Spectur Limited
ACN 140 151 579
Annual Financial Report
30 June 2022
Content
Corporate Information
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
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Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 2 of 67
Corporate information
ACN 140 151 579
Directors
Mr Darren John Cooper
Dr Gerard John Dyson
Ms Bilyana Smith
Company Secretary
Mrs Suzie Jayne Foreman
Registered Address and Principal Place of Business
12 Fargo Way,
Welshpool, WA 6106
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 2022
Page 3 of 67
Managing Directors’ Review
Managing Director’s Review
Overall Performance
FY22 was a year which demonstrated the resilience of our business against a wide set of external challenges which we
outline in this report. We are delighted to report continued sales and revenue growth in a challenging environment, with
sales momentum picking up significantly in the latter months of the year and continuing into the first months of Q1 FY23.
Market Conditions
Market conditions in H2 FY22 were substantially different than those in H1 FY22, with material impacts related to:
• Ukraine-Russia conflict
• A change of Federal government
• Rapidly rising interest rates and an increasingly inflationary environment
• A decline in the overall performance of the share market
Further tightening in an already restricted labour market
•
The spread of COVID-19, via the Omicron variant, into Spectur’s largest market at this time, Western Australia
•
• Ultimately, the lowering of restrictions related to lockdowns, masking and vaccination along with greater freedom
of travel
The former factors combined to create some uncertainty and delay in purchasing, compared to renting Spectur solutions,
which was most prevalent in Q4 FY22. The latter factors created some restraint in Q3 FY22, mostly in Western Australia.
These restrictive market factors have now either declined, passed or been accepted by the market. The reduced
availability of construction materials due to supply chain issues is leading to an increase in theft which, along with the
removal of restrictions on liberty, is leading to a general increase in crimes against property in our sectors. These factors
drive demand for the security solutions that Spectur provides.
An overall increase in market sensitivity to risk has led to ongoing demand for safety and warning solutions that resulted in
additional sales and a growing pipeline of beach warning systems. These sales continued in Q1 FY23 and are expected
to increase as summer months approach.
Revenue from Operations
For FY22 Spectur reported revenue of $5.83 million, up 11% on FY21 of $5.25 million and up 21% on FY20 of $4.80 million.
Given the market headwinds described above, this performance was very pleasing. Noting that the government restrictions
related to COVID have declined, federal elections have passed, and the market and economy are adjusting to inflation,
interest rates, labour restrictions and even European conflict, market restraints are expected to lessen in FY23.
Comparing FY22 in more detail with FY21 provides additional insights to the trends across the four key revenue streams
within Spectur:
Revenue
System Sales
Field Services
Subscriptions
Rentals
Total
FY22
$’000
1,757
742
1,397
1,932
5,828
FY21
$’000
1,762
721
1,188
1,578
5,249
% Increase
0%
3%
18%
22%
11%
Up until Q3 FY22, systems sales results were 26% up on Q3 FY21 YTD results. The relatively flat full year System Sales
performance can largely be related to a comparison between System Sales in Q4 FY22 ($342k) and Q4 FY21 ($909k). In
Q4 FY21 the very large sales with Optus and Surf Life Saving underpinned a record quarter of performance. Coincidentally,
eastern states were coming out of lockdown and there was no sign of the Delta Covid variant (or Omicron). This is
contrasted with Q4 FY22 where the effects of COVID Omicron in WA, government elections (and consequent delays to
purchasing), the Ukraine conflict and rapidly increasing inflation and interest rates were most impactful.
Currently there are more than 2,500 camera sensors active within the Spectur ecosystem, each requiring Spectur software
services, and potential requirements for relocation, maintenance, or field services.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 4 of 67
Managing Directors’ Review
Total Revenue
System Sales
Rentals
Field Services
Subscriptions
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-
The charts above show the ongoing strong growth of Spectur’s recurring revenue streams (Rentals and Subscription). This
growth in recurring revenue is due to the incremental size of the fleet and the increasing value of the items in that fleet.
Nearly a third of all rentals in the deployed Spectur fleet are now STA6 models having up to four cameras, edge AI and
other higher value features. Similarly, the subscription portions allocated to the higher value STA6 models are also providing
additional revenue growth.
The chart below of equipment rental revenue and units deployed also demonstrates stronger growth in revenue than pure
number of units, also consistent with an increase in average rental value per unit.
Equipment rentals
E
U
N
E
V
E
R
L
A
T
N
E
R
Y
L
H
T
N
O
M
250,000
200,000
150,000
100,000
50,000
-
400
350
300
250
200
150
100
50
-
S
M
E
T
S
Y
S
D
L
E
I
F
F
O
R
E
B
M
U
N
Revenue
Total Units
The Spectur sales pipeline includes a number of larger sales opportunities. Many of these were delayed during Q4 FY22
and are shifting to, or converting, in Q1 FY23. It is expected that a return to strong growth in sales of systems will occur in
H1 FY23.
Annual recurring revenue (ARR) for FY22 was $3.33 million. Annualised subscription run rates based on June 2022
deployments, which include data plan, server access and monitoring services, were approximately $1.5 million per annum,
with rental run rates at approximately $2.3 million per annum – totalling a recurring revenue run rate of approximately $3.8
million per annum as we entered FY23.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 5 of 67
Managing Directors’ Review
1,000,000
900,000
800,000
System Rentals
Subscription Revenue
Recurring Revenue per Quarter
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
Q1 - 2018 Q2 - 2018 Q3 - 2018 Q4 - 2018 Q1 - 2019 Q2 - 2019 Q3 - 2019 Q4 - 2019 Q1 - 2020 Q2 - 2020 Q3 - 2020 Q4 - 2020 Q1 - 2021 Q2 - 2021 Q3 - 2021 Q4 - 2021 Q1 - 2022 Q2 - 2022 Q3 - 2022 Q4 - 2022
FY 2018
FY 2019
FY 2020
FY 2021
FY 2022
The Table below demonstrates ongoing cost control and improvement in overhead expenses within Spectur.
Expense performance
Expense
Finance charges
Employee and Admin
Share-based payments
Other expenses
Total
FY22
$’000
87
4,433
124
828
5,472
FY21
$’000
17
4,467
167
926
5,577
% Increase
412%
-1%
-26%
-11%
-2%
Notwithstanding that finance charges have increased, largely in relation to the EGP credit facility, it is notable that overall
expenses have still reduced for FY22, in a very inflationary macro-environment.
Challenges with the supply chain and rapid increases in input costs have placed some pressure on gross margin, which has
declined from 60% to 55%. The primary sources of these cost increases have been in material costs, including an increase
in sheet metal cost of more than 30% (for example). Secondary costs have related to increases in data and cloud costs.
Projects underway are expected to improve margin, including ongoing engineering on the next generation of products
(discussed further below), combined with price increases. Regardless of these pressures the adjusted EBITDA loss
improved by 14%, to -$1.49m for FY22 compared to -$1.74m for FY21. (Adjusted EBITDA is defined as earnings before
interest, tax, depreciation, amortisation, one off income / expenses (including COVID-19 relief) and share-based payments).
Debt facility utilised
Spectur obtained a $1.5m debt facility from our largest shareholder EGP Capital, in H2, FY21. This facility was drawn down
by $700k in FY22. At the 30 June 2022 balance date, combined debt and cash facilities of $1.4m remained available. In
Q1 FY23 additional equity capital was raised. With this additional cash obviating the need for additional debt, the debt
facility was lowered to $1.1m to reduce ongoing line fee costs.
Technology advances
Spectur mitigated componentry shortages of key Spectur technology, directly impacted by supply chain issues, through re-
design and ongoing improvement by our in-house electronics and software engineers. These efforts did detract from
advancing the Company’s research and development plans; however the priority was to ensure that Spectur maintained
continuity of revenue-linked supply throughout the period.
Spectur also invested in additional inventory and key componentry, to manage these supply chain challenges which are
expected to continue into 2023.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 6 of 67
Managing Directors’ Review
In addition to supporting existing technology, Spectur completed initial designs and moved to prototype development of
our modular power platform, including key considerations of industrial design. This solution combines solar power
generation, power storage, power management and telemetry in an integrated module, suitable for use by multiple Spectur
and external platforms.
The modular power development also brings the transition to lithium battery solutions, away from commonly used lead-acid
batteries. These lithium batteries, which were deployed in select trial locations late in FY22, bring increased product life,
lighter weight, and improved power charging and performance. Transition to this type of solution allows a material change
in form factor for Spectur solutions as well as allowing substantially improved reliability, reduced cost of maintenance and
improved margins.
Modularity underpins the longer term Spectur hardware and software architecture, to enable interchangeability with internal
and 3rd party technology allowing a rapid and reliable response to customer needs.
To further enhance modularity for customers, concepts for the STA7 and STA6 update (STA6s) were developed and key
electronics hardware and firmware advanced. This evolution of the STA6 to the STA6s and ultimately the STA7 will allow
for easier external and third-party camera integration as well as simplifying production and maintenance. The STA7 platform
is designed to suit simpler assembly and setup by third parties, allowing for extended reseller channels and the potential
for online sales to be realised. This platform is also designed to suit outsourced and offshore manufacture of non-core
components.
Sales and Marketing growth
Spectur continues to build on the sales and marketing strategies deployed over the last three years. Combining an in-
house sales team for outbound sales, account management and conversion of marketing-led inbound leads has
underpinned ongoing growth in otherwise difficult markets.
At the end of FY22, Spectur’s unweighted pipeline of sales was $8.35m (and has grown to in excess of $10m in Q1 FY23),
with a probability weighted pipeline of $3.35m (now exceeding $4m in Q1 FY23). This compares with $4.65m (unweighted)
and $1.81m (weighted) at the end of FY21. The ongoing growth of the unweighted and weighted pipelines into FY23
underpin further revenue growth expectations for FY23.
Larger “live” opportunities include major utilities, larger construction alliances, local and state government contracts and
some international prospects. Whilst revenues continue to be biased towards our core security and surveillance solutions,
an increasing volume of high margin, lower competition opportunities in safety and warning solutions are growing in the
pipeline and materialising into revenues.
Enterprise Resource Planning roll out
A core objective for Spectur in FY22 was the commencement and implementation of a new Enterprise Resource Planning
(ERP) tool. Spectur is pleased to announce that the roll out of Microsoft Dynamics is nearly complete, with a number of
core elements now in operation. This integrated platform is replacing multiple manual and less-integrated tools across
finance, payroll, manufacturing, service, sales and rental modules to provide a scalable, efficient platform for Spectur’s
future growth. Ongoing integration of the Spectur technology platform into Dynamics will continue into FY23.
Spectur New Zealand update
The 51:49 joint venture between Spectur Limited and Deus-Ex in New Zealand commenced 18 months ago in difficult
COVID-impacted circumstances. Careful management of costs by both parties enabled the business to continue to operate
until late in 2021, when a full time Sales Executive was engaged, substantially building the pipeline of work and revenues
into the organisation. Ongoing investments in business infrastructure that are expected to continue into FY23 will underpin
the long-term presence and success of Spectur in New Zealand, as well as forming an extremely useful platform for pre-
testing elements of a more challenging USA entry strategy planned for the future.
Future Updates
We intend to provide regular updates to shareholders throughout FY23. To stay up to date on company news and
announcements, register your details on the Spectur investor portal at https://spectur.investorportal.com.au/stay-up-to-
date/.
Gerard Dyson
Managing Director
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 7 of 67
Directors’ Report
The Board of Directors of Spectur Limited present their report on Spectur Limited (“Company” or “Spectur”) for the year
ended 30 June 2022.
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
Gerard John Dyson
Bilyana Smith
Non-Executive Chairman
Managing Director
Non-Executive Director
Suzie Jayne Foreman
Company Secretary
Current Directors and Officers
Mr Darren John Cooper
Qualifications
Length of Service
Experience
Special Responsibilities
Gerard John Dyson
Qualifications
Length of Service
Experience
Special Responsibilities
Ms Bilyana Smith
Qualifications
Length of Service
Experience
Special Responsibilities
Independent Non-Executive Chairman
B.Bus (Curtin), Masters of Applied Finance (Macquarie), Australian Institute of Company
Directors graduate.
3 years, 11 months
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 government, property, construction and training &
labour hire. He is also an investor in and director of a range of technology & media-based
start-up businesses.
Chairman of the Remuneration and Nomination Committee
Managing Director
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.
3 years as Managing Director
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 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.
N/A
Independent Non-Executive Director
MBA from University of Sydney, Bachelor of Architecture, Australian Institute of Company
Directors graduate (GAICD).
2 years 11 months
Bilyana has extensive international experience as a company director, CEO, investor and
strategic advisor. She is Non-Executive Director and member of the Remuneration and
Nomination Committee member with Spectur. Also, Board Director with Fishburners Ltd,
Senior Advisor with First Home London, she runs her own advisory practice specialising
in business strategy, innovation and marketing. Bilyana holds MBA from the University of
Sydney, Bachelor of Architecture and is a graduate of the Australian Institute of Company
Directors graduate (GAICD). She lives in Sydney.
Remuneration and Nomination Committee member
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 8 of 67
Directors’ Report
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
Ms Bilyana Smith
Company
The GO2 People Limited
Netccentric Limited
-
-
Period of directorship
28 July 2017 – current
1 Sept 2020 - current
-
-
Company Secretary for the reporting period
Mrs Suzie Jayne Foreman
Company Secretary
Qualifications: B Comm (Econs), CA, FGIA.
Ms Foreman is a Chartered Accountant and Governance Institute Fellow member, 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 in senior management roles including as a
Chief Financial Officer and Company Secretary for a range of ASX listed entities from ASX top 300 tier entities to start-up
enterprises. Ms Foreman is skilled in cash flow, governance and enterprise risk management, financial reporting, audit, and
company secretarial work. Suzie has been involved in the listing of over 15 entities on the Australian Securities Exchange
over the past 20 years and involved in capital raisings and M&A transactions exceeding $300 million in total.
Ms Foreman has previously held numerous Company Secretarial, Non-Executive Directorships, and/or Chief Financial
Officer positions for ASX listed entities and is the Company Secretary of NickelSearch Limited (ASX:NIS), The GO2 People
Ltd (ASX:GO2) and Swift Networks Group Limited (ASX:SW1).
Principal activities
The principal activity of the Company during the year was to develop, manufacture and sell remote sensing, thinking and
acting solutions powered by solar and using the IoT [Internet of Things], camera and cloud-based technology.
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
Long Term Incentives - Performance Rights
2,083,333 Performance Rights were allocated and issued to the Managing Director, following shareholders’ approval under
the Company's Employee Incentive Scheme (Scheme) as long-term incentives.
The Performance Rights were issued for nil cash consideration, with vesting subject to the satisfaction of performance
conditions set by the Board, with the final quantum awarded to be determined on the vesting and measurement date of 30
June 2023. Refer to Section E of the Remuneration Report for the details of the performance conditions.
Incentive Options
In recognition of the continued dedication of the key management and senior employees of Spectur, in particular during
FY20 and FY21, throughout periods of Company imposed salary reductions, the Board issued:
•
•
2,200,000 unquoted Options to members of Spectur’s key management personnel (other than Directors) under
the Scheme, exercisable at $0.10, on or before 30 June 2024
2,100,000 unquoted Options to Directors under the Scheme, exercisable at $0.13, on or before 30 June 2024.
Loan Facility
Spectur entered into a binding loan facility (Facility) for A$1.5 million with its largest shareholder EGP Capital (Lender)
during the prior year, with draw down occurring in financial year FY22. The Company issued 2.25 million unquoted options
to EGP (or its nominee) as part of the transaction cost for the use of the Facility. The options are exercisable at $0.12, on or
before 31 December 2023.
Subject to obtaining the necessary shareholder approvals Spectur may, at its election, elect to repay all or part (in
multiples of $100,000) of the outstanding amount under the Facility in the form of fully paid ordinary shares in lieu of cash.
Each share will be issued at a 20% discount to the 30-day volume-weighted average price of Spectur shares traded on
ASX leading up to the repayment date. The Facility maximum and associated line fee was reduced by mutual
arrangement post the financial year end (refer to Subsequent events after the reporting date).
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 9 of 67
Directors’ Report
Employees
The Company had 27 employees as at 30 June 2022 (2021: 31 employees).
Loss per share
Basic loss per share (cents per share)
30 June 2022
(1.8)
30 June 2021
(1.7)
Subsequent events after the reporting date
Capital Raising
On 19 July 2022, Spectur announced the closure of a placement raising $1.862 million at $0.036 per share (with one free
attaching Bonus Option for every two New Shares subscribed) and launched a Securities Purchase Plan (SPP) and Shortfall
Offer to raise a targeted $500,000, with capacity to accept oversubscriptions for up to $1.15m. The SPP and Shortfall Offers
were at $0.036 per New Share, together with one free attaching Bonus Option for every two New Shares subscribed,
exercisable at $0.066 per Option, on or before 7 September 2024.
The SPP and Shortfall Offer closed raising $1.15 million, strongly supported by shareholders. The Placement, SPP and
Shortfall Offers were subject to shareholder approval, which was obtained at a General Meeting of the Company held on 7
September 2022.
The funds from the Placement, SPP and Shortfall Offers will be deployed to accelerate the growth of the business towards
EBITDA and cash breakeven, and in particular funds will be applied to:
•
•
•
•
•
finance market expansion across South and regional Australia;
engineering to suit globalisation and modular platform development;
expansion of the current marketing program, including research into a USA market entry;
purchase of additional inventory to mitigate supply chain risk; and
associated raising costs and working capital.
Reach Corporate Pty Ltd were engaged as lead manager to the offer and were issued 1,500,000 Lead Manager Options, at
an issue price of nil, exercisable at $0.066 on or before 7 September 2025, for their role as lead manager, and successful
completion of the Offer.
Modified Loan Facility
The EGP Capital Loan facility was drawn to $700k at the close of FY22. After this date, an additional $400k was drawn in
July 2022. Following the Capital Raising mentioned above, the limit of the facility was reduced from $1.5m to $1.1m and
the associated line fee was reduced by mutual arrangement.
The Directors are not aware of any other matter or circumstance that has arisen since 30 June 2022 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.
Cancellation of Performance Rights
A total of 2,917,695 FY20 and FY21 Performance Rights were cancelled on 1 July 2022, due to the vesting conditions no
longer being attainable due to cessation of employment.
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 non-compliance by an operation are identified either by internal investigations, external compliance
audits or inspections by relevant government agencies. There have not been any known breaches of laws and regulations
by the Company during the year and up to the date of this report.
Indemnification and Insurance of Officers
The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person who is or
has been a director or officer of the Company for any liability caused as such a director or officer and any legal costs
incurred by a director or officer in defending an action for any liability caused as such a director or officer.
The Company has a Directors and Officers insurance policy in place.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 10 of 67
Directors’ Report
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
FY22
Darren Cooper
Bilyana Smith
Gerard Dyson
Directors’ meetings
No. eligible to attend
13
13
13
No. attended
13
13
13
Remuneration Committee meetings
No. attended
1
1
-
No. eligible to attend
1
1
-
Securities on issue
Total shares, options and performance rights 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
189,983434
49,889,035
7,661,782
Directors’ holdings of shares, options 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
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Total
Number of shares under option
Exercise price of option
Expiry date of option
2,200,000
2,100,000
2,250,000
41,839,035
1,500,000
49,889,035
$0.10
$0.13
$0.12
$0.066
$0.066
30 June 2024
30 June 2024
31 December 2023
7 September 2024
7 September 2025
There were no 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 (PRs) in the Company were on issue.
Type
Date of Expiry
Employee
LTI Issued
FY21
Employee
LTI Issued
FY22
Total
12 months from reporting of
the Company’s audited FY23
financial statements
12 months from reporting of
the Company’s audited FY23
financial statements
No. of Performance
Rights on Issue
3,643,868
Vesting Conditions
Earnings per share (75%) and total shareholder
return (25%) weighted targets.
4,017,914
Revenue (50%) and EBITDA (50%) weighted targets.
7,661,782
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 11 of 67
Directors’ Report
Future Developments
The core vision for Spectur is around making communities safer, with a focus on remote and unpowered areas where
Spectur can provide a surveillance, warning solution, or otherwise helpful AI platform that can spot a problem, make a
decision and take an action without a cabled connection.
The key elements of the strategy to deliver this mission include:
•
•
Focused sales expansion. Spectur will continue to shift the focus of the business away from commodity products
and markets and towards areas where the unique technology platform provides high value solutions, for customers
that value those solutions. This has meant a shift in emphasis from building, particularly residential homes, towards
government, utilities and related institutions whilst maintaining a strong position in the larger building and
construction markets. This market is expected to expand to include an increasing portion of resellers or dealers
that will be intermediaries to end customers. Key tactics in the coming period are:
o Expansion of the sales footprint in Australia and New Zealand
o Ongoing development of reseller relationships
o Market entry studies into the USA
o Ongoing expansion of “blue ocean” markets such as beach warning solutions
o Expansion and maturation of the marketing platform.
Technology for today and tomorrow. Spectur has evolved from a start-up into a rapidly scaling business. To
support the growth in the organisation and underpin the platforms and solutions that are being offered to
customers, the following tactics are being deployed in the coming period:
o
Institutionalising the product development process. Through key senior hires in the Research and
Development Team, structured implementation of state-of-the-art product development systems,
engagement of industrial designers and the building of processes, Spectur is assembling a technology
platform suitable for high growth.
o Development of core elements of a modular platform. Moving to a more modular hardware and software
platform allows efficient mixing and matching of power systems, platforms, cameras, other sensors and
action elements. This allows very cost effective, yet reliable and simple to implement customisation to
suit customer needs at an attractive price point.
•
Production scaling. Closely related to the other two strategy elements, Spectur is building internal and partner
relationships suitable for scaling production of hardware as well as software and cloud elements. Future modular
platforms will combine:
o Core, inhouse designed and manufactured elements
o
Inhouse designed but externally prefabricated elements, that can potentially be manufactured close to
end customers or in low cost locations to suit.
3rd party technology that can be incorporated into the system in a modular fashion.
The core cloud software platform and associated device embedded firmware will similarly be designed and
assembled for scaling as well as modularity.
o
These three key elements, combined with ensuring the business is appropriately capitalised to cross the gap between
profitability and loss, underpin the Spectur growth strategy.
Diversity
The Company believes that the promotion of cognitive and experiential 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.
The Company has two Officers / Directors who are female, Bilyana Smith (Non-Executive Director) and Suzie Foreman
(Company Secretary). Cognitive & experiential diversity is achieved as follows:
Name
Role
Areas of Strength
Darren Cooper
Board Chair
Property, finance, significant ASX experience
Gerard Dyson
Managing Director
Engineering, leadership & management of scaled organisations,
international (US, Canada, Asia, Middle East, UK) experience
Bilyana Smith
Non-Executive Director Marketing, start-up / scale-up companies
Suzie Foreman
Company Secretary
Compliance, accounting, significant ASX experience
Further information is set out in the Corporate Governance statement detailed on the Company’s website.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 12 of 67
Directors’ Report
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 financial report. This Independence Declaration is set out
on page 24 and forms part of this Directors’ report for the year ended 30 June 2022.
Director’s interests
Interests in the shares, options and performance rights of the Company and related bodies corporate
The following relevant interests in shares and options and performance rights of the Company or a related body corporate
were held by the Directors as at the date of this report.
Directors
Darren John Cooper
Bilyana Smith
Gerard John Dyson
Total
Number of fully paid
ordinary shares
Number of options
over ordinary shares
Number of
performance rights
3,437,258
1,582,947
2,217,734
7,237,939
966,690
916,667
1,377,777
3,261,134
-
-
5,385,220
5,385,220
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 13 of 67
Remuneration Report (Audited)
Remuneration Report Contents
A. Introduction
B. Remuneration governance
C. Remuneration policy framework
D. Remuneration structure and link to business strategy
E. Executive remuneration framework and overview of incentive plans
F.
Link between performance and remuneration outcomes
G. Non-executive Directors’ remuneration
H. Executive service agreements / remuneration
I. Additional statutory disclosures
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 14 of 67
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 2022. 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. For FY22 it was deemed that only the Managing Director qualified as executive KMP for the
purposes of this report.
Key Management Personnel (KMP)
The KMP of the Company during or since the end of the financial year were as follows:
Current Directors
Mr Darren John Cooper
Dr Gerard John Dyson
Ms Bilyana Smith
Non-Executive Chairman
Managing Director (Executive)
Non-Executive Director
Full Term
Full Term
Full Term
Position
Period of Employment (to present)
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 all directors, for the period ended 30 June 2022.
B. Remuneration Governance
Spectur Board
Overall responsibility for ensuring Spectur’s remuneration strategy is aligned with Company performance and
shareholder interests and is equitable for participants.
Reviews, and as appropriate, approves recommendations from the Company’s Remuneration and Nomination
Committee (RNC).
Remuneration and Nomination Committee (RNC)
The RNC may use independent advisors to provide advice,
remuneration benchmarking data and market trend
information. No external advisors provided advice or
remuneration recommendations for FY21, as defined
under section 300A of the Corporations Act.
Monitors, recommends and reports to the Board on:
The remuneration policies and framework;
Non-Executive Director remuneration within the fee
pool approved by shareholders;
Remuneration for the Managing Director, and equity-
based compensation for the leadership team and
other key management personnel as recommended
by the Managing Director;
Managing Director incentive arrangements;
Board remuneration including terms and conditions
of appointment and retirement;
Induction of new non-executive directors and
evaluation of board performance.
The board retains discretion to adjust STI outcomes.
All variable remuneration is subject to Board approval prior to grant / payment.
Managing Risk
The members of the RNC currently are:
Committee Chair – Darren Cooper
Committee Member – Bilyana Smith
Committee Secretary – Suzie Foreman
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 15 of 67
Remuneration Report (Audited)
C. Remuneration Policy Framework
The key objective of Spectur’s remuneration policy is to be an enabler for the Company in achieving its strategic goal of
continuing to build a successful remote solar-powered sensing and cloud-based technology solutions company. The
remuneration framework is designed to attract and retain high caliber talent by rewarding them for achievement of goals
designed to deliver shareholder value.
Remuneration Policy
The Company’s remuneration framework has been designed to reward executives and employees fairly and responsibly
in accordance with the market in which the Company operates. Remuneration is performance driven, market completive,
and aligns with shareholder interests.
Performance Driven
Market Competitive
Aligns with Shareholders
Remuneration Strategy
Sets demanding levels of expected
performance that have a clear linkage
to an executive’s remuneration.
Rewards are based upon achievement
of targets aligned to the Company’s
business plans and longer-term
strategy.
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.
Variable components (short and long
term) are driven by challenging
targets focused on external and
internal measures of financial and
non-financial performance.
A proportion of the executive’s
remuneration is “at risk.”
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.
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 through an emphasis on
variable remuneration. Incentive
plans and performance measures are
aligned with the company’s success.
Equity participation in long term
incentive plan (LTIP) applies to
executives and the leadership and
senior management team of Spectur.
D. Remuneration Structure
The proportion of fixed remuneration and variable remuneration is established for the Managing Director by the RNC with
reference to market comparator data and the scope of the Managing Director’s role and is approved by the Board in
accordance with the Remuneration Policy and the provisions of the Short Term Incentive (STI) and Long Term Incentive
(LTI) Plans. These elements are both described in detail below. Non-executive Directors are excluded from participation.
Fixed Remuneration
Variable Remuneration
Fixed remuneration is made up of
base salary and superannuation.
Variable component of executive target remuneration mix allows a greater
share of remuneration at risk and subject to performance.
Fixed remuneration is targeted at the
remuneration paid to executives of
relevant comparable peer group of
ASX companies taking into account
the executive’s role, responsibility,
skills and previous experience.
STI (at risk)
LTI (at Risk)
Cash based for FY22 and non-cash
based Share Ownership Awards
for FY23 based upon percentage
of base salary.
LTI plan in the form of performance
rights.
Grants made annually with vesting
after two years for FY22.
STI hurdles based upon the
achievement of certain stretched
specified KPI’s during the financial
year over which the executive
would be able to exert sufficient
control to achieve a demonstrated
strategic outcome in his role.
The targets can consist of KPI’s
covering both financial and non-
financial measures of performance
and may be based on company,
individual, business and personal
objectives.
Performance hurdles reviewed
annually by the Board to align with
the Company’s strategic plan.
-
The hurdles applied to
reflect stretched
achievement against the
Company’s long-term
strategic goals.
- Hurdles tested at the end of
the testing period, typically a
2-3 year period.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 16 of 67
Remuneration Report (Audited)
E. Executive remuneration framework and overview of incentive plans
Variable Remuneration – Short Term Incentive Plan
Given challenges impacting the short-term performance of the Company in FY22, which were:
•
•
•
Adverse market conditions impacting sales and revenue;
Restrictions in the supply chain impacting margins and ability to provide product; and
Legacy issues in technology, limiting the ability for the technology group to advance the platform as planned,
the FY22 STI targets were not met in respect of FY22, and consequently no incentives were awarded.
Additionally, recognising that cash remains key to the business, the STI plan for FY23 has been replaced by a modified
LTI plan, proposed to address some of the shortcomings listed above.
Key points include:
•
•
Continuing the shorter duration (2 years); and
Criteria that measure the impact of Spectur’s current growth strategy (i.e. Revenue, Recurring Revenue and
EBITDA). Refer to Variable Remuneration – Long Term Incentive Plan below for further details.
Remuneration / – Share Ownership plan
In the interests of rewarding loyalty, effort and individual competencies and impact on the business in the previous financial
period, and also to contribute to retention and a longer-term alignment with Company success, an additional share
ownership model has been proposed for select employees and key members of management (Share Ownership Plan). The
Share Ownership Plan involves the provision of shares valued the grant date and is limited for senior employees to a
maximum of 7.5% of their total fixed remuneration. The issue of these Shares is intended to bring the following benefits:
•
•
•
They provide a material long term incentive to performance within the organisation;
They are an unexpected but desirable reward and recognise loyalty, effort, and impact on the business in the last
12 to 18 months; and
They do not have a cash cost to the organisation but have immediate and longer-term value to the individual.
It is anticipated that the Share Ownership Plan will be provided in Q2 FY23.
Managing Director
In recognising the cash limitations of the Company to pay the Managing Director fixed annual remuneration at a level which
would be commensurate to his likely value in the market based upon his skills and previous experience, the Remuneration
Committee propose an award in the form of Performance Rights to the Managing Director which vest after a 2-year period,
being continuous employment to (1 December 2024). The Performance Rights will be subject to approval by Shareholders
at the 2022 AGM.
Variable Remuneration – Long Term Incentive Plan
Performance Rights were granted to executives with hurdles that apply as follows for FY22:
(1) 50% of the LTIP grant is subject to a Revenue tested hurdle; and
(2) 50% of the LTIP grant is subject to an EBITDA hurdle.
The use of two performance hurdles was consistent with market practice at the time.
In total, the Company granted 2,083,333 performance rights to the Managing Director for FY22 which was approved by
shareholders at the Company Annual General Meeting in October 2021.
The hurdles motivate executives with a clear line of sight to strategic outcomes outcome through the performance hurdle
measurements. When expectations are met, and all other things being equal, the LTIP is intended to vest and deliver the
appropriate level of remuneration and market positioning.
The Remuneration Committee also considered retention as a key driver of the LTI scheme for FY22. Given economic
conditions and the labour market constraints in FY22 and beyond, in order to remain competitive in an inflationary
environment, equity incentives were used as a mechanism to deliver the value gap for senior management, to align the
Company with the fixed annual remuneration of peer companies. The performance rights have a 2-year vesting retention
period.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 17 of 67
Remuneration Report (Audited)
The structure and details of LTIP Performance Rights issued to executives in FY22 and proposed for FY23 under the plan
are summarised in the following table:
Long Term Equity Incentive Plan (LTIP)
Aspect
Purpose
Participation
Plan, Offers and Comments
The LTIP’s purpose is to align executive interests with those of shareholders by linking
reward to sustainable value creation for shareholders and to assist in the attraction and
retention of a stable focused Managing Director and leadership team.
Grants are made to those executives and key employees 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 LTIP.
Nature
Each LTIP Performance Right entitles the participant to one share in the Company upon
vesting.
Grant Frequency
Annual grant and ad-hoc on commencement of employment and future potential grants.
Delivery
Value / Number
LTI’s are delivered under the Company’s Employee Incentive Plan (EIP). The EIP enables
the Company to offer Executive Directors and key employees (Eligible Participants) a
range of different employee incentive scheme (ESS) interests with the aim of 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.
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 Eligible
Participant is calculated by reference to their maximum LTI opportunity value.
Allocations are made based on a face value approach using the Volume Weighted
Average Price of Spectur’s shares over a specified period prior to the award date. This
fixes the maximum number of shares / rights, and the actual number will vest in
accordance with the performance conditions which are set.
Vesting Period
2 years
Key Performance
indicators, weightings
and performance goals
The hurdles and relative weightings applying to LTI grants issued in the respective
periods are as follows:
FY22
50% Full Year FY2023 Revenue (tested at the end of FY23).
50% Full Year FY2023 EBITDA (tested at the end of FY23).
FY23
33.33% Full Year FY2023 & FY2024 Revenue (tested at the end of FY2024)
33.33% Full Year FY2023 & FY2024 Annual Recurring Revenue (tested at the end
of FY2024).
33.33% Full Year FY2023 & FY2024 EBITDA (tested at the end of FY2024).
All FY23 awards to related parties are subject to approval by shareholders at the Company’s
2022 annual general meeting.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 18 of 67
Remuneration Report (Audited)
Cessation of employment
during measurement
period
Change of Control
Plan gate and discretion
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 Performance Rights will normally be forfeited.
If the participant ceases employment in other circumstances (for example, due to
illness, total or permanent disablement, retirement, redundancy, 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).
Unless the Board determines otherwise, a pro-rata number of the participant’s unvested
rights will vest based on the proportion of the performance period that has passed at the
time of the change of control.
Vesting may also be subject to the achievement of pro-rata performance conditions at the
time of the change of control.
Safety performance as a “deleterious multiplier” which may be modified at the Board’s
discretion to suit the circumstances of the event(s). The Board retains discretion to
modify outcomes to ensure that the LTIP does not produce outcomes that shareholders
would be likely to consider inappropriate.
F. Performance and remuneration outcomes for FY22
Remuneration Consultants
The Remuneration and Nomination Committee may use independent Remuneration Consultants to provide advice but
elected not to do so for FY22.
Remuneration Policy vs 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.
FY22 short term remuneration incentives were linked to financial performance, product development initiatives and
individual performance measures. Longer term incentives were linked to Revenue and EBITDA targets.
The earnings of the Company for the previous five financial years are summarised below:
2022
$
2021
$
2020
$
2019
$
2018
$
Revenue
5,828,024
5,248,882
4,801,655
4,818,130
2,476,501
EBITDA (loss)
(1,908,779)
(1,755,415)
(1,452,264)
(2,586,997)
(3,764,137)
Adjusted EBITDA (loss)1
Earnings / (Loss) Per
Share (cents per share)
(1,485,343)
(1,736,321)
(1,474,251)
(2,282,945)
(2,471,633)
(1.80)
(1.70)
(2.25)
(4.82)
(7.61)
1 Adjusted EBITDA is adjusted for share-based compensation, one off income / expenses (including COVID-19 relief),
impairments, write downs, one off gains / losses and non-cash expenses.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 19 of 67
Remuneration Report (Audited)
G. Non-Executive Director Remuneration During the Reporting Period
Remuneration Policy
In accordance with best practice corporate governance, the structure of Non-Executive Director (NED) and executive
remuneration is separate and distinct. The overall level of annual NED 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 NEDs is $250,000 per annum. This aggregate amount was approved by
shareholders at the 2017 Annual General Meeting.
Equity Compensation
In accordance with Australian practice the Company’s policy was not to grant any incentive equity-based compensation to
NEDs. This policy was revised in FY22 following a change in circumstances related to COVID-19 impacting the business:
•
•
•
•
•
NEDs took a 20% salary reduction during Q4 FY20 and Q1 FY21 (a total of approx. 6 months) and revised to a
10% reduction for Q2 FY21 in alignment with Company policy implemented during the COVID-19 pandemic to
limit overhead expenses.
NEDs were paid via shares in lieu of remaining salary for Q4 FY20, escrowed for 12 months.
NED fees have remained static - for Bilyana Smith through FY20, 21 and now FY22, and for Darren Cooper from
his initial appointment in 2018 through to the end of FY22.
In the interests of cash preservation for the Company, and retaining the talent pool of directors, 500,000 unquoted
options were granted to each of the NEDs as a reward for their past salaries foregone and retention.
The options are exercisable at $0.13, on or before 30 June 2024.
Accordingly, no further equity securities were offered to NEDs in the reporting period to 30 June 2022 nor are contemplated
for future periods.
Remuneration Structure
NEDs received a fixed remuneration of base fees, which was set at $40,000 per annum plus statutory superannuation
(unchanged since FY20). These fees cover the board activities and membership of any relevant committees. In addition to
these fees, NEDs 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. NEDs do not earn
retirement benefits other than superannuation and are not entitled to any compensation on termination of their directorships.
NED fees, which are exclusive of statutory superannuation but includes committee fees, have been revised, based upon a
comparison of fees paid to directors in peer ASX listed companies as follows:
FY 22 NED Fees
Chair
$75,000
Member
$40,000
FY 23 NED Fees 1
Chair
$105,000
Member
$56,000
1 Increased NED fees to apply from 1 October 2022
The Remuneration for NEDs has remained static since Mr. Cooper’s appointment in October 2018 (4 years) and Ms. Smith’s
appointment in October 2019 (3 years). All directors have participated in Company equity raises and purchased securities
on market. Fees have been benchmarked to comparable market peers for ASX listed company director fees.
NEDs remuneration is 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.
H.
Director and Executive Service Agreements and Remuneration
As of the date of this report, remuneration and other terms of employment of Directors and Other Key Management
Personnel are formalised in employment contracts and service agreements. The major provisions of the agreements related
to remuneration are set out below.
Executive Directors (i)
Base Salary/
Fee per annum
Terms of Agreement
Notice Period
Gerard Dyson
$300,000 per annum for FY22,
subject to CPI increase.
And STI and LTI component
included and detailed above.
Executive Service
Agreement -
Commencement date –
1 July 2019
3 months in writing by either party.
The parties mutually agreed to
amend the contract from a fixed
term to a rolling contract with a 3-
month notice period.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 20 of 67
Remuneration Report (Audited)
Non-Executive Directors (i)
Darren Cooper
$75,000 + super, revised to
$105,000 + super per annum
from 1 October 2022
Bilyana Smith
$40,000 + super, revised to
$56,000 + super per annum from
1 October 2022
Non-Executive Chair
contract
Commencement date – 5
October 2018
Non-Executive Director
contract
Commencement date –1
October 2019
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
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
$
Post-
employment
benefits
$
Share-based
payments (i)
$
75,000
40,000
309,874
424,874
7,500
4,000
30,211
41,711
4,022
4,022
8,851
16,895
Percentage
performance
related
%
-
-
3%
Total
$
86,522
48,022
348,936
483,480
FY2022
Directors
Darren Cooper
Bilyana Smith
Key Management Personnel
Gerard Dyson
Total
Notes:
(i)
The share-based payments related to the value of Options which were issued to Darren Cooper, Bilyana Smith and Gerard
Dyson following shareholder approval at the 2021 AGM. In accordance with AASB 2, the options issued have been valued
based on factors such as the underlying spot and strike price and the expiry date.
Short-term benefits
Salary & fees
$
Post-
employment
benefits
$
Share-based
payments(iii)
$
69,375
37,000
255,584
361,959
6,769
3,609
24,280
34,658
17,604
17,604
54,461
89,669
Percentage
performance
related
%
-
-
16%
Total
$
93,748
58,213
334,325
486,286
FY2021
Directors
Darren Cooper (i)
Bilyana Smith (ii)
Key Management Personnel
Gerard Dyson (iii) (iv)
Total
Notes:
(i) Darren Cooper elected to receive at 20% reduction in NED fees for Q1FY21 and a 10% reduction for Q2FY21, in alignment
with Company policy implemented during the COVID-19 pandemic to limit overhead expenses.
(ii) Bilyana Smith elected to receive at 20% reduction in NED fees for Q1FY21 and a 10% reduction for Q2FY21 in alignment with
Company policy implemented during the COVID-19 pandemic to limit overhead expenses.
(iii) The share-based payments related to the value of Long Terms Incentive Performance Rights which were issued to Gerard
Dyson following shareholder approval at the 2020 AGM. In accordance with AASB 2, the performance rights issued to the
Managing Director have been valued based on factors such as the underlying share price, the expected vesting date and
vesting probability in achieving the specified vesting hurdles at the reporting date (Note 26). It should be noted that Dr Dyson
has 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 or higher than valued and
recognised in the financial report.
(iv) The issue of the Performance Rights and/or options is conditional on the receipt of shareholder approval which is to be sought
at the Company’s 2021 Annual General Meeting (AGM).
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 21 of 67
Remuneration Report (Audited)
I.
Additional statutory disclosures
Key Management Personnel Equity Holdings
Fully paid ordinary shares
FY22
30 June 2022
Directors
Darren Cooper
Bilyana Smith
Executives
Gerard Dyson1
Balance at
beginning of
year
Number
Granted in lieu
of cash
compensation
Number
Received on
exercise of
PRs
Number
Purchased
during year
Number
Balance at
resignation
Number
Balance held
at year end
Number
2,503,879
749,614
1,462,179
-
-
-
-
200,000
-
-
-
2,503,879
749,614
1,662,179
1Dr Dyson purchased 200,000 shares on market, which are held in by
FY21
30 June 2021
Directors
Darren Cooper1
Bilyana Smith2
Executives
Gerard Dyson3
Balance at
beginning of
year / on
appointment
Number
Granted in lieu
of cash
compensation
Number
Received on
exercise of
PRs
Number
Purchased
during year
Number
Balance at
resignation
Number
Balance held
at year end
Number
1,500,000
200,000
273,253
145,735
1,058,300
-
-
-
-
730,626
403,879
403,879
-
-
-
2,503,879
749,614
1,462,179
1 Darren Cooper acquired 326,747 Spectur shares on market and a further 403,879 shares were acquired pursuant to Spectur’s Share
Purchase Plan in July 2020. 273,253 shares were paid to Darren Cooper in lieu of cash consideration for salaries forgone Q4 FY20. As of
30 June 2021, 1,903,879 shares were held in the Cooper Retirement Pty Ltd , of which Mr Cooper is
the beneficiary, and 600,000 shares were directly held.
2 145,735 shares were paid to Bilyana Smith, in lieu of cash consideration for salaries forgone Q4 FY20. This was approved at Spectur’s
Annual General Meeting in October 2020. A further 403,879 shares were acquired pursuant to Spectur’s Share Purchase Plan in July 2020.
3 403,879 of shares were acquired pursuant to Spectur’s Share Purchase Plan in July 2020. Dr Dyson’s shares are held in a family trust,
with Gerard John Dyson and Chantel Yvette Dyson as trustees of the family trust.
Share options
Share options granted to KMP
During the financial year the options detailed below were granted to Directors and KMPs of the Company and the entities
they controlled as part of their remuneration.
FY22
30 June 2022
Directors
Darren Cooper
Bilyana Smith
Executives
Gerard Dyson
Balance at
beginning of
year
Number
Granted as
compensation1
Number
Exercised
Number
Expired
unexercised
Number
Balance at end
of year
Number
-
-
-
500,000
500,000
1,100,000
-
-
-
-
-
-
500,000
500,000
1,100,000
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 22 of 67
Remuneration Report (Audited)
Share options granted to KMP (continued)
•
1 In the interests of cash preservation for the Company, and retaining the talent pool of directors, 500,000 unquoted
options were granted to each of the NEDs, and 1,100,000 to the Managing Director as a reward for their past salaries
foregone during the COVID salary reductions, and to provide a mechanism for retention. The options are exercisable
at $0.13, on or before 30 June 2024.
FY21
30 June 2021
Directors
Darren Cooper1
Bilyana Smith
Executives
Gerard Dyson
Balance at
beginning of
year/ on
appointment
Number
150,000
-
-
Granted as
compensation
Number
Exercised
Number
Expired
unexercised
Number
Balance at end
of year / on
resignation
Number
-
-
-
-
-
-
(150,000)
-
-
-
-
-
1 150,000 options exercisable at $0.20 on or before 31 December 2020 expired unexercised.
During the year current and prior year, the following Performance Rights were granted to G Dyson as part of the Company’s
LTI plan.
FY21 &FY22
Directors
Gerard Dyson (FY22)
Gerard Dyson (FY21)
Balance at
beginning of
year
Issued during
the year
Cancelled /
forfeited
during the
year
Balance at end
of year
Number
Number
Number
Number
Vested and
Exercisable
Number
4,909,806
1,607,919
2,083,333
3,301,887
-
-
6,993,139
4,909,806
-
-
Post the year end, on 1 July 2022, 1,607,919 performance rights lapsed due to the vesting conditions not being met.
Performance Rights
For details of the employee share option plan and of Performance Rights granted during FY22, please refer to Notes 9 and
26. All share options issued to KMP were made in accordance with the provisions of the Spectur EIP.
Comments on Remuneration Report at Spectur’s most recent AGM
The Company received a 99.8% of “yes” votes on its remuneration report for the 2021 financial year. The Company did not
receive any specific feedback from shareholders at the 2021 Annual General Meeting on its remuneration practices.
Signed in accordance with a resolution of the directors.
Mr Darren John Cooper
Director
Dated this 30 September 2022
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 23 of 67
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Spectur Limited for the year ended 30 June
2022, 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
30 September 2022
L Di Giallonardo
Partner
Page 24 of 67
Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2022
Continuing Operations
Revenue
Cost of sales
Gross profit
COVID 19 relief
Depreciation and amortisation
Employee benefits
Finance charges
General and administrative expenses
Impairment of intangible assets
Interest income
Inventories written back / (off)
Loss on disposal of property, plant and equipment
Marketing and advertising
Property expenses – lease payments for short term leases
Research and development expenses
Share of associate’s loss
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 2022
30 June 2021
$
$
5
6
16
26
7
5,828,024
(2,624,964)
3,203,060
-
(320,908)
(3,311,931)
(87,735)
(1,121,171)
-
-
13,994
(6,185)
(267,180)
(44,186)
(163,571)
(38,570)
(124,482)
(2,268,865)
360,086
(1,908,779)
-
5,248,882
(2,108,881)
3,140,001
393,989
(317,198)
(3,573,765)
(16,528)
(935,555)
(12,640)
1,646
4,919
(1,674)
(310,567)
(107,757)
(182,477)
-
(167,342)
(2,084,948)
329,533
(1,755,415)
-
(1,908,779)
(1,755,415)
Loss attributable to members of the Company
(1,908,779)
(1,755,415)
Basic and diluted loss per share (cents per share)
10
(1.8)
(1.7)
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 25 of 67
Statement of Financial Position
At 30 June 2022
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Property, plant and equipment
Other receivables
Investments accounted for using the equity method
Intangible assets
Right-of-use assets
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Employee Benefits
Borrowings
Lease liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Lease liabilities
Employee benefits
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Net Equity
Notes
30 June 2022
30 June 2021
$
$
11
12
13
14
15
16
17
18
19
20
21
22
20
21
19
8
9
629,613
1,322,964
649,465
2,602,042
470,095
165,668
-
96,112
273,806
1,005,681
3,607,723
1,688,712
1,216,935
774,913
3,680,560
541,521
77,773
9,985
179,589
320,288
1,129,156
4,809,716
1,326,911
1,340,866
440,602
8,584
166,728
114,300
463,529
60,513
158,310
114,299
2,057,125
2,137,517
755,700
117,746
33,789
907,235
2,964,360
643,363
-
169,453
67,324
236,777
2,374,294
2,435,422
12,565,412
266,130
(12,188,179)
643,363
12,573,174
177,772
(10,315,524)
2,435,422
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 26 of 67
Statement of Changes in Equity
For the Year Ended 30 June 2022
Balance at 1 July 2021
12,573,174
177,772
(10,315,524)
2,435,422
Issued
Capital
$
Reserves Accumulated
Losses
Total Equity
$
$
$
Loss after income tax for the year
Total Comprehensive loss for the year
Shares issued during the year
Share issue costs
Value of expired performance rights
transferred to accumulated losses
Value of options brought to account during the
period
Value of Performance Rights brought to
account during the year
-
-
-
(7,762)
-
-
-
-
-
-
-
(1,908,779)
(1,908,779)
(1,908,779)
(1,908,779)
-
-
-
(7,762)
(36,124)
36,124
-
106,372
18,110
-
-
106,372
18,110
643,363
Balance as at 30 June 2022
12,565,412
266,130
(12,188,179)
Issued
Capital
$
Reserves Accumulated
Losses
Total Equity
$
$
$
Balance at 1 July 2020
11,084,845
504,479
(9,054,158)
2,535,166
Loss after income tax for the year
Total Comprehensive loss for the year
Shares issued during the year
Share issue costs
Value of expired options transferred to
accumulated losses
Options issued during the year
Value of Performance Rights brought to
account during the year
-
-
1,537,322
(48,993)
-
-
-
-
(1,755,415)
(1,755,415)
(1,755,415)
(1,755,415)
-
-
1,537,322
(48,993)
-
-
-
(494,049)
151,396
15,946
494,049
-
-
-
151,396
15,946
Balance as at 30 June 2021
12,573,174
177,772
(10,315,524)
2,435,422
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 27 of 67
Statement of Cash Flows
For the Year Ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid and other finance costs
COVID 19 relief
R & D tax incentives received
Net cash used in operating activities
11.1
Cash flows from investing activities
Payments for loans to joint venture
Payments to acquire investments
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flow from financing activities
Proceeds from issue and subscription of shares
Payments for share issue costs
Repayment of lease liabilities
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
Notes
30 June 2022
30 June 2021
$
$
6,570,502
(8,067,933)
-
(87,735)
-
301,450
(1,283,716)
(20,002)
-
24,887
(319,556)
(314,671)
-
(7,763)
(156,721)
769,635
(65,863)
539,288
5,408,095
(7,162,964)
1,734
(16,527)
531,673
274,185
(963,804)
(7,489)
(9,985)
-
(281,478)
(298,952)
1,512,661
(48,993)
(111,738)
-
(32,975)
1,318,955
(1,059,099)
56,199
1,688,712
629,613
1,632,513
1,688,712
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 28 of 67
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.
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 for Spectur Limited (Spectur) or (Company). Spectur Limited holds a 51% interest in Spectur
New Zealand Ltd. The investment in Spectur NZ is accounted for using the equity method in accordance with AASB 128.
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.
Spectur is listed on the Australian Securities Exchange (ASX), is a 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 30 September 2022.
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
New Standards and Interpretations applicable for the year ended 30 June 2022
For the year ended 30 June 2022, 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 reporting period. As a result of this
review the Directors have determined that there is no material impact of the new and revised Standards and Interpretations
on the Company, and therefore no change is necessary to accounting policies.
New Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all of the new and revised Standards and Interpretations in issue not yet adopted for the
year ended 30 June 2022. As a result of this review 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
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 settlement of liabilities in the ordinary course of business.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 29 of 67
Note 2: Significant Accounting Policies
(a)
Revenue recognition
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Company, is expected to be entitled in
exchange for transferring goods or services to a customer.
For each contract with a customer, the Company:
•
•
•
•
•
identifies the contract with a customer.
identifies the performance obligations in the contract.
determines the transaction price which takes into account estimates of variable consideration and the time value
of money.
allocates the transaction price to the separate performance obligations based on the relative stand-alone selling
price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to
the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable
consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which
is generally at the time of delivery.
Rendering of service
Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed
price or an hourly rate.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 30 of 67
Note 2: Significant Accounting Policies
(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 operates and generates taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
or when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
•
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the temporary
difference can be utilised.
•
The carrying amount of deferred income tax assets is reviewed at each 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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 31 of 67
Note 2: Significant Accounting Policies
(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)
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 as 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.
(f)
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.
(g)
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.
(h)
Property, plant and equipment
Plant and equipment are 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
Spectur platforms
25%
10% to 50%
10% to 50%
25% to 33%
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 32 of 67
Note 2: Significant Accounting Policies
(h)
Property, plant and equipment (continued)
Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount
being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The
recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the
asset belongs, unless the asset's value in use can be estimated to approximate fair value. An impairment exists when the
carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount.
The asset or cash-generating unit is then written down to its recoverable amount. For plant and equipment, impairment
losses are recognised in the statement of comprehensive income in the cost of sales line item. However, because land and
buildings are measured at revalued amounts, impairment losses on land and buildings are treated as a revaluation
decrement.
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.
(i)
Investment in associates and joint ventures
Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the
investment in associates and joint ventures is increased or decreased to recognise the Company’s share of the profit or
loss and other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency
with the accounting policies of the Company.
Unrealised gains and losses on transactions between the Company and its associates and joint ventures are eliminated to
the extent of the Company’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also
tested for impairment.
(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:
•
•
•
•
•
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probable future economic benefits;
The availability of adequate technical, financial and other resources to complete development and to use or sell the
intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
•
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria listed above. Subsequent to initial recognition, internally
generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on
the same basis as intangible assets acquired separately.
The following useful lives are used in the calculation of amortisation:
Patents
Trademarks
Other Intangibles
8 years following grant of patent
10 years following grant of trademark
3 years following acquisition
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 33 of 67
Note 2: Significant Accounting Policies
(j)
Intangible assets (continued)
Product development
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 group of assets and the asset's value in use cannot be estimated to be close to its fair value.
(k)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Company expects to obtain ownership of the leased asset at the end
of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The Company has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
(l)
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.
(m)
Employee benefits
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 employee benefits 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 employee benefits 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.
The liability for long service leave is recognised in 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)
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 34 of 67
Note 2: Significant Accounting Policies
(o)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following:
•
•
•
•
•
future lease payments arising from a change in an index, or a rate used.
residual guarantee.
lease term.
certainty of a purchase option and
termination penalties.
When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if
the carrying amount of the right-of-use asset is fully written down.
(p)
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.
(q)
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).
The Company has an Employee Incentive Plan (EIP) in place, which provides benefits to Directors, senior executives and
employees and is governed by the EIP 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 binomial /
trinomial valuation model where appropriate.
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).
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 35 of 67
Note 2: Significant Accounting Policies
(q)
Share-based payment transactions (continued)
Equity settled transactions (continued)
The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects
(a)
(b)
the extent to which the vesting period has expired; and
the Company’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a
period represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
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 volume weighted average
traded share price for the equity granted 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.
(r)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds. 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.
(s)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
(t)
Earnings per Share
Basic earnings/(loss) per share is calculated as net profit/(loss) 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/(loss) per share is calculated as net profit/(loss) attributable to members of the parent, adjusted for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
•
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 36 of 67
Note 2: Significant Accounting Policies
(u)
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 2022
Page 37 of 67
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.
(a) Revenue from contracts with customers involving sale of goods
When recognising revenue in relation to the sale of goods to customers, the key performance obligation of the Company
is considered to be the point of delivery of the goods to the customer, as this is deemed to be the time that the customer
obtains control of the promised goods and therefore the benefits of unimpeded access.
Inventories
(b)
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.
(c) 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
(d)
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.
(e) 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 using a binomial or trinomial model where
appropriate.
The Company measures the cost of cash-settled share-based payments at fair value at the grant date using the volume
weighted average traded share price for the equity granted taking into account the terms and conditions upon which the
instruments were granted.
(f) 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.
(g) Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact
of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected
credit losses, as disclosed in note 12, is calculated based on the information available at the time of preparation. The actual
credit losses in future years may be higher or lower.
(h) Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Company's operations;
comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 38 of 67
Note 3: Significant Accounting Estimates and Judgements
leasehold improvements; and the costs and disruption to replace the asset. The Company reassesses whether it is
reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or
significant change in circumstances.
Incremental borrowing rate
(i)
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such
a rate is based on what the Company estimates it would have to pay a third party to borrow the funds necessary to obtain
an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Long service leave
(j)
The liability for long service leave expected to be settled more than 12 months from the reporting date are recognised and
measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting
date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and
inflation have been taken into account.
Lease make good provision
(k)
A provision has been made for the present value of anticipated costs for future restoration of leased premises. The provision
includes future cost estimates associated with closure of the premises. The calculation of this provision requires
assumptions such as application of closure dates and cost estimates. The provision recognised for each site is periodically
reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs
for sites are recognised in the statement of financial position by adjusting the asset and the provision. Reductions in the
provision that exceed the carrying amount of the asset will be recognised in profit or loss.
(l) Warranty provision
In determining the level of provision required for warranties the Company has made judgements in respect of the expected
performance of the products, the number of customers who will actually claim under the warranty and how often, and the
costs of fulfilling the conditions of the warranty. The provision is based on estimates made from historical warranty data
associated with similar products and services.
(m) Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the Company based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the Company operates. Other than as addressed
in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any
significant uncertainties with respect to events or conditions which may impact the Company unfavourably as at the
reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 39 of 67
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 sensing,
thinking and acting platforms and associated products and services.
Note 5: Revenue from Contracts with Customers
Disaggregation of revenue
AASB 15 requires an entity to disclose a disaggregation of revenue from contracts with customers required by paragraphs
114-115. 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
30 June 2022
30 June 2021
$
$
1,757,358
734,910
2,492,268
1,931,961
1,403,795
3,335,756
1,762,276
701,503
2,463,779
1,578,006
1,207,097
2,785,103
Total revenue
5,828,024
5,248,882
The Company recognised an impairment loss on receivables from contracts with customers in the statement of profit or
loss and other comprehensive income, amounting to $4,222 for the year ended 30 June 2022 (2021: $26,906).
Note 6: Finance charges
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
30 June 2022
30 June 2021
$
(72,401)
(15,334)
(87,735)
$
(4,425)
(12,103)
(16,528)
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 40 of 67
Other Notes to the Financial Statements
Note 7: Income Tax
(a) The components of income tax benefit comprise:
Research & Development tax incentive
(b) The prima facie tax benefit on loss from ordinary activities
before income tax is reconciled to the income tax as follows:
Prima facie tax benefit on loss from ordinary activities before income tax
at 25% (2021: 26%) from ordinary operations:
Effect of items that are not assessable/deductible in determining taxable
loss:
-
-
-
-
-
Other non-allowable items
Other non-assessable items
Revenue losses not recognised
Other deferred tax balances not recognised
Research & Development tax incentive
30 June 2022
30 June 2021
$
$
(360,086)
(360,086)
(329,533)
(329,533)
(567,216)
(542,086)
205,474
-
435,358
(73,616)
(360,086)
190,268
(16,250)
377,317
(9,249)
(329,533)
Income tax benefit reported in the consolidated statement of profit
or loss and other comprehensive income from ordinary operations
(360,086)
(329,533)
(c) Recognised deferred tax liabilities at 25% (2021:26%) (Note1)
Intangible assets
Other
Recognised deferred tax assets at 25% (2021:26%) (Note 1)
Carry forward revenue losses
Net deferred tax
(d) Unrecognised deferred tax assets at 25% (2021:26%) (Note 1)
Carry forward revenue losses
Provisions and accruals
Capital raising costs
Other
24,208
-
24,028
24,028
-
1,874,866
144,259
29,128
4,488
44,898
394
45,292
45,292
-
1,478,413
173,039
73,020
4,147
2,052,741
1,728,619
The tax benefits of the above Deferred Tax Assets will only be obtained if:
(a)
the company derives future assessable income of a nature and of an amount sufficient to enable the benefits to
be utilised;
the company continues to comply with the conditions for deductibility imposed by law; and
(b)
(c) no changes in income tax legislation adversely affect the company in utilising the benefits.
Note 1 - the corporate tax rate for eligible companies reduced from 30% to 25% at 30 June 2022 providing certain turnover
thresholds and other criteria are met. Deferred tax assets and liabilities are required to be measured at the tax rate that is
expected to apply in the future income year when the asset is realised, or the liability is settled. The Directors have
determined that the deferred tax balances be measured at the tax rates stated.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 41 of 67
Other Notes to the Financial Statements
Note 8: Issued Capital
As at 30 June 2022, the Company had the following issued share capital:
30 June 2022
30 June 2021
Number
$
Number
$
Fully paid ordinary shares
106,305,280
12,565,412
75,633,065
12,573,174
Movement of issued share capital:
Balance at beginning of year
106,305,280
12,573,174
75,633,065
11,084,845
Placement at $0.05
Issue of shares in lieu of Director fees
Share issue costs
Balance at end of year
-
-
-
-
-
(7,762)
30,253,227
1,512,661
418,988
-
24,661
(48,993)
106,305,280
12,565,412
106,305,280
12,573,174
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. Every holder of ordinary shares present at a meeting in person or
by proxy, is entitled to one vote for each share held on a poll.
Ordinary shares have no par value, and the Company does not have a limited amount of authorised capital.
Note 9: Reserves
Nature and purpose of reserves
Options Reserve
This reserve is used to record the value of options subscribed for or provided to employees and consultants. Refer to
Note 26 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 26 for further details of these plans.
At 30 June 2022, the Company had the following reserve accounts:
30 June 2022
30 June 2021
Number
$
Number
$
Options
Performance rights 1
Balance at end of year
6,550,000
10,579,477
17,129,477
257,769
8,361
266,130
4,300,000
11,604,153
15,904,153
151,396
26,376
177,772
1 Included in the above is 2,917,695 performance rights which were cancelled on 1 July 2022 as the vesting conditions
have not been satisfied.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 42 of 67
Other Notes to the Financial Statements
Note 9: Reserves (continued)
OPTIONS RESERVE MOVEMENT
30 June 2022
30 June 2021
Number
$
Number
$
Movement of Company options:
Balance at beginning of year
Options issued to EGP Capital (i)
Options issued to employees
Options issued to directors
Expired options transferred to retained
earnings
4,300,000
2,250,000
-
-
-
151,396
89,478
-
16,895
22,419,933
494,049
-
2,200,000
2,100,000
-
77,458
73,938
-
(22,419,933)
(494,049)
Balance at end of year
6,550,000
257,769
4,300,000
151,396
(i)
Issued to Fundhost Limited in its capacity as responsible entity for the EGP Concentrated Value Fund, pursuant to the
terms of the Loan Facility Agreement with EGP Capital.
PERFORMANCE RIGHTS RESERVE MOVEMENT
Movement of issued performance rights:
Balance at beginning of year
Brought to account during the year (i)
Performance rights cancelled during the
year
Expired performance rights transferred to
retained earnings iii
Performance rights forfeited / written off (ii)
30 June 2022
30 June 2021
Number
$
Number
$
11,604,153
-
26,376
18,110
2,646,263
9,464,383
10,430
61,615
(1,024,676)
-
(506,493)
-
-
(36,125)
-
-
-
-
(45,669)
26,376
Balance at end of year
10,579,477
8,361
11,604,153
(i)
Issued to key employees under Spectur’s LTI plan. Refer Note 26.
(ii) Value of performance rights written back due to vesting conditions not anticipated being met and employee cessation.
(iii) Note 2,917,695 performance rights lapsed on 1 July 2022, due to the performance conditions not being met.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 43 of 67
Other Notes to the Financial Statements
Note 10: Loss per Share
Basic loss per share
Basic and diluted loss per share
Losses
Losses used in the calculation of basic loss per share is as follows:
Loss for the year
Weighted average number of ordinary shares
30 June 2022
30 June 2021
Cents per share
Cents per share
(1.8)
(1.7)
30 June 2022
30 June 2021
$
$
(1,908,779)
(1,755,415)
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 2022
30 June 2021
Number
Number
106,305,280
103,464,820
Share options and performance rights are not considered dilutive, as their impact would be to decrease the net loss per
share.
Note 11: 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
Net cash and cash equivalents
30 June 2022
30 June 2021
$
657,434
(27,821)
629,613
$
1,689,960
(1,248)
1,688,712
At 30 June 2022, the Company had a credit card facility of $50,000 (2021: $50,000) and does not attract any interest if paid
within the required period.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 44 of 67
30 June 2022
30 June 2021
$
$
(1,908,779)
(1,755,415)
Other Notes to the Financial Statements
Note 11: Cash and Cash equivalents (continued)
11.1 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
Impairment of intangibles
Accrued R&D & COVID 19 refund receivable
(Profit) / Loss on disposal of property and equipment
Share-based payment expense
Issue of Shares in lieu of Director fees
Loss attributable to non-consolidated entities
Provisions
Change in assets and liabilities
Decrease / (Increase) in trade and other receivables
(Increase) in inventories
(Decrease) / Increase in trade and other payables
Net cash outflow from operating activities
576,513
-
(278,919)
6,185
124,482
-
38,570
(50,819)
76,411
125,447
7,193
(1,283,716)
11.2 Reconciliation of liabilities arising from cash flows from financing activities:
Notes
Lease liability
Balance at 1 July 2020
Leases recognised on the adoption of AASB 16
Acquisition of leases
Derecognition of leases
Repayments
Interest paid
Balance at 30 June 2021
Acquisition of leases
Increase in borrowings
Repayments
Repayment relating to investing activities
Interest paid
Balance at 30 June 2022
20
21
21
21
21
21
21
21
21
21
21
20 &
21
281,071
-
142,443
-
Loans
93,488
-
-
-
(107,853)
(37,400)
(145,253)
12,102
327,763
113,432
-
(172,055)
-
15,334
4,425
60,513
-
769,634
(65,863)
-
-
16,527
388,276
113,432
769,634
(237,918)
-
15,334
284,474
764,284
1,048,758
568,257
12,640
(220,283)
1,674
167,342
24,661
-
264,911
(323,455)
(281,482)
577,346
(963,804)
Total
374,559
-
142,443
-
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 45 of 67
Other Notes to the Financial Statements
Note 12: Trade and Other receivables
Trade receivables (i)
Allowance for expected credit losses (ii)
Prepayments
Other
R&D refund receivable
Total
30 June 2022
30 June 2021
$
$
997,604
(31,941)
965,663
78,382
-
278,919
1,322,964
996,481
(30,898)
965,583
30,920
149
220,283
1,216,935
(i)
(ii)
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.
Note 24 includes disclosures relating to the credit risk exposures and analysis relating to the allowance for expected
credit losses.
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 2022
30 June 2021
$
$
30,898
5,265
(4,222)
31,941
51,765
6,039
(26,906)
30,898
Expected credit losses
The Company 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 2022 and 30
June 2021 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 Company 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 at 30 June 2022
and 30 June 2021 was determined as follows:
30 June 2022
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
Total
Trade receivables past due
Expected credit
loss rate
Gross carrying
amount
Lifetime expected
credit loss
2.8%
2.9%
3.2%
4.1%
6.5%
3.2%
527,699
182,561
42,818
214,386
30,140
997,604
14,535
5,238
1,349
8,870
1,949
31,941
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 46 of 67
Other Notes to the Financial Statements
Note 12: Trade and other Receivables (continued)
Expected credit losses (continued)
30 June 2021
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
Total
Trade receivables past due
Expected credit
loss rate
Gross carrying
amount
Lifetime expected
credit loss
1.6%
2.2%
4.0%
9.9%
17.6%
3.1%
689,035
190,939
26,554
15,588
74,365
996,481
10,969
4,236
1,061
1,547
13,085
30,898
The closing balance of the trade receivables allowance for expected credit losses as at 30 June 2022 reconciles with the
trade receivables allowance for expected credit losses opening balance as follows:
30 June 2020
Amounts written off
Net remeasurement of loss allowance
30 June 2021
Amounts written off
Net remeasurement of loss allowance
Closing balance – 30 June 2022
Note 13: Inventories
Raw materials – cost
Work in progress – cost
Finished goods - cost
Total
30 June 2022
$
51,765
(26,906)
6,039
30,898
(4,222)
5,265
31,941
30 June 2022
30 June 2021
$
$
496,107
56,655
96,703
649,465
559,209
18,287
197,417
774,913
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 2022
Page 47 of 67
Other Notes to the Financial Statements
Note 14: Property, Plant and Equipment
Spectur
platforms
$
Improve-
ments
$
Plant and
equipment
$
Office
equipment
Motor
Vehicles
Total
$
$
$
Balance at 1 July 2021
Additions
Disposals
362,044
194,323
-
9,492
3,741
-
40,443
7,896
(5,418)
42,719
4,454
86,823
72,570
541,521
282,984
(5,636)
(17,756)
(28,810)
Depreciation charge for the year
(242,878)
(4,444)
(19,006)
(18,479)
(40,793)
(325,600)
Balance at 30 June 2022
313,489
8,789
23,915
23,058
100,844
470,095
Balance at 1 July 2020
Additions
Disposal
388,945
218,101
(1,808)
4,761
6,256
-
43,738
12,863
-
60,696
10,938
-
123,708
621,848
-
-
248,158
(1,808)
Depreciation charge for the year
(243,194)
(1,525)
(16,158)
(28,915)
(36,885)
(326,677)
Balance at 30 June 2021
362,044
9,492
40,443
42,719
86,823
541,521
Plant and equipment
The carrying value of plant and equipment held under chattel mortgage contracts at 30 June 2022 is $nil (2020: $8,894).
There were no additions or disposals of plant and equipment held under chattel mortgage contracts in the current or
previous financial year.
Motor Vehicles
The carrying value of motor vehicles held under chattel mortgage contracts at 30 June 2022 is $64,284 (2022: $67,855).
Note 15: Investment accounted for using the equity method
Name of joint
venture
Country of
incorporation
and principal
place of business
Principal activity
Proportion of
ownership interests
held by Spectur
Spectur New
Zealand Pty Ltd
30 June 2022
30 June 2021
Provide Spectur security, sensing
and visual artificial intelligence
products to New Zealand
customers.
NZ
51%
51%
The investment in Spectur NZ is accounted for using the equity method in accordance with AASB 128.
No dividends were received from Spectur NZ during the year ended 30 June 2022.
Spectur NZ is a private company; therefore, no quoted market prices are available for its shares.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 48 of 67
Other Notes to the Financial Statements
Note 16: Intangibles
Carrying value
Cost
Impairment
Patents
Product
Development
Other
Intangibles
Total
$
$
$
$
Accumulated amortisation
(20,832)
(588,306)
38,674
-
739,339
(72,763)
100,000
(13,884)
(86,116)
878,013
(86,647)
(695,254)
Carrying value at 30 June 2022
17,842
78,270
-
96,112
Cost
Impairment
38,674
-
739,339
(72,763)
Accumulated amortisation
(15,624)
(510,037)
100,000
(13,884)
(86,116)
878,013
(86,647)
(611,777)
Carrying value at 30 June 2021
23,050
156,539
-
179,589
Reconciliation – current year
Carrying value as at 1 July 2021
Amortisation
Carrying value at 30 June 2022
Reconciliation – prior year
Carrying value as at 1 July 2020
Amortisation
Impairment
Carrying value at 30 June 2021
Patents
Product
Development
Other
Intangibles
Total
$
$
$
$
23,050
(5,208)
17,842
28,258
(5,208)
-
23,050
156,539
(78,269)
78,270
281,515
(112,336)
(12,640)
156,539
-
-
-
-
-
-
-
179,589
(83,477)
96,112
309,773
(117,544)
(12,640)
179,589
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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 49 of 67
Other Notes to the Financial Statements
Note 16: Intangibles (continued)
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 group 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 are initially measured at cost.
Following initial recognition, Other Intangibles are measured at cost less amortisation and any impairment losses.
Other Intangibles are 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 (Group of cash-generating units),
to which the Other Intangibles relates. When the recoverable amount of the cash-generating unit (Group 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 (Group 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 2022
Page 50 of 67
Other Notes to the Financial Statements
Note 17: Right-of-use Assets
Land and buildings – right-of-use
Less: Accumulated depreciation
As at 30 June
Reconciliation
As at 1 July
Additions
Amortisation expense
As at 30 June
30 June 2022
30 June 2021
$
$
594,364
(320,558)
273,806
480,932
(160,644)
320,288
30 June 2022
30 June 2021
$
$
320,288
113,432
(159,914)
273,806
278,030
158,022
(115,764)
320,288
The Company leases land and buildings for its offices and warehouses under agreements of between two to three years
with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are
renegotiated.
Note 18: Trade and other payables
Accounts payable (i)
Accruals
ATO & State Governments
Unearned revenue
Customer pre-payments
Other payables
Total
30 June 2022
30 June 2021
$
$
289,946
113,655
163,888
685,922
73,500
-
245,034
166,725
324,704
558,764
45,391
248
1,326,911
1,340,866
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms. Refer to note 24 for further
information on financial instruments.
Note 19: Employee benefits
Current Liabilities
Non-Current liabilities
30 June 2022
30 June 2021
$
$
440,602
463,529
33,789
67,324
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 51 of 67
Other Notes to the Financial Statements
Note 19: Employee benefits (continued)
Current
Employee benefits expected to be settled within the next 12 months. The current provision for employee benefits includes
all unconditional entitlements where employees have completed the required period of service and also where employees
are entitled to pro-rata payments in certain circumstances. The entire amount is presented as current, since the company
does not have an unconditional right to defer settlement. However, based on past experience, the company does not
expect all employees to take the full amount of accrued leave or require payment within the next 12 months.
Non-current
Employee benefits expected to be settled after 12 months
Note 20: Borrowings and other financial liabilities
Current loans
Secured loans
Total current loans
Non-current loans
Non-secured loans
Secured loans
Total non-current loans
30 June 2022
30 June 2021
$
8,584
8,584
700,000
55,700
755,700
$
60,513
60,513
-
-
-
Total loans
764,284
60,513
Secured Loans
These loans are secured by Motor Vehicles. The interest rates on these loans are fixed at 3.40% and interest is repayable
within a period of 51 months from the reporting date. Total monthly repayments are $886.
Non-Secured Loans
This is a $1.5 million loan facility with EGP Capital. Interest on this loan is 7% on the drawdown amount. There is also a 3%
line fee which is payable quarterly in advance until the end of the contract date – 31 December 2023. At balance date the
Company had drawn down $700,000 of this facility. The facility is repayable, at the option of the Company, either in cash or
by issuing fully paid Spectur Limited ordinary shares. The number of shares to be issued would be based on a 20% discount
to the 30-day Volume Weighted Average Price (VWAP) of Spectur Limited shares as trading on the ASX. The Company has
effectively been granted a put option by EGP Capital, which creates a derivative. The Company has calculated this derivative
to be an immaterial amount, therefore the liability has been stated at its face value at balance date.
Note 21: Lease liabilities
Current lease liabilities
Non-current lease liabilities
As at 30 June
30 June 2022
30 June 2021
$
$
166,728
117,746
284,474
158,310
169,453
327,763
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 52 of 67
Other Notes to the Financial Statements
Note 21: Lease liabilities (continued)
Reconciliation
As at 1 July
Lease inception
Principal repayments
Total
30 June 2022
30 June 2021
$
$
327,763
113,432
(156,721)
284,474
281,071
142,443
(95,751)
327,763
The Company leases several premises, and the average lease term is 3 years.
Refer Note 24 for further information on financial instruments.
Note 22: 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.
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.
Balance as at 30 June 2021
Provided during the year
Utilised
Balance at 30 June 2022
Balance as at 30 June 2020
Provided during the year
Utilised
Balance at 30 June 2021
Warranties Equipment Rental
Total current
$
$
$
55,162
81,022
(81,022)
55,162
29,693
87,103
(61,634)
55,162
59,137
66,764
(66,763)
59,138
59,137
31,596
(31,596)
59,137
114,299
147,786
(147,785)
114,300
88,830
118,699
(93,230)
114,299
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 53 of 67
Other Notes to the Financial Statements
Note 23: Dividends
The directors of the Company have not declared any dividend for the years ended 30 June 2022 and 2021.
Note 24: Financial Instruments
Capital risk management
The Company’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure and reduce
the cost of capital.
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. The Company would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current Company's share price at the time of the investment.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
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 way 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 purchasing limits.
The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the
balance date expressed in Australian dollars were nil.
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:
•
•
The Company’s sensitivity to foreign exchange has not changed significantly from the prior year.
Profit or loss would increase/decrease by $nil (2021: $nil); and
Equity reserves would increase/decrease by $nil (2021: $nil).
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 250 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.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 54 of 67
Other Notes to the Financial Statements
Note 24: Financial Instruments(continued)
Interest rate risk management (continued)
At balance date, if interest rates had been 250 basis points higher or lower and all other variables were held constant, the
Company’s:
•
•
The Company’s sensitivity to interest rate risk has not changed significantly from the prior year.
Profit or loss would increase/decrease by $nil (2021: $nil); and
Equity reserves would increase/decrease by $nil (2021: $nil).
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 2022
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
Financial Liabilities
Trade and other payables
1,326,911
88,052
52,318
-
88,875
52,318
1,467,281
141,193
-
120,866
781,570
902,436
-
-
-
-
1,326,911
297,793
886,206
2,510,910
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
Financial Liabilities
Trade and other payables
1,340,866
85,598
40,824
-
85,698
19,689
-
175,882
-
1,467,288
105,387
175,882
-
-
-
-
1,340,866
347,178
60,513
1,748,557
Lease liabilities
Loans payable
Total
30 June 2021
Lease liabilities
Loans payable
Total
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 55 of 67
Other Notes to the Financial Statements
Note 24: 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 several 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 a
reasonable approximation of their fair values.
Note 25: Contingent liabilities
The Company had no contingent liabilities as at the reporting date.
Note 26: Share-based payments
a) Recognised Share-based Payment Expense
From time to time, the Company provides Incentive Options or Performance Rights to officers, employees, consultants and
other key advisors as part of remuneration and incentive arrangements. The number of options / Performance Rights
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
Value of Performance Rights forfeited / written back
Net share based (income) / payment expense recognised in
profit or loss
30 June 2022
$
124,482
-
30 June 2021
$
213,011
(45,669)
124,482
167,342
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 balance
date Vesting date
$
$
$
Employee options
2,200,000
30 Jun 2021
30 Jun 2024
Director options
2,100,000
30 Jun 2021
30 Jun 2024
EGP Capital options
2,250,000
29 Oct 2021
31 Dec 2023
0.10
0.13
0.13
77,458
30 Jun 2021
90,832
29 Oct 2021
89,478
29 Oct 2021
(i) During the year ended 30 June 2022, an expense of $106,372 (2021: $151,396) was incurred for options issued.
In recognition of the continued dedication of the key management and senior employees of Spectur, in particular during
FY20 and FY21, throughout periods of Company imposed salary reductions, the Board issued:
•
•
2,200,000 unquoted Options to members of Spectur’s key management personnel (other than Directors) under
the Scheme, exercisable at $0.10, on or before 30 June 2024
1,600,000 unquoted Options to Directors under the Scheme, exercisable at $0.13, on or before 30 June 2024.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 56 of 67
Other Notes to the Financial Statements
Note 26: Share-based payments (continued)
a) Recognised Share-based Payment Expense (continued)
2022
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of rights (years)
Exercise price (cents)
Grant date share price
EGP Capital
0%
90.97%
1.69%
2.17
0.12
0.09
Performance rights
Number
Grant date
Expiry date
Value at
grant date
Fair value
at balance
date Vesting date
$
$
$
Director 1
Employees 1
Director
Employees
Director 2
Employees 1
1,607,919
11 Nov 2019
30 Jun 2023
179,345
11 Nov 2019
30 Jun 2023
3,301,887
30 Oct 2020
30 Jun 2024
341,981
30 Oct 2020
30 Jun 2024
2,083,333
28 Jun 2021
30 Jun 2024
3,065,012
28 Jun 2021
30 Jun 2024
0.09
0.09
0.05
0.05
0.07
0.07
147,971
30 Jun 2022
14,500
30 Jun 2022
138,422
30 Jun 2023
14,337
30 Jun 2023
145,833
30 Jun 2023
214,551
30 Jun 2023
1 During the year ended 30 June 2022, 1,309,776 (2021:1,024,676) employee performance rights and 1,607,919 (2021:nil)
director performance rights were unable to achieve the vesting conditions. This resulted in a reversal of previously
expensed amounts of $nil (2021: $5,035). These Performance Rights were cancelled following the year end.
2 Performance rights allocated to the Managing Director were approved at the Company’s Annual General Meeting.
Long Term Incentives - Performance Rights
The Performance Rights detailed above have been allocated and/or issued to key management personnel and senior
employees under the Scheme as long-term incentives.
The Performance Rights are issued for $nil cash consideration but will not vest unless the performance conditions set by
the Board have been satisfied, with the final quantum to be determined on the vesting and measurement date of 30 June
2023. Refer to Section E of the Remuneration Report of the accounts for the details of the performance conditions.
The expected life of the performance rights is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which
may also not necessarily be the actual outcome. No other features of performance rights granted were incorporated into
the measurement of fair value.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 57 of 67
Other Notes to the Financial Statements
Note 26: Share-based payments (continued)
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 2022
30 June 2021
Number
WAEP
Number
WAEP
Outstanding at beginning of year
Expired options
Granted by the Company during the year
Outstanding at end of year
Exercisable at the end of year
4,300,000
-
2,250,000
6,550,000
6,550,000
$0.10
-
0.12
$0.11
$0.11
7,000,000
(7,000,000)
4,300,000
4,300,000
4,300,000
$0.20
$0.20
$0.10
$0.10
$0.10
Note 27: 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
Post – employment benefits
Share-based payment
Total
30 June 2022
30 June 2021
$
424,874
41,711
16,895
483,480
$
361,959
34,658
89,669
486,286
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 in the
Directors’ Report.
Note 28: Auditor’s remuneration
The auditor of Spectur Limited is HLB Mann Judd.
Audit and review of the financial statements
50,500
46,100
30 June 2022
30 June 2021
$
$
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 58 of 67
Other Notes to the Financial Statements
Note 29: Events after the reporting date
Capital Raising
On 19 July 2022, Spectur announced the closure of a placement raising $1.862 million at $0.036 per share pursuant to a
share placement to sophisticated and professional investors and a Share Purchase Plan to raise a targeted $500,000, with
capacity to accept oversubscriptions for up to $1.15m, via a Security Purchase Plan (SPP) offer at $0.036 per New Share,
together with one free attaching Bonus Option for every two New Shares subscribed, exercisable at $0.066 per Option, on
or before 7 September 2024.
The SPP closed raising $1.15 million, strongly supported by shareholders. The Placement and SPP Offers were subject to
shareholder approval which was obtained at a General Meeting of the Company held on 7 September 2022.
The funds from the Placement and SPP Offer will be deployed to accelerate the growth of the business towards EBITDA
and cash breakeven, and in particular application of the funds are to:
•
•
•
•
•
finance market expansion across South and regional Australia;
engineering to suit globalisation and modular platform development;
expansion of the current marketing program, including research into a USA market entry;
purchase of additional inventory to mitigate supply chain risk; and
associated raising costs and working capital.
Reach Corporate Pty Ltd as lead manager to the offer were issued 1,500,000 Lead Manager Options, at an issue price of
nil, exercisable at $0.066 on or before 7 September 2025, for its role as Lead Manager, and successful completion of the
Offer.
The Directors are not aware of any matter or circumstance that has arisen since 30 June 2022 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 2022
Page 59 of 67
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 at 30 June 2022 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 2022.
This declaration is signed in accordance with a resolution of the board of Directors.
______________________________
Darren Cooper
Director
Dated this 30 September 2022
.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 60 of 67
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 2022, 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 2022 and of its
financial performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the 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 matters described below to be the key
audit matters to be communicated in our report.
Page 61 of 67
Key Audit Matter
How our audit addressed the key audit
matter
Revenue and related risk of fraud
Refer to Note 5
The total revenue from operations for the year is
$5,828,024, with
revenue being predominately
generated through equipment sales, rentals and related
services.
Due to the material nature of this balance and the
presumption of fraud risk over revenue recognition, as
prescribed by Australian Auditing Standards, this area
has been subject to significant audit procedures.
Our procedures included but were not limited
to the following:
− We reviewed the Company’s accounting
policy regarding the recognition and/or
deferral of revenue in line with AASB 15
Revenue from Contracts with Customers;
− We reviewed the calculation of deferred
revenue to ensure that it is correctly
calculated and in accordance with AASB
15;
− We selected a sample of
revenue
transactions and agreed the transactions
to underlying supporting documentation;
revenue
− We performed audit procedures to ensure
that
is materially complete,
including procedures surrounding cut-off
at balance date; and
We assessed
Company’s disclosures
revenue and deferred revenue.
the
in respect of
the adequacy of
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 report for the year ended 30 June 2022, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error
Page 62 of 67
In preparing the financial report, the directors are responsible for assessing the ability of the Company
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
− Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
− Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
− Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
− Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
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.
Page 63 of 67
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 2022.
In our opinion, the Remuneration Report of Spectur Limited for the year ended 30 June 2022 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
30 September 2022
L Di Giallonardo
Partner
Page 64 of 67
Additional Securities Information
ADDITIONAL SHAREHOLDER INFORMATION
SHAREHOLDING
The distribution of members and their holdings of equity securities in the Company as at 15 September 2022 were as
follows:
Quoted Securities:
There is one class of quoted securities, being fully paid ordinary shares.
Category
(Size of holding)
Fully Paid Ordinary Shares
Shareholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
41
63
129
485
276
994
Shares
6,317
200,501
1,039,712
19,772,323
168,964,581
189,983,434
There are 994 holders of ordinary shares.
b) Marketable parcel
There are 293 shareholders with less than a marketable parcel (basis price $0.036), with a total of 1,988,670 shares
amounting to 1.05% of issued capital.
c) Voting rights – Ordinary Shares
Every person present, who is a member, or a proxy, attorney or representative of a member has one vote upon a poll for
each share held.
d) Substantial Shareholders
There are no substantial shareholders listed on the Company's register as at 15 September 2022.
e) On market buy-back
There is no on-market buy-back scheme in operation for the Company’s quoted shares.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 65 of 67
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Additional Securities Information
SHAREHOLDER INFORMATION (continued)
f) Twenty Largest Shareholders
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 at 15 September 2022 is as follows:
Position
Holder Name
NATIONAL NOMINEES LIMITED
DR MALAKA AMERATUNGA
SANDHURST TRUSTEES LTD
MR PETER JOHN FERRIS
MR DUMINDA AMARAKOON & MRS GERALDINE AMARAKOON
Holding
% Held
4,500,000
2.37%
4,133,333
2.18%
3,920,064
2.06%
3,821,184
2.01%
3,650,000
1.92%
BNP PARIBAS NOMINEES PTY LTD
3,482,908
1.83%
MR DARREN JOHN COOPER
MR MARK DAMION KAWECKI
APPWAM PTY LTD
FRY SUPER PTY LTD
JOMAHO INVESTMENTS PTY LTD
SONDANCE PTY LTD
CHARLES RICHARD WALLACE WILKINS
CAMDEN EQUITY PTY LTD
CITICORP NOMINEES PTY LIMITED
MR ALISTAIR CHARLES JACKSON
GERARD JOHN DYSON
MR GEORGE LIONTOS & MRS CRISTINA LIONTOS
MR LAITH CUNNEEN
MR ANTON DE SILVA GUNAWARDENA & MRS THERESE SASHA MARIETTE
FERNANDO
3,337,212
1.76%
3,194,444
1.68%
3,000,000
1.58%
2,949,784
1.55%
2,916,667
1.54%
2,777,778
1.46%
2,690,070
1.42%
2,363,334
1.24%
2,329,849
1.23%
2,233,333
1.18%
2,217,734
1.17%
2,200,000
1.16%
2,172,268
1.14%
2,116,666
1.11%
Total
60,006,628
31.59%
Securities (Unquoted)
Number of Securities
Number of
Holders
Holders with more than 20%
Options (Exercisable at $0.10,
expiring 30 June 2024)
Options (Exercisable at $0.13,
expiring 30 June 2024)
2,200,000
2,100,000
Options (Exercisable at $0.12,
expiring 31 Dec 2023)
2,250,000
4
3
1
Refer A Below
Gerard Dyson (or his nominee holders
52.4%, Darren Cooper and Bilyana Smith
hold 23.8% each.
EGP (or his nominee) holds 100% of the
Options on issue.
Options (Exercisable at $0.066,
expiring 7 Sept 2024)
41,839,035
146
Nil
Performance Rights
7,661,782
Options (Exercisable at $0.066,
expiring 7 Sept 2024)
1,500,000
4
1
Gerard Dyson
(or his nominee) holds
5,385,220 performance rights which is equal
to 70.29% of the Performance Rights on issue.
100% of these Options are held by Reach
Corporate.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 66 of 67
Additional Securities Information
A) Holders of More than 20% of Options (Exercisable at $0.10, expiring 30 June 2024)
Position
Holder Name
1
2
3
SUZIE FOREMAN
FREDERIK MARE
NICHOLAS LE MARSHALL
Total
Holding
% Held
500,000
22.73%
600,000
27.27%
800,000
36.36%
1,900,000
86%
Voting rights
Unquoted options or performance rights do not entitle the holder to any voting rights.
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 Securities Exchange.
3. Restricted Securities
There are no restricted securities on issue.
Spectur Limited – Annual Financial Report – Year ended 30 June 2022
Page 67 of 67
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