ANNUAL REPORT
2022
CORPORATE DIRECTORY
DIRECTORS
Ross Love
Executive Chairman
Sam Wright
Non-Executive Director
Hendrik Deurloo
Non-Executive Director
Bryant McLarty
Non-Executive Director
Brian Wall
Non-Executive Director
OFFICERS
Mr. Sam Wright
Company Secretary
CORPORATE OFFICE
Suite 116, 1 Kyle Way
Claremont WA 6010
Australia
Telephone: +61 8 6161 7412
Facsimile: +61 8 9467 6111
Email:
sms@smsystems.com.au
CANADA OFFICE
100-966 Crowley Avenue
Kelowna British Colombia.
Canada V1Y OL1
www.aem-corp.com
SHARE REGISTRY
Computershare Investor Centre Pty Ltd
GPO Box 2975
Melbourne VIC 3001
Enquiries (within Australia) 1300 850 505
Enquiries (from Overseas) +61 3 9415 4000
www.investorcentre.com/contact
STOCK EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: SMN
STRUCTURAL MONITORING SYSTEMS PLC
WEBSITE
www.smsystems.com.au
STRUCTURAL MONITORING SYSTEMS PLC
MAILING ADDRESS
PO Box 661
Nedlands Western Australia 6909
UNITED KINGDOM OFFICE & REGISTERED OFFICE
The Old Court
8 Tufton Street
Ashford
Kent TN23 1PF
United Kingdom
AUDITORS
Jeffreys Henry Audit Limited
Finsgate
5-7 Cranwood Street
London EC1V 9EE
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STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 CONTENTS
Strategic report
Directors’ report
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of cash flows
Statement of changes In equity
Notes to the financial statements
Independent auditors' report
Shareholder information
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9
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23
25
26
28
68
76
IMPORTANT NOTICES
Structural Monitoring Systems Plc (the Company) is incorporated in the United Kingdom under the laws of
England and Wales. The Company is not subject to Chapters 6, 6A, 6B and 6C of the Australian Corporations
Act 2001 dealing with the acquisition of shares (including substantial holdings and takeovers).
3
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 STRATEGIC REPORT
REVIEW OF OPERATIONS
During the financial year ended 30 June 2022, Structural Monitoring Systems Plc (“SMS”, the “Group” or the “Company”),
achieved a key milestone in the granting of a Supplementary Type Certificate (“STC”) for its ground-breaking CVM™
technology.
SMS and its Canadian-based, wholly owned subsidiary, Anodyne Electronics Manufacturing Corp (“AEM”), logged total
sales for the 2022 financial year of $15.70m (excluding intercompany sales), an increase of 2% on the year prior.
At the reporting date, the balance of Group cash and cash equivalents was $1.80m (2021: $2.38m). Borrowings as at
30 June 2022 amounted to $5.46m (2021: $nil) as the Company utilised an established loan facility with HSBC Canada
to debt fund the successful acquisition of Canadian business, Eagle Audio, through its subsidiary Anodyne Electronics
Manufacturing Corp (“AEM”). The acquisition is already proving to be very successful with its suite of product offerings
significantly improving overall revenue and profit margins. AEM also utilises a working capital facility with the same banker
making up the balance of borrowings. The Group has placed $1.15m on deposit with HSBC Canada as security for its loan
facility.
BREAKTHROUGH FAA CERTIFICATION OF CVM ™ AND POST CERTIFICATION
INITIATIVES
SMS announced in March this year that the United States Federal Aviation Administration (FAA) had granted its authority
to issue a Supplemental Type Certificate (STC) approval for the use of the Company’s CVM™ technology on the B737-800
Intelstat (Gogo) Wi-Fi antenna support structure inspection. The approval marked a milestone in aviation history as the
first ever in the world regulatory agency approved sensor technology validated and certified for detecting critical structural
cracks on aircraft.
The certification of CVM™ sensors to detect cracks on aircraft is expected to meaningfully impact industry maintenance
inspection methods and reduce operating costs for the industry as it continues to recover from the unprecedented impact
of the pandemic.
The Company is focused on progressing the commercialisation strategy for CVM™ and on ongoing positive engagement
with potential customers both in the US and more broadly to achieve this end goal.
To that end, the management and engineering team received approval from Boeing for the procedures and equipment to
commence the POD testing phase of the 737 APB program in (August) at the new facility in Kelowna. This critical APB
application developed in conjunction with Delta Air Lines has a potential market in excess of 400 aircraft.
Additionally, another major airline operator is working with the team to identify a range of applications where our
monitoring systems may avoid or defer out of cycle checks which currently consume several days.
4
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Several key executives will attend the joint Airlines for America Non-destructive Testing (NDT) Forum and SAE AISC-
SHM in San Antonio, Texas, from September 27 to September 30. A number of papers on CVM will be presented to the
attendees. This is a significant industry event where all major US airlines will be represented and presents an opportunity
for industry leaders to discuss current trends and developments in NDT methodologies and to further existing relationships
and discussions with key stakeholders and initiate others.
CORPORATE
The Company completed a Rights issue in April 2022 through the issue of 5,461,451 CDIs at an issue price of $0.90 per
CDI with a 1:2 free attaching unlisted option exercisable at $1.20 with an expiry date of 6 April 2024 raising $4.91m
before issue costs.
During the year a legal claim for royalty fees against wholly owned subsidiary Structural Monitoring Systems Limited was
upheld and settled. The claim was disclosed as a contingency in the notes to the 2021 Annual Report. A subsequent claim
for costs for the same case was also upheld and settled subsequent to the balance date.
A number of changes occurred at Board level during the financial year. The Company accepted the resignations of former
Chairman Will Rouse and of directors Stephen Forman and Mike Reveley earlier this year and the Company wishes them
well in their future endeavours.
Bryant McLarty, Hendrik Deurloo and Brian Wall were all appointed as Non-executive Directors during the year. The
Company also announced the appointment of internationally recognised senior executive, Ross Love, as Executive
Chairman on July 13 this year, subsequent to the reporting date.
Mr Love is an experienced global executive and consultant with wide public and private sector experience in policy reform
and business strategy transformation in Australia and the United States.
He was formerly a Senior Partner at the Boston Consulting Group (BCG) where he worked for more than 25 years, most
recently as head of its New York business, and prior to that its Australian and New Zealand businesses.
Mr Love is currently chair of the Western Australian Water Corporation, Chair of the Fremantle Port Authority and a
director of Tellus Group Holdings and brings decades of business leadership and management to the role of Executive
Chair.
ANODYNE ELECTRONICS MANUFACTURING CORPORATION (“AEM”) FINANCIAL
PERFORMANCE UPDATE
Wholly owned SMS subsidiary, Anodyne Electronics Manufacturing Corp (“AEM”), recorded $15.70m in revenue, an
increase of 2% on the prior year and normalised EBITDA** for the year to 30 June 2022 of $2.27m (inc. intercompany
sales on an arms-length basis), a decrease of 31% year on year.
This was achieved against the backdrop of the significant impact of the Covid pandemic that affected both sales and
production at the platform level, while concurrent supply chain difficulties and inflationary price pressures encountered
during the year compounded the overall business impact. AEM also navigated a move to new premises and the installation
of new plant and equipment with minimal disruption to operations during the year.
This full year result, exceeding budget, is a tribute to the excellent team the Company has assembled in Kelowna,
operating in extremely challenging conditions. Through substantial investment in research and development, the successful
acquisition of Eagle audio and higher margins achieved from stronger sales of AEM-developed products, the Group was
able to more than offset the effects of softer sales in contract manufactured products.
5
STRATEGIC REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 AEM RELOCATION TO NEWLY CONSTRUCTED MANUFACTURING FACILITY IN
KELOWNA, BRITISH COLUMBIA
AEM increased production capacity by moving its operations to a newly constructed 35,000 square foot (3,251m2) facility
in Kelowna, British Columbia earlier this year.
The brand-new purpose-built facility, announced in 2020, was designed to increase operational efficiency and adds an
additional10,000 sq. ft. (929m2) from its previous premises.
The move represents a strategic investment in new manufacturing equipment and offers the AEM team further
opportunities for improvement and innovation with its custom footprint and layout, new state of the art equipment and
optimisation of available space.
The new premises are now fully operational with product departments open and operating at full capacity.
ACQUISITION OF EAGLE AUDIO SEPTEMBER 2021
The Company, via its wholly owned subsidiary AEM, announced the acquisition of key avionics division, Eagle Audio, from
Eagle Copters Ltd in September 2021 at a purchase price of CA$4.12m. The transaction was internally funded through
cash and the use of existing low-cost debt facilities with HSBC Canada.
The audio acquisition represents a natural synergy with AEM’s existing product offering and manufacturing facilities and
complements its current significant audio R&D effort, providing additional growth opportunities and clear new R&D
pathways into related product areas.
As outlined above, this strategic acquisition is already proving to be very successful with its suite of product offerings
significantly improving revenue and profit margins.
PROJECTED OUTLOOK
Looking ahead to the next financial year, SMS will continue to increase investment in R&D and sales team expansion
which will result in a continuation of the transition to sales of higher margin, AEM developed products. The move to a new
purpose-built facility completed in January 2022 should result in increased efficiencies of production and improved profit
margins.
Directors and Management are constantly monitoring the Covid pandemic and are not in a position at this stage to provide
firm forecasts on the effects it may have on operations for FY2023. Current visibility and realised activity levels, however,
indicate that at this stage as evidenced by improvement in revenues since March 2022 – that core operations will continue
to recover from the Covid pandemic. The SMS Board and management will continue to monitor the evolving global
situation closely and regularly.
ANALYSIS USING KEY FINANCIAL PERFORMANCE INDICATORS AND MILESTONES
As at 30 June 2022, the Group had approximately $1.80m cash at bank (2021: $2.38m).
The Group recorded a loss for the financial year of $4.03m (2021: $1.96m). The increase in loss was incurred due in
part to the payment of royalty fees of $0.69m (2021: $nil), depreciation and amortisation expenses of $1.64m (2021:
$0.97m) arising from assets acquired in the move to AEM’s new manufacturing facility, R&D expenses of $0.64m (2021:
$0.18m) incurred by AEM as it continues to generate new products to meet customer demand and increased employee
costs of $6.86m (2021: $5.21m) arising from the increase in staff count undertaken by AEM during the year. The Group
also recorded revenue during the year of $15.70m (2021: $15.34m), an increase of 2% year on year. Other key expenses
during the year were consumables and raw materials used of $7.88m (2021: $8.26m) and sales and marketing expenses of
$0.53m (2021: $0.28m). Revenue generated via the acquisition of Eagle Audio helped contribute to higher earnings in the
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STRATEGIC REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 second half of the year. In accordance with IAS 38 Intangible assets the Group has capitalised development expenses of
$0.57m (2021: $0.90) incurred in the internal development of products at the commercialisation stage of development.
The Group EBITDA* for the financial year was ($2.27m) (2021: ($0.48m). Normalised EBITDA** for AEM for the year
ended 30 June 2022 was $2.27m (2021: $3.08m).
Loss per share for the financial year was 3.26 cents per share (2021: Loss per share 1.64 cents).
Net tangible assets at the reporting date were 6.56 cents per ordinary security (2021: 8.48 cents).
At the reporting date the Group had net assets of $15.56m (2021: $14.01m). The Group had trade and other receivables
of $3.04m, inventory of $10.89m and intangible assets of $7.15m, including goodwill of $1.61m. The key movements
during the year were an increase in borrowings of $5.46m to fund the acquisition of Eagle Audio and utilise a working
capital facility provided by HSBC Canada, $1.15m was placed on deposit as security for the loan facility. ROU assets
increased by $8.40m due to the take up of a new lease on AEM’s manufacturing facility and investment in new plant and
equipment in the facility. ROU lease liabilities similarly increased by $9.51m. Inventory increased by $3.81m in part due to
the take up of Eagle Audio inventory on acquisition and to protect against supply chain issues. Intangible assets increased
by $3.43m due to the acquisition of Eagle Audio and deferral of R&D costs. Income tax expense for the year reduced from
$0.50m to a benefit of $0.28m because of a reduction in taxable income, instant write offs associated with fixed assets
acquired and right of use lease payments made during the year.
The primary movement in equity during the year was a Rights Issue completed in April 2022 raising the sum of $4.91m
before issue costs.
*EBITDA, which is inclusive of FX gains/losses, is calculated by adding back interest costs, income tax, depreciation and
amortisation expenses and deducting interest revenue from loss after tax for the year of $4.03m (2021: $1.96m).
**Normalised EBITDA is calculated by adding back to EBITDA, SMS costs of $0.86m (2021: $0.73m) borne by AEM.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and how they are managed are set out on page 20 and 21 of the Director’s Report.
AEM office in Kelowna, BC Canada
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STRATEGIC REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 S172 STATEMENT
The Board has a duty under s172 of the Companies Act 2006 to promote the success of the Company of the benefit of its
members as a whole. All decisions are made with this objective and the Board considers the long-term implications of its
actions.
The Group has a continuous stakeholder engagement programme in which Executive and Non-Executive Directors
participate to ensure the Board is aware of stakeholder interests.
The Group believes its employees are its greatest asset and it seeks to establish policies that provide a working
environment that is safe, enjoyable and rewarding.
Critical to the success of the Group is its long-term relationship with its suppliers and customers, as well as its
shareholders. The Board believes the decisions it has made have been appropriated both to support these stakeholders and
to foster stronger, long-term relationships with them.
The Group is mindful of its role with its local communities and seeks to minimise the impact of its operations on the
environment and to be a good neighbour.
Overall, in considering and taking decisions the Board seeks to act in the best interests of the business and all its
stakeholders, treating all members fairly.
The Strategic Report was signed on behalf of the Board.
Ross Love
Executive Chairman
30th September 2022
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STRATEGIC REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 DIRECTORS’ REPORT
Your directors submit their report for the year ended 30 June 2022.
DIRECTORS AND OFFICERS
The names of the Company’s directors and officers in office during the year and until the date of this report are as below.
Ross Love (Executive Chairman, appointed 13 July 2022)
Mr Love is an experienced executive and consultant with wide public and private sector experience in developing and
executing policy reforms and business strategy transformations in Australia and the United States. He has worked with
senior decision makers in government at State and Commonwealth level in Australia, the State and City Governments of
New York, and the UN, as well as with Executive teams and Boards in the corporate and non-profit sectors. Formerly a
Senior Partner at the Boston Consulting Group where he worked for over 25 years, Mr Love was most recently head of its
New York business and prior to that it’s Australian and New Zealand business.
Mr Love completed the Advanced Development Program at the London Business School and MPA (2) at the Kennedy
School of Government, Harvard University. He has a first-class BA Honours degree from the University of Western
Australia.
Mr Love has not held directorships of any other ASX listed companies in the last 3 years.
Sam Wright (Non-Executive Director, appointed 14 October 2020 and Company Secretary)
Mr Wright is experienced in the administration of ASX listed companies, corporate governance, and corporate finance.
He is a member of the Australian Institute of Company Directors, the Financial Services Institute of Australasia, and the
Chartered Secretaries of Australia.
Mr Wright is the Managing Director of Perth-based corporate advisory firm, Straight Lines Consultancy, specialising
in the provision of corporate services to public companies. He has extensive experience in relation to public company
responsibilities, including ASX and ASIC compliance, control and implementation of corporate governance, statutory
financial reporting, and shareholder relations with both retail and institutional investors.
Mr Wright is currently a Director of ASX listed companies, Pharmaust Limited, Reach Resources Limited and Structural
Monitoring Systems plc. Mr Wright is Company Secretary for ASX listed companies, Buxton Resources Limited and
Wide Open Agriculture Limited. He has also filled the role of Director and Company Secretary with a number of unlisted
companies.
9
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Bryant McLarty (Non-Executive Director, appointed 20 October 2021)
Mr McLarty is an Australian Financial Services Licensee with over 25 years’ experience in equities and capital markets. He
is chairman of Mac Euity Partners, a boutique investment and corporate advisory firm, and a director of a number of private
companies.
Past directorships include London stock exchange listed aircraft leasing company, Avation Plc, ASX listed Hazer Group
Limited, EMVision Limited and PharmAust Limited.
In the last 3 years Mr McLarty was a director of Park’D Limited (1 December 2016 – 20 April 2020). Currently he is not a
director of any ASX listed companies other than Structural Monitoring Systems plc.
Hendrik Deurloo (Non-Executive Director, appointed 1 April 2022)
Mr Deurloo has more than 23 years of experience in management and sales in the global aerospace industry and is
currently SVP & Chief Commercial Officer for Pratt & Whitney. In his role he is responsible for leading and directing all
Sales, Marketing and Customer Support worldwide for Pratt & Whitney Commercial Engines and International Aero Engines
(IAE).
Mr. Deurloo is a member of the Board of Governors of the Wings Club Foundation, a global society of aviation
professionals. He holds a bachelor’s degree in finance from East Connecticut State University and a master's degree in
business administration from the University of Connecticut.
Mr Deurloo has not held directorships of any ASX listed companies in the last 3 years.
Brian Wall (Non-Executive Director, appointed 20 June 2022)
Mr Wall has held leadership roles in a 35 year plus career with organisations such as Cintas, Troika Ventures, The Pattison
Group and most recently, Anodyne Electronics Corporation (“AEM”) a subsidiary of SMS.
Mr Wall joined AEM in August 2019 and held the position of Chief Executive until August 2022. He successfully navigated
the company through the COVID-19 pandemic successfully position the company for profitable growth in several sectors
and overseen the move to its new facility in Kelowna, BC.
Mr Wall has not held directorships of any other ASX listed companies in the last 3 years.
Will Rouse (resigned 20 June 2022)
Mr Rouse is an experienced senior banker, finance executive and “serial entrepreneur” focused on the acquisition and
optimised growth of specialised manufacturing-related businesses. In his last role, Will acquired Simcro Ltd (“Simcro”)
in 2007, a New Zealand-based export-manufacturer. Will sold his majority stake in Simcro in 2013 to The Riverside
Company, a New York private equity group, retaining a 20% shareholding. Simcro then acquired two further operating
businesses in NZ and Australia in 2015, with Will leading these acquisitions. Simcro was recently sold to a global
multinational. Will is a Chartered Accountant and remains on the Board of Simcro.
R. Michael Reveley (resigned 20 October 2021)
Mr Reveley served as a managing partner, chief executive and co-CIO of SEAL Capital Ltd, a Los Angeles-based hedge fund
specialising in global macro strategies designed to provide risk-adjusted absolute returns investing in an array of global
markets, under all market conditions. Before forming SEAL Capital, he was a founding partner and deputy CIO at Seagate
Global Advisors in Los Angeles, having earlier been director of the syndicate and derivatives group at SBC Warburg in
London and New York, vice-president of global derivatives for Swiss Bank Corporation and vice-president of the global
derivatives group at First Interstate Bank, where he co-managed a US$20bn derivatives portfolio.
10
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 Stephen Forman (resigned 20 June 2022)
Mr Forman has over 25 years of demonstrated high-level equity capital markets experience in Australia and North America,
through roles in institutional equity sales and trading, investor relations and corporate advisory with major top-tier global
investment groups, including UBS and JP Morgan, the latter where Mr Forman worked for 15 years in various senior
positions.
Mr Forman’s current role as Managing Director with New York-based investment advisory and consulting firm, Union
Square Capital Advisors saw him successfully utilise his global network to assist companies with business development and
corporate communication strategies, and to diversify their share register with Australian and North American investors. Mr
Forman holds a B.Comm – Hons (Accounting & Finance) from UWA and is a CFA Charterholder.
PRINCIPAL ACTIVITIES
During the financial year the principal continuing activities of the consolidated entity consisted of the design and
manufacture of electronic products and the provision of manufacturing services to the aviation industry.
SHAREHOLDER MEETINGS
Structural Monitoring Systems Plc held its Annual General Meeting of Shareholders as a virtual meeting on 25th January 2022.
All resolutions that were put were passed by a poll.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report and Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group and company financial statements for each financial year. The
directors are required under the rules of the Australian Securities Exchange to prepare group and company financial
statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the United Kingdom
(“UK”).
The financial statements are required by law and IFRS adopted by the UK to present fairly the financial position of the
group and the company and the financial performance of the group. The Companies Act 2006 provides in relation to such
financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are
references to their achieving a fair presentation.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the group and the company and of the profit or loss of the group and the company
for that period.
In preparing the group and company financial statements, the directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and accounting estimates that are reasonable and prudent;
c. state whether they have been prepared in accordance with IFRSs adopted by the UK; and
d.
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group
and the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s
and the company’s transactions and disclose with reasonable accuracy at any time the financial position of the group
and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They
11
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265
are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and
integrity of the corporate and financial information included on the www.smsystems.com.au website. Legislation in the
United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
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. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
EVENTS SUBSEQUENT TO THE REPORTING DATE
Subsequent to the reporting date the Company appointed Ross Love as Executive Chairman.
The Company also completed a Placement of 5,500,000 CDIs at an issue price of $0.35 per CDI each with a 1:1 free
attaching option exercisable at $1.20 with an expiry date of 6 April 2024.raising $1.93 million before issue costs. The funds
raised will be used to assist in funding the commercialisation of its unique FAA approved CVMTM technology.
On 21 September 2022, the Company advised shareholders that it is undertaking the necessary steps to convene an
Extraordinary General Meeting (EGM) in compliance with the Companies Act 2006 (UK) and that a Notice of Meeting will
be dispatched to CDI holders shortly. SMS expects the EGM to be held on or around the week commencing 31 October,
subject to the Notice of Meeting being reviewed by the regulators.
The impact of the Coronavirus pandemic is ongoing and has had financial impact for the Group to 30 June 2022, it is
not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly
developing and is dependent on measures imposed by the Australian government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
Other than the above no matters or circumstances have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial years.
RESULTS AND DIVIDEND
The operating loss, after income tax, for the year was $4.03m (2021: $1.96m). No dividends were proposed or paid during
the financial year.
SHARE CAPITAL
The impact on share capital and share premium account of the share issues during the year, is disclosed in note 23 in the
notes to the financial statements.
GOING CONCERN
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities, the continued financial performance of AEM and the realisation of assets and discharge of liabilities in
the normal course of business as well as the availability of an established operating loan facility of up to CAD$5 million.
The facility which is provided by AEM’s bankers is long standing and is secured on receivables and inventory and is subject
to loan covenants. Directors expect compliance with the covenants to continue to be met.
12
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 The directors have prepared forecasts in respect of future trading. Achievement of such forecasts would require the Group
to carry out one of, or a combination of the following to allow it to manage within its current funding facilities for the
period to 12 months from the date of this report, raise capital through the issue of shares, amend the structure of current
debt, reduce or defer employee or other administration costs within the Group. In developing these forecasts, the Directors
have made assumptions and performed sensitivity analysis on variables such revenues and exchange rates based upon
their view of the current and future economic conditions that will prevail over the forecast period of 12 months from the
date of signing these financial statements.
The Directors therefore continue to adopt the going concern basis of accounting in preparing the financial statements It
is noted, there is a material uncertainty over going concern should the Group be unable to execute one or more of the
following, raising capital through the issue of shares, amending the current debt structure to release further funds, or
reduce/defer employee costs or other operating costs.
DIRECTORS’ MEETINGS
The number of directors’ meetings (including meetings of committees of directors) and number of meetings attended by
each of the directors of the Group during the financial year:
Board meetings
Audit committee
Remuneration committee
A
2
1
-
-
2
2
1
B
2
1
-
-
2
2
1
A
1
-
-
-
1
1
-
B
1
-
-
-
1
1
-
B
3
3
1
-
3
3
1
Director
S Wright
B McLarty(1)
H Deurloo(2)
B Wall(3)
W Rouse(4)
S Forman(5)
R M Reveley(6)
A
3
3
1
-
3
3
1
(1) appointed 20 October 2021
(2) appointed 1 April 2022
(3) appointed 20 June 2022
(4), (5) resigned 20 June 2022
(6) resigned 20 October 2021
A – Number of meetings attended
B – Number of meetings held during the time which the director held office during the year
In addition to formal directors’ meetings held during the year regular executive meetings were held on a monthly basis
throughout the year.
RESEARCH AND DEVELOPMENT
The Group actively reviews technical developments in its markets with a view to taking advantage of the opportunities
available to maintain and improve its competitive position. This action involves the design and development of customised
avionics and structural health monitoring systems applicable to the aviation industry.
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DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 REMUNERATION REPORT
(AUDITED)
REMUNERATION POLICY
The Remuneration Committee of the Board of Directors of Structural Monitoring Systems Plc is responsible for determining
and reviewing compensation arrangements for the directors and executives. The Remuneration Committee (or the Board
of directors) assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit
from the retention of a high-quality board and executive team. Such officers are given the opportunity to receive their base
emoluments in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans.
It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the
company.
To assist in achieving these objectives, the Remuneration Committee links the nature and amount of executive directors’
and senior executives’ emoluments to the Company’s financial and operational performance. Executive directors and
employees have the opportunity to qualify for participation in the Company Employee Incentive Plan.
It is the Remuneration Committee’s policy that employment agreements shall be entered into with the Executive Chairman
and all other executives. Any options or performance rights held lapse when the service period is completed.
14
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
Details of the nature and amount of each major element of remuneration of each director of the Group and each of the
Group executives who receive the highest remuneration are:
Salary & Fees
Post
Employment
Share-based payments
Total
Performance
rights in lieu
of fees
Superannua-
tion
Performance
rights
$
$
$
Shares
$
Cash
$
194,505
150,000
140,000
86,250
45,000
18,750
8,349
642,854
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,416
-
-
-
-
-
18,416
$
194,505
168,416
140,000
86,250
45,000
18,750
8,349
661,270
-
-
-
-
-
-
-
-
Salary & Fees
Post
Employment
Share-based payments
Total
Performance
rights in lieu
of fees
Superannua-
tion
Performance
rights
$
$
$
Cash
$
Shares
$
$
30 June 2022
Directors
Will Rouse(1)
Stephen Forman(1)
Sam Wright
R Michael Reveley(2)
Bryant McLarty(3)
Hendrik Deurloo(4)
Brian Wall(5)
Total
30 June 2021
Directors
Will Rouse
R. Michael Reveley
Stephen Forman
Sam Wright(6)
Terry Walsh(7)
Executive
100,000
121,826
57,500
70,000
70,000
-
81,892
20,219
70,324
67,461
Toby Chandler
68,750
178,262
Total
366,250
539,984
-
-
-
-
-
-
-
138,258
66,834
426,918
107,774
67,439
-
-
-
-
247,166
157,658
140,324
34,848
11,603
113,912
223,269
89,250
559,531
571,588
167,687
1,645,509
15
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 (1 ) resigned 20 June 2022
(2) resigned 20 October 2021
(3) appointed 20 October 2021
(4) appointed 1 April 2022
(5) appointed 20 June 2022
(6) appointed as director 14 October 2020. Fees also include Company secretarial services.
(7) resigned as director 14 October 2020. Mr Walsh receives a salary of $75,000 per annum including superannuation as
legal counsel.
SHARE-BASED COMPENSATION
At the 2021 AGM, the Company did not receive any feedback at the AGM regarding its remuneration practices.
The value of Performance Rights (PRs) granted, converted and lapsed for directors and executives as part of compensation
during the year ended 30 June 2022 are set out below:
Name
Sam Wright
Bryant McLarty
Hendrik Deurloo
Brian Wall
Will Rouse
Stephen Forman
R Michael Reveley
Total
Value of PRs
granted
Value of PRs
converted
Value of PRs
lapsed
$
$
$
-
-
-
-
-
-
-
-
155,813
-
-
-
-
-
392,929
548,742
-
-
-
-
-
-
-
-
SERVICE AGREEMENTS
Remuneration and other terms of employment for Directors and executives are formalised in service agreements. Details of
these agreements are as follows:
Name:
Title:
Ross Love
Executive Chairman
Agreement commenced: 13 July 2022
Term of agreement:
no fixed term
Details:
Base salary of $325,000 plus statutory superannuation, if applicable, to be reviewed annually
by the Remuneration Committee. Subject to termination notice of 6 month notice by either
party.
16
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265
Name:
Title:
Bryant McLarty
Non-Executive Director
Agreement commenced: 20 October 2021
Term of agreement:
no fixed term
Details:
Base salary of $75,000 to be reviewed annually by the Remuneration Committee. No
termination period in place.
Name:
Title:
Hendrik Deurloo
Non-Executive Director
Agreement commenced: 1 April 2022
Term of agreement:
no fixed term
Details:
Base salary $75,000 to be reviewed annually by the Remuneration Committee. No termination
period in place.
Name:
Title:
Brian Wall
Non-Executive Director
Agreement commenced: 20 June 2022
Term of agreement:
no fixed term
Details:
Base salary $75,000 to be reviewed annually by the Remuneration Committee. No termination
period in place.
Until his retirement on 24 August 2022 Brian was also Chief Executive Officer of wholly owned subsidiary Anodyne
Electronics Manufacturing Corp (AEM). He will remain engaged as a consultant with AEM for a 12 month term on an
annual salary of CA$140,000.
Name:
Title:
Sam Wright
Non-Executive Director & Company Secretary
Agreement commenced: 1 January 2021
Term of agreement:
no fixed term
Details:
Base salary $140,000 to be reviewed annually by the Remuneration Committee. Subject to
termination notice of 1 month by the director and 2 months’ notice by the company.
Directors and executives have no entitlement to termination payments in the event of removal for misconduct.
17
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265
SHAREHOLDINGS OF DIRECTORS
CDIs held in Structural Monitoring Systems Plc:
30 June 2022
Balance at
beg of year
CDIs held on
appointment/
resignation
date
Granted as
Remunera-
tion
Exercise of
PRs
Net Change
Other
Balance at
end of year
No.
No.
No.
No.
No.
No.
Directors
Sam Wright
1,620,000
-
Bryant McLarty(1)
Hendrik Deurloo(2)
Brian Wall(3)
Will Rouse(4)
-
-
-
1,525,871
-
38,218
1,156,016
(1,252,351)
Stephen Forman(5)
1,739,978
(1,884,976)
R Michael Reveley(6)
2,471,444
(2,471,444)
Total
6,987,438
(4,044,682)
30 June 2021
Balance at
beg of year
CDIs held on
appointment/
resignation
date
Granted as
Remunera-
tion
No.
No.
No.
Directors
Will Rouse
270,588
R. Michael Reveley
2,654,351
Stephen Forman
1,900,000
-
-
-
Sam Wright(7)
Terry Walsh(8)
-
1,620,000
64,500
(64,500)
Total
4,889,439
1,555,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
155,813
147,984
1,923,797
-
-
-
-
-
324,174
1,850,045
-
-
-
38,218
96,335
144,998
-
-
-
392,929
(392,929)
548,742
320,562
3,812,060
Exercise of
PRs
Net Change
Other
Balance at
end of year
No.
No.
No.
435,428
450,000
1,156,016
-
(182,907)
2,471,444
117,308
(277,330)
1,739,978
-
-
-
-
1,620,000
-
552,736
239,363
6,987,438
18
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 PERFORMANCE RIGHTS HOLDINGS OF DIRECTORS
30 June 2022
Directors
Sam Wright
Bryant McLarty(1)
Hendrik Deurloo(2)
Brian Wall(3)
Will Rouse(4)
Stephen Forman(5)
R Michael Reveley(6)
Total
30 June 2021
Directors
Will Rouse
R. Michael Reveley
Stephen Forman
Sam Wright(7)
Terry Walsh(8)
Total
Balance at
beg of year/
on appoint-
ment
No.
155,813
-
-
-
-
253,954
392,929
802,696
Granted in
lieu of fees
Exercised
Balance at
during the
during the
PRs held on
end of the
year
No.
year
No.
resignation
No.
year
No.
-
-
-
-
-
-
-
-
(155,813)
-
-
-
-
-
-
-
-
-
-
(253,954)
(392,929)
-
(548,742)
(253,954)
Balance at
beg of year/
on appoint-
ment
No.
Granted in
lieu of fees
Exercised
Balance at
during the
during the
PRs held on
end of the
year
No.
year
No.
resignation
No.
year
No.
795,588
264,840
(435,428)
(625,000)
-
-
-
-
-
-
-
-
-
814,904
178,025
-
(600,000)
392,929
267,308
103,954
(117,308)
-
155,813
251,471-
-
-
-
-
-
253,954
155,813
(251,471)
-
2,129,271
702,632
(552,736)
(1,476,471)
802,696
(1) appointed 20 October 2021
(2) appointed 1 April 2022
(3) appointed 20 June 2022
(4), (5) resigned 20 June 2022
(6) resigned 20 October 2021
(7) appointed as director 14 October 2020.
(8) resigned as director 14 October 2020
19
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 ADDITIONAL INFORMATION
The earnings of the Group for the 5 years to 30 June 2022 are summarised below:
Sales revenue
EBITDA
EBIT
Loss after income tax
2022
$000’
2021
$000’
2020
$000’
2019
$000’
2018
$000’
15,701
(2,273)
(3,910)
(4.026)
15,340
19,095
(478)
(1,445)
(1,959)
(991)
(2,043)
(2,072)
16,380
(2,827)
(3,488)
(3,626)
7,437
(3,651)
(3,966)
(3,895)
The factors that are considered to affect total Shareholders return (“TSR”) are summarised below:
2022
2021
2020
2019
2018
Share price at financial year end $
Total dividends declared
Basic earnings per share
0.40
-
(3.26)
0.36
-
(1.64)
0.43
-
(2.19)
0.65
-
(3.51)
0.88
-
(3.55)
THIS CONCLUDES THE REMUNERATION REPORT
Information given to auditors
Each of the directors has confirmed that so far as he is aware, there is no relevant audit information of which the Group's
auditors are unaware, and that he has taken all the steps that he ought to have taken as a director in order to make himself
aware of any relevant audit information and to establish that the Group's auditors are aware of that information.
Creditor payment policy
The Group’s policy during the year was to pay suppliers in accordance with agreed terms and this policy will continue for
the year ended 30 June 2023. The Group does not follow a specific code or standard in respect of such creditors. As at 30
June 2022, the Group’s trade creditors represented 64 days’ purchases (2021: 66 days).
Financial instruments and risks
The Board has overall responsibility for the determination of the Group's risk management objectives and policies and,
whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes
that ensure the effective implementation of the objectives and policies to the Executive Chairman. The Board receives
monthly reports from the finance function through which it reviews the effectiveness of the processes put in place and the
appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Group's competitiveness and flexibility. Further details regarding these policies are set out below:
20
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 The Group is exposed through its operations to the following financial risks:
•
•
•
credit risk;
liquidity risk;
foreign exchange risk
The Group is exposed to the usual credit risk associated with selling on credit and manages this through credit control
procedures. Further information is provided in note 24 in the notes to the financial statements.
As a result of operations in Canada, USA and Australia, the Group’s assets and liabilities can be affected by movements in
the C$/A$, US$/A$ and UK/A$ exchange rates.
The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating unit in
currencies other than the unit’s functional currency.
The Group is exposed to foreign currency risk following the acquisition of a Canadian-based subsidiary and the risk could
increase in the future as international commercialisation of the Group’s technologies increase. There is currently no form
of currency hedging or risk strategy in place, but this policy is constantly monitored and appropriate strategies will be
implemented if required.
Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due.
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments,
the Group monitors forecast cash inflows and outflows on a monthly basis. The Group has an established operating loan
facility for up to CA$5 million, of which CA$0.72m is available to assist with day to day operating requirements.
Business risks and uncertainties
The Group has a reliance on one customer at the present time. The customer accounts for $7.54 million of revenues
totalling $15.70 million. The relationship with the customer is secured by a licence agreement and the Group is pursuing
growth opportunities.
The ongoing impact of the Coronavirus (COVID-19) pandemic is uncertain and it is not practicable to estimate the
potential impact , positive or negative, after the reporting date. The pandemic may affect future travel, movement of labour
and enforce supply chain constraints.
Having secured STC approval the Company continues to make progress towards commercialisation of it’s CVM™
technology.
Future developments
The directors have discussed the future developments for the business within the Strategic Report on page 6, in
accordance with Section 414C of the Companies Act 2016.
By order of the Board
Ross Love
Executive Chairman
30th September 2022
21
DIRECTORS’ REPORT ContinuedSTRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022Registered Number 04834265 Statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Consolidated
Parent
2022
$000’
Note
2021
$000’
2022
$000’
2021
$000’
Continuing operations
Revenue
Sales
Cost of sales
Gross profit
Other income
Depreciation and amortisation
Employee expenses
Impairment charges
Loss on debt for equity swap
Occupancy expenses
Research and development expenses
Royalty fees
Sales and marketing expenses
4
4
4
Share-based payments expenses
22
Administrative expenses
Operating loss before finance costs and tax
Finance income
Finance costs
Foreign exchange gains/(losses)
Income tax benefit/(expense)
6
Loss after finance costs and tax from continuing
operations
15,701
(7,875)
7,826
473
(1,638)
(6,863)
-
-
(16)
(643)
(692)
(531)
(37)
(1,926)
(4,047)
-
(400)
137
283
15,340
(8,258)
7,082
664
(967)
(5,212)
-
(52)
(61)
(181)
-
(284)
(1,116)
(1,114)
(1,241)
1
(19)
(204)
(496)
66
(39)
27
325
(2)
(1,249)
(1,814)
-
(16)
-
-
(189)
(37)
(783)
(3,738)
-
(5)
4
-
-
-
-
337
(2)
(1,070)
(387)
(52)
(61)
(41)
-
(340)
(1,116)
(382)
(3,114)
-
(3)
-
-
(4,027)
(1,959)
(3,739)
(3,117)
Loss attributable to members of the parent
(4,027)
(1,959)
(3,739)
(3,117)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Foreign currency translation
Total comprehensive income/(loss) for the year
Loss for the year attributable to owners of
Structural Monitoring Systems Plc
627
627
100
100
-
-
-
-
(3,400)
(1,859)
(3,739)
(3,117)
Earnings per share (cents per share)
Basic for loss from continuing operations
Diluted for loss from continuing operations
7
7
(3.26)
(3.26)
(1.64)
(1.64)
The accompanying notes form an integral part of the financial statements.
22
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Statement of financial position
As at 30 June 2022
Assets
Non-current assets
Loans to subsidiaries
Plant and equipment
Right-of-use assets
Intangible assets and goodwill
Total non-current assets
Current assets
Trade receivables
Prepayments and other receivables
Inventory
Financial assets
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Loans from subsidiaries
Lease liabilities
Deferred tax
Total non-current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the
parent
Issued capital
Share premium reserve
Accumulated losses
Other reserves
Total equity
Consolidated
Parent
2022
$000’
Note
2021
$000’
2022
$000’
2021
$000’
15
12
13
14
8
9
10
11
16
17
18
19
15
18
6
23
23
23
-
444
373
3,718
4,535
2,347
511
7,088
-
2,381
12,327
16,862
11,464
9,944
1
-
-
3
-
-
11,465
9,947
5
72
173
-
-
86
22
136
-
-
250
11,715
244
10,191
1,845
453
434
-
1,733
8,772
7,149
17,654
3,042
505
10,894
1,153
1,803
17,397
35,051
3,710
5,461
1,150
132
-
268
126
10,453
2,239
-
8,700
338
9,038
-
70
539
609
19,491
2,848
-
-
-
453
298
-
-
298
751
-
-
-
434
-
-
-
-
434
15,560
14,014
10,964
9,757
31,954
41,327
31,949
36,492
31,954
41,327
31,949
36,492
(57,221)
(53,194)
(60,795)
(57,056)
(500)
15,560
(1,233)
14,014
(1,522)
10,964
(1,628)
9,757
The accompanying notes form an integral part of the financial statements.
23
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Approved by the Board and authorised for issue on 30th September 2022
Ross Love, Executive Chairman
24
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Statement of cash flows
For the year ended 30 June 2022
Cashflows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Net cash provided by/(used in) operating
activities before tax paid
Income tax received/(paid)
Net cash provided by/(used in) operating
activities
Cashflows from investing activities
Payments for development expenses capitalised
Payments for financial asset
Cash paid on acquisition of business
Payments for plant and equipment
Net cash used in investing activities
Cashflows from financing activities
Proceeds from issue of shares
Issue costs
Proceeds from borrowings
Repayment of lease liabilities
Loans from/(to) subsidiaries
Net cash provided by financing activities
Net increase/(decrease) in cash held
Cash and cash equivalents at beginning of year
Effect of foreign exchange on balances
Cash and cash equivalents at end of year
20(b)
Cash and cash equivalents
Borrowings
Cash and cash equivalents net of borrowings at
end of year
Consolidated
Parent
2022
$000’
Note
2021
$000’
2022
$000’
2021
$000’
15,007
(19,226)
-
(400)
(16,569)
(14,853)
1
(19)
391
(2,269)
-
(5)
254
(880)
-
(3)
20(a)
(4,619)
1,698
(1,883)
(629)
659
(407)
-
-
(3,960)
1,291
(1,883)
(629)
(584)
(1,153)
(4,404)
(348)
(6,489)
4,915
(76)
5,461
(468)
-
9,832
(617)
2,381
39
1,803
1,803
(5,461)
(3,658)
(877)
-
-
(287)
(1,164)
503
(18)
-
(458)
-
27
154
2,065
162
2,381
2,381
-
2,381
-
-
-
-
-
4,916
(76)
-
-
(2,957)
1,883
-
-
-
-
-
-
-
-
-
-
-
-
503
(18)
-
-
144
629
-
-
-
-
-
-
-
The accompanying notes form an integral part of the financial statements.
25
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Statement of changes in equity
For the year ended 30 June 2022
Consolidated
At 1 July 2020
Loss for the year
Foreign currency translation
Total comprehensive loss for the year
Transactions with owners:
Issue of performance rights to
directors and staff/consultants
Issue of shares to directors and staff/
consultants
Conversion of performance rights to
shares
Expiry of performance rights
Share issue costs
Total transactions with owners
Issued
capital
$000’
31,946
-
-
-
-
2
1
-
-
3
Accumulated
losses
Share
premium
reserve
Share-
based
payment
reserve
Foreign
exchange
reserve
$000’
$000’
$000’
$000’
35,967
3,492
(1,976)
(56,028)
(1,959)
-
(1,959)
-
-
815
3,978
-
4,793
-
-
-
-
100
100
-
-
-
-
1,467
543
478
-
-
(18)
525
(816)
(3,978)
-
(2,849)
36,492
643
(1,876)
At 1 July 2021
Loss for the year
Foreign currency translation
Total comprehensive loss for the year
Transactions with owners:
Issue of shares for cash
Share-based payments: performance
rights
Share issue costs
Total transactions with owners
31,949
-
-
-
5
-
-
5
(53,194)
(4,027)
-
(4,027)
-
-
-
-
-
-
-
4,911
-
(76)
4,835
At 30 June 2022
31,954
(57,221)
41,327
-
-
-
-
106
-
106
749
Total
equity
$000’
13,401
(1,959)
100
(1,859)
1,467
1,023
-
-
(18)
2,472
14,014
(4,027)
627
(3,400)
4,916
106
(76)
4,946
-
-
-
-
-
-
-
627
627
-
-
-
-
At 30 June 2021
31,949
(53,194)
36,492
643
(1,876)
14,014
(1,249)
15,560
26
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Statement of changes in equity
For the year ended 30 June 2022
Parent
At 1 July 2020
Loss for the year
Total comprehensive loss for the year
Transactions with owners:
Issue of performance rights to
directors and staff/consultants
Issue of shares to directors and staff/
consultants
Conversion of performance rights to
shares
Expiry of performance rights
Share issue costs
Total transactions with owners
Accumulated
losses
Share
premium
reserve
Share-
based
payment
reserve
Foreign
exchange
reserve
$000’
$000’
$000’
$000’
(58,732)
35,967
3,492
(2,271)
Issued
capital
$000’
31,946
-
-
-
2
1
-
-
3
(3,117)
(3,117)
-
-
815
3,978
-
4,793
-
-
-
-
-
1,467
543
478
-
-
(18)
525
(816)
(3,978)
-
(2,849)
-
-
-
-
-
-
-
-
At 30 June 2021
31,949
(57,056)
36,492
643
(2,271)
At 1 July 2021
Loss for the year
Total comprehensive loss for the year
Transactions with owners:
Issue of shares for cash
Share-based payments: performance
rights
Share issue costs
Total transactions with owners
31,949
(57,056)
36,492
643
(2,271)
-
-
5
-
-
5
(3,739)
(3,739)
-
-
-
-
-
-
4,911
-
(76)
4,835
-
-
-
106
-
106
749
-
-
-
-
-
-
At 30 June 2022
31,954
(60,795)
41,327
The accompanying notes form an integral part of the financial statements.
Total
equity
$000’
10,402
(3,117)
(3,117)
1,467
1,023
-
-
(18)
2,472
9,757
9,757
(3,739)
(3,739)
4,916
106
(76)
4,946
(2,271)
10,964
27
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
1 Corporate information and authorisation of financial statements
The financial statements of Structural Monitoring Systems Plc for the year ended 30 June 2022 were authorised for
issue in accordance with a resolution of the directors on 30 September 2022 and the statements of financial position
were signed on the Board’s behalf by Ross Love.
Structural Monitoring Systems Plc is a public limited company incorporated and domiciled in the United Kingdom. The
Company’s registered office and principal place of business are disclosed on page 2 of this report. The Company’s
ordinary shares, when held as a Chess Depository Interest (CDI) and registered on the CDI register, are tradable on
the Australian Securities Exchange (ASX). Ordinary shares on the UK register cannot be traded on the Australian
Securities Exchange.
2 Summary of significant accounting policies
(a) Basis of Preparation
The consolidated financial statements and those of the parent entity are presented in Australian dollars which is
the Company’s functional currency and are rounded to the nearest one thousand Australian dollars. The average
AUD:CAD rate for the year was 0.9184 (2021: 0.9572) and the reporting date AUD:CAD spot rate was 0.8885
(2021: 0.9318). CAD is the presentational currency of Anodyne Electronics Manufacturing Corp (AEM), a wholly
owned subsidiary of the Company.
(b) Financial Position
The Group reported a net loss after tax of $4.03m(2021: loss $1.96m) and an operating cash outflow of $4.62m
(2021: cash inflow $1.70m) before tax for the year ended 30 June 2022 and reported working capital of $6.94m
including cash of $1.80m as at that date.
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities, the continued financial performance of AEM, the contribution of the Eagle Audio business, which
was acquired during the year and the realisation of assets and discharge of liabilities in the normal course of business
as well as the availability of an established operating loan facility of up to CA$5 million, of which CA$4.63m has been
drawn to date as at the date of this report. The facility, which is provided by AEM’s bankers, while payable on demand
is long standing and is secured upon receivables and inventory and is subject to loan covenants. Under the conditions
of the facility two repayments, each of CA$0.5m will be paid by the Company within the next 12 months. Directors
expect compliance with the covenants to continue to be met. Subsequent to the reporting date the Completed has
completed a share placement raising $1.93m before issue costs of $0.13m. The Group has included in its cashflow
forecast a capital raise through the issue of shares to provide additional working capital should the need arise.
The directors have prepared forecasts in respect of future trading. Achievement of such forecasts would allow the
entity to manage well within its current funding facilities for the foreseeable future. In developing these forecasts,
the Directors have made assumptions and performed sensitivity analysis on variables such as revenues and exchange
rates based upon their view of the current and future economic conditions that will prevail over the forecast period
of 12 months from the date of signing these financial statements. Business risks and uncertainties applicable to the
Group are disclosed on page 21 of the Director’s report.
The directors and senior management will formally consider all measures which would favourably reduce/defer
operational expenses should actual cash flows be less than budgeted, as they have done in previous years.
The directors therefore continue to adopt the going concern basis of accounting in preparing the financial statements.
It is noted, there is a material uncertainty over going concern should the Group be unable to execute one or more of
the following, raising capital through the issue of shares, amending the current debt structure to release further funds,
or reduce/defer employee costs or other operating costs.
28
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
(c) Statement of compliance
The Group’s financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as adopted by the United Kingdom (previously as adopted by the European Union, no changes have arisen
as a consequence of the change) as they apply to the financial statements of the Group for the year ended 30 June
2022 and are applied in accordance with the Companies Act 2006. The Group and the Company have not adopted
any standards or interpretations in advance of the required implementation dates. It is not expected that adoption of
standards or interpretations which have been issued by the International Accounting Standards Board but have not
been adopted will have a material impact on the financial statements for the year ended 30 June 2022. See note 2(d)
for further consideration.
(d) Accounting standards and Interpretations
New Accounting Standards and Interpretations not yet mandatory or early adopted
The Directors have also reviewed all of the new and revised Standards and Interpretations in issue not yet adopted
for the year ended 30 June 2022. As a result of this review the Directors have determined that there is no material
impact of the Standards and Interpretations in issue not yet adopted on the Group and, therefore, no change is
necessary to Group accounting policies.
(e) Basis of consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Structural
Monitoring Systems Plc at the end of the reporting period. A controlled entity is any entity over which Structural
Monitoring Systems Plc 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.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities
is included only for the period of the year that they were controlled.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the
consolidated group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are
reported separately within the equity section of the consolidated statement of financial position and statement of
comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the
original business combination and their share of changes in equity since that date.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses. A business combination
is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under
common control. The business combination will be accounted for from the date that control is attained, whereby
the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised
(subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a
contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability is remeasured at the end of each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at
acquisition date.
29
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive
income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
(f) Foreign currency translation
(i) Functional currency
Items included in the financial statements of each of the companies in the Group are measured using the currency
of the primary economic environment in which the entity operates (‘the functional currency’). The functional
currency of Structural Monitoring Systems Plc is Australian dollars, and its presentation currency is Australian
dollars. The functional currency of its overseas subsidiary, Structural Monitoring Systems Limited, is Australian
dollars and the functional currency of its overseas subsidiary, Anodyne Electronics Manufacturing Corp is
Canadian dollars.
(ii) Transactions and balances
Foreign currency transactions are translated into the presentational currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the statement of comprehensive income.
(iii) Group entities
The results and financial position of all the Company entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
•
Assets and liabilities for each statement of financial position presented are translated at the closing rate at
the date of that statement of financial position;
Income and expenses for each statement of comprehensive income are translated at average exchange rates
(unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions); and
•
All resulting exchange differences are recognised as a separate component of equity and in Other
comprehensive Income.
•
On consolidation, exchange differences arising from the translation of any net investment in foreign entities
are taken to foreign currency translation reserve.
When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate
share of such exchange differences are recognised in the statement of comprehensive income, as part of the gain
or loss on sale where applicable.
(g) Impairment of property, plant and equipment
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an
indicator of impairment exists, the Group makes a formal estimate of the recoverable amount. Where the carrying
amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its
recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual
asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not
generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the
recoverable amount is determined for the cash-generating unit to which the asset belongs.
30
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(h) Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes party to the contractual provisions of
the instrument.
Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other short-term deposits held by the Group with
maturities of less than three months. For the purposes of the statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
Trade, Group and other receivables
Trade, other and group receivables are recorded initially at fair value and subsequently measured at amortised cost.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Trade, other and Group payables
Trade, Group and other payables are initially measured at fair value net of direct transaction costs and subsequently
measured at amortised cost.
Equity instruments
Equity instruments issued by the Group are recorded at fair value on initial recognition net of transaction costs.
Derecognition of financial assets (including write-offs) and financial liabilities
A financial asset (or part thereof) is derecognised when the contractual rights to cash flows expire or are settled, or
when the contractual rights to receive the cash flows of the financial asset and substantially all the risks and rewards
of ownership are transferred to another party. When there is no reasonable expectation of recovering a financial
asset, it is derecognised (“written off”). The gain or loss on derecognition of financial assets measured at amortised
cost is recognised in profit or loss. A financial liability (or part thereof) is derecognised when the obligation specified in
the contract is discharged, cancelled, or expires. Any difference between the carrying amount of a financial liability (or
part thereof) that is derecognised and the consideration paid is recognised in profit or loss.
Impairment of financial assets
An impairment loss is recognised for the expected credit losses on financial assets when there is an increased
probability that the counterparty will be unable to settle an instrument’s contractual cash flows on the contractual due
dates, a reduction in the amounts expected to be recovered, or both. The probability of default and expected amounts
recoverable are assessed using reasonable and supportable past and forward-looking information that is available
without undue cost or effort. The expected credit loss is a probability-weighted amount determined from a range of
outcomes and takes into account the time value of money.
For trade receivables, material expected credit losses are measured by applying an expected loss rate to the gross
carrying amount. The expected loss rate comprises the risk of a default occurring and the expected cash flows
31
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
on default based on the aging of the receivable. The risk of a default occurring always takes into consideration all
possible default events over the expected life of those receivables (“the lifetime expected credit losses”). Different
provision rates and periods are used based on groupings of historic credit loss experience by product type, customer
type and location.
For intercompany loans that are repayable on demand, expected credit losses are based on the assumption that
repayment of the loan is demanded at the reporting date. If the subsidiary does not have sufficient accessible highly
liquid assets in order to repay the loan if demanded at the reporting date, an expected credit loss is calculated. This
is calculated based on the expected cash flows arising from the subsidiary and weighted for probability likelihood
variations in cash flows.
Definition of default
The loss allowance on all financial assets is measured by considering the probability of default.
Receivables are considered to be in default when the principal or any interest is significantly more than the associated
credit terms past due, based on an assessment of past payment practices and the likelihood of such overdue amounts
being recovered.
Write-off policy
Receivables are written off by the Group when there is no reasonable expectation of recovery, such as when the
counterparty is known to be going bankrupt, or into liquidation or administration. Receivables will also be written off
when the amount is more than materially past due.
(i) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
(j) Share-based payment transactions
The Group provides benefits to employees (including directors) in the form of share-based payment transactions,
whereby employees render services in exchange for rights over shares (‘equity-settled transactions’). The fair value of
options is determined using the Black-Scholes pricing model or using the trinomial option pricing model.
There is currently one plan in place to provide these benefits, the Employee Incentive Plan (EIP), which provides
benefits to directors and employees.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at
which they are granted.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Structural Monitoring Systems Plc (‘market conditions’).
32
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
the extent to which the vesting period has expired. This opinion is formed based on the best available information
at the reporting date. No adjustment is made for the likelihood of market performance conditions being met as the
effect of these conditions is included in the determination of fair value at grant date.
(k) Revenue
Revenue recognition – Repair services
Repairs meet the definition of a distinct service whereby the associated revenue is to be recognised at a point in
time, evidenced by the completion of the agreed upon service and delivery of the repaired parts/components to the
customer. The point in time criteria are met as the following transfers of control exist: (a) The entity has the present
right to payment for the asset; (b) the customer has the legal right to the asset; (c) the entity has transferred physical
possession of the asset; (d) the customer has the significant risks and rewards of ownership of the asset; (e) the
customer has accepted the asset. Pricing is fixed and determinable pursuant to agreed upon pricing lists that establish
stand-alone selling prices.
Revenue recognition – Product sales (stock or customised parts)
Product sales meet the definition of a distinct service whereby the associated revenue is to be recognised at a point
in time, evidenced by the delivery of the products to the customer. The point in time criteria are met as the following
transfers of control exist: (a) The entity has the present right to payment for the asset; (b) the customer has the legal
right to the asset; (c) the entity has transferred physical possession of the asset; (d) the customer has the significant
risks and rewards of ownership of the asset; (e) the customer has accepted the asset. Pricing is fixed and determinable
pursuant to agreed upon pricing lists that establish stand-alone selling prices. There are no further performance
obligations associated with these sales.
At times, multiple services or goods are sold to customers, however, contracts detail out separate prices for each
different good or service purchased. As each service or good purchased has a standalone selling price in the
negotiated contract there is no need to allocate a purchase price across multiple deliverables. In addition, each
contract includes payment terms.
The Group recognises revenue on shipping for stock parts, customized product and customer product. When the
Group provides a service (prototyping) it generally recognizes revenue when the prototype is shipped or as the
service is provided if there is no item to be shipped. The Group recognises revenue when it satisfies its performance
obligation under the contract (when the Group ships the product which is also when the customer obtains control
over the product or service).
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on a fixed
price.
(l) Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first
in first out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes,
an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity. Costs of
purchased inventory are determined after deducting rebates and discounts received or receivable.
33
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs,
net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
(m) Property, plant and equipment
Plant and equipment and leasehold improvements are stated at historical cost less accumulated depreciation and
impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
3 - 5 years
Leasehold improvements
5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date
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.
(n) 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.
The group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or
loss as incurred.
(o) 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. Finite
life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses
recognised in the statement of comprehensive income arising from the derecognition 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 arises on the acquisition of a business. Goodwill is not amortised.
34
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
Research and development
Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it
is probable that the project will be a success considering its commercial and technical feasibility; the consolidated
entity is able to use or sell the asset; the consolidated entity has sufficient resources; and intent to complete the
development and its costs can be measured reliably. Capitalised development costs are amortised on a straight-line
basis over the period of their expected benefit, being their finite life of 10 years.
Certifications
Significant costs associated with certifications are amortised on a straight-line basis over the period of their expected
benefit, being the finite life of 5 years.
Licence agreement
Significant costs associated with a licence agreement are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 years.
Technology
Significant costs associated with technological intellectual property are amortised on a straight-line basis over the
period of their expected benefit, being their finite life of 10 years.
Customer relationships
Value attached to relationships with key customers is amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 years.
Intellectual property
Significant costs incurred in securing supplementary type certificates are amortised on a straight-line basis over the
period of their expected benefit, being their finite life of 10 years.
(p) 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 cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped
together to form a cash-generating unit.
(q) Income tax
The charge for taxation for the year is the tax payable on the profit or loss for the year based on the applicable income
tax rate for each jurisdiction and takes into account deferred tax. Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit or loss and is accounted for using the balance sheet
method.
Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available in
the foreseeable future against which the temporary differences can be utilised.
35
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
(r) Other taxes
Revenues, expenses and assets are recognised net of the amount of VAT/GST except:
where the VAT/GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the VAT/GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables are stated with the amount of VAT/GST included.
The net amount of VAT/GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the VAT/GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of VAT/GST recoverable from, or payable to, the
taxation authority.
(s) 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.
(t) 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 Group’s incremental borrowing rate. Lease payments
comprise of fixed repayments less any lease incentives receivable, variable lease payments that depend on an index
or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when
the exercise of the option is reasonably certain to occur and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index, or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount
of the right-of-use asset is fully written down.
(u) Employee entitlements
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.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
(v) Investments in subsidiary undertakings
Investments in subsidiary undertakings are accounted for at cost less, where appropriate, allowances for impairment.
36
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
(w) Critical accounting estimates and judgements
The preparation of the consolidated financial statements requires management to make judgements, estimates and
assumptions concerning the future which impact the application of accounting policies and reported amounts of
assets, liabilities, income, and expenses. The accounting estimates resulting from these judgements and assumptions
seldom equal the actual results but are based on historical experiences and future expectations.
i) Share-based payment transaction:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using either a Black-Scholes
or binomial pricing models, using the assumptions detailed in note 22 Share-based payments in the notes to the
financial statements.
ii) Impairment resulting from acquisition of Anodyne Electronics Manufacturing (AEM)
Impairment of goodwill and intangible assets
An annual review is carried out (as set out in note 14 as to whether the current carrying value of goodwill is
impaired. Detailed calculations are performed based on (i) discounting expected pre-tax cash flows of the relevant
cash generating units and discounting these at an appropriate discount rate; and/or (ii) the comparison of carrying
value to the net selling price of the cash generating unit; the determination of these factors require the exercise
of judgement.
iii) Impairment of inter-company receivables
The Company has intercompany loans to its subsidiary companies which are repayable on demand. As the
subsidiaries did not have sufficient highly liquid resources to repay the loans at 30 June 2022, an expected credit
loss provision is calculated under IFRS 9.
For Structural Monitoring Systems Canada Corporation, the calculation is based upon the expectation that AEM
will trade profitably in the future and that this will allow it to repay the loans in time. Forecast cash flows under
a range of possible outcomes are assessed to derive a probability-weighted value for the loan based upon the
time taken to repay the outstanding amount in full. These calculations rely on management judgements as to the
future cash flow forecasts and the probability weightings assigned.
(iv) Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had,
or may have, on the Group entity based on known information. The consideration extends to the nature of the
products and services offered, customers, supply chain, staffing and geographic regions in which the Group
operates. Other than as addressed in specific notes, there does not currently appear to be either any significant
impact upon the financial statements or any significant uncertainties with respect to events or conditions which
may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the
Coronavirus (COVID-19) pandemic.
As at 30 June 2022, there are no other critical accounting estimates and judgements contained in the financial
report.
3 Segment information
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of
resources. The Group operates predominantly in two industries, being structural health monitoring (CVM™) and the
37
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
design and manufacture of avionics and audio systems. A third segment refers to the intellectual property (CVM™
IP) held in another subsidiary of the Parent. Company overheads are recorded in the Parent entity operating in the
structural health monitoring segment (CVM™).
The main geographic areas that the entity operates in are the USA, Canada and Europe. The Group has operations in
the USA, Canada and Australia. The parent company is registered in the UK.
The following tables present revenue, expenditure and certain asset and liability information regarding geographical
segments for the years ended 30 June 2022 and 30 June 2021:
Year ended 30 June 2022
Revenue
Sale of goods
Rendering of services
Total sales revenue
Other income
Interest revenue
FX gains/(losses)
Total segment revenue
Sales revenue by customer location:
Africa
Europe
Asia/Middle East
Americas
Total sales revenue
Result
EBITDA*
Depreciation and amortisation
Interest revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Loss for the year
Assets and liabilities
Segment assets – current
Segment assets – non-current
Segment liabilities – current
Segment liabilities – non-current
Other segment information
Capital expenditure
Depreciation
Amortisation
CVM™ IP
Avionics/
audio
$000’
$000’
CVM™
$000’
Total
$000’
-
-
-
-
-
(17)
(17)
-
-
-
-
-
(1,768)
-
(46)
(1,814)
-
(1,814)
919
-
919
682
-
682
-
-
-
14,829
807
15,636
471
-
147
16,814
6
1,703
125
13,802
15,636
2,274
(1,636)
-
(349)
289
283
572
16,228
17,653
33,881
9,317
9,038
18,355
348
631
1,005
65
-
65
2
-
7
74
-
-
-
65
65
(2,778)
(2)
-
(5)
(2,785)
-
(2,785)
250
1
251
454
-
454
-
2
-
14,894
807
15,701
473
-
137
16,871
6
1,703
125
13,867
15,701
(2,272)
(1,638)
-
(400)
(4,310)
283
(4,027)
17,397
17.654
35,051
10,453
9,038
19,491
348
633
1,005
38
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
Year ended 30 June 2021
Revenue
Sale of goods
Rendering of services
Total sales revenue
Other income
Interest revenue
FX gains/(losses)
Total segment revenue
Sales revenue by customer location:
Australasia
Africa
Europe
Asia/Middle East
Americas
Total sales revenue
Result
EBITDA*
Depreciation and amortisation
Interest revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Loss for the year
Assets and liabilities
Segment assets – current
Segment assets – non-current
Segment liabilities – current
Segment liabilities – non-current
Other segment information
Capital expenditure
Depreciation
Amortisation
CVM™ IP
Avionics/
audio
$000’
$000’
CVM™
$000’
Total
$000’
-
-
-
-
1
(21)
(20)
-
-
-
-
-
-
(388)
-
1
-
(387)
-
(387)
587
-
587
79
-
79
-
-
-
14,337
1,003
15,340
608
-
(183)
15,765
32
11
1,741
722
12,834
15,340
3,084
(965)
-
(16)
2,103
(496)
1,607
11,576
4,533
16,109
1,726
609
2,335
287
555
410
-
-
-
56
-
-
56
-
-
-
-
-
-
(3,174)
(2)
-
(3)
(3,179)
-
(3,179)
164
2
166
434
-
434
-
2
-
14,337
1,003
15,340
664
1
(204)
15,801
32
11
1,741
722
12,834
15,340
(478)
(967)
1
(19)
(1,463)
(496)
(1,959)
12,327
4,535
16,862
2,239
609
2,848
287
557
410
*EBITDA is gross profit before income tax expense, depreciation, amortisation, finance income and finance costs
39
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Major customers
During the year ended 30 June 2022 approximately $7.54m (2021: $7.08m) of the Group’s sales revenue was derived
from sales to a single US aircraft and parts company.
Revenue
In accordance with IFRS 15, the group’s revenue of $15.70m (2021: $15.34m) is made up of revenue from customers only
and does not include any other revenue. Goods and services are transferred at a point in time, not over time, as detailed in
the group’s revenue recognition policy.
The Group does not have any contract assets or contract liabilities at 30 June 2022 ($nil at 30 June 2021) as the Group
does not fulfil any of its performance obligations in advance of invoicing to its customer or bill in advance for work
performed. The Group however does have contractual balances in the form of trade receivables.
The Group also does not have any contractual costs capitalised at 30 June 2022 ($nil at 30 June 2021) or have any
outstanding performance obligations at 30 June 2022 ($nil at 30 June 2021).
40
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
4
Income and expenses
Income
Other income
SRED Recovery
Management fees
Sub-lease income
Finance income/(costs)
Foreign exchange gains/(losses)
Bank interest
Interest and finance charges payable on borrowings
Interest on overdue payables
Interest and finance charges payable on lease liabilities
Analysis of expenses by nature
Employee remuneration (see note 5)
Intangible assets
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
471
-
2
473
137
-
(251)
(46)
(103)
(263)
608
-
56
664
(204)
1
(7)
-
(12)
(222)
-
323
2
325
4
-
(5)
-
-
(1)
-
281
56
337
-
-
(3)
-
-
(3)
6,863
5,212
1,249
1,070
Amortisation of othe¬r intangible assets
1,005
410
Property, plant and equipment
Depreciation of plant and equipment
Depreciation of ROU assets
Total depreciation and amortisation
198
435
633
1,638
255
302
557
967
Consumables and raw materials used
7,087
7,438
Provision for obsolescence
Freight
Auditor’s remuneration (see note 28)
Impairment charges
Share-based payments expense (see note 22)
Research and development
Other costs of sales, distribution, and administration
68
274
299
-
37
643
3,312
11,720
63
183
155
-
1,116
181
1,306
10,442
-
2
-
2
2
-
-
-
143
1,814
37
-
844
2,838
-
2
-
2
2
-
-
-
78
387
1,116
41
705
2,327
Impairment charges relate to loans to subsidiary undertakings which are written down to the net asset values of those
entities excluding the loans at the reporting date.
41
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
5 Employees and directors
The average number of employees and directors employed by the Group during the year was:
Consolidated
Parent
2022
No.
2021
No.
2022
No.
2021
No.
63
24
11
16
114
52
22
18
15
107
-
-
3
8
11
-
-
2
7
9
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
6,222
370
271
6,863
37
6,900
4,602
355
255
5,212
1,116
6,328
1,249
1,070
-
-
1,249
37
1,286
-
-
1,070
1,116
2,186
Employee and directors’ numbers
Production
Research
Selling and distribution
Administration (including directors)
Employee remuneration
Wages and salaries
Social security costs
Defined contribution costs
Total employee costs
Share-based payments
Directors’ remuneration
Directors’ fees, comprising cash, performance rights and superannuation of $0.63m (2021: $0.30m) are included in
employee expenses in the Statement of profit and loss and other comprehensive income. Directors’ share-based payments
of $nil (2021: $0.16m) are included in share-based payments in the Statement of profit and loss and other comprehensive
income. Refer to the Remuneration report in the Director’s report for further details. This also includes details of the
highest paid director.
42
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
6
Income tax
The major components of income tax benefit/(expense)
for the years ended 30 June 2022 and 30 June 2021 are:
a) Income tax benefit/(expense)
Current tax benefit/(expense)
Deferred tax benefit/(expense)
Income tax expense/(benefit) reported in statement of
comprehensive income
A reconciliation of income tax benefit/(expense)
applicable to accounting loss before income tax at the
statutory income tax rate to income tax expense at the
effective income tax rate for the years ended 30 June
2022 and 30 June 2021 is as follows:
Loss before tax
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
(64)
(219)
(283)
361
135
496
-
-
-
-
-
-
(4,310)
(1,463)
(3,739)
(3,117)
Accounting loss before tax from continuing operations at
the statutory income tax rate of 27.00% (2021: 27.00%)
(1,164)
Expenses/(income) not assessable for income tax purposes
Deferred tax benefit/(expense) not recognised
Income tax benefit/(expense) reported in statement of
comprehensive income
Deferred tax liabilities/(assets)
Deferred tax liabilities and assets are attributable to the
following:
Plant & equipment and Right of use assets
Deferred development costs
Lease liabilities
SR&ED Investment tax credits
Warranty provision
Intangible assets
Costs deductible over 5 years
Accrued expenses
Tax losses
Deferred tax assets not recognised
Deferred tax liabilities recognised
610
837
283
1,423
333
(2,397)
(46)
(36)
1,198
3
216
13,450
(13,806)
338
(395)
509
(610)
(496)
-
-
-
-
-
-
(1,010)
434
576
(842)
477
365
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3
124
12,904
(13,031)
539
3
38
3,475
(3,516)
-
3
113
3,106
(3,222)
-
43
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
The Company and its subsidiaries are subject to the tax regime of the countries they operate in. Under UK and Australian
tax regimes, tax losses can be carried forward indefinitely, subject to meeting certain requirements. Under the Canadian
tax regime, non-capital losses can be carried forward for 20 years and carried back for up to 3 years.
Potential deferred tax assets attributable to tax losses have not been brought to account at 30 June 2022 because the
directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time.
These benefits will only be obtained if:
i.
The Group derivers future assessable income of a nature and of an amount sufficient to enable the benefit from
the deductions for the loss to be realised;
ii.
The Group continues to comply with conditions for deductibility imposed by law; and
No changes in legislation adversely affect the Group in realising the benefit from the deductions for the loss.
2022
Recognised deferred tax liabilities
Movement in deferred tax liabilities during the year:
Brought forward
Charge/(credit) to Statement of compreahensive income
Effect of fx on balances
Carried forward
2021
Recognised deferred tax liabilities
Movement in deferred tax liabilities during the year:
Brought forward
Charge/(credit) to Statement of comprehensive income
Effect of fx on balances
Carried forward
Business
combination
Tax losses
Other timing
difference
$000’
$000’
$000’
Total
$000’
445
786
-
1,231
6
(139)
-
(133)
88
(867)
19
(760)
539
(220)
19
338
Business
combination
Tax losses
Other timing
difference
$000’
$000’
$000’
Total
$000’
553
(108)
-
445
-
6
-
6
(156)
237
7
88
397
135
7
539
44
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
7 Earnings per share
Basic earnings per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares outstanding during the year.
The number of options at 30 June 2022 was 2,730,896 (2021: nil) and the number of performance rights at 30 June 2022
was 430,608 (2021: 1,692,264). Of those performance rights 280,608 were exercisable at 30 June 2022 but have been
excluded from the diluted earnings per share calculation, together with the unlisted options, on the basis they are anti-
dilutive.
The following reflects the income and share data used in the total operation’s basic loss per share computations:
Consolidated
2022
$000’
2021
$000’
Net loss attributable to equity holders from continuing operations
(4,027)
(1,959)
Weighted average number of ordinary shares for basic loss per share
123,703,164
119,578,443
Weighted average number of ordinary shares for diluted loss per share
123,703,164
119,578,443
Number of shares
Number of shares
8 Current assets – Trade receivables
Trade receivables
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
3,042
3,042
2,347
2,347
5
5
86
86
9 Current assets – Prepayments and other receivables
Prepayments
Bank guarantee*
Other receivable
GST receivable
Deposits
*bank guarantee was held as security for a premises lease
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
291
-
8
206
-
505
346
66
21
47
31
511
34
-
-
38
-
72
14
-
-
-
8
22
45
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
10 Current assets – Inventory
Raw materials
Work in progress
Finished goods
Provision for obsolescence
11 Current assets – Financial assets
Term deposit investment
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
7,709
1,417
1,852
(84)
10,894
4,373
906
1,828
(19)
7,088
-
-
173
-
173
-
-
136
-
136
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
1,153
1,153
-
-
-
-
-
-
12 Non-current assets – Property, plant and equipment
Consolidated
Balance at 1 July 2021
Additions/(disposals)
Depreciation expense
Effect of FX movement on balances
Balance at 30 June 2022
Balance at 1 July 2020
Additions
Depreciation expense
Effect of FX movement on balances
Balance at 30 June 2021
Leasehold
improvements
$000’
Plant and
equipment
$000’
Total
$000’
48
1,116
(59)
(2)
1,103
73
-
(25)
-
48
396
393
(177)
18
630
269
287
(165)
5
396
444
1,509
(236)
16
1,733
342
287
(190)
5
444
46
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
13 Non-current assets – Right-of-use assets
Consolidated
Balance at 1 July 2021
Additions
Depreciation expense
Effect of FX movement on balances
Balance at 30 June 2022
Balance at 1 July 2020
Additions
Depreciation expense
Effect of FX movement on balances
Balance at 30 June 2021
Land and
buildings
Equipment
$000’
$000’
Motor
vehicle
$000’
Total
$000’
248
6,106
(456)
220
6,118
151
461
(379)
15
248
118
2,644
(202)
93
2,653
-
147
(33)
4
118
7
-
(7)
1
1
12
-
(6)
1
7
373
8,750
(665)
314
8,772
163
608
(418)
20
373
The Group leases land and buildings for its offices and a manufacturing facility under a 10 year agreement.
The Group also leases manufacturing equipment, IT equipment and a motor vehicle under agreements of between 3 years
and 5 years.
47
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
14 Non-current assets – Intangible assets and goodwill
Reconciliations of the written down values at the beginning and end of the current financial year are set out below:
Goodwill
Certifica-
tions
Licence
agreement
Technol-
ogy
Eagle
audio IP
Eagle
audio
customer
relation-
ships
$000’
$000’
$000’
$000’
$000’
$000’
Consolidated
Balance at 1 July 2021
Acquired during the year
Development expenses
capitalised
Amortisation expense
Allocation of R&D tax
offset
1,454
66
-
-
-
Effect of FX on balances
Balance at 30 June 2022
93
1,613
354
32
1,878
-
-
-
-
-
(240)
(22)
-
10
124
-
1
11
-
3,203
565
(152)
(287)
94
2,098
-
(280)
-
159
3,082
-
256
-
(43)
-
8
221
Total
$000’
3,718
3,525
565
(737)
(287)
365
7,149
Goodwill
Certifications
$000’
$000’
Licence
agreement
$000’
Technology
$000’
Total
$000’
Consolidated
Balance at 30 June 2020
1,444
Development expenses
capitalised
Amortisation expense
Effect of FX on balances
Balance at 30 June 2021
Intangible assets
Certifications
-
-
10
1,454
586
-
(230)
(2)
354
53
-
(21)
-
32
1,118
901
(146)
5
1,878
3,201
901
(397)
13
3,718
AEM possesses distinct aircraft manufacturing and maintenance certifications, which are requisite to the sale and
maintenance of their products in key markets.
Licence agreement
AEM has a licence agreement in place with one of their key customers to be the producer and seller of certain aircraft
instruments. This has identifiable cash flows in the form of future sales to aircraft manufacturing and maintenance
providers who require these instruments.
Technology
AEM has developed proprietary aircraft parts and manufacturing technology which are expected to continue to yield future
sales. This intellectual property is separable and identifiable to the extent that it could be licensed or acquired. In addition,
there are identifiable future benefits in the form of cash flows from the sale of the resulting products to AEM customers.
48
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Eagle audio
In September 2021 the Group acquired Canadian based business, Eagle Audio including the following intangible assets:
•
Intellectual property comprising drawings and certifications, and
• Customer relationships
Amortisation
The amortisation period applied to the intangible assets are as follows:
Certifications – 5 years, remaining amortisation period is 2.5 years
Licence agreement – 5 years, remaining amortisation period is 2.5 years
Technology – 10 years, remaining amortisation period is 7.5 years
Intellectual property – 10 years, remaining amortisation period is 9.2 years
Customer relationships – 5 years, remaining amortisation period is 4.2 years
Impairment testing
Goodwill of $1.61m acquired through business combinations has been allocated to the AEM cash generating unit (2021:
$1.45m).
The impairment test has been carried out using a discounted cash flow model covering a 5 year period. Cash flow
projections are based on a budget for 2022/2023 and extrapolated for a further 4 years using a steady rate, together with
a terminal value, approved by management. The principal assumptions made in determining the recoverable amount of
goodwill as at 30 June 2022 include revenue growth of 6% per annum from 2025 (30% in 2023 and 13% in 2024), EBIDA
margin of 17% (2021: 19%) and a discount rate of 15.3% (2021: 12.5%).
If the revised estimated pre-tax discount rate applied to the discounted cash flows had been 10% less favourable in
management’s estimate the Group would need to reduce the carrying value of goodwill by $nil (2021: $nil).
If the EBITDA margin applied to the discounted cash flows had been 10% less favourable in management’s estimate the
Group would been to reduce the carrying value of goodwill by $nil (2021: $nil).
The same reduction of $nil (2021: $nil) applies if revenues had been 10% less favourable.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of AEM’s
division’s goodwill is based would not cause the cash generating unit’s carrying amount to exceed its recoverable amount.
49
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
15 Non-current assets/(liabilities) - Loans
Company
Year ended 30 June 2022
Cost
At 1 July 2021
Arising during the year
At 30 June 2022
Impairment
At 1 July 2021
Impairment charge
Net carrying amount at 30 June 2022
Year ended 30 June 2021
Cost
At 1 July 2020
Arising during the year
At 30 June 2021
Impairment
At 1 July 2020
Impairment charge
Net carrying amount at 30 June 2021
Company
Year ended 30 June 2022
Cost
At 1 July 2021
Received during the year
Net carrying amount at 30 June 2022
Year ended 30 June 2021
Cost
At 1 July 2020
Received during the year
Assigned during the year
Net carrying amount at 30 June 2021
Loans to subsidiary
undertakings
$000’
Total
$000’
21,948
3,334
25,282
12,004
1,814
13,818
11,464
23,014
(1,066)
21,948
11,617
387
12,004
9,944
Loans from subsidiary
undertakings
$000’
Total
$000’
-
298
298
921
278
(1,199)
-
21,948
3,334
25,282
12,004
1,814
13,818
11,464
23,014
(1,066)
21,948
11,617
387
12,004
9,944
-
298
298
921
278
(1,199)
-
50
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Loans to/from subsidiaries are unsecured, have no fixed date for repayment and attract no interest charge.
As the parent does not intend to call in the loans within the next 12 months the loans are classified as non-current assets
See Note 24 for further details on impairment of intercompany receivables.The consolidated financial statements include
the financial statements of the Company and the subsidiaries listed in the following table:
Country of
Incorporation
Type of
equity
Structural Monitoring Systems Limited
Australia
Ordinary share
% Equity Interest
2022
100
2021
100
Registered office:
Suite 116, 1 Kyle Way
Claremont WA 6010
Australia
Structural Monitoring Systems Canada Corp (SMSCC)
Canada
Ordinary share
100
100
Registered office:
Unit 100-966Crowley Avenue
Kelowna BC Canada
Anodyne Electronics Manufacturing Corp (AEM)
Canada
Ordinary share
100
100
Registered office:
Unit 100-966Crowley Avenue
Kelowna BC Canada
16 Current liabilities – Trade and other payables
Trade payables
Other payables
Taxes payable – HST, payroll tax
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
2,108
1,569
33
3,710
897
940
8
1,845
306
147
-
453
8
426
-
434
Trade payables are non-interest bearing and are normally settled within 30 day terms. Other payables are non-interest
bearing and have an average term of 56 days (2021: 66 days).
51
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
17 Current liabilities - Borrowings
Credit card
Overdraft - secured
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
102
5,359
5,461
-
-
-
-
-
-
-
-
-
AEM has a secured overdraft facility with a banking institution. The facility has a limit of CA$5 million secured on trade
receivables and inventory. The variable interest rate on the facility is 6.45 %. At the date of this report CA$4.63m has been
drawn on the facility. Two reductions of CA$0.5m each are due on the facility within the next 12 months.
18 Lease liabilities
Opening balance
Interest charged
Lease assigned during the year
Repayments made during the year
Lease finance purchases during the year
Effect of foreign exchange on balances
Closing balance
Split between:
Current
Non-current
19 Current liabilities – Provisions
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
338
124
-
(468)
9,744
112
9,850
1,150
8,700
9,850
262
12
(94)
(458)
610
6
338
268
70
338
-
-
-
-
-
-
-
-
-
-
Provision for warranties
132
-
-
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
94
-
(94)
-
-
-
-
-
-
-
-
52
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
20 (a) Reconciliation of the net loss before tax to the net cash provided by/(used in) operating
activities before tax paid
Loss before tax for the year
(4,310)
(1,463)
(3,738)
(3,117)
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
Adjustments for:
Loss on debt for equity swap
Share based payments
Expenses settled through equity instruments
Depreciation and amortisation
Inventories obsolescence
SRED recovery
Impairment of investments in subsidiaries
Changes in assets and liabilities
Trade receivables
Prepayments and other receivables
Inventory
Trade and other payables
Provisions
-
37
69
1,638
65
(470)
-
(696)
187
(3,010)
1,865
6
52
1,116
-
967
-
37
69
2
52
1,116
776
2
-
1,814
387
640
(120)
33
347
126
-
(50)
(37)
20
-
(88)
5
49
189
-
Net cash provided by/(used in) operating activities
(4,619)
1,698
(1,883)
(629)
20 (b) Cash and cash equivalents
Cash at bank
Cash on hand
Credit card
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
1,802
1
-
1,803
2,428
1
(48)
2,381
-
-
-
-
-
-
-
-
53
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
21 Employee benefits
(a) Employees incentive plan
On 11 December 2018 shareholders approved the employee incentive plan (EIP) for the granting of non-transferable
shares or performance rights (PRs) to directors, employees and relevant contractors with more than six months’
service at the grant date. The shares vest immediately and the PRs vest upon the satisfaction of the relevant
performance hurdles within 3 years of issue. Under the plan shares will be offered at a 12.5% discount to the lowest
5 day VWAP (calculated by taking the lowest 5 daily share price VWAPs for that quarter – and taking the average).
During the year no shares were issued to employees under the plan (2021: 1,843,081 shares).
(b) Pensions and other post-employment benefit plans
AEM maintains a defined contribution pension plan for its’ employees. AEM contributes 5% of salary to the Plan.
Employees must be employed with the company for 12 months before they are entitled to the benefit. There are
currently 84 employees participating in the plan. Contributions are paid monthly and recognised in the Statement
of comprehensive income totalling $0.40m (2021: $0.36m). Contributions of $nil (2021: $nil) are outstanding at 30
June 2022.
22. Share-based payments
The share-based payment expense for the year is as follows:
Issue of performance rights to directors and executives
Issue of shares to directors and executives under EIP
Issue of performance rights to other consultants
Issue of performance rights to eligible staff under EIP
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
23
-
14
-
37
545
78
93
400
1,116
23
-
14
-
37
545
78
93
400
1,116
Performance Rights - Directors
There were no Performance Rights (PRs) granted to any directors of the Company during the year.
$0.02m was recorded as a share-based payment expense in respect of PRs granted in prior years. Those PRs are now fully
vested.
54
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
Performance Rights - Consultants
On 30 July 2021 the Board granted 180,921 PRs to a consultant of the Company in lieu of fees accrued to 30 June 2021.
The fair value was determined by the closing share price on grant date.
The number of performance rights that were outstanding, their weighted average exercise price and their movement during
the year is as follows:
At 1 July
Granted
Exercised
Expired
At 30 June
Exercisable at 30 June
2022
No.
2021
No.
Weighted ave ex price
2022
$
2021
$
1,692,264
4,082,270
0.51
2.07
180,921
1,788,325
(1,292,577)
(1,253,331)
(150,000)
(2,925,000)
430,608
1,692,264
280,608
1,392,264
-
-
3.00
0.96
-
-
-
-
0.51
-
The weighted average contractual term remaining on performance rights outstanding at 30 June 2022 is 14 months (2021:
24 months).
The outstanding number of performance rights at 30 June 2022 and 30 June 2021 was as follows
Exercise price $
Grant date
Expiry date
2022 No.
2021 No.
$0.001
$0.001
$0.001
$0.001
$2.00
$2.75
$3.50
$2.00
$2.50
$3.00
$3.25
$3.50
$3.75
18 February 2021
18 February 2024
21 January 2021
21 January 2024
11 December 2020
11 December 2023
12 December 2019
12 December 2022
12 December 2019
12 December 2022
12 December 2019
12 December 2022
12 December 2019
12 December 2022
15 August 2018
15 August 2021
15 August 2018
15 August 2021
15 August 2018
15 August 2021
15 August 2018
15 August 2021
15 August 2018
15 August 2021
15 August 2018
15 August 2021
30,000
250,608
-
-
50,000
50,000
50,000
-
-
-
-
-
-
259,412
584,446
232,031
316,375
50,000
50,000
50,000
25,000
25,000
25,000
25,000
25,000
25,000
430,608
1,692,264
55
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Terms of Performance Rights
1. The Performance Rights are non-transferable.
2.
The Performance Rights do not confer any entitlement to attend or vote at meetings of the Company, to dividends, to
participation in new issues of securities or entitlement tom participate in any return of capital.
3.
The Performance Rights vest upon the satisfaction of the relevant performance hurdle within 3 years of the issue of
the Performance Rights and at the election of the holder.
4.
The Performance Rights lapse if the performance hurdle is not satisfied or the election to convert is not given by
the holder within 3 years of the issue of the Performance Rights except as otherwise provided for in the terms and
conditions of the Plan.
5.
Upon vesting, one ordinary share will be issued for every one Performance Right on the payment of the par value of
the ordinary share, being £0.0005 pence per share by the holder. The Shares will rank equally in all respects within the
existing shares on issue.
6.
In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the
Company prior to the vesting date, the number of Performance Rights, the share prices relevant to the performance
hurdles and any exercise price may be reconstructed in accordance with the terms and conditions of the Plan.
56
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
23 Issued capital and reserves
Chess depositary interests
On issue 128,233,149,
(2021: 121,479,031)
Issued and fully paid
Total issued and fully paid
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
31,954
31,954
31,949
31,949
31,954
31,954
31,949
31,949
Movement in chess depositary interests (CDIs) in issue
At 30 June 2020
118,382,619
31,946
Shares on issue
(No.)
$000’
Issued on 26 August 2019 – CDIs issued*
Issued on 20 December 2019 – conversion of PRs
Issued on 21 April 2020 – CDIs issued*
Issued on 17 April 2020 – conversion of PRs
Issued on 21 January 2021 – CDIs issued*
Issued on 28 January 2021 – conversion of PRs
Issued on 26 February 2021 – conversion of PRs
Issued on 20 May 2021 – conversion of PRs
Issued on 11 June 2021 – conversion of PRs
996,636
154,342
147,000
156,683
699,445
17,676
264,840
170,588
489,202
1
-
-
-
1
-
-
-
1
At 30 June 2021
121,479,031
31,949
Issued on 1 July 2021 – conversion of PRs
Issued on 3 November 2021 – conversion of PRs
Issued on 8 November 2021 – conversion of PRs
Issued on 6 April 2022 – CDIs issued for cash
324,931
574,717
392,929
5,461,541
-
-
-
5
At 30 June 2022
128,233,149
31,954
*Chess depositary interests (CDIs) issued to employees at below market price.
Chess Depositary Interests (CDIs)
CDIs 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.
57
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Share Premium Reserve
Share Premium Reserve
Movement in ordinary shares in issue
At 1 July 2020
Issued on 26 August 2019 – CDIs issued*
Issued on 20 December 2019 – conversion of PRs
Issued on 21 April 2020 – CDIs issued*
Issued on 17 April 2020 – conversion of PRs
Issued on 21 January 2021 – CDIs issued*
Issued on 28 January 2021 – conversion of PRs
Issued on 26 February 2021 – conversion of PRs
Issued on 20 May 2021 – conversion of PRs
Issued on 11 June 2021 – conversion of PRs
Share issue costs
At 30 June 2021
Issued on 1 July 2021 – conversion of PRs
Issued on 3 November 2021 – conversion of PRs
Issued on 8 November 2021 – conversion of PRs
Issued on 6 April 2022 – CDIs issued for cash
Share issue costs
At 30 June 2022
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
41,327
36,492
41,327
36,492
Shares on issue
(No.)
$000’
118,382,619
996,636
154,342
147,000
156,683
699,445
17,676
264,840
170,588
489,202
121,479,031
324,931
574,717
392,929
5,461,541
128,233,149
35,967
318
-
-
-
225
-
-
-
-
(18)
36,492
-
-
-
4,911
(76)
41,327
Other Reserves
Foreign currency translation reserve
Share-based payment reserve
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
(1,249)
749
(1,876)
643
(2,271)
749
(2,271)
643
58
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Share-based payment reserve
Outstanding at 30 June 2020
PRs granted during prior years
PRs granted during the year in lieu of fees
PRs converted during the year
PRs expired during the year
CDIs issued under Employee Incentive Plan
Outstanding at 30 June 2021
PRs granted during prior years
PRs granted during the year in lieu of fees
PRs converted during the year
PRs expired during the year
Outstanding at 30 June 2022
Nature and purpose of reserves
Share premium reserve
Performance rights
on issue (PRs)
$000’
4,082,270
3,492
-
1,788,325
(1,253,331)
(2,925,000)
-
1,692,264
-
180,921
(1,292,577)
(150,000)
430,608
624
842
(815)
(3,978)
478
643
23
83
-
-
749
The share premium reserve is used to record increments in the value of share issues when the issue price per share is
greater than the par value. The par value of shares is currently GBP0.0005 (2021: GBP0.0005). Costs of the issues are
written off against the reserve.
Share-based payment reserve
The share-based payment reserve is used to record the value of equity benefits provided to employees and directors as
part of their remuneration, or to other parties in lieu of cash compensation.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of the company.
Reserves classified on the face of the consolidated statement of financial position as retained earnings represent
accumulated earnings and are distributable. All the other reserves are non-distributable.
59
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
24 Financial risk management objective and policies
Financial risk management
Overview
The Company and Group have exposure to the following risks from their use of financial instruments:
• Market risk, including foreign currency risk, price risk and interest rate risk
• Credit and cashflow risk
•
Liquidity risk
This note presents information about the Company’s and Group’s exposure to each of the above risks, their objectives,
policies, and processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Risk management policies are established to identify and analyse the risks faced by the Company and Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Company’s and Group’s activities.
The Board of Directors oversees how management monitors compliance with the Company’s and Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the
Company and Group.
The Company and the Group's principal financial instruments are cash, receivables, borrowings and payables. The financial
assets are categorised as loans and receivables measured at amortised cost and the financial liabilities are categorised as
other financial liabilities measured at amortised cost.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will
fluctuate due to changes in market interest rates. Interest rate risk arises from fluctuations in interest bearing financial
assets and liabilities that the group uses.
Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid assets. It is
the Group's policy to settle trade payables within the credit terms allowed and therefore not incur interest on overdue
balances.
Interest bearing liabilities include a bank overdraft facility secured on trade receivables and inventory and lease finance on
plant and equipment.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or
loss by the amounts shown below. The analysis is performed on the same basis as 2021.
60
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Consolidated - 30 June 2022
Cash and cash equivalents
Borrowings
Consolidated – 30 June 2021
Cash and cash equivalents
Credit and cash flow risk
Carrying
value at year
end
$000’
1,803
(5,461)
2,381
Profit or loss
Equity
100bp
increase
$000’
100bp
decrease
$000’
100bp
increase
$000’
100bp
decrease
$000’
18
(55)
(37)
24
24
(18)
55
37
(24)
(24)
18
(55)
(37)
24
24
(18)
55
37
(24)
(24)
Credit and cash flow risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations and arises principally from the Group’s receivables from customers.
The Group trades only with recognised, creditworthy third parties. In addition, receivable balances are monitored on an
ongoing basis with the result that the Group’s exposure to bad debts is not significant.
With respect to credit and cash flow risk arising from the other financial assets of the Group, which comprise cash and cash
equivalents and term deposits, the Group’s exposure to credit and cash flow risk arises from default of the counter party,
with a maximum exposure equal to the carrying amount of these instruments. This risk is minimised by reviewing term
deposit accounts from time to time with approved banks of a sufficient Fitch Ratings credit rating of at least A-, Moody’s
credit rating of at least A2, and Standard & Poor’s credit rating of at least A-. Other than a 1 year term deposit placed as
security for its working capital facility, the Group does not place funds on terms longer than 30 days and has the facility to
place the deposit funds with more than one bank. The Group does not hold collateral as security for any of its’ receivables.
The Company has exposure to credit and cashflow risk arising from the making of loans to subsidiaries. The loans carry no
interest rate or date for repayment. Loans are impaired to the carrying value of the subsidiary’s assets.
The Group and Company undertake the following procedures to determine whether there has been a significant increase
in the credit risk of its other receivables, including group balances, since their initial recognition. Where these procedures
identify a significant increase in credit risk, the loss allowance is measured based on the risk of a default occurring over the
expected life of the instrument rather than considering only the default events expected within 12 months of the year-end.
The Group and Company have not determined that credit loss has increased during the year in respect of the Group’s trade
receivables.
61
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
Exposure to credit and cash flow risk
The carrying amount of the Group’s financial assets and liabilities represents the maximum credit exposure. The Group’s
maximum exposure to credit and cash flow risk at the reporting date was:
Cash and cash equivalents
Trade receivables
Loans to subsidiaries
Consolidated
Parent
Carrying amount
Carrying amount
2022
$000’
2021
$000’
2022
$000’
2021
$000’
1,803
3,042
-
4,845
2,381
2,347
-
4,728
-
5
11,464
11,469
-
86
9,944
10,030
The Group’s maximum exposure to credit and cash flow risk for trade receivables and cash and cash equivalents at the
reporting date by geographic region was:
Europe
Americas
Australasia
Consolidated
Parent
Carrying amount
Carrying amount
2022
$000’
2021
$000’
2022
$000’
2021
$000’
-
3,929
916
4,845
1
4,226
501
4,728
-
-
11,469
10,030
-
-
11,469
10,030
Trade receivables at 30 June 2022 represent 59 debtors’ days (2021: 56 debtors’ days).
There were no trade receivables impairment losses at 30 June 2022 (2021: $nil).
Impairment of company receivables from subsidiaries
The Company’s group receivables represent trading balances and loan amounts advanced to other group companies with
no fixed repayment dates. Under IFRS 9 the fair value of this intercompany receivable is repayable on demand to the
company.
The Company was due the following amounts as at 30 June 2022 before the recognition of any impairment loss provisions:
Gross
Impairment
Carrying value at 30 June 2022
SMS Ltd
$000’
SMSCC
$000’
Total
$000’
14,055
(13,818)
237
11,227
-
11,227
25,282
(13,818)
11,464
62
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
In respect of the balance due from Structural Monitoring Systems Limited (SMS Ltd), the Company did not have sufficient
liquid resources at 30 June 2022 to repay the loan in full. An impairment loss provision has been recognised to the extent
the carrying value at 30 June 2022 is covered by the recovery of net assets in the balance sheet of SMS Ltd. This has been
measured based on lifetime expected credit losses on the basis that credit risk has increased since initial recognition.
In respect of the balance due from Structural Monitoring Systems Canada Corporation (SMSCC), the Company did not
have sufficient liquid resources at 30 June 2022 to repay the loan in full. However, on the basis that there has been no
significant increase in credit risk and the balance is expected to be recovered by the subsidiary’s trading, no impairment loss
provision has been recognised on the basis that any impairment loss provision would be immaterial (2021: $nil). This has
been measured based on 12 month expected credit losses.
Credit risk
The measurement of impairment losses depends on whether the financial asset is “performing”, “underperforming” or
“non-performing” based on the company’s assessment of increases in the credit risk of the financial asset since its initial
recognition and any events that have occurred before the year-end which have a detrimental impact on cash flows.
The financial asset moves from “performing” to “underperforming” when the increase in credit risk since initial recognition
becomes significant.
In assessing whether credit risk has increased significantly, the company compares the risk of default at the year-end with
the risk of a default when the investment was originally recognised using reasonable and supportable past and forward-
looking information that is available without undue cost.
The risk of a default occurring takes into consideration default events that are possible within 12 months of the year-end
(“the 12 month expected credit losses”) for “performing financial assets, and all possible default events over the expected
life of those receivables(“the lifetime expected credit losses”) for “underperforming" financial assets.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to
the Group’s reputation.
The following are the contractual maturities of financial liabilities:
Consolidated - 30 June 2022
Trade and other payables
Borrowings
Lease liabilities
Consolidated - 30 June 2021
Trade and other payables
Borrowings
Carrying
Contractual
1 year or less More than 1
amount
cash flows
$000’
$000’
$000’
year
$000’
(3,677)
(5,461)
(9,850)
(3,677)
(5,461)
(9,850)
(3,677)
(5,461)
(1,150)
(18,988)
(18,988)
(10,288)
(1,845)
(338)
(2,183)
(1,845)
(338)
(2,183)
(1,845)
(268)
(2,113)
-
-
(8,700)
(8,700)
-
(70)
(70)
*Although classed as payable within 1 year or less, the debt facility is long standing and is expected to continue beyond
FY2023.
63
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
The carrying amount of financial assets and financial liabilities at amortised cost recorded by category is as follows:
Consolidated
Parent
Carrying amount
Carrying amount
2022
$000’
2021
$000’
2022
$000’
2021
$000’
1,803
3,042
-
4,845
5,461
3,677
9,850
-
18,987
2,381
2,347
-
4,728
-
1,845
338
-
2,183
-
5
11,464
11,469
-
453
-
298
751
-
86
9,963
10,049
-
434
-
-
434
Financial assets measured at amortised cost
Cash and cash equivalents
Trade receivables
Loans to subsidiary undertakings
Financial liabilities measured at amortised costs
Borrowings
Trade and other payables
Lease liabilities
Loans from subsidiary undertakings
Foreign currency risk
The Group undertakes sales and purchases that are denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations in the US dollar, Canadian dollar and the British pound.
Exposure to currency risk
The Group’s exposure to foreign currency risk at reporting date was as follows, based on notional amounts:
30 June 2022
In AUD
Cash
Trade receivables
Trade and other payables
Borrowings
30 June 2021
In AUD
Cash
Trade receivables
Trade and other payables
AUD 000’
CAD 000’
USD 000’
GBP 000’
843
6
(1,033)
-
(184)
1
350
(411)
(5,411)
(5,471)
959
2,686
(2,189)
(50)
1,406
-
-
(44)
-
(44)
AUD 000’
CAD 000’
USD 000’
GBP 000’
189
5
(511)
(317)
643
189
(982)
(150)
1,549
2,153
(352)
3,350
-
-
-
-
Total
000’
1,803
3,042
(3,677)
(5,461)
(4,293)
Total
000’
2,381
2,347
(1,845)
2,883
64
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Notes to the financial statements
30 June 2022
The Group had net assets denominated in foreign currencies of $15.77m as at 30 June 2022 (2021: net assets of $3.21m).
Based on this exposure, had the Australian dollar weakened by 10%/strengthened by 5% (2021: weakened by 10%/
strengthened by 5%) against these foreign currencies with all other variables held constant, the Group’s loss before tax for
the year would have been $1.58m lower/$0.79m higher (2021: $0.32m lower/$0.16m higher).
The Board regularly monitors the Group’s exposure to foreign exchange fluctuations.
The following significant exchange rates applied during the year:
AUD:CAD
AUD:USD
Capital risk management
Average rate
Reporting date spot rate
2022
2021
2022
2021
0.9184
0.7258
0.957
0.747
0.8885
0.6889
0.932
0.752
The Company and the Group’s objectives when managing capital are to safeguard the Company and the Group’s ability
to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital. The management of the Company and the Group’s
capital is performed by the Board.
Given the level of operations of the Group, the Board has a secured overdraft facility available with a credit limit of CA$5
million. The facility has been used during the year to finance the acquisition of Eagle Audio (CA$4.28m) and general
working capital. The Board regularly monitors, liquidity, exchange rates, cash flow and financial assets and liabilities
balances by means of financial reports and cashflow forecasting. The Company also has a history of successfully raising
capital through the issue of shares to fund it’s activities.
None of the Group’s entities are subject to externally imposed capital requirements.
25 Commitments and contingencies
At the reporting date there are no changes to commitments or contingent liabilities.
26 Related party disclosure
The consolidated financial statements include the financial statements of Structural Monitoring Systems Plc and the
subsidiaries listed in the following table.
Structural Monitoring Systems Ltd
Structural Monitoring Systems Canada Corp (SMSCC)
Anodyne Electronics Manufacturing Corp (AEM)
Australia
Canada
Canada
100
100
100
100
100
100
Country of
incorporation
% Equity interest
2022
2021
Structural Monitoring Systems Plc is the ultimate parent entity and is incorporated in the United Kingdom. The Company
carries on the business of developing the Group’s structural health monitoring technology.
65
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
Structural Monitoring Systems Limited is a subsidiary of the Group and is incorporated in Australia. It is the owner of the
intellectual property pertaining to the structural health monitoring technology.
Structural Monitoring Systems Canada Corp. ('SMSCC') was incorporated on 24 October 2017.
Anodyne Electronics Manufacturing Corporation (AEM) was acquired by SMSCC on 8 December 2017 for a consideration
of $10,998,750.
During the year the Group received loans from 3 directors detailed as follows:
Director
Loan amount
Date of loan
Interest rate
Interest paid
Repayment date
$
Stephen Forman
1,072,673
3 September 2021
Will Rouse
92,936
11 February 2022
Bryant McLarty
100,000
11 February 2022
6%
5%
5%
$
$
38,578
8 April 2022
713
781
8 April 2022
8 April 2022
The loan from Stephen Forman was denominated in US dollars. The others in Australian dollars. The loan from Stephen
Forman was placed with the Group’s bankers as collateral security for its debt facility. The other loans were for the purpose
of providing general working capital.
Remuneration paid to the directors and executives, who are considered key management personnel, for the year is
disclosed in the remuneration report in the Directors’ Report.
The share-based payments charge for directors and executives for the year was $nil (2021: $0.71m).
The following are the amounts due to key management personnel at the reporting date:
Due to director – Hendrik Deurloo
Due to director – Brian Wall
Due to director – Bryant McLarty
2022
$000’
2021
$000’
19
2
10
-
-
-
27 Events after the balance sheet date
Subsequent to the reporting date the Company appointed Ross Love as Executive Chairman.
The Company also completed a Placement of 5,500,000 CDIs at an issue price of $0.35 per CDI each with a 1:1 free
attaching option exercisable at $1.20 with an expiry date of 6 April 2024.raising $1.93 million before issue costs. The funds
raised will be used to assist in funding the commercialisation of its unique FAA approved CVMTM technology.
On 21 September 2022, the Company advised shareholders that it is undertaking the necessary steps to convene an
Extraordinary General Meeting (EGM) in compliance with the Companies Act 2006 (UK) and that a Notice of Meeting will
be dispatched to CDI holders shortly. SMS expects the EGM to be held on or around the week commencing 31 October,
subject to the Notice of Meeting being reviewed by the regulators.
The impact of the Coronavirus pandemic is ongoing and has had financial impact for the Group to 30 June 2022, it is
not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly
developing and is dependent on measures imposed by the Australian government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
Other than the above no matters or circumstances have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial years.
66
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Notes to the financial statements
30 June 2022
28 Auditors’ remuneration
Details of the amounts paid to the auditor of the Company, Jeffreys Henry Audit Limited, and other auditors for audit and
non-audit services provided during the year are set out below.
Consolidated
Parent
2022
$000’
2021
$000’
2022
$000’
2021
$000’
Fees payable to Jeffreys Henry Audit Limited (2021:
Elderton Audit (UK)) and its Component in respect of
both audit and non-audit services are as follows:
Audit services – statutory audit of parent and
consolidated accounts fees payable to the company’s
auditors for the audit of the company’s annual accounts
Audit of the accounts of subsidiaries
Other services
Audit-related assurance services
143
156
-
299
78
77
-
155
143
-
-
143
78
-
-
78
67
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Independent auditor’s report to the members of
Structural Monitoring Systems Plc
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STRUCTURAL MONITORING
SYSTEMS PLC
Opinion
We have audited the consolidated financial statements of Structural Monitoring Systems PLC (the “Parent
Company”) and its subsidiaries (the “Group”), for the year ended 30 June 2022, which comprise the consolidated and
parent company statements of comprehensive income, the consolidated and parent company statements of financial
position, the consolidated and company parent company statements of changes in equity, the consolidated and parent
company statements of cash flows and notes to the financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and UK
adopted International Accounting Standards (IFRSs).
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 30 June 2022 and of the group’s and parent company’s loss for the year then ended;
the group and parent company financial statements have been properly prepared in accordance with UK
adopted International Accounting Standards
the group and parent company financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We are independent of the company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
We draw attention to note 2 in the financial statements, which indicates that the ongoing impact current economic,
operating and trading conditions, availability of existing loan facility and ability to undertake further capital raises,
which may affect the future prospects and trading activities of the group.
68
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Independent auditor’s report to the members of
Structural Monitoring Systems Plc
The Group forecasts includes the scheduled repayment of CAD 1m of debt and additional equity funding requirements
upon which the Group is dependent. The directors are satisfied that these funding requirements will be met. These
events or conditions, along with the business risks and uncertainties and other matters as set out in note 2 indicate that
a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
The existence of a material uncertainty related to going concern requires significant judgement when developing
future plans in respect of the cash flow forecast and in determining the compliance with loan covenants.
Management performed an assessment in relation to group’s ability to continue as a going concern and the
assessment comprises a base case scenario that includes a reasonable worst-case scenario. The overall assessment
includes key assumptions considered by management that required significant judgement in relation to the
estimation of future revenues.
We assessed the significant judgements made by the management in relation to the stress test to ensure that these
are adequately considered and in line with current events and trading performance.
We performed the following audit procedures to assess the management’s judgements, key assumptions and entity’s
ability to continue as a going concern:
•
Liaising with management and discussing their going concern assessment, including their view and
perspective associated with firm’s ability to continue as a going concern
• Reviewing and assessing the reliability of the forecast to ensure its accuracy and performing arithmetical
checks
• Reviewing the past forecast with the actual results to determine if prior year’s estimates were adequately
considered and whether management’s historical approach in terms of the key assumptions was appropriate
• Reviewing the forecast in line with the potential impact of slowdown in its trading activities
• Assessing the worst-case scenario considered by management in line with the key assumptions involved
and other relevant events to determine the potential impact that these may have in respect of the current
covenants related to the external borrowing facilities
• Assessing the covenants attached to the external borrowing facilities and challenging management
approach and assessment of any breaches of covenants during the subsequent period
• Reviewing the subsequent trading activities and performance in line with the covenants attached to the
external borrowing facilities
• Reviewing the recent past track record in raising equity funding and any factors that may indicate that this
may be impacted by market conditions
• Assessing the relevant disclosure within the annual report in line with the management’s assessment and
other related aspects considered
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed
69
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Independent auditor’s report to the members of
Structural Monitoring Systems Plc
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
As there is a material uncertainty for the going concern assumption, this key audit matter has not been included within
this key audit matters section. This is in accordance with the guidance set out within ISA (UK) 705.
Key audit matter
Impairment of intangible assets
The group has intangible assets and goodwill of AUS
7,149,000 (2021: AUS3,718,000) at the yearend relating to
goodwill,
intellectual property and customer
relationships. The intangibles are being amortised over a 5- 10
year period.
licences,
The risk is that the goodwill may have become impaired or
useful economic life of the intangible assets may be different
to
technological
advancements may render its market value below its carrying
value.
the management
assumptions
or
How our audit addressed the key audit matter
The goodwill of AUS1,613,000 is subject to annual
impairment reviews.
Intangibles are only assessed for
impairment when
indicators of impairment exist. We have considered the life
cycle, public perception through the share price of the
Company and the fair value of intangibles held by the
Company.
We have performed the following audit procedures:
• Obtained management’s forecast for future value
in use of all intangible assets;
• Assessed the reliability of forecasts by agreeing to
historical inputs;
• Reviewed management
challenged
management on their judgements of the forecasted
sales and estimates useful life of the intangible
assets;
and
•
assessed the appropriateness and applicability of
discount rate applied to the current business
performance;
• Assessed the ongoing projects viability and
ensured they met the criteria defined in the
accounting standards for intangibles; and
•
•
•
Tested the clerical accuracy of management’s
forecast.
confirmed cost and useful life by reviewing the
underlying contracts for purchase of the intangible
assets, including those acquired on acquisition of
subsidiary during the year;
reviewed the latest management accounts to assess
post year end cashflows due to the technology and
70
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Independent auditor’s report to the members of
Structural Monitoring Systems Plc
Valuation of Inventory
Inventory consists of raw materials, work in progress and
finished goods which are stated at the lower of cost and net
realisable value.
Cost comprises of direct material and delivery costs, direct
labour, import duties and other taxes including an appropriate
level of fixed overheads based on normal operating capacity.
•
licences held; and
Based on the audit work performed we are satisfied, that
although there are inherent uncertainties associated with the
forecast and estimation of useful economic life of intangible
assets, the directors have made reasonable assumptions
about the valuation and useful economic life of intangible
assets, based on past experience and expected future
revenues. We are also satisfied that all necessary disclosures
have been made in the consolidated financial statements.
Our work performed included the following:
•
Performing specific analysis of slow-moving
inventory by reviewing and verifying the accuracy
listing and assessed
of
completeness of the provision of slow moving,
damaged or obsolete inventory;
the aged
inventory
As a result, judgement is applied in determining the levels of
provisions required for obsolete inventories and an appropriate
apportionment of labour and overhead.
• Compared the overhead absorption rate with recent
experience and operating capacity;
•
Tested a sample of products to the realisable value
evidenced by sales subsequent to the year end.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it
Rationale for
benchmark applied
Group financial statements
AUS485,000 (AUS320,000)
3% of turnover
Company financial statements
AUS351,000 (AUS306,000)
3% of gross assets
We believe that revenue is a primary
measure used by shareholders in assessing
the performance of the Group. All are
generally accepted auditing benchmarks.
We believe that the gross assets is an
appropriate measure used by shareholders
in assessing
the
Company and is a generally accepted
auditing benchmark.
the performance of
71
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Independent auditor’s report to the members of
Structural Monitoring Systems Plc
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across components was between AUS90,000 and AUS485,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
AUS24,000 as well as misstatements below those amounts that, in our view, warranted reporting for qualitative
reasons.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgments, for example in respect
of significant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to
fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the Group and the Company, the accounting
processes and controls, and the industry in which they operate.
The Group financial statements are a consolidation of 3 reporting units, comprising the Group’s operating businesses
and holding companies
We performed audits of the complete financial information of all reporting units.
Other information
The directors are responsible for the other information. The other information comprises the information included in
the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
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STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Independent auditor’s report to the members of
Structural Monitoring Systems Plc
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and its environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement [set out on page 10], the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material
misstatements in respect of irregularities, including fraud.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including
fraud and non-compliance with laws and regulations, was as follows:
•
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
the senior statutory auditor ensured the engagement team collectively had the appropriate competence,
•
we identified the laws and regulations applicable to the company through discussions with directors and
other management, and from our commercial knowledge and experience of the digital marketing and advertising
sector.
•
financial statements or the operations of the company, including Companies Act 2006, taxation legislation, data
we focused on specific laws and regulations which we considered may have a direct material effect on the
73
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Independent auditor’s report to the members of
Structural Monitoring Systems Plc
protection, anti-bribery, employment, environmental, health and safety legislation and anti-money laundering
regulations.
•
enquiries of management and inspecting legal correspondence; and
we assessed the extent of compliance with the laws and regulations identified above through making
•
alert to instances of non-compliance throughout the audit.
identified laws and regulations were communicated within the audit team regularly and the team remained
•
obtaining an understanding of how fraud might occur, by:
We assessed the susceptibility of the company’s financial statements to material misstatement, including
•
knowledge of actual, suspected and alleged fraud;
making enquiries of management as to where they considered there was susceptibility to fraud, their
•
regulations.
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
To address the risk of fraud through management bias and override of controls, we:
•
•
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
•
2 of the Group financial statements were indicative of potential bias;
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note
•
investigated the rationale behind significant or unusual transactions
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which
included, but were not limited to:
•
•
•
•
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims;
reviewing correspondence with HMRC and the company’s legal advisor
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations
are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards
also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the
directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may
involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
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STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Independent auditor’s report to the members of
Structural Monitoring Systems Plc
Other matters which we are required to address
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent
company and we remain independent of the group and the parent company in conducting our audit. Our audit
opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as
a body, for our audit work, for this report, or for the opinions we have formed.
Sanjay Parmar
Senior Statutory Auditor
For and on behalf of:
Jeffreys Henry Audit Limited (Statutory Auditors)
Finsgate
5-7 Cranwood Street
London EC1V 9EE
2 October 2022
75
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022 Shareholder information
Annual Report Disclosure on Corporate Governance
The Company has established and continues to refine and improve procedures to ensure a culture of good corporate
governance exists and is respected across the consolidated entity.
The Company has a written policy designed to ensure compliance with ASX Listing Rules and all other regulatory
requirements for disclosures. Additionally, the Company has adopted a policy designed to ensure procedures to implement
the policy are suitable and effective.
The Board wishes to acknowledge that nothing has come to its attention that would lead it to conclude that its current
practices and procedures are not appropriate for an organisation of the size and maturity of the Company. The Corporate
Governance Policy and the Company’s corporate governance practices is set out on the Company’s web site at www.
smsystems.com.au.
Additional information required by the Australian Stock Exchange and not shown elsewhere in this report is as follows. The
information is current as at 28 September 2022.
(a) Distribution of CDI securities
Range
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 Over
Rounding Total
Unmarketable Parcels
Total holders
Units
% Units
532
842
356
848
219
280,940
2,339,132
2,728,962
28,654,087
99,876,505
2,797
133,879,626
0.21
1.75
2.04
21.40
74.60
100.00
Minimum $ 500.00 parcel at $ 0.4600 per unit
1,087
569
320,352
Minimum
parcel size
Holders
Units
(b) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Holder
Number of Shares
Drake Private Investments
22,380,142 (16.72%)
76
STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022
Shareholder information
STRUCTURAL MONITORING SYSTEMS PLC
CHESS DEPOSITORY INTEREST (Total)
Top Holders (Grouped) As Of 28/09/2022
Composition : CDI,ES1,ES2
Rank
Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
DRAKE PRIVATE INVESTMENTS LLC
22,380,142
16.72
BNP PARIBAS NOMINEES PTY LTD
3,731,082
MR ROBERT GREGORY LOOBY
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
MR PAUL COZZI
STRAIGHT LINES CONSULTANCY PTY LTD
MR STEPHEN CAMPBELL FORMAN
MR BRYANT JAMES MCLARTY
ROSHERVILLE PTY LTD
PETER FRANCIS BOYLE NOMINEES PTY LTD
ANODYNE ELECTRONICS HOLDING CORP
LANDMARK CONSTRUCTION PTY LTD
LOOBY HOLDINGS PTY LTD
STONY RISES PTY LTD
COLONIAL FIRST STATE INV LTD <4358776 DEBRA A/C>
MR ROBERT GILLIS WYNNE
MR DAVID MICHAEL BROWN
MR ROBERT GREGORY LOOBY
3,045,430
2,986,759
2,545,173
2,077,230
2,000,000
1,923,797
1,884,976
1,653,027
1,550,000
1,325,000
1,320,000
1,155,569
1,100,000
996,964
939,444
931,668
900,000
870,000
2.79
2.27
2.23
1.90
1.55
1.49
1.44
1.41
1.23
1.16
0.99
0.99
0.86
0.82
0.74
0.70
0.70
0.67
0.65
Totals: Top 20 holders of CHESS DEPOSITORY INTEREST (Total)
Total Remaining Holders Balance
55,316,261
78,563,365
41.32
58.68
Selection Criteria: Address: Hidden Holder ID: Hidden Control Account: Included
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STRUCTURAL MONITORING SYSTEMS PLC – ANNUAL REPORT 2022