentive arrangements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 12 of 61
Remuneration Report (Audited)
The Executive Director’s performance is reviewed by the Remuneration Committee.
The Remuneration Committee may use independent Remuneration Consultants to provide advice but did not do so for
FY19.
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’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 salary; 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 the Executive Director by the
Remuneration Committee with reference to market comparator data and the scope of the 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 salary, 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 mobile telephone reimbursements.
C.2 Variable Remuneration
C.2.1 STI Plan Applicable to the Reporting Period - 2019
The STI plan was implemented by the Remuneration Committee and approved by the Board during the year.
STI bonuses have been accrued for executives, payable based upon the achievement of certain stretched specified Key
Performance Indicator (“KPI’s”) during the financial year relating to financial performance and product development. 60%
of Mr Holton’s bonus vested during the year, and 40% was forfeited during the year as the performance criteria was not
met.
Mr Dyson’s executive employment contract was executed 5 April 2019, and he is entitled to receive a pre-tax STI payment
of up to 50% of his base salary. For the period from 15 April to 30 June 2019, he was entitled to receive a potential pro-rata
STI payment according to KPI’s set by Spectur.
The FY19 KPI’s were established based upon the following:
• Workplace Health and Safety
• Company Strategy
• Operational and Financial improvements and initiatives
•
Investor Relations
100% of Mr Dyson’s bonus vested and was payable during FY19 based upon specified performance criterial being met.
STI bonuses paid or payable in relation to FY2019 are as follows:
Executive
Peter Holton
Gerard Dyson
FY 2019 Bonus Paid /
Payable
$
36,000
27,083
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 13 of 61
Remuneration Report (Audited)
C.3 STI Plan for the 2020 Reporting Period
The Board have reviewed and implemented the STI plan for FY20 taking into account the Company’s cash flow and financial
performance having regard to the operations of the Company. A scorecard of metrics were considered which the Managing
Director would be able to exert sufficient control to achieve a demonstrated strategic outcome in his role. For FY20 the STI
payments depends on the extent to which specific operating targets set at the beginning of the financial year are met or
exceeded. The operational targets consist of several KPI’s covering both financial and non-financial measures of
performance and may be based on company, individual, business and personal objectives. For FY20 these measures are:
(a) Financial Performance - EBITDA;
(b) R&D Roadmap;
With Safety performance as a “deleterious multiplier” per the following formula:
•
•
•
“0.0 x” for a fatality
“0.75 x" for a serious injury
“1.0 x” in the absence of either a fatality or a serious injury.
The Board at its discretion may choose to modify these multipliers to suit the circumstances of the event(s).
An overall performance rating for the Company is approved by the Remuneration Committee, with assessment of
performance against KPIs conducted following the finalisation of the full year audited results. The individual performance
of the Executive Director is also rated and considered when determining the amount, if any, of the STI component to be
paid, and this is performed at six-monthly intervals.
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 linked remuneration incentives by way of Performance Rights to Company performance targets. No other long
term incentives were issued to key management personnel during the period.
C.4.2 LTI Plan for Future Reporting Periods
Participation
A LTI scheme has been established for future financial periods where grants are made to those Executives that are able to
influence the generation of shareholders’ wealth and thus have a direct impact on the Company’s performance against the
relevant long-term performance hurdle. NEDs are not eligible to participate in the LTI plan.
Structure
LTI’s are delivered under the Company’s Employee Incentive Plan (“EIP”) The EIP enables the Company to offer Executive
Directors and key employees a range of different employee incentive scheme (“ESS”) interests with the aim of to attracting,
motivating and retaining key management. These ESS interests or awards include options, performance rights, service
rights, deferred shares, exempt shares, cash rights and stock appreciation rights.
The Executive Director has a maximum LTI opportunity which is based upon a percentage of their annual base salary. The
percentage depends upon the accountabilities of the role and impact on organisational performance.
Delivery
Awards under the LTI plan are made in the form of performance rights which provide, when vested, one share at nil cost
(provided the specified performance hurdle is met). No dividends are paid on unvested LTI awards. A new share will be
issued for each vested performance right. The number of performance rights allocated for each executive director is
calculated by reference to their maximum LTI opportunity value.
Value
Allocations are made based on a face value approach using the Volume Weighted Average Price of Spectur’s shares over
the first five trading days of the 2019 financial year. This fixes the maximum number of shares / rights and the actual number
will vest in accordance with the performance conditions which are set.
Milestone Targets
The LTI milestone targets (nominally weighted 75% Earnings Per Share (EPS) and 25% Total Shareholder Return (TSR))
will be reviewed by the Remuneration Committee and approved by the board to ensure they are relevant and sufficiently
stretched to provide an incentive and reward mechanism for levels of performance well exceeding budgeted or
“satisfactory”. They are tested at the end of a 3-year period and awarded on the basis of achieving the quotative targets
established in alignment with the Company’s strategy.
The Managing Director has been allocated 1,607,919 performance rights which will be subject to shareholder approval at
the 2019 Annual General Meeting of shareholders.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 14 of 61
Remuneration Report (Audited)
Leavers
If cessation of employment occurs, the following treatment will apply in respect of unvested rights:
•
•
If the participant ceases employment with Spectur on resignation or on termination for cause, unvested rights will
normally be forfeited.
If the participant ceases employment in other circumstances (for example, due to illness, total or permanent
disablement, retirement, redundancy, end of contract or other circumstances determined by the Board), unvested
rights will stay ‘on foot’ and may vest at the end of the original performance period to the extent performance
conditions are met.
The Board may determine in its discretion that the number of rights available to vest will be reduced pro-rata for time at the
date employment ceases.
The Board will retain discretion to allow for accelerated vesting (pro-rated for performance and/or time) in special
circumstances (as opposed to allowing unvested rights to remain ‘on foot’ on cessation of employment).
Remuneration Policy v’s Financial Performance
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.
During the initial growth phase of the Company the key measurable driver to the Company’s performance was sales
revenue and product development with executives’ remuneration KPI’s linked to the achievement of specified targets.
Directors and executives also held performance rights and options whose performance was linked to shareholder wealth
(via the Company’s share price).
The earnings of the Company for the previous three financial years are summarised below:
Sales Revenue
Gross profit
EBITDA
Loss after income tax
2019
$
4,818,130
2,835,581
(2,586,997)
(2,608,167)
2018
$
2,476,501
1,231,150
(3,764,137)
(3,319,043)
2017
$
1,332,681
775,897
(607,237)
(426,501)
Going forward as the Company matures, short term remuneration incentives are linked to financial performance via EBITDA
measurement. Longer term incentives are linked to Earnings Per Share (“EPS”) and Total Shareholder Return (“TSR”)
targets.
The factors that are considered to affect EPS and TSR are summarised below:
Share price ($) – Year end
Dividend declared ($)
Loss per share (cents)
2019
0.12
-
(4.82)
2018
0.28
-
(7.61)
2017
N/A
-
(3.31)
Number of shares on issue
56,402,293
49,000,025
17,500,000
The remuneration of KMP is aligned to Company performance via remuneration incentives and will be reported in
subsequent annual reports.
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 15 of 61
Remuneration Report (Audited)
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 2019. Shares were issued to Darren Cooper during the year in lieu of his cash
remuneration for the first six months following his appointment.
Remuneration Structure
Non-Executive Directors receive a fixed remuneration of base fees, presently set at $35,000 per annum plus statutory
superannuation. 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 fees were reviewed during the reporting period to 30 June 2019 and have remained unchanged since
this review. A further review will be conducted in the next financial year in accordance with the annual review of salaries
performed by the Remuneration Committee.
The current Board fee structure, which includes committee fees, for Non-Executive Directors is as per the table below:
Board
Chair
$75,000
Member
$35,000
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.
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.
Base Salary/Fee per annum
Terms of Agreement
Notice Period
Executive Directors
$260,000 per annum for year 1,
$280,000 per annum for year 2,
$300,000 per annum for year 3.
And STI and LTI component
included and detailed above.
Gerard Dyson
Non-Executive Directors
Darren Cooper
$75,000
Stephen Bodeker
$35,000
Andrew Hagen
$35,000
Commencement date – 1
July 2019 for period of 2
years
Non-Executive Director
contract
Commencement date – 5
October 2018
Non-Executive Director
contract
Commencement date – 9
June 2018
Non-Executive Director
contract
Commencement date – 9
June 2018
3 months in writing by either
party.
The contract will cease on 30
June 2022 unless the parties
mutually agree to extend.
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
Upon written advice of intention
or in accordance with the
Constitution of the Company or
the Corporations Act 2001
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 16 of 61
Remuneration Report (Audited)
E.1 Remuneration of Key Management Personnel
Mr Holton’s base salary was increased to $245,000 for FY19 from $205,000 in FY18 following a salary comparison review
against ASX listed peers.
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
Salary &
fees
$
Bonus
Payments
$
Super-
annuation
$
Share-based
payments(iv)
$
Percentage
performance
related
%
Total
$
18,750
59,134
245,000
38,325
92,771
50,000
503,980
-
-
36,000
-
-
27,083
63,083
5,267
5,345
23,275
-
3,325
4,750
41,962
36,690
55,553
55,553
-
-
-
147,796
60,707
120,032
359,828
38,325
96,096
81,833
756,821
-
46.3%
25.4%
-
-
33.1%
-
2019
Directors
Darren Cooper(i)
Richard Wilkins(ii)
Peter Holton(iii)
Stephen Bodeker
Andrew Hagen (vi)
Key Management Personnel
Gerard Dyson (v)
Total
Notes:
Darren Cooper received the equivalent of $36,690 of his salary in fully paid ordinary shares, in lieu of the cash component.
(i)
(ii) Resigned 5 October 2018. Mr Wilkins was also paid $115,100 plus statutory superannuation of $8,886 for the 6 month period
following his resignation, for his services performed as an employee during the transition.
(iii) Salary and fees include $15,000 for a vehicle allowance paid to Peter Holton (resigned on 30 June 2019).
(iv) 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.
(v) Appointed 5 April 2019.
(vi) Mr Hagen was paid $35,000 for director fees and $57,771 to Breakwater (WA) Pty Ltd for business development activities during
2019.
2018
Directors
Richard Wilkins(i)
Peter Holton(i)
Stephen Bodeker
Andrew Hagen (iii)
Total
Short-term benefits
Salary &
fees
$
Bonus
Payments
$
Super-
annuation
$
Share-based
payments
$
Percentage
performance
related
%
Total
$
205,000
205,000
38,325
97,417
545,742
20,000
50,000
-
-
70,000
19,000
20,425
-
3,325
42,750
611,111
611,111
-
-
1,222,222
855,111
886,536
38,325
100,742
1,880,714
73.8
74.6
-
-
-
Notes:
(i)
(ii)
Salary and fees include $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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 17 of 61
Remuneration Report (Audited)
Key management personnel equity holdings
Fully paid ordinary shares
Balance at
beginning of
year / on
appointment
Number
150,000
2,249,557
1,711,944
36,501
25,000
Granted in lieu
of cash
compensation
Number
Received on
exercise of
PR’s3
Number
Purchased
during year
Number
Balance at
end of year
/ on
resignation
Number
Balance held
nominally
Number
155,602
-
-
-
-
-
3,333,333
3,333,333
-
-
50,000
-
76,923
-
355,602
5,582,890
5,045,277
113,424
25,000
355,602
5,006,389
5,045,277
113,424
25,000
-
-
-
192,307
192,307
192,307
30 June 2019
Directors
Darren Cooper1
Richard Wilkins2
Peter Holton6
Stephen Bodeker4
Andrew Hagen
Executives
Gerard Dyson5
1 Appointed 5 October 2018.
2 Resigned 5 October 2018. 576,501 fully paid ordinary shares were held by Mr Wilkins de-facto spouse Judith van Ross.
3 Exercise of Tranche 1 performance rights, which vested during the financial year.
4 Shares acquired on market.
5 Appointed 5 April 2019. Shares acquired on market.
6 Resigned 30 June 2019
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
30 June 2018
Directors
Richard Wilkins2
Peter Holton
Stephen Bodeker
Andrew Hagen
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.
Share options
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.
Balance at
beginning of
year/ on
appointment
Number
150,000
2,007,639
2,017,361
252,875
500,000
-
Granted as
compensation
Number
Exercised
Number
Net change
other1
Number
Balance at end
of year / on
resignation
Number
-
-
-
-
-
-
-
-
-
-
150,000
2,007,639
2,017,361
252,875
500,000
-
-
-
-
-
-
30 June 2019
Directors
Darren Cooper1
Richard Wilkins2
Peter Holton
Stephen Bodeker
Andrew Hagen
Executives
Gerard Dyson3
1 Appointed 5 October 2018.
2 Resigned 5 October 2018
3 Appointed 5 April 2019.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 18 of 61
Remuneration Report (Audited)
30 June 2018
Directors
Richard Wilkins
Peter Holton
Stephen Bodeker
Andrew Hagen
Balance at
beginning of
year
Number
Granted as
compensation
Number
Exercised
Number
Net change
other1
Number
Balance at end
of year
Number
2,000,000
2,000,000
250,000
250,000
-
-
-
-
-
-
-
-
7,639
17,361
2,875
250,000
2,007,639
2,017,361
252,875
500,000
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.
For details of the employee share option plan and of share options granted during the 2019 financial year, please refer to
Notes 8 and 22. All share options issued to KMP were made in accordance with the provisions of the employee incentive
plan.
Performance Rights
30 June 2019
Directors
Richard Wilkins1
Peter Holton
Balance at
beginning of
year
Number
Converted
during the
year
Number
Cancelled /
forfeited
during the
year2
Balance at end
of year / upon
resignation
Number
Vested and
Exercisable3
Number
10,000,000
10,000,000
(3,333,333)
(3,333,333)
(3,333,334)
(3,333,334)
3,333,333
3,333,333
3,333,333
3,333,333
1 Resigned 5 October 2018
2 Tranche 3 performance rights cancelled for each director during the year.
3 Tranche 2 performance rights vest upon Total Revenue for the financial year ended 30 June 2019 being at least $3.5 million as per the
Company’s audited financial statements.
30 June 2018
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
Comments on Remuneration Report at Spectur’s most recent AGM
The Company received a 98.9% of “yes” votes on its remuneration report for the 2018 financial year. The Company did not
receive any specific feedback from shareholders at the 2018 Annual General Meeting on its remuneration practices.
Signed in accordance with a resolution of the directors.
Mr Darren John Cooper
Director
Dated this 31 August 2019
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 19 of 61
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Spectur Limited for the year ended 30 June 2019,
I declare that to the best of my knowledge and belief, there have been no contraventions of:
a)
the auditor independence requirements of 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 2019
N G Neill
Partner
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 20 of 61
Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2019
Continuing Operations
Revenue
Cost of Sales
Gross profit
Interest income
Other income
Research and development expenses
Employee benefits
Restructuring costs
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
Other comprehensive loss for the year
Total comprehensive loss for the year
Notes
30 June 2019
30 June 2018
$
$
5
22
6
4,818,130
(1,982,549)
2,835,581
21,109
2,530
(209,904)
(2,999,754)
(535,716)
(1,298,756)
(353,043)
(257,072)
(332,811)
(11,538)
229,137
(2,910,237)
302,070
(2,608,167)
-
2,476,501
(1,245,351)
1,231,150
68,674
986
(313,661)
(1,795,502)
-
(1,084,555)
(336,029)
(174,022)
(51,524)
(7,662)
(1,292,504)
(3,754,649)
435,606
(3,319,043)
-
(2,608,167)
(3,319,043)
Loss attributable to members of the Company
(2,608,167)
(3,319,043)
Basic loss per share (cents per share)
9
(4.82)
(7.61)
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 21 of 61
Statement of Financial Position
As at 30 June 2019
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
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Net Equity
Notes
30 June 2019
30 June 2018
$
$
10
11
12
13
14
15
16
17
16
17
7
8
1,303,261
1,226,843
936,696
3,466,800
645,268
597,310
1,242,578
4,709,378
1,494,726
101,570
271,265
1,867,561
107,377
60,117
167,494
2,035,055
2,674,323
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
8,997,115
1,108,668
(7,431,460)
2,674,323
8,220,651
1,717,498
(4,823,293)
5,114,856
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 22 of 61
Statement of Changes in Equity
For the Year Ended 30 June 2019
Balance at 1 July 2018
Loss for the year
Total Comprehensive loss for the year
Shares issued during the year (net of costs)
Share issue costs
Performance rights converted during the year
Performance rights forfeited during the year
Options issued during the year
Value of performance rights brought to
account during the year
Issued
Capital
$
Reserves Accumulated
Losses
Total Equity
$
$
$
8,220,651
1,717,498
(4,823,293)
5,114,856
-
-
52,690
(27,892)
751,666
-
-
-
-
-
-
-
(751,666)
(250,769)
15,083
378,522
(2,608,167)
(2,608,167)
(2,608,167)
(2,608,167)
-
-
-
-
-
-
52,690
(27,892)
-
(250,769)
15,083
378,522
Balance as at 30 June 2019
8,997,115
1,108,668
(7,431,460)
2,674,323
Balance at 1 July 2017
Loss for the year
Total Comprehensive loss for the year
Shares issued during the year (net of costs)
Share issue costs
Options issued during the year
Value of performance rights brought to
account during the year
Issued
Capital
$
Reserves Accumulated
Losses
Total Equity
$
$
$
1,936,890
58,500
(1,504,250)
491,140
-
-
7,580,005
(1,296,244)
-
-
-
-
-
-
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
5,114,856
Balance as at 30 June 2018
8,220,651
1,717,498
(4,823,293)
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 23 of 61
Statement of Cash Flows
For the Year Ended 30 June 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Restructuring costs
Interest received
Interest paid
Finance and related charges
R & D tax incentives received
Notes
30 June 2019
30 June 2018
$
$
4,388,331
(6,764,027)
(191,635)
23,578
(1,315)
(10,223)
464,104
2,497,683
(4,848,064)
-
65,686
(1,909)
(5,753)
212,792
Net cash used in operating activities
10.1
(2,091,187)
(2,079,565)
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Payments for intangible assets
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flow from financing activities
Proceeds from issue and subscription of shares
Proceeds from issue of options for cash
Funds received for shares to be allotted
Payments for share issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
Net (decrease) / increase in cash and cash
equivalents held
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at the end of the year
32,900
(33,333)
(275,207)
(275,640)
16,000
-
182,601
-
66,713
(82,296)
183,018
(2,183,809)
3,487,070
1,303,261
-
(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
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 24 of 61
Note 1: Basis of Preparation
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 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 financial statements are presented in Australian dollars.
The Company is a listed public Company, incorporated and operating in Australia. The entity’s principal activities are
detailed in the Directors Report.
(a)
Statement of compliance
The financial report was authorised for issue on 31 August 2019.
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).
(b)
Adoption of New and Revised Standards
Standards and Interpretations applicable to 30 June 2019
In the year ended 30 June 2019, 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. The impact of
these new standards on the Company are detailed below.
AASB 9 Financial Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and makes changes to a number of
areas including classification of financial instruments, measurements, impairment of financial assets and hedge accounting
model.
The Company has adopted AASB 9 from 1 July 2018.
The standard introduced new classification and measurement models for financial assets. A financial asset shall be
measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows which arise on specified dates and that are solely principal and interest.
A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model
whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are
solely principal and interest as well as selling the asset on the basis of its fair value.
All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an
irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading
or contingent consideration recognised in a business combination) in other comprehensive income ('OCI').
Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or
loss to reduce the effect of, or eliminate, an accounting mismatch.
For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair
value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch).
New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk
management activities of the entity.
New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is
measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since
initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring
expected credit losses using a lifetime expected loss allowance is available.
The Company has applied AASB 9 retrospectively with the effect of initially applying this standard recognised at the date
of initial application, being 1 July 2018 and has elected not to restate comparative information. Accordingly, the information
presented for 30 June 2018 has not been restated. No material impact was noted for 30 June 2018.
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 25 of 61
Note 1: Basis of Preparation
AASB 15 Revenue from Contracts with Customers
AASB 15 replaces AASB 118 Revenue and AASB 111 Construction Contracts and related interpretations and it applies
to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards.
The Company has adopted AASB 15 from 1 July 2018.
AASB 15 establishes a single comprehensive income for entities to use in accounting for revenue arising 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. The core principle of AASB 15 is that it requires identification of
distinct 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 or 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 core principle of AASB 15 is that an entity should recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:
• Step 1: Identify the contract(s) with a customer.
• Step 2: Identify the performance obligations in the contract.
• Step 3: Determine the transaction price.
• Step 4: Allocate the transaction price to the performance obligations in the contract.
• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
The Company has adopted AASB 15 using the modified retrospective method of adoption (without practical expedients)
with the effect of initially applying this standard recognised at the date of initial application, being 1 July 2018. Accordingly,
the information presented for 30 June 2018 has not been restated. The effect of the application of AASB 15 has been
applied to all contracts at date of initial application.
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 issue not yet adopted for the year ended 30 June
2019. Those which may have a material impact on the Company are set out below.
AASB 16 Leases
AASB 16 replaces AASB 117 Leases. AASB 16 removes the classification of leases as either operating leases or finance
leases-for the lessee – effectively treating all leases as finance leases.
AASB 16 is applicable to annual reporting periods beginning on or after 1 July 2019.
Impact on operating leases
AASB 16 will change how the Company accounts for leases previously classified as operating leases under AASB 117,
which were off-balance sheet. On initial application of AASB 16, for all leases (except as noted below), the Company will:
• Recognise right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured
at the present value of the future lease payments.
• Recognise depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of profit or
loss.
• Separate the total amount of cash paid into a principal portion (presented within financing activities) and interest
(presented within operating activities) in the consolidated cash flow statement.
Lease incentives (e.g. rent-free period) will be recognised as part of the measurement of the right-of-use assets and lease
liabilities whereas under AASB 117 they resulted in the recognition of a lease liability incentive, amortised as a reduction
of rental expenses on a straight-line basis.
Under AASB 16, right-of-use assets will be tested for impairment in accordance with AASB 136 Impairment of Assets.
This will replace the previous requirement to recognise a provision for onerous lease contracts.
For short-term leases (lease term of 12 months or less) and leases of low-value assets (such as personal computers and
office furniture), the Company will opt to recognise a lease expense on a straight-line basis as permitted by AASB 16.
The Company has elected not to early adopt AASB 16 but has conducted an assessment of the impact of the new standard
and have determined that there is unlikely to be a material impact.
Impact on finance leases
The main differences between AASB 16 and AASB 117 with respect to assets formerly held under a finance lease is the
measurement of the residual value guarantees provided by the lessee to the lessor.
AASB 16 requires that the Company recognises as part of its lease liability only the amount expected to be payable under
a residual value guarantee, rather than the maximum amount guaranteed as required by AASB 117.
On initial application the Company will present equipment previously included in property, plant and equipment within the
line item for right-of use assets and the lease liability, previously presented within borrowing, will be presented in a separate
line for lease liabilities.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 26 of 61
Note 1: Basis of Preparation
Based on an analysis of the Company’s finance leases as at 30 June 2019 on the basis of the facts and circumstances
that exist at that date, the directors of the Company have assessed that the impact of this change will not have an impact
on the amounts recognised in the Company’s consolidated financial statements.
Interpretation 23 Uncertainty over Income Tax Treatments
This Interpretation clarifies how to apply the recognition and measurement requirements in AASB 112 when there is
uncertainty over income tax treatments. In such a circumstance, an entity shall recognise and measure its current or
deferred tax asset or liability applying the requirements in AASB 112 based on taxable profit (tax loss), tax bases, unused
tax losses, unused tax credits and tax rates determined applying this Interpretation.
Interpretation 23 is effective from annual reporting periods beginning on or after 1 July 2019.
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 change is necessary to Company accounting policies.
(c)
Going Concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and settlements of liabilities in the ordinary course of business.
(d)
Foreign currency translation
The functional and presentation currency of Spectur Limited is Australian dollars.
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 27 of 61
Note 2: Significant Accounting Policies
(a)
Revenue from Contracts with Customers
Applicable to 30 June 2019
Revenue arises mainly from equipment sales, rental of equipment, field services and recurring revenue. The Company
generates revenue largely in Australia.
To determine when to recognise revenue, the Company follows a 5-step process:
1 Identifying the contract with a customer
2 Identifying the performance obligations
3 Determining the transaction price
4 Allocating the transaction price to the performance obligations
5 Recognising revenue when/as performance obligation(s) are satisfied.
The revenue and profits recognised in any period are based on the delivery of performance obligations and an assessment
of when control is transferred to the customer.
In determining the amount of revenue and profits to record, and related balance sheet items (such as contract fulfilment
assets, capitalisation of costs to obtain a contract, trade receivables, accrued income and deferred income) to recognise
in the period, management is required to form a number of key judgements and assumptions. This includes an assessment
of the costs the Company incurs to deliver the contractual commitments and whether such costs should be expensed as
incurred or capitalised.
Revenue is recognised either when the performance obligation in the contract has been performed, so 'point in time'
recognition or 'over time' as control of the performance obligation is transferred to the customer.
For contracts with multiple components to be delivered such as equipment sales with field services and recurring revenue,
management applies judgement to consider whether those promised goods and services are (i) distinct - to be accounted
for as separate performance obligations; (ii) not distinct - to be combined with other promised goods or services until a
bundle is identified that is distinct or (iii) part of a series of distinct goods and services that are substantially the same and
have the same pattern of transfer to the customer.
Transaction price
At contract inception the total transaction price is estimated, being the amount to which the Company expects to be entitled
and has rights to under the present contract.
The transaction price does not include estimates of consideration resulting from change orders for additional goods and
services unless these are agreed.
Once the total transaction price is determined, the Company allocates this to the identified performance obligations in
proportion to their relative stand-alone selling prices and recognises revenue when (or as) those performance obligations
are satisfied.
For each performance obligation, the Company determines if revenue will be recognised over time or at a point in time.
Where the Company recognises revenue over time for long term contracts, this is in general due to the Company
performing and the customer simultaneously receiving and consuming the benefits provided over the life of the contract.
For each performance obligation to be recognised over time, the Company applies a revenue recognition method that
faithfully depicts the Company’s performance in transferring control of the goods or services to the customer. This decision
requires assessment of the real nature of the goods or services that the Company has promised to transfer to the customer.
The Company applies the relevant output or input method consistently to similar performance obligations in other contracts.
When using the output method, the Company recognises revenue on the basis of direct measurements of the value to the
customer of the goods and services transferred to date relative to the remaining goods and services under the contract.
Where the output method is used, in particular for long term service contracts where the series guidance is applied, the
Company often uses a method of time elapsed which requires minimal estimation. Certain long-term contracts use output
methods based upon estimation of number of users, level of service activity or fees collected.
If performance obligations in a contract do not meet the over time criteria, the Company recognises revenue at a point in
time. This may be at the point of physical delivery of goods and acceptance by a customer or when the customer obtains
control of an asset or service in a contract with customer-specified acceptance criteria.
Disaggregation of revenue
The Company disaggregates revenue from contracts with customers by contract type, which includes (i) equipment sales,
(ii) equipment rentals, (iii) field services and (iv) recurring revenue as management believe this best depicts how the nature,
amount, timing and uncertainty of the Company’s revenue and cash flows.
Performance obligations
The nature of contracts or performance obligations categorised within this revenue type includes (i) equipment sales, (ii)
equipment rentals, (iii) field services, and (iv) recurring revenue.
The service contracts in this category include contracts with either a single or multiple performance obligations.
The Company considers that the services provided meet the definition of a series of distinct goods and services as they
are (i) substantially the same and (ii) have the same pattern of transfer (as the series constitutes services provided in
distinct time increments (e.g., monthly or annual services)) and therefore treats the series as one performance obligation.
(i) Equipment sales
Revenues are recognised at a point in time
(ii) Equipment rentals
Revenues are recognised over time.
(iii) Field services
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 28 of 61
Note 2: Significant Accounting Policies
Revenues are recognised at a point in time.
(iv) Recurring revenue
Revenues are recognised over time.
Contract assets and contract liabilities
The Company recognises contract liabilities for consideration received in respect of unsatisfied performance obligations
and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Company satisfies a
performance obligation before it receives the consideration, the Company recognises either a contract asset or a
receivable in its statement of financial position, depending on whether something other than the passage of time is required
before the consideration is due.
As a result of the contracts which the Company enters into with its customers, a number of different assets and liabilities
are recognised on the Company’s balance sheet. These include but are not limited to:
Trade receivables*
Accrued income*
Deferred income*
* No change in the accounting policies for these assets as a result of the adoption of AASB 15.
Applicable to 30 June 2018
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.
(b)
Other Income and Expenses
Dividends
Dividends are recognised as revenue when the right to receive payment is established. This applies even if they are paid
out of pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence.
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.
Borrowing costs
Borrowing costs are capitalised that are directly attributable to the acquisition, construction or production of qualifying
assets where the borrowing cost is added to the cost of those assets until such time as the assets are substantially ready
for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(c)
Income Tax Expenses
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 based on the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company operate and generate taxable income. Management periodically
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 29 of 61
Note 2: Significant Accounting Policies
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 balance 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.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• 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.
(d)
Segment Reporting
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 Managing Director of Spectur Limited.
(e)
Earnings per Share
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
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 30 of 61
Note 2: Significant Accounting Policies
•
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.
(f)
Cash and Cash Equivalents
Cash comprises cash at bank and in hand.
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.
Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
(g)
Trade and Other Receivables
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 30 days to 60 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 profit or loss and other 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 profit or loss and other comprehensive income.
(h)
Inventories
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
•
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.
(i)
Property, plant and equipment
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
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 31 of 61
Note 2: Significant Accounting Policies
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.
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.
(j)
Intangible assets
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:
•
•
•
• How the intangible asset will generate probable future economic benefits;
•
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;
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
Other Intangibles
Product development
8 years following grant of patent
10 years following grant of trademark
3 years following acquisition
3 to 5 years following commercial use
Impairment of tangible and intangible assets other than Other Intangibles
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.
(k)
Trade and other payables
Trade and other payables
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.
Employee leave benefits
Wages, salaries, annual leave and long service leave
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave
expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’
services up to the balance date. They are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or
payable.
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave not
expected to be settled within 12 months of the balance date are recognised in non-current other payables in respect of
employees’ services up to the balance date. They are measured as the present value of the estimated future outflows to
be made by the Company
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 32 of 61
Note 2: Significant Accounting Policies
(l)
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received
consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the
Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the
payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under
the contract.
(m)
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.
Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is
considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be received from the contract.
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.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value
of expected future payments to be made in respect of services provided by employees up to the balance date.
Consideration is given to expected future wage and salary levels, experience of employee departures, and period of
service. Expected future payments are discounted using market yields at the balance date on national government bonds
with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
(n)
Share-based payment transactions
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 33 of 61
Note 2: Significant Accounting Policies
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.
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.
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 34 of 61
Note 3: Significant Accounting Estimates and Judgements
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.
Inventories
(i)
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at
each reporting date. The future realisation of these inventories may be affected by future technology or other market-driven
changes that may reduce future selling prices.
(ii) Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utility of certain
software and IT equipment.
Impairment
(iii)
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on
expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about
future operating results and the determination of a suitable discount rate.
(iv) 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 by an external valuer using a Black-Scholes
model.
The Company measures the cost of cash-settled share-based payments at fair value at the grant date using the Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted.
(v) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as management considers that it is probable that
sufficient future tax profits will be available to utilise those temporary differences. Significant management judgement is
required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level
of future taxable profits.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 35 of 61
Other Notes to the Financial Statements
NOTE 4: 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 5: REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of revenue
AASB 134 requires an entity to disclose a disaggregation of revenue from contracts with customers required by paragraphs
114-115 of AASB 15. The Company has selected to disaggregate revenue according to the timing of the transfer of goods
and/or services. As the Company elected the modified retrospective method of adoption, comparative information under
AASB 15 is not required as disclosures for the comparative period in the notes follow the requirements of AASB 111, AASB
118 and other related interpretations.
The Company derives its revenue from the sale of goods and the provision of services at a point in time and over time in
the following major categories.
At a point in time
Equipment sales
Field services
Over Time
Equipment rentals
Recurring revenue
Total revenue
30 June 2019
$
2,271,506
539,334
2,810,840
1,241,593
765,697
2,007,290
4,818,130
The Company recognised an impairment loss on receivables from contracts with customers in the statement of
comprehensive income, amounting to $15,439 for the year ended 30 June 2019.
NOTE 6: INCOME TAX
30 June 2019
30 June 2018
$
$
(a) Income tax benefit
302,070
435,606
(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%
(2018:27.5%)
Effect of items that are not assessable/deductible in determining
taxable loss:
- Non-deductable 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
(2,910,237)
(3,754,649)
(800,315)
(1,032,528)
492,804
1,402
(193,377)
499,486
(302,070)
(302,070)
766,605
(118,190)
(271,052)
655,165
(435,606)
(435,606)
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 36 of 61
Other Notes to the Financial Statements
NOTE 6: INCOME TAX (continued)
(c) Unrecognised deferred tax
30 June 2019
30 June 2018
$
$
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%
1,816,314
1,816,314
499,486
2,382,419
2,382,419
655,165
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.
(d) Income tax recognised in profit or loss
Current tax expense
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
30 June 2019
30 June 2018
$
$
(585,912)
124,128
461,784
(302,070)
(302,070)
(493,401)
(161,764)
655,165
(435,606)
(435,606)
30 June 2019
30 June 2018
$
-
(37,703)
37,703
-
$
(180,844)
144,675
36,169
-
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 37 of 61
Other Notes to the Financial Statements
NOTE 7: ISSUED CAPITAL
As at 30 June 2019, the Company had the following issued share capital:
30 June 2019
30 June 2018
Number
$
Number
$
Fully paid ordinary shares
56,402,293
8,997,115
49,000,025
8,220,651
56,402,293
8,997,115
49,000,025
8,220,651
Movement of issued share capital:
Balance at beginning of year
Shares issued on IPO - 20c
Placement (including Director offer) at 36c
Share Purchase Plan Offer at 36c
Issue of remuneration shares (i)
Shares issued on exercise of options
Shares issued on exercise of performance
rights (ii)
Share issue costs
Balance at end of year
49,000,025
8,220,651
-
-
-
155,602
80,000
7,166,666
-
-
-
-
36,690
16,000
751,666
(27,892)
17,500,000
23,500,000
6,100,000
1,900,000
1,936,890
4,700,000
2,196,000
684,000
-
25
-
-
-
5
-
(1,296,244)
56,402,293
8,997,115
49,000,025
8,220,651
Issued to Darren Cooper in lieu of cash salary earned during the year.
(i)
(ii) Performance rights converted during the financial year.
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.
NOTE 8: 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 22 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 22 for further details of these plans
As at 30 June 2019, the Company had the following reserve accounts:
30 June 2019
30 June 2018
Number
$
Number
$
Options
Performance rights
Balance at end of year
18,419,933
7,333,332
386,446
722,222
25,753,265
1,108,668
18,499,933
21,500,000
39,999,933
371,363
1,346,135
1,717,498
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 38 of 61
Other Notes to the Financial Statements
NOTE 8: RESERVES (continued)
OPTIONS RESERVE MOVEMENT
Movement of Company options:
Balance at beginning of year
Options issued on a 1:4 basis under share
offers during the year
Issued during the year for cash
consideration
Value of all employee options brought to
account during the year
Issued during the year to consultants
Options exercised
Balance at end of year
PERFORMANCE RIGHTS MOVEMENT
30 June 2019
30 June 2018
Number
$
Number
$
18,499,933
371,363
8,850,000
58,500
-
-
-
-
(80,000)
-
-
15,083
-
-
1,999,958
-
5,500,000
55,000
150,000
2,000,000
(25)
7,480
250,383
-
18,419,933
386,446
18,499,933
371,363
30 June 2019
30 June 2018
Performance rights
Number
$
Number
7,333,333
7,333,332
722,222
722,222
21,500,000
21,500,000
Movement of issued performance rights:
Balance at beginning of year
Value of all performance rights brought to
account during the year
Performance rights converted to shares
Performance rights forfeited
Issue of performance rights to consultants /
directors
21,500,000
1,346,135
20,000,000
-
(7,166,666)
(7,000,002)
378,522
(751,666)
(250,769)
-
-
-
-
-
1,500,000
$
-
-
-
1,346,135
-
-
-
Balance at end of year
7,333,332
722,222
21,500,000
1,346,135
During the year 7,000,0002 Tranche 3 performance rights were forfeited by directors ceasing employment, with their value
written back in accordance with AASB 2.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 39 of 61
Other Notes to the Financial Statements
NOTE 9: LOSS PER SHARE
Basic loss per share
Losses used in the calculation of basic loss per share is as follows:
Losses
Weighted average number of ordinary shares
30 June 2019
30 June 2018
Cents per share
Cents per share
(4.82)
(7.61)
30 June 2019
30 June 2018
$
$
(2,608,167)
(3,319,043)
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 2019
30 June 2018
Number
Number
54,075,317
43,631,511
Share options and performance rights are not considered dilutive, as their impact would be to decrease the net loss per
share.
NOTE 10: 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 on hand and in bank
Credit cards
Cash in bank – share subscriptions held on trust 1
Short term deposits
Net cash and cash equivalents
30 June 2019
30 June 2018
$
520,125
(337)
182,595
600,878
1,303,261
$
465,068
(33,382)
-
3,055,384
3,487,070
1 Cash in bank includes $182,595 (2018: $nil) which relates to equity application funds held on behalf of investors for
unissued securities. A corresponding current liability was recorded for $182,595 (2018: $nil) as funds owed to investors
until such time as shares had been validly issued under the Tranche 1 and Tranche 2 share placements.
At 30 June 2019, the Company had a credit card facility of $50,000 (2018: $50,000) 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
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 40 of 61
Other Notes to the Financial Statements
NOTE 10: CASH AND CASH EQUIVALENTS (continued)
10.1 Reconciliation of loss after tax to net cash outflow from operating activities:
Loss for the year
Adjustments for non-cash income and expense items
Depreciation and amortisation
Accrued R&D refund receivable
R&D refund received
(Profit) / Loss on disposal of property and equipment
Share-based payment expense
Restructuring costs – non-cash
Provisions
Change in assets and liabilities
Decrease / (Increase) in trade and other receivables
(Increase) in inventories
(Decrease) / Increase in trade and other payables
30 June 2019
30 June 2018
$
$
(2,608,167)
(3,319,043)
438,125
(265,342)
-
(2,530)
(229,137)
380,773
189,165
66,803
(29,168)
(31,709)
72,743
(427,376)
204,562
683
1,292,504
-
142,217
(211,986)
(731,517)
897,648
Net cash outflow from operating activities
(2,091,187)
(2,079,565)
10.2 Reconciliation of liabilities arising from cash flows from financing activities:
Notes
16
Balance as at 1 July 2018
Proceeds from financing activities
Repayments
Repayment relating to investing activities
Interest paid
Balance as at 30 June 2019
16
NOTE 11: TRADE AND OTHER RECEIVABLES
Trade receivables (i)
Allowance for expected credit losses (ii)
Goods and services tax recoverable
Prepayments
Advances to suppliers
Other
R&D refund receivable
Total
30 June 2019
$
30 June 2018
$
257,863
66,713
(92,219)
(33,333)
9,923
208,947
-
301,842
(48,928)
-
4,949
257,863
30 June 2019
30 June 2018
$
$
868,721
(19,056)
849,665
-
106,212
5,105
519
265,342
1,226,843
399,693
(14,953)
384,740
36,944
170,310
-
8,934
427,376
1,028,304
(i) Trade receivables are non-interest bearing and are generally on terms of 30 days to 60 days. All amounts are
short term. The carrying value of trade receivables is considered a reasonable approximation of fair value.
(ii) Note 20 includes disclosures relating to the credit risk exposures and analysis relating to the allowance for
expected credit losses.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 41 of 61
Other Notes to the Financial Statements
NOTE 11: TRADE AND OTHER RECEIVABLES (continued)
Movement in allowance for expected credit losses
Balance at the beginning of the year
Provision for expected credit losses
Written off
Closing balance
30 June 2019
30 June 2018
$
14,953
15,439
(11,336)
19,056
$
-
14,953
-
14,953
Expected credit losses
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables as
these items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess
shared credit risk characteristics. They have been grouped based on the days past due.
The expected loss rates are based on the payment profile for sales over the past 24 months before 30 June 2019 and 30
June 2018 respectively as well as the corresponding historical credit losses during that period.
Trade receivables are written off when there is no reasonable expectation of recovery. Failure to make payments within
180 days from the invoice date and failure to engage with the Group on alternative payment arrangement amongst other is
considered indicators of no reasonable expectation of recovery.
On the above basis the expected credit loss for trade receivables as at 30 June 2019 and 30 June 2018 was determined
as follows:
30 June 2019
Trade receivables past due
Current
(not past
due)
1 – 30
days past
due
31 – 60
days past
due
61 – 90
days past
due
More than
90 days
past due
Expected credit loss rate
0%
0%
0%
Gross carrying amount
542,544
240,937
56,385
Lifetime expected credit loss
-
-
-
0%
1,525
-
69.7%
27,330
19,056
30 June 2018
Trade receivables past due
Current
(not past
due)
1 – 30
days past
due
31 – 60
days past
due
61 – 90
days past
due
More than
90 days
past due
Expected credit loss rate
0%
0%
0%
0%
Gross carrying amount
233,062
76,146
27,824
23,370
Lifetime expected credit loss
-
-
-
-
66.9%
39,291
14,953
Total
2.2%
868,721
19,056
Total
3.7%
399,693
14,953
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 42 of 61
Other Notes to the Financial Statements
NOTE 11: TRADE AND OTHER RECEIVABLES (continued)
The closing balance of the trade receivables allowance for expected credit losses as at 30 June 2019 reconciles with the
trade receivables allowance for expected credit losses opening balance as follows:
1 July 2017 allowance under AASB 139
AASB 9 transition adjustment
1 July 2017
Amounts written off
Net remeasurement of loss allowance
30 June 2018
Amounts written off
Net remeasurement of loss allowance
Closing balance – 30 June 2019
NOTE 12: INVENTORIES
Raw materials – cost
Work in progress – cost
Finished goods - cost
Total
30 June 2019
$
-
-
-
-
14,953
14,953
(11,336)
15,439
19,056
30 June 2019
30 June 2018
$
$
550,244
97,272
289,180
936,696
576,318
16,553
314,657
907,528
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 43 of 61
Other Notes to the Financial Statements
NOTE 13: PROPERTY, PLANT AND EQUIPMENT
Camera
equipment
$
Improve-
ments
$
Plant and
equipment
$
Office
equipment
Motor
Vehicles
Total
$
$
$
Balance at 1 July 2018
Additions
Disposals
279,598
174,517
-
16,254
-
-
51,939
42,943
(30,462)
86,343
23,287
-
143,164
34,460
577,297
275,207
-
(30,462)
Depreciation charge for the year
(105,314)
(2,660)
(12,886)
(28,885)
(27,029)
(176,774)
Balance at 30 June 2019
348,801
13,594
51,534
80,745
150,595
645,268
Balance at 1 July 2017
Additions
Disposal
18,355
274,156
-
-
18,607
-
8,131
50,494
(320)
11,300
92,913
(363)
15,945
53,731
140,777
576,947
-
(683)
Depreciation charge for the year
(12,913)
(2,353)
(6,366)
(17,507)
(13,558)
(52,697)
Balance at 30 June 2018
279,598
16,254
51,939
86,343
143,164
577,298
Plant and equipment
The carrying value of plant and equipment held under chattel mortgage contracts at 30 June 2019 is $17,091 (2018:
$30,268). Additions during the year include $20,494 (2018: $31,800) of plant and equipment held under chattel mortgage
contracts. Disposals during the year include $29,535 (2018: $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 2019 is $142,403 (2018:
$132,433). Additions during the year include $35,237 (2018: $140,777) of motor vehicles held under chattel mortgage
contracts.
NOTE 14: INTANGIBLES
Carrying value
Cost
Accumulated amortisation
Carrying value as at 30 June
2018
Cost
Accumulated amortisation
Carrying value as at 30 June
2019
Reconciliation
Carrying value as at 1 July 2018
Additions
Amortisation
Impairment
Carrying value as at 30 June
2019
Patents
Product
Development
Other Intangibles
Total
$
$
$
$
38,674
-
38,674
38,674
(5,208)
33,466
38,674
-
(5,208)
-
33,466
739,339
-
739,339
739,339
(222,715)
100,000
(19,444)
80,556
100,000
(52,780)
878,013
(19,444)
858,569
878,013
(280,703)
516,624
47,220
597,310
739,339
-
(174,987)
(47,728)
80,556
-
(33,336)
-
858,569
-
(213,531)
(47,728)
516,624
47,220
597,310
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 44 of 61
Other Notes to the Financial Statements
NOTE 14: INTANGIBLES (continued)
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.
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
Other Intangibles
8 Years
3 to 5 Years
3 Years
Impairment of tangible and intangible assets other than Other Intangibles
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.
Other Intangibles
Other Intangibles acquired is initially measured at cost.
Following initial recognition, Other Intangibles is measured at cost less amortisation and any impairment losses.
Other Intangibles 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 Other Intangibles 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 Other Intangibles forms part of
a cash-generating unit (Company of cash-generating units) and an operation within that unit is disposed of, the Other
Intangibles 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. Other Intangibles 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 Other Intangibles are not subsequently reversed.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 45 of 61
Other Notes to the Financial Statements
NOTE 15: TRADE AND OTHER PAYABLES
Accounts payable (i)
Accruals
GST
Unearned revenue
Share subscriptions received
Other payables
Total
30 June 2019
30 June 2018
$
$
360,515
224,062
61,091
457,372
182,613
209,073
1,494,726
668,232
190,866
-
406,807
-
77,928
1,343,833
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms.
NOTE 16: BORROWINGS AND OTHER FINANCIAL LIABILITIES
Current loans
Secured loans
Unsecured loans
Total current loans
Non-current loans
Secured loans
Unsecured loans
Total non-current loans
30 June 2019
30 June 2018
$
$
68,297
33,273
101,570
93,488
13,889
107,377
33,998
47,940
81,938
128,703
47,222
175,925
Total loans
208,947
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 26 to 33 months from the reporting date. Total
monthly repayments are $3,117.
NOTE 17: 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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 46 of 61
Other Notes to the Financial Statements
NOTE 17: 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.
Warranties
Equipment
Rental
Annual
Leave
Total
current
Balance as at 30 June 2018
$
-
Provided during the year
203,760
$
$
$
32,700
40,200
109,517
211,361
142,217
455,321
Utilised
(127,266)
(23,451)
(175,556)
(326,273)
Unused amounts reversed
-
-
-
-
Long
service
leave
Total non-
current
$
-
$
-
60,117
60,117
-
-
-
-
Balance as at 30 June 2019
76,494
49,449
145,322
271,265
60,117
60,117
NOTE 18: DIVIDENDS
The directors of the Company have not declared any dividend for the years ended 30 June 2019 and 2018.
NOTE 19: COMMITMENTS
As at 30 June 2019, 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.
Unit 2/6 Merino Entrance, Cockburn Central WA 6164
Unit 3/6 Merino Entrance, Cockburn Central WA 6164
20 Enterprise Way, Sunshine West VIC 3020
NOTE 20: FINANCIAL INSTRUMENTS
Capital risk management
30 June 2019
30 June 2018
$
$
156,820
-
156,820
149,500
149,500
299,000
The Company’s overall strategy remains unchanged from 2018.
The capital structure of the Company consists of cash and cash equivalents, borrowings and equity attributable to equity
holders of the company, comprising issued capital, reserves and retained earnings.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax,
dividends 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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 47 of 61
Other Notes to the Financial Statements
NOTE 20: FINANCIAL INSTRUMENTS (continued)
Financial risk management objectives
The Company is exposed to, (i) market risk (which includes foreign currency exchange risk, interest rate risk, share price
risk and commodity price risk), (ii) credit risk and (iii) liquidity risk.
Compliance with policies and exposure limits is reviewed by management on a continuous basis. The Company does not
enter into or trade financial instruments, including derivative financial instruments.
Market risk
The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest
rates, and share prices.
There has been no change to the Company’s exposure to market risks or the manner in which it manages and measures
the risk from the previous period.
Foreign currency exchange risk management
The Company undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign
exchange contracts.
The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the
balance date expressed in Australian dollars are as follows:
30 June 2019
US Dollars
•
Financial liabilities
30 June 2018
US Dollars
•
Financial liabilities
Short term
exposure
$
Long term
exposure
$
299
299
-
-
Short term
exposure
$
Long term
exposure
$
47,180
47,180
-
-
Foreign currency sensitivity analysis
The sensitivity analyses below detail 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 balance date, if foreign exchange rates had been 10 basis point higher or lower and all other variables were held constant,
the Company’s:
• Profit or loss would increase/decrease by $4 (2018: $872); and
• Equity reserves would increase/decrease by $4 (2018: $872).
The Company’s sensitivity to foreign exchange has not changed significantly from the prior year.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 48 of 61
Other Notes to the Financial Statements
NOTE 20: FINANCIAL INSTRUMENTS (continued)
Interest rate risk management
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.
A 100 basis point increase or decrease is used when reporting interest rate risk internally to management and represents
management’s assessment of the change in interest rates.
At balance date, if interest rates had been 100 basis points higher or lower and all other variables were held constant, the
Company’s:
• Profit or loss would increase/decrease by $6,006 (2018: $30,220); and
• Equity reserves would increase/decrease by $6,006 (2018: $30,220).
The Company’s sensitivity to interest rate risk has decreased during the year mainly due to the reduction in cash invested
in term deposits.
Credit risk management
Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Company is exposed to credit
risk from financial assets including cash and cash equivalents held at banks and trade and other receivables.
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.
Liquidity risk management
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.
Non-derivative financial liabilities
The following tables detail the Company’s expected contractual maturity for its non-derivative financial liabilities.
These have been drawn up based on undiscounted contractual maturities of the financial liabilities based on the earliest
date the Company can be required to repay.
The tables include both interest and principal cash flows.
30 June 2019
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
Financial Liabilities
Trade and other payables
Loans payable
Total
30 June 2018
Financial Liabilities
Trade and other payables
Loans payable
Total
1,494,726
59,691
1,554,417
-
41,939
41,939
-
107,317
107,317
-
-
-
1,494,726
208,947
1,703,673
≤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
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 49 of 61
Other Notes to the Financial Statements
NOTE 20: FINANCIAL INSTRUMENTS (continued)
Fair value measurement
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.
The Company has a number of financial instruments which are not measured at fair value in the statement of financial
position.
The Directors consider that the carrying amounts of current receivables, current payables and current borrowings are
considered to be a reasonable approximation their fair values
NOTE 21: CONTINGENT LIABILITIES
The Company had no contingent liabilities as at the reporting date.
NOTE 22: 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
Performance rights forfeited
Net share based (income) / payment expense recognised in
profit or loss
30 June 2019
$
64,687
(293,824)
30 June 2018
$
1,292,504
-
(229,137)
1,292,504
The following share-based payment arrangements were in place during the current and prior periods:
Options
Number
Grant date
Expiry date
Exercise
price
Fair value
at grant
date Vesting date
$
$
$
Consultant options
Employee options
Consultant options
Employee options
Employee options
250,000
19 May 2017
31 Dec 2020
450,000
19 May 2017
31 Dec 2020
500,000
9 Jun 2017
31 Dec 2020
1,650,000
9 Jun 2017
31 Dec 2020
150,000
19 Jan 2018
31 Dec 2020
0.20
0.20
0.20
0.20
0.37
2,500
19 May 2017
4,500
19 May 2017
5,000
9 Jun 2017
16,500
9 Jun 2017
30,165
19 Jan 2019
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 50 of 61
Other Notes to the Financial Statements
NOTE 22: SHARE-BASED PAYMENTS (continued)
a) Recognised Share-based Payment Expense (continued)
Performance rights
Number
Grant date
Expiry date
Value at
grant date
Fair value
at grant
date Vesting date
$
$
$
Directors [Tranche 1]
6,666,666
1 Mar 2017
31 Dec 2018
Directors [Tranche 2]
6,666,666
1 Mar 2017
31 Dec 2019
Directors [Tranche 3]
Consultants [Tranche 1] 3
Consultants [Tranche 2] 3
1
1 Mar 2017
31 Dec 2020
333,333
25 Jul 2017
31 Dec 2018
333,333
25 Jul 2017
31 Dec 2019
Consultants [Tranche 3] 3
333,333
25 Jul 2017
31 Dec 2020
Consultants [Tranche 1]
166,666
1 Dec 2017
31 Dec 2018
Consultants [Tranche 2]
Consultants [Tranche 3]
2
2
1 Dec 2017
31 Dec 2019
1 Dec 2017
31 Dec 2020
0.10
0.10
0.10
0.10
0.10
0.10
0.31
0.31
0.31
700,000
30 Jun 2018
700,000
30 Jun 2019
700,000
1
33,333
30 Jun 2018
33,333
30 Jun 2019
33,333
30 Jun 2020
51,666
1 Nov 2018
51,666
51,666
2
2
1 During the year ended 30 June 2019, 6,666,666 performance rights were forfeited for not meeting a vesting condition.
This resulted in a reversal of previously expensed amounts of $222,222.
2 During the year ended 30 June 2019, 333,334 performance rights were forfeited due to not meeting vesting conditions.
This resulted in a reversal of previously expensed amounts of $71,602.
3 These performance rights were issued to Spectur’s lead manager on IPO and is accounted for in share issue cost and not
share based payments.
Performance rights have a zero cost of conversion into a fully paid ordinary share upon achievement of specified
performance milestones.
There have been no further alterations to the terms and conditions of the above share-based payment arrangements since
grant date.
b) Summary of Options Granted as Share-based Payments
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:
30 June 2019
30 June 2018
Number
WAEP
Number
WAEP
Outstanding at beginning of year
3,000,000
Granted by the Company during the year
Outstanding at end of year
Exercisable at the end of year
-
3,000,000
3,000,000
$0.21
-
$0.21
-
2,850,000
150,000
3,000,000
3,000,000
$0.20
$0.37
$0.21
-
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 51 of 61
Other Notes to the Financial Statements
NOTE 23: RELATED PARTY DISCLOSURES
The Company’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 2019
30 June 2018
$
609,025
147,796
756,821
$
658,492
1,222,222
1,880,714
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 12.
NOTE 24: AUDITOR’S REMUNERATION
The auditor of Spectur Limited is HLB Mann Judd.
30 June 2019
30 June 2018
$
$
Audit or review of the financial statements
39,280
38,500
NOTE 25: EVENTS AFTER THE REPORTING DATE
On 26 June 2019, Spectur announced it had secured approximately $1.5 million, after costs, via a two-tranche placement
of shares to institutional and sophisticated investors. The Placement was conducted in two tranches with Tranche 1 raising
approximately $1.1 million (before costs) via the issue of 8,460,344 new shares conducted on 5 July 2019.
On 12 August 2019, the Company held a General meeting to approve the Tranche 2 Placement shares. Following approval
granted by shareholders 3,770,429 new fully paid ordinary shares were issued raising $490,000 (before costs).
A further 4,000,000 listed options exercisable at $0.20 on or before 31 December 2020 were issued on the 23rd of August
2019 to PAC Partners (or their nominees) as part consideration for services performed by acting as lead manager to the
Placement.
Other than noted above, the Directors are not aware of any other matter or circumstance that has arisen since 30 June
2019 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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 52 of 61
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 2019 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 2019.
This declaration is signed in accordance with a resolution of the board of Directors.
______________________________
Darren Cooper
Director
Dated this 31 August 2019
.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 53 of 61
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 Limited (“the Company”) which comprises the statement
of financial position as at 30 June 2019, the statement of profit or loss and other 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 2019 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 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. We have determined the matter described below to be the key audit
matters to be communicated in our report.
Key Audit Matter
How our audit addressed the key audit matter
Revenue and related risk of fraud
Note 3
The total revenue from operations for
the year is $4,818,130, with revenue
being predominately generated from
equipment sales and rentals and related
services.
Our procedures included but were not limited to the following:
• We reviewed the Company’s financial policy regarding the
recognition and/or deferral of revenue in line with AASB
15 Contracts with Customers;
• We reviewed the calculation of deferred revenue to
ensure that it is correctly calculation and in accordance
with the Australia Accounting Standards;
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 54 of 61
Due to the presumption of fraud risk
over revenue recognition, as prescribed
by the Australia Accounting Standards
Board, this area has been subject to
significant audit procedures.
• We selected a sample of revenue transactions and
agreed the transaction to the underlying supporting
documentation;
• We performed audit procedures to ensure that revenue is
materially completed, including procedures surrounding
cut-off at balance date;
• We assessed the adequacy of the Company’s disclosures
in respect of revenue and deferred revenue.
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 2019, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the 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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 55 of 61
-
-
-
-
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.
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 within the directors’ report for the year ended 30
June 2019.
In our opinion, the Remuneration Report of Spectur Limited for the year ended 30 June 2019 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 2019
N G Neill
Partner
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 56 of 61
Additional Securities Information
SHAREHOLDER INFORMATION
The security holder information set out below was applicable as at 24 August 2019.
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)
Ordinary Shares
Shareholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
23
104
115
436
140
818
Shares
1,399
321,190
940,630
16,800,279
50,569,568
68,633,066
There are 818 holders of ordinary shares. Each shareholder is entitled to one vote per share held.
b) Marketable parcel
There are 111 shareholders with less than a marketable parcel (basis price $0.105).
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 shareholders listed on the Companies register as at 28 August 2019, being
• Peter William Holton – 7.28%
• Charles Wallace Wilkins – 5.94%
e) On market buy-back
There is no on-market buy-back scheme in operation for the company’s quoted shares or quoted options.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 57 of 61
Additional Securities Information
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 hold is as follows:
Position
Holder Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
20
PETER WILLIAM HOLTON
CHARLES RICHARD WALLACE WILKINS
BASAPA PTY LTD
SARGON CT PTY LTD
OLDVIEW ENTERPRISES PTY LTD
LEE NICOLA JOHN RINALDI & CAROL ANGUS RINALDI
DRP 2006 SUPER PTY LTD
PABASA PTY LTD
MR PETER ANTHONY
PAC PARTNERS SECURITIES PTY LTD
MR DARREN JOHN COOPER
DMX CAPITAL PARTNERS LIMITED
INVERMORE PTY LTD
VISTA ASSET MANAGEMENT PTY LTD
MR ALIREZA TASBIHI
COBBLESTONES CORPORATE PTY LTD
SOVRAN RESOURCES PTY LTD
JUDITH VAN ROSS
STOW COURT PTY LTD
TRI BUDIHASTUTI
DR GERARD JOHN DYSON
MR ROSS MILNER MCKAY & MS CHRISTINE STUART BABBAGE
Total
Holding
% Held
4,995,277
7.28%
4,079,833
5.94%
1,562,543
2.28%
1,538,462
2.24%
1,276,449
1.86%
1,185,000
1.73%
1,181,790
1.72%
1,125,000
1.64%
1,000,000
1.46%
768,399
1.12%
750,000
1.09%
706,947
1.03%
692,308
1.01%
620,000
0.90%
600,000
0.87%
581,667
0.85%
575,000
0.84%
546,501
0.80%
537,001
0.78%
500,000
0.73%
500,000
0.73%
500,000
0.73%
25,822,177
37.63%
1) Quoted Securities – (ii) Options exercisable at $0.20 on or before 31 December 2020.
a) Distribution of Security Number
Category
Options - $0.20
(Size of holding)
Option holders
Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
5
118
29
79
25
256
2,648
332,329
229,964
3,201,469
7,228,523
10,994,933
There are 256 holders of quoted options. Option holders are not entitled to vote.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 58 of 61
Additional Securities Information
SHAREHOLDER INFORMATION (continued)
b) Marketable parcel
There are 173 shareholders with less than a marketable parcel (basis price $0.025).
c) Substantial Option holders
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 hold is as follows:
Position Holder Name
1
2
3
3
4
5
6
7
8
9
10
10
11
12
13
14
15
15
16
17
18
18
19
19
20
BASAPA PTY LTD
MR PHILIP JOHN CAWOOD
MR CRAIG RUSSELL STRANGER
MR CHARLES SIMON ARMYTAGE REED
PAC PARTNERS SECURITIES PTY LTD
MR PETER ANTHONY
ROUSE EQUITIES PTY LTD
ACNS CAPITAL MARKETS PTY LTD
MR MICHAEL JAMES BUNN
NICHOLAS LE MARSHALL
GARY LESLIE SARGEANT
MR ZEFNY MOHD IDRIS
MR PETER JOHN FERRIS
FRY SUPER PTY LTD
MS LAYLA ANNA PAULINE MCNAUGHTON
MRS JOANNE KAYE JENSZ
MR ALEXANDER CHRISTOPHER SMITH
MRS BROOKE LAUREN PICKEN
SJ CAPITAL PTY LTD
MR DUNCAN WILLIAM JONES
INVERMORE PTY LTD
MR DARREN JOHN COOPER
MR GREGORY JOHN BROWN
MR COLIN PRIESTLEY BELTON & MR CRAIG DOUGLAS PENTLAND
MS ROSEMARY PATERSON
Total
Holding
875,000
646,154
570,276
570,276
534,331
400,000
377,357
307,691
260,000
250,000
200,000
200,000
184,600
182,875
180,000
176,923
171,083
171,083
164,616
155,352
150,000
150,000
125,000
125,000
102,875
% IC
7.96%
5.88%
5.19%
5.19%
4.86%
3.64%
3.43%
2.80%
2.36%
2.27%
1.82%
1.82%
1.68%
1.66%
1.64%
1.61%
1.56%
1.56%
1.50%
1.41%
1.36%
1.36%
1.14%
1.14%
0.94%
7,230,492
65.78%
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 59 of 61
Additional Securities Information
SHAREHOLDER INFORMATION (continued)
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
Ordinary Options
(Size of holding)
Option holders
Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
-
-
3
19
14
36
-
-
30,000
1,221,250
10,173,750
11,425,000
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
There are 5 holders of Tranche 2 Performance Rights totalling 7,333,332.
2C) Performance Rights
b) Voting rights
Unlisted Performance Rights do not entitle the holder to any voting rights.
c) Holders of more than 20% of unquoted Performance Rights
• Richard Wilkins owns 3,333,333 rights which is equal to 47.62% of the Performance Rights on issue.
• Peter Holton also owns 3,333,333 rights which is equal to 47.62% of the Performance Rights on issue.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 60 of 61
Additional Securities Information
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 in Appendix 4G.
This corporate governance statement lodged on the same day as the Annual Report 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 solar security solutions 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
There are no restricted securities as at the date of signing of the report.
Spectur Limited – Annual Financial Report – Year ended 30 June 2019
Page 61 of 61