Tubi Limited
Consolidated Financial Statements
For the Year Ended 30 June 2021
Tubi Limited
ABN: 25 139 142 493
Contents
For the Year Ended 30 June 2021
Page
Consolidated Financial Statements
Directors' Report
1
Corporate Governance Statement
17
Auditor's Independence Declaration under Section 307C of the Corporations Act 2001
20
Consolidated Statement of Profit or Loss and Other Comprehensive Income
21
Consolidated Statement of Financial Position
22
Consolidated Statement of Changes in Equity
23
Consolidated Statement of Cash Flows
24
Notes to the Financial Statements
25
Directors' Declaration
63
Independent Auditor's Report
64
Additional Information for Listed Companies
69
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
The directors present their report, together with the financial statements of the Group, being Tubi Limited
(the Company) and its controlled entities, for the financial year ended 30 June 2021.
The Directors of the Company during the year ended 30 June 2021, and up to the date of this report are set
out below. All Directors held their position throughout the entire year and up to the date of this report unless
otherwise stated.
Mr. Marcello Russo
Executive Director & Chief Executive Officer
Mr. John Mouawad
Chairman & Non-Executive Director (Appointed 6 May 2021)
Mr. Ryan Shaw
Independent Non-Executive Director (Appointed 6 May 2021)
Mr. John Zeckendorf
Independent Non-Executive Director (Appointed 9 June 2021)
Mr. Simon Bird
Chairman & Independent Non-Executive Director (Resigned 1 April 2021)
Mr. Brent Emmett
Independent Non-Executive Director (Resigned 1 April 2021)
Mr. Anthony Willsallan
Non-Executive Director (Resigned 1 April 2021)
Appointments during Voluntary Administration
Philip Carter and Daniel Walley of PwC Australia were appointed joint and several Voluntary Administrators
of the Company on 23 April 2021. The Voluntary Administration ended on 6 May 2021.
Director
Experience
Marcello Russo
Executive Director,
Chief Executive Officer
& Founder
Interests in Shares:
37,949,642
Interests in Listed
Options:
740,741
Marcello Russo is the Founder and executive Director of Tubi, having steered
the Company since its inception in 2009. Marcello has had over 25 years of
experience in pipe strategy, innovation and manufacture, which is reflected in
Tubi's focus on future growth and global industry development.
At the time of the listing Marcello was the business development manager in
charge of constructing 5001, 5002, 5003, 5004 and insuring the contract in NZ
for IPLEX was delivered successfully. In February 2020 Marcello became the
CEO and maintained his directorship
ASX Listed Company Directorships in the past three years: Nil
Mr. John Mouawad
Chairman &
Independent Non-
Executive Director
Interests in Shares:
Nil
Interests in Listed
Options:
Nil
John Mouawad has over 15 years corporate restructuring experience and is
FXUUHQWO\ D 3DUWQHU LQ .RUGD0HQWKD¶V 5HVWUXFWXULQJ 3UDFWLFH -RKQ KDV
significant restructuring experience and often accepts appointments as a non
executive director on behalf of stakeholders seeking corporate restructures to
GULYH FRPPHUFLDO DQG ILQDQFLDO RXWFRPHV WKDW DUH LQ WKH HQWLWLHV¶ EHVW LQWHUHVWV
This experience includes serving as a director of the Flinders Power
Partnership Group, the Masters Home Improvement Group and Crabtree and
Evelyn. John is a registered liquidator, a member of the Australian
Restructuring Insolvency Turnaround Association, the Turnaround
Management Association and a Member of the Institute of Chartered
Accountants.
ASX Listed Company Directorships in the past three years: Nil
1
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
Director
Experience
Mr. Ryan Shaw
Independent Non-
Executive Director
Interests in Shares:
Nil
Interests in Listed
Options:
Nil
Ryan Shaw is highly experienced in the recovery and management of assets,
particularly in situations of financial distress. He is currently Principal and
Mandala Asset Solutions. Prior to joining Mandala Asset Solutions, Ryan was
a Director at PricewaterhouseCoopers corporate recovery and also worked in
Brunei for the Royal Family to help resolve the major litigation and asset
recovery that resulted from the Prince Jefri dispute.
Ryan has recently been appointed as director in a number of major run-off
situations in Australia working with major restructuring firms and asset owners
to effect the restructuring and resolution of these assets.
ASX Listed Company Directorships in the past three years: Nil
Mr. John Zeckendorf
Independent Non-
Executive Director
Interests in Shares:
Nil
Interests in Listed
Options:
Nil
John Zeckendorf is highly experienced in the recovery and management of
assets, particularly in situations of financial distress. John previously was a
Director at PricewaterhouseCoopers corporate recovery and then worked in
Brunei for the Royal Family to help resolve the major litigation and asset
recovery that resulted from the Prince Jefri dispute.
John is a Principal of Mandala Asset Solutions, who have worked extensively
in Asia in asset recovery situations and John has advised creditors,
Governments and Regulators in respect of insolvency and restructuring.
John has recently been appointed as director in a number of distressed and
restructuring situations in Australia including iFlix, Redmap and has acted as a
trustee director for overseas beneficiaries of Paladin Group.
ASX Listed Company Directorships in the past three years: Nil
Simon Bird
Chairman &
Independent Non-
Executive Director
Interests in Shares:
555,555
Interests in Listed
Options:
185,185
Simon Bird has over 30 years of global public company experience in both
senior executive and board roles.
Current directorships include Lead Independent Director of Mount Gibson Iron
(ASX: MGX) and Non-Executive Director of Pacific American Holdings (ASX:
PAK). Recent directorships include CPA Australia and several private
companies.
2
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
Director
Experience
Brent Emmett
Independent Non-
Executive Director
(resigned 1 April 2021)
Interests in Shares:
1,297,222
Interests in Listed
Options:
182,406
Brent Emmett has over 40 years' experience in petroleum exploration,
exploration and production management and investment banking.
Brent began work as an explorationist in Australia, Papua New Guinea and
New Zealand for Esso (now ExxonMobil) and then Elf Aquitaine. He joined
Ampolex as Exploration Manager in 1983 and filled general management roles
in North and South America, International and Business Development, and was
a member of the Executive Committee.
From 1997 until 2001 Brent was Managing Director - Oil & Gas Advisory with
the investment banking firm of CIBC World Markets.
Brent was the Chief Executive Officer and Managing Director of Horizon Oil for
17 years, where he was a member of the risk management and disclosure
committees. He retired as CEO of Horizon Oil in June 2018 and is currently an
advisor to the board. He remains actively involved in the oil business as a
senior advisor to industry participants.
He holds a Bachelor of Science First Class Honours degree in physics and
geophysics from Adelaide University.
ASX Listed Company Directorships in the past three years: Horizon Oil Limited.
Resigned 30 June 2018.
Anthony Willsallen
Non-Executive Director
Interests in Shares:
117,348,314
Interests in Listed
Options:
4,444,444
Tony Willsallen has 45 years in contracting, farming and heavy equipment. He
managed family agricultural enterprises for 35 years before retiring in 2010.
He is currently Managing Director of a private company involved in quarrying
and waste services since 1987 which produces and supplies quarry products to
large infrastructure projects in Southern New South Wales.
He holds a Bachelor of Agricultural Economics from the University of New
England.
ASX Listed Company Directorships in the past three years: Nil
Elissa Hansen was appointed as the Company Secretary on 11 May 2021.
(OLVVD KDV RYHU \HDUV¶ H[SHULHQFH DGYLVLQJ ERDUGV DQG PDQDJHPHQW RQ FRUSRUDWH JRYHUQDQFH#
compliance, investor relations and other corporate related issues. She has worked with boards and
management of a range of ASX listed companies including assisting companies through the IPO process.
Elissa is a Chartered Secretary who brings best practice governance advice, ensuring compliance with the
Listing Rules, Corporations Act and other relevant legislation.
Elissa holds a Bachelor of Commerce and Graduate Diploma in Applied Corporate Governance and is a
fellow of the Governance Institute of Australia (FGIA) and a graduate member of the Australian Institute of
Company Directors (GAICD)
Ariel Sivikofsky was the Company Secretary and Chief Financial Officer of the Group from 2 March 2020
until his resignation on 1 April 2021.
3
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
7KH QXPEHU RI PHHWLQJV RI WKH *URXS¶V %RDUG RI 'LUHFWRUV DQG HDFK %RDUG &RPPLWWHH KHOG GXULQJ WKH \HDU
ended 30 June 2021, and the number of meetings attended by each director were:
Director
Board Meetings
Audit & Risk
Committee Meetings
Nominations & HR
Committee meetings
Eligible to
Attend
Number
Attended
Eligible to
Attend
Number
Attended
Eligible to
Attend
Number
Attended
Marcello Russo
8
8
-
-
-
-
John Mouwad
1
1
-
-
-
-
Ryan Shaw
1
1
-
-
-
-
John Zeckendorf
-
-
-
-
-
-
Simon Bird
7
7
3
3
1
1
Brent Emmett
7
7
3
3
1
1
Anthony Willsallen
7
7
3
3
1
1
The principal activities of the Group during the year were the development, operation, leasing and sale of
mobile manufacturing plants for the production of high-GHQVLW\ SRO\HWK\OHQH ³HDPE´ SLSHV IRU XVH LQ WKH
oil and gas, irrigation, mining and infrastructure sectors.
The Group continues to operate in Australia, New Zealand and the United States.
There were no significant changes in those activities during the year.
2021 Review of operations
Key financial information for the year includes:
revenues of $9.67 million (2020: $20.81 million);
impairment expenses $0.65 million (2020: $nil);
loss after tax attributable to Group shareholders was $8.41 million (2020: loss after tax $4.67 million);
underlying EBITDA was a loss of $3.91 million (2020: loss of $4.37 million)1;
Whilst revenue began strongly at the commencement of the financial year as the two Florida Plants were
utilised, demand and margin decreased from September through to April 2021 due to the global pandemic
disruptions, US elections together with ongoing oversupply following the decline in 2019 of the oil and gas
VHFWRU 7KLV FRPELQHG ZLWK LQWHUQDO %RDUG FKDQJHV DQG WKH *URXS¶V need to divest its assets and return
surplus capital to shareholders, has resulted in a reduction of revenue for the 2021 financial year, when
compared to the prior year.
Financial Position at 30 June 2021
7KH *URXS¶V QHW DVVHWV ZHUH $14.21 million representing net tangible assets per share of $0.05 (June
2020: $0.07).
Major current assets included cash of $0.61 million. Current liabilities (excluding borrowings) decreased by
$4.32 million mainly due to a decrease in trade payables.
1 ͞/d ͟ ĂŶĚ ͞ƵŶĚĞƌůLJŝŶŐ /d ͟ ĂƌĞ ŶŽŶstatutory financial measures which are not prescribed by Australian Accounting Standards
;͞AAS͟Ϳ͘ dŚĞLJ ƌĞƉƌĞƐĞŶƚ ƚŚĞ ƉƌŽĨŝƚ under AAS adjusted for interest, tax, depreciation and amortisation and other certain specific items.
͞hŶĚĞƌůLJŝŶŐ /d ͟ ŝƐ ĂůƐŽ ĂĚũƵƐƚĞĚ ĨŽƌ ŽŶĞŽĨĨ ůĞŐĂů ĞdžƉĞŶƐĞƐ ĂŶĚ ĐŽƐƚƐ ĂƐƐŽĐŝĂƚĞĚ ǁŝƚŚ ƚŚĞ /WK͘ dŚĞ ŝƌĞĐƚŽƌƐ ĐŽŶƐŝĚĞƌ ƚŚĂƚ ͞/d ͟ ĂŶĚ
͞ƵŶĚĞƌůLJŝŶŐ /d ͟ ƌĞĨůĞĐƚ ĐŽƌĞ ĞĂƌŶŝŶŐƐ ŽĨ ƚŚĞ ĞŶƚŝƚLJ ĐŽŶƐŝƐƚĞŶƚ ǁŝƚŚ ŝŶƚĞƌŶĂů ƌĞƉŽƌƚŝŶŐ͘
4
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
On 6 April 2021, the Group entered into a trading halt and, on 8 April 2021, was suspended from official
quotation.
On 23 April 2021, the Group entered into Voluntary Administration, with the majority of the Board and
Management team resigning, with the exception of the CEO/MD, Mr Marcello Russo. On 6 May 2021, the
Group announced that the Voluntary Administration had ended pursuant to an Order of the Federal Court of
Australia on 5 May 2021. On that date, two new Board members, Mr John Mouawad and Mr Ryan Shaw
were appointed with Mr Russo continuing as CEO/MD
There have been no other significant changes in the state of affairs of entities in the Group during the year.
The Group is currently looking to divest itself of its assets, re-establish itself and or return surplus funds to
its shareholders, for further information, refer to subsequent events disclosed below.
7KH QDWXUH RI WKH *URXS¶V EXVLQHVV H[SRVHV LW WR FHUWDLQ ULVNV 7KHVH ULVNV DUH DFWLYHO\ PRQLWRUHG DQG
managed by the Company's Board Audit and Risk Committee who assists the Board in fulfilling its
responsibilities relating to the oversight of the Tubi Group's risk profile.
There were no dividends paid, recommended or declared during the current or previous financial year.
Subsequent to the year end, the following events occurred:
x
In August 2021, the following events took place as announced on ASX,
o
WKH *URXS¶V VXEVLGLDU\ 7XEL 86$ ,QF HQWHUHG LQWR D 052 6XSSO\ $JUHHPHQW ZLWK 0RVDLF )HUWLOL]HU#
LLC (Mosaic) for the supply of HDPE and MDPE Pipe for an initial term of 3 years;
o
the Group also entered into a Facility Agreement with Oxleigh Pty Ltd to borrow funds of up to
$2.5 million for general working capital purposes. The facility term was to 30 June 2022 at an
interest rate of 10% per annum, a commitment fee of 3% per annum on the available facility, and
a financial covenant requiring net tangible assets to be no less than $5 million;
o
the Company engaged advisors and consulted a number of parties in the pursuit to assist with the
potential divestment of certain assets.
x
On 25 March 2022, the Group completed the sale of certain assets under an Asset Purchase Agreement
entered into with Mosaic and Hopetoun Corporation Pty Ltd (Hopetoun). Under the terms of the
Agreement, the Group and Hopetoun agreed to sell, transfer and assign the rights of Mobile Plant 5002
and Mobile Plant 5003, together with lab, reeling & stringing and other related assets located in Bartow,
Florida USA together with the grant of an intellectual property license for US$10 million (which is
approximately AU$13.5 million). US$8.5 million was payable on completion and the balance in 12 months
under a hold back arrangement to cover the purchaser for any indemnity or warranty claims.
Mobile Plant 5002 and other equipment was owned by the Group. Mobile Plant 5003 was owned by
Hopetoun. The agreed allocation of sale proceeds to Hopetoun was AU$5.3 million (of which $4.8 million
has been paid to Hopetoun net of the hold back amount), with the remainder of approximately AU$8.2
million to the Group.
Except for the above, no other matters or circumstances have arisen since the end of the financial half 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..
7KH *URXS¶V RSHUDWLRQV DUH VXEMHFW WR ORFDO# VWDWH DQG IHGHUDO HQYLURQPHQWDO OHJLVODWLRQ DQG UHJXODWLRQV LQ
5
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
the jurisdictions in which it operates. The Board are responsible for the regular monitoring of environmental
exposure and compliance with environmental regulations and are not aware of any breaches of these
regulations during the year.
The Group has entered into deeds of indemnity, access and insurance with each Director. Under these
deeds, the Group has agreed to indemnify, to the extent permitted by the Corporations Act, each Director in
respect of certain liabilities which the Director may incur as a result of, or by reason of (whether solely or in
part), being or acting as an officer of the Group. These liabilities include losses or liabilities incurred by the
Director to any other person as an officer of the Group, including legal expenses.
7KH *URXS KDV DOVR DJUHHG WR PDLQWDLQ LQ IDYRXU RI HDFK RIILFHU D GLUHFWRUV¶ DQG RIILFHUV¶ SROLF\ RI LQVXUDQFH
for the period that they are officers and for seven years after they cease to act as officers.
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party for the
purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
PKF(NS) Audit & Assurance Limited Partnership continues in office in accordance with section 327 of the
Corporations Act 2001.
A FRS\ RI WKH DXGLWRU¶V LQGHSHQGHQFH GHFODUDWLRQ DV UHTXLUHG XQGHU VHFWLRQ 8 9& RI WKH Corporations Act
2001 is set out on page 20 of the Annual Report.
During the year, entities associated with PKF(NS) Audit & Assurance Limited Partnership (external auditor
to the Group) have provided other services in addition to the statutory audits, as disclosed in Note 27 of the
financial statements.
The Directors are satisfied that the provision of non-audit services provided by the auditor are compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The
Directors are satisfied that these non-audit servicHV GR QRW FRPSURPLVH WKH H[WHUQDO DXGLWRU¶V
independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity
and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and
Ethical Standards Board, including reviewing or audLWLQJ WKH DXGLWRU¶V RZQ ZRUN# DFWLQJ LQ D
management of decision-making capacity for the Group, acting as advocate for the Group or jointly
sharing economic risks and rewards.
6
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
Introduction
The remuneration report details WKH NH\ PDQDJHPHQW SHUVRQQHO ³KMP´ UHPXQHUDWLRQ DUUDQJHPHQWV IRU
the Group, in accordance with the requirements of the Corporations Act 2001 and its regulations.
KMP are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all Directors. The following persons of the Group were
classified as KMP during the 2021 financial year and unless otherwise indicated, were classified as KMP
for the entire year:
Mr. Marcello Russo
Executive Director & Chief Executive Officer
Mr. John Mouawad
Non-Executive Director (Appointed 6 May 2021)
Mr. Ryan Shaw
Non-Executive Director (Appointed 6 May 2021)
Mr. John Zeckendorf
Non-Executive Director (Appointed 9 June 2021)
Mr. Simon Bird
Chairman & Independent Non-Executive Director (Resigned 1
April 2021)
Mr. Brent Emmett
Independent Non-Executive Director (Resigned 1 April 2021)
Mr. Anthony Willsallan
Non-Executive Director (Resigned 1 April 2021)
Mr Ariel Sivikofsky
Company Secretary & Chief Financial Officer (Resigned 1
April 2021)
This remuneration report is set out under the following main headings:
Remuneration Framework
Equity Incentive Plans
Service Agreements
Details of Remuneration
Share-Based Compensation
Additional Disclosures Relating to Key Management Personnel
Remuneration Framework
The remuneration policy of the Group has been designed to align KMP objectives with shareholder and
business objectives by providing a fixed remuneration component and offering specific long-term incentives
based on key performance areas affecting the Group's financial results. The Board believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best key
management personnel to run and manage the Group, as well as create goal congruence between
directors, executives and shareholders.
The Board's policy for determining the nature and amount of remuneration for key management personnel
of the Group is as follows:
The remuneration policy has been developed by the Remuneration Committee and approved by the
Board following professional advice from independent external consultants.
All key management personnel receive a base salary (which is based on factors such as length of
service and experience), superannuation, fringe benefits, and performance incentives.
Performance incentives are based on predetermined key performance indicators.
Incentives paid in the form of options or rights are intended to align the interests of the KMP and the
Group with those of the shareholders. In this regard, key management personnel are prohibited from
limiting risk attached to those instruments by use of derivatives or other means.
The Remuneration Committee reviews key management personnel packages annually by reference to
WKH *URXS¶V SHUIRUPDQFH# H[HFXWLYH SHUIRUPDQFH DQG FRPSDUDEOH LQIRUPDWLRQ IURP LQGXVWU\ VHFWRUV
7
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
The performance of KMP is measured against criteria agreed annually with each executive and is based
SUHGRPLQDQWO\ RQ WKH IRUHFDVW JURZWK RI WKH *URXS¶V SURILWV DQG VKDUHKROGHUV¶ YDOXH $OO ERQXVHV DQG
incentives must be linked to predetermined performance criteria. The Board may, however, exercise its
discretion in relation to approving incentives, bonuses and options, and can recommend changes to the
&RPPLWWHH¶V UHFRPPHQGDWLRQV $Q\ FKDQJHV PXVW EH MXVWLILHG E\ UHIHUHQFH WR PHDVXUDEOH SHUIRUPDQFH
criteria. The policy is designed to attract the highest calibre of executives and reward them for performance
that results in long-term growth in shareholder wealth.
Key management personnel receive a superannuation guarantee contribution required by the law, which is
currently 9.5%, and do not receive any other retirement benefits. Some individuals, however, may choose
to sacrifice part of their salary to increase payments towards superannuation.
Upon retirement, key management personnel are paid employee benefit entitlements accrued to the date of
retirement.
All remuneration paid to KMP is valued at the cost to the Group and expensed.
The Board's policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The Remuneration Committee determines payments to the non-executive directors and
reviews their remuneration annually, based on market practice, duties and accountability. Independent
external advice is sought when required. The maximum aggregate amount of fees that can be paid to
non-executive directors is subject to approval by shareholders at the Annual General Meeting. The current
maximum is $750,000.
Certain KMP are also entitled to long-WHUP LQFHQWLYHV ³LTIs´ LQ WKH IRUP RI VKDUH-based compensation to
further align their interests with shareholders' interests. Details regarding share-based compensation is set
out below.
Key management personnel who are subject to these arrangements are subject to a policy governing the
use of external hedging arrangements. Such personnel are prohibited from entering into hedge
arrangements, i.e. put options, on unvested shares and options which form part of their remuneration
package. Terms of employment signed by such personnel contain details of such restrictions.
Equity Incentive Plans
Australian Long-Term Incentive Plan
The Group has adopted an employee incentive plan known as the Tubi Limited Long-Term Incentive Plan
³LTI Plan´ # WR DVVLVW LQ WKH UHZDUG# UHWHQWLRQ DQG PRWLYDWLRQ RI WKH *URXS V 'LUHFWRUV# VHQLRU PDQDJHPent,
and other employees. The LTI Plan is intended to assist with aligning the interests of participants with
shareholders by providing an opportunity for Eligible Participants to earn equity interests in the Company.
Under the rules of the LTI Plan, the Board has discretion to offer:
a full-time or part-time employee of any Group Company or a Director Options to acquire shares and/or
Performance Rights to acquire Shares; and
any other person who is declared by the Board in its sole and absolute discretion to be eligible to
receive grants of Options to acquire shares and/or Performance Rights to acquire Shares inclusive of
any Options, Performance Rights or similar instruments issued under any other incentive plan operated
by the Company.
(each recipient is an Eligible Employee and the above awards are collectively the Awards).
In each case the Awards can be made subject to vesting conditions and/or performance hurdles as
determined by the Board.
The terms and conditions of the LTI Plan are set out in comprehensive rules. A summary of the rules of the
LTI Plan is set out below:
The LTI Plan is open to Eligible Employees as determined by the Board. Participation is voluntary.
The Board may determine the type and number of Awards to be issued under the LTI Plan to each
participant and other terms of issue of the Awards, including but not limited to:
-
what conditions and/or performance hurdles must be met by a participant in order for an Award to
vest (if any);
-
the amount payable to be paid by a participant on the grant of Awards (if any);
-
the exercise price of any option granted to a participant;
8
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
-
the period during which a vested option can be exercised; and
-
any forfeiture conditions or disposal restrictions applying to the Awards and any Shares that a
participant receives upon exercise of their options or vesting of Performance Rights.
When any conditions and/or performance hurdles have been satisfied, their Options/Performance
Rights will become vested and will be exercisable into Shares.
Each vested Option and Performance Right enables the participant to be issued or to be transferred
one Share upon exercise or vesting (as applicable), or an equivalent cash value, subject to the rules
governing the LTI Plan and the terms of any particular offer.
Participants holding Options or Performance Rights are not permitted to participate in new issues of
Securities by the Company but adjustments may be made to the number of Shares over which the
options or Performance Rights are granted and/or the exercise price (if any) to take into account
changes in the capital structure of the Company that occur by way of pro rata and bonus issues in
accordance with the rules of the LTI Plan and the ASX Listing Rules.
If a "change of control event" occurs to the Company, and unless the Board determines otherwise, all
granted Awards will immediately vest.
A "change of control" event will occur when a person or entity becomes a legal or beneficial owner of
50% or more of the issued capital of the Company; a person or entity becomes entitled to, acquires,
holds or has an equitable interest in more than 50% of the issued share capital of the Company; or the
Board determines that there are circumstances that have occurred or are likely to occur which will
result in significant changes to the structure or control of the Company which may adversely affect the
value of the Awards. A "change of control" event does not include the listing of the Company on the
ASX.
If a participant becomes a "bad leaver":
-
all vested options which have not been exercised will continue in force and remain exercisable for
30 days, unless the Board in its sole and absolute discretion determines otherwise; and
-
all unvested options and/or performance rights will automatically be forfeited by the participant for
the payment by the Company to the participant of nominal consideration.
A participant will be a "bad leaver" if the participant resigns (other than because they have died or
resign due to incapacity arising from serious personal illness or injury), is terminated for performance or
is terminated or dismissed for misconduct, unless the Board determines otherwise in its absolute
discretion.
If a participant is a "good leaver":
-
unless the Board determines otherwise any and all vested options held by the participant which
have not been exercised will continue in force and remain exercisable for 12 months; and
-
the Board may determine the manner in which any unvested Awards held by the participant will be
dealt with.
A participant is a "good leaver" if they are not a "bad leaver".
The LTI Plan limits the number of Awards that the Company may grant without Shareholder approval,
such that the sum of all Awards on issue (assuming all options and Performance Rights were
exercised) do not at any time exceed in aggregate 5% of the fully diluted share capital of the Company
as at the date of any proposed new Awards.
The Board may delegate management and administration of the LTI Plan, together with any of their
powers or discretions under the LTI Plan, to a committee of the Board or to any one or more persons
selected by them.
Subject to the ASX Listing Rules and the Constitution, the Board may at any time amend the LTI Plan
or the terms and conditions upon which Awards have been issued under the LTI Plan provided,
generally, that the amendment does not materially reduce the rights of any Participant in respect of
Awards granted to them.
The Board may elect to use an employee share trust or other mechanism for the purposes of holding
Awards for Participants under the Plan and delivering Plan Shares on behalf of Participants upon
exercise of Options and/or Performance Rights (as the case may be).
9
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
United States Share Incentive Plan
The Company has adopted an employee incentive plan known as the Tubi Limited Share Incentive Plan
³SI Plan´ # WR DVVLVW LQ WKH UHZDUG# UHWHQWLRQ DQG PRWLYDWLRQ RI FHUWDLQ RI WKH *URXS V 'LUHFtors, senior
management, and other employees. The SI Plan is intended to assist with aligning the interests of
participants with shareholders by providing an opportunity for eligible participants to earn equity interests in
the Company.
Under the rules of the SI Plan, the Board has discretion to offer any person who is declared by the Board in
its sole and absolute discretion to be eligible (Eligible Employee) to receive grants of options to acquire
Shares and/or restricted stock units to acquire Shares (Awards).
In each case the Awards can be made subject to vesting conditions and/or performance hurdles as
determined by the Board.
The terms and conditions of the SI Plan are set out in comprehensive rules. A summary of the rules of the
SI Plan is set out below:
The SI Plan is open to Eligible Employees as determined by the Board. Participation is voluntary.
The Board may determine the type and number of Awards to be issued under the SI Plan to each
participant and other terms of issue of the Awards, including but not limited to:
-
what conditions and/or performance hurdles must be met by a participant in order for an Award to
vest (if any);
-
the amount payable to be paid by a participant on the grant of Awards (if any);
-
the exercise price of any option granted to a participant;
-
the period during which a vested option can be exercised; and
-
any forfeiture conditions or disposal restrictions applying to the Awards and any Shares that a
participant receives upon exercise of their options or vesting of restricted stock units.
When any conditions and/or performance hurdles have been satisfied, their options/restricted stock
units will become vested and will be exercisable into Shares.
Each vested option and restricted stock unit enables the participant to be issued or to be transferred
one Share upon exercise or vesting (as applicable), subject to the rules governing the SI Plan and the
terms of any particular offer.
Participants holding options or restricted stock units are not permitted to participate in new issues of
Securities by the Company but adjustments may be made to the number of Shares over which the
options or restricted stock units are granted and/or the exercise price (if any) to take into account
changes in the capital structure of the Company that occur by way of pro rata and bonus issues in
accordance with the rules of the SI Plan and the ASX Listing Rules.
If a "change of control event" occurs to the Company, and unless the Board determines otherwise, all
granted Awards will immediately vest.
A "change of control" event will occur when a person or entity becomes a legal or beneficial owner of
50% or more of the issued capital of the Company; a person or entity becomes entitled to, acquires,
holds or has an equitable interest in more than 50% of the issued share capital of the Company; or the
Board determines that there are circumstances that have occurred or are likely to occur which will
result in significant changes to the structure or control of the Company which may adversely affect the
value of the Awards. A "change of control" event does not include the listing of the Company on the
ASX.
If a participant becomes a "bad leaver":
-
all vested options which have not been exercised will continue in force and remain exercisable
within 30 days of the participant becoming a bad leaver, unless the Board in its sole and absolute
discretion determines otherwise;
-
all vested restricted stock units which have not been settled will be immediately settled in plan
shares, unless the Board in its sole and absolute discretion determines otherwise; and
-
all unvested Awards will automatically be forfeited by the participant for the payment by the
10
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
Company to the participant of nominal consideration.
A participant will be a "bad leaver" if the participant resigns (other than because they have died or
resign due to incapacity arising from serious personal illness or injury), is terminated for performance or
is terminated or dismissed for misconduct, unless determined otherwise by the Board in its sole
discretion.
If a participant is a "good leaver":
-
unless the Board determines otherwise any and all vested Options held by the participant which
have not been exercised will continue in force and remain exercisable for 12 months;
-
all unvested Options will be automatically forfeited by the participant for the payment by the
Company to the participant of nominal consideration;
-
all vested Restricted Stock Units which have not been settled will be immediately settled in Shares;
and
-
the Board may determine, in its sole and absolute discretion, the manner in which the unvested
Restricted Stock Units will be dealt with.
A participant is a "good leaver" if they are not a "bad leaver".
The SI Plan limits the number of Awards that the Company may grant without Shareholder approval,
such that the sum of all Awards on issue (assuming all options and restricted stock units were
exercised) do not at any time exceed in aggregate 5% of the fully diluted share capital of the Company
as at the date of any proposed new Awards inclusive of any Options, Restricted Stock Units or similar
instruments issued under any other incentive plan operated by the Company.
The Board may delegate management and administration of the SI Plan, together with any of their
powers or discretions under the SI Plan, to a committee of the Board or to any one or more persons
selected by them.
Subject to the ASX Listing Rules and the Constitution, the Board may at any time amend the SI Plan or
the terms and conditions upon which Awards have been issued under the SI Plan provided, generally,
that the amendment does not materially reduce the rights of any Participant in respect of Awards
granted to them.
The Board may elect to use an employee share trust or other mechanism for the purposes of holding
Awards for Participants under the Plan, and delivering Plan Shares on behalf of Participants upon
exercise of Options and/or restricted stock units (as the case may be).
There are also certain rules of the SI Plan which are applicable to Awards granted under the SI Plan to
SDUWLFLSDQWV ZKR DUH UHVLGHQWV RI WKH 86$ ³U.S Persons´ # LQFOXGLQJ WKDW;
A U.S Person may only be granted an Award if they are a U.S employee, consultant or member of the
Board of a Group entity.
A consultant is only eligible to become a participant if they are a natural person providing bona fide
services to a Group entity and such services are not:
-
in connection with the offer or sale of securities in a capital-raising transaction; or
-
performed to directly or indirectly promote or maintain a market for the Company's securities.
No U.S. Person shall be eligible to be granted an Award prior to the date such person commences
employment or other personal service relationship with a Group entity.
No option granted to an eligible U.S. Person shall have an exercise price that is less than 100% of the
fair market value of a Share on the date that the option is granted.
The Tubi Board has resolved and adopted a policy that there will be no option or share plan incentives
awarded to non-executive directors of the Company.
Service Agreements
Non-Executive Service Agreements
The Board's policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The Remuneration Committee determines payments to the non-executive directors and
reviews their remuneration annually, based on market practice, duties and accountability. Independent
external advice is sought when required. The maximum aggregate amount of fees that can be paid to
11
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
non-executive directors is subject to approval by shareholders at the Annual General Meeting. The current
maximum is $750,000.
The Group has entered into an appointment letter with each of its non-executive directors. The following
table sets out the non-H[HFXWLYH 'LUHFWRUV¶ DQQXDO UHPXQHUDWLRQ FRPPHQFLQJ IURP < -XO\ 20. No fees
were paid to non-executive Directors prior to 1 July 2020.
Director
Key Terms of Service Agreement
Simon Bird
Chairman &
Independent
Non-
Executive
Director
Term:
Remuneration:
Renewed a least every three years in accordance with the
&RPSDQ\¶V Constitution and ASX Listing Rules.
$75,000 per annum for services as Chairman of the Board.
$5,000 for services as a member of the Audit & Risk
Committee
$2,500 for services as a member of the Nominations & HR
Committee
Brent
Emmett
Independent
Non-
Executive
Director
Term:
Remuneration:
Renewed a least every three years in accordance with the
&RPSDQ\¶V Constitution and ASX Listing Rules.
$50,000 per annum for services as a Non-Executive
Director
$10,000 for services as a Chair of the Audit & Risk
Committee
$5,000 for services as Chair of the Nominations & HR
Committee
Anthony
Willsallen
Non-
Executive
Director
Term:
Remuneration:
Renewed a least every three years in accordance with the
&RPSDQ\¶V &RQVWLWXWLRQ DQG $6; /LVWLQJ 5XOHV
$50,000 per annum for services as a Non-Executive
Director
$5,000 for services as a member of the Audit Committee
$2,500 for services as a member of the Human Resources
Committee
John
Mouawad
Chairman &
Independent
Non-
Executive
Director
Term:
Remuneration:
Renewed a least every three years in accordance with the
&RPSDQ\¶V &RQVWLWXWLRQ DQG $6; /LVWLQJ 5XOHV
$75,000 per annum for services as Chairman of the Board
Ryan Shaw
Independent
Non-
Executive
Director
Term:
Remuneration:
Renewed a least every three years in accordance with the
&RPSDQ\¶V &RQVWLWXWLRQ DQG ASX Listing Rules.
$50,000 per annum for services as a Non-Executive
Director
John
Zeckendorf
Independent
Non-
Executive
Director
Term:
Remuneration:
Renewed a least every three years in accordance with the
&RPSDQ\¶V &RQVWLWXWLRQ DQG $6; Listing Rules.
$50,000 per annum for services as a Non-Executive
Director
12
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
Executive Service Agreements
The key terms concerning the employment of executives are set out in the following table:
Director
Key Terms of Service Agreement
Marcello Russo
Executive Director
& Chief Executive
Officer
Marcello Russo is employed by the Company in the position of
Executive Director and Chief Executive Officer. Marcello is
employed on a full-time basis and his fixed annual remuneration for
the year is $350,000 inclusive of superannuation and subject to tax
deductions.
Marcello is eligible to receive the following short-term cash
incentives:
for the financial year ending 30 June 2021, up to 50% of his
base salary (gross), subject to satisfactory achievement of
individual and Company performance hurdles as determined by
the Company in its absolute discretion; and
from 1 July 2020, eligible to participate in any senior executive
short-term incentive plan.
Marcello's employment contract contains express provisions
protecting the Company's confidential information and intellectual
property. Marcello's employment contract contains mutual non-
disparagement obligations which survive the termination of
employment.
Under the terms of Marcello's employment contract, either party is
entitled to terminate Marcello's employment by giving six months'
written notice.
After termination of employment, the employment contract provides
that Marcello will be subject to non-compete and non-solicitation of
employee restrictions for a period of 12 months following the
termination or cessation of employment.
Details of Remuneration
Details of the remuneration of KMP of the Group are set out in the following tables:
Short Term Benefits
Post
Employment
Benefits
Long
Term
Benefits
Share
Based
Payments
Total
Cash,
Salaries,
Fees &
Bonuses
Annual
Leave
Accrued
Non-
monetary
Superannuation
Long
Service
Leave
Equity
Settled
2021
Directors:
Brent Emmett
12,177
-
-
1,157
-
-
13,333
Marcello Russo
180,185
32,979
-
15,649
1,574
-
230,387
Simon Bird
15,411
-
-
1,464
-
-
16,875
Ryan Shaw
9,875
-
-
-
-
-
9,875
John Zeckendorf
2,957
-
-
-
-
-
2,957
John Mouawad
-
-
-
-
-
-
-
Other KMP:
Ariel Sivikofsky
199,145
-
-
16,332
-
-
215,476
Total
419,749
32,979
-
34,601
1,574
-
488,903
13
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
Short Term Benefits
Post
Employme
nt Benefits
Long Term
Benefits
Share
Based
Payments
Total
Cash,
Salaries,
Fees &
Bonuses
Annual
Leave
Accrue
d
Non-
moneta
ry
Superannu
ation
Long
Service
Leave
Equity
Settled
2020
Directors:
Simon Bird
27,447
-
-
2,607
-
-
30,054
Michael Tilley
28,540
-
-
2,711
-
-
31,251
Marcello Russo
303,443
17,734
-
22,557
5,490
-
349,224
Jeffrey Shorter
320,759
-
-
-
-
-
320,759
Anthony Willsallen
21,880
-
-
2,079
-
-
23,959
Craig Lawn
24,639
-
-
2,341
-
-
26,980
Brent Emmett
47,945
4,555
52,500
Other KMP:
Ian Coates(1)
203,729
16,952
-
-
220,681
Ariel Sivikofsky
76,126
6,375
-
7,171
-
-
89,672
Total
1,054,508
24,109
-
60,973
5,490
-
1,145,080
(1) resigned 2 March 2020
Share-Based Payments
The accounting standards require share-based payments expense to be calculated using the fair value of
the shares at grant date, amortised over the relevant performance and service period. FY21 share based
payments includes the LTI plan and represents the FY21 portion of the fair value of rights granted in FY20.
During FY21, the Group did not grant any further share-based compensation to KMPs.
Performance Rights
During the 2020 financial year, the Board resolved to grant Performance Rights to Marcello Russo on or
about 30 November 2019. The aggregate number of Performance Rights to be granted will be calculated
by dividing the amount of the award (A$150,000 in the case of Marcello Russo) by the VWAP of the
*URXS¶V VKDUHV RYHU WKH ILYH WUDGLQJ GD\V LPPHGLDWHO\ SULRU WR 8 1RYHPEHU <@
The following terms apply to the Performance Rights:
Term
Details
Expiry Date
30 August 2023
Vesting
On satisfaction of the vesting conditions and performance hurdles,
Performance Rights will automatically convert into shares of the Group.
0DUFHOOR 5XVVR¶V Performance Rights may be cash settled at the
discretion of the Board.
Performance Rights have a nil exercise price and no consideration is
payable by the holder of the Performance Rights on vesting.
Vesting Dates
The Performance Rights vest (subject to satisfaction of the vesting
conditions and performance hurdles, as follows:
Vesting Date
$
30 August 2020
$50,000
30 August 2021
$50,000
30 August 2022
$50,000
Total
$150,000
14
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
Term
Details
Vesting
Conditions
Holders of the Performance Rights must be an employee of Tubi Limited
as at the applicable vesting date.
Performance
Hurdles
The performance hurdles for each tranche of Performance Rights are:
positive total shareholder return during the prior financial year; and
10% per annum growth in earnings per share in the prior financial
year.
Rollover
If both the vesting condition and performance hurdles are not satisfied,
the relevant tranche of Performance Rights will be added to the
immediately subsequent tranche and the relevant performance hurdle will
be added to the immediately subsequent performance hurdle. If both the
vesting condition and performance hurdles are not satisfied by the third
and final tranche, all Performance Rights will automatically lapse.
Listing
The Performance Rights are not listed on the ASX or any other listing
authority, stock exchange or market.
Transfer
The PRSUs may only be transferred with the prior consent of the Board
or by force of law.
Additional Disclosures Relating to Key Management Personnel
Ordinary Shares Held by KMP
The number of Ordinary Shares in the Company during the 2021 UHSRUWLQJ SHULRG KHOG E\ HDFK RI WKH *URXS¶V NH\ PDQDJHPHQW
personnel, including their related parties, is set out below:
Ordinary Shares
KMP
Held at
Acquired
Disposed
Other
changes
Held at
As a % of
30 June
2020
in the year
in the
year
30 June 2021
Ordinary
Shares
Directors:
Marcello Russo
35,727,420
2,222,22
-
-
37,949,642
12.19%
John Mouawad
-
-
-
-
-
-
Ryan Shaw
-
-
-
-
-
-
John Zeckendorf
-
-
-
-
-
-
Simon Bird
-
555,555
-
555,555
-
-
Brent Emmett
750,000
547,222
-
1,297,222
-
-
Anthony Willsallen
104,014,980
13,333,334
-
117,348,314
-
-
15
Tubi Limited
ABN: 25 139 142 493
Directors' Report
30 June 2021
KMP Related Party Transactions
During the year ended 30 June 2021, the following transactions occurred between the Group and key
management personnel, including their close family members and entities related to them:
Loans, payable to
Ordinary Shares
KMP
Balance at
Interest
paid and
payable
for the
year
Interest
not
charged
Balance at
Highest
indebtedness
during the year
1 July 2020
30 June 2021
Directors:
Marcello Russo
200,575
-
-
-
200,575
7KLV GLUHFWRUV¶ UHSRUW# incorporating the remuneration report, is signed in accordance with a resolution of the
Board of Directors.
Director: ...........................................................
John Mouawad
Date: 6 May 2022
16
Tubi Limited
ABN: 25 139 142 493
Corporate Governance Statement
The Board is committed to achieving and demonstrating the highest standards of corporate
governance and has a detailed governance framework.
7KH&RPSDQ\¶V&RUSRUDWH*RYHUQDQFH6WDWHPHQWLVFXUUHQWDVDW6 May 2022 and is available on
WKH&RPSDQ\¶VZHEVLWHDWhttps://tubigroup.com/investors/corporate-governance/ .
17
20
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 2021, 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
6 MAY 2022
SYDNEY, NSW
PKF (NS) Audit & Assurance Limited Partnership
ABN 91 850 861 839
Liability limited by a scheme approved
under Professional Standards Legislation
Sydney
Level 8, 1 O'Connell Street
Sydney NSW 2000 Australia
GPO Box 5446 Sydney NSW 2001
p +61 2 8346 6000
f +61 2 8346 6099
Newcastle
755 Hunter Street
Newcastle West NSW 2302 Australia
PO Box 2368 Dangar NSW 2309
p +61 2 4962 2688
f +61 2 4962 3245
PKF (NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of separately owned firms and does not accept any
responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
For our office locations visit www.pkf.com.au
Tubi Limited
ABN: 25 139 142 493
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the Year Ended 30 June 2021
Note
2021
$
2020
$
Revenue
4
9,667,840
20,811,108
Other income
4
361,160
651,511
Raw materials and consumables used
5
(8,085,103)
(18,681,255)
Employee benefits expense
(2,425,008)
(3,685,290)
Depreciation and amortisation expense
5
(3,874,704)
(1,306,455)
Impairment losses on non-financial assets
5
(655,066)
-
Travel and accommodation
(378,310)
(635,314)
Repairs and maintenance
(204,155)
(797,229)
Legal and professional
(336,694)
(346,981)
Consultancy
(220,030)
(147,016)
Rental expense
(636,354)
(760,071)
Insurance
(457,209)
(432,053)
Other operating expenses
(546,070)
(327,262)
Finance expenses
6
(31,954)
(28,429)
Loss before income tax
5
(7,821,657)
(5,684,736)
Income tax (expense) / benefit
7
(584,959)
1,016,863
Loss for the year
(8,406,616)
(4,667,873)
Items that will be reclassified to profit or loss
when specific conditions are met
Exchange differences on translating foreign
controlled entities
(124,501)
91,184
Other comprehensive income for the year, net of
tax
(124,501)
91,184
Total comprehensive income for the year
(8,531,117)
(4,576,689)
Loss attributable to:
Members of the parent entity
(8,406,616)
(4,667,873)
Total comprehensive (loss) / income attributable to:
Members of the parent entity
(8,531,117)
(4,576,689)
Earnings per share
From continuing operations:
Basic earnings per share (cents)
22
(2.78)
(1.92)
Diluted earnings per share (cents)
22
(2.61)
(1.92)
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 2021
Note
2021
$
2020
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
9
611,818
776,092
Trade and other receivables
10
189,264
1,792,104
Inventories
11
165,025
2,669,132
Other non-financial assets
12
365,994
22,686
TOTAL CURRENT ASSETS
1,332,101
5,260,014
NON-CURRENT ASSETS
Property, plant and equipment
13
17,459,825
19,746,630
Intangible assets
14
44,823
307,987
Right-of-use assets
15
67,930
807,087
Deferred tax assets
16
-
1,402,646
TOTAL NON-CURRENT ASSETS
17,572,578
22,264,350
TOTAL ASSETS
18,904,679
27,524,364
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
17
1,363,718
6,747,172
Borrowings
18
1,694,482
200,575
Current tax liabilities
16
59,825
455,741
Lease liabilities
15
56,243
67,713
Employee benefits
19
170,754
198,754
TOTAL CURRENT LIABILITIES
3,345,022
7,669,955
NON-CURRENT LIABILITIES
Deferred tax liabilities
16
1,349,646
2,076,006
Lease liabilities
15
-
744,619
TOTAL NON-CURRENT LIABILITIES
1,349,646
2,820,625
TOTAL LIABILITIES
4,694,668
10,490,580
NET ASSETS
14,210,011
17,033,784
EQUITY
Issued capital
20
23,813,112
18,042,218
Reserves
21
77,154
265,205
Accumulated losses
(9,680,255)
(1,273,639)
TOTAL EQUITY
14,210,011
17,033,784
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 2021
2021
Note
Ordinary
Shares
$
Accumulated
losses
$
Foreign
Currency
Translation
Reserve
$
Share Based
Payments
Reserve
$
Total
$
Balance at 1 July 2020
18,042,218
(1,273,639)
201,655
63,550
17,033,784
Loss attributable to members of the parent
entity
-
(8,406,616)
-
-
(8,406,616)
Oher comprehensive income for the year
-
-
(124,501)
-
(124,501)
Total comprehensive income for the year
-
(8,406,616)
(124,501)
-
(8,531,117)
Transactions with owners in their
capacity as owners
Contribution of equity, net of transaction
costs
20(a)
5,770,894
-
-
-
5,770,894
Share based payment transactions
32
-
-
-
(63,550)
(63,550)
Balance at 30 June 2021
23,813,112
(9,680,255)
77,154
-
14,210,011
2020
Note
Ordinary
Shares
$
Accumulated
losses
$
Foreign
Currency
Translation
Reserve
$
Share Based
Payments
Reserve
$
Total
$
Balance at 1 July 2019
18,042,218
3,394,234
110,471
81,174
21,628,097
Loss attributable to members of the parent
entity
-
(4,667,873)
-
-
(4,667,873)
Other comprehensive income for the year
-
-
91,184
-
91,184
Total comprehensive income for the year
-
(4,667,873)
91,184
-
(4,576,689)
Transactions with owners in their
capacity as owners
Contribution of equity, net of transaction
costs
20(a)
-
-
-
-
-
Share based payment transactions
32
-
-
-
(17,624)
(17,624)
Balance at 30 June 2020
18,042,218
(1,273,639)
201,655
63,550
17,033,784
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 2021
Note
2021
$
2020
$
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
11,544,792
19,067,773
Payments to suppliers and employees
(16,543,821)
(21,906,313)
Interest received
809
16,676
Interest paid
(10,638)
(20,989)
Income taxes paid
(304,589)
(191,379)
Receipt from grants
100,000
319,848
Net cash used in by operating activities
31
(5,213,447)
(2,714,384)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of plant and equipment
179,437
7,876,310
Purchase of property, plant and equipment
(1,857,279)
(12,055,376)
Purchase of intangble assets
(60,757)
(56,995)
Net cash used in investing activities
(1,738,599)
(4,236,061)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issue of shares, net of transaction costs
5,770,894
-
Proceeds from borrowings
1,527,234
200,000
Repayment of borrowings
(303,186)
(140,395)
Repayment of lease liabilities
(82,669)
(29,846)
Net cash provided by financing activities
6,912,273
29,759
Effects of exchange rate changes on cash and cash equivalents
(124,501)
91,184
Net decrease in cash and cash equivalents held
(164,274)
(6,829,502)
Cash and cash equivalents at beginning of financial year
776,092
7,605,594
Cash and cash equivalents at end of financial year
9
611,818
776,092
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 2021
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.
Comparatives are consistent with prior years, unless otherwise stated. During the period certain reclassifications were
undertaken in the Group's Statement of Profit and Loss and Other Comprehensive Income to better align the expenses to
their nature. These reclassifications have been applied consistently to the comparative period and did not change the
results for the period.
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
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 28 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.
(b)
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
25
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(b)
Revenue and other income continued
Revenue from contracts with customers continued
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.
(c)
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.
26
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(c)
Income Tax continued
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.
(d)
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).
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.
(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)
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.
27
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(g)
Leases
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.
(h)
Financial instruments
Financial instruments are recognised initially on the date that the Group becomes party to the contractual
provisions of the instrument.
28
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(h)
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
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
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.
29
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(h)
Financial instruments continued
Financial assets continued
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.
(i)
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.
(j)
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.
30
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(j)
Property, plant and equipment continued
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
Depreciation rate
Capital Works in Progress
See below
Plant and Equipment
10 - 20%
Furniture, Fixtures and Fittings
20%
Motor Vehicles
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.
(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)
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.
31
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(l)
Impairment of non-financial assets continued
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.
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.
(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.
(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)
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.
(p)
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.
32
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(p)
Earnings per share continued
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.
(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
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.
33
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(r)
Foreign currency transactions and balances continued
Transaction and balances continued
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 8.
(t)
Going concern
The directors have, at the time of approving the financial statements, a reasonable expectation that the Group
have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to
adopt the going concern basis of accounting in preparing the financial statements.
The Group has incurred net losses after tax of $8,406,616 (2020: net loss of $4,667,873) and net operating
cash outflows of $5,213,447 (2020: outflows of $2,714,384) for the year ended 30 June 2021. At 30 June 2021,
the Group had net current liabilities of $2,012,921 (2020: $2,409,941).
The Group lodged its FY21 Interim Results and Appendix 4D on 26 February 2021, relying on ASIC
Corporations (Amendment) Instrument 2020/1080 dated 25 November 2020 (the 'Amended ASIC Relief') to
extend the lodgement for the reviewed interim financial report. The Group's operations were significantly
affected by COVID, preventing the Group from being in a position to complete the lodgement of the HY21
financial report in a timely manner.
On 6 April 2021, the Group entered into a trading halt and, on 8 April 2021, was suspended from official
quotation. Whilst in suspension, the Group appointed Voluntary Administrators on 23 April 2021. The Group
succcesfully navigated to an end to the Voluntary Administration on 5 May 2021 and the Board and
Management sought reinstatement to the ASX through a strategy to re-capitalise the Company by generating
additional funds with the potential divestment of certain assets.
34
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Summary of Significant Accounting Policies continued
(t)
Going concern continued
The above conditions give rise to a material uncertainty that may cast significant doubt upon the Group's ability
to continue as a going concern.
The Directors and Management have considered the following factors in their assessment of the going concern
basis being appropriate:
Following a comprehensive sales process involving numerous parties, the Group entered into an Asset
Purchase Agreement with Mosaic Fertilizer, LLC (Mosaic), Hopetoun Corporation Pty Ltd (Hopetoun) and
Tubi USA, Inc, to sell, transfer and assign the rights to two Mobile Plants (Plants 5002 and 5003) and other
equipment on 24 March 2022. Sale proceeds of US$8.5 million (approximately AU$13.2 million) were paid
to the Company and its subsidiaries on 25 March 2022 (with a holdback amount of US$1.5 million payable
in 12 months), effectively re-financing the Group. Of the amounts received, AU$4.8 million (net of the
holdback amount) was paid to Hopetoun for the apportionment relating to their Plant 5003;
As at the date of signing this report, the Group has cash of approximately AU$3.1 million after having
settled various outstanding creditors, the Hopetoun proceeds for the sale of Plant 5003, and the borrowing
facility that was extended to the Group by Oxleigh as disclosed in Note 33;
the Directors and Management are currently reviewing various options for the future of the Company
including whether to continue operations with its two existing Mobile Extrusion Plants (and due to the
recovery from COVID and the increase in activity in oil and gas in the US, where the Plants are located,
expects to be able to rebuild a profitable business), or to seek shareholder approval to sell its remaining
assets;
The Group has prepared financial models and cash flow forecasts to the end of Financial Year 2023 - the
Group has adequate funding and, while it reviews and considers its future operations, it would like to
maintain its ASX listing and undertakes to either seek reinstatement or be removed from the Official List of
ASX within the two-year prescribed period with the potential to pursue various options for the plants it
currently holds with sufficient funds available to support its operations.
Based on the cash flow forecasts prepared by Management underpinned by the above factors and having
carefully assessed the likelihood and timing of cash flows from forecasted 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.
The financial statements do not include any adjustments relating to the recoverability and classification of asset
carrying amounts or the amount of liabilities that might result should the Group be unable to continue as a going
concern and meet its debts as and when they fall due.
(u)
Adoption of new and revised accounting standards
The Group has adopted all standards which became effective for the first time at 30 June 2021, 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 for details of the changes due to standards adopted.
35
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
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
Effective date
for entity
Requirements
Impact
AASB 2020-1 Amendments to
Australian Accounting
Standards – Classifications of
Liabilities as Current or Non-
Current
AASB 2020-6 Amendments to
Australian Accounting
Standards – Classification of
Liabilities as Current
or Non-current – Deferral of
Effective Date
Annual
reporting
period
beginning 1
July 2023
This Standard amends AASB 101 to
clarify requirements for the
presentation of liabilities in the
statement of financial position as
current or non-current.
For example, the amendments clarify
that a liability is classified as non-
current if an entity has the right at
the end of the reporting period to
defer settlement of the liability for at
least 12 months after the reporting
period. The meaning of settlement of
a liability is also clarified.
Little impact expected
but entities should
consider the
appropriate
classification of
liabilities as current or
non-current.
3
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 and intangible assets
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. If such impairment indicators were to be triggered, and to
determine whether an impairment is to be recognised, the group estimates the recoverable amount of the
asset. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in
use. Recoverable amounts of relevant assets that are assessed using value-in-use calculations incorporate
various key assumptions.
In determining value in use, management would perform calculations incorporating the use of cash flow
projections for the asset 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.
36
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
3
Critical Accounting Estimates and Judgments continued
(a)
Key estimates - impairment of property, plant and equipment and intangible assets continued
In arriving at fair value less costs of disposal, fair value is determined as the price that would be received to sell
an asset in an orderly transaction between market participants. Refer to Note 5(a) for details of the impairment
loss recognised by the group during the year.
(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 10(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
2(b) 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 2(j) for further details of the Group's accounting policy in
relation to capital works in progress.
4
Revenue and Other Income
2021
$
2020
$
Disaggregation of revenue from contracts
with customers
- sale of goods
9,667,840
11,448,909
- sale of equipment
4(a)
-
9,362,199
Total Revenue
9,667,840
20,811,108
37
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
4
Revenue and Other Income continued
2021
$
2020
$
Other Income
- interest
809
16,102
- miscellaneous
260,351
315,561
- grants
4(b)
100,000
319,848
361,160
651,511
(a)
Sale of equipment
The sale of equipment duing the year ended 30 June 2020 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 2020 financial year and
revenue was recognised in accordance with the Group's accounting policy.
(b)
Grants
The Group received an Australian COVID-19 related grant during the year ended 30 June 2021 for $100,000.
No conditions were attached to this grant and was recognised as income in accordance with the Group's
accounting policy.
During the year ended 30 June 2020, a grant was received for the US Small Business Administration's
Paycheck Protection Program with the entire amount received being used exclusively for payroll purposes.
38
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
5
Result for the Year
The result for the year includes the following specific expenses:
2021
$
2020
$
Cost of sales
8,085,103
18,681,255
Depreciation
3,870,719
1,282,224
Amortisation
3,985
24,231
Impairment loss on non-financial assets
5(a)
655,066
-
(a)
Impairment of non-financial assets
During the year, Management determined that there were indicators of impairment of its plant, equipment and
intangibles, these were as a result of a downturn in the market, COVID-19 related disruptions and competitor
price cutting. This resulted in a reduction of order volumes.
Accordingly, in accordance with the Group's accounting policy, Management performed impairment testing and
considered information available subsequent to the year end in respect of fair value less costs of diposal to
support whether the carrying value of its assets were in excess of the recoverable amount. This information
included, in particular, the recoverable amounts obtained from the sale of Plants 5002 and Plant 5003 (owned
by Hopetoun), and associated assets, subsequent to the year end as detailed in Note 33.
The Group's assets were written down to their recoverable amount, which was determined with reference to the
fair value less costs of disposal. Impairment losses amounting to $335,131 in respect of plant and equipment
and $319,936 in respect of intangible assets have been recognised in the consolidated statement of profit or
loss and other comprehensive income. For futher details, refer to Notes 13 and 14 respectively.
6
Finance Expenses
2021
$
2020
$
Interest expense
31,954
20,861
Foreign currency loss on financial assets and liabilities
-
7,568
Total finance expenses
31,954
28,429
7
Income Tax Expense
(a) The major components of tax benefit comprise:
2021
$
2020
$
Current tax expense
Income tax - current period
428
61,993
Deferred tax benefit
Origination and reversal of temporary differences
584,531
(1,078,856)
Total income tax expense / (benefit)
584,959
(1,016,863)
39
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
7
Income Tax Expense continued
(b) Reconciliation of income tax to accounting loss:
2021
$
2020
$
Loss
(7,821,655)
(5,684,737)
Tax
%
26.00
%
27.50
(2,033,630)
(1,563,303)
Add:
Tax effect of:
- non-deductible depreciation and amortisation
146,495
486,476
- non-deductible expenses
359,242
320,941
- deferred tax on tax losses not recognised
899,296
-
- previous deferred tax assets derecognised
1,111,812
-
- deferred tax on temporary differences not
recognised
96,464
-
579,679
(755,886)
Less:
Tax effect of:
- non-assessable income
(27,500)
-
- other
-
624,892
Income tax attributable to the Group
552,179
(1,380,778)
Difference in overseas tax rates
32,781
363,914
Income tax expense / (benefit)
584,960
(1,016,864)
Weighted average effective tax rate
%
(7)
%
18
The increase in the weighted average effective consolidated tax rate for 2021 compared to 2020 is primarily as a result
of derecognition of prior year losses previously brought to account in 2020 and futher deferred taxes not being brought
to account on current year losses and temporary differences.
(c) Income tax relating to each component of other comprehensive income:
Before-tax
Amount
$
2021
Tax
(Expense)
Benefit
$
Net-of-tax
Amount
$
Before-tax
Amount
$
2020
Tax
(Expense)
Benefit
$
Net-of-tax
Amount
$
Exchange differences on translating
foreign controlled entities
(124,501)
-
(124,501)
125,771
(34,587)
91,184
40
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
8
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.
9
Cash and Cash Equivalents
2021
$
2020
$
Cash at bank and in hand
611,818
776,092
611,818
776,092
41
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
10
Trade and other receivables
2021
$
2020
$
CURRENT
Trade receivables
142,889
1,759,489
Provision for expected credit losses
10(a)
-
-
142,889
1,759,489
Other receivables
46,375
32,615
Total current trade and other receivables
189,264
1,792,104
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 2021 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.
42
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
11
Inventories
2021
$
2020
$
CURRENT
At cost:
Raw materials
91,395
2,135,295
Finished goods
78,130
533,837
Provision for obsolete stock
(4,500)
-
165,025
2,669,132
Inventories was reduced by $ 4,500 (2020: $ NIL) as a result of the write-down of inventories to net realisable value.
This write down was recognised as an expense during the year.
12
Other non-financial assets
2021
$
2020
$
CURRENT
Prepayments
365,994
22,686
13
Property, plant and equipment
Note
2021
$
2020
$
Capital works in progress
At cost
13(a)
-
3,229,469
Plant and equipment
At cost
24,116,197
19,048,169
Accumulated depreciation
(6,440,025)
(2,716,218)
Accumulated impairment losses
(335,131)
-
Total plant and equipment
17,341,041
16,331,951
Furniture, fixtures and fittings
At cost
34,609
34,240
Accumulated depreciation
(34,609)
(27,233)
Total furniture, fixtures and fittings
-
7,007
Motor vehicles
At cost
325,370
359,098
Accumulated depreciation
(206,586)
(180,895)
Total motor vehicles
118,784
178,203
Total property, plant and equipment
13(c)
17,459,825
19,746,630
43
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
13
Property, plant and equipment continued
(a)
Capital works in progress
Capital works in progress relates to the construction of Tubi's third group owned, mobile manufacturing plant,
Plant 5004 (its fourth plant in operation). Construction of Plant 5004 was completed mid December 2020,
accordingly the carrying value of this plant was transferred to Plant and Equipment.
(b)
Plant and Equipment
As at balance date, Plant and Equipment comprises primarily the carrying values of three group owned mobile
manufacturing plants, Plant 5000, 5002 and 5004, and their related assets. Details of the impairment
assessment conducted in respect of these plants are included Note 5(a) and sale of Plant 5002 subsequent to
the year end in Note 33.
(c)
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:
Note
Capital Works
in Progress
$
Plant and
Equipment
$
Furniture,
Fixtures and
Fittings
$
Motor
Vehicles
$
Total
$
Year ended 30 June 2021
Balance at the beginning of year
3,229,469
16,331,951
7,007
178,203
19,746,630
Additions
1,974,951
37,326
401
-
2,012,678
Disposals
-
(179,437)
-
-
(179,437)
Transfers
13(a)
(5,204,420)
5,204,420
-
-
-
Depreciation expense
-
(3,718,088)
(7,408)
(59,419)
(3,784,915)
Impairment loss
5(a)
-
(335,131)
-
-
(335,131)
Balance at the end of the year
-
17,341,041
-
118,784
17,459,825
Note
Capital Works
in Progress
$
Plant and
Equipment
$
Furniture,
Fixtures and
Fittings
$
Motor
Vehicles
$
Total
$
Year ended 30 June 2020
Balance at the beginning of year
8,453,616
8,098,301
15,547
247,232
16,814,696
Additions
3,035,491
9,389,326
-
6,960
12,431,777
Disposals
(8,254,651)
(17,250)
(1,537)
-
(8,273,438)
Depreciation expense
-
(1,200,922)
(5,549)
(75,733)
(1,282,204)
Foreign exchange movements
(4,987)
62,496
(1,454)
(256)
55,799
Balance at the end of the year
3,229,469
16,331,951
7,007
178,203
19,746,630
44
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
14
Intangible Assets
2021
$
2020
$
Patents and trademarks
Cost
471,406
410,649
Accumulated amortisation and impairment
losses
(426,583)
(102,662)
Net carrying value
44,823
307,987
Total Intangibles
44,823
307,987
(a)
Movements in carrying amounts of intangible assets
Note
Patents and
trademarks
$
Total
$
Year ended 30 June 2021
Balance at the beginning of the year
307,987
307,987
Additions
60,757
60,757
Amortisation
(3,985)
(3,985)
Impairment loss
5(a)
(319,936)
(319,936)
Closing value at 30 June 2021
44,823
44,823
Note
Patents and
trademarks
$
Total
$
Year ended 30 June 2020
Balance at the beginning of the year
275,223
275,223
Additions
56,995
56,995
Amortisation
(24,231)
(24,231)
Closing value at 30 June 2020
307,987
307,987
45
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
15
Leases
The Group has leases over land and buildings.
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 lease terms are an
initial 2 year term, with four options to extend the lease each for an additional two year terms That is, a rolling two year
lease for 4 additional rollovers, being for a maximum 10 year period.
The Florida lease was initially recognised with the expectation that the Group will exercise all options to extend the
lease term. During the 2021 year, Management's expectation changed and the Group is no longer planning to exercise
any option to extend the lease term. As such, the Group has treated this as a lease modification and has recognised a
reduction of the right of use asset and corresponding lease liability.
Right-of-use assets
Buildings
$
Total
$
Year ended 30 June 2021
Balance at beginning of year
807,087
807,087
Depreciation charge
(85,804)
(85,804)
Reductions in right-of-use assets due to changes
in lease liability
(653,353)
(653,353)
Balance at end of year
67,930
67,930
Buildings
$
Total
$
Year ended 30 June 2020
Balance at beginning of year
-
-
Additions to right-of-use assets
842,178
842,178
Depreciation charge
(35,091)
(35,091)
Balance at end of year
807,087
807,087
46
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
15
Leases continued
Lease liabilities
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
$
2021
Lease liabilities
57,090
-
-
57,090
56,243
2020
Lease liabilities
67,713
308,183
436,436
812,332
812,332
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:
2021
$
2020
$
Interest expense on lease liabilities
(4,232)
(1,831)
Depreciation of right-of-use assets
(128,594)
(35,091)
(132,826)
(36,922)
Consolidated Statement of Cash Flows
2021
$
2020
$
Total cash outflow for leases
133,750
29,846
16
Tax assets and liabilities
(a)
Current Tax Liability
2021
$
2020
$
Income tax payable
59,825
455,741
47
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
16
Tax assets and liabilities continued
(b)
Deferred Tax Assets
Note
Opening
Balance
$
Charged to
Income
$
Charged
directly to
Equity
$
Closing
Balance
$
Deferred tax assets
Provisions - employee benefits
30,652
674,436
-
705,088
Accruals
16,752
500,873
-
517,625
Other
179,933
-
-
179,933
Balance at 30 June 2020
227,337
1,175,309
-
1,402,646
Provisions - employee benefits
705,088
(665,009)
-
40,079
Accruals
517,625
(503,390)
-
14,235
Other
179,933
(168,701)
-
11,232
1,402,646
(1,337,100)
-
65,546
Set-off of deferred tax assets
pursuant to set-off provisions
(1,402,646)
1,337,100
-
(65,546)
Balance at 30 June 2021
-
-
-
-
(c)
Deferred Tax Liabilities
Opening
Balance
$
Charged to
Income
$
Charged
directly to
Equity
$
Closing
Balance
$
Deferred tax liabilities
Property, plant & equipment
1,916,535
(191,672)
-
1,724,863
Other
50,290
300,853
-
351,143
Balance at 30 June 2020
1,966,825
109,181
-
2,076,006
Property, plant & equipment
1,724,863
(309,671)
-
1,415,192
Other
351,143
(351,143)
-
-
2,076,006
(660,814)
-
1,415,192
Set-off of deferred tax assets
pursuant to set-off provisions
(1,402,646)
1,337,100
-
(65,546)
Balance at 30 June 2021
673,360
676,286
-
1,349,646
(d)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following:
2021
$
2020
$
Tax losses
7,735,031
-
Temporary differences
96,464
-
Total
7,831,495
-
48
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
16
Tax assets and liabilities continued
(d)
Unrecognised deferred tax assets continued
Deferred tax assets with a potential tax benefit of $1,920,135 (2020: $nil) have not been recognised in respect
of these items because it is not probable that future taxable profit will be available against which the Group can
utilise the benefits therein.
17
Trade and Other Payables
2021
$
2020
$
Current
Trade payables
1,055,803
6,240,993
GST payable
2,515
11,217
Accrued expenses
271,738
339,511
Other payables
33,662
155,451
1,363,718
6,747,172
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.
18
Borrowings
2021
$
2020
$
CURRENT
Unsecured liabilities:
Related party loans
18(a)
1,124,910
200,575
PPP loan
18(b)
288,721
-
Other loans
18(c)
280,851
-
Total current borrowings
1,694,482
200,575
Total borrowings
1,694,482
200,575
(a)
Related party loans
At 30 June 2021, related party loans amounted to $1,124,910, including accrued interest of $3,129 (2020:
$200,575, including accrued interest of $575). The loans are payable by the Group to entities related to certain
directors and shareholders. For futher details, refer to Note 30(c).
49
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
18
Borrowings continued
(b)
PPP Loan
The Paycheck Protection Program (“PPP”) loan is a COVID-19 incentive from the US govenment which
authorises forgivable loans to small businesses to pay their employees during the COVID-19 crisis once certain
conditions are met. Any amount that is not forgiven will be treated as a 2 year loan, with interest accruing at 1%
per annum, The Group recieved $280,851 in the form of a PPP loan and has applied for forgiveness for the
whole loan balance subsequent to year end. The Group expects to the total balance to be forgiven, at which
time the the balance will be recognised as grant income.
(c)
Other loans
Other loans comprise of insurance premium financing for certain insurance policies of the Group. Interest is
charged between 4% and 5% per annum, and the loan is repayable monthly over the life of the insurance
policy.
Defaults and breaches
During the current and prior year, there were no defaults or breaches on any of the Group's loans.
19
Employee Benefits
2021
$
2020
$
Current liabilities
Provision for employee benefits
170,754
198,754
170,754
198,754
20
Issued Capital
2021
$
2020
$
311,306,779 (2020: 243,142,400)
Ordinary shares
23,813,112
18,042,218
(a)
Ordinary shares
No.
$.
Opening balance at 1 July 2019
243,142,400
18,042,218
Movement
-
-
Balance at 30 June 2020 & 1 July 2020
243,142,400
18,042,218
12 August 2020: Issue under placement and institutional
entitlement offer at $0.09 per share
60,986,473
5,488,783
24 August 2020: Issue under retail entitlement offer at $0.09
per share
6,200,129
558,012
17 December 2020: Issue under placement and retail
entitlement offer to Directors at $0.09 per share
977,777
88,000
Transaction costs
-
(363,901)
Balance at 30 June 2021
311,306,779
23,813,112
50
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
20
Issued Capital continued
(a)
Ordinary shares continued
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)
Listed options
No.
$
Balance at 1 July 2020
-
-
Options issued during the year
12 August 2020: Issue under placement and
institutional entitlement offer at 1:3 shares
20,328,799
-
24 August 2020: Issue under retail entitlement offer at
1:3 shares
2,066,624
-
18 December 2020: Issue to Directors under private
placement at 1:3 shares
325,925
-
Balance at 30 June 2021
22,721,348
-
(c)
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.
(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.
51
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
22
Earnings per Share
(a) Reconciliation of earnings to profit or loss from continuing operations
2021
$
2020
$
Loss from continuing operations
(8,406,616)
(4,667,873)
Earnings used in the calculation of dilutive EPS
from continuing operations
(8,406,616)
(4,667,873)
(b) Earnings used to calculate overall earnings per share
2021
$
2020
$
Earnings used to calculate overall earnings per share
(8,406,616)
(4,667,873)
(c) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS
2021
No.
2020
No.
Weighted average number of ordinary shares
outstanding during the year used in calculating basic
EPS
302,896,134
243,142,423
Weighted average number of dilutive options
outstanding
19,246,732
2,995,890
Weighted average number of dilutive restricted share
units on issue
-
998,630
Weighted average number of ordinary shares
outstanding during the year used in calculating
dilutive EPS
322,142,866
247,136,943
23
Contracted Commitments
Contracted commitments at the end of the reporting period but not recognised as liabilities are as follows:
2021
$
2020
$
Contracted commitments for:
Construction of mobile manufacturing plants
- not later than one year
-
1,624,462
Total contracted commitments
-
1,624,462
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.
52
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
24
Financial Risk Management continued
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
2021
$
2020
$
Financial assets
Held at amortised cost
Cash and cash equivalents
611,818
776,092
Trade and other receivables
189,264
1,792,104
Financial liabilities
Financial liabilities at amortised
cost
3,118,027
7,403,488
Total financial liabilities
3,118,027
7,403,488
Total
(2,316,945)
(4,835,292)
Objectives, policies and processes
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
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.
53
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
24
Financial Risk Management continued
Objectives, policies and processes continued
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
location of its operations in those regions.
54
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
24
Financial Risk Management continued
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
$
Within
initial
trade
terms
$
2021
Trade receivables
142,889
-
142,889
-
-
-
-
Other receivables
46,375
-
46,375
-
-
-
-
Total
189,264
-
189,264
-
-
-
-
2020
Trade receivables
1,759,489
-
1,759,489
-
-
-
-
Other receivables
32,615
-
32,615
-
-
-
-
Total
1,792,104
-
1,792,104
-
-
-
-
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
and settle amounts primarily in the currency in which the overseas sales and purchases take place.
55
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
24
Financial Risk Management continued
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,
2021
USD
$
NZD
$
Total AUD
$
Nominal amounts
Financial assets
548,883
57,449
606,332
Financial liabilities
(1,470,737)
(8,363) (1,479,100)
Short-term exposure
(921,854)
49,086
(872,768)
2020
Nominal amounts
Financial assets
2,419,870
257,228
2,677,098
Financial liabilities
(7,392,370)
(88,231) (7,480,601)
Short-term exposure
(4,972,500)
168,997 (4,803,503)
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 2021 (30 June
2020: 5%). A +/- 5% change is considered for the Australian Dollar / NZD exchange rate (30 June 2020: 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 0.7518 (2020: 0.6863) for USD and 1.0745 (2020: 1.0703) 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.
56
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
24
Financial Risk Management continued
If the Australian Dollar had strengthened and weakened against the USD and NZD by 5% (30 June 2020: 5%) and 5%
(30 June 2020: 5%) respectively then this would have had the following impact:
2021
2020
+5%
-5%
+5%
-5%
USD
Net results
(46,093)
46,093
(248,625)
248,625
Equity
46,093
(46,093)
248,625
(248,625)
NZD
Net results
2,454
(2,454)
8,450
(8,450)
Equity
(2,454)
2,454
(8,450)
8,450
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
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking account
2021
$
2020
$
The franking credits available for
subsequent financial years at a
tax rate of 26% (2020: 27.5%)
-
-
The above available balance is based on the dividend franking account at year-end adjusted for:
(a)
Franking credits that will arise from the payment of the current tax liabilities;
(b)
Franking debits that will arise from the payment of dividends recognised as a liability at the year end;
(c)
Franking credits that will arise from the receipt of dividends recognised as receivables at the end of the year.
As at 30 June 2021, the Group has franking debits amounting $3,070,115 (2020: $3,070,115) 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.
57
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
26
Key Management Personnel Remuneration
Key management personnel remuneration included within employee expenses for the year is shown below:
2021
$
2020
$
Short-term employee benefits
452,728
1,078,617
Long-term benefits
1,574
5,490
Post-employment benefits
34,601
60,973
488,903
1,145,080
27
Auditors' Remuneration
2021
$
2020
$
Remuneration of the auditor PKF, for:
- auditing or reviewing the financial statements
for the current year
77,000
76,500
- other services
15,139
-
Total
92,139
76,500
28
Interests in Subsidiaries
(a)
Composition of the Group
Principal place of
business / Country of
Incorporation
Percentage
Owned (%)*
2021
Percentage
Owned (%)*
2020
Subsidiaries:
Tubi USA Inc.
USA
100
100
Tubi NZ Limited
New Zealand
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.
29
Contingencies
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2021 (2020: none).
30
Related Parties
(a)
The Group's main related parties are as follows:
Key management personnel - refer to Note 26.
58
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
30
Related Parties continued
(a)
The Group's main related parties are as follows: continued
Subsidiaries - refer to Note 28
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.
(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
$
Closing
balance
$
Interest not
charged
$
Interest
paid/payable
$
Impairment
$
Loans from KMP
2021
200,000
-
-
-
-
2020
-
200,000
-
575
-
Loans from other related parties
2021
-
1,124,910
-
3,129
-
2020
-
-
-
-
-
KMP Loans
On 15 June 2020, the Company borrowed $200,000 from Marcello Russo, a Director of the Company. Interest
was charged at a rate of 7% per annum. The loan balance was repaid after year end, during September 2020.
Related party loans
The Company entered into a Facility Agreement with Oxleigh Pty Ltd to borrow funds for general working capital
purposes. The balance owing, representing the facility used, at 30 June 2021 was $303,129 (2020: $nil). The
Facility Agreement includes a facility limit of $2,500,000, repayable on 30 June 2022. Interest is accrued at 10%
per annum, payable quarterly in arreas. A commitment fee of 3% per annum is payable on the available facility
for the available period, also payable quarterly in arreas. The facility has financial covenants requiring the
Company to hold net tangible assets at all times of more than $5 million.
Under the terms of a debt purchase arrangement, Hopetoun Corporation Pty Ltd ("Hopetoun"), a company
associated with Mr Michael Tilley and Mr Anthony Willsallen (former Directors of the Company) facilitated the
payment of amounts on behalf of Tubi Limited. The balance outstanding, due to Hopetoun at 30 June 2021 was
$821,780.94 (2020: $nil). The Group has made payments to Hopetoun subsequent to the year end to settle this
balance which is expected to be fully settled in FY2022.
59
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
31
Cash Flow Information
(a)
Reconciliation of result for the year to cashflows from operating activities
Reconciliation of net income to net cash provided by operating activities:
2021
$
2020
$
Loss for the year
(8,406,616)
(4,667,873)
Cash flows excluded from profit attributable to operating
activities
Non-cash flows in profit:
- depreciation and amortisation
3,874,704
24,231
- impairment
655,066
1,282,224
- share based payments expensed
(63,550)
(17,624)
- other
102,502
575
Changes in assets and liabilities:
- (increase)/decrease in trade and other receivables
1,602,840
1,830,959
- (increase)/decrease in other assets
(343,308)
457
- (increase)/decrease in inventories
2,504,106
(1,076,120)
- (increase)/decrease in deferred tax asset
1,402,646
(1,175,309)
- increase/(decrease) in trade and other payables
(5,391,561)
1,105,634
- increase/(decrease) in income taxes payable
(395,916)
(141,979)
- increase/(decrease) in deferred tax liability
(726,360)
109,181
- increase/(decrease) in provisions
(28,000)
11,260
Cashflows from operations
(5,213,447)
(2,714,384)
32
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 2021 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)
Restricted stock units
During the 2020 financial year, the Board resolved to grant Performance Rights to Marcello Russo on or about
30 November 2019. The aggregate number of Performance Rights to be granted are calculated by dividing the
amount of the award (A$150,000 in the case of Marcello Russo) by the VWAP of the Group’s shares over the
five trading days immediately prior to 30 November 2019.
60
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
33
Events Occurring After the Reporting Date
Subsequent to the year end, the following events occurred:
In August 2021, the following events took place as announced on ASX,
the Group's subsidiary Tubi USA Inc entered into a MRO Supply Agreement with Mosaic Fertilizer LLC
(Mosaic) for the supply of HDPE and MDPE Pipe for an initial term of 3 years;
the Group also entered into a Facility Agreement with Oxleigh Pty Ltd to borrow funds of up to $2.5 million for
general working capital purposes. The facility term was to 30 June 2022 at an interest rate of 10% per annum,
a commitment fee of 3% per annum on the available facility, and a financial covenant requiring net tangible
assets to be no less than $5 million;
the Company engaged advisors and consulted a number of parties in the pursuit to assist with the potential
divestment of certain assets.
On 25 March 2022, the Group completed the sale of certain assets under an Asset Purchase Agreement entered
into with Mosaic and Hopetoun Corporation Pty Ltd (Hopetoun). Under the terms of the Agreement, the Group
and Hopetoun agreed to sell, transfer and assign the rights of Mobile Plant 5002 and Mobile Plant 5003, together
with lab, reeling & stringing and other related assets located in Bartow, Florida USA together with the grant of an
intellectual property license for US$10 million (which is approximately AU$13.5 million). US$8.5 million was
payable on completion and the balance in 12 months under a hold back arrangement to cover the purchaser for
any indemnity or warranty claims.
Mobile Plant 5002 and other equipment was owned by the Group. Mobile Plant 5003 was owned by Hopetoun.
The agreed allocation of sale proceeds to Hopetoun was AU$5.3 million (of which $4.8 million has been paid to
Hopetoun net of the hold back amount), with the remainder of approximately AU$8.2 million to the Group.
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.
34
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.
61
Tubi Limited
ABN: 25 139 142 493
Notes to the Financial Statements
For the Year Ended 30 June 2021
34
Parent entity continued
2021
$
2020
$
Statement of Financial Position
Assets
Current assets
6,746,141
4,139,363
Non-current assets
12,902,505
15,096,469
Total Assets
19,648,646
19,235,832
Liabilities
Current liabilities
1,852,207
1,374,494
Non-current liabilities
1,349,646
1,941,298
Total Liabilities
3,201,853
3,315,792
Equity
Issued capital
23,813,112
18,042,218
Accumulated losses
(7,366,319)
(2,185,728)
Option reserve
-
63,550
Total Equity
16,446,793
15,920,040
Statement of Profit or Loss and Other
Comprehensive Income
Total profit or (loss) for the year
(5,180,591)
107,832
Total comprehensive income
(5,180,591)
107,832
Contingent liabilities
The parent entity did not have any contingent liabilities as at 30 June 2021 or 30 June 2020.
Contractual commitments
The parent entity had no unrecorded commitments as at 30 June 2021. At 30 June 2020, the parent entity had capital
commitments for the construction of mobile manufacturing plants amounting to $1,624,462.
35
Statutory Information
The registered office and principal place of business of the company
is:
Tubi Limited
2 Hopetoun Street
Paddington NSW 2021
Australia
62
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 2021 are in accordance with the
Corporations Act 2001 and:
a.
comply with Australian Accounting Standards and Corporations Regulations 2001, which, as stated in basis of
preparation Note 1 to the consolidated financial statements, constitutes 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 has 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 ..................................................................
John Mouwad
Dated 06 May 2022
63
64
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 2021, 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)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June
2021 and of its performance for the year ended on that date; and
ii)
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.
PKF (NS) Audit & Assurance Limited Partnership
ABN 91 850 861 839
Liability limited by a scheme approved
under Professional Standards Legislation
Sydney
Level 8, 1 O'Connell Street
Sydney NSW 2000 Australia
GPO Box 5446 Sydney NSW 2001
p +61 2 8346 6000
f +61 2 8346 6099
Newcastle
755 Hunter Street
Newcastle West NSW 2302 Australia
PO Box 2368 Dangar NSW 2309
p +61 2 4962 2688
f +61 2 4962 3245
PKF (NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of separately owned firms and does not accept any
responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
For our office locations visit www.pkf.com.au
65
Material Uncertainty Related to Going Concern
We draw attention to Note 2(t) to the Financial Report, which describes that the Group has reported a
loss of $8,406,616 and net operating cash outflows of $5,213,447, during the year ended 30 June
2021. As stated in Note 2(t), these events and conditions, along with other matters as set forth in Note
2(t), indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Impairment assessment of property, plant and equipment
Why significant
How our audit addressed the key audit matter
As at 30 June 2021, the Group recorded property,
plant and equipment (“PPE”) with carrying amount
of
$17,459,825
(2020
$19,746,630)
which
represented approximately 92% of the total assets,
as disclosed in note 13.
During the current financial year, the Group noted
the presence of indicators of impairment of its PPE
due to downturns in the market, COVID-19 related
disruptions
and
competitor
price
cutting.
Accordingly, the Group carried out a review of the
recoverable amounts of the corresponding PPE.
The PPE is predominantly made up of mobile
manufacturing plants, being Plants 5000, 5002 and
5004, which have been built under similar
specifications, and are considered separate cash-
generating units (“CGU’s”). In consideration of the
recoverable amount of these Plants, the Group
was able to make reference to a recent arms-
length transaction whereby Plant 5002, granting of
intellectual property license and related assets,
was sold on 24 March 2022 to Mosaic Fertiliser
LLC for approximately $8.2m. The assessment
resulted in an impairment loss of $335,131 being
recognised, as disclosed in Note 5.
Based on the size of the assets and the judgment
involved in determining the recoverable amount,
we have considered this a key audit matter.
Our work included, but was not limited to, the
following procedures:
•
Evaluating the Group’s assessment of its
CGU’s, for consistency with the requirements of
Australian Accounting Standards.
•
Evaluating the completeness of the Group’s
assessment of impairment indicators for each
CGU.
•
Assessing the key assumptions within the
impairment assessment of each asset and
CGU,
including
supporting
of
recoverable
amount through application of fair value less
costs of disposal method.
•
Review of the allocation of sale proceeds to
CGU’s and asset pools and verification that the
carrying
values
were
in
excess
of
the
recoverable amount, or if impairments were
required.
•
Reviewing key documents, such as the Asset
Purchase Agreement, for evidence of the sale
transaction being completed.
•
Confirming receipt of proceeds from the buyer
into the bank account of the Group; and
•
Assessing the adequacy of the disclosures
included in Notes 5 and 13 to the financial
report.
66
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.
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.
67
Auditor’s Responsibilities for the Audit of the Financial Report (cont’d)
• 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.
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 2021.
In our opinion, the Remuneration Report of Tubi Limited for the period ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
68
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
6 MAY 2022
SYDNEY, NSW
Tubi Limited
Additional Information for Listed Public Companies
30 June 2021
Ordinary Shares (ASX:2BE)
Tubi Limited has 311,306,779 fully paid ordinary shares on issue held by 797 Shareholders as at 1
May 2022.
Distribution of Shareholders:
Fully Paid Ordinary
Shares
Number
Holdings Ranges
Holders
Total Units
%
1-1,000
33
3,191
0.000
1,001-5,000
70
204,224
0.070
5,001-10,000
141
1,284,703
0.410
10,001-100,000
402
15,913,184
5.110
100,001-9,999,999,999
151
293,901,477
94.410
Totals
797
311,306,779
100.000
Top 20 Shareholders:
Name/Address 1
No. of
ordinary
shares
% of
issued
capital
1.
BALD HILL QUARRY PTY LTD
58,799,167
18.89%
2.
OXLEIGH PTY LTD
58,549,147
18.81%
3.
CHIARA CORPORATION PTY LTD
37,949,642
12.19%
4.
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
23,620,405
7.59%
5.
BETA GAMMA PTY LTD
7,500,000
2.41%
6.
KTM VENTURES INNOVATION FUND LP
7,222,222
2.32%
7.
SEALIGHT CAPITAL PTY LTD
6,700,000
2.15%
8.
GW BURKE INVESTMENTS PTY LTD
5,833,333
1.87%
9.
CHARLES & CORNELIA GOODE FOUNDATION PTY
LTD
4,999,999
1.61%
10.
STRUCTURE INVESTMENTS PTY LTD
4,514,737
1.45%
11.
BANNABY INVESTMENTS PTY LIMITED
3,807,111
1.22%
12.
MR DAVID ALAN VERSCHOOR & MRS DANIELLE
MILINDA VERSCHOOR
3,531,000
1.13%
13.
CS THIRD NOMINEES PTY LIMITED
3,289,086
1.06%
14.
WHITS END PTY LTD
3,135,000
1.01%
15.
JUSEPHINE PTY LTD
2,771,000
0.89%
16.
MR DAVID RIDLEY GRAY
2,666,169
0.86%
17.
CITICORP NOMINEES PTY LIMITED
2,466,508
0.79%
18.
MR CRAIG RAYMOND & MRS MARY RAYMOND
2,261,275
0.73%
19.
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED
2,252,404
0.72%
20.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2,116,806
0.68%
Total Securities of Top 20 Holdings
243,985,011
78.37%
Total of Securities
311,306,779
100.00%
69
Tubi Limited
Additional Information for Listed Public Companies
30 June 2021
Substantial Holders
The following shareholders are substantial holders:
Holder Name
Number of
Shares
% Voting
Power
Oxleigh Pty Ltd
117,348,3142
37.81%2
Bald Hill Quarry
117,348,3142
37.81%2
Chiara Corporation Pty Ltd1
37,949,642
12.23%
J P Morgan Nominees Australia Pty Limited
23,620,405
7.59%
1.
Chiara Corporation Pty Ltd is controlled by director Mr. Marcello Russo
2.
Oxleigh Pty Ltd and Bald Hill Quarry Pty Ltd have entered into 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
³UHOHYDQW LQWHUHVW´ DV WKDW WHUP LV GHILQHG LQ WKH &RUSRUDWLRQV $FW LQ HDFK RWKHU¶V 6KDUHV
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 264 shareholders holding less than a marketable parcel of shares based on the last
price of AUD 0.04 prior to the Company going into suspension on 6 April 2021, representing a total
of 311,306,779 shares.
Options (ASX:2BEO)
Tubi Limited has 22,721,348 listed options on issue exercisable at $0.15 and expiring 30 June
2022. These are held by 294 Optionholders.
Distribution of Optionholders:
Holdings Ranges
Holders
Total Units
%
1-1,000
34
16,658
0.070
1,001-5,000
112
267,612
1.180
5,001-10,000
33
245,847
1.080
10,001-100,000
68
2,587,380
11.390
100,001-9,999,999,999
47
19,603,851
86.280
Totals
294
22,721,348
100.000
70
Tubi Limited
Additional Information for Listed Public Companies
30 June 2021
Top 20 Optionholders:
Name/Address 1
No. of
Options
%
OXLEIGH PTY LTD
2,222,222
9.78%
BALD HILL QUARRY PTY LTD
2,222,222
9.78%
CS THIRD NOMINEES PTY LIMITED
1,925,927
8.48%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
1,757,683
7.74%
BETA GAMMA PTY LTD
833,333
3.67%
KTM VENTURES INNOVATION FUND LP
740,741
3.26%
CHIARA CORPORATION PTY LTD
740,741
3.26%
CHARLES & CORNELIA GOODE FOUNDATION PTY LTD
565,681
2.49%
MR MARCEL KUNATH
516,667
2.27%
MASTER STEPHEN DINESH RAJARATNAM
498,798
2.19%
MR KENNETH JOSEPH HALL
444,444
1.96%
MR ANDREW EDWIN YOUNG
443,076
1.95%
KNIGHT61 INVESTMENTS PTY LTD
387,074
1.70%
STRUCTURE INVESTMENTS PTY LTD
370,371
1.63%
BANNABY INVESTMENTS PTY LTD
370,370
1.63%
MR DAVID RIDLEY GRAY
370,367
1.63%
SDRAJA PTY LTD
361,130
1.59%
BEARAY PTY LIMITED
333,333
1.47%
GW BURKE INVESTMENTS PTY LTD
277,778
1.22%
APPWAM PTY LTD
233,333
1.03%
Total Securities of Top 20 Holdings
15,615,291
68.72%
Total of Securities
22,721,348
100.00%
Voting Rights
Options do not carry a right to vote.
71
Tubi Limited
Additional Information for Listed Public Companies
30 June 2021
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. John Mouawad
Non-Executive Chairman
Mr. Marcello Russo
Managing Director
Mr. Ryan Shaw
Non-Executive Director
Mr. John Zeckendorf
Non-Executive Director
Company Secretary
Ms. Elissa Hansen
Company Secretary
Share Registry
Boardroom Pty Limited
Level 12
225 George Street
Sydney NSW 2000
Telephone +61 2 9290 9600
Auditor
PKF
Level 8
2¶&RQQHOO 6WUHHW
Sydney NSW 2000
ASX Code: 2BE
72