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ACN 140 151 579
Annual Consolidated Financial Report
30 June 2023
Content
Corporate Information
Managing Director’s Review
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Note 1: Basis of Preparation
Note 2: Significant Accounting Policies
Note 3: Significant Accounting Estimates and Judgements
Other Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Securities Information
3
4
11
16
26
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28
29
30
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Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 2 of 68
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 Consolidated Financial Report – Year ended 30 June 2023
Page 3 of 68
Managing Director’s Review
Managing Director’s Review
Overall Performance
FY23 was characterised by organic as well as acquisitive growth. The year began with capital raisings intended to underpin
investments that would form the foundation for ongoing profitable growth, including development of our Global Modular
Platform and expansion into South Australia. These investments were effectively deployed, including a strategic acquisition,
positioning the Company well for FY24 and beyond.
Spectur largely renewed the hardware and core elements of its cloud technology stacks, ready for scaling. Sales and
revenue also grew substantially in the government and reseller sectors off the back of focussed marketing and outbound
sales. The final quarter of the year included a strategic placement to existing shareholders and a renegotiation of the EGP
debt facility, reducing the outstanding debt to $650k and extending the term until 31 December 2024.
The Company is well placed for FY24, following a Q4 FY23 of consolidated operating cash usage of only $6k. The ongoing
growth in the sales pipeline into FY24 is consistent with the agreed strategic frameworks. It is expected that the investments
of FY23 (and earlier years) will be realised in FY24 and beyond as the Company executes its “profitable growth” strategy.
Market Conditions
Economic conditions in FY23 were dominated by rising inflation and associated interest rates. Spectur’s focus on
government and utilities clients benefited the Company via increased government and utilities spending, whilst our reduced
exposure to the residential building market insulated the Company from material margin erosion and increasing competitive
pressures.
Other notable events were the ongoing conflict between Russia and Ukraine, general acceptance of COVID-19 in the
community and the re-opening of Australia to international travellers. The latter item has led to some increase in the
available workforce, but workers in key areas remain in short supply whilst pressure on housing availability only continues,
offsetting the interest rate impacts. Through productivity improvements, Spectur has been able to offset some inflationary
pressures, and ongoing price review, engineering work and careful component selection has enabled us to mitigate recent
supply chain cost increases.
H2 FY23 was also characterised by the “arrival” of generative AI to the public, most notably Chat-GPT and similar
technologies. This has increased awareness of the potential and opportunities associated with AI in the broader community,
creating growth in that sector and adjacent sectors. Spectur has seen increased opportunities in partnering or supplying
the AI community as it seeks to extend further into the “unwired” environment.
The rush towards implementing AI is expected to continue as the technology evolves at an ever-increasing rate. Spectur
seeks to partner with AI companies either as a platform for their end customers or as a provider of AI for Spectur customers.
It is expected that this element of the business will grow with these strong market tailwinds.
Many expect FY24 to bring a peak in interest rates and inflation, with some likely reductions in interest rates later in the
financial year, potentially alongside recessions in the USA and other countries. Increasing unemployment is already being
felt in Australian markets, which will likely flow into crime statistics and demand for security solutions. Spectur continues to
push hard into the provision of security solutions direct to business and government customers, and increasingly to resellers
or other security providers in the market.
Material Acquisitions
On 17 February 2023, Spectur acquired 3 Crowns Technologies Pty Ltd (3CT) for $876k (including subsequent minor
adjustment) comprising of $250k of Spectur shares and $626k of cash. 3CT aligns well with Spectur's focus areas, serving
essential sectors such as state and local government and emergency services. 3CT provides a broad range of practical
solutions, from smart city applications and coastal monitoring to analytics and disaster management. Its versatile platform
can integrate sensor and video data with AI and analytics, delivering useful real-time insights or reports via a customizable
web dashboard.
On 17 March 2023, Spectur acquired the remaining 49% share of Spectur New Zealand Limited (SNZ) from Deus Ex Limited
for $58k (AUD), also extinguishing any remaining debts between Deus Ex Limited and SNZ. The original Joint Venture (JV)
was established in FY21 and was an exceptional low risk / low cost learning platform for other international markets. The
JV enabled Spectur to establish and build the business at a time when international travel was not possible, leveraging local
New Zealand contacts and knowledge. Through FY23, Spectur progressively assumed control of key functions to deliver
a more consistent and repeatable customer experience, and now through full acquisition will benefit from more efficient
decision making and associated capital allocation.
Revenue from Operations
For FY23 Spectur Group reported consolidated revenue of $7.368 million, up 26% on FY22 of $5.828 million and up 40%
on FY21 of $5.249 million. Spectur Limited revenue (excluding acquisitions) was $6.9m, up 18% on FY22 of $5.828 million
and up 31% on FY21 of $5.249 million. Noting that the consolidated revenue only included 4.4 months of 3CT and 3.5
months of SNZ, it is expected that underlying growth across all entities, consolidated for a full year, will result in increased
revenues in FY24 and beyond.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 4 of 68
Managing Director’s Review
Comparing FY23 in more detail with FY22 provides additional insights to the trends across the four key revenue streams
within Spectur and recent acquisitions:
Revenue
System Sales
Field Services
Subscriptions
Rentals
3CT
SNZ
Total
FY23
$’000
2,086
850
1,644
2,308
(From 17 February 2023) 442
(From 17 March 2023) 38
7,368
FY22
$’000
1,757
742
1,397
1,932
-
-
5,828
% Increase
19%
15%
18%
19%
-
-
26%
Several larger contracts expected to be awarded in H2 FY23 were deferred and only a small portion of the expected
revenues from the Optus contract expansion was realised, leading to a softer half of revenue following the 26% organic
growth noted in H1 FY23. Strong growth in subscriptions within Spectur Limited, noting the extensive base that existed in
FY22, was due to higher average value subscription contracts as well as overall increases in the numbers of systems that
are subscribed.
Currently there are more than 2,300 Spectur systems active, with nearly 3,000 cameras deployed. For some of our
advanced, Company-owned systems, up to 5 different applications are running on one platform with 3 different customers
subscribing to data and applications.
The charts above show the strong ongoing growth of Spectur’s recurring revenue streams (Rentals and Subscription) and
the impact of the recent 3CT acquisition in particular (3CT and SNZ combined shown as a hashed extension on the FY2023
bars). It is notable that the full year revenues for 3CT were run rating at more than $1.2m/year for the portion of the financial
year they were owned by Spectur.
Rental revenue growth rates exceeded unit deployment rates as the proportion of more advanced multi-camera systems
displaced earlier, simpler models in the rental fleet. As Spectur increasingly focuses on government, utility, institutional and
reseller customers, the growth rate in the direct-to-customer rental business (mainly construction) is expected to be less
than the overall business growth rate.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 5 of 68
Managing Director’s Review
Full year subscription revenue for Spectur Limited, which included AI services, data plans, storage, server access and
monitoring services, was $1.644m. Full year rental revenue for Spectur Limited was $2.308m. The recurring revenue
contribution from the 3CT and SNZ acquisitions was $454k for the part year leading to a consolidated full year annual
recurring revenue (ARR) of $4.406m. The run rate of ARR, based on Q4 FY23 results, was over $5.3m per annum.
Sales performance
FY23 was characterised by steady broad-based growth in sales rather than singular material contracts. Even the large
contract extension from Optus in Q3 FY23 only had a minor impact on revenues for FY23, with most of the revenue now
expected in FY24. The nature of the Spectur sales pipeline has shifted with an increasing number of larger opportunities
with government, utility, reseller and institutional type customers. Construction opportunities have moved to be more
dominated by larger construction alliances for major projects compared with smaller rental contracts with individual builders.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 6 of 68
Managing Director’s Review
This is increasing the average size of contracts and value of customers, improving the ability of the sales team to deliver
increasing sales without having to increase at a parallel rate. In many cases, customers are growing in an incremental
fashion with multiple (in some cases monthly) orders of systems rather than singular large buying processes.
FY24 is expected to bring a continuation and extension of the current strategic focus. Increasing shift in volumes to resellers,
with the security, hire and AI industries being core targets, will be key to increasing the ratio of revenue to sales costs. FY23
investments in product development, sales expertise and establishing our presence on strategic panel contracts will also
position Spectur to be more active and successful in state and government tenders. Expansion of our marketing team in
Q2 FY24 is expected to further leverage and improve the performance of our sales and marketing group, and the top line.
Cost performance
Gross margin percentages improved substantially in Spectur Limited from 55% to 58%. Consolidated gross margin
percentages improved from 55% to 56%, noting lower gross margin percentages in SNZ and 3CT.
The Spectur NZ business model was impacted primarily by scaling issues and some challenges with maintaining and
supporting equipment from Australia. The Company has learned substantially from this multi-year experiment, with ongoing
improvements expected into FY24.
The 3CT business model is somewhat different to Spectur, almost exclusively (at this time) being based on recurring
revenue. Hardware, software, 3rd party costs and much of the labour within the organisation is in the direct costs of the
business associated with subscriptions, with only a small residual element of overheads. Fortunately, many of these costs
are relatively fixed (up to certain volumes of services) allowing margin improvement to occur with increasing volume.
Gross margin percentages
3CT
Spectur NZ
Spectur Ltd Equipment sales
Spectur Ltd Field services
Spectur Ltd Equipment rentals
Spectur Ltd Subscriptions
Consolidated GM %
FY23
$’000
30%
18%
47%
24%
83%
55%
56%
FY22
$’000
-
-
42%
12%
78%
62%
55%
% Increase
NA
NA
14%
107%
6%
-12%
3%
Within Spectur Ltd, supply chain pressures on componentry, which were exacerbated by earlier hardware designs with
limited optionality, had led to some gross margin erosion in FY22 and at the beginning of FY23. This substantially improved
as the year progressed with the introduction of the STA6s model upgrade. It is expected that this will continue in FY24 with
the new STA-Power, HD6 and STA7 models replacing prior hardware.
Field services margins improved progressively and into FY24 as simpler technology, that is easier to install and more
reliable, began to displace earlier technology. These ongoing improvements are also making it easier for resellers and end
customers to self-install.
Rental business margin improvements were substantially linked to extended life of the rental fleet. The rental fleet, which
has a harder life than most owner-operated systems, was originally estimated to be 3 years. Spectur platforms have
demonstrated extraordinary resilience and the rental fleet in some cases is up to 5 years old, improving returns on the
original asset costs. Resellers who are seeking to hire Spectur systems in most cases can also return substantial gross
margins for highly utilised platforms.
Subscription margins declined in response to growing costs associated with cloud AI hosting and data. Changes in the
cloud infrastructure made during the year along with a shift in data providers has led to improvements in margin in FY23
Q4, that are expected to continue to improve through to Q4 of FY24 as they are deployed.
Overall gross margins (in dollar terms) increased across all Spectur Limited revenue streams without the benefit of acquired
margin.
As expected and budgeted, Spectur overhead costs increased in FY23 as substantial investments were made in technology,
systems, sales and marketing to underpin the next phase of growth. Most of these strategic objectives were achieved in
FY23, with the final phases of ERP deployment still to be completed and the STA7 to be deployed later in H1 FY24. These
investments allow Spectur to now focus on execution and shifting to more profitable growth, underpinned by growing top
line, gross margins and reduced overhead spend.
Adjusted and consolidated EBITDA declined by 9% to a $1.61m loss for FY23 compared to $1.48m loss for FY22. (Adjusted
EBITDA is defined as earnings before interest, tax, depreciation, amortisation, and share-based payments).
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 7 of 68
Managing Director’s Review
Consolidated Expenses
(unadjusted)
Finance charges
Employee and Admin
Share-based payments
Other expenses
Total
FY23
$’000
127
5,530
530
1,208
7,395
FY22
$’000
87
4,433
124
828
5,472
% Increase
45%
25%
326%
46%
35%
Finance charges increased in FY23 in response to carrying a larger level of debt ($1.1m) for most of FY23, with the reduction
to $650k occurring later in Q4 FY23.
Employee benefits now include additional six employees from acquisitions in addition to organic staff growth in engineering
and sales. There were also substantial legal and restructuring costs associated with acquisitions that occurred in FY23 and
are considered “one-off”.
Share-based payments (non-cash) have increased as the business continues to track towards agreed Service Rights and
goals set in the Employee Securities Incentive Plan (to be assessed following FY24 and FY25.
Other expenses include the impairment (non-cash) of $435k of goodwill (all goodwill) from both the 3CT and SNZ
acquisitions. As the operations of both businesses are assimilated into the Spectur business, and increasing crossover
occurs in both sales and costs, it will become increasingly difficult to distinguish the margins being generated by these
acquisitions. Accordingly, the Board has taken a conservative approach in deciding to fully impair the goodwill arising from
both acquisitions. It is noted that this approach also removes the requirements for future ongoing assessments and
valuations of goodwill for carrying value purposes.
Debt facility utilised
Spectur obtained a $1.5m debt facility from our largest shareholder, EGP Capital in H2 FY21. In Q1 FY23 Spectur
renegotiated the facility to a reduced limit of $1.1m, which was the amount drawn at the time, as it was determined no more
debt funding would be required. In Q4 FY23 Spectur undertook a placement of $500k to substantially reduce the debt to
$650k and extended the term on the balance of the debt to December 2024.
Technology advances
FY23 brought large changes to the technology stack at Spectur. These changes were intended to prepare the Company
for scale-improving key features such as reliability, cost, modularity, production efficiency, ease of shipping, installation and
use, user experience and more.
In the hardware stack, Spectur introduced a new product range with “STA-Power”, a fully integrated solar-battery power
supply system that can be easily installed by a single person, with a van or light utility vehicle and no need for cranes or
working at heights. This system was designed to be part of a modular suite of power solutions for Spectur platforms and
3rd party technology allowing mixing and matching to suit different uses, geographies and power needs. It has been well
received in the market and has opened a new revenue stream in providing power technology (and associated services) for
other technology customers.
The HD5 camera system, optimised over many years to be the workhorse, backbone product of Spectur solutions, ended
production in Q4 FY23. Remaining final systems are being sold and deployed, with the new HD6 system designed, tested,
built and being deployed to Spectur outlets in advance of a Q1 FY24 launch. This new system builds on the lessons learned
from HD5 and STA6 models, bringing improved modularity, edge AI, 4K video, 2-way communications and other features
that were not previously available on HD5 models.
The STA6-240X model was developed and introduced late in the financial year, in response to demand from existing
customers for a robust and flexible powered solution for indoor or heavily shaded locations. Fitting seamlessly into the
Spectur ecosystem, the wall-mounted STA6-240X works from 240V power (a 110X model is available for 110V
environments) and can support multiple cameras and peripherals either on the body of the system or located up to 100m
away.
The STA7 model, in advanced prototyping with the electronics complete and the firmware in final testing, is expected to be
released in Q2 FY24, ending the production of the STA6s. This new model brings highly modular edge AI for up to 4
cameras and multiple peripherals, along with improved power management allowing more performance per watt of sunlight.
This system (and the single camera HD6) is ideal for the next generation of Spectur applications as well as gathering data
for other 3rd party AI technology customers.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 8 of 68
Managing Director’s Review
Whilst less visible but no less important, the Spectur cloud infrastructure was largely renewed and upgraded, improving on
reliability and underpinning the platform for future growth. With the addition of the 3CT cloud and software stack, Spectur
can now manage multiple data streams (not just cameras), integrated with advanced workflow managers (including
leveraging AI) and present results, reports and data (and act) in real time through an industry leading user interface.
Ongoing design work on the core Spectur user interface is expected to be visible to resellers and ultimately all Spectur
customers later in FY24.
The Spectur platforms have made a step change in modularity in FY23. They can now use multiple power sources, many
different types of camera and peripherals, deploy an extensive array of AI or advanced algorithmic applications and present
this in a very flexible and configurable user interface, or directly into 3rd party software. This makes Spectur extremely agile
and able to respond to customer needs quickly, cost effectively and reliably.
Key Risks
The Board is cognisant of certain principal risks that may impact the ability of the Group to achieve its business objectives
which include:
• Capital and funding requirements – Depending on how successfully the Group executes the profit and growth
strategy and related circumstances within the macroenvironment, additional capital may be required at some
point beyond existing cash reserves.
• Development and commercialisation of the Group’s technology – The success of the Group will depend upon our
ability to preserve our technology leadership and intellectual property. A failure to maintain our unique value
proposition in the face of new or evolving competitors could impact margins, profitability and the overall success
of the company in scaling up.
• Sales and customer risks – The Group will need to maintain and expand the customers spend within its existing
customer base and develop new relationships with strategic customers. A key element of the Spectur strategy is
accelerated expansion via reseller channels. The reseller model provides significant advantages by increasing
customer reach with lower capital intensity, however, risks lie in the ability or motivation of the reseller to achieve
agreed sales volumes, which are not under the direct control of the Group.
• Relationships with suppliers and supply chain – Spectur relies on a number of suppliers that are located in Asia
and who typically charge in US dollars. Impacts of various government responses to the COVID-19 pandemic
had a recent impact on our ability to rely on our supply chain. There was a global chip shortage which impacted
lead times, availability and costs of production. Whilst we have observed a significant easing of these conditions,
continuous and close management of such risks is ongoing.
• Reliance on key personnel - The Company relies on the experience and knowledge of key members of its staff.
In the event that key personnel leave and the Company is unable to recruit suitable replacements, such loss
could have an adverse effect on the Company.
• Macroeconomic conditions – Economic and market risks, both in Australia and internationally, may have a direct
and/or indirect impact on our ability to achieve our business objectives. These include movements in interest,
inflation and currency exchange rates (as these may have an impact on supply and demand in the industries in
which we operate).
• Cyber security – There is an increasing volume, scope and intensity of cyber and ransom attacks on companies
and government. Whilst Spectur has advanced mitigation solutions and is further expanding the scope of
systems and processes to reduce the risk of a successful cyber attack, a residual risk remains. This risk could
impact the ability of Spectur to provide solutions to companies, with a corresponding risk to revenue and future
sales.
The Board is responsible for setting the risk appetite of the Group and is committed to maintaining a risk management
framework that monitors and manages business risks.
FY24 expectations
Investments made in FY23 and prior years have laid a foundation for profitable growth. For FY24, the Company’s focus is
on operational excellence and leveraging the investments made to date for cashflow and profitability improvements. The
product market fit for our core solutions is proven, and Spectur is improving efficiency in delivery.
FY24 will bring ongoing outbound focus on the government, utilities, construction and institutional spaces, with particular
focus on resellers that support these markets. Current reseller focus is on providers in the security, hire and AI space with
initial research ongoing into the wholesaler and online space. It is expected that less capital-intensive and larger scaling
will occur through the reseller channels.
Spectur will focus on providing industry leading security and surveillance platforms - platforms that will become the
preferred choice for security providers and end customers. Similarly, we expect to continue our push into providing safety
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 9 of 68
Managing Director’s Review
and warning solutions for remote locations, building on our currently dominant position in beach safety. Spectur is also
actively market testing platform solutions for AI and sensing customers.
Whilst Spectur has existing customers in the USA (via 3CT), international focus will be on bringing Spectur NZ to profitability,
along with other new domestic locations such as South Australia. No new full-service geographic expansions (outside of
resellers) are expected for FY24.
Spectur has a unique offering that provides a very positive contribution to making our communities safer, more sustainable
and smarter. We expect to focus on the areas where we can make the most positive impact, with the most valuable and
differentiated offering, as we scale into a large, rapidly growing and ultimately international market.
Gerard Dyson
Managing Director
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 10 of 68
Directors’ Report
The Board of Directors of Spectur Limited present their report on Spectur Limited (“Company” or “Spectur”) and its
controlled entities (“Group”) for the year ended 30 June 2023.
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
Suzie Jayne Foreman
Non-Executive Chairman
Managing Director
Non-Executive Director
Company Secretary
Current Directors and Officers
Mr Darren John Cooper
Qualifications
Length of Service
Experience
Independent Non-Executive Chairman
B.Bus (Curtin), Masters of Applied Finance (Macquarie), Australian Institute of Company
Directors graduate.
4 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 aged care.
He is also an investor in and director of a range of technology & media-based start-up
businesses.
Gerard John Dyson
Qualifications
Length of Service
Experience
Ms Bilyana Smith
Qualifications
Length of Service
Experience
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.
4 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.
Independent Non-Executive Director
MBA from University of Sydney, Bachelor of Architecture (University of Belgrade),
Graduate of the Australian Institute of Company Directors (GAICD).
3 years 11 months
Bilyana Smith has extensive international experience as a company director, CEO,
investor and strategic advisor. She is Non-Executive Director 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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 11 of 68
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
Xamble Group Limited (formerly
Netccentric Limited)
-
-
Period of directorship
28 July 2017 – 30 April 2023
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 activities of the Group during the year were providing security, safety, environmental monitoring and visual AI
solutions that contribute to making communities safer, smarter and more sustainable. Spectur develops, manufactures and
sells solar-powered and remotely connected hardware, and writes firmware, software, cloud and web apps that enable
solutions to be delivered reliably and securely to customers. An in-house customer service team provides warehousing,
installation, repair and maintenance services to Spectur customers and resellers. The Company also provides a selection
of 3rd party hardware and software to supplement the in-house capabilities
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
Material Acquisitions
On 17 February 2023, Spectur acquired 3 Crowns Technologies Pty Ltd (3CT) for $876k (including subsequent minor
adjustment) comprising of $250k of Spectur shares and $626k of cash. On 17 March 2023, Spectur also acquired the
remaining 49% share of Spectur New Zealand Limited (SNZ) from Deus Ex Limited for $58k (AUD), extinguishing any
remaining debts between Deus Ex Limited and SNZ.
The Board has taken a conservative approach in deciding to fully impair the goodwill arising from both acquisitions
resulting in an immediate impairment (non-cash) of $435k of goodwill from both the 3CT and SNZ acquisitions. It is noted
that this conservative approach removes the requirements for future ongoing assessments and valuations of goodwill for
carrying value purposes.
Employees
The Group had 35 employees as at 30 June 2023 (2022: 27 employees).
Loss per share
Basic loss per share (cents per share)
30 June 2023
(1.6)
30 June 2022
(1.8)
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 12 of 68
Directors’ Report
Subsequent events after the reporting date
The Directors are not aware of any matter or circumstance that has arisen since 30 June 2023 which significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of
the Group, in future financial years.
Laws and Regulations
Spectur’s operations are subject to various laws and regulations under the relevant government legislation. Full compliance
with these laws and regulations is regarded as a minimum standard for all operations to achieve the objectives of the
Company. Instances of 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. During the year, an insurance premium of $48,652
(2022: $48,106) was paid in respect of the policy.
Directors’ meetings
The number of meetings of Directors held during the year and the number of meetings attended by each Director were as
follows:
Director
FY23
Darren Cooper
Bilyana Smith
Gerard Dyson
Directors’ meetings
No. eligible to attend
13
13
12
No. attended
13
13
12
Securities on issue
Total shares, options and performance rights and service 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
Number of service rights
225,784,876
49,889,035
19,783,061
7,000,000
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 13 of 68
Directors’ Report
Performance and Service Rights
As at the date of this report, the following performance and service rights in the Company were on issue.
Type
Date of Expiry
30 June 2025
No. of Performance
Rights on Issue
11,019,540
Vesting Conditions
Revenue
(33.4%) and EBITDA (33.3%) targets.
(33.3%), Annual
recurring Revenue
31 December 2025
8,763,522
Revenue
(33.4%) and EBITDA (33.3%) targets.
(33.3%), Annual
recurring Revenue
31 December 2025
6,000,000
Subject to continuous service over the vesting
period to 1 December 2024
31 December 2025
1,000,000
Subject to continuous service over the vesting
period to 1 December 2024
26,783,062
Employee
LTI Issued
FY23
MD LTI
issued
FY23
MD and
Employee
Service
Rights
Co-Sec
Service
Rights
Total
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.
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, Strategy, start-up / scale-up companies, marketing,
international experience (UK, Asia, Middle East)
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.
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 26 and forms part of this Directors’ report for the year ended 30 June 2023.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 14 of 68
Directors’ Report
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
Number of service
rights
3,437,258
1,782,947
3,402,461
8,622,666
966,690
916,667
1,377,777
3,261,134
-
-
8,763,522
8,763,522
-
-
6,000,000
6,000,000
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 15 of 68
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 Consolidated Financial Report – Year ended 30 June 2023
Page 16 of 68
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 2023. 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 FY23 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 2023.
B. Remuneration Governance
Spectur Board
Spectur Board has overall responsibility for ensuring Spectur’s remuneration strategy is aligned with Company
performance and shareholder interests and is equitable for participants.
The Board may use independent advisors to provide
advice, remuneration benchmarking data and market
trend information. No external advisors provided advice or
remuneration recommendations for FY23, as defined
under section 300A of the Corporations Act.
The Board monitors, reviews and approves the following:
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
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 17 of 68
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 link 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.
Remuneration Structure
D.
The proportion of fixed remuneration and variable remuneration for the Managing Director is established by the Board
with reference to market comparator data and the scope of the Managing Director’s role, 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)
Non-cash based Bonus Awards for
FY23 based upon percentage of
base salary. For FY24 the awards
are cash based.
STI hurdles based upon the
LTI plan in the form of performance
rights.
Grants made annually with vesting
after two years for FY23.
achievement of certain stretched
specified KPIs 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 KPIs
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 Consolidated Financial Report – Year ended 30 June 2023
Page 18 of 68
Remuneration Report (Audited)
E. Executive remuneration framework and overview of incentive plans
Variable Remuneration – Short Term Incentive Plan
For FY23, in order to retain select employees and key members of management in an otherwise cash constrained
environment which limited fixed salary increases, key employees were provided with an award of shares up to a maximum
of 7.5% of their fixed annual remuneration.
For FY24 the Short-Term incentive plan is a cash-based bonus award (maximum of 8% of fixed annual remuneration), for
the achievement of pre-determined key performance measures (KPIs). The KPIs are objectively set at the commencement
of the year, measured, and STIs awarded at the end of the audited reporting period based upon results. For FY24 the
STI’s relate to achieving a specified cash balance, and EBITDA of the core Spectur entity.
Variable Remuneration – Long Term Incentive Plan
Under the Company’s Long-Term Incentive (LTI) arrangements, the Board has determined that eligible participants may
earn an LTI award in the form of Performance Rights for the achievement of pre-determined key performance measures
(KPIs) each financial year. The KPIs are objectively set at the commencement of the year, measured, and LTIs awarded at
the end of the financial year based upon results. LTI awards for executives are contractual, in accordance with their
Executive Service Agreements.
The hurdles motivate executives with a clear line of sight to strategic outcomes through the performance hurdle
measurements. When expectations are met, the LTIP is intended to vest and deliver the appropriate level of remuneration
and market positioning.
In total, the Company granted:
8,763,522 performance rights to the Managing Director for FY23
6,000,000 service rights to the Managing Director for FY23
which were approved by shareholders at the Company Annual General Meeting in October 2023.
The Service rights were a one-off retention mechanism, which have not been offered for future periods.
The Board also considered retention as a key driver of the LTI scheme for FY23 and FY24. 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.
The structure and details of LTIP Performance Rights issued to executives in FY23 and proposed for FY24 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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 19 of 68
Remuneration Report (Audited)
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
Cessation of employment
during measurement
period
Change of Control
Plan gate and discretion
Refer to performance metrics table below.
All FY24 awards to related parties are subject to approval by shareholders at the Company’s
2023 annual general meeting.
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 20 of 68
Remuneration Report (Audited)
The performance of KMPs during the year ended 30 June 2023 for Long-Term incentives were assessed against key
performance measures that covered the following areas:
Indicator
% Weighting Reason for selection
Company Performance
Shareholder value, operational excellence
and growth.
(a)
(b)
(c)
Achievement of combined 2 financial years’
annual budgeted to high case Revenue
33.3%
To drive sales and overall company revenue
growth
Achievement of combined 2 financial years’
annual budgeted to high case Annual Recurring
Revenue
33.3%
Focus on value growth through the stickiness
of revenue contracts (ie, for future periods)
Achievement of combined 2 financial years’
annual budgeted to high case EBITDA
33.3%
Reflects improvements in revenue and cost
control.
F. Performance and remuneration outcomes for FY23
Remuneration Consultants
The Board may use independent Remuneration Consultants to provide advice but elected not to do so for FY23.
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.
FY23 short term remuneration incentives were linked to financial performance, product development initiatives and
individual performance measures. Longer term incentives were linked to Revenue, ARR and EBITDA targets.
The earnings of the Company for the previous five financial years are summarised below:
2023
$
2022
$
2021
$
2020
$
2019
$
Revenue
7,367,578
5,828,024
5,248,882
4,801,655
2,476,501
EBITDA (loss)
(2,139,756)
(1,908,779)
(1,755,415)
(1,452,264)
(3,764,137)
Adjusted EBITDA (loss)1
(1,610,019)
(1,485,343)
(1,736,321)
(1,474,251)
(2,471,633)
Earnings / (Loss) Per
Share (cents per share)
(1.62)
(1.80)
(1.70)
(2.25)
(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.
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
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 21 of 68
Remuneration Report (Audited)
In accordance with Australian practice the Company’s policy was not to grant any equity-based compensation to NEDs.
This policy was revised in FY20 following a change in circumstances related to COVID-19 impacting the business and
cash constraints. Spectur Chair Darren Cooper has agreed to take 100% of his Director fees in Spectur as fully paid
ordinary shares for the 6-month period from 1 April 2023 to 30 September 2023. The number of shares to be issued will
be calculated at the volume-weighted average price for shares traded each month over the period, with shareholder
approval for the issue of shares to be sought at the 2023 Annual General Meeting.
Remuneration Structure
NEDs received a fixed remuneration of base fees, which was set at $56,000 per annum plus statutory superannuation. 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 are not entitled to any compensation on termination
of their directorships.
NED fees, which are exclusive of statutory superannuation but includes committee fees, are based upon a comparison of
fees paid to directors in peer ASX listed companies as follows:
FY 23 NED Fees
Chair
$105,000
Member
$56,000
As noted above Spectur Chair Darren Cooper has agreed to take 100% of his Director fees in Spectur fully paid ordinary
shares for the 6-month period from 1 April 2023 to 30 September 2023.
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
Base Salary/
Fee per annum
Gerard Dyson
$312,000 per annum for FY23,
and STI and LTI component
included and detailed above.
Non-Executive Directors (i)
Darren Cooper $105,000 + super per annum
Bilyana Smith
$56,000 + super per annum
Terms of Agreement
Notice Period
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.
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
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 22 of 68
Remuneration Report (Audited)
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),(i)
$
71,250
52,000
311,585
434,835
10,238
5,460
32,716
48,414
26,250
-
194,871
221,121
Percentage
performance
related
%
-
-
41%
Total
$
107,738
57,460
539,172
704,370
FY2023
Non-Executive
Directors
Darren Cooper (i)
Bilyana Smith
Executive Directors
Gerard Dyson (ii)
Total
Notes:
(i)
(ii)
Darren Cooper has agreed to take 100% of his Director fees in Spectur fully paid ordinary shares for the 6-month period
from 1 April 2023 to 30 September 2023. The Share Based payment is the Equity in lieu of salary (accounted for in FY23).
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 2022 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.
Short-term benefits
Salary & fees
$
Post-
employment
benefits
$
Share-based
payments
$
75,000
40,000
309,874
424,874
7,500
4,000
30,211
41,711
4,022
4,022
8,849
16,893
Percentage
performance
related
%
5%
8%
3%
Total
$
86,522
48,022
348,934
483,478
FY2022
Non-Executive
Directors
Darren Cooper (i)
Bilyana Smith (i)
Executive Directors
Gerard Dyson (i)
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 23 of 68
Remuneration Report (Audited)
I.
Additional statutory disclosures
Key Management Personnel Equity Holdings
Fully paid ordinary shares
FY23
30 June 2023
Non-Executive
Directors
Darren Cooper (ii)
Bilyana Smith (ii)
Executive Directors
Gerard Dyson (I) (ii)
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
-
-
1,662,179
784,727
-
-
-
933,379
1,033,333
955,555
-
-
-
3,437,258
1,782,947
3,402,461
Granted as a share award pursuant to the FY23 incentive plan.
Purchased at $0.036 per share pursuant to the Company’s September 2022 share purchase plan.
(i)
(ii)
FY22
Balance at
beginning of
year / on
appointment
Number
Granted in
lieu of cash
compensatio
n
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
30 June 2022
Non-Executive
Directors
Darren Cooper
Bilyana Smith
Executive Directors
Gerard Dyson1
1 403,879 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 of the Group and the entities they controlled
as part of their remuneration.
FY23
30 June 2023
Non-Executive Directors
Darren Cooper 1
Bilyana Smith 1
Executive Directors
Gerard Dyson 1
Balance at
beginning of
year
Number
Granted as
compensation1
Number
Purchased
Number
Expired
unexercised
Number
Balance at end
of year
Number
500,000
500,000
1,100,000
-
-
-
466,690
416,667
277,777
-
-
-
966,690
916,667
1,377,777
1 Purchased as a free attaching option pursuant to the Company’s September 2022 share purchase plan.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 24 of 68
Remuneration Report (Audited)
Share options granted to KMP (continued)
FY22
30 June 2022
Non-Executive Directors
Darren Cooper1
Bilyana Smith 1
Executive Directors
Gerard Dyson 1
Balance at
beginning of
year/ on
appointment
Number
Granted as
compensation
Number
Exercised
Number
Expired
unexercised
Number
Balance at end
of year / on
resignation
Number
-
-
-
500,000
500,000
1,100,000
-
-
-
-
-
-
500,000
500,000
1,100,000
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.
During the year current and prior year, the following Performance and Service Rights were granted to G Dyson as part of
the Company’s LTI plan.
FY22 &FY23
Directors – G Dyson
Service rights
Performance rights (FY23)
Performance rights (FY22)
Performance rights (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
-
6,993,139
4,909,806
1,607,919
6,000,000
8,763,522
2,083,333
3,301,887
-
(6,993,139)
-
-
6,000,000
8,763,522
6,993,139
4,909,806
-
-
-
-
During FY23, 6,993,139 performance rights were cancelled or lapsed due to the vesting conditions not being met.
Performance Rights
For details of the Employee Securities Incentive Plan (ESIP) and terms of the Performance and Service Rights granted
during FY23, please refer to Notes 9 and 26. All share options issued to KMP were made in accordance with the provisions
of the Spectur ESIP.
Comments on Remuneration Report at Spectur’s most recent AGM
The Company received 83.6% of “yes” votes on its remuneration report for the 2023 financial year. The Company did not
receive any specific feedback from shareholders at the 2022 Annual General Meeting on its remuneration practices.
Signed in accordance with a resolution of the directors.
Mr Darren John Cooper
Director
Dated this 29 September 2023
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 25 of 68
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Spectur Limited for the year
ended 30 June 2023, 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
29 September 2023
L Di Giallonardo
Partner
Page 26 of 68
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the Year Ended 30 June 2023
Continuing Operations
Revenue
Cost of sales
Gross profit
Government grants received
Other income
Depreciation and amortisation
Employee benefits
Finance charges
General and administrative expenses
Impairment of intangible assets
Inventories written back
Loss on disposal of property, plant and equipment
Marketing and advertising
Property expenses – lease payments for short term leases
Research and development expenses
Fair value remeasurement (on acquisition of
subsidiary)
Reversal of prior period impairment of loan to
associate
Share of associate’s loss
Share-based payment expense
Loss before income tax benefit
Income tax benefit
Loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations
Total comprehensive loss for the year
Notes
30 June 2023
30 June 2022
$
$
5
6
22
26
7
7,367,578
(3,218,611)
4,148,967
18,000
361
(313,883)
(4,301,784)
(127,040)
(1,228,619)
(435,225)
-
(268)
(232,154)
(47,805)
(285,451)
50,708
37,734
-
(529,738)
(3,246,197)
323,132
(2,923,065)
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)
1,661
-
(2,921,404)
(1,908,779)
Basic and diluted loss per share (cents per share)
10
(1.6)
(1.8)
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 27 of 68
Consolidated Statement of Financial Position
At 30 June 2023
Notes
30 June 2023
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
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
11
12
13
14
15
16
17
18
19
20
21
19
20
18
8
9
1,522,090
1,317,740
1,072,164
3,911,994
504,734
128,304
238,107
809,620
1,680,765
5,592,759
629,613
1,322,964
649,465
2,602,042
470,095
165,668
96,112
273,806
1,005,681
3,607,723
1,470,035
1,326,911
664,212
6,374
154,498
132,700
440,602
8,584
166,728
114,300
2,427,819
2,057,125
724,587
661,991
50,109
1,436,687
3,864,506
1,728,253
755,700
117,746
33,789
907,235
2,964,360
643,363
16,109,084
730,413
(15,111,244)
1,728,253
12,565,412
266,130
(12,188,179)
643,363
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 28 of 68
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
Issued
Capital
$
Reserves Accumulated
Losses
Total Equity
$
$
$
Balance at 1 July 2022
12,565,412
266,130
(12,188,179)
643,363
Loss after income tax for the year
Other comprehensive income
Total Comprehensive loss for the year
Shares issued during the period
Share issue costs
Value of expired performance rights written
back
Value of options brought to account during the
period
Value of performance rights brought to
account during the period
Value of service rights brought to account
during the period
-
-
3,864,987
(321,315)
-
-
-
-
(2,923,065)
(2,923,065)
1,661
1,661
-
-
(8,361)
28,024
381,275
61,684
-
1,661
(2,923,065)
(2,921,404)
-
-
-
-
-
3,864,987
(321,315)
(8,361)
28,024
381,275
61,684
Balance as at 30 June 2023
16,109,084
730,413
(15,111,244)
1,728,253
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 options transferred to
accumulated losses
Value of options brought to account during the
period
Value of Performance Rights brought to
account during the period
-
-
-
(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)
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 29 of 68
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
Notes
30 June 2023
30 June 2022
$
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid and other finance costs
Other Government grants received
R & D tax incentives received
7,438,251
(8,890,611)
-
(127,040)
18,000
288,243
Net cash used in operating activities
11.1
(1,273,157)
6,570,502
(8,067,933)
-
(87,735)
-
301,450
(1,283,716)
Cash flows from investing activities
Payments for loans to joint venture
Payments to acquire investments – net of cash
acquired
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
(120,135)
(20,002)
(514,774)
4,357
(165,251)
(795,803)
3,512,414
(321,315)
(164,200)
400,000
(465,462)
2,961,437
-
24,887
(319,556)
(314,671)
-
(7,763)
(156,721)
769,635
(65,863)
539,288
892,477
(1,059,099)
629,613
1,522,090
1,688,712
629,613
The accompanying notes form part of these financial statements.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 30 of 68
Note 1: Basis of Preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standard and
Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board (“IASB”).
The accounting policies detailed below have been consistently applied to all the years presented unless otherwise stated.
The financial statements for Spectur Limited and its controlled entities are included in note 28 (“Group”).
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other
comprehensive income, certain classes of property, plant and equipment and derivative financial instruments.
The financial statements are presented in Australian dollars.
Spectur is listed on the Australian Securities Exchange (ASX) and is a public company, incorporated in Australia and
operating in Australia and New Zealand. The Group’s principal activities are detailed in the Directors’ Report.
(a)
Statement of compliance
The financial report was authorised for issue on 29 September 2023.
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 2023
For the year ended 30 June 2023, the Directors have reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Group 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 Group, 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 2023. 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 Group 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 Consolidated Financial Report – Year ended 30 June 2023
Page 31 of 68
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 Consolidated Financial Report – Year ended 30 June 2023
Page 32 of 68
Note 2: Significant Accounting Policies
(c)
Income Tax Expense
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 Consolidated Financial Report – Year ended 30 June 2023
Page 33 of 68
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 Consolidated Financial Report – Year ended 30 June 2023
Page 34 of 68
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 or as part of a business combination
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of acquisition. 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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 35 of 68
Note 2: Significant Accounting Policies
(j)
Intangible assets (continued)
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
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)
Goodwill
Goodwill arises on the acquisition of a business and represents the excess of the consideration transferred over the fair
value of the net identifiable assets acquired. Goodwill is not amortised but is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Impairment of goodwill is taken to profit or loss and is not subsequently reversed.
(l)
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.
(m)
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.
(n)
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 36 of 68
Note 2: Significant Accounting Policies
(n)
Employee benefits (continued)
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.
(o)
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.
(p)
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.
(q)
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 37 of 68
Note 2: Significant Accounting Policies
(r)
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).
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.
(s)
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.
(t)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 38 of 68
Note 2: Significant Accounting Policies
(u)
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.
(v)
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.
(w)
Principals of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Spectur Limited (Company)
as at 30 June 2023 and the results of all subsidiaries for the year then ended. Spectur Limited and its subsidiaries are
referred to in these financial statements as the ‘Group’. Comparative information represents Company balances only.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. These entities are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities within the Group are eliminated.
Unrealised losses are also eliminated unless the transactions provide evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group. The acquisitions of subsidiaries are accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in
equity attributable to the parent.
Non-controlling interest in the result and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses
incurred by the Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets (including goodwill), liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in the entity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 39 of 68
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.
(b)
Inventories
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.
(d)
Impairment
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.
Recovery of deferred tax assets
(f)
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. 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.
Lease term
(h)
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
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 40 of 68
Note 3: Significant Accounting Estimates and Judgements
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 41 of 68
Other Notes to the Consolidated 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, in Australia and New Zealand. The operations in New
Zealand comprise an immaterial portion of the Group. Therefore, all activities of the Group are considered to represent only
one segment.
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. The Group has selected
to disaggregate revenue according to the timing of the transfer of goods and/or services.
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
Subscription revenue
30 June 2023
30 June 2022
$
$
2,104,556
856,917
2,961,473
2,352,367
2,053,738
4,406,105
1,757,358
734,910
2,492,268
1,931,961
1,403,795
3,335,756
Total revenue
7,367,578
5,828,024
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 $44,100 for the year ended 30 June 2023 (2022: $4,222).
Note 6: Finance charges
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
30 June 2023
30 June 2022
$
(102,537)
(24,503)
(127,040)
$
(72,401)
(15,334)
(87,735)
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 42 of 68
Other Notes to the Consolidated 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% (2022: 26%):
Effect of items that are not assessable/deductible in determining taxable
loss:
-
-
-
-
-
-
Other non-allowable items
Impairment of intangible assets
Revenue losses not recognised
Loss attributable to non-consolidated entities
Other deferred tax balances not recognised
Research & Development tax incentive
30 June 2023
30 June 2022
$
$
(323,132)
(323,132)
(360,086)
(360,086)
(811,549)
(567,216)
389,986
108,806
219,150
(10,571)
104,178
(323,132)
205,474
-
446,978
(85,236)
(360,086)
Income tax benefit reported in the consolidated statement of profit
or loss and other comprehensive income
(323,132)
(360,086)
(c) Recognised deferred tax liabilities at 25% (2022:25%) (Note1)
Intangible assets
Right of use assets
Prepayments
Recognised deferred tax assets at 25% (2022:25%) (Note 1)
Carry forward revenue losses
Net deferred tax
(d) Unrecognised deferred tax assets at 25% (2022:25%) (Note 1)
Carry forward revenue losses
Provisions and accruals
Lease liability
Capital raising costs
Other
(3,160)
(168,547)
(9,918)
(181,625)
179,178
2,447
-
2,269,767
171,195
168,892
80,440
1,367
(24,208)
(68,452)
-
(92,480)
92,480
-
-
1,806,415
144,259
71,118
29,128
1,822
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;
(b)
the company continues to comply with the conditions for deductibility imposed by law; and
(c) no changes in income tax legislation adversely affect the company in utilising the benefits.
2,691,661
2,052,742
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 43 of 68
Other Notes to the Consolidated Financial Statements
Note 7: Income Tax (continued)
Note 1 - the corporate tax rate for eligible companies is 25% providing certain turnover thresholds and other criteria are
met. All other companies are taxed at 30%. 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.
Note 2 - Comparative figures have been restated to meet legislative requirements. The overall tax position has not
changed.
Note 8: Issued Capital
As at 30 June 2023, the Company had the following issued share capital:
30 June 2023
30 June 2022
Number
$
Number
$
Fully paid ordinary shares
225,784,876
16,109,084
106,305,280
12,565,412
Movement of issued share capital:
Balance at beginning of year
106,305,280
12,565,412
106,305,280
12,573,174
Placement at $0.036
Placement at $0.02
Shares issued on acquisition of Three
Crowns Technologies Pty Ltd
Issue of shares to staff at $0.039
Issue of shares to MD at $0.031
Share issue costs
Balance at end of year
83,678,154
25,000,000
3,012,414
500,000
8,048,678
1,968,037
784,727
250,000
78,246
24,327
-
(321,315)
-
-
-
-
-
-
-
-
-
-
-
(7,762)
225,784,876
16,109,084
106,305,280
12,565,412
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 and Service Rights Reserves
This reserve is used to record the value of performance and service rights provided to employees, Directors and
consultants as part of their remuneration. Refer to Note 26 for further details of these plans.
Foreign Currency Translation Reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 44 of 68
Other Notes to the Consolidated Financial Statements
Note 9: Reserves (continued)
At 30 June 2023, the Company had the following reserve accounts:
30 June 2023
30 June 2022
Number
$
Number
$
Options
Performance rights
Service rights
Foreign currency translation reserve
Balance at end of year
49,889,035
19,783,061
7,000,000
n/a
76,672,096
285,793
381,275
61,684
1,661
730,413
6,550,000
10,579,477
257,769
8,361
-
-
-
-
17,129,477
266,130
OPTIONS RESERVE MOVEMENT
Movement of Company options:
Balance at beginning of year
Options issued to EGP Capital (i)
Placement options issued
Options issued to directors
Lead manager options issued
Balance at end of year
30 June 2023
30 June 2022
Number
$
Number
$
6,550,000
257,768
-
41,839,035
-
1,500,000
49,889,035
-
-
-
28,025
285,793
4,300,000
2,250,000
-
-
-
151,396
89,478
-
16,894
-
6,550,000
257,768
(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
30 June 2023
30 June 2022
Number
$
Number
$
10,579,477
24,651,259
8,361
381,275
11,604,153
-
26,376
18,110
(15,447,675)
(8,361)
(1,024,676)
-
Movement of issued performance rights:
Balance at beginning of year
Brought to account during the year (i)
Performance rights cancelled during the
year ii
Expired performance rights transferred to
retained earnings iii
Balance at end of year
19,783,061
381,275
10,579,477
-
-
-
(36,125)
8,361
(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 Consolidated Financial Report – Year ended 30 June 2023
Page 45 of 68
Other Notes to the Consolidated Financial Statements
30 June 2023
30 June 2022
Number
-
7,000,000
7,000,000
$
-
61,684
61,684
Number
-
-
-
$
-
-
-
Note 9: Reserves (continued)
SERVICE RIGHTS RESERVE MOVEMENT
Movement of issued service rights:
Balance at beginning of year
Brought to account during the year
Balance at end of year
Note 10: Loss per Share
Basic loss per share
Basic and diluted loss per share
Losses
30 June 2023
30 June 2022
Cents per share
Cents per share
(1.6)
(1.8)
30 June 2023
30 June 2022
$
$
(2,923,065)
(1,908,779)
Losses used in the calculation of basic loss per share are as follows:
Loss for the year
Weighted average number of ordinary shares
The weighted average number of ordinary shares used in the calculation of basic and diluted loss per share is as follows:
Weighted average number of ordinary shares for the purpose of basic
loss per share
30 June 2023
30 June 2022
Number
Number
180,789,369
106,305,280
Share options and performance and service rights are not considered dilutive, as their impact would be to decrease the
net loss per share.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 46 of 68
Other Notes to the Consolidated Financial Statements
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 2023
30 June 2022
$
1,523,425
(1,335)
1,522,090
$
657,434
(27,821)
629,613
At 30 June 2023, the Company had a credit card facility of $50,000 (2022: $50,000) and does not attract any interest if paid
within the required period.
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 goodwill
(Profit) / Loss on disposal of property and equipment
Share-based payment expense
Fair value remeasurement (on acquisition of subsidiary)
(Profit) / loss attributable to non-consolidated entities
Change in assets and liabilities
Increase in provisions
Decrease / (Increase) in trade and other receivables
(Increase) / decrease in inventories
Increase in trade and other payables
30 June 2023
30 June 2022
$
$
(2,923,065)
(1,908,779)
388,550
435,225
268
537,172
(50,708)
(37,734)
(62,379)
659,285
(231,934)
12,163
576,513
-
6,185
124,482
-
38,570
(50,819)
(202,508)
125,447
7,193
Net cash outflow from operating activities
(1,273,157)
(1,283,716)
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 47 of 68
Other Notes to the Consolidated Financial Statements
Note 11: Cash and Cash equivalents (continued)
11.2 Reconciliation of liabilities arising from cash flows from financing activities:
Balance at 1 July 2021
Acquisition of leases
Increase in borrowings
Repayments
Interest paid
Balance at 30 June 2022
Acquisition of leases
Acquired through business
combinations
Increase in borrowings
Repayments
Interest paid
Balance at 30 June 2023
Notes
19 & 20
19
20
19 & 20
19 & 20
19
22
20
19 & 20
19 & 20
Lease liability
327,763
113,432
Loans
60,513
-
-
769,634
Total
388,276
113,432
769,634
(172,055)
(137,646)
(309,701)
15,334
284,474
548,028
148,189
-
(188,705)
24,503
816,489
71,783
764,284
-
32,138
400,000
(561,479)
96,018
87,117
1,048,758
548,028
180,327
400,000
(750,184)
120,521
730,961
1,547,450
Note 12: Trade and Other receivables
Trade receivables (i)
Allowance for expected credit losses (ii)
Prepayments
Other
R&D refund receivable
Total
30 June 2023
30 June 2022
$
$
926,664
(31,674)
894,990
107,965
977
313,808
1,317,740
997,604
(31,941)
965,663
78,382
-
278,919
1,322,964
(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 2023
30 June 2022
$
$
31,941
43,833
(44,100)
31,674
30,898
5,265
(4,222)
31,941
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 48 of 68
Other Notes to the Consolidated Financial Statements
Note 12: Trade and Other receivables (continued)
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 2023 and 30
June 2022 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 2023
and 30 June 2022 was determined as follows:
30 June 2023
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
Trade receivables past due
Expected credit
loss rate
Gross carrying
amount
Lifetime expected
credit loss
3.13%
3.56%
5.30%
11.91%
725,436
115,776
81,109
4,343
22,742
4,119
4,296
517
-
-
-
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
Trade receivables past due
Total
3.42%
926,664
31,674
Total
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
The closing balance of the trade receivables allowance for expected credit losses as at 30 June 2023 reconciles with the
trade receivables allowance for expected credit losses opening balance as follows:
30 June 2021
Amounts written off
Net remeasurement of loss allowance
30 June 2022
Amounts written off
Net remeasurement of loss allowance
Closing balance – 30 June 2023
30 June 2023
$
30,898
(4,222)
5,265
31,941
(44,100)
43,833
31,674
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 49 of 68
Other Notes to the Consolidated Financial Statements
Note 13: Inventories
Raw materials – cost
Work in progress – cost
Finished goods - cost
Total
30 June 2023
30 June 2022
$
$
390,439
215,805
465,920
1,072,164
496,107
56,655
96,703
649,465
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.
Note 14: Property, Plant and Equipment
Spectur
platforms
Leasehold
improve-
ments
Plant and
equipment
$
$
$
Total
Office
equipment
Motor
Vehicles
$
$
$
Balance at 1 July 2022
Additions
Acquired through business
combinations (i)
Disposals
313,489
151,284
129,151
(4,625)
8,789
-
-
-
23,915
6,603
23,058
100,844
3,691
-
470,095
161,578
-
-
4,924
38,109
172,184
-
-
(4,625)
Depreciation charge for the year
(214,548)
(4,864)
(19,055)
(9,635)
(46,396)
(294,498)
Balance at 30 June 2023
374,751
3,925
11,463
22,038
92,557
504,734
Balance at 1 July 2021
Additions
Disposal
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
(i) Refer note 22 for details of additions to property, plant and equipment acquired through business combinations.
Plant and equipment
The carrying value of plant and equipment held under chattel mortgage contracts at 30 June 2023 is $nil (2022: $nil). 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 2023 is $82,606 (2022: $64,284).
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 50 of 68
Other Notes to the Consolidated Financial Statements
Note 15: Intangibles
Carrying value
Cost
Acquired through business
combinations
Additions
Impairment
Accumulated amortisation
APNIC
Addresses
$
-
143,360
-
-
-
Software
Development
$
Other
Intangibles
$
-
878,013
84,388
8,299
-
-
-
(86,647)
(10,580)
(778,726)
Carrying value at 30 June 2023
143,360
82,107
12,640
Cost
Impairment
Accumulated amortisation
Carrying value at 30 June 2022
-
-
-
-
-
-
-
-
878,013
(86,647)
(695,254)
96,112
Reconciliation – current year
Carrying value as at 1 July 2022
Acquired through business
combinations (i)
Additions
Impairment
Amortisation
APNIC
Addresses
$
-
143,360
-
-
-
Software
Development
$
Other
Intangibles
$
-
96,112
84,388
8,299
-
-
-
-
(10,580)
(83,472)
Carrying value at 30 June 2023
143,360
82,107
12,640
Reconciliation – prior year
Carrying value as at 1 July 2021
Amortisation
Carrying value at 30 June 2022
-
-
-
-
-
-
179,589
(83,477)
96,112
Goodwill
Total
$
-
435,225
-
(435,225)
-
-
-
-
-
-
$
878,013
662,973
8,299
(521,872)
(789,306)
238,107
878,013
(86,647)
(695,254)
96,112
Goodwill
Total
$
-
435,225
-
$
96,112
662,973
8,299
(435,225)
(435,225)
-
-
-
-
-
(94,052)
238,107
179,589
(83,477)
96,112
(i) Refer note 22 for details of additions to Intangibles acquired through business combinations.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 51 of 68
Other Notes to the Consolidated Financial Statements
Note 16: Right-of-use Assets
Land and buildings – right-of-use
Less: Accumulated depreciation
As at 30 June
Reconciliation
As at 1 July
Additions
Acquired through business combinations
Depreciation expense
As at 30 June
30 June 2023
30 June 2022
$
$
834,704
(25,084)
809,620
594,364
(320,558)
273,806
30 June 2023
30 June 2022
$
$
273,806
548,029
146,167
(158,382)
809,620
320,288
113,432
-
(159,914)
273,806
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 17: Trade and other payables
Accounts payable (i)
Accruals
ATO & State Governments
Unearned revenue
Customer pre-payments
Total
30 June 2023
30 June 2022
$
$
350,849
117,573
217,037
727,387
57,189
289,946
113,655
163,888
685,922
73,500
1,470,035
1,326,911
(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 18: Employee benefits
30 June 2023
30 June 2022
$
$
Current Liabilities(i)
664,212
440,602
Non-Current liabilities (long service leave)
50,109
33,789
(i) Includes long service leave liability of $63,908 (2022: $nil)
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 52 of 68
Other Notes to the Consolidated Financial Statements
Note 18: 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 19: 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 2023
30 June 2022
$
6,374
6,374
650,000
74,587
724,587
$
8,584
8,584
700,000
55,700
755,700
Total loans
730,961
764,284
Secured Loans
These loans are secured by Motor Vehicles. The interest rates on these loans range from 3.40% to 9.85% and interest is
repayable within a period of 40 months from the reporting date. Total monthly repayments are $2,037.
Non-Secured Loans
This is a $650,000 loan facility with EGP Capital. During the year an amount of $400,000 was drawn down additional to the
$700,000 balance as at 30 June 2022. During May 2023 a repayment of $450,000 was made. This resulted in the loan
balance of $650,000 as noted above. Interest on this loan is 10% on the drawdown amount till December 2023 and
increasing to 13% from 1 January 2024. The facility is repayable by 31 December 2024, 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. Spectur can elect to convert a maximum of $250k of shares per quarter. 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 20: Lease liabilities
Current lease liabilities
Non-current lease liabilities
As at 30 June
30 June 2023
30 June 2022
$
$
154,498
661,991
816,489
166,728
117,746
284,474
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 53 of 68
Other Notes to the Consolidated Financial Statements
Note 20: Lease liabilities (continued)
Reconciliation
As at 1 July
Lease inception
Acquired through business combinations
Principal repayments
Total
30 June 2023
30 June 2022
$
$
284,474
548,028
148,189
(164,202)
816,489
327,763
113,432
-
(156,721)
284,474
The Company leases several premises, and the average lease term is 3 years, with options to renew for a further three
years.
Refer Note 24 for further information on financial instruments.
Note 21: 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 2022
Provided during the year
Utilised
Balance at 30 June 2023
Balance as at 30 June 2021
Provided during the year
Utilised
Balance at 30 June 2022
Warranties Equipment Rental
Total current
$
$
$
55,162
100,265
(100,264)
55,163
55,162
81,022
(81,022)
55,162
59,138
89,963
(71,564)
77,537
59,137
66,764
(66,763)
59,138
114,300
190,228
(171,828)
132,700
114,299
147,786
(147,785)
114,300
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 54 of 68
Other Notes to the Consolidated Financial Statements
Note 22: Business combinations
On 17 February 2023, Spectur Limited acquired 100% of the issued shares in Three Crown Technologies Pty Ltd (3CT), a
software platform provider that supplies intelligent monitoring solutions, for consideration of $876k. The consideration
comprised cash consideration of $626k and the issue of 8,048,678 Spectur Limited shares ($250k).
On 17 March 2023, Spectur Limited also acquired the remaining 49% shares in Spectur New Zealand Limited (SNZ) from
Deus Ex Limited for a cash consideration of $58k. Spectur Limited had previously accounted for its 51% holding as an
equity accounted investment as the company was jointly controlled.
Details of the purchase consideration, the net asset values acquired and resulting goodwill are as follows:
Purchase consideration
Cash Paid
Value of Spectur Limited shares issued
Total purchase consideration
3CT
625,544
250,000
875,544
SNZ
57,510
-
57,510
Total
683,054
250,000
933,054
The fair value of the assets, liabilities and goodwill as at acquisition dates were as follows: (These values are final at 30 June
2023):
Cash and cash equivalents
Trade receivables and other receivables
Inventories
Property, plant and equipment
Intangible assets - software
Intangible assets – APNIC addresses
Right of use assets
Trade and other payables
Payable to Spectur Limited
Financial liabilities
Lease liabilities
Employee benefits
Total net identifiable assets / liabilities
Fair value remeasurement
Total net identifiable assets / liabilities after fair
value remeasurement
3CT
157,233
317,206
-
65,768
84,388
143,360
-
(74,842)
-
-
-
(75,515)
617,598
-
SNZ
11,047
14,474
95,382
106,416
-
-
146,167
(3,565)
(253,390)
(32,139)
(148,189)
(5,264)
(69,061)
(50,708)
Total
168,280
331,680
95,382
172,184
84,388
143,360
146,167
(78,407)
(253,390)
(32,139)
(148,189)
(80,779)
548,537
(50,708)
617,598
(119,769)
497,829
Goodwill recognised
257,946
177,279
435,225
The acquired businesses contributed revenues of $479,590 and losses after tax of $72,064 to Group for the period since
acquisition. If the acquisitions had occurred on 1 July 2022, full year contributions would have been revenues of $1,361,825
and losses after tax of $202,786 (excluding one off items).
As the operations of both businesses are assimilated into the Spectur business, and increasing crossover occurs in both sales
and costs, it will become increasingly difficult to distinguish the margins being generated by these acquisitions. Accordingly,
the Board has taken a conservative approach in deciding to fully impair the goodwill arising from both acquisitions. It is noted
that this approach also removes the requirements for future ongoing assessments and valuations of goodwill for carrying value
purposes.
Purchase consideration – cash outflow
The net cash outflows in the period relating to the acquisitions were $514,774, being the cash considerations of $683,054 less
net cash acquired of $168,280.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 55 of 68
Other Notes to the Consolidated Financial Statements
Note 23: Dividends
The directors of the Company have not declared any dividend for the years ended 30 June 2023 and 2022.
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 2022 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 amount of the Company’s foreign currency denominated monetary assets and monetary liabilities at the
balance date expressed in Australian dollars was $14,195.
Foreign currency sensitivity analysis
The sensitivity analyses below detail the Company’s sensitivity to an increase/decrease in the Australian dollar against the
United States dollar. The sensitivity analysis includes only outstanding foreign currency denominated monetary items.
A 100-basis point is the sensitivity rate used when reporting foreign currency risk internally to management and represents
management’s assessment of the possible change in foreign exchange rates. At balance date, if foreign exchange rates had
been 10 basis point higher or lower and all other variables were held constant, the Company’s profit or loss and equity
reserves would not have been affected materially.
The Company’s sensitivity to foreign exchange has not changed significantly from the prior year.
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 Consolidated Financial Report – Year ended 30 June 2023
Page 56 of 68
Other Notes to the Consolidated 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 profit or loss and equity reserves would not have been affected materially.
The Company’s sensitivity to interest rate risk has not changed significantly from the prior year.
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 and ensuring, as far as possible, that the Company is always able to meet its liabilities when
due, is to continuously monitor forecast and actual cash flows and match 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 2023
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
Financial Liabilities
Trade and other payables
1,333,827
Lease liabilities
Loans payable
Total
30 June 2022
109,556
45,619
136,208
110,249
54,986
-
715,144
763,576
1,489,002
301,443
1,478,720
-
-
-
-
1,470,035
934,949
864,181
3,269,165
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
Financial Liabilities
Trade and other payables
1,326,911
Lease liabilities
Loans payable
Total
Fair value measurement
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
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 57 of 68
Other Notes to the Consolidated Financial Statements
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 payment expense recognised in
profit or loss
30 June 2023
$
538,099
(8,361)
30 June 2022
$
124,482
-
529,738
124,482
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
Lead Manager (i)
1,500,000
7 Sep 2022
7 Sep 2025
0.100
0.130
0.130
0.066
77,458
30 Jun 2021
90,832
29 Oct 2021
89,478
29 Oct 2021
28,025
7 Sep 2022
(i) During the year ended 30 June 2023, an expense of $28,025 (2022: $106,372) was incurred for options issued. The
expense for the current financial year was included in share capital as a capital raising cost.
Performance rights
Number
Grant date
Expiry date
Value at
grant date
Fair value
at balance
date Vesting date
$
$
$
Director 1
Employees
Employees
8,763,522
25 Nov 2022
30 Jun 2025
8,367,735
7 Oct 2022
30 Jun 2025
2,651,805
14 Apr 2023
30 Jun 2025
0.04
0.04
0.04
343,200
30 Jun 2024
327,700
30 Jun 2024
103,851
30 Jun 2024
1 Performance rights allocated to the Managing Director were approved at the Company’s Annual General Meeting.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 58 of 68
Other Notes to the Consolidated Financial Statements
Note 26: Share-based payments (continued)
a) Recognised Share-based Payment Expense (continued)
Long Term Incentives - Performance and service 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
2024. Refer to Section E of the Remuneration Report on page 19 for the details of the performance conditions.
Service rights
Number
Grant date
Expiry date
Value at
grant date
Fair value
at balance
date Vesting date
$
$
$
Director 1
6,000,000
25 Nov 2022
1 Dec 2024
0.031
186,000
1 Dec 2024
Company Secretary 1
1,000,000
25 Nov 2022
1 Dec 2024
0.031
31,000
1 Dec 2024
1 Subject to continuous service over the vesting period to 1 December 2024.
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 2023
30 June 2022
Number
WAEP
Number
WAEP
Outstanding at beginning of year
6,550,000
$0.100
4,300,000
$0.100
Expired options
Granted by the Company during the year
Outstanding at end of year
Exercisable at the end of year
-
1,500,000
8,050,000
8,050,000
-
$0.019
$0.10
$0.10
-
2,250,000
6,550,000
6,550,000
-
$0.120
$0.120
$0.100
The value of the options granted during the year was included in share capital as a capital raising cost.
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 payments
Total
30 June 2023
30 June 2022
$
434,835
48,414
221,121
704,370
$
424,874
41,711
16,893
483,478
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.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 59 of 68
Other Notes to the Consolidated Financial Statements
Note 28: Interests in Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2 (w).
Name
Spectur New Zealand Limited
Three Crowns Technologies Pty Ltd
Country of
incorporation
New Zealand
Australia
30 June 2023
30 June 2022
$
100%
100%
$
51%
-
In previous years the investment in Spectur NZ was accounted for using the equity method in accordance with AASB 128.
Note 29: Auditor’s remuneration
The auditor of Spectur Limited is HLB Mann Judd.
30 June 2023
30 June 2022
$
$
Audit and review of the financial statements
57,500
50,500
Note 29: Events after the reporting date
The Directors are not aware of any matter or circumstance that has arisen since 30 June 2023 which significantly affected,
or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group,
in future financial years.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 60 of 68
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 Group’s financial position at 30 June 2023 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 2023.
This declaration is signed in accordance with a resolution of the board of Directors.
______________________________
Darren Cooper
Director
Dated this 29 September 2023
.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 61 of 68
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”) and its controlled entities (“the
Group”), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; 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 Group 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 (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
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 62 of 68
Key Audit Matter
Revenue and related risk of fraud
(Refer to Note 5)
How our audit addressed the key audit
matter
The total revenue from operations for the year ended 30
June 2023
revenue being
predominantly generated through equipment sales and
rentals and subscriptions.
is $7,367,578, with
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. As a
result, we considered this to be a key audit matter.
Our procedures included but were not limited
to the following:
We reviewed
the Group’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;
We performed audit procedures to ensure
that
is materially complete,
including procedures surrounding cut-off
at balance date; and
revenue
Accounting for the acquisition of 3 Crowns Technologies
Pty Ltd (“3CT”)
(Refer to Note 22)
We assessed the adequacy of the Group’s
disclosures in respect of revenue and
deferred revenue.
During the financial year, the Company completed the
acquisition of 100% of the issued capital of 3CT.
We have considered this to be a key audit matter as
accounting for this transaction is a complex and
judgemental exercise. Management
to
determine the fair values of the assets and liabilities
assumed, in particular in determining the allocation of
purchase consideration to the separately identifiable net
assets. In addition, management is required to assess
whether the acquisition is a business combination or an
asset acquisition.
is required
We also considered this to be a key audit matter due to
its size and importance to the users’ understanding of the
financial report.
Our audit procedures included but were not
limited to the following:
- We read the Share Purchase Agreement
for the acquisition to understand the key
terms and conditions;
- We
reviewed
management’s
assessment whether the acquired assets
constituted a business, and we
conducted our own enquiries in this
regard;
- We agreed the fair value of consideration
paid to supporting documentation;
that
- We obtained evidence
the
acquisition date assets and liabilities of
the acquiree were fairly stated;
- We considered the allocation of the
purchase consideration to the assets and
liabilities acquired;
- We considered the Board’s rationale in
the goodwill
relation
recorded on the acquisition; and
impairing
to
- We assessed the adequcy of the Group’s
disclosures in the financial report with
respect to this business combination.
Page 63 of 68
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 Group’s annual report for the year ended 30 June 2023, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Page 64 of 68
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 Group’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 Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
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
2023.
In our opinion, the Remuneration Report of Spectur Limited for the year ended 30 June 2023 complies with
Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
29 September 2023
L Di Giallonardo
Partner
Page 65 of 68
Additional Securities Information
ADDITIONAL SHAREHOLDER INFORMATION
SHAREHOLDING
The distribution of members and their holdings of equity securities in the Company as at 18 September 2023 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
43
59
113
475
287
977
Shares
6,847
187,051
906,393
19,861,365
204,823,220
225,784,876
There are 977 holders of ordinary shares.
b) Marketable parcel
Based on the price per security of $0.02, the number of holders with an unmarketable holding total 367, with total shares of
3,598,875, amounting to 1.59% 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
Substantial shareholders listed on the Company's register as at 15 September 2023.
Position
1
Holder Name
APPWAM PTY LTD
Holding
16,281,860
% IC
7.21%
e) On market buy-back
There is no on-market buy-back scheme in operation for the Company’s quoted shares.
Spectur Limited – Annual Consolidated Financial Report – Year ended 30 June 2023
Page 66 of 68
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 18 September 2023 is as follows:
Position
Holder Name
APPWAM PTY LTD
COASTALWATCH HOLDINGS PTY LTD
JOMAHO INVESTMENTS PTY LTD
SANDHURST TRUSTEES LTD
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