Tempo Australia Limited
Annual Report 2020

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Tempo Australia Limited ABN 51 000 689 725 Consolidated Financial Statements For the Year Ended 31 December 2020 TABLE OF CONTENTS FOR THE YEAR ENDED 31 December 2020 DIRECTORS’ REPORT ........................................................................................................................................... 1 REMUNERATION REPORT – AUDITED................................................................................................................. 7 AUDITOR’S INDEPENDENCE DECLARATION ...................................................................................................... 13 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ........................... 14 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................... 15 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................... 16 CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................................ 17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................................... 18 DIRECTORS’ DECLARATION ............................................................................................................................... 49 INDEPENDENT AUDITOR’S REPORT .................................................................................................................. 50 CORPORATE DIRECTORY ................................................................................................................................... 56 Corporate Governance Statement The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to refine and improve the governance framework and practices in place to ensure they meet the interests of shareholders. Tempo complies with the Australian Securities Exchange (ASX) Corporate Governance Council’s Corporate Governance Principles and Recommendations (the Principles). DIRECTORS’ REPORT DIRECTORS’ REPORT The Directors present this report together with the financial report of the consolidated entity consisting of Tempo Australia Limited (Tempo) and the entities it controls, for the financial year ended 31 December 2020 and the auditor’s report thereon. DIRECTORS The following persons were directors of Tempo during the financial year and up to the date of this report, unless otherwise stated: Guido Belgiorno-Nettis William Howard Charles Rottier Christopher Cook (Appointed on 19 March 2021) David Iverach (Resigned on 4 March 2021) PRINCIPAL ACTIVITIES During the financial year the continuing activities of the consolidated entity consisted of: • Asset management and maintenance, • Construction across the infrastructure, resources, power, telecommunications, and renewable commercial sectors. As evidenced by the results there has been limited opportunity in the past year. industrial energy, REVIEW OF OPERATIONS & RESULTS The net profit after tax for this year was $229K, an increase from the loss ($19,964K) last year. Full year revenue in FY2020 was $30,124K down from $52,944K last year, which was result of the COVID-19 pandemic and completion of construction projects. The group had a Net Assets value of $9,569K at the year end, with a cash balance of $6,637K. The cash receipts for the year are inclusive of $2,299K from the Job Keeper program, $200K 1 from Cash Boost and $158K Payroll tax refund from Victoria and Queensland. The Strategy for Tempo Asset Management Services (TAMS) is to remain focused on long term electrical maintenance contracts while expanding into facilities management services. The expansion of services will initially be through existing customers where TAMS can use its customer knowledge and experience to provide a broader service offerings. The current customer base is predominately blue chip Corporates and Government Agencies. Tempo has a number of opportunities in the TAMS pipeline, but nothing to advise the market on at the current time. It is a difficult market in maintenance which is still seeing the effects of in the Pandemic on our clients resulting uncertain client investment time frames. Tempo remains interested in Engineering and Construction opportunities, which are filtered using Tempo’s Risk Appetite Matrix before progressing with a bid. The construction and engineering market continues to be extremely difficult. Tempo continues to look at expanding our activities in renewable energy, and as outlined previously, is focussed on opportunities in The available technologies in the renewable sector are quite diverse and progress slow due to the impacts of the Pandemic. The development horizon for the application of new technology in renewable energy opportunities is expected to extend into next financial year. technology based infrastructure. Since Year End Tempo finalised its construction activities from 2020 and now has no Construction Bonds outstanding. FUTURE DEVELOPMENTS AND EVENTS AFTER THE REPORT PERIOD The Board of Tempo has and will continue to address the potential effect of the Corona Virus INSURANCE OF INDEMNIFICATION AND DIRECTORS, OFFICERS AND AUDITORS For the year ended 31 December 2020, Tempo continued to indemnify Directors and Officers of Tempo against all liabilities to persons (other than Tempo or related body corporate) which arise out of the performance of their normal duties as Directors or Executive Officers unless the liability relates to conduct involving lack of good faith. liability Tempo also continues to indemnify the Directors and Executive Officers against all costs and expenses incurred in defending an action that falls within the scope of the indemnity. The Directors’ and Officers’ insurance provides cover against costs and expenses involved in defending legal actions and any resulting payments arising from a liability to persons (other than Tempo) incurred in their position as a Director or Executive Officer unless the conduct involves a wilful breach of duty or an improper use of inside information or position to gain advantage. The insurance policy does not allow specific disclosure of the nature of the liabilities insured against or the premium paid under the policy. PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY No person has applied for the leave of Court to bring proceedings on behalf of the consolidated entity. DIRECTORS’ REPORT on the business. Tempo will continue to receive Job Keeper through to March 2021. The reduced in FY20 impact of Corona virus revenue continues to effect Company performance. We have implemented a program of ongoing WHS initiatives, procedures and protocols to maximise the safety of our staff, customers, and members of the public. Our current success in this area has reduced our LTIFR from over 8 to nil over the past year. We are in regular contact with our key clients to see if there are any additional services we can deliver given that our people are already at their sites. The Board and Management review business levels consistently and will continue to address costs and reductions in working capital where possible. We continue to fulfill our continuous disclosure obligation and provide updates if and when necessary. ENVIRONMENTAL PERFORMANCE During 2020 accreditations for: REGULATION AND the Group maintained its 1. Quality management system to ISO 9001; 2. Environment management system to ISO 14001:2015; and 3. Occupational health certification to ISO AS/NZS4801:2001. and safety DIVIDENDS PAID, RECOMMENDED AND DECLARED No dividends were paid, declared, or recommended since the start of the financial year. 2 DIRECTORS’ REPORT INFORMATION ON DIRECTORS AND COMPANY SECRETARY The directors of Tempo during the financial year and up to the date of this report are provided below, together with Company Secretary. MR GUIDO BELGIORNO-NETTIS AM – NON-EXECUTIVE CHAIRPERSON BE MBA, FIEAust Appointment: Experience and Expertise: Appointed as Non-Executive Chairman 11 July 2019 Appointed as Executive Chairman 29 April 2019 Appointed as Non-Executive Director 22 December 2016 Guido is Managing Director of the private company, Transfield Holdings Pty Ltd, which changed business focus in 2001 from Engineering and Construction to private equity. Leading up to this change, Guido held a number of key positions within the Transfield Group, including Managing Director, CEO Transfield Engineering and Construction, and Project Development Director. In 2015 he founded Angophora Capital Pty Ltd. Guido is Chairperson of the Australian Chamber Orchestra, and a Member of the Australian School of Business Advisory Council. He was named a Member of the Order of Australia in 2007 for service to the construction industry and the arts. He holds a Bachelor of Engineering from UNSW and an MBA from AGSM and is a Fellow of Engineers Australia. Guido is currently a member of the Group’s Nominations and Remuneration Committee; the HSE Committee and the Audit & Compliance Committee. During his appointment as a Non-Executive Director, but prior to his appointment as Non- Executive Chairperson, Guido was the Chairperson of the Group’s Risk, HSE and Commercial Committee and a member of the Nominations and Remuneration Committee and the Audit & Compliance Committee. Directorships: Current directorships in other listed companies: None Directorships in listed companies in the last three years: None MR WILLIAM HOWARD – EXECUTIVE DIRECTOR, CFO AND COMPANY SECRETARY BFinAdmin Appointment: Experience and Expertise: Appointed as Executive Director 15 August 2019 William brings significant experience to these roles having recently served for three years as the CFO of a Financial Services company in Western Sydney where he, realigned financial systems, operations and reporting. William also managed the due diligence processes for interested parties on potential acquisitions. Prior to this, William had performed the role of General Manager Finance to a mining services business in the Hunter Valley, whilst managing and operating his own labour hire company. The preceding decade saw William as Regional Operations Manager at AJ Lucas and previous to that with Lahey Constructions Pty Ltd as General Manager Finance. William holds a Bachelor of Financial Administration and is a qualified Accountant. Directorships: Current directorships in other listed companies: None Directorships in listed companies in the last three years: None 3 DIRECTORS’ REPORT MR CHARLES ROTTIER – NON-EXECUTIVE DIRECTOR BE (Hons), GAICD and FIEAust Appointment: Experience and Expertise: Appointed as Non-Executive Director 18 March 2020 Charles is an experienced executive and director with significant experience in engineering, construction and maintenance services companies. Charles has experience working in Australia, New Zealand, Papua New Guinea, Singapore, Thailand, Malaysia, China and the United Kingdom. Management responsibilities include full P&L responsibility for Australian and International business units, managing due diligence and integration of acquisitions and establishing new business opportunities for both stand-alone businesses and significant joint ventures. Until recently he was Chairman of LogiCamms. He is currently Chair of the Future Fuels CRC and has previously held the roles of CEO of Austin Engineering Limited and EGM Engineering and Construction at Transfield Services. Charles is the current Chairperson of the Group’s HSE Committee. Directorships: Current directorships in other listed companies: None Directorships in listed companies in the last three years: Chairman of LogiCamms from July 2019 to February 2020, Director of LogiCamms September 2017 to June 2019 MR CHRISTOPHER COOK – NON-EXECUTIVE DIRECTOR BSc (Hons), MBA Appointment: Experience and Expertise: Appointed as Non-Executive Director on 19 March 2021 Appointed as Alternate Non-Executive Director to David Iverach and Guido Belgiorno- Nettis on 26 November 2020 Chris is currently the Chief Executive Officer for Angophora Capital and serves as an investment advisor to Transfield Holdings. Chris has been involved in a number of water, telecommunication and renewable projects in Australia, Europe, USA and the Middle East. Chris served on the Advisory Board of Novatec Solar GmbH and remains on the Operations Committee for the Sydney Harbour Tunnel and Investment Committee for Transfield Holdings. Directorships: Current directorships in other listed companies: None Directorships in listed companies in the last three years: None DR DAVID IVERACH – NON-EXECUTIVE DIRECTOR BE (Hons), Grad Dip Fuel Technology, PhD Resignation: Experience and Expertise: Resigned as Non-Executive Director 4 March 2021 David has over 45 years’ experience at the executive level in the public and private sectors and has served on several boards. David’s time at Transfield included a broad range of strategic and operational positions. He played a leading role in the formation of several Transfield businesses and projects, including the formation of Transfield Services as a standalone business unit and the entry of Transfield into the renewable energy sector. Roles included Commercial 4 DIRECTORS’ REPORT Director of Transfield Construction, CEO Energy, CEO Investments and Project Director in the development phase of several large-scale infrastructure projects. Prior to joining Transfield in 1990, David was Director General of Transport in the NSW Government with oversight of rail, roads, ports, grain handling and public transport. David is the current Chairperson of the Group’s Nominations and Remuneration Committee and a member of the Audit & Compliance Committee. Directorships: Current directorships in other listed companies: None Directorships in listed companies in the last three years: None COMPANY SECRETARY MR WILLIAM HOWARD – COMPANY SECRETARY BFinAdmin Appointment: Experience and Expertise: Appointed as Executive Director 15 August 2020 and Company Secretary 15 July 2020 William brings significant experience to both these roles having served for the past three years as the CFO of a Financial Services company in Western Sydney where he, realigned financial systems, operations and reporting. William also managed the due diligence processes for interested parties on potential acquisitions. Prior to this, William had performed the role of General Manager Finance to a mining services business in the Hunter Valley, whilst managing and operating his own labour hire company. The preceding decade saw William as Regional Operations Manager at AJ Lucas and previous to that with Lahey Constructions Pty Ltd as General Manager Finance. William holds a Bachelor of Financial Administration and is a qualified Accountant. Directorships: Current directorships in other listed companies: None Directorships in listed companies in the last three years: None MEETINGS OF DIRECTORS The number of meetings of the Board of Directors and of each Board committee held during the financial year and the numbers of meetings attended by each director were: 5 HeldAttendedHeldAttendedHeldAttendedHeldAttendedGuido Belgiorno-Nettis1111221133William Howard1111221133David Iverach1111221133Charles Rottier199000055Christopher Cook²11000000Nomination and Remuneration CommitteeRisk, HSE and Commercial Committee1. Charles Rottier was appointed as Non-Executive Director on 18 March 2020Directors’ MeetingsAudit and Compliance Committee2. Christopher Cook was appointed as Alternate Non-Executive Director for David Iverach and Guido Belgiorno-Nettis on 26 November 2020 and appointed as Non-Executive Director on 19 March 2021 DIRECTORS’ REPORT DIRECTORS’ INTERESTS IN SHARES AND RIGHTS OVER SHARES Current directors’ relevant interests in shares of Tempo or options over shares in Tempo at the date of this report are detailed below. AUDITORS’ INDEPENDENCE DECLARATION A copy of the auditors’ independence declaration in relation to the audit for the financial year is provided within this financial report on page 12. NON-AUDIT SERVICES Fees paid to PKF (NS) Audit & Assurance Ltd Partnership for tax and consulting services to the Group totalled $61,150. SHARE OPTIONS Unissued shares As at the date of this report, there were no unissued ordinary shares under options. Shares issued as a result of the exercise of options During the financial year no options were exercised. 6 Guido Belgiorno-NettisWilliam HowardCharles RottierChristopher Cook 462,791 - 160,000 - - 2,800,000 83,322,371 3,324,246 Rights over ordinary sharesOrdinary Shares REMUNERATION REPORT |AUDITED REMUNERATION REPORT – AUDITED REMUNERATION POLICIES The Board policy for determining the nature and amount of remuneration of Directors and Executives is agreed by the Board of Directors as a whole. The Board structures remuneration so that it rewards those who perform and is strongly aligned with Tempo’s strategic direction and the creation of value to shareholders. The performance of Tempo depends on the quality of its employees. To grow, Tempo must attract, motivate, and retain skilled employees, which includes the Directors and Executives. To this end, Tempo utilises the principles of providing competitive rewards to attract and retain high calibre executives. the and remuneration executives, the Board takes into consideration the performance of the Group, operation, function, and geographic regions as well as that of the individual. The Board obtains professional advice where necessary to ensure that Tempo attracts and retains talented and motivated Directors and Employees who can enhance Tempo’s their contributions and leadership. In determining employees performance levels of through and variable For Executives, Tempo provides a remuneration package that incorporates both fixed cash-based remuneration remuneration consisting of short and long-term incentive opportunities, that may include, performance- based cash remuneration and share-based remuneration. Directors received fixed fees for their services. The contracts for service between Tempo and Directors and Executives are on a continuing basis, the terms of which are not expected to change in the immediate future aside from normal negotiations on contracts as they approach their conclusion and the normal annual review processes. No remuneration consultants were engaged during the year. 7 Short-Term Incentive Plan (STIP) For second tier Key Management Personnel (KMP), a Short-Term Incentive Plan (STIP) has been developed which enables eligible members to a cash bonus, based on annual performance of Tempo against a range of metrics and at the discretion of the Board. These targets include performance against financial metrics such as profitability, cash flow, overhead costs, and targets, such as order strategic positioning, investor engagement and management team development; operational metrics such as audit performance, system development and reporting; Risk and HSE targets. leadership intake; Long-Term Incentive Plan (LTIP) A Long-Term Incentive Plan (LTIP) has also been developed which will grant eligible employees to performance rights in Tempo. Any issue (at the discretion of the Board) under the LTIP would likely be subject to vesting over the following three years subject to performance of the Total Shareholder Returns (TSR) of Tempo versus the ASX300 over the vesting. The TSR is chosen to embed shareholder interests directly into the remuneration structure. Nil rights were vested during the year 2020. There were 12M performance rights cancelled and additional 5.9M performance rights granted to senior executives in 2020 due to the dilutionary impact of the rights issue completed by Tempo in December 2019. Non-Executive Director Remuneration Non-executive Directors receive fees and may also receive a share-based remuneration. Tempo determines for the maximum remuneration, including thresholds for share- based remuneration, for Directors by resolution. ASX listing rules require the aggregate Non- be executive determined periodically by a general meeting. remuneration Director’s amount REMUNERATION REPORT |AUDITED Voting and comments made at Tempo’s 22 May 2020 Annual General Meeting (‘AGM’) At the last AGM held on 22 May 2020, 99.7% of the votes received supported the adoption of the remuneration report for the year ended 31 December 2019. Tempo did not receive any specific feedback at the AGM regarding its remuneration practices. DIRECTORS’ COMPENSATION The directors during the year ended 31 December 2020 were: Guido Belgiorno-Nettis Executive Chairman - - - Appointed as Non-Executive Chairman 11 July 2019 Appointed as Executive Chairman 29 April 2019 Appointed as Non-Executive Director 22 December 2016 William Howard Executive Director - - Appointed as Executive Director 15 August 2019 Appointed as Chief Financial Officer and Company Secretary 15 July 2019 David Iverach Non-Executive Director Charles Rottier Non-Executive Director - Appointed as Non-Executive Director 18 March 2020 - Appointed as Non-Executive Director 10 December 2018 Christopher Cook Alternate Non-Executive Director for David Iverach and Guido Belgiorno-Nettis - Appointed as Alternate Non-Executive Director for David Iverach and Guido Belgiorno-Nettis 26 November 2020 - David Iverach resigned as Non-Executive Director 4 March 2021 - Chris Cook appointed as Non-Executive Director on 19 March 2021 EXECUTIVES’ COMPENSATION Other key management personnel during the year ended 31 December 2020 were: Paul Dalgleish Chief Executive Officer - Appointed as Chief Executive Officer 15 July 2019 John Cuffe Executive General Manager TAMS - Appointed as Executive General Manager TAMS 15 April 2020 8 REMUNERATION REPORT |AUDITED DIRECTORS AND KMP REMUNERATION FOR THE YEARS ENDED 31 DECEMBER 2020 AND 31 DECEMBER 2019 9 Post-employmentTermination paymentsTotal remunerationPerformance relatedSalary & FeesNon monetary benefitsSuper- annuationLong service leaveAnnual leaveShare OptionsPerformance Rights(%)202047,667-------47,6670%201916,601-------16,6010%2020340,000-26,030-22,813-7,699-396,5422%2019127,916-10,396-10,401-3,586-152,3002%202038,768-3,683-----42,4510%201914,846-1,410-----16,2560%202042,215-------42,2150%2019---------2020---------2019---------2020360,0005,65822,273-18,148-(415,769)-(9,691)4290%2019168,000-10,501-12,693-483,478-674,67172%2020206,346-16,67515,849---238,8700%2019---------2020---------2019303,026-16,493---(25,147)26,320320,692-8%2020---------2019171,318-12,970-----184,2880%2020---------20193,848-325-----4,1730%20201,034,9965,65868,661-56,810-(408,070)-758,0542019805,554-52,097-23,094-461,91726,3201,368,981John Cuffe ⁷Ian Lynass⁸Scott Macdonald⁹7. John Cuffe was appointed as Executive General Manager TAMS on 15 April 2020Christopher Cook⁵5. Christopher Cook was appointed as Alternate Non-Executive Director for David Iverach and Guido Belgiorno-Nettis on 26 November 2020 and appointed as Non-Executive Director on 19 March 20212. William Howard was appointed as Chief Financial Officer and Company Secretory on 15 July 2019, as Executive Director on 15 August 20193. David Iverach retired as Alternate Non-Executive Director to Guido Belgiorno-Nettis on 21 March 2018, was appointed Non-Executive Director on 10 December 2018 and resigned as Non-Executive Director on 4 March 2021.Ian Widdicombe¹⁰1. Guido Belgiorno-Nettis was appointed as Non-Executive Director on 22 December 2016, Executive Chairmann on 29 April 2019 and Non-Executive Chairman on 11 July 2019TOTAL DIRECTORS AND KMPLong-term benefitsShare-based paymentsPaul Dalgleish⁶David Iverach3Charles Rottier⁴Guido Belgiorno-Nettis1William Howard2Short-term benefitsPlease note that the comparatives have been restated for the classification of annual leave as a long-term benefit in line with accounting policy4. Charles Rottier was appointed as Non-Executive Director on 18 March 20206. Paul Dalgleish was appointed as Chief Executive Officer on 15 July 20198. Ian Lynass resigned as Managing Director on 29 April 2019 and resigned as Non-Executive Director on 16 August 20199. Scott Macdonald resigned as Chief Financial Officer and Company Secretary on 17 April 201910. Ian Widdicombe resigned on 03 April 2019 REMUNERATION REPORT |AUDITED SHAREHOLDING OF KMP Shares held in Tempo. RIGHTS HOLDING OF KMP The number of rights over ordinary shares in the parent entity held during the financial year by each Director and other members of key management personnel of the consolidated entity, including their personally related parties is set out below. 10 Balance 1 January 2020Balance at appointment as KMPIssued on exercise of performance rightsNet change other #Balance 31 December 2020Guido Belgiorno-Nettis183,322,371---83,322,371William Howard2324,246--3,000,0003,324,246David Iverach36,845,216---6,845,216Charles Rottier4---100,000100,000Christopher Cook⁵462,791---462,791Paul Dalgleish⁶---17,100,00017,100,000John Cuffe ⁷-----TOTAL 90,954,624--20,200,000111,154,6245. Christopher Cook was appointed as Alternate Non-Executive Director for David Iverach and Guido Belgiorno-Nettis on 26 November 2020 and appointed as Non-Executive Director on 19 March 20216. Paul Dalgleish was appointed as Chief Executive Officer on 15 July 20197. John Cuffe was appointed as Executive General Manager TAMS on 15 April 20203. David Iverach retired as Alternate Non-Executive Director to Guido Belgiorno-Nettis on 21 March 2018, was appointed Non-Executive Director on 10 December 2018 and resigned as Non-Executive Director on 4 March 2021.# These movements represent on-market purchase of shares during the year by the respective KMPs.Includes shares held directly, indirectly and beneficially by KMP.1. Guido Belgiorno-Nettis was appointed as Non-Executive Director on 22 December 2016, Executive Chairmann on 29 April 2019 and Non-Executive Chairman on 11 July 20192. William Howard was appointed as Chief Financial Officer and Company Secretory on 15 July 2019, as Executive Director on 15 August 20194. Charles Rottier was appointed as Non-Executive Director on 18 March 2020Balance at the start of the year ᵅGranted as remuneration ᵇRights cancelled ᶜRights forfeitedBalance at the end of the yearVested at end of yearVested and exercisable at end of yearVested and exercisable at end of yearWilliam Howard2,000,000800,000--2,800,000---Paul Dalgleish24,000,0005,100,000(12,000,000)-17,100,000---TOTAL26,000,0005,900,000(12,000,000)-19,900,000---a. The performance rights were granted at employment commencement and accordingly ongoing performance conditions were set as this was issued as a sign on bonus. The performance rights granted are subject to continued employment over five years of service.c. Perfomance rights cancelled and replaced with Loan funded sharesb. Additional performance rights granted to senior executives in 2020 due to the dilutionary impact of the rights issue completed in December 2019 REMUNERATION REPORT |AUDITED PERFORMANCE RIGHTS AWARDED, VESTED AND LAPSED DURING THE YEAR The table below discloses the number of performance rights granted, vested, or lapsed during the year. ADDITIONAL INFORMATION The earnings of the consolidated entity for the five years to 31 December 2020 are summarised below: DIRECTOR AND KMP AGREEMENTS Tempo currently has service agreements with its Executive and Non-executive Directors. The agreements detailing the formal terms and conditions of the appointment, expected time commitment, procedure regarding conflicts of interest, performance appraisal, remuneration, superannuation, and insurance arrangements. Tempo Constitution governs the election and appointment of directors, rotation of elected directors, casual vacancies, and eligibility for election. The terms and entitlements of Non-executive Directors are governed by normal employment law. The following summarises the key provisions of service agreements with executives: Name: Title: Agreement commenced: Remuneration revised: 01 May 2020 Details: Guido Belgiorno-Nettis Non-Executive Director 22 December 2016 $85,000 adjusted to $64,000 [Covid Adjustment] per annum inclusive of superannuation (if applicable) Name: Title: Agreement Commenced: Remuneration revised: 01 May 2020 Agreement ended: 4 March 2021 Details: David Iverach Non-Executive Director 10 December 2018 $65,000 adjusted to $52,000 [Covid adjustment] per annum inclusive of superannuation (if applicable) 11 Financial year grantedNumber of Rights GrantedGrant dateFair value per right at award date ($)Vesting dateExpiry dateNo. vested during yearNo. forfeited during yearValue of rights vested during the year ($)William Howard2020800,0005/02/20 0.02 14/07/24---Paul Dalgleish20205,100,0005/02/20 0.01 14/07/24---20202019201820172016$'000$'000$'000$'000$'000Revenue and other income (excluding interest income)30,42853,21741,69118,11481,142EBITDA776(2,683)(5,400)(1,794)6,393EBIT229(14,645)(6,039)(2,397)6,201Profit/(Loss) after income tax229(19,964)(5,648)(1,047)5,455Share price at financial year end ($)0.0610.0490.1450.2400.230Total dividends declared (cents per share)-----Basic earning/(loss) per share (cents per share)0.065(8.020)(2.344)(0.435)2.713The factors that are considered to affect total shareholders return ('TSR') are summarised below REMUNERATION REPORT |AUDITED Name: Title: Agreement commenced: Terms of agreement: Details: William Howard Executive Director 15 July 2019 Permanent full time Base salary of $295,000 per annum plus superannuation. Six months termination notice by either party, STI up to 40% and performance rights subject to the satisfaction of specified milestones and performance criteria (both individual and company). Name: Title: Agreement commenced: Details: Name: Title: Agreement commenced: Details: Charles Rottier Non-Executive Director 18 March 2020 $65,000 adjusted to $52,000 [Covid adjustment] per annum inclusive of superannuation (if applicable) Christopher James Cook Non-Executive Director 19 March 2021 $65,000 adjusted to $52,000 [Covid adjustment] per annum inclusive of superannuation (if applicable) Tempo has non-fixed term employment contracts with its Executives. The contracts detail the formal terms and conditions of the employment. Name: Title: Agreement commenced: Terms of agreement: Details: Name: Title: Agreement commenced: Terms of agreement: Details: Paul Dalgleish Chief Executive Officer 15 July 2019 Permanent full time Base salary of $360,000 per annum plus superannuation. Six months termination notice by either party, performance rights subject to the satisfaction of specified milestones and performance criteria of Tempo. John Cuffe Executive General Manager TAMS 15 April 2020 Permanent full time Base salary of $290,000 per annum plus superannuation. Six months termination notice for the first twelve-month period, reducing to three months after the initial twelve-month term. Signed in accordance with a Resolution of the Directors. William Howard Executive Director, Chief Financial Officer and Company Secretary Date: 31 March 2021 12 AUDITOR’S INDEPENDENCE DECLARATION AUDITOR’S INDEPENDENCE DECLARATION 13 TEMPO AUSTRALIA LTD AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 14 Note2020$'0002019$'000Revenue430,12452,944Other income4304273Revenue and other income30,42853,217Employee and director benefits expense610,42319,487Administration costs1,0261,332Occupancy costs320408Depreciation and amortisation 12, 131,1601,399Other expenses573394Project material costs5,01310,611Equipment and other subcontractor costs11,52122,634Listing and other statutory charges9794Interest and finance charges164198Other professional expenses355940Impairment expense12, 13, 144710,365Total expenses30,19967,862Profit/(Loss) before income tax expense229(14,645)Income tax (credit) / expense7-(5,319)Profit/(Loss) attributable to the members of the parent229(19,964)Other comprehensive income--Total comprehensive Profit/(Loss)229(19,964)Net Profit/(Loss) attributable to members of the parent entity229(19,964)Profit/(Loss) per shareBasic Profit/(Loss) – cents per share210.06(8.02)Diluted Profit/(Loss) – cents per share210.06(8.02)The accompanying notes from part of these financial statements.Consolidated entity TEMPO AUSTRALIA LTD AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 15 Note2020$'0002019$'000CURRENT ASSETSCash and cash equivalents86,6377,340Trade and other receivables92,75410,439Contract assets102,1631,016Inventories11166505Other assets424461Total current assets12,14419,761NON-CURRENT ASSETSPlant and equipment122,4593,338Other assets (non current)804-Total non-current assets3,2633,338Total assets15,40723,099CURRENT LIABILITIESTrade and other payables162,53310,443Interest bearing loans and borrowings ©171,0341,285Provisions 18942805Total current liabilities4,50912,533NON-CURRENT LIABILITIESInterest bearing loans and borrowings (nc)171,2501,948Provisions (nc) 1879118Total non-current liabilities1,3292,066Total liabilities5,83814,599Net assets 9,5698,500EQUITYContributed equity 1984,84284,056Share option reserve191,6342,042Accumulated losses(76,907)(77,598)Total equity9,5698,500The accompanying notes from part of these financial statements.Consolidated entity TEMPO AUSTRALIA LTD AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020 16 Contributed equityAccumulated lossesShare Option ReserveTotal equityNote$'000$'000$'000$'000At 1 January 201980,341(57,636)1,58024,285Loss for the year-(19,962)-(19,962)Other comprehensive income----Total comprehensive loss -(19,962)-(19,962)Share issues3,915--3,915Share based payments--495495Reversal of unvested options--(33)(33)Cost of share raising(200)--(200)At 31 December 201984,056(77,598)2,0428,500At 1 January 202084,056(77,598)2,0428,500Profit for the year-229-229Other comprehensive income----Total comprehensive profit -229-229Share issues804--804Share based payments--5454Transfer on the cancellation of performance rights-462(462)-Cost of share raising(18)--(18)At 31 December 202084,842(76,907)1,6349,569The accompanying notes from part of these financial statements. TEMPO AUSTRALIA LTD AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020 17 Note2020$'0002019$'000CASH FLOW FROM OPERATING ACTIVITIESReceipts from customers35,33051,652Payments to suppliers and employees(34,517)(50,441)Interest and finance charges paid(213)(198)Interest received4945Net cash generated by operating activities206491,058CASH FLOW FROM INVESTING ACTIVITIESProceeds from sale of property, plant and equipment43812Payments for property plant and equipment(103)(353)Net cash generated by /(used in) investing activities335(341)CASH FLOW FROM FINANCING ACTIVITIES(Raising costs)/proceeds from issue of equity instruments19(41)3,715Proceeds from borrowings17-16,415Repayment of borrowings17(1,646)(18,273)Net cash (used in) / generated by financing activities(1,687)1,857Net increase (decrease) in cash and cash equivalents(703)2,574Cash and cash equivalents at beginning of year7,3404,766Total cash and cash equivalents at the end of the year6,6377,340The accompanying notes from part of these financial statements.Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 1 Corporate information 2.2 Change in accounting policy The consolidated financial statements of Tempo Australia Limited (Tempo) and its subsidiaries (collectively, the Group) were authorised for issue in accordance with a resolution of the director’s 31 March 2021. Tempo is a for profit company limited by shares, incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange. Tempo’s registered office is c/o Company Matters Pty Limited, Level 12, 680 George Street, Sydney NSW 2000 The consolidated financial statements are present- ed in Australian dollars which is the parent entity’s functional and presentation currency. The nature of the operations and principal activities of the consolidated entity are described in the Directors’ Report. Rounding The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) where noted ($’000) under the option available to Tempo under ASIC Corporations in Financial/Directors’ Reports) Instrument 2016/191. Tempo is an entity to which this legislative instrument applies. (Rounding 2 Significant accounting policies Basis of preparation The consolidated financial statements are general- purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting authoritative Standards, pronouncements of the Australian Accounting Standards Board (AASB). other and New and amended accounting standards and interpretations amended The consolidated entity has adopted all of the new and Accounting or Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Standards Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. following Accounting The Interpretations are most consolidated entity: Standards to relevant and the Conceptual Framework for Financial Reporting (Conceptual Framework) The consolidated entity has adopted the revised Conceptual Framework from 1 January 2020. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards, but it has not had a material impact on the consolidated entity's financial statements. New Accounting Standards and Interpretations not yet mandatory or early adopted Standards Accounting and Australian Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 31 December 2020. Management do not expect material impact to arise for the consolidated entity from the future application of these new or amended Accounting Standards and Interpretations. Basis of consolidation The consolidated financial statements include the financial position and performance of controlled 18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 entities from the date on which control is obtained until the date that control is lost. liabilities, equity, Intragroup assets, income, expenses and cashflows relating to transactions between entities in the consolidated entity have been eliminated in full for the purpose of these financial statements. Appropriate adjustments have been made to a controlled entity’s financial position, performance, and cash flows where the accounting policies used by that entity were different from those adopted by the consolidated entity. All controlled entities have a 30 June financial year end. A list of controlled entities is contained in Note 24 to the financial statements. Subsidiaries Subsidiaries are all entities over which the parent has control. Control is established when the parent 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 relevant activities of the entity. Summary of significant accounting policies a. Current versus non-current classifications The Group presents assets and liabilities in the financial position based on a statement of current/non-current classification. An asset is current when it is: • Expected to be realised or intended to be sold or consumed in the normal operating cycle. • Held primarily for the purpose of trading. • Expected to be realised within twelve months after the reporting period. or • Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. 19 A liability is current when: • • • It is expected to be settled in the normal operating cycle. It is held primarily for the purpose of trading. It is due to be settled within twelve months after the reporting period. or • There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Group classifies all other liabilities as non- current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. b. Revenue from contracts with customers from contracts with customers Revenue is recognised when goods and services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods and services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customer. Maintenance and construction electrical services The Group provides maintenance and construction electrical services. The Group assesses each contract to identify the performance obligations and transaction price within the contract. The total is allocated to performance transaction price obligations based on relative standalone selling prices. the those contracts where customer For simultaneously receives and consumes the goods and service provided by the Group; the Group’s performance creates or enhances an asset that the is created or customer controls as the asset enhanced; or work is performed on assets that have no alternative use to the Group and the Group has a right to payment for performance to date, revenue is recognised over time. Where the criteria to recognise revenue over time is not satisfied the group recognises revenue at a point in time. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 If the consideration in the contract includes a variable amount, typically for cost plus contracts or contracts with a schedule of rates, the Group estimates the amount of the consideration to which it is entitled in exchange for transferring the goods and services to the customer. The variable consideration is estimated at contract inception and constrained until is highly probable that a significant reversal of the cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Certain contracts are subject to claims which are enforceable under the contract. If the claim does not result in any additional goods or services, the transaction price is updated, and the claim accounted for as variable consideration. it Where appropriate, the Group applies the variable consideration allocation exception to allocate variable consideration to distinct services in a contract where the contract includes a series of distinct services that form a single performance obligation. For other contracts where the Group has a right to consideration in an amount that corresponds directly with the value to the customer of the Group’s performance completed to date, the Group utilised the practical expedient to recognise revenue in the amounts to which the Group has a right to invoice. In all other cases, in recognising revenue over time, the group applies an input method to measure the Group’s the performance obligation by comparing costs incurred to date, mainly labour and consumables, to the total expected costs. satisfying progress towards Project fulfilment costs Contract fulfilment costs are expensed as incurred except where they generate or enhance resources of the Group that will be used to satisfy future performance obligations in which case, they are capitalised and amortised over the course of the contract. 20 Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group transfers goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration. If the Group’s right to an amount of consideration is unconditional (other than the passage of time), the contract asset is classified as a receivable. of significant disclosures The accounting judgements, estimates and assumptions relating to from contracts with customers are revenue provided in Note 3. c. Government grants Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset. When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released to profit or loss over the expected useful life of the asset, based on the pattern of consumption of the benefits of the underlying asset by equal annual instalments. During the year, the Group was entitled to receive the Job Keeper payments, which had been recognised as compensation to the employee expenses. d. Income tax income tax assets and Current income tax Current liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 the reporting date in the countries where the Group operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax in which returns with respect to situations applicable to interpretation and establishes provisions where appropriate. regulations are subject tax Deferred tax Deferred tax is provided using the full liability balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences, except: • When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. • Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except: • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination 21 • and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it reflects new information obtained about facts and circumstances that exist at the acquisition date that, if known, would have affected the amount recognised at that date were recognised during the measurement period or recognised in profit or loss. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. Tax consolidated group Tempo and its wholly owned Australian resident subsidiaries formed a tax consolidated group with effect from 1 July 2005. In addition to its own current and deferred tax amounts, Tempo also recognises the current tax liabilities (or assets) and deferred tax liabilities (or assets) arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group. e. Property, plant and equipment Property, plant and equipment is carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a re-valued asset. A formal assessment of the recoverable amount is made when impairment indicators are present. The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. from 22 included Subsequent costs are in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are recognised as an expense in the statement of comprehensive income during the financial period in which they are incurred. Depreciation is provided on a straight-line basis and diminishing-value basis over the asset’s useful life to the consolidated entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of the unexpired period of the lease and the estimated useful lives of the improvements. The useful lives used are listed as below: f. Right of use assets recognised at right-of-use asset A the is 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 Asset ClassUseful liveFurniture and fixtures5 – 10 yearsComputer equipment4 yearsPlant & Equipment4 yearsMotor Vehicles6 yearsRight of Use1 – 3 years NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 to impairment or adjusted for any remeasurement of lease liabilities. The consolidated entity 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. g. Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Refer to Note 13 for further details. The useful lives of intangible assets are assessed as either finite or indefinite. life and assessed Intangible assets with finite lives are amortised over for the useful economic impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the depreciation and amortisation expense category. Intangible assets with indefinite useful lives are not amortised but are tested for impairment annually at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. indefinite An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or where no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss. Intangible assets have been recognised relating to the acquisition of customer contracts through business combinations. These assets have been measured at their fair value at the date of acquisition and are amortised using the straight-line method over periods of between 2.5 and 3 years. h. Goodwill is carried at cost Goodwill less accumulated impairment losses. Goodwill is calculated as the excess of the sum of: • The consideration transferred and any non- controlling interest; and • The acquisition date fair value of any previously held equity interest over the acquisition date fair value of net identifiable assets acquired in a business combination. i. Financial instruments Financial instruments are recognised initially on the date the that the Group becomes party contractual provisions of the instrument. to On initial recognition, all financial instruments are measured at fair value plus transaction costs. Financial assets All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Classification On initial recognition, financial assets are measured at amortised cost. 23 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets. The Group uses the presumption that an asset which is more than 30 days past due has seen a significant increase in credit risk. Amortised cost Assets measured at amortised cost are financial assets where: • • the business model is to hold assets to collect contractual cash flows; and the contractual terms give rise on specified dates to cash flows are solely payments of principal and interest on the principal amount outstanding. The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position. Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate method less provision for impairment. Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on derecognition is recognised in profit or loss. Impairment of financial assets and contract assets Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets: • and • financial assets measured at amortised cost; contract assets. reasonable and When determining whether the credit risk of a financial assets has increased significant since initial recognition and when estimating ECL, the Group considers supportable information that is relevant and available without undue cost or effort. This includes both quantitative and analysis based on the Group's historical experience and informed credit assessment and including forward looking information. information qualitative and The Group uses the presumption that a financial asset is in default when: • • the other party is unlikely to pay its credit obligations to the Group in full, without recourse to actions such as realising security (if any is held); or the financial assets are more than 90 days past due. Credit losses are measured as the present value of the difference between the cash flows due to the Group in accordance with the contract and the cash flows expected to be received. This is applied using a probability weighted approach. Trade receivables and contract assets Impairment of trade receivables and contract assets have been determined using the simplified approach in AASB 9 which uses an estimation of losses. The Group has lifetime expected credit determined the probability of non-payment of the receivable and contract asset and multiplied this by the amount of the expected loss arising from default. The amount of the impairment is recorded in a separate allowance account with the loss being recognised in other expense. Once the receivable is determined to be uncollectable then the gross the carrying amount associated allowance. is written off against Where the Group renegotiates the terms of trade receivables due from certain customers, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in profit or loss. Other financial assets measured at amortised cost Impairment of other financial assets measured at amortised cost are determined using the expected credit loss model in AASB 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12 months is recognised. Where the 24 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 asset has experienced significant increase in credit risk then the lifetime losses are estimated and recognised. its recoverable amount, the asset exceeds is considered impaired and is written down to its recoverable amount. Financial liabilities The Group measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective interest rate method. The financial liabilities of the Group comprise trade payables, bank and other loans and lease liabilities. j. Inventories Inventories are valued at the lower of cost and net realisable value and are comprised entirely of consumables. Cost is determined on a FIFO basis of the direct costs of materials. Inventories determined to be obsolete or damaged are written down to net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. k. Impairments of non-financial assets Further disclosures relating to impairment of non- financial assets are also provided in the following notes: • • Intangible assets - Note 13 Goodwill - Note 14 The Group assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value- in-use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU In assessing value-in-use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. its The impairment calculation is performed by the Group using a value-in-use model with discounted cash flows. The Group bases impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets forecast are allocated. These budgets and calculations generally cover a five-year period. A long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses of continuing operations are recognised in the statement of profit or loss in impairment expense. losses no For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised longer exist or have impairment decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in 25 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 prior years. Such reversal is recognised in the statement of profit or loss. for goodwill by assessing Goodwill is tested for impairment annually in December and when circumstances indicate that the carrying value may be impaired. Impairment is the determined recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets with indefinite useful lives are tested for impairment annually as at 31 December level, as appropriate, and when at the CGU circumstances indicate that the carrying value may be impaired. l. Cash and short-term deposits Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above. Outstanding bank overdrafts are considered as current liabilities. m. Treasury shares instruments that are reacquired Own equity (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue, or cancellation of the Group’s own equity instruments. n. Provisions contract, provision to be reimbursed, for example, under an insurance is the recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. reimbursement If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Superannuation, annual o. service leave leave and long Superannuation The Group makes contributions as defined contributions. There is no defined benefit superannuation scheme operated by the Group. Long service leave and annual leave The Group does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each reporting date. The Group recognises a liability for long service leave and annual leave measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. p. Earnings per share 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. When the Group expects some or all of a Basic earnings per share is calculated by dividing the profit attributable to owners of Tempo by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share adjusts the basic earnings per share to take into account the after- income tax effect of interest and other financing 26 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. q. Share based payments of employees the Group Some receive remuneration in the form of share-based payments, whereby as consideration for equity instruments (equity-settled transactions). employees services render Equity-settled Transactions cost of equity-settled The is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are given in Note 28. transactions is recognised in employee benefits That cost expense (Note 6), together with a corresponding increase in equity (share-based payment reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate 27 expensing of an award unless there are also service and/or performance conditions. No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting is satisfied, provided that all other condition performance and/or conditions are satisfied. service When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, for any modification that increases the total far value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss. is recognised is The dilutive effect of outstanding options in the reflected as additional share dilution computation of diluted earnings per share (further details are given in Note 21). r. Share Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options which vest immediately are recognised as a deduction from equity, net of any tax effects. s. Segment reporting Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Critical Accounting 3 Judgments Estimates and Estimates and assumptions The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. the disclosure of contingent Judgements the Determining timing of electrical and telecommunications repairs and maintenance services The Group concluded that revenue for electrical and repairs and maintenance telecommunications services is to be recognised over time because the customer simultaneously receives and consumes the benefits provided by the Group. The fact that another entity would not need to re-perform work that the Group has provided to date demonstrates that the customer simultaneously receives and consumes the benefits of the Group’s performance as it performs. Determining the timing of construction and electrical project work The Group concluded that revenue for electrical project work and construction work is to be recognised over time. Factors that were considered include the act that the Group’s performance does not create an asset with an alternative use, the Group is entitled to payment for performance to date and the customer controls the asset as the entity creates or enhances it. The Group determined that the input method based on costs incurred to date compared to total expected costs is a direct relationship between the Group’s effort (i.e., costs incurred) and the transfer of services to the customer. 28 The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur. Revenue from contracts with customers – Variable consideration Certain contracts contain provisions for liquidated damages which would be considered variable consideration. The group has applied judgement in not constraining this variable revenue consideration on the basis that there is no history of in relation to significant reversals of revenue liquidated damages. for Provision for expected credit losses of trade receivables and contract assets The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type). The provision matrix is initially based on the Group’s historical observed default rates and adjusted for forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The in amount of ECLs circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be is sensitive to changes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 representative of customer’s actual default in the future. The information about the ECLs on the Group’s trade receivables and contract assets is disclosed in Note 9. Taxes Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. The Group has $17,069K (2019: $15,070K) of tax losses carried forward. These losses relate to subsidiaries that have a history of losses, do not expire, and may be used to offset taxable income elsewhere in the Group. The Group had determined that while its deferred tax assets were recoverable based on the expectation of future taxable income but had been reversed in the assets at 30 June 2019 as a matter of prudence. Further details on taxes are disclosed in Note 7. Impairment review Financial assets (including receivables) A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. The Group considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised as profit or loss and in an allowance account against reflected receivables. impaired asset the continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss. Interest on Non-financial assets The carrying amounts of the Group’s non-financial assets (other than inventories, construction work in progress and deferred tax assets) are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash- generating unit is the greater of its value in use and 29 allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired. is not tested NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Groups of assets (“the cash generating unit” or “CGU”). The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, is determined for the CGU to which the corporate asset belongs. recoverable amount then the its CGU exceeds An impairment loss is recognised if the carrying its amount of an asset or recoverable amount. losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill Impairment 4 Revenue and other income 30 2020$'0002019$'000Revenues from contracts with customers30,12452,944Interest revenue calculated using the effective interest method4945Other income255228Total revenue and other income30,42853,217Consolidated entityRevenue from contracts with customers by type of customer2020$'0002019$'000Government and infrastructure4,0744,304Commercial25,55547,022Education and aged care4951,461Resources-101Other-56Total revenues from contracts with customers30,12452,944Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 The transaction price allocated to the remaining performance obligations as described in Note 2.4(b) (unsatisfied or partially unsatisfied as of 31 December) is as follows: 5 Other expenses 6 Employee and director expenses 7 Income tax The major components of income tax expense for the years ended 31 December 2020 and 2019 are: 31 2020$'0002019$'000Within one year29115,338Total revenue and other income29115,338Consolidated entity2020$'0002019$'000Candidate screening cost285145Movement in allowance for expected credit losses(212)249Total other expenses73394Consolidated entity2020$'0002019$'000Salaries, wages and other expenses11,96917,679Job Keeper(2,513)-Superannuation expenses9131,313Share based payments54495Total employee and director expenses10,42319,487Consolidated entity2020$'0002019$'000Current income tax(25)1,654Deferred income tax2572Derecognition of deferred tax asset(7,045)Income tax expense reported in the income statement-(5,319)Consolidated entity2020$'0002019$'000Contributed EquityConversion of prior year balances to 26% tax rate (2019: 30%)82Blackhole Expense-(2)Capital raising cost amortisation2-Income tax (credit) / expense reported in the equity statement10-Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group’s application income tax rate is as follows: Deferred income tax at 31 December relates to the following: In 2019 the Group had written off a deferred tax asset on carried forward losses and unused tax credits. 32 2020$'0002019$'000Accounting loss before income tax229(14,645)Tax at Australia's statutory income tax rate of 26% (2019: 30%)(59)4,394Tax effect of amounts which are not deductible in calculating taxable income32(3,158)Conversion of prior year balances to 26% tax rate (2019: 30%)(655)490Others2-Adjustments the conversion of prior year balances to 26% tax rate (2019: 30%)655-Income tax benefit at the effective tax rate of 11.8% (2019: 6%)(25)1,726Provision for Current year income tax expense / (benefit)25(1,726)Derecognition of prior year DTA-(5,319)Income tax credit reported in the income statement-(5,319)Consolidated entity01 Revenue2020$'0002019$'000Deferred tax assetsCarried forward tax losses4,4404,521Research and development tax credits2,3412,341Accrued expenses77124Employee benefits263346Trade and other receivables2896Plant and equipment--Equity raising cost debited to equity261Offset of deferred tax liabilities(568)(238)Deferred tax asset not recognised(6,597)(7,252)Adjustments in respect of previous years14-Net deferred tax assets-0Deferred tax liabilitiesInventory-15Prepayment and receivables159Plant and equipment4672Intangibles--Works in progress507143Offset against deferred tax asset(568)(238)Net deferred tax liabilities--Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 The movement of the current and deferred tax relates to the following: 8 Cash and short-term deposits 9 Trade and other receivables Trade receivables are non-interest bearing and are generally on terms of 14 to 60 days. Included within Other receivables are term deposits and rental bonds of $438K (2019: $443K). Set out below is the movement in the allowance for expected credit losses of trade receivables: The information about the credit exposures is disclosed in Note 17. 33 Current Income Tax 2020$'000Deferred Income Tax 2020$'000Current Income Tax 2019$'000Deferred Income Tax 2019$'000Opening balance---5,318Income tax credit recognised in profit and loss---(5,318)R&D income recognised as government grant----Charged to equity-10--Charged to reserves----Offset the prior year DTA provision-(10)--Closing balance----Amounts recognised on the consolidated statement of financial positionDeferred tax asset----Closing balance----Consolidated entity2020$'0002019$'000Cash at bank and on hand3,6987,340Short term deposits2,939-Cash and cash equivalents6,6377,340Consolidated entity2020$'0002019$'000CURRENTTrade receivables2,27510,233Allowance for expected credit losses(109)(321)Other receivables588527Total current trade and other receivables2,75410,439Consolidated entity2020$'0002019$'000As at 1 January32163Provision for expected credit losses (Note 17)(212)258As at 31 December109321Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 10 Contract assets Set out below is the movement in the allowance for expected credit losses of contract assets: Contract assets are initially recognised for revenue earned from maintenance and constructions services as receipt of consideration is conditional on successful completion of performance obligations. Upon completion of these services and acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables. In 2020, $Nil (2019 Provision for doubtful debts: $Nil) was recognised as provision for expected credit losses on contract assets. No revenue was recognised during the year (2019: $Nil) for performance obligations satisfied in previous years. 11 Inventories 34 2020$'0002019$'000Contract assets2,1631,016Total contract assets2,1631,016Consolidated entity2020$'0002019$'000As at 1 January-51Provision for expected credit losses (Note 17)--Written off during the period--Reversed during the period-(51)Provision used during the period--As at 31 December--2020$'0002019$'000Consumables166505Total inventories166505 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 12 Plant and Equipment Reconciliation of the carrying amounts at the beginning and end of the current financial year: The carrying value of plant and machinery held under finance leases contracts at 31 December 2020 was $616K (2019: $912K). Additions during the year include Nil (2019: $142K) of plant and equipment and motor vehicles under finance leases. 35 2020$'0002019$'000Furniture and fixtures - gross carrying value at cost325364Furniture and fixtures - accumulated depreciation(138)(135)Net book value furniture and fixture187229Plant and equipment - gross carrying value at cost1,4211,365Plant and equipment - accumulated depreciation(504)(348)Net book value plant and equipment9171,017Computer equipment – gross carrying value at cost574108Computer equipment – accumulated depreciation(427)-Net book value computer equipment147108Motor vehicles – gross carrying value at cost2,5632,667Motor vehicles – accumulated depreciation(1,366)(889)Net book value motor vehicle1,1971,778Property - gross carrying value Cost414755Property - accumulated depreciation(403)(549)Net book value right of use assets - property11206Total gross carrying value at cost5,2975,259Total accumulated depreciation(2,838)(1,921)Total net book value2,4593,338Consolidated entityFurniture and fixtures$'000Plant and equipment$'000Computer equipment$'000Motor vehicles$'000Building$'000Total$'000Balance at 1 January 20193451,119416432-2,312Additions111113291,7005792,532Adjust on transition to IFRS 16---759176935Disposals(254)(37)(70)(12)-(373)Impairment---(626)(169)(795)Depreciation expense(68)(181)(183)(461)(380)(1,273)Balance at 31 December 20191341,0141921,7922063,338Additions718369490-713Disposals(5)(11)(5)(364)-(385)Impairment--(47)--(47)Depreciation expense(13)(169)(62)(721)(195)(1,160)Balance at 31 December 20201879171471,197112,459 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Certain leased assets under contracts are pledged as security for the related finance lease liability: 13 Intangible assets 14 Goodwill impairment During 2019, the Group assessed its goodwill and intangible assets for impairment. The Group considered the relationship between its market capitalisation and its book value, among other factors when reviewing for indicators of impairment. Management found that the market capitalisation of the Group was below the book value of its equity, indicating a potential impairment of goodwill and impairment of the assets. As part of assessing for impairment, it was determined that the cash generating units (CGUs) of the Group would be aggregated for the purposes of testing the goodwill of $9,230K due to the interrelated nature of operating segments. The recoverable amount of the aggregated CGU was determined based on a value-in-use calculation using cash flow projections from financial forecasts. This forecast was extrapolated to a five-year forecast based on the assumptions detailed below. The post-tax discount rate applied to cash flow projections was 11.50% and cash flows beyond the forecast period were extrapolated using a 2.4% growth rate that is the same as the long-term average growth rate for the electrical services industry. Trading during the six months to 30 June 2019 had been more difficult than had been anticipated. This led to management reassessing the forecasts used as inputs to the value in use calculations which directly impacted the results of the assessment. As a result of the analysis, it was concluded that the carrying value of the CGU exceeded its recoverable amount, and the goodwill associated with the CGU was subsequently recognised as a pre-tax impairment. In conjunction with the impairment of the goodwill management also impaired the customer contracts that had been recognised in conjunction with the goodwill when the assets were originally acquired. 36 Furniture and fixtures$'000Plant and equipment$'000Computer equipment$'000Motor vehicles$'000Building$'000Total$'000Balance at 31 December 2019---1,5834242,007Balance at 31 December 2020---1,123111,134Goodwill$'000Customer Relationships$'000Productivity Tool$'000Total$'000Balance at 1 January 20199,230466-9,696Amortisation-(126)-(126)Impairment(9,230)(340)-(9,570)Balance at 31 December 2019----Amortisation----Impairment----Balance at 31 December 2020---- NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 15 Segment reporting Segment reporting The Group has identified its operating segment based on internal management reporting that is reviewed by the Board of Directors (chief operating decision makers)) in assessing performance and determining the allocation of resources. All segments operate only in one geographical area, being Australia. (a) Segment performance 37 31-Dec-20Asset maintenance and serviceConstruction & electrical project workCorporate / unallocatedTotal$'000$'000$'000$'000RevenueSales15,96014,164-30,124Other revenue1526146304Total segment revenue16,11214,17014630,428Operating expenses(15,353)(13,365)(110)(28,828)Earnings before interest, tax, depreciation & amortisation (EBITDA)759805361,600Depreciation and amortisation(945)(193)(22)(1,160)Earnings before interest and tax (EBIT)(186)61214440Interest expense(113)(37)(14)(164)Income tax (credit)/expenses----Impairment of assets(33)(14)-(47)Net profit/(loss) for the year(332)561-22931-Dec-19Asset maintenance and serviceConstruction & electrical project workCorporate / unallocatedTotal$'000$'000$'000$'000RevenueSales22,93730,007-52,944Other revenue13110834273Total segment revenue23,06730,1153453,217Operating expenses(24,888)(30,671)(409)(55,968)Earnings before interest, tax, depreciation & amortisation (EBITDA)(1,821)(556)(375)(2,751)Depreciation and amortisation(439)(264)(695)(1,399)Earnings before interest and tax (EBIT)(2,260)(820)(1,070)(4,150)Interest expense(47)(45)(38)(131)Income tax (credit)/expenses--(5,319)(5,319)Impairment of assets(295)(8)(10,061)(10,365)Net profit/(loss) for the year(2,602)(874)(16,488)(19,964) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (b) Segment asset and liabilities Major customers The consolidated entity has a number of customers to which it provides services. The consolidated entity supplies a single external customer which accounts for 27% of external revenue (2019: 29%). The next most significant customer accounts for 25% (2019: 25%). 16 Trade and other payables 17 Financial liabilities 17.1 Financial liabilities: Interest-bearing loans and borrowing Tempo has a $10M Invoice Finance Facility with the National Australia Bank Limited (‘NAB’). This facility attracts a variable interest rate. At 31 December the effective rate was 5.02%. At 31 December 2020 $10M was unused (2019: $10M). It is secured by a first ranking general security interest, a security interest 38 31-Dec-20Asset maintenance and serviceConstruction & electrical project workCorporate / unallocatedTotal1. CURRENT ASSETS$'000$'000$'000$'000Total Assets5,0102,4677,93015,407Total Liabilities4,0651,0067675,83831-Dec-19Asset maintenance and serviceConstruction & electrical project workCorporate / unallocatedTotal$'000$'000$'000$'000Total Assets7,1468,8547,09923,099Total Liabilities4,9818,63398514,5992020$'0002019$'000Trade payables1,3945,013Other payables1,1395,430Total trade and other payables2,53310,443Consolidated entityInterest RateMaturity2020$'0002019$'000Current interest-bearing loans and borrowingsObligations under leases (Note 22)4.73%20219441,038Insurance Borrowing3.09%202190247NAB Invoice Finance Facility ($10,000,000 Facility)5.02%On Demand--Total current interest-bearing loans and borrowings1,0341,285Non Current interest-bearing loans and borrowingsObligations under leases (Note 22)4.83%2022-20231,2501,948Total non- current interest-bearing loans and borrowings1,2501,948Total interest-bearing loans and borrowings2,2843,233Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 registered pursuant to the Invoice Finance Facility Agreement and a Guarantee and Indemnity given by Tempo. The Group has an asset finance leasing facility with NAB of $3,450K. On 31 December 2020, the amount of the facility that was unused was $2,827K. On 31 December 2019, the Group has an asset finance leasing facility with NAB of $3,450K and the amount of the facility that was unused was $2,538K. Other leases in relation to plant, vehicles and other equipment amount to $1,577K. At 31 December 2019 the amount relating to other leases was $2,074K. All finance liabilities are repayable on demand with the exception of leases. Refer to Note 22 for the relevant maturity profile of these leases. 17.2 Financial liabilities: Bank guarantees and surety bonds The Group has surety bond facilities of $7,000K (2019: $7,000K). At 31 December 2020 bonds valued at $1,583K had been issued (2019: $2,002K). The bond premium rate is 1.5% per annum on the face value of each bond. As at 31 December 2020 Tempo had bank guarantees issued of $286K (2019: $286K) which were secured by term deposits. Corresponding term deposits of $286K (2019: $286K) are recorded in other receivables (refer Note 9). 17.3 Fair values The carrying value of all current financial assets and liabilities approximates the fair value largely due to the short-term maturity of these instruments. Lease liabilities are recognised at a discount value implicit in the leases (refer Note 22). Set out below is a comparison of the carrying amounts and fair values of the Group’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values: The fair value of obligations under leases is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value. 39 Carrying amount$'000Fair value$'000Carrying amount$'000Fair value$'000Non-current interest-bearing loans and borrowings1,2501,2901,9482,053Obligations under finance leases (Note 22)1,2501,2901,9482,05320202019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Changes in liabilities arising from financing activities The ‘Other’ column includes is the reclassification of non-current portion of interest-bearing loans and borrowings (finance leases) to current due to the passage of time. 17.4 Financial instruments risk management objectives and policies The Group’s principal liabilities comprise loans and borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial assets include trade receivables and cash and short-term deposits that derive directly from its operations. The Group has determined that there is no material market, credit, liquidity, or interest risk in relation to the cash or other receivables held in deposits. The Group is exposed to market risk, credit risk and liquidity risk. Interest rate risks are not considered as significant. The Group’s senior management oversees the management of these risks under the policies approved by the Risk, HSE and Commercial Committee and the Board. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market price. Market risk comprises three types of risk, interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and debt. The sensitivity analysis in the following sections relate to the position as of 31 December in 2020 and 2019. Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s long-term debt is secured with fixed interest rates. All long-term deposits have variable interest rates. As a result, the Board believes there is no material interest rate risk. 40 1-Jan-20$'000Cash flows$'000New Leases$'000Lease recognise as AASB 16$'000Others$'00031-Dec-20$'000Current interest-bearing loans and borrowings (excluding items listed below)247(417)--26191Current obligations under leases1,038(1,180)128-957943Non-current obligations under leases1,948(49)309-(958)1,250Total liabilities from financing activities3,233(1,646)437-2602,284Consolidated entity1-Jan-19$'000Cash flows$'000New Leases$'000Lease recognise as AASB 16$'000Others$'00031-Dec-19$'000Current interest-bearing loans and borrowings (excluding items listed below)1,149(902)---247Current obligations under leases177(956)3623921,0631,038Non-current obligations under leases843-1,625543(1,063)1,948Total liabilities from financing activities2,169(1,858)1,987935-3,233Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s has minimal to this risk profile. Other price risk The Group does not have any equity instruments or commodity risk exposure. Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with reputable banks and financial institutions. Credit quality of a customer is assessed prior to engagement. Outstanding customer receivables are regularly monitored. At 31 December 2020 the Group had 2 customers (2019: 5) that owed the Group more than $200K each and accounted for approximately 64% (2019: 84%) of all receivables. There were 1 customer (2019: 5) with balances over $500K accounting for 48% of all receivables (2019: 84%) of the total receivables balance. An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses (“ECL”). The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions, and forecasts of future economic conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 9. The Group does not hold collateral as security. The Group evaluates the concentration risk with respect to trade receivables as low, as its customers are located within several industries and operate in largely independent markets. The customers are grouped into four different categories: Historically the Group’s ECL has been extremely low. Impairment charges over the 5 years 2015 to 2020 inclusive averages to 1.71% of the total trade receivables per year. 41 2020$'000Risk Assessment2019$'000Listed public companies1,631Very Low1,874Government departments/agencies313Very Low357Not for profit organisations-Very Low98Commercial businesses331Very Low811Total trade receivables2,2753,140Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Set out below is the information about the credit risk exposure on the Groups trade receivables and contract assets using a provision matrix: Liquidity Risk The Group monitors its risk of a shortage of funds using by utilising liquidity planning tools across a 15- month horizon. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of short-term borrowings and finance leases. The Group assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Group has access to a variety of sources of funding and the majority of the debt maturing within 12 months can be rolled over with existing lenders. 18 Provisions Employee benefits Provision for employee benefits represents amounts accrued for annual leave, rostered days off, staff retentions and long service leave. 42 Contract assets0-30 Days31-60 Days61-90 Days>91 DaysTotal$'000$'000$'000$'000$'000$'000Expected credit loss rate0.00%0.00%0.00%0.00%60.89%2.46%Total gross carrying amount2,1631,1917321731794,438Expected credit loss----109109Total ECL Provision----109109Consolidated entity31 December 2020Contract assets0-30 Days31-60 Days61-90 Days>91 DaysTotal$'000$'000$'000$'000$'000$'000Expected credit loss rate0.00%0.08%0.49%9.50%17.81%2.85%Total gross carrying amount1,0166,2071,6391,41097711,250Expected credit loss-58134174321Total ECL Provision-5813417432131 December 2019Consolidated entity2020$'0002019$'000Current provisionsEmployee benefits942805Total current provisions942805Non-current provisionsEmployee benefits79118Total Non-current provisions79118Total provisions1,021923Consolidated entity2020$'0002019$'000Carrying amount at the beginning of period923737Additional provision made516786Amounts used(418)(600)Total employee benefits provisions1,021923Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 19 Contributed equity 19 (a) Ordinary Shares Fully paid ordinary shares carry one vote per share and carry the right to dividends. 19 (b) Share based payments reserve The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 28 for further details of the plan. 19 (c) Capital risk management For the purpose of the Group’s capital management, capital includes issued capital, and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to maximise the shareholder value. The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the consolidated entity may adjust the dividends paid to shareholders or issue new shares. The consolidated entity’s capital risk management policy remains unchanged from the Annual Report for the year ended 31 December 2019. 43 Note2020$'0002019$'000Ordinary shares fully paid19 (a)84,84284,05684,84284,056Consolidated entityMovements in ordinary shares# of shares$'000# of shares$'000Balance as at the beginning of the year342,535,50684,056240,804,58179,491Shares issued – proceeds received20,100,000804101,730,9253,915Costs of share issue-(18)-(200)Release of other contributed equity---850Balance as at the end of the year362,635,50684,842342,535,50684,056Consolidated entity2019Consolidated entity20202020$'0002019$'000Balance as at the beginning of the year2,0421,580Share-based payments54487Reversal of unvested options(462)(25)1,6342,042Balance as at the end of the year NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 20 Cash flow reconciliation 21 Profit / (Loss) per share Basic profit/(loss) per share is calculated by dividing the profit/loss for the year attributable to ordinary equity holders of the parent by the weighted average number of the ordinary shares outstanding during the year. There were no options outstanding at the end of 2020 (2019: Nil). The following table reflects the loss and share data used in the basic EPS calculations: There have been no transactions involving ordinary shares between the reporting date and date of completion of these financial statements. 44 2020$'0002019$'000Reconciliations of the net loss after tax to the net cash flows from operating activitiesNet Profit/(Loss)229(19,964)Non-operating cash itemsDepreciation1,1601,273Amortisation-125Impairment of intangible and tangible assets-10,365Provisions for expected credit losses120207(Profit)/loss on sale of assets49(5)ESOP,option and performance rights expenses(12)462Gain on settlement of contingent consideration fro KP Electric acqusition--Changes in assets and liabilitiesTrade and other receivables and contract assets4,496(3,320)Inventories339(103)Other assets37(67)Trade and other payables(5,863)6,577Provisions94190Deferred tax assets-5,318Net Operating cash inflows/(outflows)6491,058Consolidated entity2020$'0002019$'000The following reflects the profit/(loss) and share data used in the calculations of basic and diluted profit/(loss) per shareNet profit/(loss) after tax229(19,964)Profit/(loss) used in calculating basic and diluted profit/(loss) per share229(19,964)Weighted average number of ordinary shares used in calculating basic loss per share353,824,547248,940,380Effect of dilutive securitiesShare options--Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share353,824,547248,940,380Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 22 Lease expenditure commitments Lease commitments The Group has leases for various items of plant and machinery. The Group’s obligations under leases are secured by the lessor’s title to the leased assets. Future minimum lease payments under leases and hire purchase contracts, together with the present value of the net minimum lease payments are, as follows: Note 2.2 provides detail of the Group’s adoption of AASB 16: Leases. The Group applied the modified retrospective approach and as such, comparative disclosure continues to distinguish between operating and finance leases. 23 Capital Commitments The entity had no capital commitments as at 31 December 2020 (2019: Nil) 24 Group information Information about subsidiaries The consolidated financial statements of the Group include: 45 2020$'0002019$'000Depreciation charge for right-of-use assets: - Motor vehicles651408 - Property195331Additions to right-of-use assets: - Motor vehicles4371,992 - Property--Carrying value of right-of-use assets: - Motor vehicles1,1231,583 - Property11424Interest expense on lease liabilities94147Short-term lease expense through profit or loss--Low value asset lease expense through profit or loss--Total cash outflow for leases1,3591,064Consolidated entityMinimum Payments$'000Present value of Payment$'000Minimum Payments$'000Present value of Payment$'000Within one year1,0279441,1581,038After one year but not more than five years1,2901,250958884More than five years--1,0951,064Total minimum lease payments2,3172,1953,2112,986Less amounts representing finance charges(124)(119)(225)-Present value of minimum lease payments2,1932,0762,9862,98620202019Consolidated entity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 The immediate and ultimate holding company of the Group is Tempo Australia Ltd which is based and listed in Australia. 25 Related party disclosures Note 24 provides information about the Group’s structure, including details of the subsidiaries and the holding company. The following table provides the total amount of transactions that have been entered into with related parties for the relevant year. Each of the above entities is considered to be a related party due to common directorships between them and the Group. The balances relate to director fee and consultancy service fee. Outstanding balances $6K for Angophora Capital Pty Ltd and $10K for CLR Consulting Pty Ltd related to director fees at the year-end, which are unsecured and interest free. Compensation of key management personnel of the Group 26 Business combinations There were no business acquisitions in 2020 and 2019. 46 Country of Incorporation20202019Tempo Resources Solutions Pty LtdAustralia100%100%Tempo Engineering Pty LtdAustralia100%100%Cablelogic Pty Ltd Australia100%100%Tempo Construction & Maintenance Pty LtdAustralia100%100%Tempo Personnel Management Pty LtdAustralia100%100%Tempo Global Pty LtdAustralia100%100%KP Electric (Australia) Pty LtdAustralia100%100%Consolidated entityPurchases from related parties2020$'000Purchases from related parties2019$'000Angophora Capital Pty Ltd144 60 D&T Superannuation Pty Ltd-20 Sadsacks Holding Pty Ltd-2 CLR Consulting Pty Ltd42 -Consolidated entity2020$'0002019$'000Short-term employee benefits834 864 Post-employment benefits52 58 Long-term benefits-29 Termination benefits41 26 Share-based payment(408)462 5191,439Consolidated entityTotal benefits NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 27 Parent company information 28 Share based payments An Employee Share Incentive Right Plan (ESIRP) was established by Tempo and approved by shareholders at the general meeting held in May 2013 and renewed at the general meeting held on 31 May 2016. Under the ESIRP Tempo may grant options and/or performance rights over ordinary shares in the parent entity to certain employees of Tempo. The options and/or performance rights are issued for nil consideration and are granted in accordance with guidelines established by the ESIRP. The expense recognised for employee services received during the year was $53K (2019: $495K, $462K had been backed out to retain earning in 2020). Movements during the year The following tables illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options and performance rights during the year. Performance rights granted during the year are valued with reference to the share price at the grant date. 47 2020$'0002019$'000Loss after income tax-16,823Total comprehensive loss-16,823Total current assets7,0757,030Total assets7,9307,100Total current liabilities11,5039,443Total liabilities11,5219,536EquityContributed equity83,39384,602Share based payment reserve1,3761,784Accumulated losses(88,360)(88,822)Total equity(3,591)(2,436)ContingenciesThe parent entity had no contingent liabilities as at 31 December 2020 (2019: Nil).Capital CommitmentsThe parent entity had no contingent liabilities as at 31 December 2020 (2019: Nil).Performance rights# of sharesWAEP# of sharesWAEPOutstanding as 1 January26,000,000-500,000-Granted during the year5,900,000-26,000,000-Exercised during the year----Forfeited during the year--(500,000)-Cancelled Prior year Performance rights(12,000,000)---Outstanding at 31 December19,900,000-26,000,000-Consolidated entity2020Consolidated entity2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 29 Auditors remuneration The auditor of Tempo is PKF (NS) Audit & Assurance Ltd Partnership from 31 December 19, and before that it was Ernst & Young Australia. 1. 2. Among $91.8K in 2019, $40K was paid to Ernst & Young Australia for FY2018 additional auditing charges. PKF (NS) Audit & Assurance Ltd Partnership were paid $61,150 for consulting service provided during the year 2020 (2019: $22,800) 30 Post balance sheet events There were no post balance date material events. 31. Contingencies The consolidated entity has no contingent assets or liabilities as at 31 December 2020 (2019: Nil). 48 2020$2019$Audit or review of the financial reportsErnst & Young Australia -91,800¹PKF (NS) Audit & Assurance Ltd Partnership²76,50050,000Total76,500141,800Consolidated entity DIRECTORS’ DECLARATION DIRECTORS’ DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2020 The Directors declare that the financial statements and notes are in accordance with the Corporations Act 2001 and: a. Comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements. b. Give a true and fair view of the financial position of the consolidated entity as at 31 December 2020 and of its performance as represented by the results of their operations and its cash flows, for the year ended on that date; and c. Comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. In the opinion of the Directors, there are reasonable grounds to believe Tempo will be able to pay its debts as and when they become due and payable. The Directors have been given the declarations required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a Resolution of the Directors. William Howard Executive Director, Chief Financial Officer and Company Secretary Sydney Date: 31 March 2021 49 ADDITIONAL INFORMATION REQUIRED BY THE ASX INDEPENDENT AUDITOR’S REPORT 50 ADDITIONAL INFORMATION REQUIRED BY THE ASX 51 ADDITIONAL INFORMATION REQUIRED BY THE ASX 52 ADDITIONAL INFORMATION REQUIRED BY THE ASX 53 ADDITIONAL INFORMATION REQUIRED BY THE ASX ADDITIONAL INFORMATION REQUIRED BY ASX CORPORATE GOVERNANCE STATEMENT The purpose of Tempo is to deliver to clients in the industrial and commercial sectors specialist multidisciplinary maintenance and construction services, which protect and enhance their investments, without ever compromising on our values. Whilst doing this the Board is committed to providing a satisfactory return to its shareholders and fulfilling its corporate governance obligations and responsibilities in the best interests of Tempo and its shareholders. Good governance enables Tempo to deliver this purpose whilst meeting the Board’s intent. The governance structures and processes are defined in Tempo’s Corporate Governance Statement which can be found at https://www.tempoaust.com/corporate. SHAREHOLDER INFORMATION The information below is current at 23 March 2021, and includes additional information required by the Australian Securities Exchange Limited which is not shown elsewhere in this report. SECURITIES EXCHANGE LISTING Quotation has been granted for all the ordinary shares of Tempo on all Member Exchanges of the Australian Securities Exchange Limited DISTRIBUTION OF SHAREHOLDERS The number of shareholders, by size of holding, in each class of share is: VOTING RIGHTS On show of hands: one vote for each member on poll: one vote for each share held. SUBSTANTIAL SHAREHOLDERS The names of substantial shareholders disclosed in substantial holding notices given to Tempo are: 54 Category (Size of holding)Number of ordinary shareholdersNumber of ordinary shares% of issued capital100,001 and Over167350,484,360 96.65 10,001 to 100,00027010,488,711 2.89 5,001 to 10,00095727,420 0.20 1,001 to 5,000248859,823 0.24 1 to 1,00023775,192 0.02 Total1,017362,635,506 100.00 NameNumber of ordinary shares% of issued capitalANGOPHORA CAPITAL PTY LTD 83,322,37122.98ANTHONY BARTON & ASSOCIATES50,398,47713.90BONTEMPO NOMINEES PTY LTD 42,271,63211.66 ADDITIONAL INFORMATION REQUIRED BY THE ASX TOP 20 SHAREHOLDERS 55 RankNameNumber of ordinary shares% of issued capital1ANGOPHORA CAPITAL PTY LTD 83,322,371 22.98 2ANTHONY BARTON & ASSOCIATES50,398,477 13.90 3BONTEMPO NOMINEES PTY LTD 42,271,632 11.66 4DR PAUL JOSEPH DALGLEISH & ASSOCIATES30,563,364 8.43 5ZERO NOMINEES PTY LTD 20,000,000 5.52 6J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 11,433,024 3.15 7OAKTONE NOMINEES PTY LTD 9,060,034 2.50 8CITICORP NOMINEES PTY LIMITED 5,442,909 1.50 9MR IVAN TANNER & MRS FELICITY TANNER 4,550,000 1.25 10HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 4,258,788 1.17 11KAHLIA NOMINEES PTY LTD 4,000,000 1.10 12GDM SERVICES PTY LTD 4,000,000 1.10 13MISS SILVANA MASALKOVSKI 3,548,086 0.98 14SADSACKS PTY LTD 3,324,246 0.92 15MR PAUL SANTILLO 3,050,000 0.84 16CHEMBANK PTY LIMITED 2,800,000 0.77 17IMPULSE TRADING CO PTY LTD 2,350,000 0.65 18MR ALEXANDER KING 2,332,500 0.64 19VANAVO PTY LIMITED 2,050,000 0.57 20MR ANTONIO SCAFFIDI & MRS MARIA SCAFFIDI 2,030,000 0.56 Total 290,785,431 80.19 Balance of register71,850,075 19.81 Grand total362,635,506100 CORPORATE DIRECTORY CORPORATE DIRECTORY DIRECTORS Guido Belgiorno-Nettis William Howard Charles Rottier Christopher Cook David Iverach LEADERSHIP TEAM Paul Dalgleish John Cuffe Non-Executive Chairman Executive Director, Chief Financial Officer and Company Secretary Non-Executive Director Non-Executive Director (Appointed on 19 March 2021) Non-Executive Director (Resigned on 4 March 2021) Chief Executive Officer Executive General Manager TAMS STOCK EXCHANGE LISTING Tempo’s shares are quoted on the Australian Stock Exchange under the code TPP. POSTAL ADDRESS PO Box 588 West Perth WA 6872 AUSTRALIA REGISTERED OFFICE c/o Company Matters Pty Limited Level 12, 680 George Street Sydney NSW 2000 AUDITOR PKF (NS) Audit & Assurance Ltd Partnership Level 8, 1 O'Connell St Sydney NSW, 2000 +61 02 8346 6000 www.pkf.com.au PRINCIPAL PLACE OF BUSINESS Level 12, 680 George Street Sydney NSW 2000 +61 (8) 9460 1500 info@tempoaust.com www.tempoaust.com SHARE REGISTRY Link Market Services QV1, Level 12 250 St Georges Terrace Perth WA 6000 +61 1300 554 474 www.linkmarketservices.com.au 56

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