ASX: ST1
Annual Report
2023
Secure. Sustainable. Scalable.
Table of Contents
A Letter from the Chairman
A Letter from the Managing Director and CEO
Board of Directors
Executive Members
Directors' Report
Auditor’s Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor’s Report
Additional Shareholder Information
Corporate Directory
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3
Annual Report 2023 A letter from
The Chairman
Dear Shareholders,
I am pleased to present our Annual Report for FY23. The
past financial year was a period of reform and renewal
for Spirit as we progressed towards our goal of becoming
one of Australia’s leading providers of modern and secure
digital workplaces.
We continued directing our efforts to transition the Group
away from capital intensive infrastructure to become a full
spectrum technology provider focused on providing our
customers with integrated innovative solutions built on
service and solution delivery.
While the financial results for the year ended 30 June 2023
(FY23) were below our goals, the work undertaken by the
Board and management in FY23 is expected to ensure the
Group is now outwardly focused on growth with a clearly
defined accountable and outcome driven set of strategic
goals. As part of the work, we successfully completed
the transfer of our Network Assets and progressed the
restructure of our Managed Services business.
The centre of our strategy is the customer not only the
technology. Spirit is dedicated to building and bundling
technology solutions that are aligned to each customer’s
journey. We have a vision to be known within the market
for solving a customer’s problem and securely enabling
their employees.
The Board believes our strategy provides our Group a
robust platform for growth going into FY24 and beyond.
We are also confident it will deliver much better returns for
our shareholders.
Another key focus across FY23 has been around
transparency and accountability. Accountability is being
embedded across the organisation culturally to underpin
all deliverables to customers and stakeholders.
During the year, we also finalised the appointment of Elie
Ayoub, one of the co-Managing Directors of Nexgen –
Spirit’s Collaboration & Communication Business – as an
Executive Director.
This restructure has resulted in a simplification of Spirit’s
sales and support processes following a reduction in our
product portfolio to remove complexity and provide clarity
of purpose and focus.
Elie co-founded Nexgen and in this role, continues to
oversee Spirit’s Collaboration & Communication business
growth strategy. He brings a broad range of skills and
experience to the Board, and we look forward to Elie’s
contributions in the next stage of our growth.
During the financial year, we also reshaped our vision with
the launch of a new corporate strategy, formalising our
transition from infrastructure to our long-term strategic
focus of being a technology solutions provider.
The new strategy, which focuses on the core offerings
of Secure, Sustainable and Scalable addresses a critical
customer and wider market need for technology solutions
that improve resilience to cyber-attacks (Secure), address
climate change and reduce carbon emissions (Sustainable)
and ensure responsiveness to challenging business
conditions (Scalable).
On 31 August 2023, Michelle Bendschneider resigned
from her role as Non-Executive Director. As previously
announced on 8 June 2023, Ms. Bendschneider advised
that she intended on stepping down from the Spirit Board
due to other business commitments once the full-year
financial statements (Appendix 4E) had been finalised and
announced.
The Board is grateful for Michelle’s input and enthusiasm
over her time on the board, and we thank Michelle and
wish her all the best for her future endeavours.
4
Annual Report 2023A Letter from the Chairman
In addition, Mr. Julian Haber also tendered his resignation
from his position as Non-Executive Director, effective 31
August 2023 to pursue other business interests. Mr. Haber
joined Spirit as part of the Intalock acquisition (Spirit’s
Cyber security business) and his deep knowledge and
experience in the Cyber industry have been a great asset
to the Company.
The Board is appreciative of Julian’s significant
contributions, and we wish him all the best for his future
endeavours.
We enter the new financial year (FY24) with much
optimism as we work towards returning the Managed
Services business back into positive earnings and as
we continue to progress our goal of becoming one of
Australia’s leading providers of modern and secure digital
workplaces.
I would like to thank our Board, Management team and
employees for their hard work and dedication over the past
12 months as we have repositioned the Group for growth.
I would also like to thank shareholders for your continued
support.
James Joughin
Chairman
5
Annual Report 2023 A letter from
The Managing
Director and CEO
Dear Shareholders,
It is a pleasure to be addressing you in my first full financial
year as Managing Director and CEO of Spirit Technology
Solutions Ltd.
Whilst the 2023 financial year has not been without its
challenges, it has been a period of reset and regeneration
for our Company as we focused our efforts on the
restructure of our Managed Services business and
launched our new go-to market strategy to focus our
service offerings via the three key high-growth areas of
Secure, Sustainable and Scalable.
Progress with Managed Services restructure
During FY23, we progressed the Managed Services
restructure with a new leadership team in place, all
previous Managed Services acquisitions integrated into
a single Spirit brand and all key customers moved to
our new scalable Microsoft Modern Workplace (MWP)
solutions. In addition, we completed an agreement with
entities associated with the principals of the Maret Group
to transfer selected data centre and network assets
(Network Assets) from our Managed Service business in
December 2022.
The restructuring program, alongside the various
divestment programs undertaken over the last two
years, has redefined the strategic and customer focus
of this segment. There remains more work to be done
by management to ensure this operation achieves its
required level of earnings returns, but we exit FY23 having
undertaken the key activities required to stabilise and reset
the operation for forward growth.
Launch of new go-to market strategy
In May 2023, we launched our new corporate strategy,
progressing our move towards becoming one of Australia’s
leading providers of modern and secure digital workplaces
via the provision of the following services:
▶ Secure: Helping companies create a secure organisation
and reduce risks through our Cyber Security solutions.
▶ Sustainable: Working with our partners Cisco and
Microsoft to provide companies with smart networks, IoT
devices and carbon reporting and management models
to help reduce their carbon footprint.
▶ Scalable: We help businesses to be scalable at low cost
through our smart infrastructure solutions.
The strategy is designed to address the growing need
of Spirit clients and the wider market for solutions that
improve their resilience to cyber-attacks and climate
change and ensures they are responsive to challenging
business conditions.
Targeting the Group’s 7,000+ customers, the strategy will
also enable Spirit to offer highly relevant solutions that
enable organisations to scale up or down and optimise
their goals around staff and customer experience as they
navigate changes in the economic environment.
Launch of new Security Operations centre
Our new Security Operations Centre (SOC) built to ASIO
“Secret” standards went live in June 2023. The new facility
is a key differentiator for Spirit, against generic SOC
capabilities provided by other Australian managed service
providers.
The facility supports our SOC services and enables the
cyber team to scale and underpins the sale of security
services into the Managed Services customer base and
initial cross sell opportunities went live in June 2023. The
SOC already manages a growing number of leading
Australian organisations and enables our customers to
protect $22 billion in revenue.
6
Annual Report 2023A Letter from the Managing Director and CEO
▶ Managed Services cyber security defence and workplace
productivity offer for SME customers, to be sold into the
existing SME customer base of 7,000+ customers
▶ Cyber managed security solution delivered from our
new SOC which enables our expansion into the growing
higher value defence industry supply chain
▶ Additional new cyber contracts signed from a number
of new and renewing ASX 100 customers in the last 3
months
▶ Development of Spirit’s Sustainable business enhanced
with new high-growth AI offers targeting a number of
the Group’s customers
Alongside these, Spirit will continue to focus on its growth
strategy through:
▶ Organic growth through expanding its Australian
presence, signing new customers and upselling
offerings to existing customers
▶ Target acquisitions to grow further in the Secure,
Sustainable and Scalable space
▶ Further agreements and partnerships with our
leading global technology partners
▶ Developing unique intellectual property that
supports accelerated project delivery timeframes and
builds capabilities that deliver measurable outcomes
for customers
I would like to thank our Board, Management team and
employees for their hard work and dedication over the
past 12 months as we have repositioned our Company for
growth.
Thanks also to our shareholders for your continued
support. I look forward to updating you on our progress
towards our goal of becoming one of Australia’s leading
providers of modern and secure digital workplaces.
Julian Challingsworth
Managing Director and CEO
Communication and Collaboration
The Collaboration & Communication business achieved
record revenue performance in FY23, up 19% year-on-year
due to an ongoing build in recurring and outperformance
on product sales particularly in H1 FY23.
The number of business customers continued to build
over the course of the financial year with the segment now
servicing 6,000+ customers on average contract tenures of
4+ years.
This provides the Group with a solid foundation to sustain
high levels of organic growth through sales of new
products into this installed base, combined with other
growth avenues such as our new Dealer program and
potentially further geographic expansion.
As CISCO’s #1 partner in the Asia Pacific region for
their communication platform, the Collaboration &
Communication team continues to grow and support
thousands of Australian organisations with the best in
video and calling experiences.
The offers provide a scalable and secure platform to
support an organisation’s transition to Work from Home
/ Work from Anywhere that is being adopted by many of
Australia’s leading companies.
Financial overview
Spirit reported Group revenue of $127.1 million for FY23,
down 6.1% on FY22 and Group Underlying EBITDA (refer to
Directors' report page 14) of $5.2 million.
The loss for the Group for FY23 after income tax was
$11.389 million, down from the $53.166 million loss in FY22.
A restructuring provision of $1 million was recognised
to provide for estimated costs associated with further
Managed Services restructuring initiatives to be
implemented in the six months to 31 December 2023.
Cash outflows from operating activities were $3.7 million
for the year ended 30 June 2023 (FY22: cash inflows $3.5
million). This included cash outflows associated with
restructuring costs of $1.7 million (2022: $0.4 million).
Cash obligations associated with business combination
payments and business acquisition and divestment costs
were largely satisfied through debt drawdowns.
Outlook
Spirit enters FY24 with a refocused Company and growth
platform that is expected to drive the Managed Services
business back into positive earnings.
In August, we launched several new high-growth market
offers which offer a significant opportunity to drive
earnings growth:
7
Annual Report 2023
Board of
Directors
Annual Report 2023ASX: ST1 James Joughin
Julian Challingsworth
Elie Ayoub
Chairman
Managing Director
James Joughin brings over 30 years
Julian is a proven leader of ASX-
of general corporate experience,
listed companies, with a strong
having been a senior partner of
professional service and corporate
Ernst & Young until 2013. He was
finance background. He has
a partner of the firm for 17 years
extensive experience managing
and headed the Mergers and
enterprise, government, and critical
Acquisitions division in Melbourne.
infrastructure clients.
Co-CEO Nexgen &
Executive Director
Elie co-founded Nexgen in
2009 and has been jointly
responsible for the growth and
direction of the Company. He
has 25 years’ of experience in the
telecommunications industry
across the SME, residential,
corporate and government
customer segments.
Julian Haber
Michelle Bendschneider
Greg Ridder
Non-Executive Board Member
Non-Executive Director
Non-Executive Director
Julian is a highly regarded leader
Michelle is an experienced
Greg is currently the Chairman of
in Cyber Security and Information
executive with an impressive
Kogan.com. Formerly Asia Pacific
Technology, having built one of
technology and finance
Regional President at NYSE-listed
Australia’s most reputable Cyber
background that includes stints
Owens-Illinois, Greg led growth and
Security companies, Intalock
with IBM, Telstra, and CBA.
diversification from its traditional
Technologies, which was acquired
by Spirit in December 2020.
Australian base through joint
ventures and acquisitions in China
and Southeast Asia.
9
Annual Report 2023 Executive
Members
Annual Report 2023ASX: ST1 Julian Challingsworth
Zoe Rosenwax
Paul Miller
Managing Director
Head of People
Chief Financial Officer
Julian is a proven leader of ASX-
Zoe is an experienced people and
Paul is a Chartered Accountant
listed companies, with a strong
culture leader, with over 10 years
with more than 25 years of financial
professional service and corporate
experience leading the HR function
experience. Having commenced
finance background. He has
for some of Australia's leading
his career with PwC in Australia
extensive experience managing
businesses.
enterprise, government, and critical
infrastructure clients.
and London, Paul has specialised
expertise working in high growth
companies.
Nathan Knox
James Harb
Chief Operating Officer
Co-CEO Nexgen
Nathan joins Spirit with a wealth
Along with Elie, James co-founded
of experience in similar roles at
Nexgen in 2009 and has over
leading ASX100 companies and
20 years’ experience in the telco
government agencies, including
industry.
Tesserant, NBN Co, Coles, and
Woolworths.
Elie Ayoub
Co-CEO Nexgen &
Executive Director
Elie co-founded Nexgen in
2009 and has been jointly
responsible for the growth and
direction of the Company. He
has 25 years’ of experience in the
telecommunications industry
across the SME, residential,
corporate and government
customer segments.
11
Annual Report 2023 Directors'
Report
Annual Report 2023ASX: ST1 Spirit Technology Solutions Ltd
Directors' report
30 June 2023
The Directors present their report, together with the financial statements, on the Consolidated Entity (referred
to hereafter as the 'Consolidated Entity') consisting of Spirit Technology Solutions Ltd (referred to hereafter as
the 'Company', 'parent entity' or 'Spirit') and the entities it controlled at the end of, or during, the year ended 30
June 2023.
Directors
The following persons were Directors of Spirit Technology Solutions Ltd during the whole of the financial
year and up to the date of this report, unless otherwise stated:
Mr James Joughin (Non-Executive Chairman)
Mr Julian Challingsworth (Managing Director and Chief Executive Officer - appointed 11 July 2022)
Mr Elie Ayoub (Co-CEO Nexgen and Executive Director – appointed as Executive Director on 8 June 2023)
Mr Julian Haber (Executive Director 1 April 2022 to 18 November 2022, Interim Managing Director 16 May
2022 to 11 July 2022, and Non-Executive Director from 19 November 2022)
Mr Sol Lukatsky (Managing Director - resigned 2 July 2022)
Mr Gregory Ridder (Non-Executive Director)
Ms Michelle Bendschneider (Non-Executive Director)
Principal activities
During the financial year the principal activities of the Consolidated Entity consisted of the provision of
Collaboration and Communication services, Cyber Security services and Managed IT services.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Operating and Financial Review
Entity’s operations
The Consolidated Entity remains focused on becoming one of Australia’s leading providers of modern and
secure digital workplaces with a focus purely on the business-to-business market by providing a complete
offering across Telecommunications, Internet, Cloud, IT Managed Services and Cyber Security, backed by
service excellence. The Spirit business model offers the full solution for the modern-day business to
communicate with its staff and customers whilst also protecting business’ data and cloud infrastructure.
The changing landscape of cloud and hybrid work models has profoundly transformed the cyber landscape,
reshaping the way organisations approach cybersecurity, data management, collaboration and remote access.
This shift coupled with the aim of Spirit to be a leader in the Australian cloud and cyber industry saw the Company
invest in the development of a range of new product offerings during the financial year under review. Within our
Managed Services division that involved the development of a ‘Secure and Modern’ solution for our customers
to work from anywhere safely and effectively. The Company also progressed the tailoring of this mid-market
solution to enable our small business customers, whom are likewise looking for cost-effective ways to adopt to
the cloud. Our Collaboration & Communication division is excited at the launch of this solution to provide their
customers with access to simplified onboarding, expert IT support, cost savings, cybersecurity enhancements,
and the ability to leverage cutting-edge technologies.
As a technology services company, our core requirements of any solution are Secure, Sustainable and
Scalable to allow for optimised Managed Solutions. The centre of our mission is our customer not the
technology. Spirit is dedicated at building and bundling technology solutions that are aligned to each customer’s
journey. This encompasses for instance ‘Internet of Things’ technology to drive data points tailored to customer
business driver needs or delivering sustainability solutions to assist our customers on their respective individual
journeys to achieve energy efficiencies. Spirit has a vision to be known within the market for solving a customer’s
problem and securely enabling their employees.
2
13
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
The Consolidated Entity’s reporting framework aligns to the following key operating segments (as outlined in
Note 4: Operating Segments of the financial statements):
▪ Collaboration and Communication: offering award-winning voice solutions, managed service solutions, data
and office technology for small business;
▪ Cyber security: offering specialist cyber managed services and industry leading solutions to corporate and
enterprise customers delivered through a 24/7 Security Operations Centre and professional service teams.
This capability also enables Spirit to put cyber security at the core of all key market solutions provided across
our segments, improving the resilience and security of all our customers;
▪ Managed Services (IT&T): offering a comprehensive range of managed IT and professional services
including end-user, public cloud, infrastructure and networking, data and voice solutions to SMB and mid-
market customers.
Review of operations and financial position
The loss for the Consolidated Entity for the financial year ended 30 June 2023 (“FY23”) after providing for income
tax amounted to $11.389M (30 June 2022 (“FY22”): loss $53.166M). Total revenue and other income for the
Consolidated Entity for FY23 was $127.3M (FY22: $138.7M). The following table summarises the key financial
metrics for the financial year:
2023
$'000
2022
$'000
Change
$'000
Revenue (refer Note 5 to the financial statements)
Other income (refer Note 6 to the financial statements)
127,114
157
135,338
3,394
(8,224)
(3,237)
Revenue and other income
127,271
138,732
(11,461)
Earnings before interest, taxes, depreciation & amortisation
(EBITDA*)
Share-based payments***
Loss/(profit) on divestment of non-core assets
(refer Note 6 & 7 to the financial statements)
Acquisition & divestment costs***
Restructuring costs****
Other restructuring items*****
Net fair value loss on remeasurement of contingent
consideration on business combinations***
Impairment of non-current assets
Underlying EBITDA*
Depreciation and amortisation expense
(exc. amortisation of customer relationships)
Finance costs (net)
Underlying Profit/(Loss) before income tax
benefit/(expense)**
(8,266)
942
600
(46,216)
721
(1,823)
37,950
221
2,423
200
2,732
901
1,926
1,527
-
(1,726)
1,205
901
8,042
-
2,747
48,374
5,295
(48,374)
5,151
7,256
(2,105)
(2,879)
(6,461)
(1,580)
(1,170)
3,582
(410)
692
(375)
1,067
(Loss)/profit after income tax benefit/(expense)***
(11,389)
(53,166)
41,777
* EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the
profit/(loss) under AAS adjusted for depreciation, amortisation, interest and tax. Underlying EBITDA is EBITDA adjusted to
exclude share-based payments, gain/(loss) on divestment of non-core assets, acquisition & divestment costs, restructuring
costs, net fair value loss on remeasurement of contingent consideration on business combinations and impairment of non-
current assets. Underlying EBITDA for the year to 30 June 2023 also includes a notional gross margin adjustment add back
to reflect the one-off loss on customer retention initiatives – shown as ‘Other restructuring items’.
14
3
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
The Consolidated Entity’s reporting framework aligns to the following key operating segments (as outlined in
Note 4: Operating Segments of the financial statements):
▪ Collaboration and Communication: offering award-winning voice solutions, managed service solutions, data
and office technology for small business;
▪ Cyber security: offering specialist cyber managed services and industry leading solutions to corporate and
enterprise customers delivered through a 24/7 Security Operations Centre and professional service teams.
This capability also enables Spirit to put cyber security at the core of all key market solutions provided across
our segments, improving the resilience and security of all our customers;
▪ Managed Services (IT&T): offering a comprehensive range of managed IT and professional services
including end-user, public cloud, infrastructure and networking, data and voice solutions to SMB and mid-
market customers.
Review of operations and financial position
The loss for the Consolidated Entity for the financial year ended 30 June 2023 (“FY23”) after providing for income
tax amounted to $11.389M (30 June 2022 (“FY22”): loss $53.166M). Total revenue and other income for the
Consolidated Entity for FY23 was $127.3M (FY22: $138.7M). The following table summarises the key financial
metrics for the financial year:
2023
$'000
2022
$'000
Change
$'000
Revenue (refer Note 5 to the financial statements)
Other income (refer Note 6 to the financial statements)
127,114
157
135,338
3,394
(8,224)
(3,237)
Revenue and other income
127,271
138,732
(11,461)
Earnings before interest, taxes, depreciation & amortisation
(EBITDA*)
Share-based payments***
Loss/(profit) on divestment of non-core assets
(refer Note 6 & 7 to the financial statements)
Acquisition & divestment costs***
Restructuring costs****
Other restructuring items*****
Net fair value loss on remeasurement of contingent
consideration on business combinations***
Impairment of non-current assets
Underlying EBITDA*
Depreciation and amortisation expense
(exc. amortisation of customer relationships)
Finance costs (net)
Underlying Profit/(Loss) before income tax
benefit/(expense)**
(8,266)
(46,216)
37,950
942
600
721
221
(1,823)
2,423
200
2,732
901
1,926
1,527
-
(1,726)
1,205
901
8,042
-
2,747
48,374
5,295
(48,374)
5,151
7,256
(2,105)
(2,879)
(6,461)
(1,580)
(1,170)
3,582
(410)
692
(375)
1,067
(Loss)/profit after income tax benefit/(expense)***
(11,389)
(53,166)
41,777
* EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the
profit/(loss) under AAS adjusted for depreciation, amortisation, interest and tax. Underlying EBITDA is EBITDA adjusted to
exclude share-based payments, gain/(loss) on divestment of non-core assets, acquisition & divestment costs, restructuring
costs, net fair value loss on remeasurement of contingent consideration on business combinations and impairment of non-
current assets. Underlying EBITDA for the year to 30 June 2023 also includes a notional gross margin adjustment add back
to reflect the one-off loss on customer retention initiatives – shown as ‘Other restructuring items’.
** Underlying net profit/(loss) before income tax benefit/(expense) (“uNPBT”) is a financial measure which is not prescribed
by Australian Accounting Standards (‘AAS’) and adjusts underlying EBITDA* to deduct depreciation & amortisation
(excluding amortisation of customer relationships) and finance costs (net of interest revenue). The Directors consider that
these measures are useful in gaining an understanding of the performance of the entity, consistent with internal reporting.
*** Refer Statement of profit or loss and other comprehensive income.
**** Restructuring costs encompasses:
▪ Product IP development costs ($0.4M) related to costs associated with the development of the new Modern
Workplace Solution (“MWS”) and Small Business Managed Services (“SBMS”) offerings. The portion related to the
half year to 31 December 2022 (“H1 FY23”) was $0.3M and the portion related to the half year to 30 June 2023
(“H2 FY23”) was $0.1M. This represents a restatement of the normalisations reflected in the Interim Financial
Report for H1 FY23.
▪ System reengineering costs ($0.6M); and
▪ Employee redundancy costs ($1.7M).
***** Other restructuring items covers a notional add back for professional services margin loss on customer retention
migrations ($0.9M). This relates to the assessed gross margin forgone on supporting customers to move from acquisition
legacy products that were end of life to new product MWS offerings. The portion related to H1 FY23 was $0.3M and the
portion related to H2 FY23 was $0.6M. This represents a restatement of the normalisations reflected in the Interim Financial
Report for H1 FY23.
The last 18 months have been directed at transitioning the Company away from capital intensive infrastructure
to become a full spectrum technology provider focused on providing our customers with integrated innovative
solutions built on service and solution delivery. The consumer broadband business was divested in October
2021, the Fixed Wireless broadband business was divested in June 2022 and selected data centre and network
assets were divested in December 2022. These divestments have reshaped the profit and loss of the Company
(and specifically that of the Managed Services IT&T segment) in so far as a combination of a reduction in
revenue (with divested customers), lowering of gross margins (associated with moving to wholesale
arrangements), reduction of operating costs and a reduction of depreciation & amortisation with the sale of
capital assets. To gain a more useful comparison of performance across financial years underlying Profit & Loss
before income tax (“uNPBT”) is considered a better indicator.
FY23 can also be summarised as a year in which the company looked inwards in so far as reshaping its strategic
vision into three core forward pillars around Secure, Sustainable and Scalable as the foundation for all its
customer deliverables moving forward. The Company is aiming to be known within the market for solving
complex customer business problems and building and delivering products that are tailored to our customers
business drivers underpinned by security at the core. A key focus for the coming financial year is to embed our
outstanding cyber security capability into one third of our customer base through direct engagement of our Cyber
Security division or through new cyber security enabled products. That focus is to be delivered through
accelerating people collaboration between the business segments.
Another key focus across FY23 has been around transparency and accountability. Accountability is being
embedded across the organisation culturally to underpin all deliverables to customers and stakeholders. The
Board continues to acknowledge that the financial performance at a group and individual segment level remains
challenging and requires a significant uplift to meet expectations. The work undertaken by the Board and
management in FY23 is expected to ensure the Group is now outward focused on growth with a clearly defined
accountable and outcome driven set of strategic goals.
Below is a review of FY23 performance by segment.
Collaboration and Communication
The Collaboration and Communication segment achieved an uNPBT** for FY23 of $8.0M (FY22: $8.6M) on a
record full year sales revenue of $41.6M (FY22: $35.0M).
The segment performance was mixed with a very strong performance in the six month period to 31 December
2022 (“H1 FY23’’) accounting for 71% of its uNBPT contribution relative to the six month period ended 30 June
2023 (“H2 FY23”). The segments performance is historically stronger in H1 relative to H2 however the drop in
H2 FY23 was larger than expected and attributable to a combination of product based revenue constraints
(associated with economic inflationary market factors dampening demand) combined with some margin and
operating cost pressures.
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15
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Acknowledging some earnings constraints exist in short term in the context of the current inflationary
environment, the segment continues to achieve solid revenue growth year on year reflecting both the demand
for the products offered within the SMB market alongside a proven and well-disciplined sales methodology. The
Board remains pleased with the continued performance of this segment and the forward focus is on organic
growth driven by:
- Development of new market Modern Workplace Solution offering, encompassing managed services & cyber
security products tailored to the small business market, that can be sold to its customer base of some 6,000
businesses.
- Sales team expansion with a scale up of a new telemarketing team in the Philippines to grow lead generation
and in turn conversion success.
- Expansion via a new dealer enabled business centre offering to leverage the collaboration and
communication product sets to the wider business network community.
- Ongoing collaboration with our Partners (lead by Cisco) to increase opportunities and reach to deliver market
leading solutions that our customers are demanding.
Cyber Security
The Cyber Security division achieved an uNPBT** for FY23 of $0.6M (FY22: $2.0M) on full-year sales revenue
of $33.6M (FY22: 31.4M). This segment suffered from management disruption in H1 FY23 as a consequence
of the former division CEO taking on the dual role of interim Group CEO during the transition period to find a
permanent Group Managing Director. The financial outcomes reflect this distraction and also acknowledges that
there was a capability gap left as a consequence of this key departure that impacted sales pipelines and delivery
oversight. That capability gap was corrected during the financial year with the appointment in H2 FY23 of an
experienced Chief Revenue Officer for the segment. The outcomes also reflect distractions associated with
significant investment initiatives to develop new products and automation considered necessary to lay the
foundation for forward growth, differentiate on customer experience and to enable cyber sales into the other
Company segments. Key deliverables included:
- Development of new solutions to drive improved customer experience including the development of AI tools
(Chat GBT and PIA) to automate cyber incident response capabilities.
- Development of new Microsoft Core to extend the capabilities of the Security Operations Centre (“SOC”) to
support Microsoft Security opportunities, which is a significant growth area.
- Building and launch of new SOC in Brisbane constructed to ASIO “Secret” standards, which now manages
a growing number of leading Australian organisations. The new facility is a key differentiator against generic
SOC capabilities provided by other Australian managed service providers. The new facility will support our
SOC services and enable the cyber team to scale and underpins the sale of security services into the
Managed Services customer base.
These investments in people, process and capability are expected to underpin forward profitability.
Managed Services (IT&T)
The Managed Services division has been a challenging operation that has weighed heavily on the Groups
financial performance. The segment has been a complex operation having a mix of legacy Telco operations and
services combined with a number of acquisitions that delivered varying capabilities, products and vendors. The
Board and management has been focused on right sizing this operation and that focus consumed resources in
FY23, however the Consolidated Entity exits the financial year in a position to look outwards and leverage the
outputs of the investments made.
The Managed Services segment achieved an uNPBT** loss for FY23 of ($3.3M) (FY22 loss: $7.0M) on full year
revenue of $52.4M (FY22: 69.6M). The revenue reduction reflects the segments divestment programs alongside
its customer target and profitability refocus initiatives.
FY23 was focused on a progression of the restructuring program and initiatives that the Board implemented to
drive profitability enhancement which included:
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Directors' report
30 June 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Acknowledging some earnings constraints exist in short term in the context of the current inflationary
environment, the segment continues to achieve solid revenue growth year on year reflecting both the demand
for the products offered within the SMB market alongside a proven and well-disciplined sales methodology. The
Board remains pleased with the continued performance of this segment and the forward focus is on organic
growth driven by:
businesses.
Cyber Security
- Development of new market Modern Workplace Solution offering, encompassing managed services & cyber
security products tailored to the small business market, that can be sold to its customer base of some 6,000
- Sales team expansion with a scale up of a new telemarketing team in the Philippines to grow lead generation
and in turn conversion success.
- Expansion via a new dealer enabled business centre offering to leverage the collaboration and
communication product sets to the wider business network community.
- Ongoing collaboration with our Partners (lead by Cisco) to increase opportunities and reach to deliver market
leading solutions that our customers are demanding.
The Cyber Security division achieved an uNPBT** for FY23 of $0.6M (FY22: $2.0M) on full-year sales revenue
of $33.6M (FY22: 31.4M). This segment suffered from management disruption in H1 FY23 as a consequence
of the former division CEO taking on the dual role of interim Group CEO during the transition period to find a
permanent Group Managing Director. The financial outcomes reflect this distraction and also acknowledges that
there was a capability gap left as a consequence of this key departure that impacted sales pipelines and delivery
oversight. That capability gap was corrected during the financial year with the appointment in H2 FY23 of an
experienced Chief Revenue Officer for the segment. The outcomes also reflect distractions associated with
significant investment initiatives to develop new products and automation considered necessary to lay the
foundation for forward growth, differentiate on customer experience and to enable cyber sales into the other
Company segments. Key deliverables included:
- Development of new solutions to drive improved customer experience including the development of AI tools
(Chat GBT and PIA) to automate cyber incident response capabilities.
- Development of new Microsoft Core to extend the capabilities of the Security Operations Centre (“SOC”) to
support Microsoft Security opportunities, which is a significant growth area.
- Building and launch of new SOC in Brisbane constructed to ASIO “Secret” standards, which now manages
a growing number of leading Australian organisations. The new facility is a key differentiator against generic
SOC capabilities provided by other Australian managed service providers. The new facility will support our
SOC services and enable the cyber team to scale and underpins the sale of security services into the
Managed Services customer base.
These investments in people, process and capability are expected to underpin forward profitability.
Managed Services (IT&T)
The Managed Services division has been a challenging operation that has weighed heavily on the Groups
financial performance. The segment has been a complex operation having a mix of legacy Telco operations and
services combined with a number of acquisitions that delivered varying capabilities, products and vendors. The
Board and management has been focused on right sizing this operation and that focus consumed resources in
FY23, however the Consolidated Entity exits the financial year in a position to look outwards and leverage the
outputs of the investments made.
The Managed Services segment achieved an uNPBT** loss for FY23 of ($3.3M) (FY22 loss: $7.0M) on full year
revenue of $52.4M (FY22: 69.6M). The revenue reduction reflects the segments divestment programs alongside
its customer target and profitability refocus initiatives.
FY23 was focused on a progression of the restructuring program and initiatives that the Board implemented to
drive profitability enhancement which included:
- The Segment progressed its strategy to divest non-core assets inclusive of selected data centre and network
assets (“Network Assets”) which was completed on 1 December 2022. This strategy focuses Managed
Services on enabling organisations to transfer to secure digital work environments that underpin the
connected modern workplace and less on capital intensive infrastructure. This move is a further step of
simplification, focus and profitability enhancement.
- Progressed the development and implementation of Digital Modern Workplace (“MWP”) as a product across
our customer base. This enables customer access to improved collaboration tools that promotes greater
teamwork for their employees, increases flexibility in terms of where they work, and provides a more secure
environment from cyber events.
- The development of our MWP offering enabled the transition of a range of key customers off historic
proprietary legacy platforms that were no longer fit for purpose and were creating significant customer and
reputational damage. Those issues reflected in significant financial credits being provided to customers to
compensate for outages.
As acknowledgment of the customer impacts that these legacy products were causing, the professional
services provided to move existing customers to the new MWP solutions was heavily discounted and
subsidised. The uNPBT** reported includes a notional underlying adjustment addback of $0.9M to reflect
the professional services margin loss on customer retention migrations. No underlying adjustment has been
reflected for the financial credits provided.
Importantly this transition process has been completed and concludes a further part of the drive to simplify
the business model and delivery capabilities. The Company has been transitioning its customers off legacy
solutions to more standardised Microsoft centric solutions, which benefit the customer, and present Spirit
the opportunity to gain efficiencies through delivering standardised solutions at scale.
- Review of customer cohorts, and ongoing rationalisation of those cohorts, to enable concentration on a
more defined profitable target base being mid-market customers where the business can target at providing
secure and connected modern workplace solutions.
- Product portfolio streamlined to focus on delivering profitable products into growth segments.
-
Implementation of new managed services technology platforms to leverage AI in the triage and management
of service level 1 calls which will enable a further realignment of the overhead base.
- Nationalisation of the service desk, which involved combining three separate region-based support teams
into one centralised Support Centre. This has significantly improved efficiencies by streamlining processes
and utilising shared resources, resulting in a drastic improvement in key performance metrics and has led
to increased customer satisfaction.
- Reduction of labour costs associated with a staged right sizing of the employee base following
implementation of the above range of initiatives.
The Board remains very cognisant of the time and effort that has been consumed on this segment and continues
to assess all options with a view to mitigating forward earnings and cashflow impacts alongside acknowledging
the segments potential value and growth possibilities. The divestment during the financial year of the Network
Assets removes a further layer of risk and now creates a more focused platform and streamlined operation. The
segment has progressed its strategic focus on the Spirit Microsoft Core, which will accelerate its progress in
deploying Microsoft Modern Workplace, Microsoft cloud and security solutions at scale. Having right sized the
operations the segment now needs to scale with new customers and leverage the returns from aligning to such
a high growth, market leading suite of products and technologies.
A restructuring provision of $1M has been recognised as at 30 June 2023 to provide for estimated costs
associated with further restructuring initiatives to be implemented in the six months to 31 December 2023 and
concludes the restructuring program.
Cash outflows from operating activities were $3.7M for the year ended 30 June 2023 (2022: cash inflows $3.5M).
This included cash outflows associated with restructuring costs of $1.7M (2022: $0.4M). Cash obligations
associated with business combination payments and business acquisition and divestment costs were largely
satisfied through debt drawdowns. Net cash outflows from investing activities were $11.0M (2022: $1.2M net of
business divestment proceeds). During the financial year, the Company drew down net debt from its banking
facility of $12M as part of its capital management strategy.
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Spirit Technology Solutions Ltd
Directors' report
30 June 2023
The basic and diluted earnings per share loss for the financial year ended 30 June 2023 was 1.67 cents (2022:
loss of 8.08 cents).
The net assets of the Consolidated Entity decreased by $6.3M to $53.1M as at 30 June 2023 (30 June 2022:
$59.4M). This decrease primarily reflects the impact of the contingent consideration increase associated with
the outperformance of the collaboration and communication segment.
Prospects for future financial years and Business Risks
The Consolidated Entity continues to evolve as it progresses its transition into a Modern Technology service
provider that is known for delivering tailored innovative customer solutions. Spirit’s mission is to help our
customers deliver on their strategic goals. That evolution and mission has been accelerated recently through a
divestment phase of non-core legacy network assets. Spirit is positioned to leverage the solution and product
sets it has assembled to drive future organic growth and deliver a solution focused customer experience.
The Company’s immediate strategic priorities remain focused on improved profitability performance across all
segments, driving organic growth and returning to positive cash flows from its operations. As part of that focus,
there will be ongoing acceleration of initiatives within the Managed Services (IT&T) business segment to move
that division’s uNPBT** to a positive position. In conjunction the Consolidated Entity needs to maintain its
investment in human capital and technology platforms to build a sustainable and profitable business generating
long-term shareholder returns.
The evolutionary path of building a scalable and profitable company inherently involves risk. Those risk factors
change over time in both nature and weighting. Management and the Board of the Company actively manage
risk and apply mitigation strategies (where possible) to reduce the impact of the stated risk on the Company’s
achievement of its goals.
The key material business risks that the Company foresees that could impede the achievement of its future
operational and financial success at the time of signing the Directors Report are set out below.
Funding Risk
In recognition of the profitability outcomes in the financial year’s ended 30 June 2023 and 30 June 2022, the
Company is focused on getting to an operational cashflow positive position alongside managing residual
acquisition contingent consideration obligations over the ensuing 21 months. The Consolidated Entity will
continue to require access to external capital in addition to its own operational cash flow generation abilities.
The funding strategy includes sourcing and utilising a mix of debt funding, non-core asset divestment funding
and shareholder equity. As at 30 June 2023 the Company had a net debt position of $18M (30 June 2022: 1.3M)
and net current liability position of $7.7M (30 June 2022: $10M) which is primarily associated with the residual
business acquisition liabilities linked with the acquisitions of Intalock (Spirit) Cyber Security Pty Ltd (formerly
Intalock Technologies Pty Ltd) (“Intalock”) and Nexgen Investment Group Pty Ltd (“Nexgen”), alongside a
component of the borrowings classified as current (noting the post balance sheet date renegotiations outlined
below).
During the financial year, there were two variations to the Company’s loan facility limit which is currently $28M.
The renegotiation of the facility included changes to the financial covenants (as outlined in note 22 of the financial
statements) and other conditions and undertakings by the Company. As at 30 June 2023 $25M had been drawn
with a further $3M drawn by the Company post year end. As part of the undertakings provided, the Company is
required to pay down the facility to $20M by July 2024 at the latest following a further renegotiation on the facility
limit and timing that was reached after 30 June 2023. The statement of financial position reflects the
circumstances that existed as at balance date (before this further amendment) with a portion of the borrowings
shown as current.
As outlined in the Statement of Financial Position (within the financial statements) the future consideration
payments owing are provisioned at $7.5M. Accordingly, there are funding obligations and funding risks
associated with these payments. To address those risk factors the Company has entered into an agreement
with the founders of both Intalock and Nexgen to crystalise the commitments and manage the associated
cashflow settlement obligations. Those cashflow obligations have been spread over the next 21 months with
$4.1M being classified as current and $3.4M as non-current.
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Spirit Technology Solutions Ltd
Directors' report
30 June 2023
loss of 8.08 cents).
The basic and diluted earnings per share loss for the financial year ended 30 June 2023 was 1.67 cents (2022:
The net assets of the Consolidated Entity decreased by $6.3M to $53.1M as at 30 June 2023 (30 June 2022:
$59.4M). This decrease primarily reflects the impact of the contingent consideration increase associated with
the outperformance of the collaboration and communication segment.
Prospects for future financial years and Business Risks
The Consolidated Entity continues to evolve as it progresses its transition into a Modern Technology service
provider that is known for delivering tailored innovative customer solutions. Spirit’s mission is to help our
customers deliver on their strategic goals. That evolution and mission has been accelerated recently through a
divestment phase of non-core legacy network assets. Spirit is positioned to leverage the solution and product
sets it has assembled to drive future organic growth and deliver a solution focused customer experience.
The Company’s immediate strategic priorities remain focused on improved profitability performance across all
segments, driving organic growth and returning to positive cash flows from its operations. As part of that focus,
there will be ongoing acceleration of initiatives within the Managed Services (IT&T) business segment to move
that division’s uNPBT** to a positive position. In conjunction the Consolidated Entity needs to maintain its
investment in human capital and technology platforms to build a sustainable and profitable business generating
long-term shareholder returns.
The evolutionary path of building a scalable and profitable company inherently involves risk. Those risk factors
change over time in both nature and weighting. Management and the Board of the Company actively manage
risk and apply mitigation strategies (where possible) to reduce the impact of the stated risk on the Company’s
achievement of its goals.
The key material business risks that the Company foresees that could impede the achievement of its future
operational and financial success at the time of signing the Directors Report are set out below.
Funding Risk
In recognition of the profitability outcomes in the financial year’s ended 30 June 2023 and 30 June 2022, the
Company is focused on getting to an operational cashflow positive position alongside managing residual
acquisition contingent consideration obligations over the ensuing 21 months. The Consolidated Entity will
continue to require access to external capital in addition to its own operational cash flow generation abilities.
The funding strategy includes sourcing and utilising a mix of debt funding, non-core asset divestment funding
and shareholder equity. As at 30 June 2023 the Company had a net debt position of $18M (30 June 2022: 1.3M)
and net current liability position of $7.7M (30 June 2022: $10M) which is primarily associated with the residual
business acquisition liabilities linked with the acquisitions of Intalock (Spirit) Cyber Security Pty Ltd (formerly
Intalock Technologies Pty Ltd) (“Intalock”) and Nexgen Investment Group Pty Ltd (“Nexgen”), alongside a
component of the borrowings classified as current (noting the post balance sheet date renegotiations outlined
below).
During the financial year, there were two variations to the Company’s loan facility limit which is currently $28M.
The renegotiation of the facility included changes to the financial covenants (as outlined in note 22 of the financial
statements) and other conditions and undertakings by the Company. As at 30 June 2023 $25M had been drawn
with a further $3M drawn by the Company post year end. As part of the undertakings provided, the Company is
required to pay down the facility to $20M by July 2024 at the latest following a further renegotiation on the facility
limit and timing that was reached after 30 June 2023. The statement of financial position reflects the
circumstances that existed as at balance date (before this further amendment) with a portion of the borrowings
shown as current.
As outlined in the Statement of Financial Position (within the financial statements) the future consideration
payments owing are provisioned at $7.5M. Accordingly, there are funding obligations and funding risks
associated with these payments. To address those risk factors the Company has entered into an agreement
with the founders of both Intalock and Nexgen to crystalise the commitments and manage the associated
cashflow settlement obligations. Those cashflow obligations have been spread over the next 21 months with
$4.1M being classified as current and $3.4M as non-current.
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
The Company’s aim is to manage settlement of these obligations from its operating cash flows and debt facilities.
That noted, the risk with respect to such preferred funding access is contingent on the Consolidated Entity’s
performance improvements to generate positive cashflows from operations and ongoing support from its
financiers. The Company has a number of initiatives that it is currently pursuing to mitigate the risks, including
regular communication with the financier and assessing other alternative sources of finance in whole or in part.
Contingent Consideration Risk
Contingent consideration risk relates to the variability of any earn-out consideration associated with acquisitions.
During the financial year ended 30 June 2023, this risk was fully addressed and remaining contingent
consideration obligations were crystallised as follows.
Intalock
As outlined Note 34, the acquisition of Intalock included a contingent consideration element by way of an earn-
out structure based upon EBITDA performance over a 12-month period ended 30 June 2022 (“FY22”). The
earnout consideration was to be settled 100% in cash. The finalised amount of contingent consideration due
and payable where the FY22 target has been exceeded was $3.476M.
During the year ended 30 June 2023, $2.687M was settled. The remaining balance to be settled of $0.789M is
classified as a current liability as at the reporting date.
Nexgen
As outlined Note 34, the acquisition of Nexgen included a contingent consideration element by way of an earn-
out structure based on performance targets for the 18 months ended 30 June 2023. The Company and the
founders finalised these arrangements in their entirety in February 2023. The amount of contingent consideration
included a component settled in shares of the Company totaling $4.537M which were issued on 31 March 2023.
$6.9 million was paid in cash during the financial year ended 30 June 2023. A further cash component of
$6.737M remains to be settled as at 30 June 2023 of which $3.3M is classified as a current liability and the
remainder is classified as a non-current liability as at the reporting date.
The contingent consideration payable is higher than originally anticipated but reflects the performance of
Nexgen.
Cyber Risks
Cyber related attacks are an inherent risk faced by every organisation and the financial and operational impact
that this risk can have on an organisation is very high. Accordingly, as a material business risk it requires
constant management and risk mitigation. In December 2020 Spirit acquired Intalock Technologies Pty Ltd (now
known as Intalock (Spirit) Cyber Security Pty Ltd). Intalock is a leading cyber security services company and
operates a Security Operations Centre providing 24/7 monitoring, technical services and support for enterprise
size clients. Intalock also provides internal support services for Spirit. The Consolidated Entity therefore has the
internal capability of this division to provide proactive and reactive solutions management of any Cyber related
events that present against Spirit and its customer base. Cyber Security services are now a fundamental risk
management requirement for any organisation and is a critical defence mechanism for all companies across
their IT infrastructure and software layers.
Sales Execution Risk
Achievement of the Company’s growth strategy is contingent on consistent building and execution of its sales
strategy within the segment target markets. That execution is reliant on attracting and retaining the right mix of
sales talent. Over the last few financial years, the Consolidated Entity has had mixed success in this regard with
the Managed Services segment in particular facing significant sales staff retention and delivery execution
challenges.
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Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Labour Market and Inflationary Pressures
Access to required human capital talent within the Australian employment pool remains a key business risk
although it is easing. The Company operates in a highly competitive industry and requires a mix of skilled
professionals to execute its business plan. Spirit, like all companies, is not immune to the ongoing challenges in
sourcing and retaining skilled staff in a competitive and at times wage inflationary environment. Spirit has
developed strategies to retain its workforce team and will continue to invest in not only employee retention
programs but also the enhancement of initiatives to be an employer of choice.
Aspirational Risk
The Consolidated Entity can still be classified as a small company as measured against other companies listed
on the ASX. As the Company continues to achieve growth and scale, the potential complexity and degree of risk
may also increase in the absence of mitigation strategies. The Company’s forward strategic goal is also to
accelerate entry into the mid-market customer space. That strategy will increasingly focus on targeting more
complex mid-market customers and transactions. To achieve these goals, this process will involve an ongoing
investment in people, marketing/branding and system enhancements.
Spirit has historically pursued accelerated growth through an acquisition strategy. Acquisitions carry risk in terms
of successful execution, integration and achieving pro-forma contributions of the acquired business. As Spirit
moves forward it will focus more on a balanced combination of organic and inorganic growth mix.
Global Stability Risk
There remains ongoing risk associated with international stability risks. At the date of this Directors’ Report, local
and international markets remain in a delicate phase, tempered by inflationary pressures. Given the fluid and
unpredictable nature of external factors there remains ongoing risk that disruptions may occur that impact the
ability of the Consolidated Entity to achieve its stated forward objectives.
Significant changes in the state of affairs
On 1 December 2022, the Consolidated Entity announced it had entered into and completed an agreement for
the transfer of selected Network Assets to a Melbourne based business associated with the principals of the
Maret Group which acquired Spirit’s Fixed Wireless business in June 2022. The transfer is consistent with Spirit’s
strategy of simplifying its Managed Services (IT&T) business, reducing operating costs and sharpening its focus
on target customer segments.
On 31 March 2023, the Consolidated Entity announced the issue of 70,881,125 fully paid ordinary shares for no
cash consideration, issued at a fair value price of $0.064 (6.4 cents) per fully paid ordinary share, as part of the
contingent consideration in relation to the Nexgen acquisition.
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial
year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly
affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated Entity’s state of
affairs in future financial years.
Likely developments and expected results of operations
Refer ‘Entity’s operations’ and ‘Prospects for future financial years’.
Environmental regulation
The Consolidated Entity is not subject to any significant environmental regulation under Australian
Commonwealth or State law.
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Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Information on Directors
Name:
Title:
Mr James Joughin
Non-Executive Chairman
Qualifications:
Bachelor of Business, CPA, GAICD
Experience and expertise:
James Joughin brings over 31 years of general corporate experience, having
been a senior partner of Ernst & Young until 2013. He was a partner of that
firm for 17 years and headed the Mergers and Acquisitions division in
Melbourne. James is also an experienced company Director and holds (or has
held) Non-Executive Directorships of a number of private and public
companies. He has wide business experience and has previously held the
position of Chair of a private company and is currently Chair of a number of
Risk and Audit Committees. For most of his career, James has been providing
advice to Boards in relation to growth strategies, improving shareholder value,
mergers and acquisitions, funding (both debt and equity) and IPO’s.
Other current Directorships:
None
Former Directorships (last 3
years):
MyDeal.com.au Ltd (ASX: MYD) (resigned 23 September 2022)
Bio-Gene Technology Ltd (ASX:BGT) (resigned 22 April 2023)
Special responsibilities:
Member, Audit and Risk Committee,
Chair, Nomination and Remuneration Committee (Member up to 19 April 2022
and Chair from 20 April 2022)
Interests in shares:
5,459,936 fully paid ordinary shares
Interests in options:
Interests in rights:
Nil
Nil
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Labour Market and Inflationary Pressures
Access to required human capital talent within the Australian employment pool remains a key business risk
although it is easing. The Company operates in a highly competitive industry and requires a mix of skilled
professionals to execute its business plan. Spirit, like all companies, is not immune to the ongoing challenges in
sourcing and retaining skilled staff in a competitive and at times wage inflationary environment. Spirit has
developed strategies to retain its workforce team and will continue to invest in not only employee retention
programs but also the enhancement of initiatives to be an employer of choice.
Aspirational Risk
The Consolidated Entity can still be classified as a small company as measured against other companies listed
on the ASX. As the Company continues to achieve growth and scale, the potential complexity and degree of risk
may also increase in the absence of mitigation strategies. The Company’s forward strategic goal is also to
accelerate entry into the mid-market customer space. That strategy will increasingly focus on targeting more
complex mid-market customers and transactions. To achieve these goals, this process will involve an ongoing
investment in people, marketing/branding and system enhancements.
Spirit has historically pursued accelerated growth through an acquisition strategy. Acquisitions carry risk in terms
of successful execution, integration and achieving pro-forma contributions of the acquired business. As Spirit
moves forward it will focus more on a balanced combination of organic and inorganic growth mix.
Global Stability Risk
There remains ongoing risk associated with international stability risks. At the date of this Directors’ Report, local
and international markets remain in a delicate phase, tempered by inflationary pressures. Given the fluid and
unpredictable nature of external factors there remains ongoing risk that disruptions may occur that impact the
ability of the Consolidated Entity to achieve its stated forward objectives.
Significant changes in the state of affairs
On 1 December 2022, the Consolidated Entity announced it had entered into and completed an agreement for
the transfer of selected Network Assets to a Melbourne based business associated with the principals of the
Maret Group which acquired Spirit’s Fixed Wireless business in June 2022. The transfer is consistent with Spirit’s
strategy of simplifying its Managed Services (IT&T) business, reducing operating costs and sharpening its focus
on target customer segments.
On 31 March 2023, the Consolidated Entity announced the issue of 70,881,125 fully paid ordinary shares for no
cash consideration, issued at a fair value price of $0.064 (6.4 cents) per fully paid ordinary share, as part of the
contingent consideration in relation to the Nexgen acquisition.
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial
year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly
affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated Entity’s state of
affairs in future financial years.
Likely developments and expected results of operations
Refer ‘Entity’s operations’ and ‘Prospects for future financial years’.
Environmental regulation
Commonwealth or State law.
The Consolidated Entity is not subject to any significant environmental regulation under Australian
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Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Qualifications:
Experience and expertise:
Mr Julian Challingsworth
Managing Director and Chief Executive Officer (appointed 11 July 2022)
Masters of Organisational Consulting from Ashridge Business School (UK), a
Graduate Diploma in IT, Swinburne University (Aust), Bachelor of Business,
Accounting, RMIT (Aust), Chartered Accountants (CAANZ), Fellow Australian
CPA (FCPA), Graduate, Australian Institute of Company Directors (GAICD).
Julian previously acted as the Co-Chief Executive Officer of Tesserent (ASX
TNT). Tesserent provides cybersecurity to enterprise, government and critical
infrastructure customers. Under Julian’s leadership the organisation grew
significantly through both acquisitive and organic means. Julian spent 3 years
in the role before he resigned and stepped down from his role as Co-Chief
Executive in November 2021. Julian joined Tesserent after serving as
Managing Director and a Partner of The Litmus Group for over ten years and
a board member and Partner of PPB Advisory. In addition to advising over
twenty organisations on growth acceleration strategies in Australia, Asia and
Europe, Julian was a key driver in growing Litmus in Australia and
internationally before it was acquired by PPB Advisory. Julian was a Director
of Cordence Worldwide, a global consulting partnership with 2,800
consultants across 60+ locations. Julian worked with the international team to
develop sales and growth strategies for the 8 member firms.
Julian is a proven ASX listed CEO, with a strong professional services and
corporate finance background.
Other current Directorships:
None
Former Directorships (last 3
years):
Interests in shares:
Tesserent Limited (ASX: TNT) (resigned 23 November 2021)
11,646,891 fully paid ordinary shares
Interests in options:
Nil
Interests in rights:
6,250,000 Performance Rights
Name:
Title:
Mr Gregory Ridder
Non-Executive Director
Qualifications:
BBus (Acc), Grad Dip (Mktg), GAICD, CPA
Experience and expertise:
Mr Ridder is an experienced Non-Executive Director currently serving on the
boards of Kogan.com, Life Without Barriers, both of which he chairs, and PNG
Sustainable Development Program.
Formerly Asia Pacific Regional President at NYSE-listed Owens-Illinois, he
led growth and diversification from its traditional Australian base through
numerous joint ventures and acquisitions.
Other current Directorships:
Chairman, Kogan.com (ASX: KGN)
Former Directorships (last 3
years):
Special responsibilities:
None
Chair, Audit and Risk Committee from 15 July 2020
Member, Nomination and Remuneration Committee from 15 July 2020
Interests in shares:
2,250,000 fully paid ordinary shares
Interests in options:
Interests in rights:
Nil
Nil
22
11
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Mr Julian Haber
Executive Director (1 April 2022 to 18 November 2022), Interim Managing
Director (16 May 2022 to 11 July 2022), and Non-Executive Director (from 19
November 2022)
Qualifications:
Nil
Experience and expertise:
Julian previously acted as the Co-Chief Executive Officer of Tesserent (ASX
Experience and expertise:
Julian is a highly regarded leader in Cyber Security and Information
Technology, having built Intalock Technologies over the last 11 years which
was acquired by Spirit in December 2020. During that time Intalock evolved
from being a small start-up to providing mission critical services to Australia’s
largest enterprises and government departments across Australia, including
Whole-of-Government cyber services protecting the G20 Brisbane summit. As
CEO of Intalock (Spirit’s Cyber business), Julian oversaw the strategy and
growth of the company ensuring that it continues to innovate and deliver
sophisticated cyber security solutions to its managed and professional
services customers across varied industries.
Previously at Symantec, the world’s largest Information Management and
Cyber Security company at the time, Julian was responsible for the Public
Sector - Queensland, Northern Territory and Pacific Islands. Under his five
years of leadership, this region delivered annual revenue growth of over 300%
and resulted in some of the largest and most loyal customers in the ANZ
region. Having a wealth of experience, Julian has been invited to sit on
numerous Global and Regional Partner Advisory Boards for some of the
world’s largest technology companies.
Other current Directorships:
None
Former Directorships (last 3
years):
Interests in shares:
None
5,693,092 fully paid ordinary shares
Interests in options:
Interests in rights:
Nil
Nil
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Qualifications:
Mr Julian Challingsworth
Managing Director and Chief Executive Officer (appointed 11 July 2022)
Masters of Organisational Consulting from Ashridge Business School (UK), a
Graduate Diploma in IT, Swinburne University (Aust), Bachelor of Business,
Accounting, RMIT (Aust), Chartered Accountants (CAANZ), Fellow Australian
CPA (FCPA), Graduate, Australian Institute of Company Directors (GAICD).
TNT). Tesserent provides cybersecurity to enterprise, government and critical
infrastructure customers. Under Julian’s leadership the organisation grew
significantly through both acquisitive and organic means. Julian spent 3 years
in the role before he resigned and stepped down from his role as Co-Chief
Executive in November 2021. Julian joined Tesserent after serving as
Managing Director and a Partner of The Litmus Group for over ten years and
a board member and Partner of PPB Advisory. In addition to advising over
twenty organisations on growth acceleration strategies in Australia, Asia and
Europe, Julian was a key driver in growing Litmus in Australia and
internationally before it was acquired by PPB Advisory. Julian was a Director
of Cordence Worldwide, a global consulting partnership with 2,800
consultants across 60+ locations. Julian worked with the international team to
develop sales and growth strategies for the 8 member firms.
Julian is a proven ASX listed CEO, with a strong professional services and
corporate finance background.
years):
Name:
Title:
Other current Directorships:
None
Former Directorships (last 3
Tesserent Limited (ASX: TNT) (resigned 23 November 2021)
Interests in shares:
11,646,891 fully paid ordinary shares
Interests in options:
Nil
Interests in rights:
6,250,000 Performance Rights
Mr Gregory Ridder
Non-Executive Director
Qualifications:
BBus (Acc), Grad Dip (Mktg), GAICD, CPA
Experience and expertise:
Mr Ridder is an experienced Non-Executive Director currently serving on the
boards of Kogan.com, Life Without Barriers, both of which he chairs, and PNG
Sustainable Development Program.
Formerly Asia Pacific Regional President at NYSE-listed Owens-Illinois, he
led growth and diversification from its traditional Australian base through
numerous joint ventures and acquisitions.
Other current Directorships:
Chairman, Kogan.com (ASX: KGN)
Former Directorships (last 3
None
years):
Special responsibilities:
Chair, Audit and Risk Committee from 15 July 2020
Member, Nomination and Remuneration Committee from 15 July 2020
Interests in shares:
2,250,000 fully paid ordinary shares
Interests in options:
Interests in rights:
Nil
Nil
11
12
23
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Ms Michelle Bendschneider
Non-Executive Director
Qualifications:
Bachelor of Information Technology and GAICD
Experience and expertise:
Michelle is an experienced Executive, with an expansive background in
building growth businesses in the Technology, Professional Services and
Telecommunications sectors. During her career at IBM, Michelle held multiple
including consulting,
Senior Executive roles
professional services, and managed services.
in Technology services
At Telstra, she successfully led the formation of a professional services
business spanning cutting edge network services, cyber security solutions,
collaboration solutions, Cloud services and IoT solutions, through a series of
acquisitions and organic growth. Michelle went on to run the Product Group
for Telstra Enterprise, where she led the strategy to transition and modernise
legacy product portfolios to embrace Software Defined Networking, Cloud
Services & Technologies, Cyber Security, IoT and Digital transformation
capabilities. At CBA, Michelle led the delivery of technology enabled Security
and Privacy solutions, addressing significant areas of risk for the organisation.
Other current Directorships:
None
Former Directorships (last 3
years):
None
Special responsibilities:
Member, Nomination and Remuneration Committee from 1 April 2022
Member, Audit and Risk Committee from 1 April 2022
Interests in shares:
465,000 fully paid ordinary shares
Interests in options:
Interests in rights:
Nil
Nil
Name:
Title:
Mr Elie Ayoub
Co-CEO Nexgen and Executive Director (appointed as Executive Director on
8 June 2023)
Qualifications:
Nil
Experience and expertise:
Elie is one of the co-CEO’s of Nexgen – Spirit’s Communication and
Collaboration Business which he co-founded in 2009 and has been jointly
responsible for the growth and direction of the Company. Elie has 25 years’ of
experience in the telecommunications industry across the SME, residential,
corporate and government customer segments. Prior to co-founding Nexgen,
Elie held roles at Digitel, One.tel, Macquarie Telecom and Axis Telecom. Elie
has broad experience managing a number of telecommunications functions
including, provisioning, project management, network solutions, billing,
finance, service, sales and marketing. Elie has been instrumental in building,
developing and maintaining Nexgen’s sales, marketing, HR and operational
processes, and in managing strategic partnerships and vendor relationships.
Other current Directorships:
Former Directorships (last 3
years):
Special responsibilities:
None
None
None
Interests in shares:
73,985,171 fully paid ordinary shares
Interests in options:
Interests in rights:
Nil
Nil
24
13
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Ms Michelle Bendschneider
Non-Executive Director
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Mr Sol Lukatsky
Managing Director (resigned 2 July 2022)
Qualifications:
Bachelor of Information Technology and GAICD
Qualifications:
Masters of Marketing, Bachelor of Business (Marketing)
Experience and expertise:
Experience and expertise:
Other current Directorships:
Former Directorships (last 3
years):
Interests in shares:
Interests in options:
Mr Lukatsky is a C-Suite Executive with multiple company transactions
across: ASX and Private Equity backed companies. He has over 17 years in
senior leadership roles covering: marketing, sales management, digital,
customer experience, big data, capital markets, innovation and operations
within blue chip organisations including: Dun & Bradstreet, Challenger
Financial Services and NAB. In addition, as CEO he has led two Private Equity
backed companies in the online services and digital technology markets (GLS
& Workstar). This included, Global P&L responsibilities, +650 team members
with offices across Australia, Asia and Europe. Educated at Harvard,
Melbourne Business School, RMIT and awarded a Fellowship by Leadership
Victoria.
None
None
3,354,421 fully paid ordinary shares (held at date of cessation on 2 July 2022)
3,000,000 unlisted options, vesting on 1 July 2022, exercisable at $0.15 (15
cents) per option, expiring 1 July 2023 (held at date of cessation on 2 July
2022)
3,000,000 unlisted options, vesting on 1 July 2022, exercisable at $0.18 (18
cents) per option, expiring 1 July 2023 (held at date of cessation on 2 July
2022)
3,000,000 unlisted options, vesting on 1 July 2022, exercisable at $0.215
(21.5 cents) per option, expiring 1 July 2023 (held at date of cessation on 2
July 2022)
Interests in rights:
2,905,102 Performance Rights (relates to balance retained at cessation on 2
July 2022)
'Other current Directorships' quoted above are current Directorships for listed entities only and excludes
Directorships of all other types of entities, unless otherwise stated.
'Former Directorships (last 3 years)' quoted above are Directorships held in the last 3 years for listed entities
only and excludes Directorships of all other types of entities, unless otherwise stated.
Company secretary
Ms Melanie Leydin, BBus (Acc. Corp Law) CA FGIA
Melanie Leydin has over 30 years’ experience in the accounting profession and over 20 years’ experience as a
Company Director, including as nominated Company Secretary of ASX listed entities. She has extensive
experience in relation to public company responsibilities, including ASX and ASIC compliance, control and
implementation of corporate governance, statutory financial reporting, reorganization of Companies, initial public
offerings, secondary raisings and shareholder relations.
Melanie holds a Bachelor of Business majoring in Accounting and Corporate Law. She is a Member of the
Institute of Chartered Accountants, a Fellow of the Governance Institute of Australia and is a Registered
Company Auditor. Melanie founded and was principal of a renowned Australian professional services firm from
February 2000. In November 2021 Vistra Group acquired that business and Melanie is now Vistra Australia's
Managing Director.
13
14
25
Michelle is an experienced Executive, with an expansive background in
building growth businesses in the Technology, Professional Services and
Telecommunications sectors. During her career at IBM, Michelle held multiple
Senior Executive roles
in Technology services
including consulting,
professional services, and managed services.
At Telstra, she successfully led the formation of a professional services
business spanning cutting edge network services, cyber security solutions,
collaboration solutions, Cloud services and IoT solutions, through a series of
acquisitions and organic growth. Michelle went on to run the Product Group
for Telstra Enterprise, where she led the strategy to transition and modernise
legacy product portfolios to embrace Software Defined Networking, Cloud
Services & Technologies, Cyber Security, IoT and Digital transformation
capabilities. At CBA, Michelle led the delivery of technology enabled Security
and Privacy solutions, addressing significant areas of risk for the organisation.
Special responsibilities:
Member, Nomination and Remuneration Committee from 1 April 2022
Member, Audit and Risk Committee from 1 April 2022
Interests in shares:
465,000 fully paid ordinary shares
Other current Directorships:
None
Former Directorships (last 3
years):
None
Interests in options:
Interests in rights:
Nil
Nil
Name:
Title:
Mr Elie Ayoub
8 June 2023)
Qualifications:
Nil
Experience and expertise:
Co-CEO Nexgen and Executive Director (appointed as Executive Director on
Elie is one of the co-CEO’s of Nexgen – Spirit’s Communication and
Collaboration Business which he co-founded in 2009 and has been jointly
responsible for the growth and direction of the Company. Elie has 25 years’ of
experience in the telecommunications industry across the SME, residential,
corporate and government customer segments. Prior to co-founding Nexgen,
Elie held roles at Digitel, One.tel, Macquarie Telecom and Axis Telecom. Elie
has broad experience managing a number of telecommunications functions
including, provisioning, project management, network solutions, billing,
finance, service, sales and marketing. Elie has been instrumental in building,
developing and maintaining Nexgen’s sales, marketing, HR and operational
processes, and in managing strategic partnerships and vendor relationships.
Other current Directorships:
Former Directorships (last 3
years):
Special responsibilities:
None
None
None
Interests in options:
Interests in rights:
Nil
Nil
Interests in shares:
73,985,171 fully paid ordinary shares
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held
during the year ended 30 June 2023, and the number of meetings attended by each Director were:
Full Board
Remuneration Committee Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Nomination and
Mr James Joughin
Mr Julian Challingsworth*
Mr Elie Ayoub**
Mr Julian Haber
Mr Gregory Ridder
Ms Michelle Bendschneider
Mr Sol Lukatsky***
12
12
1
11
12
10
-
12
12
1
12
12
12
-
5
-
-
-
5
5
-
5
-
-
-
5
5
-
2
-
-
-
2
2
-
2
-
-
-
2
2
-
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
Mr Julian Challingsworth was appointed to the Board effective 11 July 2022.
Mr Elie Ayoub was appointed to the Board effective 8 June 2023.
*
**
*** Mr Sol Lukatsky resigned from the Board effective 2 July 2022.
Remuneration Report (audited)
The Remuneration Report details the key management personnel remuneration arrangements for the
Consolidated Entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all Directors.
The Remuneration Report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Consolidated Entity's executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the
achievement of strategic objectives and the creation of value for shareholders and it is considered to conform
to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that executive
reward satisfies the following key criteria for good reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its Directors and
executives. The performance of the Consolidated Entity depends on the quality of its Directors and executives.
The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
26
15
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held
during the year ended 30 June 2023, and the number of meetings attended by each Director were:
Full Board
Remuneration Committee Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Nomination and
Mr James Joughin
Mr Julian Challingsworth*
Mr Elie Ayoub**
Mr Julian Haber
Mr Gregory Ridder
Ms Michelle Bendschneider
Mr Sol Lukatsky***
12
12
1
11
12
10
-
12
12
1
12
12
12
-
5
-
-
-
5
5
-
5
-
-
-
5
5
-
2
-
-
-
2
2
-
2
-
-
-
2
2
-
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
*
**
Mr Julian Challingsworth was appointed to the Board effective 11 July 2022.
Mr Elie Ayoub was appointed to the Board effective 8 June 2023.
*** Mr Sol Lukatsky resigned from the Board effective 2 July 2022.
Remuneration Report (audited)
The Remuneration Report details the key management personnel remuneration arrangements for the
Consolidated Entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all Directors.
The Remuneration Report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Consolidated Entity's executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the
achievement of strategic objectives and the creation of value for shareholders and it is considered to conform
to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that executive
reward satisfies the following key criteria for good reward governance practices:
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its Directors and
executives. The performance of the Consolidated Entity depends on the quality of its Directors and executives.
The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
●
●
●
●
●
●
●
●
●
●
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
The reward framework is designed to align executive reward to shareholders' interests. The Board has
considered that it should seek to enhance shareholders' interests by:
having economic profit as a core component of plan design
●
focusing on sustained growth in shareholder wealth, particularly growth in share price, and delivering
●
constant or increasing return on capital as well as focusing the executive on key non-financial drivers of
value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive
Director remuneration is separate.
Non-Executive Directors remuneration
The annual Non-Executive Director Chairman fees are $120,000 per annum, which took effect from 1 July 2021.
The annual Non-Executive Director member fees are $75,000 per annum, which took effect from 1 July 2021.
The annual Chair Fee for the Chair of the Audit and Risk Committee and Nomination and Remuneration
Committee are $10,000 per annum, which took effect from 1 July 2021. Committee members do not currently
receive any additional fees.
Under the Constitution the Directors decide the total amount paid to each Director as remuneration for their
services. Under ASX Listing Rules, the total amount paid to all Non-Executive Directors must not exceed in total
in any financial year the amount fixed at the annual general meeting of the Company held on 13 October 2020,
which is presently $500,000. Remuneration must not include a commission on, or a percentage of, the profits
or income of the Company.
Non-Executive Directors' fees and payments are reviewed annually by the Board. The Board may, from time to
time, receive advice from independent remuneration consultants to ensure Non-Executive Directors' fees and
payments are appropriate and in line with the market. The Chairman's fees are determined independently of the
fees of other Non-Executive Directors based on comparative roles in the external market. The Chairman is not
present at any discussions relating to the determination of his own remuneration.
Directors may also be reimbursed for travel and other expenses incurred in attending to the Company's affairs.
Non-Executive Directors may be paid such additional or special remuneration as the Directors decide is
appropriate where a Director performs extra work or services which are not in the capacity as a Director of the
Company.
There are no proposed retirement benefit schemes for Directors other than statutory superannuation
contributions.
Executive remuneration
The Consolidated Entity aims to reward executives based on their position and responsibility with a level and
mix of remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
long-term incentives in the form of share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
15
16
27
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Fixed remuneration consisting of base salary, superannuation and non-monetary benefits, are reviewed
annually by the Nomination and Remuneration Committee based on individual and business unit performance,
the overall performance of the Consolidated Entity and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor
vehicle benefits) where it does not create any additional costs to the Consolidated Entity and provides additional
value to the executive.
Use of remuneration consultants
The Company engages the services of independent and specialist remuneration consultants from time to time
to benchmark the remuneration of Directors and Key Management Personnel, and to assist the Company in
ensuring that its remuneration arrangements remain competitive. During the year ended 30 June 2023, the
Company engaged a specialist remuneration consultant, SLM Corporate to provide advice in relation to
recommendations regarding
the Managing Director and CEO, and
recommendations in relation to the LTI framework of the Company. The amount paid for this advice and
recommendations during the financial year ended 30 June 2023 amounted to $27,500 (2022: $31,350).
the remuneration package of
The Board was satisfied that the advice received was free from any undue influence by the KMP to whom the
advice may relate, because protocols were observed and complied with regarding any interaction between SLM
Corporate and management, and because all remuneration advice was provided to the Remuneration and
Nomination Committee.
Consolidated Entity performance and link to remuneration
Currently, the Consolidated Entity assesses its performance from achievement of operational goals and
shareholder value. The performance measures for both the Company’s Short-term Incentive Plan (STI Plan)
and Long Term Incentive Plan (LTI Plan) are tailored to align at-risk remuneration and performance hurdle
thresholds to the delivery of the Consolidated Entity’s operational and financial objectives and sustained
shareholder value growth.
This is achieved through certain executives being entitled to both short-term and long-term incentives. The STI
Plan primarily incorporates operational and financial performance objectives into its hurdles. The LTI Plan
generally incorporates into its performance measures, Relative Total Shareholder Return (Relative TSR) and
Absolute Total Shareholder Return (Absolute TSR) hurdles.
The LTI Plan is part of the Company’s remuneration strategy and is designed to align the interests of
management and shareholders (Total Shareholder Return measurement) and assist the Company to attract,
motivate and retain executives. In particular, the LTI Plan is designed to provide relevant directors, key
employees and other selected personnel with an incentive to remain with Spirit and contribute to the future
performance of the Group over the long term. Further details on the LTI Plan are presented in Share Based
Compensation of this Directors’ report.
Voting and comments made at the Company's 17 November 2022 Annual General Meeting ('AGM')
At the 17 November 2022 AGM, 96.95% of the votes received supported the adoption of the remuneration report
for the year ended 30 June 2022. The Company did not receive any specific feedback at the AGM regarding its
remuneration practices.
28
17
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Fixed remuneration consisting of base salary, superannuation and non-monetary benefits, are reviewed
annually by the Nomination and Remuneration Committee based on individual and business unit performance,
the overall performance of the Consolidated Entity and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor
vehicle benefits) where it does not create any additional costs to the Consolidated Entity and provides additional
value to the executive.
Use of remuneration consultants
The Company engages the services of independent and specialist remuneration consultants from time to time
to benchmark the remuneration of Directors and Key Management Personnel, and to assist the Company in
ensuring that its remuneration arrangements remain competitive. During the year ended 30 June 2023, the
Company engaged a specialist remuneration consultant, SLM Corporate to provide advice in relation to
recommendations regarding
the remuneration package of
the Managing Director and CEO, and
recommendations in relation to the LTI framework of the Company. The amount paid for this advice and
recommendations during the financial year ended 30 June 2023 amounted to $27,500 (2022: $31,350).
The Board was satisfied that the advice received was free from any undue influence by the KMP to whom the
advice may relate, because protocols were observed and complied with regarding any interaction between SLM
Corporate and management, and because all remuneration advice was provided to the Remuneration and
Nomination Committee.
Consolidated Entity performance and link to remuneration
Currently, the Consolidated Entity assesses its performance from achievement of operational goals and
shareholder value. The performance measures for both the Company’s Short-term Incentive Plan (STI Plan)
and Long Term Incentive Plan (LTI Plan) are tailored to align at-risk remuneration and performance hurdle
thresholds to the delivery of the Consolidated Entity’s operational and financial objectives and sustained
shareholder value growth.
This is achieved through certain executives being entitled to both short-term and long-term incentives. The STI
Plan primarily incorporates operational and financial performance objectives into its hurdles. The LTI Plan
generally incorporates into its performance measures, Relative Total Shareholder Return (Relative TSR) and
Absolute Total Shareholder Return (Absolute TSR) hurdles.
The LTI Plan is part of the Company’s remuneration strategy and is designed to align the interests of
management and shareholders (Total Shareholder Return measurement) and assist the Company to attract,
motivate and retain executives. In particular, the LTI Plan is designed to provide relevant directors, key
employees and other selected personnel with an incentive to remain with Spirit and contribute to the future
performance of the Group over the long term. Further details on the LTI Plan are presented in Share Based
Compensation of this Directors’ report.
Voting and comments made at the Company's 17 November 2022 Annual General Meeting ('AGM')
At the 17 November 2022 AGM, 96.95% of the votes received supported the adoption of the remuneration report
for the year ended 30 June 2022. The Company did not receive any specific feedback at the AGM regarding its
remuneration practices.
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Details of remuneration
•
The key management personnel of the Consolidated Entity consisted of the following Directors and other
executives of Spirit Technology Solutions Ltd:
●
●
●
James Joughin, Non-Executive Chairman
Julian Challingsworth, Managing Director (appointed 11 July 2022)
Julian Haber, Executive Director (1 April 2022 to 18 November 2022), Interim Managing Director (16 May
2022 to 11 July 2022), and Non-Executive Director (from 19 November 2022)
Gregory Ridder, Non-Executive Director
Michelle Bendschneider, Non-Executive Director
Elie Ayoub, Co-CEO Nexgen and Executive Director (appointed as a member of key management
personnel effective, 1 February 2023 and appointed as an Executive Director on 8 June 2023)
Sol Lukatsky, Managing Director (resigned 2 July 2022)
Mark Dioguardi, Chief Technology Officer (ceased as a member of key management personnel effective
15 August 2022)
Nathan Knox, Chief Operating Officer (appointed as a member of key management personnel effective 15
August 2022)
James Harb, Co-CEO Nexgen (appointed as a member of key management personnel effective 1
February 2023)
Paul Miller, Chief Financial Officer
●
●
●
●
●
●
●
●
Amounts of remuneration
Details of the remuneration of key management personnel of the Consolidated Entity are set out in the following
tables.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Cash
Other
Super-
Long
service
bonus
payments
annuation
leave
$
$
$
$
Equity-
settled
$
Total
$
118,181
85,000
68,182
37,500
389,487
133,632
253,682
1,538
-
-
-
-
-
-
-
-
-
-
33,139
-
12,409
-
7,159
-
-
-
-
-
-
-
-
-
130,590
85,000
108,480
37,500
-
-
-
153,035
40,896
9,273
24,981
15,023
586
(3,929)
13,436
(26,942)
108,286
-
-
145,937
539,255
138,976
292,099
288,591
231,074
241,460
41,250
300,000
1,900,986
-
-
-
50,000
50,000
-
-
-
-
186,174
24,263
23,770
4,331
36,750
198,855
381
10,653
-
3,057
(2,758)
25,138
-
19,028
67,972
280,856
275,883
64,609
457,779
366,361 2,699,618
2023
Non-Executive Directors:
James Joughin
Gregory Ridder
Michelle Bendschneider^
Julian Haber*
Executive Directors:
Julian Challingsworth**
Julian Haber*
Elie Ayoub***
Sol Lukatsky****
Other Key Management
Personnel:
Nathan Knox#
James Harb##
Mark Dioguardi###
Paul Miller+
17
18
29
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
^
*
Ms Michelle Bendschneider provided strategic consultancy services to the Company and was paid a fee of $33,139 during
the year ended 30 June 2023. This payment is shown in ‘Other Payments’.
Mr Julian Haber was appointed to the Board in an Executive Director capacity effective 1 April 2022. He moved into a Non-
Executive capacity effective 19 November 2022. The remuneration noted above reflects the apportionment for these two
positions.
Mr Julian Challingsworth was appointed as Managing Director effective 11 July 2022.
**
*** Mr Elie Ayoub was appointed as a member of key management personnel (“KMP”) effective, 1 February 2023 and appointed
as an Executive Director on 8 June 2023. The remuneration disclosed represents his remuneration for the period 1 July 2022
to 30 June 2023. The total remuneration component related to his period as a KMP was $129,764 and the total remuneration
component related to his period as an executive director was $25,118.
**** Mr Sol Lukatsky resigned from the Board on 2 July 2022. The balance shown in ‘Other’ relates to termination payments. The
#
##
###
+
share-based payments represents the full year expense for the performance rights that remain on foot.
Mr Nathan Knox commenced with the Company on 15 August 2022 and was appointed as a member of key management
personnel effective from that date.
Mr James Harb was appointed as a member of key management personnel effective, 1 February 2023. The remuneration
disclosed represents his remuneration for the period 1 July 2022 to 30 June 2023. The total remuneration component related
to his period as a KMP was $139,964.
Mr Mark Dioguardi ceased as a member of key management personnel effective 15 August 2022. The remuneration disclosed
represents his remuneration for the period 1 July 2022 to 15 August 2022.
Mr Paul Miller was awarded a cash retention bonus in respect of his FY23 remaining tenure, paid in FY23.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
2022
Non-Executive Directors:
James Joughin
Gregory Ridder
Michelle Bendschneider*
Inese Kingsmill**
Executive Directors:
Julian Haber***
Sol Lukatsky****+
Mark Dioguardi#+
Other Key Management
Personnel:
Paul Miller+
Cash salary
and fees
$
110,856
85,000
17,045
21,250
Cash
Non-
Super-
Long
service
bonus
monetary
annuation
leave
$
$
$
$
Equity-
settled
$
-
-
-
-
11,085
-
1,705
-
-
-
-
-
Total
$
121,941
85,000
18,750
21,250
-
-
-
-
172,532
378,461
330,000
-
35,000
55,989
291,250
1,406,394
37,500
128,489
17,253
57,821
47,844
3,929
26,942
15,051
-
272,239
336,812
193,714
770,463
785,696
39,688
175,396
6,407
52,329
54,017
428,862
663,068 2,425,676
-
-
-
-
-
-
-
-
-
*
**
***
Ms Michelle Bendschneider was appointed to the Board effective 1 April 2022.
Ms Inese Kingsmill resigned from the Board effective 30 September 2021.
Mr Julian Haber was appointed to the Board effective 1 April 2022. The remuneration disclosed represents his remuneration
for the period 1 July 2021 to 30 June 2022. The amounts he received pre-1 April 2022 in his capacity as CEO of Intalock
Technologies Pty Ltd was $118,740 and post 1 April 2022 in his capacity as Executive Director was $74,974.
**** Mr Sol Lukatsky resigned from the Board on 2 July 2022.
#
+
Mr Mark Dioguardi resigned from the Board on 1 April 2022. The amounts he received pre-1 April 2022 in his capacity as
Executive Director was $540,739 and post 1 April 2022 in his capacity as Chief Technology Officer was $244,957.
Mr Lukatsky, Mr Dioguardi and Mr Miller were awarded cash bonuses in respect of their FY22 performance, determined and
paid in FY23. In addition to statutory superannuation on base salary and the FY22 cash bonus, the superannuation for Mr
Lukatsky, Mr Dioguardi and Mr Miller also includes statutory superannuation on the FY21 cash bonus.
30
19
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Ms Michelle Bendschneider provided strategic consultancy services to the Company and was paid a fee of $33,139 during
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
James Joughin
Gregory Ridder
Michelle Bendschneider
Julian Haber
Executive Directors:
Julian Challingsworth
Julian Haber
Elie Ayoub
Sol Lukatsky
Other Key Management
Personnel:
Nathan Knox
James Harb
Mark Dioguardi
Paul Miller
Fixed remuneration
At risk - STI
At risk - LTI
2023
2022
2023
2022
2023
2022
100%
100%
100%
100%
80%
100%
100%
49%
91%
100%
71%
85%
100%
100%
100%
-
-
100%
100%
60%
-
100%
50%
78%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5%
-
-
7%
9%
-
-
-
-
20%
-
-
51%
9%
-
29%
15%
-
-
-
-
-
-
-
35%
-
-
43%
13%
^
*
#
##
###
the year ended 30 June 2023. This payment is shown in ‘Other Payments’.
Mr Julian Haber was appointed to the Board in an Executive Director capacity effective 1 April 2022. He moved into a Non-
Executive capacity effective 19 November 2022. The remuneration noted above reflects the apportionment for these two
positions.
**
Mr Julian Challingsworth was appointed as Managing Director effective 11 July 2022.
*** Mr Elie Ayoub was appointed as a member of key management personnel (“KMP”) effective, 1 February 2023 and appointed
as an Executive Director on 8 June 2023. The remuneration disclosed represents his remuneration for the period 1 July 2022
to 30 June 2023. The total remuneration component related to his period as a KMP was $129,764 and the total remuneration
component related to his period as an executive director was $25,118.
**** Mr Sol Lukatsky resigned from the Board on 2 July 2022. The balance shown in ‘Other’ relates to termination payments. The
share-based payments represents the full year expense for the performance rights that remain on foot.
Mr Nathan Knox commenced with the Company on 15 August 2022 and was appointed as a member of key management
Mr James Harb was appointed as a member of key management personnel effective, 1 February 2023. The remuneration
disclosed represents his remuneration for the period 1 July 2022 to 30 June 2023. The total remuneration component related
personnel effective from that date.
to his period as a KMP was $139,964.
Mr Mark Dioguardi ceased as a member of key management personnel effective 15 August 2022. The remuneration disclosed
represents his remuneration for the period 1 July 2022 to 15 August 2022.
+
Mr Paul Miller was awarded a cash retention bonus in respect of his FY23 remaining tenure, paid in FY23.
Short-term benefits
Post-
Long-term
Share-based
employment
benefits
payments
benefits
Cash salary
Cash
Non-
Super-
and fees
bonus
monetary
annuation
leave
$
$
$
$
$
Equity-
settled
$
Long
service
2022
Non-Executive Directors:
James Joughin
Gregory Ridder
Michelle Bendschneider*
Inese Kingsmill**
Executive Directors:
Julian Haber***
Sol Lukatsky****+
Mark Dioguardi#+
Other Key Management
Personnel:
Paul Miller+
110,856
85,000
17,045
21,250
172,532
378,461
330,000
-
-
-
-
-
35,000
55,989
-
-
-
-
-
-
-
-
-
11,085
1,705
-
-
-
-
-
-
17,253
57,821
47,844
3,929
26,942
15,051
272,239
336,812
Total
$
121,941
85,000
18,750
21,250
193,714
770,463
785,696
-
-
-
-
-
291,250
1,406,394
37,500
128,489
39,688
175,396
6,407
54,017
428,862
52,329
663,068 2,425,676
Ms Michelle Bendschneider was appointed to the Board effective 1 April 2022.
Ms Inese Kingsmill resigned from the Board effective 30 September 2021.
*
**
***
Mr Julian Haber was appointed to the Board effective 1 April 2022. The remuneration disclosed represents his remuneration
for the period 1 July 2021 to 30 June 2022. The amounts he received pre-1 April 2022 in his capacity as CEO of Intalock
Technologies Pty Ltd was $118,740 and post 1 April 2022 in his capacity as Executive Director was $74,974.
**** Mr Sol Lukatsky resigned from the Board on 2 July 2022.
#
Mr Mark Dioguardi resigned from the Board on 1 April 2022. The amounts he received pre-1 April 2022 in his capacity as
Executive Director was $540,739 and post 1 April 2022 in his capacity as Chief Technology Officer was $244,957.
+
Mr Lukatsky, Mr Dioguardi and Mr Miller were awarded cash bonuses in respect of their FY22 performance, determined and
paid in FY23. In addition to statutory superannuation on base salary and the FY22 cash bonus, the superannuation for Mr
Lukatsky, Mr Dioguardi and Mr Miller also includes statutory superannuation on the FY21 cash bonus.
19
20
31
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Julian Challingsworth
Managing Director (appointed 11 July 2022)
Agreement commenced:
11 July 2022
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
written notice.
Details:
Effective 11 July 2022, fixed remuneration of $400,000 per annum, plus
statutory superannuation.
Mr Challingsworth will be entitled to a potential short-term incentive (STI) of
up to $100,000 per annum, representing 25% of his base remuneration. The
STI is subject to achievement of Key Performance Indicators (KPIs) to be
determined from time to time by the Board.
On commencement, Mr Challingsworth received an initial long-term incentive
(LTI) grant of 6,250,000 Performance Rights, vesting over a three-year period
(1 July 2022 to 30 June 2025) subject to continued employment and
satisfaction of a relative Total Shareholder Return performance hurdles
measured against a comparator group of companies. After the initial LTI
detailed above for FY2023, from FY2024 Mr. Challingsworth will be entitled to
an annual allocation of Performance Rights pursuant to the terms of the
Company's Employee Incentive Plan (EIP). An LTI entitlement of 75% of
Annual Base Salary can be paid to him from FY2024. Subject to shareholder
approval, the LTI will be granted on an annual basis from FY2024, and vesting
will be contingent on the achievement of specific performance hurdles.
Mr. Challingsworth has agreed to purchase at least $75,000 each year of
shares. He must ensure that he complies with the terms of the Securities
Trading Policy before doing so.
The Company has also implemented a Loan Funded Share Plan which was
approved by shareholders at the Annual General Meeting held on 17
November 2022, where Mr. Challingsworth was invited to obtain a loan from
the Company to purchase or reimburse him for purchases of up to $380,000
worth of shares on 2 separate occasions, no later than 15 months after the
date of shareholder approval.
32
21
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Julian Challingsworth
Managing Director (appointed 11 July 2022)
Agreement commenced:
11 July 2022
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Julian Haber
Executive Director (1 April 2022 to 18 November 2022), Interim Managing
Director (16 May 2022 to 11 July 2022), and Non-Executive Director (from 19
November 2022)
Agreement commenced:
16 May 2022
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
written notice.
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
Details:
Details:
Effective 11 July 2022, fixed remuneration of $400,000 per annum, plus
written notice.
statutory superannuation.
Intalock Technologies Pty Ltd,
As Chief Executive Officer of
fixed
remuneration of $137,662 per annum, plus statutory superannuation.
Effective 16 May 2022, Mr. Haber was appointed as Interim Managing Director
pending a permanent replacement. He held this position until 11 July 2022
when Mr. Julian Challingsworth was appointed in that role. During this period
Mr. Haber’s fixed remuneration increased to $400,000 per annum, plus
statutory superannuation. In the 2023 financial year, Mr. Haber was entitled to
a potential short-term incentive (STI) of up to $200,000 per annum (pro-rated
from the commencement date of Mr. Haber’s Interim Managing Director role
to its conclusion), representing 50% of his base remuneration. No long-term
incentive (LTI) will be awarded given the interim nature of the role.
Name:
Title:
Sol Lukatsky
Managing Director (resigned 2 July 2022)
Agreement commenced:
23 April 2018; terms revised on 27 July 2020
Term of agreement:
4 years and termination provisions will be a period of 12 weeks’ notice by the
employee and 26 weeks’ notice by the Company or payment in lieu of notice.
Details:
Effective 1 July 2020, fixed remuneration of $400,000 per annum, plus
statutory superannuation. Mr Lukatsky will be entitled to a potential short-term
incentive (STI) of up to $200,000, representing 50% of his base remuneration.
Mr Lukatsky was also entitled to a long-term incentive (LTI) of up to $200,000,
representing 50% of his base remuneration (excluding superannuation),
which was approved by shareholders at the Annual General Meeting held on
13 October 2020.
Mr Challingsworth will be entitled to a potential short-term incentive (STI) of
up to $100,000 per annum, representing 25% of his base remuneration. The
STI is subject to achievement of Key Performance Indicators (KPIs) to be
determined from time to time by the Board.
On commencement, Mr Challingsworth received an initial long-term incentive
(LTI) grant of 6,250,000 Performance Rights, vesting over a three-year period
(1 July 2022 to 30 June 2025) subject to continued employment and
satisfaction of a relative Total Shareholder Return performance hurdles
measured against a comparator group of companies. After the initial LTI
detailed above for FY2023, from FY2024 Mr. Challingsworth will be entitled to
an annual allocation of Performance Rights pursuant to the terms of the
Company's Employee Incentive Plan (EIP). An LTI entitlement of 75% of
Annual Base Salary can be paid to him from FY2024. Subject to shareholder
approval, the LTI will be granted on an annual basis from FY2024, and vesting
will be contingent on the achievement of specific performance hurdles.
Mr. Challingsworth has agreed to purchase at least $75,000 each year of
shares. He must ensure that he complies with the terms of the Securities
Trading Policy before doing so.
The Company has also implemented a Loan Funded Share Plan which was
approved by shareholders at the Annual General Meeting held on 17
November 2022, where Mr. Challingsworth was invited to obtain a loan from
the Company to purchase or reimburse him for purchases of up to $380,000
worth of shares on 2 separate occasions, no later than 15 months after the
date of shareholder approval.
21
22
33
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Mr Mark Dioguardi
Chief Technology Officer (ceased as a member of key management personnel
effective 15 August 2022)
Agreement commenced:
7 November 2018, terms revised on 27 July 2020
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
written notice.
Details:
Name:
Title:
Effective 1 July 2020, fixed remuneration of $330,000 per annum, plus
statutory superannuation up to the date of ceasing to be a member of key
management personnel. Post 15 August 2022, Mr Dioguardi’s remuneration
arrangement changed in line with his change of roles and responsibilities
within the Company.
Mr Elie Ayoub
Collaboration & Communication – Co Chief Executive Officer & Executive
Director (appointed as Executive Director on 8 June 2023)
Agreement commenced:
1 April 2021, terms revised on 1 January 2023, 1 April 2023 and 1 July 2023
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
written notice.
Details:
Name:
Title:
As co-CEO of Nexgen, Spirit's Communication and Collaboration Business,
Mr Ayoub’s base salary is $335,000 per annum, plus statutory superannuation
and car allowance. Effective 1 July 2023, Mr Ayoub’s base salary increased
to $380,000 per annum, plus statutory superannuation and car allowance.
There is no contractual short-term incentive or long-term incentive.
Mr James Harb
Collaboration & Communication – Co Chief Executive Officer
Agreement commenced:
1 April 2021, terms revised on 1 January 2023 and 1 July 2023
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
written notice.
Details:
Name:
Title:
As co-CEO of Nexgen, Spirit's Communication and Collaboration Business,
Mr Harb’s base salary is $285,000 per annum, plus statutory superannuation
and car allowance. Effective 1 July 2023, Mr Harb’s base salary increased to
$380,000 per annum, plus statutory superannuation and car allowance. There
is no contractual short-term incentive or long-term incentive.
Mr Nathan Knox
Chief Operating Officer – Spirit Group
Agreement commenced:
15 August 2022, terms revised on 1 November 2022
Term of agreement:
No fixed term. Ongoing until terminated by either party with two months written
notice.
Details:
Effective 1 November 2022, fixed remuneration of $275,000 per annum, plus
statutory superannuation. In 2023 financial year Mr Knox is entitled to a
potential short-term
to $50,000 (inclusive of
superannuation) prorated for commencement date. In the 2023 financial year,
Mr Knox was issued an LTI in the form of 1,558,000 Performance Rights,
vesting on satisfaction of performance hurdles, over a performance period
commencing on 10 February 2023 and ending on 30 June 2025.
incentive (STI) of up
34
23
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Mr Mark Dioguardi
Chief Technology Officer (ceased as a member of key management personnel
effective 15 August 2022)
Agreement commenced:
7 November 2018, terms revised on 27 July 2020
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
written notice.
Effective 1 July 2020, fixed remuneration of $330,000 per annum, plus
statutory superannuation up to the date of ceasing to be a member of key
management personnel. Post 15 August 2022, Mr Dioguardi’s remuneration
arrangement changed in line with his change of roles and responsibilities
within the Company.
Mr Elie Ayoub
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name:
Title:
Mr Paul Miller
Chief Financial Officer
Agreement commenced:
25 November 2019, terms revised on 1 October 2021
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
written notice.
Details:
Effective 1 October 2021, fixed remuneration of $300,000 per annum, plus
statutory superannuation. In 2023 financial year Mr Miller is entitled to a
potential short-term incentive (STI) of up to $75,000, representing 25% of his
base remuneration (excluding superannuation). In the 2023 financial year, Mr
Miller was issued an LTI in the form of 1,640,000 Performance Rights, vesting
on satisfaction of performance hurdles, over a performance period
commencing on 10 February 2023 and ending on 30 June 2025.
Collaboration & Communication – Co Chief Executive Officer & Executive
Director (appointed as Executive Director on 8 June 2023)
Key management personnel have no entitlement to termination payments in the event of removal for
misconduct.
Agreement commenced:
1 April 2021, terms revised on 1 January 2023, 1 April 2023 and 1 July 2023
Share-based compensation
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
Issue of shares
written notice.
Mr Julian Challingsworth, Managing Director and Chief Executive Officer is party to a Loan Share Plan that was
approved by Shareholders on 17 November 2022. Pursuant to the terms of the Plan he is able to finance the
market value acquisition of Spirit shares on the ASX by way of a limited recourse loan or use the loan to
reimburse Spirit share purchases to a value of up to $760,000.
The loan will become repayable if Mr Challingsworth ceases to be an employee of the Company and in other
circumstances set out in the Plan. The loan is limited recourse, meaning that it can be satisfied in full by selling
shares the subject of the loan. If the market value of the shares at that time is below the amount of the loan, Mr
Challingsworth will not be required to pay the difference in value. To access the shares (for example, if Mr
Challingsworth wanted the ability to sell the shares) he will first have to repay the cash amount of the loan.
Escrow may also apply to shares in excess of the loan amount.
The loan is subject to interest at the 2-year Bank Bill Swap Rate to be determined at the date of the loan. Interest
will be capitalised on the loan amount on a quarterly basis and on repayment will be added to the amount of the
loan.
As at 30 June 2023 the loan amount is $374,653.
There were no other shares issued to Directors and other key management personnel as part of compensation
during the year ended 30 June 2023.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and
other key management personnel in this financial year or future reporting years are as follows:
Name:
Title:
Details:
Name:
Title:
Details:
Name:
Title:
Details:
Name:
Title:
Details:
As co-CEO of Nexgen, Spirit's Communication and Collaboration Business,
Mr Ayoub’s base salary is $335,000 per annum, plus statutory superannuation
and car allowance. Effective 1 July 2023, Mr Ayoub’s base salary increased
to $380,000 per annum, plus statutory superannuation and car allowance.
There is no contractual short-term incentive or long-term incentive.
Collaboration & Communication – Co Chief Executive Officer
Agreement commenced:
1 April 2021, terms revised on 1 January 2023 and 1 July 2023
Term of agreement:
No fixed term. Ongoing until terminated by either party with three months
Mr James Harb
written notice.
As co-CEO of Nexgen, Spirit's Communication and Collaboration Business,
Mr Harb’s base salary is $285,000 per annum, plus statutory superannuation
and car allowance. Effective 1 July 2023, Mr Harb’s base salary increased to
$380,000 per annum, plus statutory superannuation and car allowance. There
is no contractual short-term incentive or long-term incentive.
Mr Nathan Knox
Chief Operating Officer – Spirit Group
Agreement commenced:
15 August 2022, terms revised on 1 November 2022
Term of agreement:
No fixed term. Ongoing until terminated by either party with two months written
notice.
Effective 1 November 2022, fixed remuneration of $275,000 per annum, plus
statutory superannuation. In 2023 financial year Mr Knox is entitled to a
potential short-term
incentive (STI) of up
to $50,000 (inclusive of
superannuation) prorated for commencement date. In the 2023 financial year,
Mr Knox was issued an LTI in the form of 1,558,000 Performance Rights,
vesting on satisfaction of performance hurdles, over a performance period
commencing on 10 February 2023 and ending on 30 June 2025.
Grant date
14 May 2019
14 May 2019
14 May 2019
Vesting date and
exercisable date
1 July 2022
1 July 2022
1 July 2022
Expiry date
1 July 2023
1 July 2023
1 July 2023
Fair value
per option
at grant date
$0.0780
$0.0690
$0.0600
$0.150
$0.180
$0.215
Exercise price
23
24
35
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name
Number of
Grant date
Sol Lukatsky
Sol Lukatsky
Sol Lukatsky
Mark Dioguardi
Mark Dioguardi
Mark Dioguardi
options
granted
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
Vesting date and
exercisable date
Expiry date
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2023
1 July 2023
1 July 2023
1 July 2023
1 July 2023
1 July 2023
Options granted carry no dividend or voting rights.
Exercise price
Fair value
per option
at grant date
$0.0780
$0.0690
$0.0600
$0.0780
$0.0690
$0.0600
$0.150
$0.180
$0.215
$0.150
$0.180
$0.215
There were no options over ordinary shares granted to or vested by Directors and other key management
personnel as part of compensation during the year ended 30 June 2023.
Performance Rights
The terms and conditions of each grant of Performance Rights over ordinary shares affecting remuneration of
Directors and other key management personnel in this financial year or future reporting years are as follows:
Grant date
22 April 2020
22 April 2020
13 October 2020
13 October 2020
13 October 2020
11 June 2021
11 June 2021
29 November 2021
29 November 2021
11 March 2022
11 March 2022
11 July 2022
10 February 2023
10 February 2023
10 February 2023
10 February 2023
10 February 2023
10 February 2023
Vesting date and
exercisable date
Expiry date
1 July 2022
1 July 2022
30 June 2023
1 July 2023
30 June 2023
30 June 2023
30 June 2023
30 June 2024
30 June 2024
30 June 2024
30 June 2024
30 June 2025
30 June 2024
30 June 2024
30 June 2024
30 June 2025
30 June 2025
30 June 2025
22 April 2023
30 June 2024
12 November 2023
12 November 2023
12 November 2023
11 June 2024
11 June 2024
7 April 2025
7 April 2025
7 April 2025
7 April 2025
30 June 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
Share
price
hurdle for
vesting
$0.00
$0.00
$0.00
$0.30
$0.00
$0.00
$0.00
$0.33
$0.00
$0.33
$0.00
$0.00
$0.093
$0.124
$0.155
$0.093
$0.124
$0.155
Fair value
per right
at grant date
$0.1084
$0.1250
$0.3417
$0.3661
$0.3700
$0.1815
$0.2800
$0.0970
$0.0540
$0.0720
$0.0160
$0.0519
$0.0482
$0.0346
$0.0245
$0.0547
$0.0453
$0.0376
36
25
Annual Report 2023
Sol Lukatsky
Sol Lukatsky
Sol Lukatsky
Mark Dioguardi
Mark Dioguardi
Mark Dioguardi
options
granted
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
3,000,000 14 May 2019
exercisable date
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2023
1 July 2023
1 July 2023
1 July 2023
1 July 2023
1 July 2023
Options granted carry no dividend or voting rights.
Fair value
per option
at grant date
$0.150
$0.180
$0.215
$0.150
$0.180
$0.215
$0.0780
$0.0690
$0.0600
$0.0780
$0.0690
$0.0600
There were no options over ordinary shares granted to or vested by Directors and other key management
personnel as part of compensation during the year ended 30 June 2023.
Performance Rights
The terms and conditions of each grant of Performance Rights over ordinary shares affecting remuneration of
Directors and other key management personnel in this financial year or future reporting years are as follows:
Vesting date and
exercisable date
Expiry date
Grant date
22 April 2020
22 April 2020
13 October 2020
13 October 2020
13 October 2020
11 June 2021
11 June 2021
29 November 2021
29 November 2021
11 March 2022
11 March 2022
11 July 2022
10 February 2023
10 February 2023
10 February 2023
10 February 2023
10 February 2023
10 February 2023
1 July 2022
1 July 2022
30 June 2023
1 July 2023
30 June 2023
30 June 2023
30 June 2023
30 June 2024
30 June 2024
30 June 2024
30 June 2024
30 June 2025
30 June 2024
30 June 2024
30 June 2024
30 June 2025
30 June 2025
30 June 2025
22 April 2023
30 June 2024
12 November 2023
12 November 2023
12 November 2023
11 June 2024
11 June 2024
7 April 2025
7 April 2025
7 April 2025
7 April 2025
30 June 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
Share
price
hurdle for
vesting
Fair value
per right
at grant date
$0.00
$0.00
$0.00
$0.30
$0.00
$0.00
$0.00
$0.33
$0.00
$0.33
$0.00
$0.00
$0.093
$0.124
$0.155
$0.093
$0.124
$0.155
$0.1084
$0.1250
$0.3417
$0.3661
$0.3700
$0.1815
$0.2800
$0.0970
$0.0540
$0.0720
$0.0160
$0.0519
$0.0482
$0.0346
$0.0245
$0.0547
$0.0453
$0.0376
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Name
Number of
Grant date
Vesting date and
Expiry date
Exercise price
Name
Number of
Grant date
rights
granted
Vesting date and Expiry date
exercisable date
Paul Miller
Paul Miller
Sol Lukatsky
Sol Lukatsky
Sol Lukatsky
Mark Dioguardi
Mark Dioguardi
Mark Dioguardi
Paul Miller
Paul Miller
Sol Lukatsky
Sol Lukatsky
Mark Dioguardi
Mark Dioguardi
Paul Miller
Paul Miller
Julian Challingsworth
Paul Miller
Paul Miller
Paul Miller
Nathan Knox
Nathan Knox
Nathan Knox
164,634 22 April 2020
164,634 22 April 2020
457,457 13 October 2020
457,456 13 October 2020
457,456 13 October 2020
251,601 13 October 2020
356,816 13 October 2020
251,601 13 October 2020
154,391 11 June 2021
154,392 11 June 2021
1 July 2022
1 July 2022
30 June 2023
1 July 2023
30 June 2023
30 June 2023
1 July 2023
30 June 2023
30 June 2023
30 June 2023
3,000,000 29 November 2021 30 June 2024
3,000,000 29 November 2021 30 June 2024
2,500,000 29 November 2021 30 June 2024
2,500,000 29 November 2021 30 June 2024
30 June 2024
30 June 2024
30 June 2025
30 June 2025
30 June 2025
30 June 2025
30 June 2025
30 June 2025
30 June 2025
546,667 10 February 2023
546,667 10 February 2023
546,666 10 February 2023
519,333 10 February 2023
519,333 10 February 2023
519,334 10 February 2023
750,000 11 March 2022
750,000 11 March 2022
6,250,000 11 July 2022
vesting
Share price Fair value
hurdle for
per right
at grant date
$0.1084
$0.1250
$0.3417
$0.3661
$0.3700
$0.3417
$0.3661
$0.3700
$0.1815
$0.2800
$0.0970
$0.0540
$0.0970
$0.0540
$0.0720
$0.0160
$0.0519
$0.0547
$0.0453
$0.0376
$0.0547
$0.0453
$0.0376
$0.00
$0.00
$0.00
$0.30
$0.00
$0.00
$0.30
$0.00
$0.00
$0.00
$0.33
$0.00
$0.33
$0.00
$0.33
$0.00
$0.00
$0.093
$0.124
$0.155
$0.093
$0.124
$0.155
22 April 2023
30 June 2024
12 November 2023
12 November 2023
12 November 2023
12 November 2023
12 November 2023
12 November 2023
11 June 2024
11 June 2024
7 April 2025
7 April 2025
7 April 2025
7 April 2025
7 April 2025
7 April 2025
30 June 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
10 February 2026
Performance Rights granted carry no dividend or voting rights.
The Performance Rights were issued for $Nil consideration, and the vesting of the rights is contingent on the
Company achieving certain hurdles over a three-year performance period, and in some cases share price
performance hurdles.
The performance hurdles for the Performance Rights issued in February 2023 are as follows:
Absolute TSR
100% of the Performance Rights vest based on absolute total shareholder return (“Absolute TSR”) performance
of the Company, and service conditions outlined below.
The vesting schedule is set out below:
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.0930 at any time between grant and 30 June 2025.
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.1240 at any time between grant and 30 June 2025.
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.1550 at any time between grant and 30 June 2025.
The vesting conditions above are also subject to the following conditions. For each of the three Tranches above,
50% of the Performance Rights in each tranche will only vest if the participant remains employed with the
Company until 31 December 2023 and the vesting conditions for each tranche above have been met, with the
remaining 50% of the Performance Rights in each tranche, subject to remaining employeed with the Company
until 31 December 2024 and the vesting conditions for each tranche above being met.
The performance hurdles for the Performance Rights issued to Julian Challingsworth in July 2022, are
as follows:
25
26
37
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Relative TSR
100% of the Performance Rights are subject to a Relative TSR performance hurdle and will be eligible to vest
and become exercisable into Shares, assuming the relevant performance hurdles are met at the end of the
Performance Period.
The vesting schedule is set out below:
•
•
•
If the TSR is at the 50th percentile of the peer group, 65% of the rights will vest;
If the TSR is at the 90th percentile of the peer group, 100% of the rights will vest; and
If the TSR is between the 50th and 90th percentile, a pro rata number of rights will vest.
Measurement
The number of Performance Rights which vest is determined by assessing the performance of the Company,
as measured by TSR relative to a comparator group of companies. The VWAP of the Shares in the one-month
preceding the Performance Date compared to the VWAP of the Shares in the one month preceding the
commencement of the Performance Period (which commenced on 1 July 2022), will be used in calculating TSR
over the Performance Date. The TSR incorporates capital returns as well as dividends notionally reinvested and
is considered the most appropriate means of measuring the Company’s performance.
The performance hurdles for 2022 are based on the Company’s TSR performance:
(a) 50% of the Performance Rights that are subject to the Relative TSR performance hurdle will be eligible to
vest and become exercisable into Shares, assuming the relevant performance hurdles are met, at the end of
year 2, and the balance at the end of year 3 (with the opportunity for a catch up at the end of year 3 if the
milestones are not met at the end of the second year but are met at the end of the third year).
The Relative TSR would only be achieved subject to a minimum share price of $0.33 (33 cents). The vesting
schedule would be as set out below:
•
•
•
If the TSR is at the 50th percentile of the peer group, 65% of the rights will vest;
If the TSR is at the 90th percentile of the peer group, 100% of the rights will vest; and
If the TSR is between the 50th and 90th percentile, a pro rata number of rights will vest.
Measurement
The number of Performance Rights which vest is determined by assessing the performance of the Company,
as measured by TSR relative to a comparator group of companies. The VWAP of the Shares in the one-month
preceding the Performance Dates compared to the VWAP of the Shares in the one month preceding the
commencement of the Performance Period, will be used in calculating TSR over the Performance Dates. The
TSR incorporates capital returns as well as dividends notionally reinvested and is considered the most
appropriate means of measuring the Company’s performance.
Absolute TSR
(b) 50% of the Performance Rights that are subject to the Absolute TSR performance hurdle will be eligible to
vest and become exercisable into Shares, assuming the relevant performance hurdles are met, at the end of
year 2, and the balance at the end of year 3 (with the opportunity for a catch up at the end of year 3 if the
milestones are not met at the end of the second year but are met at the end of the third year). The portion of
Performance Rights that are subject to the Absolute TSR will only vest and become exercisable into Shares as
per the vesting schedule set out below:
• 50% at 33 cents
• 100% at 40 cents
• The difference between 50% and 100% based on a sliding scale between 33 cents and 40 cents.
38
27
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Relative TSR
Performance Period.
The vesting schedule is set out below:
100% of the Performance Rights are subject to a Relative TSR performance hurdle and will be eligible to vest
and become exercisable into Shares, assuming the relevant performance hurdles are met at the end of the
•
•
•
If the TSR is at the 50th percentile of the peer group, 65% of the rights will vest;
If the TSR is at the 90th percentile of the peer group, 100% of the rights will vest; and
If the TSR is between the 50th and 90th percentile, a pro rata number of rights will vest.
Measurement
The number of Performance Rights which vest is determined by assessing the performance of the Company,
as measured by TSR relative to a comparator group of companies. The VWAP of the Shares in the one-month
preceding the Performance Date compared to the VWAP of the Shares in the one month preceding the
commencement of the Performance Period (which commenced on 1 July 2022), will be used in calculating TSR
over the Performance Date. The TSR incorporates capital returns as well as dividends notionally reinvested and
is considered the most appropriate means of measuring the Company’s performance.
The performance hurdles for 2022 are based on the Company’s TSR performance:
(a) 50% of the Performance Rights that are subject to the Relative TSR performance hurdle will be eligible to
vest and become exercisable into Shares, assuming the relevant performance hurdles are met, at the end of
year 2, and the balance at the end of year 3 (with the opportunity for a catch up at the end of year 3 if the
milestones are not met at the end of the second year but are met at the end of the third year).
The Relative TSR would only be achieved subject to a minimum share price of $0.33 (33 cents). The vesting
schedule would be as set out below:
•
•
•
If the TSR is at the 50th percentile of the peer group, 65% of the rights will vest;
If the TSR is at the 90th percentile of the peer group, 100% of the rights will vest; and
If the TSR is between the 50th and 90th percentile, a pro rata number of rights will vest.
The number of Performance Rights which vest is determined by assessing the performance of the Company,
as measured by TSR relative to a comparator group of companies. The VWAP of the Shares in the one-month
preceding the Performance Dates compared to the VWAP of the Shares in the one month preceding the
commencement of the Performance Period, will be used in calculating TSR over the Performance Dates. The
TSR incorporates capital returns as well as dividends notionally reinvested and is considered the most
appropriate means of measuring the Company’s performance.
Measurement
Absolute TSR
(b) 50% of the Performance Rights that are subject to the Absolute TSR performance hurdle will be eligible to
vest and become exercisable into Shares, assuming the relevant performance hurdles are met, at the end of
year 2, and the balance at the end of year 3 (with the opportunity for a catch up at the end of year 3 if the
milestones are not met at the end of the second year but are met at the end of the third year). The portion of
Performance Rights that are subject to the Absolute TSR will only vest and become exercisable into Shares as
per the vesting schedule set out below:
• 50% at 33 cents
• 100% at 40 cents
• The difference between 50% and 100% based on a sliding scale between 33 cents and 40 cents.
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Measurement
The number of Performance Rights which vest is determined by assessing the Share price performance of the
Company. The VWAP of the Shares in the one-month preceding the Performance Dates will be used in
calculating Share price performance over the Performance Dates.
The Nomination and Remuneration Committee will test performance against the Performance Hurdles to
determine whether the Performance Rights are eligible to vest shortly after the end of Performance Dates.
If the Performance Hurdles are not satisfied by the end of the Performance Period, the Performance Rights will
lapse unless the Nomination and Remuneration Committee exercises its discretion to waive the Performance
Hurdle in whole or in part.
For the Performance Rights granted during FY20 and FY21, 30% of the maximum amount of Performance
Rights that may vest are at risk, if appropriate behaviors, as measured by a 360-degree feedback review are
not met. An overall 75% of agreed or strongly agreed needs to be achieved in the 360-degree feedback result.
At the Annual General Meeting held on 29 November 2021, the Board sought to change the terms of previously
issued Performance Rights to remove the Return on Invested Capital (ROIC) vesting condition and replace it
with the TSR performance hurdles as outlined above. The Board considered that the previous ROIC hurdle was
no longer fit for purpose or relevant to the Company, as the cost of capital on which the ROIC was based has
changed significantly over the years, and establishing the appropriate capital base for the determination of ROIC
is challenging considering the business strategy has changed.
The number of Performance Rights over ordinary shares granted to and vested by Directors and other key
management personnel as part of compensation during the year ended 30 June 2023 are set out below:
Name
Julian Challingsworth
Nathan Knox
Paul Miller
Sol Lukatsky
Mark Dioguardi
Number of Number of Number of Number of
rights
granted
rights
granted
rights
vested
rights
vested
during the during the during the during the
year
2023
year
2022
year
2023
year
2022
6,250,000
1,558,000
1,640,000
-
-
-
-
1,500,000
6,000,000
5,000,000
-
-
-
-
-
-
-
-
49,338
103,844
Additional information
The earnings of the Consolidated Entity for the five years to 30 June 2023 are summarised below:
Revenue and other income
Net (loss)/profit before tax
Net (loss)/profit after tax
Share price
2023
$'000
127,271
(13,919)
(11,389)
$0.050
2022
$'000
138,732
(55,041)
(53,166)
$0.053
2021
$'000
104,469
1,345
1,157
$0.26
2020
$'000
2019
$'000
34,874
(2,043)
(1,515)
$0.24
17,452
(1,009)
(824)
$0.26
27
28
39
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director of the Company and other
members of key management personnel of the Consolidated Entity, including their personally related parties, is
set out below:
Ordinary shares
James Joughin
Julian Challingsworth*
Julian Haber
Sol Lukatsky**
Mark Dioguardi***
Gregory Ridder
Michelle Bendschneider
Elie Ayoub****
James Harb*****
Nathan Knox******
Paul Miller
Balance at
Balance
Additions
Disposals/
the start of on the date of
becoming a
KMP
the year
other
Balance at
the end of
the year
4,764,936
-
5,693,092
3,354,421
1,547,972
1,750,000
-
-
-
-
196,127
17,306,548
-
-
-
-
-
-
-
38,544,609
32,120,299
-
-
70,664,908
695,000
11,646,891
-
-
-
500,000
465,000
35,440,562
38,440,563
-
-
87,188,016
-
-
-
(3,354,421)
(1,547,972)
-
-
-
-
-
-
5,459,936
11,646,891
5,693,092
-
-
2,250,000
465,000
73,985,171
70,560,862
-
196,127
(4,902,393) 170,257,079
*
**
***
****
Mr Julian Challingsworth was appointed to the Board effective 11 July 2022. Upon appointment, Mr Challingsworth
had no shareholding in the Company.
Mr Sol Lukatsky resigned from the Board on 2 July 2022. The balance disclosed in the “Disposals/other” column
represents his shareholding on the date of resignation.
Mr Mark Dioguardi resigned from the Board on 1 April 2022 and ceased to be a member of key management
personnel on 15 August 2022. The balance disclosed in the “Disposals/other” column represents his shareholding
on the date of ceasing to be a member of key management personnel.
Mr Elie Ayoub was appointed as a member of Key Management Personnel effective 1 February 2023 (and was
appointed to the Board effective 8 June 2023). Upon appointment as a member of KMP, Mr Ayoub held 38,544,609
shares in the Company. On 31 March 2023, Mr Ayoub was issued 35,440,562 shares as part consideration for the
Nexgen Group Milestone Incentive Consideration.
***** Mr James Harb was appointed as a member of Key Management Personnel effective 1 February 2023. Upon
appointment as a member of KMP, Mr Harb held 32,120,299 shares in the Company. On 31 March 2023, Mr Harb
was issued 35,440,563 shares as part consideration for the Nexgen Group Milestone Incentive Consideration.
****** Mr Nathan Knox was appointed as a member of Key Management Personnel effective 15 August 2022. Upon
appointment, Mr Knox had no shareholding in the Company.
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and
other members of key management personnel of the Consolidated Entity, including their personally related
parties, is set out below:
Options over ordinary shares
Sol Lukatsky
Mark Dioguardi**
the start of
the year
9,000,000
9,000,000
18,000,000
Balance at Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
(9,000,000)
(9,000,000)
(18,000,000)
-
-
-
* Mr Sol Lukatsky resigned from the Board effective 2 July 2022. The balance disclosed in “Expired/forfeited/other”
column represents his option holding on the date of resignation.
** Mr Mark Dioguardi was no longer considered a member of key management personnel effective 15 August 2022. The
balance disclosed in the “Expired/forfeited/other” column represents his option holding on the date of ceasing to be a
member of key management personnel.
40
29
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Additional disclosures relating to key management personnel
The number of shares in the Company held during the financial year by each Director of the Company and other
members of key management personnel of the Consolidated Entity, including their personally related parties, is
Shareholding
set out below:
Ordinary shares
James Joughin
Julian Challingsworth*
Julian Haber
Sol Lukatsky**
Mark Dioguardi***
Gregory Ridder
Michelle Bendschneider
Elie Ayoub****
James Harb*****
Nathan Knox******
Paul Miller
Balance at
Balance
Additions
Disposals/
Balance at
the start of on the date of
the year
becoming a
KMP
other
the end of
the year
4,764,936
5,693,092
3,354,421
1,547,972
1,750,000
-
-
-
-
-
196,127
695,000
11,646,891
(3,354,421)
(1,547,972)
-
-
-
-
-
-
-
-
-
500,000
465,000
38,544,609
32,120,299
35,440,562
38,440,563
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,459,936
11,646,891
5,693,092
-
-
-
2,250,000
465,000
73,985,171
70,560,862
196,127
17,306,548
70,664,908
87,188,016
(4,902,393) 170,257,079
*
**
***
Mr Julian Challingsworth was appointed to the Board effective 11 July 2022. Upon appointment, Mr Challingsworth
had no shareholding in the Company.
Mr Sol Lukatsky resigned from the Board on 2 July 2022. The balance disclosed in the “Disposals/other” column
represents his shareholding on the date of resignation.
Mr Mark Dioguardi resigned from the Board on 1 April 2022 and ceased to be a member of key management
personnel on 15 August 2022. The balance disclosed in the “Disposals/other” column represents his shareholding
on the date of ceasing to be a member of key management personnel.
****
Mr Elie Ayoub was appointed as a member of Key Management Personnel effective 1 February 2023 (and was
appointed to the Board effective 8 June 2023). Upon appointment as a member of KMP, Mr Ayoub held 38,544,609
shares in the Company. On 31 March 2023, Mr Ayoub was issued 35,440,562 shares as part consideration for the
Nexgen Group Milestone Incentive Consideration.
***** Mr James Harb was appointed as a member of Key Management Personnel effective 1 February 2023. Upon
appointment as a member of KMP, Mr Harb held 32,120,299 shares in the Company. On 31 March 2023, Mr Harb
was issued 35,440,563 shares as part consideration for the Nexgen Group Milestone Incentive Consideration.
****** Mr Nathan Knox was appointed as a member of Key Management Personnel effective 15 August 2022. Upon
appointment, Mr Knox had no shareholding in the Company.
The number of options over ordinary shares in the Company held during the financial year by each Director and
other members of key management personnel of the Consolidated Entity, including their personally related
Balance at Granted
Exercised
Expired/
Balance at
forfeited/
the end of
other
the year
-
-
-
-
-
-
(9,000,000)
(9,000,000)
(18,000,000)
-
-
-
the start of
the year
9,000,000
9,000,000
18,000,000
* Mr Sol Lukatsky resigned from the Board effective 2 July 2022. The balance disclosed in “Expired/forfeited/other”
column represents his option holding on the date of resignation.
** Mr Mark Dioguardi was no longer considered a member of key management personnel effective 15 August 2022. The
balance disclosed in the “Expired/forfeited/other” column represents his option holding on the date of ceasing to be a
member of key management personnel.
Option holding
parties, is set out below:
Options over ordinary shares
Sol Lukatsky
Mark Dioguardi**
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
Performance Rights holding
The number of Performance Rights over ordinary shares in the Company held during the financial year by each
Director and other members of key management personnel of the Consolidated Entity, including their personally
related parties, is set out below:
Performance Rights over ordinary shares
Julian Challingsworth*
Sol Lukatsky**
Mark Dioguardi***
Nathan Knox****
Paul Miller
Balance at Granted
the start of
the year
-
7,372,369
5,860,018
-
2,138,051
15,370,438
6,250,000
-
-
1,558,000
1,640,000
9,448,000
Vested/
exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
(7,372,369)
(5,860,018)
(164,634)
(13,397,021)
6,250,000
-
-
1,558,000
3,613,417
11,421,417
* Mr Julian Challingsworth was appointed to the Board effective 11 July 2022. Mr Challingsworth was issued with an
initial LTI in the form of 6,250,000 Performance Rights for FY2023 as part of his employment agreement as
announced on 7 July 2022.
** Mr Sol Lukatsky resigned from the Board on 2 July 2022. On cessation Mr Lukatsky retained a pro-rata portion of
Performance Rights based on the proportion of the relevant vesting period that Mr Lukatsky was an employee up to
the date of cessation. A total of 4,467,267 Performance Rights were forfeited, with the balance of 2,905,102
Performance Rights retained and continue on-foot as per the terms of the applicable employee incentive plan and
offer letter.
*** Mr Mark Dioguardi was no longer considered a member of key management personnel effective 15 August 2022. On
cessation of employment, Mr Dioguardi retained a pro-rata portion of Performance Rights based on the proportion of
the relevant vesting period that Mr Dioguardi was an employee up to the date of cessation. A total of 2,646,121
Performance Rights were forfeited, with the balance of 3,213,897 Performance Rights retained and continue on-foot
as per the terms of the applicable employee incentive plan and offer letter.
**** Mr Nathan Knox was appointed as a member of Key Management Personnel effective 15 August 2022.
This concludes the Remuneration Report, which has been audited.
Shares under option
There were no unissued ordinary shares of Spirit Technology Solutions Ltd under option at the date of this
report.
Shares under Performance Rights
Unissued ordinary shares of Spirit Technology Solutions Ltd under Performance Rights at the date of this report
are as follows:
Grant date
22 April 2020
13 October 2020
11 June 2021
29 November 2021
11 March 2022
11 July 2022
10 February 2023
Expiry date
30 June 2024
12 November 2023
11 June 2024
7 April 2025
7 April 2025
30 June 2026
10 February 2026
Number
under rights
326,972
1,605,312
534,378
4,513,686
1,694,799
6,250,000
11,847,000
26,772,147
No person entitled to exercise the Performance Rights had or has any right by virtue of the performance right
to participate in any share issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Spirit Technology Solutions Ltd issued on the exercise of options during the
year ended 30 June 2023 and up to the date of this report.
Shares issued on the exercise of Performance Rights
The were no ordinary shares of Spirit Technology Solutions Ltd issued on exercise of performance rights during
the year ended 30 June 2023 and up to the date of this report.
29
30
41
Annual Report 2023
Spirit Technology Solutions Limited
Directors' report
30 June 2023
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred in their capacity
as a Director or executive, for which they may be held personally liable, except where there is a lack of good
faith.
During the financial year the Company paid a premium in respect of a contract to insure the Directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not during or since the end of the financial year indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor.
During the financial year the Company has not paid a premium in respect of a contract to insure the auditor of
the Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for
the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year
by the auditor are outlined in Note 30 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or
by another person or firm on the auditor's behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in Note 30 to the financial statements do not
compromise the external auditor's independence requirements of the Corporations Act 2001 for the following
reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical
Standards Board, including reviewing or auditing the auditor's own work, acting in a management or
decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic
risks and rewards.
●
Officers of the Company who are former partners of PKF Melbourne Audit & Assurance Pty Ltd
There are no officers of the Company who are former partners of PKF Melbourne Audit & Assurance Pty Ltd.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in
accordance with that Corporations Instrument to the nearest ‘000 dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001
is set out immediately after this Directors' report.
Auditor
PKF Melbourne Audit & Assurance Pty Ltd continues in office in accordance with section 327 of the Corporations
Act 2001.
42
31
Annual Report 2023
Spirit Technology Solutions Ltd
Directors' report
30 June 2023
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the Directors
___________________________
James Joughin
Non-Executive Chairman
30 August 2023
Spirit Technology Solutions Limited
Directors' report
30 June 2023
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred in their capacity
as a Director or executive, for which they may be held personally liable, except where there is a lack of good
faith.
During the financial year the Company paid a premium in respect of a contract to insure the Directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not during or since the end of the financial year indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor.
During the financial year the Company has not paid a premium in respect of a contract to insure the auditor of
the Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for
the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year
by the auditor are outlined in Note 30 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or
by another person or firm on the auditor's behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in Note 30 to the financial statements do not
compromise the external auditor's independence requirements of the Corporations Act 2001 for the following
reasons:
objectivity of the auditor; and
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
●
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical
Standards Board, including reviewing or auditing the auditor's own work, acting in a management or
decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic
risks and rewards.
Officers of the Company who are former partners of PKF Melbourne Audit & Assurance Pty Ltd
There are no officers of the Company who are former partners of PKF Melbourne Audit & Assurance Pty Ltd.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in
accordance with that Corporations Instrument to the nearest ‘000 dollars, or in certain cases, the nearest dollar.
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001
Auditor's independence declaration
is set out immediately after this Directors' report.
PKF Melbourne Audit & Assurance Pty Ltd continues in office in accordance with section 327 of the Corporations
Auditor
Act 2001.
31
32
43
Annual Report 2023
Auditor’s
Independence
Declaration
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33
PKF Melbourne Audit & Assurance Pty Ltd ABN 75 600 749 184
Level 12, 440 Collins Street, Melbourne, Victoria 3000
T: +61 3 9679 2222 F: +61 3 9679 2288 www.pkf.com.au
Liability limited by a scheme approved under Professional Standards Legislation
PKF Melbourne Audit & Assurance Pty Ltd is a member firm of the PKF International Limited family of separately owned firms and does not accept any
responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
PKF Melbourne Audit & Assurance Pty Ltd ABN 75 600 749 184
Level 12, 440 Collins Street, Melbourne, Victoria 3000
T: +61 3 9679 2222 F: +61 3 9679 2288 www.pkf.com.au
Liability limited by a scheme approved under Professional Standards Legislation
PKF Melbourne Audit & Assurance Pty Ltd is a member firm of the PKF International Limited family of separately owned firms and does not accept any
responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
33
(cid:3)
(cid:3)
45
Annual Report 2023
Statement of
Profit or Loss
and Other
Comprehensive
Income
Annual Report 2023ASX: ST1 Spirit Technology Solutions Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Spirit Technology Solutions Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Consolidated
Revenue
Revenue
Other income
Cost of sales
Other income
Cost of sales
Expenses
Employee benefits expense
Expenses
Share-based payments
Employee benefits expense
Administration and corporate expenses
Share-based payments
Selling
Administration and corporate expenses
Marketing
Selling
Acquisition and divestment costs
Marketing
Restructuring costs
Acquisition and divestment costs
Net fair value loss on remeasurement of financial liabilities
Restructuring costs
Impairment of non-current assets
Net fair value loss on remeasurement of financial liabilities
Depreciation and amortisation expense
Impairment of non-current assets
Finance costs
Depreciation and amortisation expense
Finance costs
Loss before income tax benefit
Loss before income tax benefit
Income tax benefit
Income tax benefit
Loss after income tax benefit for the year attributable to the owners of
Spirit Technology Solutions Ltd
Loss after income tax benefit for the year attributable to the owners of
Spirit Technology Solutions Ltd
Other comprehensive income for the year, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year attributable to the owners of
Spirit Technology Solutions Ltd
Total comprehensive loss for the year attributable to the owners of
Spirit Technology Solutions Ltd
Earnings per share for loss attributable to the owners of Spirit
Technology Solutions Ltd
Basic earnings per share
Earnings per share for loss attributable to the owners of Spirit
Technology Solutions Ltd
Diluted earnings per share
Basic earnings per share
Diluted earnings per share
Note
Note
5
5
6
6
7
40
7
40
7
7
7
7
7
7
7
7
8
8
Consolidated
2023
$'000
2023
127,114
$'000
2022
$'000
2022
$'000
135,338
127,114
157
(65,594)
157
(65,594)
(44,849)
(942)
(44,849)
(10,449)
(942)
(993)
(10,449)
(1,694)
(993)
(200)
(1,694)
(2,732)
(200)
(8,042)
(2,732)
-
(8,042)
(4,073)
-
(1,622)
(4,073)
(1,622)
(13,919)
135,338
3,394
(67,523)
3,394
(67,523)
(47,008)
(721)
(47,008)
(12,224)
(721)
(1,199)
(12,224)
(1,699)
(1,199)
(1,926)
(1,699)
(1,527)
(1,926)
(2,747)
(1,527)
(48,374)
(2,747)
(7,655)
(48,374)
(1,170)
(7,655)
(1,170)
(55,041)
(13,919)
2,530
(55,041)
1,875
2,530
(11,389)
1,875
(53,166)
(11,389)
-
(53,166)
-
-
(11,389)
-
(53,166)
(11,389)
(53,166)
Cents
Cents
Cents
Cents
(1.67)
(1.67)
(1.67)
(1.67)
(8.08)
(8.08)
(8.08)
(8.08)
39
39
39
39
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
34
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
34
47
Annual Report 2023
Statement
of Financial
Position
Annual Report 2023ASX: ST1 Spirit Technology Solutions Ltd
Statement of financial position
Spirit Technology Solutions Ltd
As at 30 June 2023
Statement of financial position
As at 30 June 2023
Assets
Current assets
Assets
Cash and cash equivalents
Current assets
Trade and other receivables
Cash and cash equivalents
Inventories
Trade and other receivables
Contract cost assets
Inventories
Other assets
Contract cost assets
Total current assets
Other assets
Total current assets
Non-current assets
Contract cost assets
Non-current assets
Property, plant and equipment
Contract cost assets
Right-of-use assets
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax
Intangible assets
Other assets
Deferred tax
Total non-current assets
Other assets
Total assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Liabilities
Trade and other payables
Current liabilities
Lease liabilities
Trade and other payables
Provisions
Lease liabilities
Unearned revenue
Provisions
Borrowings
Unearned revenue
Deferred consideration
Borrowings
Contingent consideration
Deferred consideration
Total current liabilities
Contingent consideration
Total current liabilities
Non-current liabilities
Borrowings
Non-current liabilities
Lease liabilities
Borrowings
Deferred tax
Lease liabilities
Provisions
Deferred tax
Unearned revenue
Provisions
Contingent consideration
Unearned revenue
Total non-current liabilities
Contingent consideration
Total liabilities
Total non-current liabilities
Net assets
Total liabilities
Net assets
Equity
Issued capital
Equity
Reserves
Issued capital
Accumulated losses
Reserves
Total equity
Accumulated losses
Total equity
Note
Note
9
10
9
11
10
13
11
12
13
12
13
14
13
15
14
16
15
17
16
12
17
12
18
19
18
20
19
24
20
22
24
21
22
34
21
34
22
19
22
23
19
20
23
24
20
34
24
34
25
26
25
26
Consolidated
Consolidated
2023
$'000
2023
$'000
7,024
8,463
7,024
2,789
8,463
2,313
2,789
5,000
2,313
25,589
5,000
25,589
2022
$'000
2022
$'000
11,733
11,575
11,733
4,281
11,575
1,222
4,281
4,342
1,222
33,153
4,342
33,153
3,305
1,003
3,305
4,429
1,003
77,589
4,429
5,118
77,589
2,147
5,118
93,591
2,147
119,180
93,591
119,180
2,893
1,415
2,893
2,577
1,415
78,859
2,577
4,086
78,859
528
4,086
90,358
528
123,511
90,358
123,511
15,329
1,771
15,329
3,944
1,771
3,132
3,944
5,000
3,132
-
5,000
4,089
-
33,265
4,089
33,265
20,000
2,673
20,000
4,200
2,673
2,005
4,200
467
2,005
3,437
467
32,782
3,437
66,047
32,782
53,133
66,047
53,133
15,632
1,661
15,632
5,583
1,661
6,028
5,583
-
6,028
2,611
-
11,660
2,611
43,175
11,660
43,175
13,000
1,369
13,000
5,544
1,369
583
5,544
422
583
-
422
20,918
-
64,093
20,918
59,418
64,093
59,418
119,411
2,393
119,411
(68,671)
2,393
53,133
(68,671)
53,133
114,874
1,826
114,874
(57,282)
1,826
59,418
(57,282)
59,418
The above statement of financial position should be read in conjunction with the accompanying notes
35
The above statement of financial position should be read in conjunction with the accompanying notes
35
49
Annual Report 2023
Statement of
Changes in
Equity
Annual Report 2023ASX: ST1 Balance at 30 June 2023
119,411
2,393
(68,671)
53,133
Spirit Technology Solutions Ltd
Statement of changes in equity
Spirit Technology Solutions Ltd
For the year ended 30 June 2023
Statement of changes in equity
For the year ended 30 June 2023
Consolidated
Consolidated
Balance at 1 July 2022
Balance at 1 July 2022
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (Note 40)
Transactions with owners in their capacity as owners:
Issue of shares to vendor as earnout consideration in
Share-based payments (Note 40)
relation to the Nexgen acquisition (Note 25)
Issue of shares to vendor as earnout consideration in
relation to the Nexgen acquisition (Note 25)
Balance at 30 June 2023
Consolidated
Consolidated
Balance at 1 July 2021
Balance at 1 July 2021
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (Note 40)
Transactions with owners in their capacity as owners:
Transfers
Share-based payments (Note 40)
Issue of shares to the vendor as part of the earnout
Transfers
consideration in relation to the Trident acquisition
Issue of shares to the vendor as part of the earnout
Issue of shares to the vendor as part of the earnout
consideration in relation to the Trident acquisition
consideration in relation to the Altitude IT acquisition
Issue of shares to the vendor as part of the earnout
Issue of shares to the vendor as part of the earnout
consideration in relation to the Altitude IT acquisition
consideration in relation to the Beachhead acquisition
Issue of shares to the vendor as part of the earnout
Issue of shares to the vendor as part of the earnout
consideration in relation to the Beachhead acquisition
consideration in relation to the Reliance IT acquisition
Issue of shares to the vendor as part of the earnout
Issue of shares to vendor as part of deferred
consideration in relation to the Reliance IT acquisition
consideration in relation to the Nexgen acquisition
Issue of shares to vendor as part of deferred
consideration in relation to the Nexgen acquisition
Balance at 30 June 2022
Reserves Accumulated
Total equity
Reserves Accumulated
$'000
Total equity
$'000
losses
$'000
losses
$'000
4,537
119,411
-
2,393
-
(68,671)
4,537
53,133
Reserves Accumulated
Total equity
Reserves Accumulated
$'000
Total equity
$'000
Issued
capital
Issued
$'000
capital
$'000
114,874
114,874
-
-
-
-
-
-
-
-
4,537
Issued
capital
Issued
$'000
capital
$'000
112,689
112,689
-
-
-
-
-
-
-
-
-
-
251
251
77
77
404
404
262
262
1,191
$'000
1,826
1,826
-
-
-
-
-
-
567
567
-
$'000
1,187
1,187
-
-
-
-
-
-
721
(82)
721
(82)
-
-
-
-
-
-
-
-
-
(57,282) 59,418
$'000
(57,282) 59,418
(11,389)
(11,389)
-
-
(11,389)
(11,389)
-
-
(11,389)
(11,389)
(11,389)
(11,389)
-
-
-
567
567
4,537
losses
$'000
losses
$'000
(4,198)
(4,198)
(53,166)
-
(53,166)
-
(53,166)
$'000
109,678
109,678
(53,166)
-
(53,166)
-
(53,166)
(53,166)
(53,166)
-
82
-
82
-
-
-
-
-
-
-
-
-
721
-
721
-
251
251
77
77
404
404
262
262
1,191
1,191
114,874
-
1,826
-
(57,282)
1,191
59,418
Balance at 30 June 2022
114,874
1,826
(57,282)
59,418
The above statement of changes in equity should be read in conjunction with the accompanying notes
36
The above statement of changes in equity should be read in conjunction with the accompanying notes
36
51
Annual Report 2023
Statement of
Cash Flows
Annual Report 2023ASX: ST1 Spirit Technology Solutions Ltd
Statement of cash flows
Spirit Technology Solutions Ltd
For the year ended 30 June 2023
Statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Cash flows from operating activities
Government grants received
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Government grants received
Restructuring costs
Payments to suppliers and employees (inclusive of GST)
Loan funded share plan
Restructuring costs
Deposits refunded
Loan funded share plan
Interest received
Deposits refunded
Interest and other finance costs paid
Interest received
Interest and other finance costs paid
Net cash (used in)/from operating activities
Note
Note
Consolidated
Consolidated
2022
$'000
2022
$'000
2023
$'000
2023
$'000
136,810
45
136,810
(137,226)
45
(1,708)
(137,226)
(375)
(1,708)
175
(375)
42
175
(1,493)
42
(1,493)
(3,730)
6
6
6
7
6
7
38
151,085
1,184
151,085
(147,540)
1,184
(389)
(147,540)
-
(389)
136
-
-
136
(980)
-
(980)
3,496
Net cash (used in)/from operating activities
38
(3,730)
3,496
Cash flows from investing activities
Payments for property, plant and equipment
Cash flows from investing activities
Payments for intangibles
Payments for property, plant and equipment
Cash payments to acquire businesses, net of cash acquired
Payments for intangibles
Acquired income tax liabilities refunded/(paid)
Cash payments to acquire businesses, net of cash acquired
Acquisition and divestment costs
Acquired income tax liabilities refunded/(paid)
Proceeds from disposal of assets and right of use
Acquisition and divestment costs
Proceeds from disposal of assets and right of use
Net cash used in investing activities
14
16
14
34
16
34
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Cash flows from financing activities
Repayment of borrowings
Proceeds from borrowings
Repayment of lease liabilities
Repayment of borrowings
Repayment of lease liabilities
Net cash from financing activities
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Cash and cash equivalents at the end of the financial year
9
9
(374)
(324)
(374)
(10,350)
(324)
186
(10,350)
(200)
186
37
(200)
37
(11,025)
(11,025)
12,000
-
12,000
(1,954)
-
(1,954)
10,046
10,046
(4,709)
11,733
(4,709)
11,733
7,024
(3,004)
(1,373)
(3,004)
(14,128)
(1,373)
(427)
(14,128)
(853)
(427)
18,536
(853)
18,536
(1,249)
(1,249)
21,000
(18,000)
21,000
(2,007)
(18,000)
(2,007)
993
993
3,240
8,493
3,240
8,493
11,733
7,024
11,733
The above statement of cash flows should be read in conjunction with the accompanying notes
37
The above statement of cash flows should be read in conjunction with the accompanying notes
37
53
Annual Report 2023
Notes to the
Financial
Statements
Annual Report 2023ASX: ST1 Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 1. General information
The financial statements cover Spirit Technology Solutions Ltd as a Consolidated Entity consisting of Spirit
Technology Solutions Ltd and the entities it controlled at the end of, or during, the year. The financial statements
are presented in Australian dollars which is Spirit Technology Solutions Ltd's functional and presentation
currency.
Spirit Technology Solutions Ltd is a listed public company limited by shares, incorporated and domiciled in
Australia. Its registered office and principal place of business are:
Registered office
Principal place of business
Level 4, 100 Albert Road
South Melbourne Victoria 3205
Level 2, 19-25 Raglan Street
South Melbourne Victoria 3205
A description of the nature of the Consolidated Entity's operations and its principal activities are included in the
Directors' report which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 30 August
2023. The Directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new, revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current
reporting period.
The Consolidated Entity has elected to early adopt AASB 2022-6 Amendments to Australian Accounting
Standards – Non-current Liabilities with Covenants, in conjunction with, AASB 2020-1 Amendments to
Australian Accounting Standards – Classification of Liabilities as Current or Non-current. The amendments
within AASB 2022-6, build upon the amendments contained within AASB 2020-1 and consequently, we describe
the effect of these amendments at a combined level. This adoption amends AASB 101 and improves the
disclosure of liabilities arising from loan arrangements in our financial statements. By adopting these
amendments early, the Company aims to enhance the information provided to our stakeholders regarding our
loan arrangements and their classification as either current or non-current. This early adoption allows us to
benefit from the clarity and guidance provided by AASB 2022-6 and AASB 2020-1, ensuring transparent and
comprehensive reporting of our financial position. We believe that early adoption of these standards will result
in more meaningful financial statements for our stakeholders.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
38
55
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the
Consolidated Entity has adequate resources and strategic initiatives in place to continue in operational existence
for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the
financial statements.
The Consolidated Entity has a net current liability position as at 30 June 2023 of $7.676M (30 June 2022 net
current liability position: $10.022M). This financial position needs to be considered noting the following key
factors:
▪ Current liabilities includes unearned revenue of $3.1M. This liability unwinds to revenue rather than being a
cash settled liability.
▪ During the financial year, there were two variations to the Company’s loan facility limit which is currently
$28M. The renegotiation of the facility included changes to the financial covenants (as outlined in note 22
of the financial statements) and other conditions and undertakings by the Company. As at 30 June 2023
$25M had been drawn with a further $3M drawn by the Company post year end. As part of the undertakings
provided, the Consolidated Entity is required to reduce the facility to $20M by July 2024 at the latest
(following a post year end amendment noted below).
▪ A further renegotiation on the facility limit and timing was reached after 30 June 2023 however the statement
of financial position reflects the circumstances that existed as at balance date with a portion of the
borrowings ($5M) shown as current. Had the changes occurred before 30 June 2023, the borrowings would
have been classified all as non-current and the net current liability position as at 30 June 2023 would have
been $2.676M as opposed to $7.676M.
▪ The Consolidated Entity continues to rationalise its operations with the primary focus on returning to positive
cash flows from its operations. To achieve this there will be ongoing acceleration of initiatives within the
Managed Services (IT&T) business segment to move that division’s earnings to a positive position. These
measures continue to require capital to implement, alongside management of residual contingent
consideration obligations, and accordingly the Company continues to manage funding risks which includes
regular communication with its financier and assessing other sources of finance in whole or in part.
▪ As outlined in the Directors Report, the Consolidated Entity’s Cyber Security segment is expected to return
to its historic earnings trends, noting the financial performance issues and corrective measures that
occurred in the year ended 30 June 2023. The Consolidated Entity remains of the view that its Collaboration
& Communication segment will maintain its growth ambitions across the medium term, acknowledging some
earnings constraints exist in short term in the context of the current inflationary environment.
▪ The Consolidated Entity has a portfolio of assets which it considers has significant value when benchmarked
against similar observed traded assets in the market. Those assets can be leveraged as required to support
ongoing liquidity and debt requirements noting the timeframes involved in divestment of those assets.
▪ The Consolidated Entity remains confident that it also has the ability to request additional support from
existing shareholders if financial assistance is required.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Consolidated Entity’s accounting
policies. The areas involving a higher degree of judgement or complexity or areas where assumptions and
estimates are significant to the financial statements are disclosed in Note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated
Entity only. Supplementary information about the parent entity is disclosed in Note 33.
56
39
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Note 2. Significant accounting policies (continued)
Going concern
financial statements.
factors:
cash settled liability.
The Directors have, at the time of approving the financial statements, a reasonable expectation that the
Consolidated Entity has adequate resources and strategic initiatives in place to continue in operational existence
for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the
The Consolidated Entity has a net current liability position as at 30 June 2023 of $7.676M (30 June 2022 net
current liability position: $10.022M). This financial position needs to be considered noting the following key
▪ Current liabilities includes unearned revenue of $3.1M. This liability unwinds to revenue rather than being a
▪ During the financial year, there were two variations to the Company’s loan facility limit which is currently
$28M. The renegotiation of the facility included changes to the financial covenants (as outlined in note 22
of the financial statements) and other conditions and undertakings by the Company. As at 30 June 2023
$25M had been drawn with a further $3M drawn by the Company post year end. As part of the undertakings
provided, the Consolidated Entity is required to reduce the facility to $20M by July 2024 at the latest
(following a post year end amendment noted below).
▪ A further renegotiation on the facility limit and timing was reached after 30 June 2023 however the statement
of financial position reflects the circumstances that existed as at balance date with a portion of the
borrowings ($5M) shown as current. Had the changes occurred before 30 June 2023, the borrowings would
have been classified all as non-current and the net current liability position as at 30 June 2023 would have
been $2.676M as opposed to $7.676M.
▪ The Consolidated Entity continues to rationalise its operations with the primary focus on returning to positive
cash flows from its operations. To achieve this there will be ongoing acceleration of initiatives within the
Managed Services (IT&T) business segment to move that division’s earnings to a positive position. These
measures continue to require capital to implement, alongside management of residual contingent
consideration obligations, and accordingly the Company continues to manage funding risks which includes
regular communication with its financier and assessing other sources of finance in whole or in part.
▪ As outlined in the Directors Report, the Consolidated Entity’s Cyber Security segment is expected to return
to its historic earnings trends, noting the financial performance issues and corrective measures that
occurred in the year ended 30 June 2023. The Consolidated Entity remains of the view that its Collaboration
& Communication segment will maintain its growth ambitions across the medium term, acknowledging some
earnings constraints exist in short term in the context of the current inflationary environment.
▪ The Consolidated Entity has a portfolio of assets which it considers has significant value when benchmarked
against similar observed traded assets in the market. Those assets can be leveraged as required to support
ongoing liquidity and debt requirements noting the timeframes involved in divestment of those assets.
▪ The Consolidated Entity remains confident that it also has the ability to request additional support from
existing shareholders if financial assistance is required.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Consolidated Entity’s accounting
policies. The areas involving a higher degree of judgement or complexity or areas where assumptions and
estimates are significant to the financial statements are disclosed in Note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated
Entity only. Supplementary information about the parent entity is disclosed in Note 33.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Spirit
Technology Solutions Ltd (‘Company’ or ‘parent entity’) as at 30 June 2023 and the results of all subsidiaries
for the year then ended. Spirit Technology Solutions Ltd and its subsidiaries together are referred to in these
financial statements as the ‘Consolidated Entity’.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity
controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated
Entity. They are de-consolidated from the date that control ceases.
Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODMs’). The CODMs
are responsible for the allocation of resources to operating segments and assessing their performance. Refer
Note 4 Operating segments.
Revenue recognition
Revenue is recognised and measured in accordance with the principles of AASB 15 Revenue from contracts
with customers at the fair value of the consideration received or receivable, after taking into account any trade
discounts and volume rebates allowed, to the extent that it is probable that economic benefit will flow to the
Consolidated Entity and the revenue can be reliably measured.
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Consolidated Entity is expected
to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the Consolidated Entity: identifies the contract with a customer; identifies the performance obligations in the
contract; determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when
or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods
or services promised.
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.
Recurring revenue
Internet access, equipment rentals, line rentals, managed IT and security services are recognised in the period
in which the service is provided. Where Income for services is invoiced in advance, the amount is recorded as
Unearned Income and recognition in the income statement is delayed until the service has been provided.
Non-recurring revenue
Call charges, professional services, time and materials billings, hardware and software sales and set-up charges
are recognised in the period in which the services or goods are delivered.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Grants
Grants received on the condition that specified services are delivered, or conditions are fulfilled, are initially
recognised as a liability, and revenue is recognised as services are performed or conditions fulfilled. Grants
related to assets are presented in the statement of financial position either as deferred income or by deducting
the relevant amount in determining the carrying amount of the asset.
Interest
Interest revenue is recognised as interest accrues using the effective interest method.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the
same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the Consolidated Entity’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to
be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other
assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity’s normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Note 2. Significant accounting policies (continued)
Grants
Interest
Other revenue
Income tax
applicable.
Grants received on the condition that specified services are delivered, or conditions are fulfilled, are initially
recognised as a liability, and revenue is recognised as services are performed or conditions fulfilled. Grants
related to assets are presented in the statement of financial position either as deferred income or by deducting
the relevant amount in determining the carrying amount of the asset.
Interest revenue is recognised as interest accrues using the effective interest method.
Other revenue is recognised when it is received or when the right to receive payment is established.
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
●
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the
same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
classification.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the Consolidated Entity’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to
be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other
assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity’s normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value, less any provision for impairment. Trade receivables are
generally due for settlement within 30 days.
The Consolidated Entity has applied the simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance which is applied at the operating segment level. To measure the expected
credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract cost assets
Contract assets are recognised when the Consolidated Entity has transferred goods or services to the customer
but where the Consolidated Entity is yet to establish an unconditional right to consideration. Contract assets are
treated as financial assets for impairment purposes.
The contract cost assets relate to costs incurred to both obtain or fulfil a contract with a customer. Costs typically
included sales commissions, customer contract buy-out costs and costs related directly to fulfilling a customer
contract such as direct labour. The contract assets are amortised to cost of sales over the average contract life
which is assessed to be in the range of 3 – 4 years. There are management judgements required in assessing
both the types of costs capitalised and amortisation periods as outlined.
Inventories
Stock on hand is stated at the lower of cost and net realisable value. Cost comprises purchase and delivery
costs, net of rebates and discounts received or receivable.
Financial assets
Financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined
based on both the business model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is
no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within
a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the
contractual terms of the financial asset represent contractual cash flows that are solely payments of principal
and interest.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the Consolidated Entity’s assessment at the end of each reporting period as to
whether the financial instrument’s credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss recognised
is measured on the basis of the ’probability weighted present value of anticipated cash shortfalls over the life of
the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance
is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other
cases, the loss allowance reduces the asset’s carrying value with a corresponding expense through profit or
loss.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. Depreciation commences from
the time the asset is available for its intended use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment
over their expected useful lives as follows:
Leasehold improvements
Plant and equipment*
Motor vehicles
Furniture and fixtures
Right of use assets
3 – 5 years
2 – 7 years
4 – 5 years
3 – 7 years
1 – 5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date to ensure it is not in excess of the assets recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds
are taken to profit or loss.
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 Consolidated Entity 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.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Note 2. Significant accounting policies (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss recognised
is measured on the basis of the ’probability weighted present value of anticipated cash shortfalls over the life of
the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance
is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other
cases, the loss allowance reduces the asset’s carrying value with a corresponding expense through profit or
loss.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. Depreciation commences from
the time the asset is available for its intended use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment
over their expected useful lives as follows:
Leasehold improvements
Plant and equipment*
Motor vehicles
Furniture and fixtures
Right of use assets
3 – 5 years
2 – 7 years
4 – 5 years
3 – 7 years
1 – 5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date to ensure it is not in excess of the assets recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds
are taken to profit or loss.
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 Consolidated Entity 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.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their
fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment.
Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains
or losses recognised in profit or loss arising from the de-recognition of intangible assets are measured as the
difference between net disposal proceeds and the carrying amount of the intangible asset. The method and
useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption
or useful life are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill is recorded at the amount by which the purchase price for a business combination exceeds the fair
value attributed to the interest in the net fair value of identifiable assets, liabilities and contingent liabilities
acquired at date of acquisition.
Goodwill is subsequently measured at cost less any impairment losses.
Goodwill is subject to impairment testing on an annual basis. Impairment losses are calculated based on the
Directors’ assessment of the recoverable amount of the cash-generating unit (CGU). Recoverable amount is
assessed on the basis of the expected net cash flows that will be received from the asset’s employment and
subsequent disposal.
Intellectual property
Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over
the period of their expected benefit, being their finite life of 7 years.
Brand names
Acquired brand names are stated at cost less any impairment.
Brand names are subject to impairment testing on an annual basis. Impairment losses are calculated based on
the Directors’ assessment of the CGU’s. Recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the asset’s employment and subsequent disposal.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 10 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of
their expected benefit being their finite life of 3-5 years.
Other intangible assets
Other intangible assets that are acquired by the Consolidated Entity and have finite lives are stated at cost less
accumulated amortisation and any accumulated impairment losses.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might
be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or CGU to which the asset belongs. Assets that do not have independent cash flows are
grouped together to form a CGU.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end
of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
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 Consolidated Entity’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; lease term; 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.
Provisions
Provisions are recognised when the Consolidated Entity has a present (legal or constructive) obligation as a
result of a past event, it is probable the Consolidated Entity will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation at the reporting date, taking into account the risks
and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of
time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to
be paid when the liabilities are settled.
Non-accumulating sick leave is expensed to profit or loss when incurred.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with terms
to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Note 2. Significant accounting policies (continued)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end
of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
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 Consolidated Entity’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; lease term; 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
Borrowings
Lease liabilities
written down.
Provisions
Provisions are recognised when the Consolidated Entity has a present (legal or constructive) obligation as a
result of a past event, it is probable the Consolidated Entity will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation at the reporting date, taking into account the risks
and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of
time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to
be paid when the liabilities are settled.
Non-accumulating sick leave is expensed to profit or loss when incurred.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with terms
to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together
with non-vesting conditions that do not determine whether the Consolidated Entity receives the services that
entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided
all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Consolidated Entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the Consolidated Entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any
non-controlling interest in the acquiree. For each business combination the non-controlling interest in the
acquiree is measured at either fair value or at the proportionate share of the acquiree’s identifiable net assets.
All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business the Consolidated Entity assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms, economic
conditions, the Consolidated Entity’s operating or accounting policies and other pertinent conditions in existence
at the acquisition-date.
Where the business combination is achieved in stages, the Consolidated Entity remeasures its previously held
equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and
the previous carrying amount is recognised in profit or loss.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value.
Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is
recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any
pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-
existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to
the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-
date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer’s previously held equity
interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts
the provisional amounts recognised and also recognises additional assets or liabilities during the measurement
period, based on new information obtained about the facts and circumstances that existed at the acquisition-
date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii)
when the acquirer receives all the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Spirit Technology
Solutions Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
Basic and diluted earnings per share from operations has been presented in the statement of profit or loss and
other comprehensive income. Basic and diluted earnings is presented in Note 39 to the financial statements.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred
is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from or payable to the tax authority is included in other receivables or other payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from or payable to the tax authority are presented as operating cash
flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from or payable to the tax
authority.
64
47
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Note 2. Significant accounting policies (continued)
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value.
Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is
recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to ‘rounding-off’. Amounts in this report have been rounded off in
accordance with that Corporations Instrument to the nearest ’000 dollars, or in certain cases, the nearest dollar.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any
pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-
existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to
the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-
date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer’s previously held equity
interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts
the provisional amounts recognised and also recognises additional assets or liabilities during the measurement
period, based on new information obtained about the facts and circumstances that existed at the acquisition-
date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii)
when the acquirer receives all the information possible to determine fair value.
Earnings per share
Basic earnings per share
issued during the financial year.
Diluted earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Spirit Technology
Solutions Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
Basic and diluted earnings per share from operations has been presented in the statement of profit or loss and
other comprehensive income. Basic and diluted earnings is presented in Note 39 to the financial statements.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred
is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from or payable to the tax authority is included in other receivables or other payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from or payable to the tax authority are presented as operating cash
Commitments and contingencies are disclosed net of the amount of GST recoverable from or payable to the tax
flows.
authority.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on various other
factors, including expectations of future events management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
Carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Revenue recognition
The Consolidated Entity’s contracts are recognised as and when performance obligations are met. Identifying
performance obligations, allocating the transaction price to performance obligations, and determining the timing
of revenue recognition of these contracts at times requires the application of judgement due to the complexity
and nature of the customer arrangements. The assumptions made in the estimates are based on the information
available to Management at the reporting date. A change in the estimated stage of completion could have an
impact on the timing of the revenue recognition. Refer to Note 2 for further information on revenue recognition.
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 customer. These assumptions include recent sales experience and
historical collection rates.
Goodwill and other indefinite life intangible assets
The Consolidated Entity tests annually, or more frequently if events or changes in circumstances indicate
impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in Note 2. The recoverable amounts of each CGU have been
determined based on value-in-use calculations. These calculations require the use of assumptions, including
estimated discount rates based on the current cost of capital and growth rates of the estimated future cash
flows. Refer Note 16.
Impairment of property, plant and equipment
The Consolidated Entity assesses impairment of property, plant and equipment at each reporting date by
evaluating conditions specific to the Consolidated Entity and to the particular asset that may lead to impairment.
If an impairment trigger exists, the recoverable amount of the asset is determined.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Consolidated Entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences and
losses. Noting that the Consolidated Entity has incurred losses in the current and previous financial years, the
expectation is that future taxable earnings will be generated sufficient to utilise the deferred tax assets.
47
48
65
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 4. Operating segments
Identification of reportable operating segments
The Chief Operating Decision Makers (‘CODM’s) manage the Consolidated Entities operations across three
operating segments as outlined below. Each of those operating segments has a dedicated ‘segment Chief
Executive Officer’ responsible for financial performance and asset allocation decisions within that segment.
▪ Collaboration and Communication offering award-winning voice solutions, managed service solutions, data
and office technology for small business;
▪ Cyber security offering specialist cyber managed services and industry leading solutions to corporate and
enterprise customers delivered through a 24/7 Security Operations Centre and professional service teams.
This capability also enables Spirit to put cyber security at the core of all key market solutions provided
across our segments, improving the resilience and security of all our customers;
▪ Managed Services (IT&T) offering a comprehensive range of managed IT and professional services
including end-user, public cloud, infrastructure and networking, data and voice solutions to SMB and mid-
market customers.
The CODMs review these segments on an underlying basis down to the underlying (loss)/profit before income
tax expense level. Underlying adjustments are reported on a consolidated group basis but attributed to the
segments for disclosure purposes.
Year ended 30 June 2023
Revenue
End customer revenue
Intercompany revenue
Underlying earnings before interest, taxes,
depreciation & amortisation*
Depreciation and amortisation expense
Finance costs (net of interest income)
Underlying net profit/(loss) before income tax**
Underlying Adjustments:
Share based payments
Loss on divestment of selected data centre &
network assets
Acquisition and divestment costs
Restructuring costs***
Other restructuring items****
Net fair value loss on remeasurement of contingent
consideration on business combinations
Amortisation of customer relationships
(Loss)/profit before income tax benefit
Income tax benefit
(Loss) after income tax benefit
Collaboration &
Communication
Cyber
Security
$’000
$’000
Managed
Services
(IT&T)
$’000
Corporate
Total
$’000
$’000
41,588
33,192
52,334
-
127,114
-
416
37
(453)
-
41,588
33,608
52,371
(453) 127,114
9,474
(1,436)
(42)
7,996
963
(2,141)
(3,145) 5,151
(387)
(1,056)
- (2,879)
19
(64)
(1,493) (1,580)
595
(3,261)
(4,638)
692
-
-
-
-
-
-
(1,194)
6,802
-
-
-
-
(942)
(942)
(600)
(104)
-
(600)
(96)
(200)
(103)
(2,529)
(100) (2,732)
-
-
-
(901)
-
(901)
-
-
(8,042) (8,042)
- (1,194)
492
(7,395)
(13,818) (13,919)
2,530
(11,389)
* EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the
profit/(loss) under AAS adjusted for depreciation, amortisation, interest and tax. Underlying EBITDA is EBITDA adjusted to
exclude share-based payments, gain/(loss) on divestment of non-core assets, acquisition & divestment costs, restructuring
costs, net fair value loss on remeasurement of contingent consideration on business combinations and impairment of non-
current assets. Underlying EBITDA for the year to 30 June 2023 also includes a notional gross margin adjustment add back
to reflect the one-off loss on customer retention initiatives – shown as ‘Other restructuring items’.
66
49
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 4. Operating segments
Identification of reportable operating segments
The Chief Operating Decision Makers (‘CODM’s) manage the Consolidated Entities operations across three
operating segments as outlined below. Each of those operating segments has a dedicated ‘segment Chief
Executive Officer’ responsible for financial performance and asset allocation decisions within that segment.
▪ Collaboration and Communication offering award-winning voice solutions, managed service solutions, data
and office technology for small business;
▪ Cyber security offering specialist cyber managed services and industry leading solutions to corporate and
enterprise customers delivered through a 24/7 Security Operations Centre and professional service teams.
This capability also enables Spirit to put cyber security at the core of all key market solutions provided
across our segments, improving the resilience and security of all our customers;
▪ Managed Services (IT&T) offering a comprehensive range of managed IT and professional services
including end-user, public cloud, infrastructure and networking, data and voice solutions to SMB and mid-
market customers.
The CODMs review these segments on an underlying basis down to the underlying (loss)/profit before income
tax expense level. Underlying adjustments are reported on a consolidated group basis but attributed to the
segments for disclosure purposes.
Year ended 30 June 2023
Revenue
End customer revenue
Intercompany revenue
Underlying earnings before interest, taxes,
depreciation & amortisation*
Depreciation and amortisation expense
Finance costs (net of interest income)
Underlying net profit/(loss) before income tax**
Underlying Adjustments:
Share based payments
Loss on divestment of selected data centre &
network assets
Acquisition and divestment costs
Restructuring costs***
Other restructuring items****
Net fair value loss on remeasurement of contingent
consideration on business combinations
Amortisation of customer relationships
(Loss)/profit before income tax benefit
Income tax benefit
(Loss) after income tax benefit
Collaboration &
Communication
Cyber
Security
Managed
Services
Corporate
Total
(IT&T)
$’000
41,588
33,192
52,334
-
127,114
-
416
37
(453)
-
41,588
33,608
52,371
(453) 127,114
9,474
(1,436)
(42)
7,996
963
(2,141)
(3,145) 5,151
(387)
(1,056)
- (2,879)
19
(64)
(1,493) (1,580)
595
(3,261)
(4,638)
692
-
-
-
-
-
-
(1,194)
6,802
-
(942)
(942)
(600)
(104)
-
(600)
(96)
(200)
(103)
(2,529)
(100) (2,732)
(901)
-
(901)
-
-
-
-
-
-
-
-
(8,042) (8,042)
- (1,194)
2,530
(11,389)
* EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the
profit/(loss) under AAS adjusted for depreciation, amortisation, interest and tax. Underlying EBITDA is EBITDA adjusted to
exclude share-based payments, gain/(loss) on divestment of non-core assets, acquisition & divestment costs, restructuring
costs, net fair value loss on remeasurement of contingent consideration on business combinations and impairment of non-
current assets. Underlying EBITDA for the year to 30 June 2023 also includes a notional gross margin adjustment add back
to reflect the one-off loss on customer retention initiatives – shown as ‘Other restructuring items’.
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 4. Operating segments (continued)
** Underlying net profit/(loss) before income tax benefit/(expense) (“uNPBT”) is a financial measure which is not prescribed by
Australian Accounting Standards (‘AAS’) and adjusts underlying EBITDA* to deduct depreciation & amortisation (excluding
amortisation of customer relationships) and finance costs (net of interest revenue). The Directors consider that these measures
are useful in gaining an understanding of the performance of the entity, consistent with internal reporting.
*** Restructuring costs encompasses:
▪ Product IP development costs ($0.4M) related to costs associated with the development of the new Modern Workplace
Solution (“MWS”) and Small Business Managed Services (“SBMS”) offerings. The portion related to the half year to 31
December 2022 (“H1 FY23”) was $0.3M and the portion related to the half year to 30 June 2023 (“H2 FY23”) was
$0.1M. This represents a restatement of the normalisations reflected in the Interim Financial Report for H1 FY23.
▪ System reengineering costs ($0.6M); and
▪ Employee redundancy costs ($1.7M).
**** Other restructuring items covers a notional addback for professional services margin loss on customer retention migrations
($0.9M). This relates to the assessed gross margin forgone on supporting customers to move from acquisition legacy products
that were end of life to new product MWS offerings. The portion related to H1 FY23 was $0.3M and the portion related to H2
FY23 was $0.6M. This represents a restatement of the normalisations reflected in the Interim Financial Report for H1 FY23.
30 June 2023
Total assets
Total liabilities
Net assets
Collaboration &
Communication
Cyber
Security
$’000
72,437
(10,739)
$’000
30,191
(11,391)
Managed
Services
(IT&T)
$’000
10,709
(12,034)
Corporate
Total
$’000
$’000
5,843 119,180
(66,047)
(31,883)
61,698
18,800
(1,325)
(26,040)
53,133
$’000
$’000
$’000
$’000
Year ended 30 June 2022
Revenue
End customer revenue
Intercompany revenue
Underlying earnings before interest, taxes,
depreciation & amortisation*
Depreciation and amortisation expense
Finance costs (net of interest income)
Underlying net (loss)/profit before income tax**
Underlying Adjustments:
Share based payments
Profit on divestment of consumer & fixed wireless
assets
Acquisition and divestment costs
Restructuring costs
Net fair value loss on remeasurement of contingent
consideration on business combinations
492
(7,395)
(13,818) (13,919)
Impairment of non-current assets
Collaboration &
Communication
Cyber
Security
$’000
$’000
Managed
Services
(IT&T)
$’000
Corporate
Total
$’000
$’000
34,982
30,899
69,457 - 135,338
-
498
158
(656)
-
34,982
31,397
69,615
(656) 135,338
9,885
(1,238)
(61)
8,586
2,432
(447)
(26)
(2,154)
(2,907) 7,256
(4,776)
- (6,461)
(103)
(980) (1,170)
1,959
(7,033)
(3,887)
(375)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(721)
(721)
1,823
-
1,823
-
(1,926) (1,926)
(275)
(1,252) (1,527)
-
(2,747) (2,747)
(48,374)
-
- (48,374)
- (1,194)
Amortisation of customer relationships
(1,194)
(Loss)/profit before income tax benefit
7,392
1,959
(53,859)
(10,533) (55,041)
Income tax benefit
(Loss) after income tax benefit
* & ** Refer above footnotes.
49
50
1,875
(53,166)
67
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
30 June 2022
Total assets
Total liabilities
Net assets
Collaboration &
Communication
Cyber
Security
$’000
72,938
(11,316)
$’000
27,186
(7,541)
Managed
Services
(IT&T)
$’000
17,805
(19,549)
Corporate
Total
$’000
5,582
(25,687)
$’000
123,511
(64,093)
61,622
19,645
(1,744)
(20,105)
59,418
Major customers
During the year ended 30 June 2023 there are no individual customers which accounted for 5% or more of
sales.
Note 5. Revenue
Sales revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major product lines
Managed services
Internet and data services
Security services
Voice services
Cloud services
Other
Geographical regions
Australia
Timing of revenue recognition
Goods and services transferred at a point in time
Services transferred over time
Note 6. Other income
Government infrastructure grants
Government subsidies
Profit on divestment of consumer & fixed wireless assets*
Profit on sale of other assets and right of use
Miscellaneous income
Interest income
* Refer Note 35
68
51
Consolidated
2023
$’000
2022
$’000
127,114
135,338
27,655
19,133
34,138
39,599
4,668
1,921
38,866
23,148
33,207
33,180
5,921
1,016
127,114
135,338
127,114
135,338
69,852
57,262
74,038
61,300
127,114
135,338
Consolidated
2023
$’000
2022
$’000
35
10
-
28
42
42
394
1,078
1,823
39
60
-
157
3,394
Annual Report 2023
Collaboration &
Communication
Cyber
Security
Managed
Services
(IT&T)
$’000
$’000
72,938
(11,316)
$’000
27,186
17,805
(7,541)
(19,549)
(25,687)
$’000
5,582
$’000
123,511
(64,093)
61,622
19,645
(1,744)
(20,105)
59,418
During the year ended 30 June 2023 there are no individual customers which accounted for 5% or more of
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
30 June 2023
30 June 2022
Total assets
Total liabilities
Net assets
Major customers
sales.
Note 5. Revenue
Sales revenue
Major product lines
Managed services
Internet and data services
Security services
Voice services
Cloud services
Other
Geographical regions
Australia
Timing of revenue recognition
Goods and services transferred at a point in time
Services transferred over time
Note 6. Other income
Government infrastructure grants
Government subsidies
Profit on divestment of consumer & fixed wireless assets*
Profit on sale of other assets and right of use
Miscellaneous income
Interest income
* Refer Note 35
Consolidated
2023
$’000
2022
$’000
127,114
135,338
27,655
19,133
34,138
39,599
4,668
1,921
38,866
23,148
33,207
33,180
5,921
1,016
127,114
135,338
127,114
135,338
69,852
57,262
74,038
61,300
127,114
135,338
Consolidated
2023
$’000
2022
$’000
35
10
-
28
42
42
394
1,078
1,823
39
60
-
157
3,394
Spirit Technology Solutions Ltd
Notes to the financial statements
Corporate
Total
Note 7. Expenses
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Loss before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Motor vehicles
Furniture and fixtures
Total depreciation (refer Note 14)
Amortisation
Right-of-use assets
Customer relationships
Software and projects
Intellectual property
Total amortisation (refer Notes 15 and 16)
Total depreciation and amortisation
Finance costs
Borrowings
Finance leases
Finance costs expensed
Employee benefits expense excluding superannuation
Employee benefits expense excluding superannuation
Employee benefits included in other disclosures
Acquisition and divestment expenses
Loss/(Gain) on divestment of business assets
Redundancy expense
System reengineering expense
Product IP development expense
Superannuation expense
Defined contribution superannuation expense
Impairment of receivables
Bad and doubtful debts expense*
Consolidated
2023
$’000
2022
$’000
170
404
109
94
777
1,702
1,194
400
-
179
2,832
113
85
3,209
1,983
1,194
1,128
141
3,296
4,446
4,073
7,655
1,493
129
980
190
1,622
1,170
43,582
45,453
-
(110)
(1,704)
(419)
(427)
40,922
(431)
(370)
(1,413)
(114)
-
43,125
3,927
3,883
44,849
47,008
869
669
*The Consolidated Entity has recognised a loss of $869,000 in profit or loss in respect of impairment of
receivables for the year ended 30 June 2023 (2022: $669,000), including bad debts expense of $602,000 (2022:
$517,000).
51
52
69
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 7. Expenses (continued)
Restructuring costs
Employee redundancy expense
System reengineering expense
Product IP development expense
Consolidated
2023
$’000
2022
$’000
1,704
601
427
1,413
114
-
2,732
1,527
Loss on sale of business assets
Loss on divestment of selected data centre & network assets (refer Note 35)
600
-
Impairment of non-current assets
Property, plant and equipment (refer Note 14)
Right-of-use assets (refer Note 15)
Intangibles (refer Note 16)
Note 8. Income tax (benefit)/expense
Numerical reconciliation of income tax (benefit)/expense & tax at the statutory rate
(Loss) before income tax benefit/(expense)
Tax at the statutory tax rate of 30.0% (30.0% at 30 June 2022)
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Acquisition related
Share options and employee share scheme
Impairment of goodwill and other non-tax deductible assets
Other differences
Income tax (benefit)/expense
Note 9. Current assets – cash and cash equivalents
Cash at bank
70
53
-
-
-
-
2,214
357
45,803
48,374
Consolidated
2023
$’000
2022
$’000
(13,919)
(55,041)
(4,176)
(16,512)
2,423
283
-
(1,060)
824
216
13,499
98
(2,530)
(1,875)
Consolidated
2023
$’000
2022
$’000
7,024
11,733
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 10. Current assets – trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Loss on sale of business assets
Loss on divestment of selected data centre & network assets (refer Note 35)
600
-
The ageing of trade receivables are as follows:
Current
1 to 30 days overdue
31 to 60 days overdue
61 to 90 days overdue
Over 90 days overdue
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 7. Expenses (continued)
Restructuring costs
Employee redundancy expense
System reengineering expense
Product IP development expense
Impairment of non-current assets
Property, plant and equipment (refer Note 14)
Right-of-use assets (refer Note 15)
Intangibles (refer Note 16)
Note 8. Income tax (benefit)/expense
Consolidated
2023
$’000
2022
$’000
9,121
(759)
8,362
101
11,870
(707)
11,163
412
8,463
11,575
Consolidated
2023
$’000
2022
$’000
5,955 6,960
3,135
722
231
822
1,790
275
319
782
9,121
11,870
Numerical reconciliation of income tax (benefit)/expense & tax at the statutory rate
(Loss) before income tax benefit/(expense)
Tax at the statutory tax rate of 30.0% (30.0% at 30 June 2022)
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Acquisition related
Share options and employee share scheme
Impairment of goodwill and other non-tax deductible assets
Other differences
Income tax (benefit)/expense
Allowance for expected credit losses
The Consolidated Entity retains a provision of $759,000 in respect of impairment of receivables for the year
ended 30 June 2023 (2022: $707,000).
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
1 to 3 months overdue
4 to 6 months overdue
Over 6 months overdue
Note 9. Current assets – cash and cash equivalents
Movements in the allowance for expected credit losses are as follows:
Cash at bank
Opening balance
Additions and releases
Closing balance
Consolidated
2023
$’000
2022
$’000
165
223
371
759
140
463
104
707
Consolidated
2023
$’000
2022
$’000
707
52
759
487
220
707
53
54
71
Consolidated
2023
$’000
2022
$’000
1,704
601
427
1,413
114
-
2,732
1,527
-
-
-
-
2,214
357
45,803
48,374
Consolidated
2023
$’000
2022
$’000
(13,919)
(55,041)
(4,176)
(16,512)
2,423
283
-
(1,060)
824
216
13,499
98
(2,530)
(1,875)
Consolidated
2023
$’000
2022
$’000
7,024
11,733
Annual Report 2023
Spirit Technology Solutions Limited
Notes to the financial statements
30 June 2023
Note 11. Current assets – inventories
Stock on hand – at cost
Less: Provision for impairment
Note 12. Other assets
Accrued revenue
Prepayments
Employee loans
Vendor loans
Other assets
Current
Non-current
Note 13. Contract cost assets
Contract cost assets
Accumulated release to profit and loss
Current
Non-current
Reconciliation of the written down values at the beginning and end of the current
and previous financial year are set out below:
Opening balance
Additions
Release to the profit and loss
Closing balance
72
55
Consolidated
2023
$’000
2022
$’000
3,359
(570)
4,670
(389)
2,789
4,281
Consolidated
2023
$’000
2022
$’000
5,358
1,469
4
4
312
2,988
1,475
-
150
257
7,147
4,870
5,000
2,147
4,342
528
7,147
4,870
Consolidated
2023
$’000
2022
$’000
8,539
(2,921)
5,168
(1,053)
5,618
4,115
2,313
3,305
1,222
2,893
5,618
4,115
Consolidated
2023
$’000
2022
$’000
4,115
3,371
(1,868)
1,687
3,287
(859)
5,618
4,115
Annual Report 2023
Spirit Technology Solutions Limited
Notes to the financial statements
30 June 2023
Note 11. Current assets – inventories
Stock on hand – at cost
Less: Provision for impairment
Note 12. Other assets
Accrued revenue
Prepayments
Employee loans
Vendor loans
Other assets
Current
Non-current
Note 13. Contract cost assets
Contract cost assets
Accumulated release to profit and loss
Current
Non-current
Reconciliation of the written down values at the beginning and end of the current
and previous financial year are set out below:
Opening balance
Additions
Release to the profit and loss
Closing balance
55
Consolidated
2023
$’000
2022
$’000
3,359
(570)
4,670
(389)
2,789
4,281
Consolidated
2023
$’000
2022
$’000
5,358
1,469
4
4
312
2,988
1,475
-
150
257
7,147
4,870
5,000
2,147
4,342
528
7,147
4,870
Consolidated
2023
$’000
2022
$’000
8,539
(2,921)
5,168
(1,053)
5,618
4,115
2,313
3,305
1,222
2,893
5,618
4,115
Consolidated
2023
$’000
2022
$’000
4,115
3,371
(1,868)
1,687
3,287
(859)
5,618
4,115
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 14. Non-current assets – property, plant and equipment
Leasehold improvements – at cost
Less: Accumulated depreciation and impairment
Plant and equipment at cost
Less: Accumulated depreciation and impairment
Motor vehicles – at cost
Less: Accumulated depreciation
Furniture & Fixtures at Cost
Less: Accumulated depreciation
Consolidated
2023
$’000
2022
$’000
813
(776)
37
6,943
(6,313)
630
533
(427)
106
936
(706)
230
813
(606)
207
6,936
(6,162)
774
671
(456)
215
848
(629)
219
1,003
1,415
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Consolidated
Leasehold
improvements
Plant and
equipment
Motor vehicles
Furniture &
Fixtures
Work in
progress
Total
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 30 June 2021
Adjustments through business
combinations (Note 34)
Additions/transfers
Transfers from held for sale
Disposals on asset divestment
(Note 35)
Disposals – Other
Depreciation expense
Impairment expense
Balance at 30 June 2022
Additions/transfers
Disposals – Other
Depreciation expense
Balance at 30 June 2023
404
13,120
(105)
27
217 2,809
- 100
(10,347)
(19)
-
-
(179)
(130)
207
-
-
(170)
37
55
298
-
-
-
(25)
(113)
-
215
2
(2)
(109)
106
(2,832)
(2,084)
774
267
(7)
(404)
630
56
267
10
27
-
-
-
(85)
-
219
105
-
(94)
230
49
13,895
-
230
(49) 3,004
- 100
-
-
-
-
-
-
-
-
-
(10,347)
(44)
(3,209)
(2,214)
1,415
374
(9)
(777)
1,003
73
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 15. Non-current assets – right-of-use assets
Right-of-use assets
Less: Accumulated amortisation and impairment
Consolidated
2023
$’000
2022
$’000
7,188
(2,759)
6,379
(3,802)
4,429
2,577
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Consolidated
Opening balance
Additions
Disposals on asset divestment (Note 35)
Disposals – Other
Amortisation expense
Impairment expense
Note 16. Non-current assets – intangibles
Goodwill – at cost
Intellectual property – at cost
Less: Accumulated amortisation and impairment
Software
Less: Accumulated amortisation and impairment
Brand names – at cost
Customer relationships
Less: Accumulated amortisation
74
57
Consolidated
2023
$’000
2022
$’000
2,577
3,612
3,891
1,598
- (325)
(58) (247)
(1,702) (1,983)
- (357)
4,429
2,577
Consolidated
2023
$’000
2022
$’000
63,382
63,382
1,412
(1,412)
-
6,007
(5,160)
847
1,412
(1,412)
-
5,635
(4,712)
923
4,105
4,105
11,942
(2,687)
9,255
11,942
(1,493)
10,449
77,589
78,859
Annual Report 2023
Right-of-use assets
Less: Accumulated amortisation and impairment
Reconciliations
set out below:
Consolidated
Opening balance
Additions
Disposals – Other
Amortisation expense
Impairment expense
Disposals on asset divestment (Note 35)
Note 16. Non-current assets – intangibles
Goodwill – at cost
Intellectual property – at cost
Less: Accumulated amortisation and impairment
Software
Less: Accumulated amortisation and impairment
Brand names – at cost
Customer relationships
Less: Accumulated amortisation
Consolidated
2023
$’000
2022
$’000
7,188
(2,759)
6,379
(3,802)
4,429
2,577
Consolidated
2023
$’000
2022
$’000
2,577
3,612
3,891
1,598
- (325)
(58) (247)
(1,702) (1,983)
- (357)
4,429
2,577
Consolidated
2023
$’000
2022
$’000
63,382
63,382
1,412
(1,412)
-
6,007
(5,160)
847
1,412
(1,412)
-
5,635
(4,712)
923
4,105
4,105
11,942
(2,687)
9,255
11,942
(1,493)
10,449
77,589
78,859
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 15. Non-current assets – right-of-use assets
Note 16. Non-current assets – intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Goodwill
Brand names Software &
Customer
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
Consolidated
Balance at 30 June 2021
Additions through business
combinations (Note 34)*
Additions
Disposals on asset divestment
(Note 35)
Disposals – Other
Amortisation expense
Impairment expense
Balance at 30 June 2022
Additions
Disposals – Other
Amortisation expense
at cost
$’000
at cost
$’000
projects
at cost
$’000
relationships
at cost
$’000
105,245
6,286
4,105
-
3,051
-
11,643
-
-
(5,093)
-
-
(43,056)
63,382
-
-
-
-
-
-
-
-
4,105
-
-
-
523
-
(2)
(1,128)
(1,521)
923
324
-
(400)
-
-
-
(1,194)
-
10,449
-
-
(1,194)
Balance at 30 June 2023
63,382
4,105
847
9,255
Intellectual
property
at cost
$’000
Total
$’000
517
-
850
-
124,561
6,286
1,373
(5,093)
-
(141)
(1,226)
(2)
(2,463)
(45,803)
-
-
-
-
-
78,859
324
-
(1,594)
77,589
Goodwill, Brand Names & Intangible Assets with Indefinite Lives
Goodwill and brand names, including those acquired during the year, are allocated to the segment cash-
generating units (CGU). The recoverable amount of each CGU is determined based on a value-in-use model
which uses cash flow projections based on the financial budget for the 12 months immediately following the
reporting date, and cash flows beyond 12 months extrapolated through a 5-year outlook.
The assumptions used for the current reporting period may differ from the assumptions in the past or next
reporting period as internal and external circumstances and expectations change. The Consolidated Entity has
applied the following assumptions in the 30 June 2023 calculation of value-in-use.
Operating Segment
Goodwill &
Brand Names
$’000
Years 1 – 3
Average
Revenue
Annual Growth
Rate
Years 4 & 5
Growth
Rate
Terminal
Growth
Rate
Post Tax
Discount
Rate
Collaboration and Communication
Cyber Security
50,136
17,351
11%
14%
10%
10%
3%
3%
13.5%
13.5%
Sensitivity analysis on the key assumptions employed in the value-in-use calculations has been performed by
Management. The sensitivities applied were decreasing sales and associated cost of goods sold by 10%
throughout the model period (whilst holding operating costs stable), increasing the post-tax discount rate by 2
percentage points and reducing the terminal value growth rate by half.
In the prior financial year ended 30 June 2022, upon applying the value-in-use calculations and sensitivity tests
across the asset bases, including goodwill, it was determined that the carrying amounts allocated to the
Managed Services (IT&T) operating segment exceeded their recoverable amount giving rise to an impairment
expense as at 30 June 2022 of $45.8M (of which $43.1M was directly related to goodwill).
57
58
75
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 17. Non-current assets – deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Employee benefits
Expenses deductible in future periods
Other provisions/accruals
Right of Use Assets
Property Plant & Equipment
Tax losses
Deferred tax asset
Note 18. Current liabilities – trade and other payables
Trade payables
GST payable
Other payables
Refer to Note 28 for further information on financial instruments.
Note 19. Lease liabilities
Lease liability
Current
Non-current
Refer to Note 28 for further information on financial instruments.
76
59
Consolidated
2023
$’000
2022
$’000
1,173
359
1,500
147
274
1,665
1,136
545
2,334
-
-
71
5,118
4,086
Consolidated
2023
$’000
2022
$’000
9,901
495
4,933
9,450
562
5,620
15,329
15,632
Consolidated
2023
$’000
2022
$’000
4,444
3,030
1,771
2,673
1,661
1,369
4,444
3,030
Annual Report 2023
Deferred tax asset comprises temporary differences attributable to:
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 17. Non-current assets – deferred tax
Amounts recognised in profit or loss:
Employee benefits
Expenses deductible in future periods
Other provisions/accruals
Right of Use Assets
Property Plant & Equipment
Tax losses
Deferred tax asset
Note 18. Current liabilities – trade and other payables
Refer to Note 28 for further information on financial instruments.
Note 19. Lease liabilities
Trade payables
GST payable
Other payables
Lease liability
Current
Non-current
Refer to Note 28 for further information on financial instruments.
Consolidated
2023
$’000
2022
$’000
1,173
359
1,500
147
274
1,665
1,136
545
2,334
-
-
71
5,118
4,086
Consolidated
2023
$’000
2022
$’000
9,901
495
4,933
9,450
562
5,620
15,329
15,632
Consolidated
2023
$’000
2022
$’000
4,444
3,030
1,771
2,673
1,661
1,369
4,444
3,030
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 20. Provisions
Annual leave
Long service leave
Provision for income tax
Restructuring
Lease make good
Other provisions
Current
Non-current
Consolidated
2023
$’000
2022
$’000
1,960
1,395
-
1,024
497
1,073
2,377
1,409
(31)
1,138
200
1,073
5,949
6,166
3,944
2,005
5,583
583
5,949
6,166
Reconciliations
Reconciliations of the movement in values at the beginning and end of the current and previous financial year
are set out below:
Consolidated
$’000
$’000
$’000
$’000
Annual leave Long service
leave
Provision for
income tax
Restructure Lease make
good
$’000
Other
provisions
good
$’000
Total
$’000
Balance at 30 June 2021
Additional provisions
recognised during the year
Credited to profit or loss
Payments during the year
Balance at 30 June 2022
Additional provisions
recognised during the year
Credited to profit or loss
Refunds/(Payments) during
the year
1,999
1,271
478 -
48
-
3,796
3,073
-
(2,695)
433
-
(295)
-
1,138
(82) -
(427) -
152
1,073
-
-
-
-
5,869
(82)
(3,417)
2,377
1,409
(31)
1,138
200
1,073
6,166
2,318
-
131
-
1,024
- (155) -
(2,735)
(145)
186
(1,138)
297
-
-
-
-
3,770
(155)
-
(3,832)
Balance at 30 June 2023
1,960
1,395
-
1,024
497
1,073
5,949
Note 21. Current liabilities – deferred consideration
Deferred consideration
Refer to Note 34 for further information on deferred consideration.
Consolidated
2023
$’000
2022
$’000
-
2,611
59
60
77
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 22. Borrowings
Bank loans
Current
Non-current
Consolidated
2023
$’000
2022
$’000
25,000
13,000
5,000
20,000
-
13,000
25,000
13,000
Refer to Note 28 for further information on financial instruments, including the loan repayment maturity profile.
Assets pledged as security
The bank loan of $25M (2022: $13M) has a first ranking security over the assets and undertakings of Spirit
Technology Solutions Ltd and its wholly owned subsidiaries.
On 22 June 2022, the Consolidated Entity executed a facility renewal with its banker for a further term of 3 years
expiring 1 July 2025. On 4 November 2022 and 28 June 2023, the Consolidated Entity executed Amending
Deeds to vary the Facility Agreement. The renegotiation of the facility included changes to the facility limit
(currently $28M), financial covenants (as outlined below) and other conditions and undertakings by the
Company. As at 30 June 2023 $25M had been drawn with a further $3M drawn by the Company post year end.
As part of the undertakings provided, the Consolidated Entity is required to pay down the facility to $20M by
July 2024 at the latest (refer Note 28) following a further renegotiation on the facility limit and timing that was
reached after 30 June 2023. The statement of financial position reflects the circumstances that existed as at
balance date (before this further amendment) with a portion of the borrowings ($5M) shown as current.
The Company’s loan facility is subject to compliance with the following financial covenants during the financial
year ended 30 June 2024 and 30 June 2025:
▪ Net Leverage Ratio (NLR): expressed as a ratio of (A) the aggregate outstanding accommodation of the
Group (as defined within the facility documents) less the aggregate amount of cash held by the group as at
the Calculation Date; and (B) the Group EBITDA (as defined within the facility documents). For the
remaining term of the facility the Calculation Date means 31 March 2024, 30 June 2024, 30 September
2024, 31 December 2024, 31 March 2025 and 30 June 2025. The NLR must at the calculation date be less
than or equal to the agreed ratio for that calculation date (which is stepped down over the next 18 months).
▪ Minimum Net Worth (MNW): expressed as Total Assets less Total Liabilities. The MNW is assessed on a
quarterly basis commencing 30 June 2024 and must at the calculation date be equal to or more than the
agreed benchmark for that calculation date.
In accordance with the provisions of the covenants and undertakings given, non-compliance can trigger a
Review Event of the facility which is generally a standing right under normal commercial loan facilities. Such
review events may include a requirement to pay down in part or in whole the loan facility and other conditions
as agreed with the funder.
78
61
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 22. Borrowings
Bank loans
Current
Non-current
Spirit Technology Solutions Limited
Notes to the financial statements
30 June 2023
Note 23. Non-current liabilities - deferred tax
Deferred tax liability comprises temporary differences attributable to:
Property, plant and equipment
Identifiable intangible assets
Deferred tax liability
Consolidated
2023
$’000
2022
$’000
25,000
13,000
5,000
20,000
-
13,000
25,000
13,000
Refer to Note 28 for further information on financial instruments, including the loan repayment maturity profile.
Note 24. Unearned revenue
Customer contract unearned revenue
Current
Non-current
Consolidated
2023
$'000
2022
$'000
84
4,116
386
5,158
4,200
5,544
Consolidated
2023
$'000
2022
$'000
3,599
6,450
3,132
467
6,028
422
3,599
6,450
Reconciliations
Reconciliations of the movements at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 30 June 2021
Additions on asset divestment (Note 35)
Disposals on asset divestment (Note 35)
Net other movements
Balance at 30 June 2022
Net other movements
Balance at 30 June 2023
Customer
contract
unearned
revenue
$'000
Government
infrastructure
grants
Total
$'000
$'000
4,964
720
-
766
6,450
(2,851)
3,599
1,514
-
6,478
720
(1,189) (1,189)
441
(325)
-
-
-
6,450
(2,851)
3,599
Assets pledged as security
The bank loan of $25M (2022: $13M) has a first ranking security over the assets and undertakings of Spirit
Technology Solutions Ltd and its wholly owned subsidiaries.
On 22 June 2022, the Consolidated Entity executed a facility renewal with its banker for a further term of 3 years
expiring 1 July 2025. On 4 November 2022 and 28 June 2023, the Consolidated Entity executed Amending
Deeds to vary the Facility Agreement. The renegotiation of the facility included changes to the facility limit
(currently $28M), financial covenants (as outlined below) and other conditions and undertakings by the
Company. As at 30 June 2023 $25M had been drawn with a further $3M drawn by the Company post year end.
As part of the undertakings provided, the Consolidated Entity is required to pay down the facility to $20M by
July 2024 at the latest (refer Note 28) following a further renegotiation on the facility limit and timing that was
reached after 30 June 2023. The statement of financial position reflects the circumstances that existed as at
balance date (before this further amendment) with a portion of the borrowings ($5M) shown as current.
The Company’s loan facility is subject to compliance with the following financial covenants during the financial
year ended 30 June 2024 and 30 June 2025:
▪ Net Leverage Ratio (NLR): expressed as a ratio of (A) the aggregate outstanding accommodation of the
Group (as defined within the facility documents) less the aggregate amount of cash held by the group as at
the Calculation Date; and (B) the Group EBITDA (as defined within the facility documents). For the
remaining term of the facility the Calculation Date means 31 March 2024, 30 June 2024, 30 September
2024, 31 December 2024, 31 March 2025 and 30 June 2025. The NLR must at the calculation date be less
than or equal to the agreed ratio for that calculation date (which is stepped down over the next 18 months).
▪ Minimum Net Worth (MNW): expressed as Total Assets less Total Liabilities. The MNW is assessed on a
quarterly basis commencing 30 June 2024 and must at the calculation date be equal to or more than the
agreed benchmark for that calculation date.
In accordance with the provisions of the covenants and undertakings given, non-compliance can trigger a
Review Event of the facility which is generally a standing right under normal commercial loan facilities. Such
review events may include a requirement to pay down in part or in whole the loan facility and other conditions
as agreed with the funder.
61
62
79
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 25. Equity - issued capital
2023
Shares
Consolidated
2022
Shares
2023
$'000
2022
$'000
Ordinary shares - fully paid
735,604,704 664,723,579
119,411 114,874
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
Issue of shares to the vendor as part of the earnout
consideration in relation to the Trident acquisition
Issue of shares to the vendor as part of the earnout
consideration in relation to the Altitude IT acquisition
Issue of shares to the vendor as part of the earnout
consideration in relation to the Beachhead acquisition
Issue of shares to the vendor as part of the earnout
consideration in relation to the Reliance IT acquisition
Conversion of vested performance rights
Conversion of vested performance rights
Issue of shares to vendor as part of deferred
consideration in relation to the Nexgen acquisition
Balance
Issue of shares to vendor as earnout consideration in
relation to the Nexgen acquisition
30 June 2021
652,292,046
112,689
9 September 2021
1,024,218
$0.245
9 September 2021
315,773
$0.245
9 September 2021
1,648,142
$0.245
9 September 2021
10 September 2021
11 January 2022
1,071,040
49,338
103,844
$0.245
$0.000
$0.000
251
77
404
262
-
-
31 March 2022
8,219,178
$0.145
1,191
30 June 2022
664,723,579
114,874
31 March 2023
70,881,125
$0.064
4,537
Balance
30 June 2023
735,604,704
119,411
Movements in unquoted options
Details
Balance
Balance
Date
Options
$'000
30 June 2022
18,000,000
30 June 2023
18,000,000
-
-
80
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 25. Equity - issued capital
Movements in ordinary share capital
Ordinary shares - fully paid
735,604,704 664,723,579
119,411 114,874
Consolidated
2023
Shares
2022
Shares
2023
$'000
2022
$'000
Details
Balance
Balance
Balance
Details
Balance
Balance
Issue of shares to the vendor as part of the earnout
Issue of shares to the vendor as part of the earnout
Issue of shares to the vendor as part of the earnout
consideration in relation to the Altitude IT acquisition
9 September 2021
315,773
$0.245
consideration in relation to the Beachhead acquisition
9 September 2021
1,648,142
$0.245
Issue of shares to the vendor as part of the earnout
consideration in relation to the Reliance IT acquisition
9 September 2021
10 September 2021
11 January 2022
1,071,040
49,338
103,844
$0.245
$0.000
$0.000
Conversion of vested performance rights
Conversion of vested performance rights
Issue of shares to vendor as part of deferred
consideration in relation to the Nexgen acquisition
31 March 2022
8,219,178
$0.145
1,191
251
77
404
262
-
-
Issue of shares to vendor as earnout consideration in
relation to the Nexgen acquisition
31 March 2023
70,881,125
$0.064
4,537
30 June 2022
664,723,579
114,874
30 June 2023
735,604,704
119,411
Movements in unquoted options
Date
Options
$'000
30 June 2022
18,000,000
30 June 2023
18,000,000
-
-
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 25. Equity - issued capital (continued)
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company
in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par
value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
consideration in relation to the Trident acquisition
9 September 2021
1,024,218
$0.245
Capital risk management
Date
Shares
Issue price
$'000
30 June 2021
652,292,046
112,689
Share buy-back
There is no current on-market share buy-back.
The Consolidated Entity'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 to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Consolidated Entity 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 Consolidated Entity is subject to certain financing arrangement covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2022 Annual Report.
Note 26. Equity - reserves
Share-based payments reserve
Capital reserve
Consolidated
2023
$'000
2022
$'000
2,387
6
1,820
6
2,393
1,826
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of
their remuneration, and other parties as part of their compensation for services.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 26. Equity - reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 30 June 2021
Share-based payments expense (Note 40)
Transfers
Balance at 30 June 2022
Share-based payments expense (Note 40)
Balance at 30 June 2023
Note 27. Equity - dividends
Share-
based
payments
reserve
$'000
Capital
reserve
$'000
Total
$'000
1,187
721
(82)
1,826
567
1,181
721
(82)
1,820
567
2,387
2,393
6
-
6
-
6
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 28. Financial instruments
Financial risk management objectives
The Consolidated Entity's activities expose it to a variety of financial risks as set out below.
Risk management is carried out by senior finance executives ('Finance') under the guidance of the Board of
Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Consolidated
Entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and if required, hedges
financial risks within the Consolidated Entity's operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Consolidated Entity undertakes transactions denominated in foreign currencies and therefore has exposure
to foreign currency risk. Offshore Customer Care, Service Delivery, Technology and Finance teams are located
in the Philippines and costs the Consolidated Entity around $1,540 USD per week. The Consolidated Entity also
sources security-based software products and spends approximately $4.9M USD per annum. Conversion is at
the applicable exchange rate at the time the transaction is authorised or at an agreed exchange rate that is fixed
at the time of sales order acceptance by the customer using an appropriate hedging product (on a case by case
basis).
Price risk
The Consolidated Entity is not exposed to any significant price risk.
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Annual Report 2023
Movements in each class of reserve during the current and previous financial year are set out below:
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 26. Equity - reserves (continued)
Movements in reserves
Consolidated
Balance at 30 June 2021
Share-based payments expense (Note 40)
Transfers
Balance at 30 June 2022
Share-based payments expense (Note 40)
Balance at 30 June 2023
Note 27. Equity - dividends
Note 28. Financial instruments
Financial risk management objectives
Share-
based
payments
reserve
$'000
Capital
reserve
$'000
Total
$'000
1,187
721
(82)
1,826
567
1,181
721
(82)
1,820
567
2,387
2,393
6
-
6
-
6
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 28. Financial instruments (continued)
Interest rate risk
The Consolidated Entity's main interest rate risk arises from long-term borrowings. Borrowings obtained at
variable rates expose the Consolidated Entity to interest rate risk. Borrowings obtained at fixed rates expose
the Consolidated Entity to fair value interest rate risk. The entire facility is exposed to variable interest rates.
The Consolidated Entity paid $1,493,000 in interest during the 2023 financial year (2022: $980,000).
The facility is structured such that a line fee is payable on the facility limit ($28M), a usage fee payable on funds
drawn and an interest charge based on BBSY plus a margin. As at the reporting date the Consolidated Entity
had the following variable rate borrowings. The net weighted average interest rate detailed below is calculated
on the aggregation of the usage fee and interest charge for the year ended 30 June 2023 of $945,000 (2022:
$449,000) over the average balance drawn down during the year ended 30 June 2023 of $18.2M (2022:
$22.1M). The line fee for the year ended 30 June 2023 was $517,000 (2022: $531,000).
Consolidated
Bank loan
2023
2022
Weighted
average
interest
rate
%
Balance
$'000
Weighted
average
interest
rate
%
Balance
$'000
5.18%
25,000
2.03%
13,000
There were no dividends paid, recommended or declared during the current or previous financial year.
Net exposure to cash flow interest rate risk
25,000
13,000
The Consolidated Entity's activities expose it to a variety of financial risks as set out below.
Risk management is carried out by senior finance executives ('Finance') under the guidance of the Board of
Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Consolidated
Entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and if required, hedges
financial risks within the Consolidated Entity's operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
basis).
Price risk
The Consolidated Entity undertakes transactions denominated in foreign currencies and therefore has exposure
to foreign currency risk. Offshore Customer Care, Service Delivery, Technology and Finance teams are located
in the Philippines and costs the Consolidated Entity around $1,540 USD per week. The Consolidated Entity also
sources security-based software products and spends approximately $4.9M USD per annum. Conversion is at
the applicable exchange rate at the time the transaction is authorised or at an agreed exchange rate that is fixed
at the time of sales order acceptance by the customer using an appropriate hedging product (on a case by case
The Consolidated Entity is not exposed to any significant price risk.
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
For the Consolidated Entity the bank loans outstanding, totalling $25M (2022: $13M), are interest bearing loans.
On 22 June 2022, the Consolidated Entity executed a facility renewal with its banker for a further term of 3 years
expiring 1 July 2025. On 4 November 2022 and 28 June 2023, the Consolidated Entity executed Amending
Deeds to vary the Facility Agreement. The renegotiation of the facility included changes to the financial
covenants (as outlined in Note 22) and other conditions and undertakings by the Company. As at 30 June 2023
$25M had been drawn with a further $3M drawn by the Company post year end. As part of the undertakings
provided, the Consolidated Entity is required to pay down the facility to $20M by July 2024 at the latest (refer
contractual maturity profile below) following a further renegotiation on the facility limit and timing that was
reached after 30 June 2023. The statement of financial position reflects the circumstances that existed as at
balance date (before this further amendment) with a portion of the borrowings ($5M) shown as current.
Refer Note 22.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Consolidated Entity. The Consolidated Entity has a strict code of credit and follows a rigorous
collection process. The maximum exposure to credit risk at the reporting date to recognised financial assets is
the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of
financial position and notes to the financial statements. The Consolidated Entity does not hold any collateral.
The Consolidated Entity has adopted a lifetime expected loss allowance in estimating expected credit losses to
trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. The credit
loss model takes into consideration the industry dynamics and exposures of the customer base.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 28. Financial instruments (continued)
With regards to Debtors, amounts older than 90 days owing are reviewed and where appropriate taken up as a
provision for doubtful debts. This process is completed monthly. As at 30 June 2023 $759,000 was booked as
an allowance for expected credit losses against the total amount owed by debtors. There are no guarantees
against this receivable but management closely monitors the receivable balance on a monthly basis and is in
regular contact with its customers to mitigate risk.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of
this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to
make contractual payments for a period greater than 1 year.
Liquidity risk
Liquidity risk management requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and
payable.
The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves, available borrowing
facilities or pursuing other forms of liquidity support by continuously monitoring actual and forecast cash flows
and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Consolidated Entity's remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the financial liabilities are required to be paid. The tables include both interest and
principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from
their carrying amount in the statement of financial position.
Less than 6
months
6 -12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Consolidated - 2023
$'000
$'000
$'000
$'000
$'000
Remaining
contractual
maturities
$'000
Non-derivatives
Non-interest bearing
Trade and other payables
Contingent consideration
Interest-bearing - variable
Bank loan* +
Lease liability**
15,329
1,882
-
2,207
-
3,437
-
-
-
-
15,329
7,526
-
932
-
839
5,000
1,067
20,000
1,224
Total non-derivatives
18,143
3,046
9,504
21,224
-
382
382
25,000
4,444
52,299
* Weighted average interest rate of 5.18%
** Weighted average interest rate of 5.27%
+ As outlined in Note 2 and Note 28, post balance sheet date (30 June 2023) a further renegotiation on the facility limit and
timing was reached with the Financier and the above maturity profile reflects that updated position as opposed to the
statement of financial position which reflects the circumstances that existed as at balance date with a portion of the
borrowings ($5M) shown as current.
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Annual Report 2023
With regards to Debtors, amounts older than 90 days owing are reviewed and where appropriate taken up as a
provision for doubtful debts. This process is completed monthly. As at 30 June 2023 $759,000 was booked as
an allowance for expected credit losses against the total amount owed by debtors. There are no guarantees
against this receivable but management closely monitors the receivable balance on a monthly basis and is in
regular contact with its customers to mitigate risk.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of
this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to
make contractual payments for a period greater than 1 year.
Liquidity risk
payable.
Liquidity risk management requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and
The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves, available borrowing
facilities or pursuing other forms of liquidity support by continuously monitoring actual and forecast cash flows
and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Consolidated Entity's remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the financial liabilities are required to be paid. The tables include both interest and
principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from
their carrying amount in the statement of financial position.
Consolidated - 2023
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade and other payables
Contingent consideration
Interest-bearing - variable
Bank loan* +
Lease liability**
15,329
1,882
-
2,207
-
3,437
-
-
-
-
15,329
7,526
-
932
-
839
5,000
1,067
20,000
1,224
-
382
382
25,000
4,444
52,299
* Weighted average interest rate of 5.18%
** Weighted average interest rate of 5.27%
+ As outlined in Note 2 and Note 28, post balance sheet date (30 June 2023) a further renegotiation on the facility limit and
timing was reached with the Financier and the above maturity profile reflects that updated position as opposed to the
statement of financial position which reflects the circumstances that existed as at balance date with a portion of the
borrowings ($5M) shown as current.
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 28. Financial instruments (continued)
Note 28. Financial instruments (continued)
Less than 6
months
6 -12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Consolidated - 2022
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade and other payables
Contingent consideration
Deferred consideration
Interest-bearing - variable
Bank loan*
Lease liability**
15,632
-
2,611
-
11,660
-
-
-
-
-
-
-
-
830
-
831
-
1,369
13,000
-
Total non-derivatives
19,073
12,491
1,369
13,000
* Weighted average interest rate of 2.03%
** Weighted average interest rate of 5.27%
Fair value of financial instruments
Unless otherwise stated the carrying amounts of financial instruments reflect their fair value.
Remaining
contractual
maturities
$'000
-
-
-
-
-
-
15,632
11,660
2,611
13,000
3,030
45,933
Less than 6
months
6 -12
Between 1
Between 2
Over 5
months
and 2 years
and 5 years
years
Remaining
contractual
maturities
Note 29. Key management personnel disclosures
Directors
The following persons were Directors of Spirit Technology Solutions Ltd during the financial year and up to the
date of the financial statements:
Mr James Joughin (Non-Executive Chairman)
Mr Julian Challingsworth (Managing Director and Chief Executive Officer - appointed 11 July 2022)
Mr Julian Haber (Executive Director 1 April 2022 to 18 November 2022, Interim Managing Director 16 May
2022 to 11 July 2022, and Non-Executive Director from 19 November 2022)
Mr Elie Ayoub (Co-CEO Nexgen and Executive Director – appointed as Executive Director on 8 June 2023)
Mr Sol Lukatsky (Managing Director - resigned 2 July 2022)
Mr Gregory Ridder (Non-Executive Director)
Ms Michelle Bendschneider (Non-Executive Director - appointed 1 April 2022)
Total non-derivatives
18,143
3,046
9,504
21,224
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major
activities of the Consolidated Entity, directly or indirectly, during the financial year:
Mr James Harb (Collaboration & Communication – Co Chief Executive Officer)
Mr Nathan Knox (Chief Operating Officer – Spirit Group)
Mr Paul Miller (Chief Financial Officer)
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 29. Key management personnel disclosures (continued)
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the
Consolidated Entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
2023
$
2022
$
2,137,160 1,534,883
175,396
52,329
663,068
198,855
(2,758)
366,361
2,699,618 2,425,676
Note 30. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by PKF Melbourne Audit
& Assurance Pty Ltd, the auditor of the Company, and its related practices:
Consolidated
2023
$
2022
$
180,000
20,000
172,000
-
32,750
-
7,000
25,000
38,250
45,350
239,750
280,600
Audit and assurance services - PKF Melbourne Audit & Assurance Pty Ltd
Audit or review of the financial statements
Assurance related services in respect of earnout accounting
Other services – PKF Melbourne
Tax compliance services
Tax advisory and due diligence services
Corporate advisory and due diligence services
Note 31. Contingent liabilities
There were no contingent liabilities at 30 June 2023 and 30 June 2022.
Note 32. Related party transactions
Parent entity
Spirit Technology Solutions Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 36.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 29. Key management personnel disclosures (continued)
Note 32. Related party transactions (continued)
Compensation
Key management personnel
The aggregate compensation made to Directors and other members of key management personnel of the
Consolidated Entity is set out below:
Disclosures relating to key management personnel are set out in Note 29 and the remuneration report included
in the Directors' report.
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 30. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by PKF Melbourne Audit
& Assurance Pty Ltd, the auditor of the Company, and its related practices:
Consolidated
2023
$
2022
$
2,137,160 1,534,883
198,855
(2,758)
366,361
175,396
52,329
663,068
2,699,618 2,425,676
Consolidated
2023
$
2022
$
180,000
20,000
172,000
-
32,750
-
7,000
25,000
38,250
45,350
239,750
280,600
Audit and assurance services - PKF Melbourne Audit & Assurance Pty Ltd
Audit or review of the financial statements
Assurance related services in respect of earnout accounting
Other services – PKF Melbourne
Tax compliance services
Tax advisory and due diligence services
Corporate advisory and due diligence services
Note 31. Contingent liabilities
There were no contingent liabilities at 30 June 2023 and 30 June 2022.
Note 32. Related party transactions
Spirit Technology Solutions Ltd is the parent entity.
Parent entity
Subsidiaries
Interests in subsidiaries are set out in Note 36.
Transactions with related parties
Mr Julian Haber, Executive Director (1 April 2022 to 18 November 2022), Interim Managing Director (16 May
2022 to 11 July 2022), and Non-Executive Director (from 19 November 2022), is also the co-founder of Intalock
(Spirit) Cyber Security Pty Ltd (formerly known as Intalock Technologies Pty Ltd) (“Intalock”). As outlined in Note
34, the acquisition of Intalock included a contingent consideration element by way of an earn-out structure based
upon EBITDA performance over a 12-month period ended 30 June 2022 (“FY22”). The earnout consideration
was to be settled 100% in cash. The finalised amount of contingent consideration due and payable where the
FY22 target has been exceeded was $3.476M.
During the year ended 30 June 2023, $2.687M was settled. The remaining balance to be settled of $0.789M is
classified as a current liability as at the reporting date.
Mr Elie Ayoub, Executive Director, and Mr James Harb, Collaboration & Communication – Co CEO, were the
co-founders of Nexgen Australia Group Pty Ltd (“Nexgen"). As outlined in Note 34, the acquisition of Nexgen
included a contingent consideration element by way of an earn-out structure based on performance targets for
the 18 months ended 30 June 2023. The Company and the founders finalised these arrangements in their
entirety in February 2023. The amount of contingent consideration included a component settled in shares of
the Company totaling $4.537M which were issued on 31 March 2023. $6.9 million was paid in cash during the
financial year ended 30 June 2023. A further cash component of $6.737M remains to be settled as at 30 June
2023 of which $3.3M is classified as a current liability and the remainder is classified as a non-current liability
as at the reporting date.
The Consolidated Entity rents a premises in Sydney that is owned by Mr Elie Ayoub and Mr James Harb. The
monthly rent is presently $27,392 plus associated outgoings. The lease is rolling month to month and is in the
process of being renewed.
Ms Michelle Bendschneider (Non-Executive Director) provided strategic consultancy services to the Company
and was paid a fee of $33,139 during the year ended 30 June 2023.
There were no other transactions with related parties during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting
date.
Loans to/from related parties
Mr Julian Challingsworth, Managing Director and Chief Executive Officer is party to a Loan Share Plan that was
approved by Shareholders on 17 November 2022. Pursuant to the terms of the Plan he is able to finance the
market value acquisition of Spirit shares on the ASX by way of a limited recourse loan or use the loan to
reimburse Spirit share purchases to a value of up to $760,000.
The loan will become repayable if Mr Challingsworth ceases to be an employee of the Company and in other
circumstances set out in the Plan. The loan is limited recourse, meaning that it can be satisfied in full by selling
shares the subject of the loan. If the market value of the shares at that time is below the amount of the loan, Mr
Challingsworth will not be required to pay the difference in value. To access the shares (for example, if Mr
Challingsworth wanted the ability to sell the shares) he will first have to repay the cash amount of the loan.
Escrow may also apply to shares in excess of the loan amount.
The loan is subject to interest at the 2-year Bank Bill Swap Rate to be determined at the date of the loan. Interest
will be capitalised on the loan amount on a quarterly basis and on repayment will be added to the amount of the
loan.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 32. Related party transactions (continued)
As at 30 June 2023 the loan amount is $374,653. There were no other loans to or from related parties at the
current and previous reporting date.
Note 33. Legal parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(Loss) after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves (Note 26)
Accumulated losses
Total equity
Parent
2023
$'000
2022
$'000
621
(61,830)
621
(61,830)
945
1,543
82,450
82,371
740
1,252
40,327
45,973
119,411
2,393
(79,681)
114,874
1,826
(80,302)
42,123
36,398
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The bank loan facility of $28M is secured first over the assets and undertakings of Spirit Technology Solutions
Ltd and its wholly owned subsidiaries.
The parent entity had no other guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30
June 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30
June 2022.
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Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
current and previous reporting date.
Note 33. Legal parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2023
$'000
2022
$'000
621
(61,830)
621
(61,830)
945
1,543
82,450
82,371
740
1,252
40,327
45,973
119,411
2,393
(79,681)
114,874
1,826
(80,302)
42,123
36,398
Profit/(Loss) after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves (Note 26)
Accumulated losses
Total equity
June 2022.
Contingent liabilities
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The bank loan facility of $28M is secured first over the assets and undertakings of Spirit Technology Solutions
Ltd and its wholly owned subsidiaries.
The parent entity had no other guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30
June 2022.
Note 32. Related party transactions (continued)
Note 33. Legal parent entity information (continued)
As at 30 June 2023 the loan amount is $374,653. There were no other loans to or from related parties at the
Significant accounting policies
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
The accounting policies of the parent entity are consistent with those of the Consolidated Entity, as disclosed in
Note 2, except for the following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt
may be an indicator of an impairment of the investment.
Note 34. Business combinations
Acquisition of Intalock Technologies during the previous financial years
The Company acquired 100% of Intalock (Spirit) Cyber Security Pty Ltd (formerly known as Intalock
Technologies Pty Ltd) (“Intalock”), with effective control on 1 December 2020. The acquisition has been
accounted for as a Business Combination under AASB 3. Intalock is a leading cyber security services business
with a market leading and sophisticated full Security Operations Centre. This acquisition allows Spirit to cross
sell and deliver highly secure bundled Cyber Security Services with Data, Cloud and Voice.
The fair values of the identifiable net assets acquired are detailed below:
Cash and cash equivalents
Trade and other receivables
Prepayments
Deposits
Plant and equipment
Right-of-use assets
Intangible assets
Trade payables
GST payables
Unearned revenue
Provision for income tax
Employee entitlements
Make good provision
Lease liabilities
Net assets acquired
Goodwill
Net fair value gain on remeasurement of financial liabilities
Acquisition-date fair value of the total consideration transferred
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: contingent consideration (remaining to be settled)
Less: shares issued by Company as part of consideration
Net cash used
Fair value
$'000
2,575
2,237
143
235
150
733
191
(2,194)
(56)
(1,200)
(279)
(275)
(45)
(755)
1,460
17,351
2,676
21,487
21,487
(789)
(2,457)
18,241
71
72
89
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 34. Business combinations (continued)
i. Consideration transferred
Acquisition-related costs amounting to $190,000 are not included as part of the consideration for the acquisition
and were recognised as transaction costs in the profit and loss statement.
ii. Identifiable net assets
The fair value of the trade receivables acquired as part of the business combination amounted to $2,237,000.
As of the acquisition date, the Company’s best estimate was that this asset would be fully realised.
iii. Goodwill
Goodwill of $17,351,000 was primarily related to the Company’s growth expectations through customer
expansion. As outlined in Note 4, Intalock forms its own operating segment (Cyber Security) and goodwill on
acquisition has been allocated to that segment.
iv. Deferred consideration
The acquisition of Intalock included a deferred consideration element to be settled by 31 August 2021. The
deferred consideration is to be settled 100% in cash capped at $3,000,000. This amount was settled in full in
FY22.
v. Contingent consideration
The acquisition of Intalock included a contingent consideration element by way of an earn-out structure based
upon EBITDA performance over a 12-month period ended 30 June 2022 (FY22). The earnout consideration is
to be settled 100% in cash.
The FY22 earnout structure facilitated a scaled achievement of the FY22 target whereby the contingent
consideration is payable in a range exceeding 105% of the FY22 Target. At the date of acquisition, the Board
and management assessed the likelihood of achieving the relevant EBITDA performance targets at the 105%
level with $800,000 of contingent consideration recognised. Subsequent to the assessment date of 30 June
2021, the amount of contingent consideration payable where the FY22 EBITDA was likely to exceed the
performance target was estimated to be $623,000. The finalised amount of contingent consideration due and
payable where the FY22 target has been exceeded was $3.476M in cash.
During the year ended 30 June 2023, $2.687M was settled in cash. The remaining balance to be settled of
$0.789M is classified as a current liability as at the reporting date.
vi. Contribution to the Consolidated Entity’s results
Intalocks contribution to the Consolidated Entity’s results as disclosed in Note 4 Operating segments are as
follows:
Revenue
Underlying earnings before interest,
taxes, depreciation & amortisation*
Underlying net profit before income
Tax*
* Refer Note 4 for definitions.
FY22
FY23
$’000
$’000
33,608 31,397
963
2,432
595
1,959
90
73
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 34. Business combinations (continued)
Note 34. Business combinations (continued)
iv. Deferred consideration
FY22.
v. Contingent consideration
to be settled 100% in cash.
i. Consideration transferred
Acquisition-related costs amounting to $190,000 are not included as part of the consideration for the acquisition
and were recognised as transaction costs in the profit and loss statement.
ii. Identifiable net assets
The fair value of the trade receivables acquired as part of the business combination amounted to $2,237,000.
As of the acquisition date, the Company’s best estimate was that this asset would be fully realised.
iii. Goodwill
Goodwill of $17,351,000 was primarily related to the Company’s growth expectations through customer
expansion. As outlined in Note 4, Intalock forms its own operating segment (Cyber Security) and goodwill on
acquisition has been allocated to that segment.
The acquisition of Intalock included a deferred consideration element to be settled by 31 August 2021. The
deferred consideration is to be settled 100% in cash capped at $3,000,000. This amount was settled in full in
The acquisition of Intalock included a contingent consideration element by way of an earn-out structure based
upon EBITDA performance over a 12-month period ended 30 June 2022 (FY22). The earnout consideration is
The FY22 earnout structure facilitated a scaled achievement of the FY22 target whereby the contingent
consideration is payable in a range exceeding 105% of the FY22 Target. At the date of acquisition, the Board
and management assessed the likelihood of achieving the relevant EBITDA performance targets at the 105%
level with $800,000 of contingent consideration recognised. Subsequent to the assessment date of 30 June
2021, the amount of contingent consideration payable where the FY22 EBITDA was likely to exceed the
performance target was estimated to be $623,000. The finalised amount of contingent consideration due and
payable where the FY22 target has been exceeded was $3.476M in cash.
During the year ended 30 June 2023, $2.687M was settled in cash. The remaining balance to be settled of
$0.789M is classified as a current liability as at the reporting date.
vi. Contribution to the Consolidated Entity’s results
Intalocks contribution to the Consolidated Entity’s results as disclosed in Note 4 Operating segments are as
follows:
Revenue
Underlying earnings before interest,
taxes, depreciation & amortisation*
Underlying net profit before income
Tax*
* Refer Note 4 for definitions.
FY23
$’000
FY22
$’000
33,608 31,397
963
2,432
595
1,959
Acquisition of Nexgen during the previous financial year
The Company acquired 100% of Nexgen Australia Group Pty Ltd (“Nexgen"), with effective control on 1 April
2021. Nexgen sells a range of high growth Data, Security & Voice products. The acquisition brings over 5,000
new B2B clients and some one hundred new sales people to Spirit to drive organic growth, complementary
products and scale.
The fair values of the identifiable net assets acquired are detailed below:
Cash and cash equivalents
Trade and other receivables
Inventories
Accrued revenue
Deposits
Property, plant and equipment
Deferred tax assets
Right-of-use assets
Brand names
Customer Relationships
Other intangible assets
Trade and other payables
GST payables
Provision for income tax
Deferred tax liability
Employee benefits
Lease liability
Net assets acquired
Goodwill
Net fair value gain on remeasurement of financial liabilities
Acquisition-date fair value of the total consideration transferred
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: contingent consideration (remaining to be settled)
Less: shares issued by Company as part of consideration
Net cash used
Fair value
$'000
20
271
681
1,713
148
797
382
1,567
4,105
11,942
1,145
(2,969)
(106)
(167)
(5,158)
(886)
(1,567)
11,918
46,031
7,716
65,665
65,665
(6,737)
(17,892)
41,036
i. Consideration transferred
Acquisition-related costs amounting to $517,000 are not included as part of the consideration for the acquisition
and were recognised as transaction costs in the 30 June 2021 ($423,000) and 30 June 2022 ($94,000) profit
and loss statement.
ii. Identifiable net assets
The fair value of the trade receivables acquired as part of the business combination amounted to $271,000. As
of the acquisition date, the Company’s best estimate was that this asset would be fully realised.
73
74
91
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 34. Business combinations (continued)
iii. Goodwill
Goodwill of $46,031,000 was primarily related to the Company’s growth expectations through customer
expansion. As outlined in Note 4, Nexgen forms its own operating segment (Collaboration & Communication)
and goodwill on acquisition has been allocated to that segment.
iv. Deferred consideration
The acquisition of Nexgen included an initial deferred consideration of $11,137,000 which was revised to
$12,216,000. The equity component of the deferred consideration was settled in shares of the Company issued
on 31 March 2022 (at a fair value of $1,191,000) and the remaining component settled (or to be settled) in cash
(being $11,025,000). As at 30 June 2022, $2,611,000 remains as a current liability. During the financial year
ended 30 June 2023 $762,000 was settled in cash and the remainder was written back to the profit & loss as a
net fair value gain on remeasurement of financial liabilities.
v. Contingent consideration
The acquisition of Nexgen included a contingent consideration element by way of an earn-out structure based
upon Milestone Incentives available based on performance targets for FY22 and FY23. The earnout
consideration is to be settled 30% in shares of the Company and 70% in cash.
The earnout structure facilitated a scaled achievement of the FY22 and FY23 targets whereby the contingent
consideration is payable based on the achievement of the relevant EBTDA performance targets. At the date of
acquisition, the Board and management assessed the likelihood of achieving the relevant EBITDA performance
targets and accordingly recognised total contingent consideration of $2,980,000, all of which was classified as
non-current. Subsequent to the assessment date of 1 April 2021, the amount of contingent consideration
payable where the FY22 and HY23 EBITDA is likely to exceed the performance target was amended to reflect
new information obtained about facts and circumstances at the acquisition date that, if known, would have
affected the measurement of the contingent consideration. Accordingly, the amended contingent consideration
totalling $8,610,000 was recorded and classified as a current liability as at 30 June 2022.
As a consequence of the ongoing impact of Covid lockdowns during the early part of FY22, it was agreed with
the Nexgen founders to amend the earnout measurement periods from the 12 months ended 30 June 2022
(FY22) and 6 months ended 31 December 2022 (HY23) respectively to the twelve months ended 31 December
2022 (CY22) and 6 months ended 30 June 2023 (H223). There was no impact on deferred consideration
amounts noted above.
The Company and the founders finalised these arrangements in their entirety in February 2023. The amount of
contingent consideration included a component settled in shares of the Company totalling $4.537M which were
issued on 31 March 2023. $6.9 million was paid in cash during the financial year ended 30 June 2023. A further
cash component of $6.737M remains to be settled as at 30 June 2023 of which $3.3M is classified as a current
liability and the remainder is classified as a non-current liability as at the reporting date.
The contingent consideration payable is higher than originally anticipated but reflects the strong performance of
Nexgen.
vi. Contribution to the Consolidated Entity’s results
Nexgen’s contribution to the Consolidated Entity’s results as disclosed in Note 4 Operating segments are as
follows:
Revenue
Underlying earnings before interest,
taxes, depreciation & amortisation*
Underlying net profit before income
Tax*
* Refer Note 4 for definitions.
92
FY22
FY23
$’000
$’000
41,588 34,982
9,474
9,885
7,996
8,586
75
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 35. Asset Divestments
Divestment of Network Assets during the current financial year
On 1 December 2022, the Company completed the transfer of selected data centre and network assets (“Network
Assets”) to a Melbourne based business associated with the principals of the Maret Group which acquired Spirit’s
Fixed Wireless business in June 2022. The transfer is consistent with Spirit’s strategy of simplifying its Managed
Services (IT&T) business, reducing operating costs and sharpening focus on target customer segments. The
transfer was completed for nominal consideration.
Cash proceeds on completion
Gross proceeds on sale
The fair values of the identifiable net assets disposed:
Inventories
Other net working capital adjustments
Plus: divestment related costs
Loss on divestment
i. Wholesale Supply Agreement
Fair value
$'000
-
-
(80)
(95)
(175)
(425)
(600)
(600)
Spirit is party to a Wholesale Supply Agreement (“WSA”) that was amended as part of the Network Asset
divestment. The agreement acknowledges that the acquirer of the Network Assets reserved capacity on its Network
for Spirit on the basis that Spirit will purchase Wholesale Services at least equal to the Take or Pay Amount. The
Take or Pay Period is the period of time from the Commencement Date (being 1 December 2022) until the earlier
of: (a) 18 months after the Commencement Date; or (b) when the amount of all charges for any Wholesale Service
supplied after the Commencement Date meets an agreed aggregate threshold.
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 34. Business combinations (continued)
iii. Goodwill
Goodwill of $46,031,000 was primarily related to the Company’s growth expectations through customer
expansion. As outlined in Note 4, Nexgen forms its own operating segment (Collaboration & Communication)
and goodwill on acquisition has been allocated to that segment.
iv. Deferred consideration
The acquisition of Nexgen included an initial deferred consideration of $11,137,000 which was revised to
$12,216,000. The equity component of the deferred consideration was settled in shares of the Company issued
on 31 March 2022 (at a fair value of $1,191,000) and the remaining component settled (or to be settled) in cash
(being $11,025,000). As at 30 June 2022, $2,611,000 remains as a current liability. During the financial year
ended 30 June 2023 $762,000 was settled in cash and the remainder was written back to the profit & loss as a
net fair value gain on remeasurement of financial liabilities.
v. Contingent consideration
The acquisition of Nexgen included a contingent consideration element by way of an earn-out structure based
upon Milestone Incentives available based on performance targets for FY22 and FY23. The earnout
consideration is to be settled 30% in shares of the Company and 70% in cash.
The earnout structure facilitated a scaled achievement of the FY22 and FY23 targets whereby the contingent
consideration is payable based on the achievement of the relevant EBTDA performance targets. At the date of
acquisition, the Board and management assessed the likelihood of achieving the relevant EBITDA performance
targets and accordingly recognised total contingent consideration of $2,980,000, all of which was classified as
non-current. Subsequent to the assessment date of 1 April 2021, the amount of contingent consideration
payable where the FY22 and HY23 EBITDA is likely to exceed the performance target was amended to reflect
new information obtained about facts and circumstances at the acquisition date that, if known, would have
affected the measurement of the contingent consideration. Accordingly, the amended contingent consideration
totalling $8,610,000 was recorded and classified as a current liability as at 30 June 2022.
As a consequence of the ongoing impact of Covid lockdowns during the early part of FY22, it was agreed with
the Nexgen founders to amend the earnout measurement periods from the 12 months ended 30 June 2022
(FY22) and 6 months ended 31 December 2022 (HY23) respectively to the twelve months ended 31 December
2022 (CY22) and 6 months ended 30 June 2023 (H223). There was no impact on deferred consideration
amounts noted above.
The Company and the founders finalised these arrangements in their entirety in February 2023. The amount of
contingent consideration included a component settled in shares of the Company totalling $4.537M which were
issued on 31 March 2023. $6.9 million was paid in cash during the financial year ended 30 June 2023. A further
cash component of $6.737M remains to be settled as at 30 June 2023 of which $3.3M is classified as a current
liability and the remainder is classified as a non-current liability as at the reporting date.
The contingent consideration payable is higher than originally anticipated but reflects the strong performance of
vi. Contribution to the Consolidated Entity’s results
Nexgen’s contribution to the Consolidated Entity’s results as disclosed in Note 4 Operating segments are as
Nexgen.
follows:
Revenue
Underlying earnings before interest,
taxes, depreciation & amortisation*
Underlying net profit before income
Tax*
* Refer Note 4 for definitions.
FY23
$’000
FY22
$’000
41,588 34,982
9,474
9,885
7,996
8,586
75
76
93
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 35. Asset Divestments (continued)
Divestment of Consumer Assets during the previous financial year
On 29 October 2021, the Company completed the sale of its non-core consumer residential Internet business to
Melbourne based broadband and telecommunications provider DGtek Pty Ltd (DGtek) for a transaction value of
$5.1M. Under the sale agreement, DGtek acquired the consumer business including the customer base and
relevant infrastructure assets.
The divestment was in line with the Company’s strategy to focus on being a leading and fully integrated technology
provider of modern digital workplaces to the business market, from SMB to corporates. The consumer internet
business was not critical to future operations and represented less than 2% of the Consolidated Entity’s revenue.
Cash proceeds on completion
Contingent consideration
Gross proceeds on sale
The fair values of the identifiable net assets disposed:
Assets held for sale
Intangible assets
Plus: divestment related costs
Profit on divestment
i. Allocation basis of goodwill on disposal
Fair value
$'000
4,900
200
5,100
(1,120)
(1,200)
(2,320)
(411)
(2,731)
2,369
The goodwill disposed originally arose from the acquisition of the LinkOne Group of companies on 1 April 2019.
The goodwill allocated to the divested CGU assets of $1.2M represented the proportion of the consumer assets
acquired relative to the total fair value of the assets on that acquisition.
ii. Contingent consideration
The sale included contingent consideration of $200,000 which was released based on customer migration
milestones being achieved. During the financial year ended 30 June 2023 $100,000 was received and the
remaining $100,000 was written back to the profit & loss as a net fair value loss on remeasurement of financial
liabilities.
94
77
Annual Report 2023
On 29 October 2021, the Company completed the sale of its non-core consumer residential Internet business to
Melbourne based broadband and telecommunications provider DGtek Pty Ltd (DGtek) for a transaction value of
$5.1M. Under the sale agreement, DGtek acquired the consumer business including the customer base and
relevant infrastructure assets.
The divestment was in line with the Company’s strategy to focus on being a leading and fully integrated technology
provider of modern digital workplaces to the business market, from SMB to corporates. The consumer internet
business was not critical to future operations and represented less than 2% of the Consolidated Entity’s revenue.
Cash proceeds on completion
Contingent consideration
Gross proceeds on sale
Assets held for sale
Intangible assets
Plus: divestment related costs
The fair values of the identifiable net assets disposed:
Profit on divestment
i. Allocation basis of goodwill on disposal
The goodwill disposed originally arose from the acquisition of the LinkOne Group of companies on 1 April 2019.
The goodwill allocated to the divested CGU assets of $1.2M represented the proportion of the consumer assets
acquired relative to the total fair value of the assets on that acquisition.
ii. Contingent consideration
The sale included contingent consideration of $200,000 which was released based on customer migration
milestones being achieved. During the financial year ended 30 June 2023 $100,000 was received and the
remaining $100,000 was written back to the profit & loss as a net fair value loss on remeasurement of financial
liabilities.
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 35. Asset Divestments (continued)
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 35. Asset Divestments (continued)
Divestment of Consumer Assets during the previous financial year
Divestment of Fixed Wireless Wholesale Assets during the previous financial year
On 1 June 2022, the Company completed the sale of its fixed wireless infrastructure assets to Melbourne based
Maret Infrastructure Pty Ltd (“Maret Group”) for $15M upfront consideration. Under the sale agreement, Maret
Group acquired the infrastructure assets with Spirit retaining the business customer relationships and revenues.
The Maret Group will charge Spirit wholesale services fees for connected services under a wholesale services
agreement between the parties.
Fair value
$'000
4,900
200
5,100
(1,120)
(1,200)
(2,320)
(411)
(2,731)
2,369
Cash proceeds on completion
Network and NOC “as a service” fee
Gross proceeds on sale
The fair values of the identifiable net assets disposed:
Inventories
Other assets
Plant and equipment
Right-of-use assets
Intangible assets
Unearned revenue
Employee benefits
Plus: divestment related costs
Loss on divestment
i. Allocation basis of goodwill on disposal
Fair value
$'000
14,989
(720)
14,269
(475)
(87)
(10,347)
(325)
(3,893)
1,189
95
(13,843)
(972)
(14,815)
(546)
The goodwill disposed originally arose from the acquisition accounting associated with Anttel Communications
Group Pty Ltd, Building Connect Pty Ltd, Wells Research Pty Ltd and World Without Wires Pty Ltd. The total
goodwill booked on those acquisitions totalled $7.8M. As outlined in Note 3 (Critical accounting judgements,
estimates and assumptions) the allocation of goodwill on divested asset groups requires the application of
judgement. On the basis that the sale structure involved Spirit retaining the business customer relationships and
revenues it was determined that 50% of the goodwill was related to the infrastructure assets (representing $3.9M)
and the residual to the forward customer cash flows retained.
ii. Network and NOC “as a service” fee
As part of the associated Spirit Wholesale Services Agreement with the Maret Group, there is provision for a
Network and Network Operations Centre (“NOC”) “as a service” fee which commences in month 13 after the
completion date. This fee was provided at a 100% discount for the first 12 months as part of the agreed upfront
sale price and equated to approximately $60,000 per month. Under AASB 3 Business Combinations this
component of the transaction price is to be accounted for under AASB 15 Revenue from Contracts with Customers
and according was allocated to unearned revenue.
77
78
95
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 35. Asset Divestments (continued)
iii. Contingent consideration
The sale agreement included up to $6M in earn-out payments over two years, subject to revenue targets being
achieved. As part of the sale of business agreement for the Network Assets on 1 December 2022, a variation to
the Fixed Wireless Network business agreement was entered into that varied the original earn-out agreement. Spirit
can receive up to $3M in earn-out payments over two years, subject to revenue targets being achieved.
The variable consideration is accounted for in accordance with AASB 15 Revenue from Contracts with Customers
which dictates that the amount can only be recognised to the extent that it is highly probable of being earned. As
at the reporting date of 30 June 2023 (and prior period reporting date of 30 June 2022), the Company was not in a
position to determine the amount with the level or certainty required under the accounting standard.
Note 36. 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:
Name
Spirit Technology Services Pty Ltd
(previously Spirit Telecom (Australia) Pty Ltd)
Phone Name Marketing Australia Pty Ltd
World Without Wires Pty Ltd
Anttel Communications Group Pty Ltd
Ignite Broadband Pty Ltd
LinkOne Pty Ltd
Wells Research Pty Ltd
Building Connect Pty Ltd
Bigscreensound Pty Ltd, trading as Arinda IT
Phoenix Austec Group Pty Ltd
Trident Computer Services Pty Ltd
Neptune Managed Services Pty Ltd
VPDA Group Holdings Limited
Voice Print and Data Australia Pty Ltd
Live Call Pty Ltd
Now IT Solutions Pty Ltd
Ancore Pty Ltd, trading as Altitude IT
Beachhead Group Pty Ltd
Reliance Technology Pty Ltd
Intalock (Spirit) Cyber Security Pty Ltd
(previously Intalock Technologies Pty Ltd)
Nexgen Capital Pty Ltd
Nexgen Investment Group Pty Ltd
Business Telecom Australia Pty Ltd
Spirit Business Centre Pty Ltd
Spirit Capital Pty Ltd
Principal place of business /
Country of incorporation
Ownership interest
2022
%
2023
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
For the purposes of this note the parent entity has been deemed as the legal parent entity Spirit Technology
Solutions Ltd.
96
79
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 37. Events after the reporting period
No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly
affect the Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of
affairs in future financial years.
Note 38. Reconciliation of loss after income tax to net cash (used in)/from operating activities
Loss after income tax benefit/(expense) for the year
Adjustments for:
Depreciation and amortisation expense
Impairment of non-current assets
Net loss/(gain) on disposal of property, plant and equipment
Share-based payments
Acquisition and divestment costs
Net fair value loss on remeasurement of financial liabilities
Interest and other finance costs paid
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease/(Increase) in inventories
(Increase)/Decrease in other assets
(Increase) in contract assets
(Increase) in deferred tax assets (net)
(Decrease) in trade and other payables
(Decrease)/Increase in provisions
(Decrease)/Increase in unearned revenue
Net cash (used in)/from operating activities
Consolidated
2023
$'000
2022
$'000
(11,389)
(53,166)
4,073
-
268
567
(200)
8,042
129
7,655
48,374
(1,862)
721
853
2,747
190
3,112
1,492
(2,277)
(1,503)
(2,376)
1,089
(2,179)
667
(2,428)
(1,793)
(303) (182)
(514)
2,309
(2,851)
501
(3,730)
3,496
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 35. Asset Divestments (continued)
iii. Contingent consideration
The sale agreement included up to $6M in earn-out payments over two years, subject to revenue targets being
achieved. As part of the sale of business agreement for the Network Assets on 1 December 2022, a variation to
the Fixed Wireless Network business agreement was entered into that varied the original earn-out agreement. Spirit
can receive up to $3M in earn-out payments over two years, subject to revenue targets being achieved.
The variable consideration is accounted for in accordance with AASB 15 Revenue from Contracts with Customers
which dictates that the amount can only be recognised to the extent that it is highly probable of being earned. As
at the reporting date of 30 June 2023 (and prior period reporting date of 30 June 2022), the Company was not in a
position to determine the amount with the level or certainty required under the accounting standard.
Note 36. 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:
Principal place of business /
Country of incorporation
2023
%
2022
%
Ownership interest
Name
Spirit Technology Services Pty Ltd
(previously Spirit Telecom (Australia) Pty Ltd)
Phone Name Marketing Australia Pty Ltd
World Without Wires Pty Ltd
Anttel Communications Group Pty Ltd
Ignite Broadband Pty Ltd
LinkOne Pty Ltd
Wells Research Pty Ltd
Building Connect Pty Ltd
Bigscreensound Pty Ltd, trading as Arinda IT
Phoenix Austec Group Pty Ltd
Trident Computer Services Pty Ltd
Neptune Managed Services Pty Ltd
VPDA Group Holdings Limited
Voice Print and Data Australia Pty Ltd
Live Call Pty Ltd
Now IT Solutions Pty Ltd
Ancore Pty Ltd, trading as Altitude IT
Beachhead Group Pty Ltd
Reliance Technology Pty Ltd
Intalock (Spirit) Cyber Security Pty Ltd
(previously Intalock Technologies Pty Ltd)
Nexgen Capital Pty Ltd
Nexgen Investment Group Pty Ltd
Business Telecom Australia Pty Ltd
Spirit Business Centre Pty Ltd
Spirit Capital Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
For the purposes of this note the parent entity has been deemed as the legal parent entity Spirit Technology
Solutions Ltd.
79
80
97
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 39. Earnings per share
Weighted average number of ordinary shares used in calculating basic earnings
per share
682,589,506
657,644,431
Weighted average number of ordinary shares used in calculating diluted earnings
per share
682,589,506
657,644,431
Number
Number
Loss attributable to the owners
of Spirit Technology Solutions
Ltd
Basic earnings per share
Diluted earnings per share
Note 40. Share-based payments
2023
Total
$'000
2022
Total
$'000
(11,389)
(53,166)
2023
Total
Cents
(1.67)
(1.67)
2022
Total
Cents
(8.08)
(8.08)
During the financial year ended 30 June 2023, 6,250,000 Performance Rights were granted by the Company to
key management personnel with a vesting period ending 30 June 2025, of which 6,250,000 Performance Rights
have a Relative Total Shareholder Return ("Relative TSR") performance hurdle measured against a peer group.
During the financial year ended 30 June 2023, 11,668,000 Performance Rights were granted by the Company
to key management personnel and certain employees with a vesting period ending 30 June 2025, which vest
subject to Absolute TSR performance hurdles being met, as outlined below.
Also, during the financial year ended 30 June 2023, 179,000 Performance Rights were granted by the Company
to certain employees with a vesting period ending 30 June 2024, which vest subject to Absolute TSR
performance hurdles being met, as outlined below.
Absolute TSR
100% of the Performance Rights vest based on absolute total shareholder return (“Absolute TSR”) performance
of the Company, and service conditions outlined below.
The vesting schedule is set out below:
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.0930 at any time between grant and 30 June 2025.
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.1240 at any time between grant and 30 June 2025.
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.1550 at any time between grant and 30 June 2025.
The vesting conditions above are also subject to the following conditions. For each of the three Tranches above,
50% of the Performance Rights in each tranche will only vest if the participant remains employed with the
Company until 31 December 2023 and the vesting conditions for each tranche above have been met, with the
remaining 50% of the Performance Rights in each tranche, subject to remaining employeed with the Company
until 31 December 2024 and the vesting conditions for each tranche above being met.
98
81
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 40. Share-based payments (continued)
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together
with non-vesting conditions that do not determine whether the Consolidated Entity receives the services that
entitle the employees to receive payment. No account is taken of any other vesting conditions.
Set out below are summaries of options granted under the Spirit Technology Solutions Ltd Long Term Incentive
Plan:
2023
Grant date
Expiry date
Exercise Balance at Granted
the start of
the year
price
Exercised Expired/ Balance at
forfeited/ the end of
other
the year
14/05/2019
14/05/2019
14/05/2019
01/07/2023
01/07/2023
01/07/2023
$0.150 6,000,000
$0.180 6,000,000
$0.215 6,000,000
18,000,000
-
-
-
-
-
-
-
-
- 6,000,000
- 6,000,000
- 6,000,000
- 18,000,000
2022
Grant date
Expiry date
Exercise Balance at Granted
the start of
the year
price
Exercised Expired/ Balance at
forfeited/ the end of
other
the year
14/05/2019
14/05/2019
14/05/2019
01/07/2023
01/07/2023
01/07/2023
$0.150 6,000,000
$0.180 6,000,000
$0.215 6,000,000
18,000,000
Weighted average exercise price
$0.182
-
-
-
-
-
-
-
-
-
-
- 6,000,000
- 6,000,000
- 6,000,000
- 18,000,000
-
$0.182
The weighted average remaining contractual life of options outstanding at the end of the financial year was Nil
year (2022: 1 year).
Weighted average number of ordinary shares used in calculating basic earnings
Weighted average number of ordinary shares used in calculating diluted earnings
per share
per share
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 39. Earnings per share
Loss attributable to the owners
of Spirit Technology Solutions
Ltd
Basic earnings per share
Diluted earnings per share
Note 40. Share-based payments
Number
Number
682,589,506
657,644,431
682,589,506
657,644,431
2023
Total
$'000
2022
Total
$'000
(11,389)
(53,166)
2023
Total
Cents
(1.67)
(1.67)
2022
Total
Cents
(8.08)
(8.08)
During the financial year ended 30 June 2023, 6,250,000 Performance Rights were granted by the Company to
key management personnel with a vesting period ending 30 June 2025, of which 6,250,000 Performance Rights
have a Relative Total Shareholder Return ("Relative TSR") performance hurdle measured against a peer group.
During the financial year ended 30 June 2023, 11,668,000 Performance Rights were granted by the Company
to key management personnel and certain employees with a vesting period ending 30 June 2025, which vest
subject to Absolute TSR performance hurdles being met, as outlined below.
Also, during the financial year ended 30 June 2023, 179,000 Performance Rights were granted by the Company
to certain employees with a vesting period ending 30 June 2024, which vest subject to Absolute TSR
performance hurdles being met, as outlined below.
100% of the Performance Rights vest based on absolute total shareholder return (“Absolute TSR”) performance
of the Company, and service conditions outlined below.
Absolute TSR
The vesting schedule is set out below:
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.0930 at any time between grant and 30 June 2025.
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.1240 at any time between grant and 30 June 2025.
• One-third of the Performance Rights vest when the Company's 30-trading day Volume Weighted
Average Price (VWAP) is equal to or greater than $0.1550 at any time between grant and 30 June 2025.
The vesting conditions above are also subject to the following conditions. For each of the three Tranches above,
50% of the Performance Rights in each tranche will only vest if the participant remains employed with the
Company until 31 December 2023 and the vesting conditions for each tranche above have been met, with the
remaining 50% of the Performance Rights in each tranche, subject to remaining employeed with the Company
until 31 December 2024 and the vesting conditions for each tranche above being met.
81
82
99
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 40. Share-based payments (continued)
Set out below are summaries of Performance Rights granted under the plan:
2023
Grant date
Expiry date
22/04/2020
13/10/2020
11/06/2021
29/11/2021
11/03/2022
11/07/2022
10/02/2023
30/06/2024
12/11/2023
11/06/2024
07/04/2025
07/04/2025
30/06/2026
10/02/2026
2022
Grant date
Expiry date
12/09/2018
18/02/2019
22/04/2020
13/10/2020
11/06/2021
29/11/2021
11/03/2022
12/09/2021
18/02/2023
22/04/2023
12/11/2023
11/06/2024
07/04/2025
07/04/2025
Balance at Granted
the start of
the year
Exercised
Forfeited Balance at
the end of
the year
653,943
2,232,387
620,685
11,000,000
2,000,000
-
-
-
-
-
- 6,250,000
- 11,847,000
16,507,015 18,097,000
-
(326,971)
326,972
-
(627,075) 1,605,312
-
(86,307)
534,378
- (6,486,314) 4,513,686
(305,201) 1,694,799
-
-
- 6,250,000
- 11,847,000
-
- (7,831,868) 26,772,147
Balance at Granted
the start of
the year
Exercised
Forfeited Balance at
the end of
the year
247,059
520,000
653,943
2,232,387
620,685
-
-
-
-
-
- 11,000,000
- 2,000,000
4,274,074 13,000,000
(49,338)
(197,721)
-
(103,844) (416,156)
-
-
653,943
- 2,232,387
-
620,685
- 11,000,000
- 2,000,000
(613,877) 16,507,015
-
-
-
-
-
(153,182)
The weighted average remaining contractual life of Performance Rights outstanding at the end of the financial
year was 1.19 years (2022: 2.47 years).
For the Performance Rights granted during the current financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant date
Expiry date
11/07/2022
10/02/2023
10/02/2023
10/02/2023
10/02/2023
10/02/2023
10/02/2023
30/06/2026
10/02/2026
10/02/2026
10/02/2026
10/02/2026
10/02/2026
10/02/2026
100
Share price Expected Dividend
at grant date
volatility
yield
Risk-free
interest rate at grant date
Fair value
65%
65%
65%
65%
65%
65%
65%
-
-
-
-
-
-
-
3.19%
3.20%
3.20%
3.20%
3.20%
3.20%
3.20%
$0.0519
$0.0547
$0.0453
$0.0376
$0.0482
$0.0346
$0.0245
$0.056
$0.065
$0.065
$0.065
$0.065
$0.065
$0.065
83
Annual Report 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Spirit Technology Solutions Ltd
Notes to the financial statements
30 June 2023
Note 40. Share-based payments (continued)
Note 40. Share-based payments (continued)
Set out below are summaries of Performance Rights granted under the plan:
Share-based payments expense reconciliation
Issue of share options to Directors and employees under incentive option scheme
Issue of Performance Rights to Directors and employees under Performance
Rights plan
Loan Share Plan
Total share-based payments expense reconciliation
Consolidated
2023
$
2022
$
1
566
567
375
942
396
325
721
-
721
84
101
2023
Grant date
22/04/2020
13/10/2020
11/06/2021
29/11/2021
11/03/2022
11/07/2022
10/02/2023
2022
Grant date
12/09/2018
18/02/2019
22/04/2020
13/10/2020
11/06/2021
29/11/2021
11/03/2022
Expiry date
Balance at Granted
Exercised
Forfeited Balance at
30/06/2024
12/11/2023
11/06/2024
07/04/2025
07/04/2025
30/06/2026
10/02/2026
12/09/2021
18/02/2023
22/04/2023
12/11/2023
11/06/2024
07/04/2025
07/04/2025
the end of
the year
(326,971)
326,972
(627,075) 1,605,312
(86,307)
534,378
- (6,486,314) 4,513,686
(305,201) 1,694,799
- 6,250,000
- 11,847,000
the start of
the year
653,943
2,232,387
620,685
11,000,000
2,000,000
the start of
the year
247,059
520,000
653,943
2,232,387
620,685
- 6,250,000
- 11,847,000
16,507,015 18,097,000
- (7,831,868) 26,772,147
(49,338)
(197,721)
(103,844) (416,156)
-
-
the end of
the year
-
-
653,943
- 2,232,387
620,685
- 11,000,000
- 2,000,000
- 11,000,000
- 2,000,000
4,274,074 13,000,000
(153,182)
(613,877) 16,507,015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expiry date
Balance at Granted
Exercised
Forfeited Balance at
The weighted average remaining contractual life of Performance Rights outstanding at the end of the financial
year was 1.19 years (2022: 2.47 years).
For the Performance Rights granted during the current financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant date
Expiry date
Share price Expected Dividend
Risk-free
Fair value
at grant date
volatility
yield
interest rate at grant date
11/07/2022
10/02/2023
10/02/2023
10/02/2023
10/02/2023
10/02/2023
10/02/2023
30/06/2026
10/02/2026
10/02/2026
10/02/2026
10/02/2026
10/02/2026
10/02/2026
65%
65%
65%
65%
65%
65%
65%
-
-
-
-
-
-
-
3.19%
3.20%
3.20%
3.20%
3.20%
3.20%
3.20%
$0.0519
$0.0547
$0.0453
$0.0376
$0.0482
$0.0346
$0.0245
$0.056
$0.065
$0.065
$0.065
$0.065
$0.065
$0.065
83
Annual Report 2023
Directors'
Declaration
Annual Report 2023ASX: ST1 Spirit Technology Solutions Ltd
Directors' declaration
30 June 2023
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in Note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Consolidated Entity's financial
position as at 30 June 2023 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the Directors
___________________________
James Joughin
Non-Executive Chairman
30 August 2023
85
103
Annual Report 2023
Independent
Auditor’s
Report
Annual Report 2023ASX: ST1 (cid:3)
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(cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:381)(cid:367)(cid:349)(cid:282)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:393)(cid:396)(cid:381)(cid:296)(cid:349)(cid:410)(cid:3)(cid:381)(cid:396)(cid:3)(cid:367)(cid:381)(cid:400)(cid:400)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:381)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:396)(cid:286)(cid:346)(cid:286)(cid:374)(cid:400)(cid:349)(cid:448)(cid:286)(cid:3)(cid:349)(cid:374)(cid:272)(cid:381)(cid:373)(cid:286)(cid:853)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:381)(cid:367)(cid:349)(cid:282)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:272)(cid:346)(cid:258)(cid:374)(cid:336)(cid:286)(cid:400)(cid:3)
(cid:349)(cid:374)(cid:3)(cid:286)(cid:395)(cid:437)(cid:349)(cid:410)(cid:455)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:381)(cid:367)(cid:349)(cid:282)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3) (cid:381)(cid:296)(cid:3) (cid:272)(cid:258)(cid:400)(cid:346)(cid:3)(cid:296)(cid:367)(cid:381)(cid:449)(cid:400)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:374)(cid:3)(cid:286)(cid:374)(cid:282)(cid:286)(cid:282)(cid:853)(cid:3)(cid:374)(cid:381)(cid:410)(cid:286)(cid:400)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:853)(cid:3)
(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3) (cid:373)(cid:258)(cid:410)(cid:286)(cid:396)(cid:349)(cid:258)(cid:367)(cid:3) (cid:258)(cid:272)(cid:272)(cid:381)(cid:437)(cid:374)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3) (cid:393)(cid:381)(cid:367)(cid:349)(cid:272)(cid:455)(cid:3) (cid:349)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) and the Directors’ Declaration of the Company(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:39)(cid:396)(cid:381)(cid:437)(cid:393)(cid:3)
(cid:272)(cid:381)(cid:373)(cid:393)(cid:396)(cid:349)(cid:400)(cid:349)(cid:374)(cid:336)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)the entities it controlled at the year’s end or from time to time during the financial year.(cid:3)
(cid:47)(cid:374)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:381)(cid:393)(cid:349)(cid:374)(cid:349)(cid:381)(cid:374)(cid:853)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:94)(cid:393)(cid:349)(cid:396)(cid:349)(cid:410)(cid:3)(cid:100)(cid:286)(cid:272)(cid:346)(cid:374)(cid:381)(cid:367)(cid:381)(cid:336)(cid:455)(cid:3)(cid:94)(cid:381)(cid:367)(cid:437)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:62)(cid:410)(cid:282)(cid:3)(cid:349)(cid:400)(cid:3)(cid:349)(cid:374)(cid:3)(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:4)(cid:272)(cid:410)(cid:3)(cid:1006)(cid:1004)(cid:1004)(cid:1005)(cid:853)(cid:3)
(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:349)(cid:374)(cid:336)(cid:855)(cid:3)
(cid:894)(cid:258)(cid:895) (cid:336)(cid:349)(cid:448)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:3)(cid:410)(cid:396)(cid:437)(cid:286)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:296)(cid:258)(cid:349)(cid:396)(cid:3)(cid:448)(cid:349)(cid:286)(cid:449)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)Group’s(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:393)(cid:381)(cid:400)(cid:349)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:258)(cid:400)(cid:3)(cid:258)(cid:410)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:58)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:381)(cid:296)(cid:3)(cid:349)(cid:410)(cid:400)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:393)(cid:286)(cid:396)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)
(cid:410)(cid:346)(cid:286)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:286)(cid:374)(cid:282)(cid:286)(cid:282)(cid:3)(cid:381)(cid:374)(cid:3)(cid:410)(cid:346)(cid:258)(cid:410)(cid:3)(cid:282)(cid:258)(cid:410)(cid:286)(cid:854)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)
(cid:894)(cid:271)(cid:895) (cid:272)(cid:381)(cid:373)(cid:393)(cid:367)(cid:455)(cid:349)(cid:374)(cid:336)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:4)(cid:437)(cid:400)(cid:410)(cid:396)(cid:258)(cid:367)(cid:349)(cid:258)(cid:374)(cid:3)(cid:4)(cid:272)(cid:272)(cid:381)(cid:437)(cid:374)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:94)(cid:410)(cid:258)(cid:374)(cid:282)(cid:258)(cid:396)(cid:282)(cid:400)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:90)(cid:286)(cid:336)(cid:437)(cid:367)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:1006)(cid:1004)(cid:1004)(cid:1005)(cid:856)(cid:3)
(cid:17)(cid:258)(cid:400)(cid:349)(cid:400)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:75)(cid:393)(cid:349)(cid:374)(cid:349)(cid:381)(cid:374)(cid:3)
(cid:116)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:282)(cid:437)(cid:272)(cid:410)(cid:286)(cid:282)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:349)(cid:374)(cid:3)(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:4)(cid:437)(cid:400)(cid:410)(cid:396)(cid:258)(cid:367)(cid:349)(cid:258)(cid:374)(cid:3)(cid:4)(cid:437)(cid:282)(cid:349)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:94)(cid:410)(cid:258)(cid:374)(cid:282)(cid:258)(cid:396)(cid:282)(cid:400)(cid:856)(cid:3)(cid:75)(cid:437)(cid:396)(cid:3)(cid:396)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)(cid:437)(cid:374)(cid:282)(cid:286)(cid:396)(cid:3)(cid:410)(cid:346)(cid:381)(cid:400)(cid:286)(cid:3)(cid:400)(cid:410)(cid:258)(cid:374)(cid:282)(cid:258)(cid:396)(cid:282)(cid:400)(cid:3)
(cid:258)(cid:396)(cid:286)(cid:3)(cid:296)(cid:437)(cid:396)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:282)(cid:286)(cid:400)(cid:272)(cid:396)(cid:349)(cid:271)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)Auditor’s Responsibilit(cid:349)(cid:286)(cid:400)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:4)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:38)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:400)(cid:286)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:381)(cid:296)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:856)(cid:3)
(cid:116)(cid:286)(cid:3)(cid:258)(cid:396)(cid:286)(cid:3)(cid:349)(cid:374)(cid:282)(cid:286)(cid:393)(cid:286)(cid:374)(cid:282)(cid:286)(cid:374)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:39)(cid:396)(cid:381)(cid:437)(cid:393)(cid:3)(cid:349)(cid:374)(cid:3)(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:381)(cid:396)(cid:3)(cid:349)(cid:374)(cid:282)(cid:286)(cid:393)(cid:286)(cid:374)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:396)(cid:286)(cid:395)(cid:437)(cid:349)(cid:396)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:4)(cid:272)(cid:410)(cid:3)
(cid:1006)(cid:1004)(cid:1004)(cid:1005)(cid:3)and the ethical requirements of the Accounting Professional and Ethical Standards Board’s (cid:4)(cid:87)(cid:28)(cid:94)(cid:3)(cid:1005)(cid:1005)(cid:1004)(cid:3)(cid:18)(cid:381)(cid:282)(cid:286)(cid:3)(cid:381)(cid:296)(cid:3)(cid:28)(cid:410)(cid:346)(cid:349)(cid:272)(cid:400)(cid:3)
(cid:296)(cid:381)(cid:396)(cid:3) (cid:87)(cid:396)(cid:381)(cid:296)(cid:286)(cid:400)(cid:400)(cid:349)(cid:381)(cid:374)(cid:258)(cid:367)(cid:3) (cid:4)(cid:272)(cid:272)(cid:381)(cid:437)(cid:374)(cid:410)(cid:258)(cid:374)(cid:410)(cid:400)(cid:3) (cid:894)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3) (cid:47)(cid:374)(cid:282)(cid:286)(cid:393)(cid:286)(cid:374)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3) (cid:94)(cid:410)(cid:258)(cid:374)(cid:282)(cid:258)(cid:396)(cid:282)(cid:400)(cid:895)(cid:3) (cid:894)(cid:410)(cid:346)(cid:286)(cid:3) (cid:18)(cid:381)(cid:282)(cid:286)(cid:895)(cid:3) (cid:410)(cid:346)(cid:258)(cid:410)(cid:3) (cid:258)(cid:396)(cid:286)(cid:3) (cid:396)(cid:286)(cid:367)(cid:286)(cid:448)(cid:258)(cid:374)(cid:410)(cid:3) (cid:410)(cid:381)(cid:3) (cid:381)(cid:437)(cid:396)(cid:3) (cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)
(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:349)(cid:374)(cid:3)(cid:4)(cid:437)(cid:400)(cid:410)(cid:396)(cid:258)(cid:367)(cid:349)(cid:258)(cid:856)(cid:3)(cid:116)(cid:286)(cid:3)(cid:346)(cid:258)(cid:448)(cid:286)(cid:3)(cid:258)(cid:367)(cid:400)(cid:381)(cid:3)(cid:296)(cid:437)(cid:367)(cid:296)(cid:349)(cid:367)(cid:367)(cid:286)(cid:282)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:381)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:286)(cid:410)(cid:346)(cid:349)(cid:272)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:3)(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:282)(cid:286)(cid:856)(cid:3)
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•
•
•
•
•
•
•
the appropriateness of Management’s determination
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(cid:400)(cid:410)(cid:396)(cid:258)(cid:410)(cid:286)(cid:336)(cid:349)(cid:286)(cid:400)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:381)(cid:437)(cid:410)(cid:367)(cid:381)(cid:381)(cid:364)(cid:400)(cid:854)(cid:3)
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(cid:282)(cid:258)(cid:410)(cid:258)(cid:854)(cid:3)
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(cid:258)(cid:448)(cid:258)(cid:349)(cid:367)(cid:258)(cid:271)(cid:367)(cid:286)(cid:3)(cid:349)(cid:374)(cid:282)(cid:437)(cid:400)(cid:410)(cid:396)(cid:455)(cid:3)(cid:282)(cid:258)(cid:410)(cid:258)(cid:854)(cid:3)
86
PKF Melbourne Audit & Assurance Pty Ltd ABN 75 600 749 184
Level 12, 440 Collins Street, Melbourne, Victoria 3000
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PKF Melbourne Audit & Assurance Pty Ltd is a member firm of the PKF International Limited family of separately owned firms and does not accept any
responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.(cid:3)
(cid:3)
(cid:3)
105
Annual Report 2023 (cid:3)
(cid:3)
(cid:3)
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(cid:68)(cid:258)(cid:374)(cid:258)(cid:336)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:286)(cid:400)(cid:410)(cid:349)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:361)(cid:437)(cid:282)(cid:336)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:258)(cid:3)(cid:60)(cid:286)(cid:455)(cid:3)(cid:4)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)
(cid:68)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:856)(cid:3)
(cid:3)
• Management’s sensitivity analysis around the key
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•
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(cid:3)
(cid:18)(cid:367)(cid:258)(cid:400)(cid:400)(cid:349)(cid:296)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:3)(cid:381)(cid:296)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)
(cid:4)(cid:400)(cid:3)(cid:381)(cid:437)(cid:410)(cid:367)(cid:349)(cid:374)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:3)(cid:69)(cid:381)(cid:410)(cid:286)(cid:3)(cid:1006)(cid:1006)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:39)(cid:396)(cid:381)(cid:437)(cid:393)(cid:3)(cid:346)(cid:286)(cid:367)(cid:282)(cid:3)(cid:258)(cid:3)(cid:373)(cid:258)(cid:396)(cid:364)(cid:286)(cid:410)(cid:3)(cid:396)(cid:258)(cid:410)(cid:286)(cid:3)(cid:367)(cid:381)(cid:258)(cid:374)(cid:3)
(cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:381)(cid:296)(cid:3)(cid:936)(cid:1006)(cid:1012)(cid:373)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:346)(cid:258)(cid:282)(cid:3)(cid:437)(cid:410)(cid:349)(cid:367)(cid:349)(cid:400)(cid:286)(cid:282)(cid:3)(cid:936)(cid:1006)(cid:1009)(cid:373)(cid:3)(cid:258)(cid:410)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:58)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:853)(cid:3)
(cid:449)(cid:346)(cid:349)(cid:272)(cid:346)(cid:3)(cid:349)(cid:400)(cid:3)(cid:393)(cid:396)(cid:286)(cid:400)(cid:286)(cid:374)(cid:410)(cid:286)(cid:282)(cid:3)(cid:258)(cid:400)(cid:3)(cid:258)(cid:3)(cid:936)(cid:1009)(cid:373)(cid:3)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3)(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:258)(cid:3)(cid:936)(cid:1006)(cid:1004)(cid:373)(cid:3)
(cid:374)(cid:381)(cid:374)(cid:882)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3)(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:410)(cid:3)(cid:271)(cid:258)(cid:367)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:282)(cid:258)(cid:410)(cid:286)(cid:856)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3) (cid:39)(cid:396)(cid:381)(cid:437)(cid:393)(cid:3) (cid:346)(cid:258)(cid:448)(cid:286)(cid:3) (cid:286)(cid:258)(cid:396)(cid:367)(cid:455)(cid:3) (cid:258)(cid:282)(cid:381)(cid:393)(cid:410)(cid:286)(cid:282)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:393)(cid:396)(cid:349)(cid:374)(cid:272)(cid:349)(cid:393)(cid:367)(cid:286)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:4)(cid:4)(cid:94)(cid:17)(cid:3)
(cid:1006)(cid:1004)(cid:1006)(cid:1004)(cid:882)(cid:1005)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:4)(cid:4)(cid:94)(cid:17)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1006)(cid:882)(cid:1010)(cid:3)(cid:449)(cid:346)(cid:349)(cid:272)(cid:346)(cid:3)(cid:346)(cid:258)(cid:448)(cid:286)(cid:3)(cid:258)(cid:373)(cid:286)(cid:374)(cid:282)(cid:286)(cid:282)(cid:3)(cid:4)(cid:4)(cid:94)(cid:17)(cid:3)(cid:1005)(cid:1004)(cid:1005)(cid:3)
(cid:349)(cid:374)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:410)(cid:381)(cid:3)(cid:374)(cid:381)(cid:374)(cid:882)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3)(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:272)(cid:381)(cid:448)(cid:286)(cid:374)(cid:258)(cid:374)(cid:410)(cid:400)(cid:856)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3)(cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:349)(cid:400)(cid:3)(cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:396)(cid:286)(cid:3)(cid:381)(cid:437)(cid:410)(cid:367)(cid:349)(cid:374)(cid:286)(cid:282)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:349)(cid:374)(cid:3)
the commentary in the Directors’ report, (cid:69)(cid:381)(cid:410)(cid:286)(cid:3)(cid:1006)(cid:1006)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:1006)(cid:1012)(cid:856)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3)(cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:381)(cid:437)(cid:410)(cid:367)(cid:349)(cid:374)(cid:286)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:282)(cid:349)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)
(cid:410)(cid:346)(cid:286)(cid:3) (cid:286)(cid:296)(cid:296)(cid:286)(cid:272)(cid:410)(cid:3) (cid:381)(cid:296)(cid:3) (cid:258)(cid:373)(cid:286)(cid:374)(cid:282)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3) (cid:410)(cid:381)(cid:3) (cid:410)(cid:346)(cid:349)(cid:400)(cid:3) (cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:400)(cid:437)(cid:271)(cid:400)(cid:286)(cid:395)(cid:437)(cid:286)(cid:374)(cid:410)(cid:3) (cid:410)(cid:381)(cid:3)
(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:286)(cid:374)(cid:282)(cid:856)(cid:3)
(cid:24)(cid:437)(cid:286)(cid:3) (cid:410)(cid:381)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:373)(cid:258)(cid:410)(cid:286)(cid:396)(cid:349)(cid:258)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:361)(cid:437)(cid:282)(cid:336)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)
(cid:396)(cid:286)(cid:395)(cid:437)(cid:349)(cid:396)(cid:286)(cid:282)(cid:3)(cid:410)(cid:381)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:282)(cid:286)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:258)(cid:272)(cid:272)(cid:437)(cid:396)(cid:258)(cid:272)(cid:455)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:367)(cid:258)(cid:400)(cid:400)(cid:349)(cid:296)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)
(cid:272)(cid:381)(cid:373)(cid:393)(cid:367)(cid:286)(cid:410)(cid:286)(cid:374)(cid:286)(cid:400)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3) (cid:349)(cid:374)(cid:3) (cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:410)(cid:381)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)
(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:853)(cid:3)(cid:449)(cid:286)(cid:3)(cid:346)(cid:258)(cid:448)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:282)(cid:286)(cid:396)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:349)(cid:400)(cid:3)(cid:258)(cid:3)(cid:60)(cid:286)(cid:455)(cid:3)(cid:4)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:68)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:856)(cid:3)
(cid:75)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:47)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)
(cid:75)(cid:437)(cid:396)(cid:3) (cid:393)(cid:396)(cid:381)(cid:272)(cid:286)(cid:282)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3) (cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:282)(cid:853)(cid:3) (cid:271)(cid:437)(cid:410)(cid:3) (cid:449)(cid:286)(cid:396)(cid:286)(cid:3) (cid:374)(cid:381)(cid:410)(cid:3) (cid:367)(cid:349)(cid:373)(cid:349)(cid:410)(cid:286)(cid:282)(cid:3) (cid:410)(cid:381)(cid:853)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)
(cid:296)(cid:381)(cid:367)(cid:367)(cid:381)(cid:449)(cid:349)(cid:374)(cid:336)(cid:855)(cid:3)
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(cid:18)(cid:381)(cid:374)(cid:296)(cid:349)(cid:396)(cid:373)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:367)(cid:381)(cid:258)(cid:374)(cid:3)(cid:271)(cid:258)(cid:367)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:346)(cid:286)(cid:367)(cid:282)(cid:3)(cid:410)(cid:346)(cid:396)(cid:381)(cid:437)(cid:336)(cid:346)(cid:3)(cid:282)(cid:349)(cid:396)(cid:286)(cid:272)(cid:410)(cid:3)(cid:410)(cid:346)(cid:349)(cid:396)(cid:282)(cid:882)
(cid:393)(cid:258)(cid:396)(cid:410)(cid:455)(cid:3)(cid:272)(cid:381)(cid:374)(cid:296)(cid:349)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:296)(cid:396)(cid:381)(cid:373)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:367)(cid:286)(cid:374)(cid:282)(cid:286)(cid:396)(cid:856)(cid:3)
(cid:90)(cid:286)(cid:448)(cid:349)(cid:286)(cid:449)(cid:286)(cid:282)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:282)(cid:286)(cid:396)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:395)(cid:437)(cid:258)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:410)(cid:349)(cid:373)(cid:349)(cid:374)(cid:336)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)
(cid:282)(cid:381)(cid:272)(cid:437)(cid:373)(cid:286)(cid:374)(cid:410)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:286)(cid:448)(cid:349)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:400)(cid:437)(cid:393)(cid:393)(cid:381)(cid:396)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)
(cid:410)(cid:346)(cid:286)(cid:3) (cid:272)(cid:367)(cid:258)(cid:400)(cid:400)(cid:349)(cid:296)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:271)(cid:381)(cid:396)(cid:396)(cid:381)(cid:449)(cid:349)(cid:374)(cid:336)(cid:400)(cid:3) (cid:258)(cid:400)(cid:3) (cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3)
(cid:374)(cid:381)(cid:374)(cid:882)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3) (cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3) (cid:258)(cid:400)(cid:3) (cid:258)(cid:410)(cid:3) (cid:1007)(cid:1004)(cid:3) (cid:58)(cid:437)(cid:374)(cid:286)(cid:3) (cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:286)(cid:448)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3)
(cid:400)(cid:437)(cid:271)(cid:400)(cid:286)(cid:395)(cid:437)(cid:286)(cid:374)(cid:410)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:856)(cid:3)
(cid:90)(cid:286)(cid:448)(cid:349)(cid:286)(cid:449)(cid:286)(cid:282)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:258)(cid:272)(cid:272)(cid:437)(cid:396)(cid:258)(cid:272)(cid:455)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:258)(cid:282)(cid:346)(cid:286)(cid:396)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3) (cid:410)(cid:381)(cid:3) (cid:272)(cid:381)(cid:448)(cid:286)(cid:374)(cid:258)(cid:374)(cid:410)(cid:3)
(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:396)(cid:286)(cid:395)(cid:437)(cid:349)(cid:396)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3)(cid:282)(cid:437)(cid:396)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:400)(cid:437)(cid:271)(cid:400)(cid:286)(cid:395)(cid:437)(cid:286)(cid:374)(cid:410)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)
(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:856)(cid:3)
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Directors’ Responsibilities for the Financial Report(cid:3)
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(cid:282)(cid:381)(cid:3)(cid:400)(cid:381)(cid:856)(cid:3)
(cid:3)
106
87
(cid:3)
Annual Report 2023 (cid:3)
(cid:3)
(cid:258)(cid:400)(cid:400)(cid:286)(cid:410)(cid:400)(cid:3)
(cid:68)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:856)(cid:3)
(cid:60)(cid:286)(cid:455)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:3)(cid:3)
(cid:44)(cid:381)(cid:449)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:258)(cid:282)(cid:282)(cid:396)(cid:286)(cid:400)(cid:400)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:349)(cid:400)(cid:3)(cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:3)
(cid:47)(cid:373)(cid:393)(cid:258)(cid:349)(cid:396)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3) (cid:381)(cid:296)(cid:3) (cid:336)(cid:381)(cid:381)(cid:282)(cid:449)(cid:349)(cid:367)(cid:367)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:349)(cid:374)(cid:282)(cid:286)(cid:296)(cid:349)(cid:374)(cid:349)(cid:410)(cid:286)(cid:3) (cid:367)(cid:349)(cid:296)(cid:286)(cid:3) (cid:349)(cid:374)(cid:410)(cid:258)(cid:374)(cid:336)(cid:349)(cid:271)(cid:367)(cid:286)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3)(cid:381)(cid:437)(cid:410)(cid:272)(cid:381)(cid:373)(cid:286)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:349)(cid:373)(cid:393)(cid:258)(cid:349)(cid:396)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:258)(cid:400)(cid:400)(cid:286)(cid:400)(cid:400)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:272)(cid:381)(cid:437)(cid:367)(cid:282)(cid:3)(cid:448)(cid:258)(cid:396)(cid:455)(cid:3)(cid:349)(cid:296)(cid:3)
(cid:258)(cid:400)(cid:400)(cid:437)(cid:373)(cid:393)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3) (cid:449)(cid:349)(cid:410)(cid:346)(cid:349)(cid:374)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:272)(cid:258)(cid:400)(cid:346)(cid:3) (cid:296)(cid:367)(cid:381)(cid:449)(cid:3) (cid:393)(cid:396)(cid:381)(cid:361)(cid:286)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:853)(cid:3) (cid:410)(cid:381)(cid:3)
• Management’s sensitivity analysis around the key
(cid:282)(cid:349)(cid:296)(cid:296)(cid:286)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3)(cid:258)(cid:400)(cid:400)(cid:437)(cid:373)(cid:393)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:449)(cid:286)(cid:396)(cid:286)(cid:3)(cid:258)(cid:393)(cid:393)(cid:367)(cid:349)(cid:286)(cid:282)(cid:856)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3)(cid:286)(cid:448)(cid:258)(cid:367)(cid:437)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:396)(cid:286)(cid:272)(cid:381)(cid:448)(cid:286)(cid:396)(cid:258)(cid:271)(cid:367)(cid:286)(cid:3)(cid:258)(cid:373)(cid:381)(cid:437)(cid:374)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:336)(cid:381)(cid:381)(cid:282)(cid:449)(cid:349)(cid:367)(cid:367)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)
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(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:282)(cid:286)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:367)(cid:349)(cid:364)(cid:286)(cid:367)(cid:349)(cid:346)(cid:381)(cid:381)(cid:282)(cid:3)(cid:381)(cid:296)(cid:3)(cid:400)(cid:437)(cid:272)(cid:346)(cid:3)(cid:373)(cid:381)(cid:448)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3)(cid:381)(cid:272)(cid:272)(cid:437)(cid:396)(cid:396)(cid:349)(cid:374)(cid:336)(cid:3)
(cid:400)(cid:437)(cid:296)(cid:296)(cid:349)(cid:272)(cid:349)(cid:286)(cid:374)(cid:410)(cid:3)(cid:410)(cid:381)(cid:3)(cid:336)(cid:349)(cid:448)(cid:286)(cid:3)(cid:396)(cid:349)(cid:400)(cid:286)(cid:3)(cid:410)(cid:381)(cid:3)(cid:349)(cid:373)(cid:393)(cid:258)(cid:349)(cid:396)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:271)(cid:286)(cid:455)(cid:381)(cid:374)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:367)(cid:286)(cid:448)(cid:286)(cid:367)(cid:3)
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•
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(cid:374)(cid:381)(cid:374)(cid:882)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3)(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:410)(cid:3)(cid:271)(cid:258)(cid:367)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:282)(cid:258)(cid:410)(cid:286)(cid:856)(cid:3)
•
(cid:90)(cid:286)(cid:448)(cid:349)(cid:286)(cid:449)(cid:286)(cid:282)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:282)(cid:286)(cid:396)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:395)(cid:437)(cid:258)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:410)(cid:349)(cid:373)(cid:349)(cid:374)(cid:336)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3) (cid:39)(cid:396)(cid:381)(cid:437)(cid:393)(cid:3) (cid:346)(cid:258)(cid:448)(cid:286)(cid:3) (cid:286)(cid:258)(cid:396)(cid:367)(cid:455)(cid:3) (cid:258)(cid:282)(cid:381)(cid:393)(cid:410)(cid:286)(cid:282)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:393)(cid:396)(cid:349)(cid:374)(cid:272)(cid:349)(cid:393)(cid:367)(cid:286)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:4)(cid:4)(cid:94)(cid:17)(cid:3)
(cid:282)(cid:381)(cid:272)(cid:437)(cid:373)(cid:286)(cid:374)(cid:410)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:286)(cid:448)(cid:349)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:400)(cid:437)(cid:393)(cid:393)(cid:381)(cid:396)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)
(cid:1006)(cid:1004)(cid:1006)(cid:1004)(cid:882)(cid:1005)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:4)(cid:4)(cid:94)(cid:17)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1006)(cid:882)(cid:1010)(cid:3)(cid:449)(cid:346)(cid:349)(cid:272)(cid:346)(cid:3)(cid:346)(cid:258)(cid:448)(cid:286)(cid:3)(cid:258)(cid:373)(cid:286)(cid:374)(cid:282)(cid:286)(cid:282)(cid:3)(cid:4)(cid:4)(cid:94)(cid:17)(cid:3)(cid:1005)(cid:1004)(cid:1005)(cid:3)
(cid:410)(cid:346)(cid:286)(cid:3) (cid:272)(cid:367)(cid:258)(cid:400)(cid:400)(cid:349)(cid:296)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:271)(cid:381)(cid:396)(cid:396)(cid:381)(cid:449)(cid:349)(cid:374)(cid:336)(cid:400)(cid:3) (cid:258)(cid:400)(cid:3) (cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3)
(cid:349)(cid:374)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:410)(cid:381)(cid:3)(cid:374)(cid:381)(cid:374)(cid:882)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3)(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:272)(cid:381)(cid:448)(cid:286)(cid:374)(cid:258)(cid:374)(cid:410)(cid:400)(cid:856)(cid:3)
(cid:374)(cid:381)(cid:374)(cid:882)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3) (cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3) (cid:258)(cid:400)(cid:3) (cid:258)(cid:410)(cid:3) (cid:1007)(cid:1004)(cid:3) (cid:58)(cid:437)(cid:374)(cid:286)(cid:3) (cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:286)(cid:448)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3)(cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:349)(cid:400)(cid:3)(cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:396)(cid:286)(cid:3)(cid:381)(cid:437)(cid:410)(cid:367)(cid:349)(cid:374)(cid:286)(cid:282)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:349)(cid:374)(cid:3)
(cid:400)(cid:437)(cid:271)(cid:400)(cid:286)(cid:395)(cid:437)(cid:286)(cid:374)(cid:410)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:856)(cid:3)
the commentary in the Directors’ report, (cid:69)(cid:381)(cid:410)(cid:286)(cid:3)(cid:1006)(cid:1006)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:1006)(cid:1012)(cid:856)(cid:3)
•
(cid:90)(cid:286)(cid:448)(cid:349)(cid:286)(cid:449)(cid:286)(cid:282)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:258)(cid:272)(cid:272)(cid:437)(cid:396)(cid:258)(cid:272)(cid:455)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:258)(cid:282)(cid:346)(cid:286)(cid:396)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3) (cid:410)(cid:381)(cid:3) (cid:272)(cid:381)(cid:448)(cid:286)(cid:374)(cid:258)(cid:374)(cid:410)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3)(cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:381)(cid:437)(cid:410)(cid:367)(cid:349)(cid:374)(cid:286)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:282)(cid:349)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)
(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:396)(cid:286)(cid:395)(cid:437)(cid:349)(cid:396)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3)(cid:282)(cid:437)(cid:396)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:400)(cid:437)(cid:271)(cid:400)(cid:286)(cid:395)(cid:437)(cid:286)(cid:374)(cid:410)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)
(cid:410)(cid:346)(cid:286)(cid:3) (cid:286)(cid:296)(cid:296)(cid:286)(cid:272)(cid:410)(cid:3) (cid:381)(cid:296)(cid:3) (cid:258)(cid:373)(cid:286)(cid:374)(cid:282)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3) (cid:410)(cid:381)(cid:3) (cid:410)(cid:346)(cid:349)(cid:400)(cid:3) (cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:400)(cid:437)(cid:271)(cid:400)(cid:286)(cid:395)(cid:437)(cid:286)(cid:374)(cid:410)(cid:3) (cid:410)(cid:381)(cid:3)
(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:856)(cid:3)
(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:286)(cid:374)(cid:282)(cid:856)(cid:3)
•
(cid:90)(cid:286)(cid:448)(cid:349)(cid:286)(cid:449)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:349)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:410)(cid:381)(cid:3)
(cid:24)(cid:437)(cid:286)(cid:3) (cid:410)(cid:381)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:373)(cid:258)(cid:410)(cid:286)(cid:396)(cid:349)(cid:258)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:361)(cid:437)(cid:282)(cid:336)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)
(cid:448)(cid:258)(cid:367)(cid:349)(cid:282)(cid:258)(cid:410)(cid:286)(cid:3)(cid:258)(cid:272)(cid:272)(cid:437)(cid:396)(cid:258)(cid:272)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:367)(cid:286)(cid:410)(cid:286)(cid:374)(cid:286)(cid:400)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:400)(cid:437)(cid:272)(cid:346)(cid:856)(cid:3)
(cid:396)(cid:286)(cid:395)(cid:437)(cid:349)(cid:396)(cid:286)(cid:282)(cid:3)(cid:410)(cid:381)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:282)(cid:286)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:258)(cid:272)(cid:272)(cid:437)(cid:396)(cid:258)(cid:272)(cid:455)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:367)(cid:258)(cid:400)(cid:400)(cid:349)(cid:296)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)
(cid:272)(cid:381)(cid:373)(cid:393)(cid:367)(cid:286)(cid:410)(cid:286)(cid:374)(cid:286)(cid:400)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3) (cid:349)(cid:374)(cid:3) (cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:410)(cid:381)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)
(cid:367)(cid:349)(cid:258)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:853)(cid:3)(cid:449)(cid:286)(cid:3)(cid:346)(cid:258)(cid:448)(cid:286)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:282)(cid:286)(cid:396)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:349)(cid:400)(cid:3)(cid:258)(cid:3)(cid:60)(cid:286)(cid:455)(cid:3)(cid:4)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:68)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:856)(cid:3)
(cid:75)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:47)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)
(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:410)(cid:346)(cid:286)(cid:396)(cid:286)(cid:381)(cid:374)(cid:856)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3)(cid:24)(cid:349)(cid:396)(cid:286)(cid:272)(cid:410)(cid:381)(cid:396)(cid:400)(cid:3)(cid:258)(cid:396)(cid:286)(cid:3)(cid:396)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:367)(cid:286)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:381)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:349)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:856)(cid:3)(cid:100)(cid:346)(cid:286)(cid:3)(cid:381)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:349)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:396)(cid:349)(cid:400)(cid:286)(cid:400)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:349)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:3)
(cid:410)(cid:346)(cid:286)(cid:3)Group’s(cid:3)(cid:258)(cid:374)(cid:374)(cid:437)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:286)(cid:374)(cid:282)(cid:286)(cid:282)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:58)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:3)but does not include the financial report and our auditor’s
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Directors’ Responsibilities for the Financial Report(cid:3)
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•
(cid:3)
87
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(cid:3)
Auditor’s Responsibilities for the Audit of the Financial Report(cid:3)
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•
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• (cid:75)(cid:271)(cid:410)(cid:258)(cid:349)(cid:374)(cid:3) (cid:258)(cid:374)(cid:3) (cid:437)(cid:374)(cid:282)(cid:286)(cid:396)(cid:400)(cid:410)(cid:258)(cid:374)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3) (cid:381)(cid:296)(cid:3) (cid:349)(cid:374)(cid:410)(cid:286)(cid:396)(cid:374)(cid:258)(cid:367)(cid:3) (cid:272)(cid:381)(cid:374)(cid:410)(cid:396)(cid:381)(cid:367)(cid:3) (cid:396)(cid:286)(cid:367)(cid:286)(cid:448)(cid:258)(cid:374)(cid:410)(cid:3) (cid:410)(cid:381)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3) (cid:349)(cid:374)(cid:3) (cid:381)(cid:396)(cid:282)(cid:286)(cid:396)(cid:3) (cid:410)(cid:381)(cid:3) (cid:282)(cid:286)(cid:400)(cid:349)(cid:336)(cid:374)(cid:3) (cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3) (cid:393)(cid:396)(cid:381)(cid:272)(cid:286)(cid:282)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3) (cid:410)(cid:346)(cid:258)(cid:410)(cid:3) (cid:258)(cid:396)(cid:286)(cid:3)
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Group’s(cid:3)(cid:349)(cid:374)(cid:410)(cid:286)(cid:396)(cid:374)(cid:258)(cid:367)(cid:3)(cid:272)(cid:381)(cid:374)(cid:410)(cid:396)(cid:381)(cid:367)(cid:856)(cid:3)
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Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the
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exists, we are required to draw attention in our auditor’s report to the r(cid:286)(cid:367)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:282)(cid:349)(cid:400)(cid:272)(cid:367)(cid:381)(cid:400)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:381)(cid:396)(cid:853)(cid:3)
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up to the date of our auditor’s report. However, future events or conditions may cause the (cid:39)(cid:396)(cid:381)(cid:437)(cid:393)(cid:3) (cid:410)(cid:381)(cid:3) (cid:272)(cid:286)(cid:258)(cid:400)(cid:286)(cid:3) (cid:410)(cid:381)(cid:3)
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• (cid:75)(cid:271)(cid:410)(cid:258)(cid:349)(cid:374)(cid:3)(cid:400)(cid:437)(cid:296)(cid:296)(cid:349)(cid:272)(cid:349)(cid:286)(cid:374)(cid:410)(cid:3)(cid:258)(cid:393)(cid:393)(cid:396)(cid:381)(cid:393)(cid:396)(cid:349)(cid:258)(cid:410)(cid:286)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:286)(cid:448)(cid:349)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:396)(cid:286)(cid:336)(cid:258)(cid:396)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:349)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:286)(cid:374)(cid:410)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)(cid:381)(cid:396)(cid:3)(cid:271)(cid:437)(cid:400)(cid:349)(cid:374)(cid:286)(cid:400)(cid:400)(cid:3)(cid:258)(cid:272)(cid:410)(cid:349)(cid:448)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)
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(cid:349)(cid:374)(cid:282)(cid:286)(cid:393)(cid:286)(cid:374)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:410)(cid:381)(cid:3)(cid:272)(cid:381)(cid:373)(cid:373)(cid:437)(cid:374)(cid:349)(cid:272)(cid:258)(cid:410)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:410)(cid:346)(cid:286)(cid:373)(cid:3)(cid:258)(cid:367)(cid:367)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:346)(cid:349)(cid:393)(cid:400)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:381)(cid:410)(cid:346)(cid:286)(cid:396)(cid:3)(cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:400)(cid:3)(cid:410)(cid:346)(cid:258)(cid:410)(cid:3)(cid:373)(cid:258)(cid:455)(cid:3)(cid:396)(cid:286)(cid:258)(cid:400)(cid:381)(cid:374)(cid:258)(cid:271)(cid:367)(cid:455)(cid:3)(cid:271)(cid:286)(cid:3)(cid:410)(cid:346)(cid:381)(cid:437)(cid:336)(cid:346)(cid:410)(cid:3)(cid:410)(cid:381)(cid:3)
(cid:271)(cid:286)(cid:258)(cid:396)(cid:3)(cid:381)(cid:374)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:349)(cid:374)(cid:282)(cid:286)(cid:393)(cid:286)(cid:374)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:449)(cid:346)(cid:286)(cid:396)(cid:286)(cid:3)(cid:258)(cid:393)(cid:393)(cid:367)(cid:349)(cid:272)(cid:258)(cid:271)(cid:367)(cid:286)(cid:853)(cid:3)(cid:258)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:410)(cid:258)(cid:364)(cid:286)(cid:374)(cid:3)(cid:410)(cid:381)(cid:3)(cid:286)(cid:367)(cid:349)(cid:373)(cid:349)(cid:374)(cid:258)(cid:410)(cid:286)(cid:3)(cid:410)(cid:346)(cid:396)(cid:286)(cid:258)(cid:410)(cid:400)(cid:3)(cid:381)(cid:396)(cid:3)(cid:400)(cid:258)(cid:296)(cid:286)(cid:336)(cid:437)(cid:258)(cid:396)(cid:282)(cid:400)(cid:3)(cid:258)(cid:393)(cid:393)(cid:367)(cid:349)(cid:286)(cid:282)(cid:856)(cid:3)(cid:3)
(cid:38)(cid:396)(cid:381)(cid:373)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:400)(cid:3)(cid:272)(cid:381)(cid:373)(cid:373)(cid:437)(cid:374)(cid:349)(cid:272)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:24)(cid:349)(cid:396)(cid:286)(cid:272)(cid:410)(cid:381)(cid:396)(cid:400)(cid:853)(cid:3)(cid:449)(cid:286)(cid:3)(cid:282)(cid:286)(cid:410)(cid:286)(cid:396)(cid:373)(cid:349)(cid:374)(cid:286)(cid:3)(cid:410)(cid:346)(cid:381)(cid:400)(cid:286)(cid:3)(cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:400)(cid:3)(cid:410)(cid:346)(cid:258)(cid:410)(cid:3)(cid:449)(cid:286)(cid:396)(cid:286)(cid:3)(cid:381)(cid:296)(cid:3)(cid:373)(cid:381)(cid:400)(cid:410)(cid:3)(cid:400)(cid:349)(cid:336)(cid:374)(cid:349)(cid:296)(cid:349)(cid:272)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:349)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)
(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:437)(cid:396)(cid:396)(cid:286)(cid:374)(cid:410)(cid:3)(cid:393)(cid:286)(cid:396)(cid:349)(cid:381)(cid:282)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:258)(cid:396)(cid:286)(cid:3)(cid:410)(cid:346)(cid:286)(cid:396)(cid:286)(cid:296)(cid:381)(cid:396)(cid:286)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:364)(cid:286)(cid:455)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:400)(cid:856)(cid:3)(cid:116)(cid:286)(cid:3)(cid:282)(cid:286)(cid:400)(cid:272)(cid:396)(cid:349)(cid:271)(cid:286)(cid:3)(cid:410)(cid:346)(cid:286)(cid:400)(cid:286)(cid:3)(cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:400)(cid:3)
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare(cid:3)
(cid:272)(cid:349)(cid:396)(cid:272)(cid:437)(cid:373)(cid:400)(cid:410)(cid:258)(cid:374)(cid:272)(cid:286)(cid:400)(cid:853)(cid:3) (cid:449)(cid:286)(cid:3) (cid:282)(cid:286)(cid:410)(cid:286)(cid:396)(cid:373)(cid:349)(cid:374)(cid:286)(cid:3) (cid:410)(cid:346)(cid:258)(cid:410)(cid:3) (cid:258)(cid:3) (cid:373)(cid:258)(cid:410)(cid:410)(cid:286)(cid:396)(cid:3) (cid:400)(cid:346)(cid:381)(cid:437)(cid:367)(cid:282)(cid:3) (cid:374)(cid:381)(cid:410)(cid:3) (cid:271)(cid:286)(cid:3) (cid:272)(cid:381)(cid:373)(cid:373)(cid:437)(cid:374)(cid:349)(cid:272)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3) (cid:349)(cid:374)(cid:3) (cid:381)(cid:437)(cid:396)(cid:3) (cid:396)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3) (cid:271)(cid:286)(cid:272)(cid:258)(cid:437)(cid:400)(cid:286)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:258)(cid:282)(cid:448)(cid:286)(cid:396)(cid:400)(cid:286)(cid:3)
(cid:272)(cid:381)(cid:374)(cid:400)(cid:286)(cid:395)(cid:437)(cid:286)(cid:374)(cid:272)(cid:286)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:282)(cid:381)(cid:349)(cid:374)(cid:336)(cid:3) (cid:400)(cid:381)(cid:3) (cid:449)(cid:381)(cid:437)(cid:367)(cid:282)(cid:3) (cid:396)(cid:286)(cid:258)(cid:400)(cid:381)(cid:374)(cid:258)(cid:271)(cid:367)(cid:455)(cid:3) (cid:271)(cid:286)(cid:3) (cid:286)(cid:454)(cid:393)(cid:286)(cid:272)(cid:410)(cid:286)(cid:282)(cid:3) (cid:410)(cid:381)(cid:3) (cid:381)(cid:437)(cid:410)(cid:449)(cid:286)(cid:349)(cid:336)(cid:346)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:393)(cid:437)(cid:271)(cid:367)(cid:349)(cid:272)(cid:3) (cid:349)(cid:374)(cid:410)(cid:286)(cid:396)(cid:286)(cid:400)(cid:410)(cid:3) (cid:271)(cid:286)(cid:374)(cid:286)(cid:296)(cid:349)(cid:410)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:400)(cid:437)(cid:272)(cid:346)(cid:3)
(cid:272)(cid:381)(cid:373)(cid:373)(cid:437)(cid:374)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:856)(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
88
(cid:3)
107
Annual Report 2023 (cid:3)
(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:381)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)
Auditor’s Opinion(cid:3)
(cid:116)(cid:286)(cid:3)(cid:346)(cid:258)(cid:448)(cid:286)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:24)irectors’ report for the year ended (cid:1007)(cid:1004)(cid:3)(cid:58)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:856)(cid:3)(cid:3)
(cid:47)(cid:374)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:381)(cid:393)(cid:349)(cid:374)(cid:349)(cid:381)(cid:374)(cid:853)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:455)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:286)(cid:374)(cid:282)(cid:286)(cid:282)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:58)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:853)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:367)(cid:349)(cid:286)(cid:400)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:400)(cid:286)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:1007)(cid:1004)(cid:1004)(cid:4)(cid:3)
(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:4)(cid:272)(cid:410)(cid:3)(cid:1006)(cid:1004)(cid:1004)(cid:1005)(cid:856)(cid:3)
(cid:90)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3) (cid:24)(cid:349)(cid:396)(cid:286)(cid:272)(cid:410)(cid:381)(cid:396)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:18)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:455)(cid:3) (cid:258)(cid:396)(cid:286)(cid:3) (cid:396)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:367)(cid:286)(cid:3) (cid:296)(cid:381)(cid:396)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)(cid:393)(cid:396)(cid:286)(cid:393)(cid:258)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:393)(cid:396)(cid:286)(cid:400)(cid:286)(cid:374)(cid:410)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3) (cid:349)(cid:374)(cid:3)
(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3) (cid:449)(cid:349)(cid:410)(cid:346)(cid:3) (cid:400)(cid:286)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:1007)(cid:1004)(cid:1004)(cid:4)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:18)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3) (cid:4)(cid:272)(cid:410)(cid:3) (cid:1006)(cid:1004)(cid:1004)(cid:1005)(cid:856)(cid:3) (cid:75)(cid:437)(cid:396)(cid:3) (cid:396)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:349)(cid:400)(cid:3) (cid:410)(cid:381)(cid:3) (cid:286)(cid:454)(cid:393)(cid:396)(cid:286)(cid:400)(cid:400)(cid:3) (cid:258)(cid:374)(cid:3) (cid:381)(cid:393)(cid:349)(cid:374)(cid:349)(cid:381)(cid:374)(cid:3) (cid:381)(cid:374)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)
(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:853)(cid:3)(cid:271)(cid:258)(cid:400)(cid:286)(cid:282)(cid:3)(cid:381)(cid:374)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:272)(cid:381)(cid:374)(cid:282)(cid:437)(cid:272)(cid:410)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:3)(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:4)(cid:437)(cid:400)(cid:410)(cid:396)(cid:258)(cid:367)(cid:349)(cid:258)(cid:374)(cid:3)(cid:4)(cid:437)(cid:282)(cid:349)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:94)(cid:410)(cid:258)(cid:374)(cid:282)(cid:258)(cid:396)(cid:282)(cid:400)(cid:856)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:87)(cid:60)(cid:38)(cid:3)
(cid:68)(cid:286)(cid:367)(cid:271)(cid:381)(cid:437)(cid:396)(cid:374)(cid:286)(cid:853)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:4)(cid:437)(cid:336)(cid:437)(cid:400)(cid:410)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:3)
(cid:3)
(cid:3)
(cid:60)(cid:258)(cid:349)(cid:410)(cid:367)(cid:455)(cid:374)(cid:374)(cid:3)(cid:17)(cid:396)(cid:258)(cid:282)(cid:455)(cid:3)
(cid:87)(cid:258)(cid:396)(cid:410)(cid:374)(cid:286)(cid:396)(cid:3)
108
89
(cid:3)
Annual Report 2023 (cid:116)(cid:286)(cid:3)(cid:346)(cid:258)(cid:448)(cid:286)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:24)irectors’ report for the year ended (cid:1007)(cid:1004)(cid:3)(cid:58)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:856)(cid:3)(cid:3)
(cid:47)(cid:374)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:381)(cid:393)(cid:349)(cid:374)(cid:349)(cid:381)(cid:374)(cid:853)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:455)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:286)(cid:374)(cid:282)(cid:286)(cid:282)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:58)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:853)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:367)(cid:349)(cid:286)(cid:400)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:400)(cid:286)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:1007)(cid:1004)(cid:1004)(cid:4)(cid:3)
(cid:100)(cid:346)(cid:286)(cid:3) (cid:24)(cid:349)(cid:396)(cid:286)(cid:272)(cid:410)(cid:381)(cid:396)(cid:400)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:18)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:455)(cid:3) (cid:258)(cid:396)(cid:286)(cid:3) (cid:396)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:367)(cid:286)(cid:3) (cid:296)(cid:381)(cid:396)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)(cid:393)(cid:396)(cid:286)(cid:393)(cid:258)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3) (cid:393)(cid:396)(cid:286)(cid:400)(cid:286)(cid:374)(cid:410)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3) (cid:349)(cid:374)(cid:3)
(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3) (cid:449)(cid:349)(cid:410)(cid:346)(cid:3) (cid:400)(cid:286)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) (cid:1007)(cid:1004)(cid:1004)(cid:4)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:18)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3) (cid:4)(cid:272)(cid:410)(cid:3) (cid:1006)(cid:1004)(cid:1004)(cid:1005)(cid:856)(cid:3) (cid:75)(cid:437)(cid:396)(cid:3) (cid:396)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3) (cid:349)(cid:400)(cid:3) (cid:410)(cid:381)(cid:3) (cid:286)(cid:454)(cid:393)(cid:396)(cid:286)(cid:400)(cid:400)(cid:3) (cid:258)(cid:374)(cid:3) (cid:381)(cid:393)(cid:349)(cid:374)(cid:349)(cid:381)(cid:374)(cid:3) (cid:381)(cid:374)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)
(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:853)(cid:3)(cid:271)(cid:258)(cid:400)(cid:286)(cid:282)(cid:3)(cid:381)(cid:374)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:258)(cid:437)(cid:282)(cid:349)(cid:410)(cid:3)(cid:272)(cid:381)(cid:374)(cid:282)(cid:437)(cid:272)(cid:410)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:3)(cid:258)(cid:272)(cid:272)(cid:381)(cid:396)(cid:282)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:4)(cid:437)(cid:400)(cid:410)(cid:396)(cid:258)(cid:367)(cid:349)(cid:258)(cid:374)(cid:3)(cid:4)(cid:437)(cid:282)(cid:349)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:94)(cid:410)(cid:258)(cid:374)(cid:282)(cid:258)(cid:396)(cid:282)(cid:400)(cid:856)(cid:3)
(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:381)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:90)(cid:286)(cid:373)(cid:437)(cid:374)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:90)(cid:286)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)
Auditor’s Opinion(cid:3)
(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:4)(cid:272)(cid:410)(cid:3)(cid:1006)(cid:1004)(cid:1004)(cid:1005)(cid:856)(cid:3)
(cid:90)(cid:286)(cid:400)(cid:393)(cid:381)(cid:374)(cid:400)(cid:349)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:87)(cid:60)(cid:38)(cid:3)
(cid:68)(cid:286)(cid:367)(cid:271)(cid:381)(cid:437)(cid:396)(cid:374)(cid:286)(cid:853)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:4)(cid:437)(cid:336)(cid:437)(cid:400)(cid:410)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1007)(cid:3)
(cid:3)
(cid:60)(cid:258)(cid:349)(cid:410)(cid:367)(cid:455)(cid:374)(cid:374)(cid:3)(cid:17)(cid:396)(cid:258)(cid:282)(cid:455)(cid:3)
(cid:87)(cid:258)(cid:396)(cid:410)(cid:374)(cid:286)(cid:396)(cid:3)
89
(cid:3)
Additional
Shareholder
Information
Annual Report 2023ASX: ST1 Spirit Technology Solutions Ltd
Shareholder information
30 June 2023
The shareholder information set out below was applicable as at 15 September 2023.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Number
of holders
of ordinary
shares
Number
of
ordinary
shares
%
of
ordinary
shares
Number
of holders
of performance
rights
Number
of
performance
rights
%
of
Performance
rights
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a
marketable parcel
190
794
538
1,008
24,820
2,317,641
4,270,476
37,319,767
349 691,672,000
2,879 735,604,704
0.00%
0.32%
0.58%
5.07%
94.03%
100.00%
1,601
7,512,265
1.02%
-
-
-
-
17
17
-
-
-
-
-
26,772,147
26,772,147
-
-
-
-
100.00%
100.00%
-
-
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
Number
held
% of total
shares
issued
85,000,000
MR PETER DIAMOND & MRS DIANA DIAMOND
UBS NOMINEES PTY LTD
66,886,908
MARQUEE HOLDINGS PTY LTD
55,988,507
CITICORP NOMINEES PTY LIMITED
41,983,852
HARB HOLDINGS PTY LTD
35,440,563
WARBONT NOMINEES PTY LTD
27,192,668
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
21,946,141
HARB HOLDINGS PTY LTD
20,547,945
BUTTONWOOD NOMINEES PTY LTD
18,751,858
HURACAN HOLDINGS PTY LTD
17,996,664
CRAZY DIAMOND PTY LTD
15,000,000
QUANTUM 777 PTY LTD
13,508,095
BRIGGS GROUP CONSULTING PTY LTD
12,606,789
12,578,750
WADE TECHNOLOGIES PTY LTD
B & R JAMES INVESTMENTS PTY LIMITED 10,000,000
8,727,483
MR JULIAN GORDON CHALLINGSWORTH
5,693,092
NIKALA HABER
5,500,000
SEABIRD INVESTMENTS (WA) PTY LTD
5,459,936
PENBURY GRANGE PTY LTD
5,000,000
MDJD PTY LTD
5,000,000
LPB CORPORATE PTY LTD
5,000,000
CHEMBANK PTY LIMITED
11.56
9.09
7.61
5.71
4.82
3.70
2.98
2.79
2.55
2.45
2.04
1.84
1.71
1.71
1.36
1.19
0.77
0.75
0.74
0.68
0.68
0.68
Unquoted equity securities
495,809,251
67.40
Number
Number
on issue of holders
Performance rights over ordinary shares on issue
26,772,147
17
111
Annual Report 2023
Spirit Technology Solutions Ltd
Shareholder information
30 June 2023
Substantial holders
Substantial holders in the Company, as disclosed in substantial holding notices given to the Company, are set
out below:
Ordinary shares
Number
held
% of total
shares
issued
CRAZY DIAMOND PTY LTD / PETER + DIANA DIAMOND ATF (PETER + DIANA
DIAMOND SUPER FUND)
ELIE AYOUB / MARQUEE HOLDINGS PTY LTD /
HURACAN HOLDINGS PTY LTD
JAMES HARB / HARB HOLDINGS PTY LTD /
QUANTUM 777 PTY LTD < THE QUANTUM 777 FAMILY A/C>
TIGA TRADING PTY LTD / THORNEY OPPORTUNITIES LTD / THORNEY
TECHNOLOGIES LTD
REGAL FUNDS MANAGEMENT PTY LTD
BANK OF AMERICA CORPORATION AND ITS RELATED BODIES CORPORATE
103,000,000
14.00
73,985,171
10.06
67,560,862
52,141,281
47,978,201
38,198,820
9.18
7.84
6.52
5.19
Voting rights
The voting rights attached to each class of equity security are set out below:
Ordinary shares
All issued shares carrying voting rights on a one-for-one basis.
Unquoted options
There are no voting rights attached to unquoted options.
Performance rights
There are no voting rights attached to performance rights.
There are no other classes of equity securities.
Corporate Governance Statement
The Company’s 2023 Corporate Governance Statement is available on the Company’s website at:
https://www.spirit.com.au/investor-centre/
Annual General Meeting
Spirit Technology Solutions Ltd advises that its Annual General Meeting will be held on Wednesday, 22
November 2023. The time and other details relating to the meeting will be advised in the Notice of Meeting to be
sent to all shareholders and released to ASX in due course. In accordance with ASX Listing Rules and the
Company’s Constitution, the closing date for receipt of nominations for the position of Director are required to be
lodged at the registered office of the Company by 5.00pm (AEDT) on 11 October 2023.
112
Annual Report 2023
Corporate Directory
Directors
Auditor
PKF Melbourne Audit & Assurance Pty Ltd
Level 12, 440 Collins Street
Melbourne, Victoria 3000
Stock exchange listing
Spirit Technology Solutions Ltd securities are listed on
the Australian Securities Exchange
(ASX code: ST1)
ACN 089 224 402
Website
spirit.com.au
James Joughin (Non-Executive Chairman)
Julian Challingsworth (CEO & Managing Director)
Julian Haber (Executive Director)
Elie Ayoub (Executive Director)
Gregory Ridder (Non-Executive Director)
Michelle Bendschneider (Non-Executive Director)
Company secretary
Melanie Leydin
Registered office
Level 4, 100 Albert Road
South Melbourne, Victoria 3205
Phone: 03 9692 7222
Principal place of business
Level 2, 19-25 Raglan Street
South Melbourne, Victoria 3205
Phone: 1300 007 001
Share register
Automic Group
Level 5, 126 Phillip Street
Sydney, New South Wales 2000
Phone: 1300 288 664 (within Australia)
+61 (0) 2 9698 5414 (International)
114
Annual Report 2023 Thanks for reading.
115
Annual Report 2023 Secure. Sustainable. Scalable.
E investor@spirit.com.au P 1300 007 001 W spirit.com.au/Investor-Hub