Tubi Limited
ABN: 25 139 142 493
Consolidated Financial Statements
For the Year Ended 30 June 2020
Tubi Limited
ABN: 25 139 142 493
Contents
For the Year Ended 30 June 2020
Consolidated Financial Statements
Directors' Report
Corporate Governance Statement
Auditor's Independence Declaration under Section 307C of the Corporations Act 2001
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report
Additional Information for Listed Public Companies
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Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2020
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Directors' Report
30 June 2020
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ABN: 25 139 142 493
Directors' Report
30 June 2020
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Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2020
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Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2020
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Tubi Limited
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30 June 2020
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ABN: 25 139 142 493
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30 June 2020
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Tubi Limited
ABN: 25 139 142 493
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ABN: 25 139 142 493
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30 June 2020
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30 June 2020
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30 June 2020
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30 June 2020
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17
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2020
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18
Tubi Limited
ABN: 25 139 142 493
Corporate Governance Statement
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19
Tubi Limited
ABN: 25 139 142 493
Auditor’s Independence Declaration under section 307C of the Corporations Act 2001
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for
the audit of Tubi Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge
and belief, there have been:
(i) No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(ii) No contraventions of any applicable code of professional conduct in relation to the audit.
PKF
SCOTT TOBUTT
PARTNER
30 SEPTEMBER 2020
SYDNEY, NSW
20
PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.For office locations visit www.pkf.com.auSydneyLevel 8, 1 O’Connell StreetSydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001 p +61 2 8346 6000 f +61 2 8346 6099PKF(NS) Audit & Assurance Limited PartnershipABN 91 850 861 839Liability limited by a scheme approved under Professional Standards LegislationNewcastle755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309p +61 2 4962 2688 f +61 2 4962 3245 Tubi Limited
ABN: 25 139 142 493
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the Year Ended 30 June 2020
Revenue
Other income
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Travel and accommodation
Repairs and maintenance
Legal and professional
Consultancy
Rental expense
Insurance
Other operating expenses
Finance expenses
(Loss) / Profit before income tax
Income tax expense
(Loss) / Profit for the year
Items that will be reclassified to profit or
loss when specific conditions are met
Exchange differences on translating foreign
controlled entities
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
(Loss) / Profit attributable to:
Members of the parent entity
Total comprehensive (loss) / income
attributable to:
Members of the parent entity
Earnings per share
From continuing operations:
Basic earnings per share (cents)
Diluted earnings per share (cents)
Note
5
5
2020
$
2019
$
20,811,108
651,527
(23,051,888)
(706,820)
31,563,749
117,059
(25,902,032)
(626,368)
6
7
8
(1,306,455)
(407,765)
(180,364)
(346,981)
(269,679)
(17,368)
(85,956)
(745,650)
(28,445)
(5,684,736)
1,016,863
(1,019,454)
(290,072)
(40,893)
(1,220,195)
(157,261)
(29,406)
(27,133)
(234,006)
(9,683)
2,124,305
(625,252)
(4,667,873)
1,499,053
91,184
57,777
91,184
57,777
(4,576,689)
1,556,830
(4,667,873)
1,499,053
(4,576,689)
1,556,830
22
22
(1.92)
(1.89)
0.80
0.80
The accompanying notes form part of these financial statements.
21
Tubi Limited
ABN: 25 139 142 493
Consolidated Statement of Financial Position
As At 30 June 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Deferred tax assets
Intangible assets
Right-of-use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Current tax liabilities
Lease liabilities
Employee benefits
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
Total equity attributable to equity
holders of the Company
TOTAL EQUITY
Note
2020
$
2019
$
10
11
12
15
13
25
14
16
17
18
25
16
19
25
16
20
21
776,092
1,792,104
2,669,132
22,686
7,605,594
3,623,199
1,593,012
23,143
5,260,014
12,844,948
19,746,630
1,402,646
307,987
807,087
16,814,696
227,337
275,223
-
22,264,350
17,317,256
27,524,364
30,162,204
6,747,172
200,575
455,741
67,713
198,754
5,641,538
140,395
597,855
-
187,494
7,669,955
6,567,282
2,076,006
744,619
1,966,825
-
2,820,625
1,966,825
10,490,580
8,534,107
17,033,784
21,628,097
18,042,218
265,205
(1,273,639)
18,042,218
191,645
3,394,234
17,033,784
21,628,097
17,033,784
21,628,097
The accompanying notes form part of these financial statements.
22
Tubi Limited
ABN: 25 139 142 493
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2020
2020
Balance at 1 July 2019
Loss attributable to members of the parent
entity
Total other comprehensive income for the
year
Total comprehensive income for the year
Transactions with owners in their
capacity as owners
Contribution of equity, net of transaction
costs
Share based payment transactions
Ordinary
Shares
Retained
Earnings
Foreign
Currency
Translation
Reserve
Share Based
Payments
Reserve
Note
$
$
$
$
Total
$
18,042,218
3,394,234
110,471
81,174
21,628,097
-
-
-
-
-
(4,667,873)
-
-
91,184
(4,667,873)
91,184
-
-
-
-
-
-
-
-
(4,667,873)
91,184
(4,576,689)
-
(17,624)
(17,624)
20(a)
33
Balance at 30 June 2020
18,042,218
(1,273,639)
201,655
63,550
17,033,784
2019
Balance at 1 July 2018
Profit attributable to members of the parent
entity
Total other comprehensive income for the
year
Total comprehensive income for the year
Transactions with owners in their
capacity as owners
Contribution of equity, net of transaction
costs
Share based payment transactions
Ordinary
Shares
Retained
Earnings
Foreign
Currency
Translation
Reserve
Share Based
Payments
Reserve
Note
$
$
$
$
4,838,823
1,895,181
52,694
-
-
-
1,499,053
-
-
57,777
1,499,053
57,777
Total
$
6,786,698
1,499,053
57,777
1,556,830
13,203,395
-
-
-
-
-
20(a)
13,203,395
33
-
-
-
-
-
81,174
81,174
Balance at 30 June 2019
18,042,218
3,394,234
110,471
81,174
21,628,097
The accompanying notes form part of these financial statements.
23
Tubi Limited
ABN: 25 139 142 493
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income taxes paid
Receipt from grants
Net cash (used in) / provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of plant and equipment
Purchase of property, plant and equipment
Purchase of intangble assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Net cash provided by financing activities
Note
2020
$
2019
$
19,067,773
(21,906,313)
16,676
(20,989)
(191,379)
319,848
33,864,232
(31,122,037)
43,575
(10,264)
(175,436)
-
32
(2,714,384)
2,600,070
7,876,310
(12,055,376)
(56,995)
129,943
(9,334,574)
(36,044)
(4,236,061)
(9,240,675)
-
200,000
(140,395)
(29,846)
10,574,911
-
(77,293)
-
29,759
10,497,618
Effects of exchange rate changes on cash and cash equivalents
Net (decrease) / increase in cash and cash equivalents held
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
91,184
(6,829,502)
7,605,594
57,777
3,914,790
3,690,804
10
776,092
7,605,594
The accompanying notes form part of these financial statements.
24
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
The consolidated financial report covers Tubi Limited and its controlled entities ('the Group'). Tubi Limited is a for-profit
Company limited by shares, incorporated and domiciled in Australia.
Each of the entities within the Group prepare their financial statements based on the currency of the primary economic
environment in which the entity operates (functional currency). The consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional and presentation currency.
The financial report was authorised for issue by the Directors on 30 September 2020.
Comparatives are consistent with prior years, unless otherwise stated.
1
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with the
Australian Accounting Standards and the Corporations Act 2001.
These financial statements comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
2
Change in Accounting Policy
Leases - Adoption of AASB 16
The Group has adopted AASB 16 Leases using the modified retrospective (cumulative catch-up) method from 1 July
2019 and therefore the comparative information for the year ended 30 June 2019 has not been restated and has been
prepared in accordance with AASB 117 Leases and associated Accounting Interpretations.
Impact of adoption of AASB 16
Under AASB 117, the Group assessed whether leases were operating or finance leases based on its assessment of
whether the significant risks and rewards of ownership had been transferred to the Group or remained with the lessor.
Under AASB 16, there is no differentiation between finance and operating leases for the lessee and therefore all
leases which meet the definition of a lease are recognised on the consolidated statement of financial position (except
for short-term leases and leases of low value assets).
The Group has elected to use the exception to lease accounting for short-term leases and leases of low value assets,
and the lease expense relating to these leases are recognised in the consolidated statement of profit or loss on a
straight line basis.
Practical expedients used on transition
AASB 16 includes a number of practical expedients which can be used on transition, the Group has used the following
expedients:
contracts which had previously been assessed as not containing leases under AASB 117 were not re-assessed
on transition to AASB 16;
lease liabilities have been discounted using the Group's incremental borrowing rate at 1 July 2019;
right-of-use assets at 1 July 2019 have been measured at an amount equal to the lease liability adjusted by the
amount of any prepaid or accrued lease payments;
25
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
2
Change in Accounting Policy continued
Leases - Adoption of AASB 16 continued
Impact of adoption of AASB 16 continued
a single discount rate was applied to all leases with similar characteristics;
the right-of-use asset was adjusted by the existing onerous lease provision (where relevant) at 30 June 2019
rather than perform impairment testing of the right-of-use asset;
excluded leases with an expiry date prior to 30 June 2020 from the consolidated statement of financial position
and lease expenses for these leases have been recorded on a straight-line basis over the remaining term;
used hindsight when determining the lease term if the contract contains options to extend or terminate the
lease;
for leases which were classified as finance leases under AASB 117, the carrying amount of the right-of-use
asset and the lease liability at 1 July 2019 are the same value as the leased asset and liability on 30 June 2019.
Financial statement impact of adoption of AASB 16
The Group has recognised right-of-use assets of $Niland lease liabilities of $Nil at 1 July 2019, for leases previously
classified as operating leases. Refer to Note 16 for details of new leases entered into during the year and recognised
under the provisions of AASB 16.
3
Summary of Significant Accounting Policies
(a)
Basis for consolidation
The consolidated financial statements include the financial position and performance of controlled entities from
the date on which control is obtained until the date that control is lost.
Intragroup assets, liabilities, equity, 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 June financial year end.
A list of controlled entities is contained in Note 29 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.
26
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(b)
Income Tax
The tax expense recognised in the consolidated statement of profit or loss and other comprehensive income
comprises current income tax expense plus deferred tax expense.
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the
year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the
tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current
tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of
tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.
Deferred tax is not provided for the following:
The initial recognition of an asset or liability in a transaction that is not a business combination and at the
time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Taxable temporary differences arising on the initial recognition of goodwill.
Temporary differences related to investment in subsidiaries, associates and jointly controlled entities to
the extent that the Group is able to control the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent
that it is probable that taxable profit will be available against which the deductible temporary differences and
losses can be utilised.
Current and deferred tax is recognised as income or an expense and included in profit or loss for the period
except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in
which case the tax is recognised in other comprehensive income or equity respectively.
(c)
Leases
For comparative year
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but
not the legal ownership that are transferred to entities in the Group, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest
expense for the period.
Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor,
are charged as expenses on a straight-line basis over the life of the lease term.
27
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(c)
Leases continued
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over
the life of the lease term.
For current year
At inception of a contract, the Group assesses whether a lease exists - i.e. does the contract convey the right to
control the use of an identified asset for a period of time in exchange for consideration.
This involves an assessment of whether:
The contract involves the use of an identified asset - this may be explicitly or implicitly identified within
the agreement. If the supplier has a substantive substitution right then there is no identified asset.
The Group has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of use.
The Group has the right to direct the use of the asset i.e. decision making rights in relation to changing
how and for what purpose the asset is used.
At the lease commencement, the Group recognises a right-of-use asset and associated lease liability for the
lease term. The lease term includes extension periods where the Group believes it is reasonably certain that
the option will be exercised.
The right-of-use asset is measured using the cost model where cost on initial recognition comprises of the
lease liability, initial direct costs, prepaid lease payments, estimated cost of removal and restoration less any
lease incentives received.
The right-of-use asset is depreciated over the lease term on a straight line basis and assessed for impairment
in accordance with the impairment of assets accounting policy.
The lease liability is initially measured at the present value of the remaining lease payments at the
commencement of the lease. The discount rate is the rate implicit in the lease, however where this cannot be
readily determined then the Group's incremental borrowing rate is used.
Subsequent to initial recognition, the lease liability is measured at amortised cost using the effective interest
rate method. The lease liability is remeasured whether there is a lease modification, change in estimate of the
lease term or index upon which the lease payments are based (e.g. CPI) or a change in the Group's
assessment of lease term.
Where the lease liability is remeasured, the right-of-use asset is adjusted to reflect the remeasurement or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Exceptions to lease accounting
The Group has elected to apply the exceptions to lease accounting for both short-term leases (i.e. leases with a
term of less than or equal to 12 months) and leases of low-value assets. The Group recognises the payments
associated with these leases as an expense on a straight-line basis over the lease term.
28
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(d)
Revenue and other income
Revenue from contracts with customers
The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised
goods or services to customers at an amount that reflects the consideration the Group expects to receive in
exchange for those goods or services. Revenue is recognised by applying a five-step model as follows:
1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognise revenue as and when control of the performance obligations is transferred
Specific revenue streams
Sale of goods - manufacture of HDPE pipe
The principal revenue stream of the Group is the operation of Mobile Plants to manufacture High Density
Polyethylene (HDPE) pipes for industrial projects. Revenue is recognised upon successful delivery of
manufactured pipes under the terms of the contract over the project term, being the point at which the
performance obligation has been met under the terms of the contract with customers.
Sale of equipment - construction and sale of Mobile Plants
Revenue from the sale of equipment represents the construction and sale of Mobile Plants used in the
manufacture of HDPE pipes for industrial use. Revenue is recognised on completion of the performance
obligations and when control of the performance obligations relating to the equipment is transferred to the
customer.
Other income
Other income is recognised on an accruals basis when the Group is entitled to it.
(e)
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
are capitalised as part of the cost of that asset.
All other borrowing costs are recognised as an expense in the period in which they are incurred.
(f)
Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except
where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
29
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(f)
Goods and services tax (GST) continued
Receivables and payable are stated inclusive of GST.
Cash flows in the consolidated statement of cash flows are included on a gross basis and the GST component
of cash flows arising from investing and financing activities which is recoverable from, or payable to, the
taxation authority is classified as operating cash flows.
(g)
Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using
the first-in-first-out basis and is net of any rebates and discounts received. Net realisable value is estimated
using the most reliable evidence available at the reporting date and inventory is written down through an
obsolescence provision if necessary.
(h)
Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment.
Plant and equipment
Plant and equipment are measured using the cost model.
Depreciation
Property, plant and equipment is depreciated on a straight-line or reducing balance basis (as appropriate) over
the assets useful life to the Group, commencing when the asset is ready for use.
The depreciation rates used for each class of depreciable asset are shown below:
Fixed asset class
Capital Works in Progress
Plant and Equipment
Furniture, Fixtures and Fittings
Motor Vehicles
Depreciation rate
See below
10 - 20%
20%
25%
At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset
is reviewed. Any revisions are accounted for prospectively as a change in estimate.
Capital works in progress relate to the construction of new mobile manufacturing plants which once completed
and commisioned as ready for use will be transferred to plant and equipment and depreciated in line with the
respective rate above.
(i)
Financial instruments
Financial instruments are recognised initially on the date that the Group becomes party to the contractual
provisions of the instrument.
30
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(i)
Financial instruments continued
On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for
instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).
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, the Group classifies its financial assets into the following categories, those measured at:
amortised cost
fair value through profit or loss - FVTPL
fair value through other comprehensive income - equity instrument (FVOCI - equity)
fair value through other comprehensive income - debt investments (FVOCI - debt)
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets.
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
Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:
financial assets measured at amortised cost
31
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(i)
Financial instruments continued
Financial assets continued
When determining whether the credit risk of a financial assets has increased significant since initial recognition
and when estimating ECL, the Group considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and analysis
based on the Group's historical experience and informed credit assessment and including forward looking
information.
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which
permits the use of the lifetime expected loss provision. To measure the expected credit losses, financial assets
have been grouped based on shared credit risk characteristics and the days past due. The loss allowance
provision incorporate forward looking information.
Trade receivables
Impairment of trade receivableshave been determined using the simplified approach in AASB 9 which uses an
estimation of lifetime expected credit losses. The Group has determined the probability of non-payment of the
receivable 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
finance expense. Once the receivable is determined to be uncollectable then the gross carrying amount is
written off against the associated allowance.
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 asset has experienced significant increase in credit risk then the lifetime
losses are estimated and recognised.
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 finance lease liabilities.
(j)
Impairment of non-financial assets
At the end of each reporting period the Group determines whether there is an evidence of an impairment
indicator for non-financial assets.
Where an indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not
yet available for use, the recoverable amount of the asset is estimated.
32
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(j)
Impairment of non-financial assets continued
Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-
generating unit (CGU) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value
in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-
generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or
loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment
loss, except for goodwill.
(k)
Intangibles
Patents and trademarks
Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are
carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are
amortised over their useful life of 20 years.
Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible
assets, other than goodwill, from the date that they are available for use.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(l)
Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
(m)
Employee benefits
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to
the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have
been measured at the amounts expected to be paid when the liability is settled.
Employee benefits expected to be settled more than one year after the end of the reporting period have been
measured at the present value of the estimated future cash outflows to be made for those benefits. In
determining the liability, consideration is given to employee wage increases and the probability that the
employee may satisfy vesting requirements. Cashflows are discounted using market yields on high quality
corporate bond rates incorporating bonds rated AAA or AA by credit agencies, with terms to maturity that match
the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.
33
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(n)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of
the reporting period.
(o)
Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company 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 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.
(p)
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.
(q)
Equity-settled compensation
The Group operates equity-settled share-based payment employee share and option schemes. The fair value
of the equity to which employees become entitled is measured at grant date and recognised as an expense
over the vesting period, with a corresponding increase to an equity account. The fair value of shares is
ascertained as the market bid price. The fair value of options is ascertained using a Black-Scholes pricing
model which incorporates all market vesting conditions. The amount to be expensed is determined by reference
to the fair value of the options or shares granted, this expense takes in account any market performance
conditions and the impact of any non-vesting conditions but ignores the effect of any service and non-market
performance vesting conditions.
Non-market vesting conditions are taken into account when considering the number of options expected to vest.
At the end of each reporting period, the Group revises its estimate of the number of options which are expected
to vest based on the non-market vesting conditions. Revisions to the prior period estimate are recognised in
profit or loss and equity.
(r)
Foreign currency transactions and balances
Transaction and balances
Foreign currency transactions are recorded at the spot rate on the date of the transaction.
At the end of the reporting period:
Foreign currency monetary items are translated using the closing rate;
Non-monetary items that are measured at historical cost are translated using the exchange rate at the
34
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(r)
Foreign currency transactions and balances continued
Transaction and balances continued
date of the transaction; and
Non-monetary items that are measured at fair value are translated using the rate at the date when fair
value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates
different from those at which they were translated on initial recognition or in prior reporting periods are
recognised through profit or loss, except where they relate to an item of other comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group's
presentation currency are translated as follows:
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period where the average rate
approximates the rate at the date of the transaction; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group's foreign
currency translation reserve in the consolidated statement of financial position. These differences are
recognised in the consolidated statement of profit or loss and other comprehensive income in the period in
which the operation is disposed.
(s)
Segment reporting
Operating segments are identified on the basis of internal reports to senior management about components of
the Group that are regularly reviewed by senior management who have been identified as the chief operating
decision makers, in order to allocate resources to the segment and to assess its performance. Information
reported to senior management for the purposes of resource allocation and assessment of performance is
specifically focused on core products and services offered, comprising one reportable segments as disclosed in
Note 9.
35
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(t)
Going concern
The financial report has been prepared on a going concern basis, which assumes continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group has incurred net losses after tax of $4,667,873 (2019: profit of $1,499,053) and net cash outflows of
$6,829,502 (2019: inflows of $3,914,790) for the year ended 30 June 2020. At 30 June 2020, the Group had net
current liabilities of $2,409,941 (2019: net current assets of $6,277,666). The directors have considered the
following factors in their assessment of the going concern basis:
From the commencement of the year until March 2020 the Group continued to manufacture HDPE pipe
from its Mobile Extrusion Plant in the Permian Basin, Texas, USA for MPS Enterprises, Inc under a
Manufacturing and Supply Agreement. The decline in investment activity in the upstream oil and gas
industry caused by the decline in oil prices led to a reduction in orders, selling prices, exclusivity
restrictions, and margins;
The Group also incurred significant operating costs in 1H FY20 due to a series of operator failings,
resulting in approximately six weeks of lost production;
To mitigate the decline in the Permian Basin and the risks of operations, the Group has invested in an
internal sales team and instigated a change in senior management;
The Group has further secured customers in new markets in Florida. Through late March to May two plants
were commissioned at a base site leased from a key customer and global miner of phosphate and potash
in Bartow, Florida;
The Group had cash of $776,092 as at 30 June 2020 and, as disclosed in Note 34, the Group successfully
completed a $6.1m capital raising subsequent to the year end.
Based on the cash flow forecasts prepared by the directors underpinned by the above factors, and having
carefully assessed the likelihood and timing of cash flows from planned operations, the directors are confident
that the Group will be able to fund its activities and be able to pay its debts as they fall due. The directors have
therefore determined the going concern basis as being appropriate in the preparation of this financial report.
(u)
Adoption of new and revised accounting standards
The Group has adopted all standards which became effective for the first time at 30 June 2020, the adoption of
these standards has not caused any material adjustments to the reported financial position, performance or
cash flow of the Group or refer to Note 2 for details of the changes due to standards adopted.
36
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
3
Summary of Significant Accounting Policies continued
(v)
New Accounting Standards and Interpretations
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory
application dates for future reporting periods. The Group has decided not to early adopt these Standards. The
following table summarises those future requirements, and their impact on the Group where the standard is
relevant:
Standard Name
Conceptual Framework for
Financial Reporting
(Conceptual Framework)
Effective date
for entity
1 January
2020
Requirements
The Conceptual Framework contains
new definition and recognition
criteria as well as new guidance on
measurement that affects several
Accounting Standards.
Impact
The Group has
determined not to
early adopt this
Standard. The Group
will consider the
revised definitions
included within the
revised Conceptual
Framework,
particularly where the
accounting for an
existing balance has
been developed with
reference to the
previous conceptual
framework. In addition,
any balances or
transactions which
have been taken to
other comprehensive
income will be
reviewed to confirm
that they are permitted
by an accounting
standard.
4
Critical Accounting Estimates and Judgments
The directors make estimates and judgements during the preparation of these consolidated financial statements
regarding assumptions about current and future events affecting transactions and balances.
These estimates and judgements are based on the best information available at the time of preparing the financial
statements, however as additional information is known then the actual results may differ from the estimates.
The significant estimates and judgements made have been described below.
(a)
Key estimates - impairment of property, plant and equipment
The Group assesses impairment at the end of each reporting period by evaluating conditions specific to the
Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed
using value-in-use calculations which incorporate various key assumptions.
37
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
4
Critical Accounting Estimates and Judgments continued
(a)
Key estimates - impairment of property, plant and equipment continued
If such impairment indicators were to be triggered, management would perform such calculations incorporating
the use of cash flow projections for plant and equipment incorporating growth rates factored into valuation
models for the next five years on the basis of management’s expectations around the Group’s continued ability
to capture market share from competitors. Cash flow growth rates would then also be determined for periods
subsequent to the five year period to reflect historical industry averages. The rates would incorporate an
allowance for inflation. Pre-tax discount rates would be used in all models based on management's assessment
of market factors relevant to the Group's business and industry.
(b)
Key estimates - receivables
The receivables at reporting date have been reviewed to determine whether there is any objective evidence that
any of the receivables are impaired. An expected credit loss provision is included for any receivable where the
entire balance is not considered collectible. Refer to Note 11(a) for further details on the determination of the
expected credit loss provision.
(c)
Key judgments - revenue recognition relating to construction and sale of mobile plants
The Group undertakes contracts for the construction and sale of mobile plants and related activities.
Recognition of revenue in relation to these contracts involves determining when all performance conditions and
obligtaions under the terms of the contract have been met, and control over the asset constructed together with
the related benefits have been passed in the entirety to the customer. The assumptions are based on the
information available to management at the reporting date together with formal acceptance being recieved from
the customer that such performance obligations under the terms of the contract have been met. Refer to Note
3(d) for further details of the Group's accounting policy in relation to revenue recognition.
(d)
Key judgments - capitalisation of expenditure relating to mobile plants
The Group capitalises expenditure relating to the construction of new mobile manufacturing plants. In
determinig which costs qualify for capitalisation as capital works in progress, the Group determines whether
costs that are directly attributable to the construction of such plant can be measured reliably, and whether
economic benefit from such construction will flow to the Group. Directly attributable costs are those costs that
the Group incurs in bringing the asset to the location and condition necessary for it to be capable of operating in
the manner intended by management. Refer to Note 3(h) for further details of the Group's accounting policy in
relation to capital works in progress.
38
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
4
Critical Accounting Estimates and Judgments continued
(e)
Impact of Coronavirus (COVID-19)
Background
The spread of novel coronavirus (COVID-19), a respiratory illness caused by a new virus, was declared a public
health emergency by the World Health Organisation in January 2020 and upgraded to a global pandemic in
March 2020. This pandemic has severely impacted many local economies around the globe. In many countries,
businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken
to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-
essential services have triggered significant disruptions to businesses worldwide, resulting in an economic
slowdown. Global stock markets have also experienced great volatility and a significant weakening.
Governments and central banks have responded with monetary and fiscal interventions to stabilise economic
conditions.
The Group has considered the effects of these events based on the information at the date of issuing this
financial report and potential effects of business and other market volatility in preparing its financial statements.
Impact and considerations for the financial statements of the Group
The Group has determined that the financial position and performance of the Group will not be significantly or
materially impacted by COVID-19 when considering the nature of the Group's operations, customer and
supplier base, and levels of activity to date.
Production at our base site in Florida is currently classified as an essential service under the COVID-19
restrictions. Tubi is not currently experiencing material operating restrictions in Florida, where the Group's
operations, primarily supplying the mining industry, satisfy the essential services exemptions to business and
social restrictions. Raw materials are delivered to a rail siding close to Tubi's manufacturing site. The
manufacture and supply of raw materials together with other services currently remain active.
Production volumes from both these plants have steadily increased in the last quarter of the year. Production at
the plant located in Odessa, Texas has temporarily been suspended. A decision on whether to keep the plant at
the Odessa location or re-deploy it will be made as different regional markets are evaluated
5
Revenue and Other Income
Revenue from continuing operations
Revenue from contracts with customers
- Sale of goods
- sale of equipment
Total Revenue
2020
$
2019
$
11,448,909
31,563,749
(a)
9,362,199
-
20,811,108
31,563,749
39
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
5
Revenue and Other Income continued
Other Income
- interest
- other income
- grants
(a)
Sale of equipment
2020
$
2019
$
(b)
16,102
315,577
319,848
19,789
97,270
-
651,527
117,059
Sale of equipment represents the supply of Mobile Plant and related equipment (the Plant) in accordance with
the Equipment Purchase Agreement (EPA) with Iplex Pipelines NZ Limited (IPLEX) entered into on 21
December 2018. The construction and assembly of the Plant together with related performance obligations
under the terms of the EPA were completed during the year and revenue has been recognised in accordance
with the Group's accounting policy.
(b)
Grants
The government grant was received for the US Small Business Administration's Paycheck Protection Program
with the entire amount received being used exclusively for payroll purposes.
6
Finance Income and Expenses
Finance expenses
Interest expense
Foreign currency loss on financial
assets and liabilities
Total finance expenses
7
Result for the Year
The result for the year includes the following specific expenses:
Cost of sales
Other expenses:
Depreciation
Amortisation
2020
$
2019
$
20,877
9,683
7,568
28,445
-
9,683
2020
$
2019
$
23,051,888
25,902,032
1,282,224
24,231
1,002,654
16,800
40
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
8
Income Tax Expense
(a) The major components of tax expense (income) comprise:
Current tax expense
Income tax - current period
Deferred tax expense
Origination and reversal of
temporary differences
Total income tax expense
(b) Reconciliation of income tax to accounting profit:
Profit
Tax
Add:
Tax effect of:
- non-deductible depreciation and
amortisation
- share options expensed during
year
- non-deductible expenses
Less:
Tax effect of:
- other
Recoupment of prior year tax
losses previously not brought to
account
Income tax attributable to the
Group
Difference in overseas tax rates
Income tax expense
Weighted average effective tax
rate
2020
$
2019
$
61,993
609,471
(1,078,856)
15,781
(1,016,863)
625,252
2020
$
(5,684,736)
27.50
%
(1,563,302)
2019
$
2,124,305
27.50
%
584,184
486,476
387,509
-
320,941
24,352
-
(755,885)
996,045
(624,892)
(80,094)
-
(226,627)
(1,380,777)
363,914
689,324
(64,072)
(1,016,863)
625,252
%(18)
%29
The decrease in the weighted average effective consolidated tax rate for 2020 compared to 2019 is primarily as a
result of losses brought to account in 2020 that previously were not recognised in 2019.
41
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
8
Income Tax Expense continued
(c) Income tax relating to each component of other comprehensive income:
2020
Tax
(Expense)
Benefit
Before-tax
Amount
Net-of-tax
Amount
Before-tax
Amount
2019
Tax
(Expense)
Benefit
Net-of-tax
Amount
$
$
$
$
$
$
125,771
(34,587)
91,184
79,692
(21,915)
57,777
Exchange differences on translating
foreign controlled entities
9
Operating Segments
Segment information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Board of Directors (chief operating decision maker) in assessing performance and determining the allocation of
resources.
The Group is managed primarily on the basis of product category and service offerings as the diversification of the
Group's operations inherently have notably different risk profiles and performance assessment criteria. Operating
segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to
have similar economic characteristics and are also similar with respect to the following:
the products sold and/or services provided by the segment;
the manufacturing process;
the type or class of customer for the products or services;
the distribution method; and
any external regulatory requirements.
Performance is measured based on segment profit before income tax as included in the internal financial reports.
The Group has one reportable segment, being the manufacturing of HDPE pipe and the sale of technology licenses to
manufacture HDPE pipe. The sale of mobile plants is not considered an operating segment based on above and the
Group's accounting polilcy.
10 Cash and Cash Equivalents
Cash at bank and in hand
2020
$
776,092
2019
$
7,605,594
776,092
7,605,594
42
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
11 Trade and other receivables
CURRENT
Trade receivables
Provision for impairment
Deposits
Other receivables
Amounts due from related party
Total current trade and other
receivables
2020
$
2019
$
1,759,489
-
1,759,489
-
32,615
-
2,982,869
-
2,982,869
515,928
98,813
25,589
1,792,104
3,623,199
(a)
31(b)
The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term
nature of the balances.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial
statements.
(a)
Impairment of receivables
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which
permits the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.
The loss allowance provision as at 30 June 2020 is determined as follows, the expected credit losses
incorporate forward looking information.
The Group determines the loss allowance for trade receivables at an amount equal to lifetime expected credit
loss (ECL). The ECL on trade receivables are estimated using a provision matrix by reference to past default
experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are
specific to the debtors, general economic conditions of the industry in which the debtors operate and an
assessment of both the current as well as the forecast direction of conditions at the reporting date.
Based on the the Group's historical experience and assessment of these factors, no loss allowance has been
required for the year.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation
or has entered into bankruptcy proceedings.
43
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
12 Inventories
CURRENT
At cost:
Raw materials
Finished goods
Write downs of inventories to net realisable value during the year were $ NIL (2019: $ NIL).
13 Property, plant and equipment
2020
$
2019
$
2,135,295
533,837
1,218,187
374,825
2,669,132
1,593,012
Capital works in progress
At cost
Plant and equipment
At cost
Accumulated depreciation
Total plant and equipment
Furniture, fixtures and fittings
At cost
Accumulated depreciation
Total furniture, fixtures and fittings
Motor vehicles
At cost
Accumulated depreciation
Total motor vehicles
Total property, plant and
equipment
(a)
Capital works in progress
Note
2020
$
2019
$
(a)
3,229,469
8,453,616
19,048,169
(2,716,218)
9,662,907
(1,564,606)
16,331,951
8,098,301
34,240
(27,233)
33,653
(18,106)
7,007
15,547
359,098
(180,895)
352,138
(104,906)
178,203
247,232
(b)
19,746,630
16,814,696
Capital works in progress relates to the construction of Tubi's third group owned, mobile manufacturing plant,
Plant 5004 (its fourth plant in operation, as one is currently leased) to be commissioned by the end of FY2021.
Details of the capital commitments in relation to these works are included in Note 23(c).
44
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
13 Property, plant and equipment continued
(b)
Movements in carrying amounts of property, plant and equipment
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and
the end of the current financial year:
Year ended 30 June 2020
Balance at the beginning of year
Additions
Disposals
Depreciation expense
Foreign exchange movements
Capital Works
in Progress
Plant and
Equipment
Furniture,
Fixtures and
Fittings
$
$
$
Motor
Vehicles
$
Total
$
8,453,616
3,035,491
8,098,301
9,389,326
(8,254,651)
(17,250)
-
(1,200,922)
(4,987)
62,496
15,547
247,232
16,814,696
-
(1,537)
(5,549)
(1,454)
6,960
12,431,777
-
(8,273,438)
(75,733)
(1,282,204)
(256)
55,799
Balance at the end of the year
3,229,469
16,331,951
7,007
178,203
19,746,630
Year ended 30 June 2019
Balance at the beginning of year
Additions
Disposals
Depreciation expense
Foreign exchange movements
Capital Works
in Progress
Plant and
Equipment
Furniture,
Fixtures and
Fittings
$
$
$
Motor
Vehicles
$
Total
$
-
8,292,726
8,453,616
-
-
-
850,057
(138,902)
(934,967)
29,387
6,375
10,551
-
(1,626)
247
277,701
20,350
8,576,802
9,334,574
-
(138,902)
(66,061)
(1,002,654)
15,242
44,876
Balance at the end of the year
8,453,616
8,098,301
15,547
247,232
16,814,696
During the year, disposal of Capital Works in Progress comprised the following:
- Sale of the Mobile Plant on completion of construction in accordance with the Equipment Purchase
Agreement with Iplex Pipelines NZ Limited. Refer to Note 5 for details of the revenue recognised in
relation to this Plant. Cash flows from the proceeds of this sale have been recognised in receipts from
customers in the Consolidated Statement of Cash Flows;
45
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
14 Intangible Assets
Patents and trademarks
Cost
Accumulated amortisation and
impairment
Net carrying value
Total Intangibles
(a)
Movements in carrying amounts of intangible assets
Year ended 30 June 2020
Balance at the beginning of the year
Additions
Amortisation
Closing value at 30 June 2020
Year ended 30 June 2019
Balance at the beginning of the year
Additions
Amortisation
Closing value at 30 June 2019
15 Other non-financial assets
CURRENT
Prepayments
2020
$
2019
$
410,649
353,654
(102,662)
(78,431)
307,987
307,987
275,223
275,223
Patents and
trademarks
$
Total
$
275,223
56,995
(24,231)
275,223
56,995
(24,231)
307,987
307,987
Patents and
trademarks
$
Total
$
255,979
36,044
(16,800)
255,979
36,044
(16,800)
275,223
275,223
2020
$
2019
$
22,686
23,143
46
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
16 Leases
The Group has applied AASB 16 using the modified retrospective (cumulative catch-up) method and therefore the
comparative information has not been restated and continues to be reported under AASB 117 and related
Interpretations.
The Group has leases over land and buildings.
The Group has chosen not to apply AASB 16 to leases of intangible assets.
Information relating to the leases in place and associated balances and transactions are provided below.
Terms and conditions of leases
This asset and corresponding liability relate to the manufacturing site lease at Batow, Florida. The initial lease term is
for a 2 year period, with an option to extend the lease every 2 years, for 4 additional periods. That is, a rolling two year
lease for 4 additional rollovers, being for a 10 year period.
Right-of-use assets
Year ended 30 June 2020
Balance at beginning of year
Depreciation charge
Balance at end of year
Lease liabilities
Buildings
$
Total
$
842,178
(35,091)
842,178
(35,091)
807,087
807,087
The maturity analysis of lease liabilities based on contractual undiscounted cash flows is shown in the table below:
< 1 year
1 - 5 years
> 5 years
Total
undiscounted
lease liabilities
Lease liabilities
included in this
Consolidated
Statement Of
Financial Position
$
$
$
$
$
67,713
308,183
436,436
812,332
812,332
2020
Lease liabilities
Extension options
A number of the building leases contain extension options which allow the Group to extend the lease term by up to
twice the original non-cancellable period of the lease.
The Group includes options in the leases to provide flexibility and certainty to the Group operations and reduce costs
of moving premises and the extension options are at the Group's discretion.
At commencement date and each subsequent reporting date, the Group assesses where it is reasonably certain that
the extension options will be exercised.
47
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
16 Leases continued
Consolidated Statement of Profit or Loss and Other Comprehensive Income
The amounts recognised in the consolidated statement of profit or loss and other comprehensive income relating to
leases where the Group is a lessee are shown below:
Depreciation of right-of-use assets
Consolidated Statement of Cash Flows
Total cash outflow for leases
17 Trade and Other Payables
Current
Trade payables
Deposits
GST payable
Accrued expenses
Other payables
2020
$
(35,091)
(35,091)
2020
$
29,846
2019
$
2019
$
-
-
-
2020
$
2019
$
6,240,993
-
11,217
339,511
155,451
1,540,310
3,798,785
-
276,562
25,881
6,747,172
5,641,538
Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying
value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature
of the balances.
Deposits relate to payments received in advance for the commissioning of mobile manufacturing plants under the
terms of agreed contracts with customers. These plants are currently under construction and included as capital works
in progress in Property, plant and equipment - refer to Note 13.
48
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
18 Borrowings
CURRENT
Unsecured liabilities:
Related party payables
Secured liabilities:
Lease liability secured
Total current borrowings
Total borrowings
2020
$
2019
$
200,575
-
23
-
140,395
200,575
140,395
200,575
140,395
(a)
Borrowings - related party loans
In June 2020, related party loans amounting to $200,575, including accrued interest of $575, was payable by the
Group to entities related to certain directors and shareholders.
19 Employee Benefits
Current liabilities
Provision for employee benefits
20 Issued Capital
243,142,400 (2019: 243,142,400)
Ordinary shares
2020
$
2019
$
198,754
187,494
198,754
187,494
2020
$
2019
$
18,042,218
18,042,218
49
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
20 Issued Capital continued
(a)
Ordinary shares
Opening balance at 1 July 2018
19: Rights issue at $6.04 per
share
Subtotal
Conversion on 1:30 share split
Apr 2019: Issue pre-IPO shares at
$0.20 per share
Apr 2019: Conversion of director
and shareholder loans to shares
Transaction costs
Balance at 30 June 2019
Movement
Balance at 30 June 2020
No.
$.
5,791,531
4,838,823
208,469
1,259,152
6,000,000
180,000,000
6,097,975
6,097,975
50,000,000
10,000,000
13,142,400
-
2,628,484
(684,241)
243,142,400
-
18,042,218
-
243,142,400
18,042,218
The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the
Company. On a show of hands at meetings of the Company, each holder of ordinary shares has one vote in
person or by proxy, and upon a poll each share is entitled to one vote.
The Company does not have authorised capital or par value in respect of its shares.
(b)
Capital Management
The key objectives of the Group when managing capital is to safeguard its ability to continue as a going
concern and maintain optimal benefits to stakeholders. The Group defines capital as its equity and net debt.
There has been no change to capital risk management policies during the year.
The Company manages its capital structure and makes funding decisions based on the prevailing economic
environment and has a number of tools available to manage capital risk. These include maintaining a diversified
debt portfolio, the ability to adjust the size and timing of dividends paid to shareholders and the issue of new
shares.
The Board monitors a range of financial metrics including return on capital employed and gearing ratios.
21 Reserves
(a)
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are recognised in other
comprehensive income - foreign currency translation reserve. The cumulative amount is reclassified to profit or
loss when the net investment is disposed of.
50
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
21 Reserves continued
(b)
Share based payments reserve
This reserve records the cumulative value of employee service received for the issue of share options. When
the option is exercised the amount in the share option reserve is transferred to share capital.
22 Earnings per Share
(a) Reconciliation of earnings to profit or loss from continuing operations
(Loss) / Profit from continuing operations
Earnings used in the calculation of
dilutive EPS from continuing
operations
(b) Earnings used to calculate overall earnings per share
Earnings used to calculate overall
earnings per share
2020
$
2019
$
(4,667,873)
1,499,053
(4,667,873)
1,499,053
2020
$
2019
$
(4,667,873)
1,499,053
(c) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS
Weighted average number of ordinary
shares outstanding during the year used
in calculating basic EPS
Weighted average number of dilutive
options outstanding
Weighted average number of dilutive
restricted share units on issue
Weighted average number of ordinary
shares outstanding during the year
used in calculating dilutive EPS
23 Capital and Leasing Commitments
(a)
Finance Leases
Minimum lease payments:
- not later than one year
Present value of minimum lease
payments
2020
No.
2019
No.
243,142,423
192,378,671
2,995,890
764,384
998,630
254,795
247,136,943
193,397,850
2020
$
2019
$
-
-
140,395
140,395
51
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
23 Capital and Leasing Commitments continued
(a)
Finance Leases continued
Finance leases are in place for plant and equipment and normally have a term between 1 and 2 years. The
leases have terms of renewal but no purchase option or escalation clauses. Renewals are at the option of the
entity holding the lease.
(b)
Operating Leases
Minimum lease payments under
non-cancellable operating leases:
- not later than one year
2020
$
2019
$
-
31,173
Operating leases are in place for plant and equipment and normally have a term between 1 and 2 years.
Lease payments are increased on an annual basis to reflect market rentals.
(c)
Contracted Commitments
Contracted commitments for:
Rental of storage facility in US
- not later than one year
- between one year and five years
Construction of mobile
manufacturing plants
- not later than one year
- between one year and five years
Total contracted commitments
-
-
-
133,138
3,750
136,888
1,624,462
-
10,316,735
610,328
1,624,462
11,063,951
52
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
24 Financial Risk Management
The Group is exposed to a variety of financial risks through its use of financial instruments.
The Group‘s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of
financial markets.
The most significant financial risks to which the Group is exposed to are described below:
Specific risks
Credit risk
Market risk - currency risk, interest rate risk and price risk
Financial instruments used
The principal categories of financial instrument used by the Group are:
Trade receivables
Cash at bank
Trade and other payables
Financial assets
Held at amortised cost
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Financial liabilities at amortised
cost
Total financial liabilities
Total
Objectives, policies and processes
2020
$
2019
$
776,092
7,605,594
1,792,104
3,623,199
7,403,488
6,379,788
7,403,488
6,379,788
(4,835,292)
4,849,005
The Board of Directors have overall responsibility for the establishment of the Group’s financial risk management
framework. This includes the development of policies covering specific areas such as foreign exchange risk, interest
rate risk, credit risk and the use of derivatives.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
The day-to-day risk management is carried out by the Group’s finance function under policies and objectives which
have been approved by the Board of Directors. The Chief Financial Officer has been delegated the authority for
designing and implementing processes which follow the objectives and policies. This includes monitoring the levels of
53
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
24 Financial Risk Management continued
Objectives, policies and processes continued
exposure to interest rate and foreign exchange rate risk and assessment of market forecasts for interest rate and
foreign exchange movements.
The Board of Directors receives monthly reports which provide details of the effectiveness of the processes and
policies in place.
Mitigation strategies for specific risks faced are described below:
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to
the Group.
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and
financial institutions, as well as credit exposure to wholesale and retail customers, including outstanding receivables
and committed transactions.
The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties
are reputable banks with high quality external credit ratings.
Trade receivables
Trade receivables consist of a small number of customers, spread across similar industries and geographical areas.
Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of
financial loss from defaults. The risk management committee has established a credit policy under which each new
customer is analysed individually for creditworthiness before the Group's standard payment and delivery terms and
conditions are offered. The Group review includes external ratings, if they are available, financial statements, credit
agency information and industry information. Credit limits are established for each customer and the utilisation of credit
limits by customers is regularly monitored by line management. Customers who subsequently fail to meet their credit
terms are required to make purchases on a prepayment basis until creditworthiness can be re-established.
The Board receives monthly reports summarising the turnover, trade receivables balance and aging profile of each of
the key customers individually and the Group's other customers analysed by industry sector as well as a list of
customers currently transacting on a prepayment basis or who have balances in excess of their credit limits.
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default
risk associated with the industry and country in which the customers operate.
Management considers that all the financial assets that are not impaired for each of the reporting dates under review
are of good credit quality, including those that are past due.
The Group is currently dependent on the credit worthiness of two key customers. In the event that either counterparty
were to fall into bankruptcy, fail financially or otherwise default on its payment obligations to the Group, the Group may
be exposed to significant financial loss both from a failure of that counterparty to pay amounts owing to the Group for
product or plant supplied, and from the failure of that party's ability to meet its contractual obligations to the Group.
On a geographical basis, the Group has significant credit risk exposures in Australia, New Zealand and USA given the
54
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
24 Financial Risk Management continued
Credit risk continued
location of its operations in those regions.
The following table details the Group's trade and other receivables exposure to credit risk (prior to collateral and other
credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as 'past due'
when the debt has not been settled, within the terms and conditions agreed between the Group and the customer or
counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency
of the debtors and are provided for where there is objective evidence indicating that the debt may not be fully repaid to
the Group.
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high
credit quality.
Past due but not impaired
(days overdue)
Gross
amount
Past due
and
impaired
$
$
< 30
$
31-60
61-90
$
$
> 90
$
1,759,489
32,615
1,792,104
2,982,869
640,330
3,623,199
-
-
-
-
-
-
1,759,489
32,615
1,792,104
2,964,246
640,330
3,604,576
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,623
-
18,623
Within
initial
trade
terms
$
-
-
-
-
-
-
2020
Trade receivables
Other receivables
Total
2019
Trade receivables
Other receivables
Total
The Group does not hold any financial assets with terms that have been renegotiated, but which would otherwise be
past due or impaired.
The other classes of receivables do not contain impaired assets.
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 prices.
(i) Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating
due to movement in foreign exchange rates of currencies in which the Group holds financial instruments which are
other than the AUD functional currency of the Group.
Exposures to currency exchange rates arise from the Group's overseas sales and purchases, which are primarily
denominated in US Dollars (USD) and New Zealand Dollars (NZD).
To mitigate the Group's exposure to foreign currency risk, non-Australian Dollar cash flows are monitored. The Group
aims to hold sufficient cash and cash equivalents in these respective currencies to enable it to carry out its operations
55
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
24 Financial Risk Management continued
and settle amounts primarily in the currency in which the overseas sales and purchases take place.
Therefore, the Group‘s risk management procedures distinguish short-term foreign currency cash flows (due within 6
months) from longer-term cash flows. Where the amounts to be paid and received in a specific currency are expected
to largely offset one another, no further hedging activity is undertaken.
Foreign currency denominated financial assets and liabilities, translated into Australian Dollars at the closing rate, are
as follows,
2020
Nominal amounts
Financial assets
Financial liabilities
Short-term exposure
2019
Nominal amounts
Financial assets
Financial liabilities
Short-term exposure
USD
$
NZD
Total AUD
$
$
2,419,870
257,228
2,677,098
(7,392,370)
(88,231) (7,480,601)
(4,972,500)
168,997 (4,803,503)
3,826,567
(1,433,075)
281,487
4,108,054
(419,537) (1,852,612)
2,393,492
(138,050) 2,255,442
The following table illustrates the sensitivity of the net result for the year and equity in regards to the Group‘s financial
assets and financial liabilities and the US Dollar – Australian Dollar exchange rate and New Zealand Dollar –
Australian Dollar exchange rate. There have been no changes in the assumptions calculating this sensitivity from prior
years.
It assumes a +/- 5% change of the Australian Dollar / USD exchange rate for the year ended 30 June 2020 (30 June
2019: 5%). A +/- 5% change is considered for the Australian Dollar / NZD exchange rate (30 June 2019: 5%). Both of
these percentages have been determined based on the average market volatility in exchange rates in the previous 12
months.
The year end exchange rate is 0.6863 (2019: 0.7013) for USD and 1.0547 (2019: 1.0424) for NZD.
The sensitivity analysis is based on the foreign currency financial instruments held at the reporting date and also takes
into account forward exchange contracts that offset effects from changes in currency exchange rates.
If the Australian Dollar had strengthened and weakened against the USD and NZD by 5% (30 June 2019: 5%) and 5%
(30 June 2019: 5%) respectively then this would have had the following impact:
56
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
24 Financial Risk Management continued
USD
Net results
Equity
NZD
Net results
Equity
2020
2019
+5%
-5%
+5%
-5%
(248,625)
248,625
248,625
(248,625)
113,411
(113,411)
(113,411)
113,411
8,450
(8,450)
(8,450)
8,450
7,364
(7,364)
(7,364)
7,364
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions.
Nonetheless, the analysis above is considered to be representative of the Group's exposure to foreign currency risk.
25 Tax assets and liabilities
(a)
Current Tax Liability
Income tax payable
(b)
Deferred Tax Assets
Deferred tax assets
Provisions - employee benefits
Accruals
Transaction costs on equity issue
Balance at 30 June 2019
Provisions - employee benefits
Accruals
Transaction costs on equity issue
Balance at 30 June 2020
2020
2019
$
455,741
$
597,855
Opening
Balance
Charged to
Income
Charged
directly to
Equity
Closing
Balance
Note
$
$
$
$
-
-
-
-
30,652
16,752
179,933
30,652
16,752
179,933
227,337
674,436
500,873
-
227,337
1,175,309
-
-
-
-
-
-
-
-
30,652
16,752
179,933
227,337
705,088
517,625
179,933
1,402,646
57
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
25 Tax assets and liabilities continued
(c)
Deferred Tax Liabilities
Deferred tax liabilities
Property, plant & equipment
Other
Balance at 30 June 2019
Property, plant & equipment
Other
Balance at 30 June 2020
26 Dividends
Opening
Balance
Charged to
Income
Charged
directly to
Equity
Closing
Balance
$
$
$
$
1,717,694
198,841
-
50,290
1,717,694
249,131
1,916,535
(191,672)
50,290
300,853
1,966,825
109,181
-
-
-
-
-
-
1,916,535
50,290
1,966,825
1,724,863
351,143
2,076,006
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking account
The franking credits available for
subsequent financial years at a
tax rate of 30%
2020
$
2019
$
-
-
The above available balance is based on the dividend franking account at year-end adjusted for:
(a)
(b)
(c)
Franking credits that will arise from the payment of the current tax liabilities;
Franking debits that will arise from the payment of dividends recognised as a liability at the year end;
Franking credits that will arise from the receipt of dividends recognised as receivables at the end of the year.
As at 30 June 2020, the Group has franking debits amounting $3,070,115 (2019: $2,878,736) arising from R&D tax
offsets. The franking debits will be recouped against future dividends. The ability to use franking credits on future
dividends will only be available once the franking debits have been fully recouped. This is dependent upon the
Company's future ability to declare dividends.
58
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
27 Key Management Personnel Remuneration
Key management personnel remuneration included within employee expenses for the year is shown below:
Short-term employee benefits
Long-term benefits
Post-employment benefits
Share-based payments
28 Auditors' Remuneration
Remuneration of the auditor PKF,
for:
- auditing or reviewing the
financial statements for the
current year
- taxation services
- other services
Total
2020
$
1,078,617
5,490
60,972
9,654
2019
$
759,229
22,890
40,938
81,174
1,154,733
904,231
2020
$
2019
$
76,500
-
-
76,500
48,878
7,304
96,435
152,617
Other services in prior year relate to advisory services in relation to the initial public offering and listing of Tubi Limited
on the Australian Stock Exchange (ASX).
29 Interests in Subsidiaries
(a)
Composition of the Group
Subsidiaries:
Tubi USA Inc.
Tubi NZ Limited
Principal place of
business / Country of
Incorporation
Percentage
Owned (%)*
Percentage
Owned (%)*
2020
2019
USA
New Zealand
100
100
100
100
*The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries.
The principal activities of both subsidiaries during the year was the development, operation, leasing and sale of
mobile manufacturing plants for the production of high-density polyethylene ("HDPE") pipes for use in the oil
and gas, irrigation, mining and infrastructure sectors.
30 Contingencies
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2020 .
59
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
31 Related Parties
(a)
The Group's main related parties are as follows:
Key management personnel - refer to Note 27.
Subsidiaries - refer to Note 29
Other related parties include close family members of key management personnel and entities that are
controlled or significantly influenced by those key management personnel or their close family members.
(b)
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
On 1 November 2019 the Company determined not to proceed with the order for one of four new manufacturing
plants proposed for completion during the current financial year.
A company (Hopetoun Corporation Pty Ltd ("Hopetoun")) associated with Mr Michael Tilley and Mr Anthony
Willsallen who were both substantial shareholders and directors of the Company offered to approach the
individual component suppliers and seek to place orders for the same components as those cancelled by the
Company.
These orders were subsequently placed on the understanding that the major component suppliers would refund
to the Company any deposits made for the components. As part of this process Hopetoun also purchased
some miscellaneous parts which the Company had already purchased including electrical wiring, cooling
components and pumps from the Company at the Company's cost and reimbursed the Company for capitalised
design, engineering and other direct costs incurred by the Company. The prices paid for these components and
services were the same as the prices Hopetoun might have acquired them from the original suppliers. The
carrying value of these costs amounted to $850,716 and have been recognised as a disposal of Capital Works
in Progress during the year.
Under the terms of this agreement, Hopetoun entered into a lease arrangement on 1 February 2020 providing
the Company the right to use this plant in its manufacturing operations once constructed for a period of 12
months, for US$1 in rent. Hopetoun has also given the Company an exclusive option until 31st December 2020
to acquire the plant at Hopetoun's cost of construction. The term of the lease is 12 months and has been
accounted for as a short-term lease in accordance with the Accounting Standards. Under the arrangement, the
Company also contributed commissioning costs of AU$333,339 to bring the plant to its current condition and
use. This amount has been capitalised as part of plant and equipment during the year. Hopetoun has also
received unrestricted technology license to operate the plant in any market other than New Zealand upon
completion of the lease term.
60
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
31 Related Parties continued
(c)
Loans to/from related parties
Unsecured loans are made to the subsidiaries, key management personnel and other related parties on an
arm's length basis. Loans are unsecured and repayable in cash.
Opening
balance
Interest
paid/payable
Interest not
charged
Closing
balance
Impairment
Loans from KMP
2020
2019
Loans from related parties
2019
32 Cash Flow Information
$
$
$
$
$
-
200,000
473,484
2,155,000
-
-
-
-
-
575
-
-
-
-
-
(a)
Reconciliation of result for the year to cashflows from operating activities
Reconciliation of net income to net cash provided by operating activities:
(Loss) / Profit for the year
Cash flows excluded from profit
attributable to operating activities
Non-cash flows in profit:
- amortisation
- depreciation
- share based payments expensed
- other
Changes in assets and liabilities:
- (increase)/decrease in trade and
other receivables
- (increase)/decrease in other assets
- (increase)/decrease in inventories
- (increase)/decrease in deferred tax
asset
- increase/(decrease) in trade and
other payables
- (increase)/decrease in other liabilities
- increase/(decrease) in income taxes
payable
- increase/(decrease) in deferred tax
liability
- increase/(decrease) in provisions
Cashflows from operations
2020
$
2019
$
(4,667,873)
1,499,053
24,231
1,282,224
(17,624)
575
16,800
1,002,654
81,174
-
1,830,959
457
(1,076,120)
(2,270,855)
83,041
(1,037,472)
(1,175,309)
(227,337)
1,105,634
-
2,760,244
(35,917)
(141,979)
428,022
109,181
11,260
249,131
51,532
(2,714,384)
2,600,070
61
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
33 Share-based Payments
The Company provides benefits to employees (including senior executives) of the Group in the form of share-based
payments whereby employees render services in exchange for options and shares.
At 30 June 2020 the Group has the following share-based payment schemes:
Australian Long Term Incentive Plan;
United States Share Incentive Plan;
Tenure Restricted Stock Units;
Performance Restricted Stock Units.
(a)
Options granted
A summary of the Company options issued is as follows:
2020
Grant Date
30 April 2019
Expiry Date
30 August
2022
Exercise
price
Balance
at start of
the year
Granted
during
the year
Exercised
during
the year
Forfeited
during the
year
Vested
and
exercisabl
e at the
end of the
year
Balance
at the end
of the
year
0.20
- 4,500,000
- (4,500,000)
-
-
The weighted average fair value of the options granted during the year was $
- (2019: $ 0.07).
(b)
Restricted stock units
A summary of the Restricted Stock Units (RSUs) issued is as follows:
Note Grant Date
30 April
2019
30 April
2019
30
November
2019
Expiry
Date
30 August
2022
30 August
2022
30 August
2023
Tenure RSUs (i)
Performance RSUs (ii)
Performance RSUs (iii)
(i) These Tenure RSUs were forfeited during the year.
(ii) These Performance RSUs were forfeited during the year.
Balance at
start of
year
Granted
during the
year
Forfeited
during the
year
Balance at
end of
year
-
-
-
1,500,000 (1,500,000)
-
-
-
-
(ii) The Board resolved to grant these Performance RSUs on or about 30 November 2019. The aggregate
-
-
-
62
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
33 Share-based Payments continued
Restricted stock units continued
(b)
number of Performance Rights to be granted will be calculated by dividing the amount of the award by the
VWAP of the Group's shares over the five trading days immediately prior to 30 November 2019.
34 Events Occurring After the Reporting Date
The consolidated financial report was authorised for issue on 30 September 2020 by the board of directors.
1) Subsequent to the year end, the Group successfully completed a $6.1 million capital raising by way of a placement
and accelerated non-renounceable institutional entitlement offer to eligible new investors and existing shareholders.
The capital raising was well supported and sees several new institutions and sophisticated investors joining the
register. All Directors and related parties participated in the capital raising.
Eligible Shareholders also received one free New Option for every three New Shares they subscribe for under the
Entitlement Offer. The New Options are exercisable at $0.15 at any time from the date of issue until 30 June 2022.
2) In September 2020, the related party loan amounting to $200,575 was repaid in full.
Except for the above, no other matters or circumstances have arisen since the end of the financial year which
significantly affected or could significantly affect the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial years.
35 Parent entity
The following information has been extracted from the books and records of the parent, Tubi Limited and has been
prepared in accordance with Accounting Standards.
The financial information for the parent entity, Tubi Limited has been prepared on the same basis as the consolidated
consolidated financial statements except as disclosed below.
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the consolidated financial
statements of the parent entity. Dividends received from associates are recognised in the parent entity profit or loss,
rather than being deducted from the carrying amount of these investments.
63
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2020
35 Parent entity continued
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Retained earnings
Option reserve
Total Equity
Statement of Profit or Loss and Other
Comprehensive Income
Total profit or (loss) for the year
Total comprehensive income
Contingent liabilities
2020
$
2019
$
4,139,363
15,096,469
6,560,376
15,978,678
19,235,832
22,539,054
1,374,494
1,941,298
4,795,471
1,728,074
3,315,792
6,523,545
18,042,218
(2,185,728)
63,550
18,042,218
(2,077,883)
81,174
15,920,040
16,045,509
107,832
(525,475)
107,832
(525,475)
The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019.
Contractual commitments
The parent entity had capital commitments for the construction of mobile manufacturing plants amounting to
$1,624,462 as at 30 June 2020 .
36 Statutory Information
The registered office and principal place of business of the company
is:
Tubi Limited
2 Hopetoun Street
Paddington NSW 2021
Australia
64
Tubi Limited
ABN: 25 139 142 493
Directors' Declaration
The directors of the Company declare that:
1.
the consolidated financial statements and notes for the year ended 30 June 2020 are in accordance with the
Corporations Act 2001 and:
a.
comply with Accounting Standards, which, as stated in basis of preparation Note 1 to the consolidated financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards
(IFRS); and
b.
give a true and fair view of the financial position and performance of the consolidated group;
2.
the Chief Executive Officer and Chief Finance Officer have given the declarations required by Section 295A that:
a.
the financial records of the Company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
b.
the consolidated financial statements and notes for the financial year comply with the Accounting Standards; and
c.
the consolidated financial statements and notes for the financial year give a true and fair view.
3.
in the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Director ..................................................................
Simon Bird
Dated 30 September 2020
65
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TUBI LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Tubi Limited and its controlled entities (the company
and its subsidiaries (“the Group”)), which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the period then ended,
notes comprising a summary of significant accounting policies and other explanatory information, and the
directors’ declaration of the company and the consolidated entity comprising the company and the entities it
controlled at the year’s end or from time to time during the financial year.
In our opinion, the financial report of Tubi Limited is in accordance with the Corporations Act 2001,
including:
i)
ii)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020
and of its performance for the year ended on that date; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
66
PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.For office locations visit www.pkf.com.auSydneyLevel 8, 1 O’Connell StreetSydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001 p +61 2 8346 6000 f +61 2 8346 6099PKF(NS) Audit & Assurance Limited PartnershipABN 91 850 861 839Liability limited by a scheme approved under Professional Standards LegislationNewcastle755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309p +61 2 4962 2688 f +61 2 4962 3245 Key Audit Matters
A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of
the financial report of the current year. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. For each matter below, our description of how our audit addressed the matter is provided in
that context
1.
Revenue recognition - IPLEX contract
Why significant
How our audit addressed the key audit matter
During the year the Group recognised revenue of
$9.362m in relation to a stand-alone contract
with IPLEX for the construction, assembly and
supply of a Mobile Plant (refer to Note 5).
recognition under
this particular
Revenue
contract involved significant judgement regarding
the
the
satisfaction of performance obligations under the
following three key components of the contract:
timing of revenue and
level and
- Equipment purchase;
- License of intellectual property; and
- Service contract.
Given the nature of the transaction and degree of
judgement required in the accounting treatment,
we consider this be a Key Audit Matter.
Our work included, but was not limited to, the
following procedures:
• Reviewing revenue recognition policy with
from
to AASB 15 Revenue
reference
Contracts with Customers.
•
Performing detailed assessment in respect of
the 3 components of the IPLEX contract;
• Reviewing management’s assessment of the
IPLEX contract
revenue
in
recognition under the five step model of AASB
15 and the appropriate accounting treatment;
and
relation
to
•
Vouching sales
invoices and amounts
received to bank, and ensuring in accordance
with the agreed terms of the contract.
67
Key Audit Matters (cont’d)
2.
Capitalised expenditure
Why significant
As disclosed in note 13, the Group has capitalised
expenditure of $12.432m in the year to 30 June
2020.
the construction of
Capitalised expenditure is predominantly in relation
to
three new mobile
manufacturing plants (two of which have been
commissioned during the year).
These mobile manufacturing plants represent the
core assets of the Group. Therefore existence,
and
ownership
capitalised
valuation
in accordance with AASB 116
expenditure,
Property, Plant and Equipment,
is materially
significant for the Group.
of
The carrying value of mobile manufacturing plants
is therefore considered a Key Audit Matter.
How our audit addressed the key audit matter
Our work included, but was not limited to, the
following procedures:
•
•
•
•
•
•
•
•
•
in
capitalised projects with
for overseeing
responsible
key
the
to assess validity of capitalised
reviewing the construction project plans relating
to the mobile manufacturing plants along with
any key assumptions/
judgments made by
management.
discussing
personnel
projects
expenditure;
vouching a sample of additions to supporting
purchase invoices and tracing to bank payment
or supplier ledger balance as appropriate;
vouching a sample of labour costs charged to
the projects for validity, including review of
rationale around calculations and allocation;
assessing expenditure
the
line with
construction project plans to confirm legitimacy
of capital expenses allocated to each plant
project in accordance with AASB 116 Property,
Plant and Equipment;
assessing work in progress at 30 June 2020
with reference
to determine their continued viability and
tracking to budget. This includes reviewing
progress reports to management and the
Board and related minutes of meetings;
reviewing the historical accuracy of project plans
with particular attention for any project defaults
or write offs of previously
capitalised
expenditure;
reviewing management’s assessment in relation
to forecasts and sales pipeline in relation to
future utilisation of mobile manufacturing plants;
and
the mobile
verifying physical existence of
manufacturing plants
through date stamped
photographs and live video feed from the actual
physical site.
to construction project plans
68
Other Information
Other information is financial and non-financial information in the annual report of the Group which is
provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other
Information in the annual report.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s report. The
remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information in
the Financial Report and based on the work we have performed on the Other Information that we obtained
prior the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the entity’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue and auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
69
Auditor’s Responsibilities for the Audit of the Financial Report (cont’d)
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the consolidated entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and other related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the consolidated entity to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the group financial report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
70
Auditor’s Responsibilities for the Audit of the Financial Report (cont’d)
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors’ report for the period ended 30 June
2020.
In our opinion, the Remuneration Report of Tubi Limited for the period ended 30 June 2020, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
PKF
SCOTT TOBUTT
PARTNER
30 SEPTEMBER 2020
SYDNEY
71
Tubi Limited
Additional Information for Listed Public Companies
30 June 2020
Additional Information for Listed Public Companies
30 June 20120
The following information is current as at 27 September 2020.
Ordinary Shares (ASX:2BE)
Distribution of Shareholders
Fully Paid Ordinary
Shares
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Top 20 Shareholders
Holders
30
80
139
403
148
800
Number
Total Units
1,211
242,087
1,233,910
15,491,700
293,360,094
310,329,002
%
0.000
0.080
0.400
4.990
94.530
100.000
No. Name
1.
2.
3.
4.
5.
6.
7.
8.
9
BALD HILL QUARRY PTY LTD
OXLEIGH PTY LTD
CHIARA CORPORATION PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BETA GAMMA PTY LTD
KTM VENTURES INNOVATION FUND LP
SEALIGHT CAPITAL PTY LTD
GW BURKE INVESTMENTS PTY LTD
CS THIRD NOMINEES PTY LIMITED
10. CHARLES & CORNELIA GOODE FOUNDATION PTY LTD
11. STRUCTURE INVESTMENTS PTY LTD
12. BANNABY INVESTMENTS PTY LIMITED
13. MR DAVID ALAN VERSCHOOR & MRS DANIELLE MILINDA
VERSCHOOR
14. NATIONAL NOMINEES LIMITED
15. WHITS END PTY LTD
16.
17. MR DAVID RIDLEY GRAY
18. MR CRAIG LAWN & MRS JOY LAWN
SUPER FUND A/C>
19. CITICORP NOMINEES PTY LIMITED
20. ROGERS SF MANAGEMENT PTY LTD
No. of
Ordinary
Shares
Held
% of
Issued
Capital
58,799,167 18.947%
58,549,147 18.867%
37,949,642 12.229%
7.956%
24,691,005
2.417%
7,500,000
2.327%
7,222,222
2.159%
6,700,000
5,833,333
1.880%
5,304,384
1.709%
4,999,999
1.611%
4,611,112
1.486%
3,807,111
1.227%
3,531,000
3,333,334
3,135,000
2,771,000
2,166,169
1.138%
1.074%
1.010%
0.893%
0.698%
1,942,500
1,901,196
0.626%
0.613%
1,722,222
0.555%
Total Securities of Top 20 Holdings
246,469,543 79.422%
72
Tubi Limited
Additional Information for Listed Public Companies
30 June 2020
Total of Securities
310,329,002
Substantial Shareholders
The following shareholders are substantial holders:
Holder Name
Oxleigh Pty Ltd1
Bald Hill Quarry2
Chiara Corporation Pty Ltd3
J P Morgan Nominees Australia Pty Limited
Number of
Shares
117,348,3144
117,348,3144
37,949,642
24,691,005
% Voting
Power
37.81%4
37.81%4
12.23%
7.96%
1.
2.
3.
4.
Oxleigh Pty Ltd is controlled by director Mr. Michael Tilley
Bald Hill Quarry Pty Ltd is controlled by director Mr. Anthony Willsallen
Chiara Corporation Pty Ltd is controlled by director Mr. Marcello Russo
Oxleigh Pty Ltd and Bald Hill Quarry Pty Ltd have entered in to a Consultation Deed Consultation Deed under
which each has agreed to not dispose of Shares without first notifying and consulting with the other party on
(among other things) the terms, the manner and the extent to which the other party may acquire those shares.
The effect of the Consultation Deed is that each Related Party Shareholder (among other things) has a
³UHOHYDQWLQWHUHVW´ DVWKDWWHUPLVGHILQHGLQWKH&RUSRUDWLRQV$FW LQHDFKRWKHU¶V6KDUes and has voting
power of 37.81% in the Company.
Voting Rights
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present
at a meeting or by proxy has one vote on a show of hands.
Unmarketable Holders
There are 140 shareholders holding less than a marketable parcel of shares based on the
closing price of AUD 0.073 on 25 September 2020 representing a total of 4,25,223 shares.
Restricted Securities
The Company has the 69,871,200 fully paid ordinary restricted securities which are voluntarily escrowed for
24 months from quotation (ending 16/06/2021).
Options (ASX:2BEO)
Tubi Limited has 22,395,423 listed options on issue exercisable at $0.15 and expiring 30 June 2020.
These are held by 308 Optionholders.
Distribution of Optionholders
Listed Options
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Holders
34
134
29
68
43
308
Number
Total Units
16,658
305,213
214,602
2,602,040
19,256,910
22,395,423
%
0.070
1.360
0.960
11.620
85.990
100.000
73
Tubi Limited
Additional Information for Listed Public Companies
30 June 2020
Top 20 Optionholders
No.
Name
1. OXLEIGH PTY LTD
2. BALD HILL QUARRY PTY LTD
3. J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
4. CS THIRD NOMINEES PTY LIMITED
5. NATIONAL NOMINEES LIMITED
6. BETA GAMMA PTY LTD
7. KTM VENTURES INNOVATION FUND LP
8. CHIARA CORPORATION PTY LTD
9 CHARLES & CORNELIA GOODE FOUNDATION PTY LTD
10. MR KENNETH JOSEPH HALL
11. KNIGHT61 INVESTMENTS PTY LTD
12. STRUCTURE INVESTMENTS PTY LTD
13. BANNABY INVESTMENTS PTY LTD
14. MR DAVID RIDLEY GRAY
15. E-TECH CAPITAL PTY LTD
16. BEARAY PTY LIMITED
17. GW BURKE INVESTMENTS PTY LTD
18. MASTER STEPHEN DINESH RAJARATNAM
19. APPWAM PTY LTD
20. BEIRNE TRADING PTY LTD
No. of
Options
Held
2,222,222
2,222,222
2,091,016
1,925,927
1,111,111
833,333
740,741
% of
Issued
Capital
9.923%
9.923%
9.337%
8.600%
4.961%
3.721%
3.308%
740,741
3.308%
565,681
444,444
2.526%
1.985%
387,074
1.728%
370,371
1.654%
370,370
370,367
333,333
333,333
277,778
248,413
233,333
231,111
1.654%
1.654%
1.488%
1.488%
1.240%
1.109%
1.042%
1.032%
Total Securities of Top 20 Holdings
Total of Securities
16,052,921 71.679%
22,395,423
Voting Rights
Options do not carry a right to vote.
74
Tubi Limited
Additional Information for Listed Public Companies
30 June 2020
Corporate Directory
Company
Tubi Limited ACN 139 142 493
2 Hopetoun Street
Paddington NSW 2021
Phone: +61 2 9331 8725
Email companysecretary@tubigroup.com
Web www.tubigroup.com
Directors
Mr. Simon Bird
Mr. Marcello Russo
Mr. Tony Willsallen
Mr. Brent Emmett
Company Secretary
Mr. Ariel Sivikofsky
Independent Non-Executive Chairman
Managing Director
Non-Executive Director
Independent Non-Executive Director
Company Secretary and Chief Financial Officer
Share Registry
Boardroom Pty Limited
Level 12
225 George Street
Sydney NSW 2000
Telephone +61 2 9290 9600
Auditor
PKF
Level 8
2¶&RQQHOO6WUHHW
Sydney NSW 2000
ASX Code: 2BE
75