Level 2, 40 Gloucester Street
The Rocks NSW 2000, Australia
TZ Limited
www.tz.net
ABN 26 073 979 272
29 August 2024
ASX Announcement
TZ Limited Annual Report – Appendix 4E
Key highlights include:
• Management’s streamlining of the business to drive greater cost and production efficiencies through
optimised business processes, improved supplier terms and relationships and more structured cross-
functional and cross-geography cooperation is starting to show results.
•
Earnings before interest, tax, depreciation and amortization, adjusted for impairment (adjusted EBITDA)
of $780,178 ($0.78m);
•
Significant improvement in average gross margin from 39% (30 June 2023) to 50% (30 June 2024);
•
Annuity Subscription revenue approaches $4m per annum;
•
Initiatives now taken for the US operations to “resume significant growth”;
•
Staff costs reduced from $7.4m (30 June 2023) to $4.4m (30 June 2024);
OUTLOOK
Several initiatives have been taken for the US operations to have improved performance in FY25.
More effort to grow the recurring revenue, especially in the US.
The company has been extensively researching opportunities for additional, diversified growth.
The target would be to acquire another SaaS revenue stream with the potential for cross-selling TZ products
and services. These efforts will be continuing.
This announcement is authorised for release by TZ Limited’s Board of Directors.
For further information, please contact:
Peter Graham
Chairman
Phone: +61 412 225 616
Email: p.graham@tz.net
TZ Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
TZ Limited
ABN:
26 073 979 272
Reporting period:
For the year ended 30 June 2024
Previous period:
For the year ended 30 June 2023
2. Results for announcement to the market
$
Revenues from ordinary activities
up
1% to
13,937,328
Earnings before interest, tax, depreciation and amortisation, adjusted for
impairment ('adjusted EBITDA')
up
117% to
780,178
Profit from ordinary activities after tax attributable to the owners of TZ
Limited
up
102% to
99,352
Profit for the year attributable to the owners of TZ Limited
up
102% to
99,352
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Comments
The profit for the consolidated entity after providing for income tax amounted to $99,352 (30 June 2023: loss of $5,985,562).
The earnings before interest, tax, depreciation and amortisation ('EBITDA'), adjusted for impairment, was a profit of $780,178
(30 June 2023: loss of $4,673,012).
EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the profit
under AAS adjusted for non-specific non-cash and significant items. The Directors consider adjusted EBITDA to reflect the
core earnings of the consolidated entity.
Additional information supporting the Appendix 4E disclosure requirements can be found in the Annual Report which contains
the Directors' report and the 30 June 2024 Financial Statements and accompanying notes.
3. Net tangible assets
Reporting
period
Previous
period
Cents
Cents
Net tangible assets per ordinary security
(1.71)
(1.75)
As at 30 June 2024, the net tangible assets per ordinary security of (1.71¢) presented above is inclusive of right-of-use assets
and lease liabilities.
4. Control gained over entities
Not applicable.
TZ Limited
Appendix 4E
Preliminary final report
5. Loss of control over entities
Name of entities (or group of entities)
TZ Holdings Inc
TZ Development Technologies Inc
TZ Tooling Inc
Date control lost
29 September 2023
6. Dividends
Current period
There were no dividends paid, recommended or declared during the current financial period.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
7. Dividend reinvestment plans
Not applicable.
8. Details of associates and joint venture entities
Not applicable.
9. Foreign entities
Details of origin of accounting standards used in compiling the report:
All foreign entities are in compliance with IFRS which is equivalent to Australian Accounting Standards.
10. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unmodified opinion has been issued.
11. Signed
As authorised by the Board of Directors
Signed ___________________________
Date: 28 August 2024
Peter Graham
Chairman
Sydney
TZ Limited
ABN 26 073 979 272
Annual Report - 30 June 2024
TZ Limited
Contents
30 June 2024
1
Corporate directory
2
CEO's Message
4
Directors' report
5
Auditor's independence declaration
15
Statement of profit or loss and other comprehensive income
16
Statement of financial position
17
Statement of changes in equity
18
Statement of cash flows
19
Notes to the financial statements
20
Consolidated entity disclosure statement
48
Directors' declaration
49
Independent auditor's report to the members of TZ Limited
50
Shareholders information
54
TZ Limited
Corporate directory
30 June 2024
2
Directors
Peter Graham - Non-Executive Chairman
John D'Angelo - Non-Executive Director
Simon White - Non-Executive Director
Company secretary
Mathew Watkins
Annual General Meeting
21 November 2024
Registered office
Level 2, 40 Gloucester Street
The Rocks NSW 2000
Head Office Tel: +61 2 9053 6753
Principal place of business
TZ Limited and TZI Australia Pty Limited
Level 2, 40 Gloucester Street
The Rocks NSW 2000 Australia
Telezygology, Inc.
200 Howard Avenue, Suite 280,
Des Plaines, IL 60018 USA
TZI Singapore Pte Limited,
Suntec Tower 2, 9 Temasek Boulevard #29-01
Singapore 038989
TZI UK Limited
3rd Floor
207 Regent Street
London W1B 3HH
England
Share register
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Tel: 1300 787 272
Fax: +61 3 9473 2500
Auditor
PKF Brisbane Audit
Level 2, 66 Eagle Street
Brisbane QLD 4000
Solicitors
K&L Gates
Level 31, 1 O'Connell Street
Sydney NSW 2000
Bankers
St George Bank Limited
Level 3, 1 Chifley Square
Sydney NSW 2000
Stock exchange listing
TZ Limited shares are listed on the Australian Securities Exchange (ASX code: TZL)
Website
www.tz.net
TZ Limited's public website contains information regarding its products and the
Company, including an investor services section
E-mail: info@tz.net
TZ Limited
Corporate directory
30 June 2024
3
Corporate Governance Statement
The Directors and Management are committed to conducting the business of TZ Limited
in an ethical manner and in accordance with the highest standards of corporate
governance. TZ Limited has adopted and substantially complied with the ASX
Corporate
Governance
Principles
and
Recommendations
(Fourth
Edition)
(‘Recommendations’) to the extent appropriate to the size and nature of its operations.
The Corporate Governance Statement, which sets out the corporate governance
practices that were in operation during the financial year and identifies and explains any
Recommendations that have not been followed, was approved at the same time as the
annual report can be found at https://tz.net/investors/corporate-governance/
TZ Limited
CEO’s Message
30 June 2024
4
Dear Shareholders,
The turnaround in the Group’s performance this year focussed on “right setting” the organisation, rebuilding our capabilities
through putting the right competencies in place and addressing inefficiencies in the way TZ operated.
Key Restructuring Highlights
•
Reduction in staff costs from $7.4 million (30 June 2023) to $4.4 million (30 June 2024);
•
Closed previous management’s setup into India. All functions brought back to Australia;
•
Consolidation of all finance functions back in Australia providing better transparency and global costs reduced from circa
$850k to $450k per annum;
•
Liquidation of 3 dormant US subsidiaries and the transition of “Health Insurance” from TZ back to the individual staff
members provided both cost and administration savings.
Key Performance Indicators
•
EBITDA improvement from a loss of $4,673,012 (30 June 2023) to a profit of $780,178 (30 June 2024);
•
Significant improvement in average gross margin on sales from 39% (30 June 2023) to 50% (30 June 2024);
•
Annuity Subscription revenue continues to grow towards $4 million (circa $3.5 million in FY24) per annum;
•
Updated and refreshed software offerings.
Most importantly, TZ has established a business-wide team culture and a galvanizing vision that has been instrumental in the
Group achieving its stated objectives. The reinvigoration of customer relationships and the focus on customer success has
rebuilt the reputation of TZ as a reliable and “best-in-class” provider.
While there are some initiatives that we are still working on to resolve more complex legacy issues, our focus for the coming
12 months is on growth. In our traditional markets, we believe there are many opportunities to improve our sales penetration.
In particular, the US Educational Sector, where we actively participate, remains a very large and attractive addressable market.
We recently secured our 100th customer in that sector, but with over 4,000 colleges and universities in US, there is enormous
potential to accelerate engagement.
In the Corporate Sector, our established customers like Apple, Microsoft and large property developer and real estate
organisations, like CapitaLand in Asia, continue to offer the potential to expand our business within their extensive operations.
Diligent account management will be implemented to ensure we convert the potential into sales.
Our data centre security business, which represents about 10% of our overall turnover, is also looking extremely prospective
with the data centre industry forecast to grow strongly due to the increasing demand for data storage and processing, as well
as the need for social, mobile, analytics, and cloud services. With established customers, NextDC, Macquarie Telecom and
others, planning to expand this year, the opportunities to grow this niche business are promising.
The team at TZ will continue to work towards returning shareholder confidence. For now, the signs are definitely positive and
encouraging.
John Wilson
Group CEO
28 August 2024
TZ Limited
Directors' report
30 June 2024
5
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity' or 'TZ' or 'the Group') consisting of TZ Limited (referred to hereafter as the 'Company' or 'parent entity')
and the entities it controlled at the end of, or during, the year ended 30 June 2024.
Directors
The following persons were Directors of TZ Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Peter Graham - Non-Executive Chairman
John D’Angelo - Non-Executive Director
Simon White - Non-Executive Director
Cary Peter Stynes - Non-Executive Director (resigned on 20 February 2024)
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of the development of intelligent
devices and smart device systems that enable the commercialisation of hardware and software solutions for the management,
control and monitoring of business assets and the provision of associated value-added services through Telezygology Inc.,
TZI Australia Pty Limited ('TZI'), TZI Singapore Pte Ltd and TZI UK Limited.
All of the operations of the consolidated entity are based in Australia, the United States of America, United Kingdom and
Singapore.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The profit for the consolidated entity after providing for income tax amounted to $99,352 (30 June 2023: loss of $5,985,562).
This year has seen the Group undertake major restructuring of our operations and realignment in the way that we do business.
The net result of those operational changes is a very successful turnaround of the business.
Business Highlights
Business highlights over the year include:
●
Right setting the operational structure and business framework
●
Improving gross margins across the business from 39% last year to over 50%
●
Streamlining business systems and reducing the cost of implementation
●
Simplifying supply chain and actively resolving legacy inventory management issues
●
Refocusing our sales effort and implementing effective account management principles
●
Optimising our cloud services and improving the overall quality and security of our cloud offering
●
Growing our software annuity revenue business - 20% growth on last year
●
Updating and refreshing our software offerings so we can compete effectively in our chosen market segments
●
Sales of A$13,937,328 (1% increase over FY23 performance) despite significant reduction in operational spend
Addressing Operational Legacy
Many steps have been taken to lay a structured framework for the way the Group conducts its business including the
standardisation of policies and processes across all subsidiaries, and the establishment of cross-functional and cross-
geographic teams to tackle identified gaps in business operation.
The Board and Management have, in particular, put in place strong fiscal discipline and governance across all financial,
accounting and banking matters to ensure that we manage the business within our operational capital constraints. Our
business systems have been designed to provide strong visibility on performance KPIs, operating costs and expenses so that
we can be proactive in the management of the business.
Although much work has been done to resolve legacy operational issues, the Group is still working hard to address the
challenge of high inventory levels and handle the large open orders, which were placed around the COVID years, which far
outstrip current product demand. In response to the former, the Group took steps in June 2024 to bring inventory back in-
house in the US, to allow stock rationalisation and provision for obsolete stock write-offs.
TZ Limited
Directors' report
30 June 2024
6
As to the matter of large open orders, the Group is confident it can resolve this through on-going collaboration and negotiation
with our supportive Supply Partners to phase production supply over the next several years, until we right set production
against demand.
Product and Technology Update
The last 12 months has seen TZ get back to its roots as a technology innovator. The Group had lost much ground in the
previous three years lacking a clear technological direction, in particular, losing its differentiation against competitors who
have closed the gap in product capability in recent years.
This last year saw a far more structured program of software releases and enhancements to our major platforms to address
some of the workflow issues identified by our customers. The Group also released its newly architected feature-rich mobile
platform across its Day Locker and Campus platforms which should allow TZ to stand out once again from the competition. A
much-needed upgrade to the User Portals and modernisation of the User Experience is well underway and should be launched
in Q2 of FY2025.
Work is also well advanced on the Group’s next generation product offering, which TZ believes will revolutionise our offering
with an unprecedented uplift in configuration design and customisation options.
Outlook
With the restructuring and rebuilding initiatives delivering significantly improved performance of the business, the Group is
now shifting from operational efficiency and the implementation of stabilising measures to a focus on growth.
Significant changes in the state of affairs
During the year ended 30 June 2024 pursuant to a Third Deed of Variation and additional informal agreements (“the
variations”) entered into between the company and First Samuel Limited, the repayment date of its debenture facilities were
extended from the original date of 31 January 2024, to future dates as outlined below:
●
$2,500,000 to 30 June 2025;
●
$200,000 repaid in April 2024; and
●
$800,000 to be agreed between the Company and First Samuel Limited.
During the year ended 30 June 2024, the Company repaid $200,000 to First Samuel Limited.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Likely developments and expected results of operations
Further information on the future strategies is detailed in the Chief Executive Officer's message which precedes the Directors'
report and Annual Financial Statements.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
TZ Limited
Directors' report
30 June 2024
7
Information on the Directors in office as at the date of this report
Name:
Peter Graham
Title:
Non-Executive Chairman
Qualifications:
Professional Diploma in Stockbroking - Stockbrokers Association of Australia & Deakin
University
Margin Lending Accreditation - Stockbrokers Association of Australia & Deakin
University
ASIC PS146 - Securities & Derivatives Industry Association & Deakin University
Registered Representative - Sydney Futures Exchange (SFE)
Accredited Derivatives Adviser Level One - Australian Stock Exchange (ASX) &
Tribecca
Experience and expertise:
Peter is an experienced corporate advisor with a comprehensive financial background.
Initially in accountancy before a decade of Treasury roles with Westpac and UBS, Peter
switched to equities in the 1990’s and has over 20 years’ experience as a research
analyst, institutional dealer and corporate advisor. The significant finance and capital
markets experience was to the fore after Peter joined the board as Chairman, with TZ
embarking on successful capital raises to substantially reduce the Group’s debt.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
Chair
Interests in shares:
14,041,074 fully paid ordinary shares
Interests in options:
None
Name:
John D’Angelo
Title:
Non-Executive Director
Qualifications:
Bachelor of Engineering – Monash University
Regulatory Guide 146 (RG146) - Kaplan Business School
Experience and expertise:
John has vast international experience in the areas of Marketing, Finance and
Engineering. He spent 15 years based in Singapore in senior management positions for
JP Morgan and Hartree Partners (part owned by the investment firm Oaktree Capital).
Prior to this, he held management positions at Chase Manhattan Bank and Mitsui
Commodities. John began his career as an Engineer at BHP before moving into the
Marketing and Financial Risk Management areas for the company where he spent some
time based in the U.S.A. John holds a Bachelor Of Engineering (Hons).
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
2,297,190 ordinary shares
Interests in options:
None
Name:
Simon White
Title:
Non-Executive Director
Qualifications:
Bachelor of Commerce – Bachelor of Law - Curtin University
Regulatory Guide 146 (RG146) - Kaplan Business School
Diploma of Management - Ashton College
MBA - currently studying at Ducere Business School
Experience and expertise:
Post a successful AFL career, Simon worked in corporate advisory and equity capital
markets, with initial experience at Patersons Stockbroking before joining Sequoia
Financial Group (SEQ) and then the Delcor Family office. In this time Simon worked on
IPO’s, equity placements, corporate advisory and restructuring. He has worked on a
variety of deals across many business sectors. Recently, Simon has been Director of
Investor Relations with Paradigm Biopharma. Simon’s skills in corporate governance
will be most beneficial to the TZ Limited board.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships in all
other types of entities, unless otherwise stated.
TZ Limited
Directors' report
30 June 2024
8
'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships in all other types of entities, unless otherwise stated.
Company secretary
Mathew Watkins
Mr Watkins is a Chartered Accountant who has extensive ASX experience within several industry sectors including
Biotechnology, Bioscience, Resources and Information Technology. He specialises in ASX statutory reporting, ASX
compliance, Corporate Governance and board and secretarial support. Mr Watkins is appointed Company Secretary on a
number of ASX listed Companies.
Mr Watkins is employed at Vistra Australia Pty Ltd (Vistra), a global corporate services provider. Vistra is a prominent provider
of specialised consulting and administrative services to clients in the Fund, Corporate, Capital Markets, and Private Wealth
sectors. Vistra have vast experience working with listed entities and brings a strong background of working with growing
companies within the resources sector.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2024, and the
number of meetings attended by each Director were:
Full Board
Attended
Held
Peter Graham - Chairman
12
12
John D’Angelo
12
12
Simon White
12
12
Cary Stynes (resigned on 20 February 2024)
7
7
Held: represents the number of meetings held during the time the Director held office.
Remuneration report (audited)
The remuneration report, which has been audited, outlines the Director and key management personnel remuneration
arrangements for the consolidated entity and the company, in accordance with the requirements of the Corporations Act 2001
and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all Directors.
The remuneration report is set out under the following main headings:
●
Principles used to determine the nature and amount of remuneration
●
Details of remuneration
●
Service agreements
●
Share-based compensation
●
Additional information
●
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's and company's executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders and conforms with the market best practice for delivery of reward. The
Board ensures that executive reward satisfies the following key criteria for good reward governance practices:
●
set competitive remuneration packages to attract and retain high calibre employees;
●
link executive rewards to shareholder value creation; and
●
establish appropriate demanding performance hurdles for variable executive remuneration.
The Board reviews and is responsible for the consolidated entity’s remuneration policies, procedures and practices.
TZ Limited's employee Equity Incentive Plan ('EIP') was approved by the shareholders during the Company's 2021 Annual
General Meeting held on 27 January 2022. The Plan was designed to attract, retain, motivate and reward eligible persons
(Employees and Directors) of the Company (collectively the 'Participants') by issuing securities to the Participants. The vesting
of those securities may be subject to certain performance criteria to be determined by the Board.
TZ Limited
Directors' report
30 June 2024
9
Non-Executive Directors' remuneration
Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of, the
directors. Non-Executive Directors' fees and payments are reviewed annually. The Board considers advice from shareholders
and takes into account the fees paid to Non-Executive Directors of comparable companies, when undertaking the annual
review process. Non-Executive Directors are NOT entitled to participate in the EIP.
ASX listing rules require that the aggregate Non-Executive Directors remuneration shall be determined periodically by a
general meeting. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it
is apportioned amongst Directors is reviewed annually. The most recent determination was at the AGM held on 23 November
2023, where the shareholders approved an aggregate remuneration of $500,000.
Executive remuneration
The consolidated entity and company aims to reward executives with a level and mix of remuneration based on their position
and responsibility, which is both fixed and variable.
The executive remuneration and reward framework has four components:
●
base pay and non-monetary benefits;
●
short-term performance incentives;
●
share-based payments; and
●
other remuneration such as superannuation and long service leave.
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board, based on individual and business unit performance, the overall performance of the consolidated entity and comparable
market remunerations.
Executives can receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits)
where it does not create any additional costs to the consolidated entity and adds additional value for the executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the targets of those
executives in charge of meeting those targets. STI payments are granted to executives based on specific annual targets and
key performance indicators ('KPI') being achieved. KPI’s can include profit contribution, customer satisfaction, leadership
contribution and product management.
The long-term incentives ('LTI') includes long service leave and share-based payments. As noted above, the EIP Plan has
been set up to reward executives based on long term incentive measures in the form of fully paid ordinary, options and rights.
These include increase in shareholders' value relative to the entire market and the increase compared to the consolidated
entity's direct competitors.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the consolidated entity. Executives and other
employees can be issued with options and rights to acquire shares in the company. The number and the terms of the options
and rights issued are determined by the Board after consideration of the employee's performance and their ability to contribute
to the achievement of the consolidated entity's objectives. Refer to the additional information section of the remuneration
report for details of the last five years earnings and total shareholders' return ('TSR').
Voting and comments made at the company's 2023 Annual General Meeting ('AGM')
At the last AGM 98.69% of the shareholders voted to adopt the remuneration report for the year ended 30 June 2023. The
company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
The key management personnel of the consolidated entity consisted of the following persons:
●
Peter Graham - Non-Executive Chairman
●
John D’Angelo - Non-Executive Director
●
Simon White - Non-Executive Director
●
Cary Stynes – Non-Executive Director (resigned on 20 February 2024)
●
John Wilson – Group Chief Executive Officer
●
Chris Kelliher – President, Telezygology, Inc
TZ Limited
Directors' report
30 June 2024
10
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash
salary
Super-
Employee
Share
and fees
Other**
Bonus
annuation
leave
Options
grants
Total
2024
$
$
$
$
$
$
$
$
Non-Executive
Directors:
P Graham
111,667
-
-
-
-
-
-
111,667
J D’Angelo
61,667
-
-
-
-
-
-
61,667
S White
61,667
-
-
-
-
-
-
61,667
C Stynes*
40,000
-
-
-
-
-
-
40,000
Other Key
Management
Personnel:
J Wilson
300,000
11,539
30,000
25,292
19,845
457
16,875
404,008
C Kelliher
289,722
-
20,842
-
7,538
69
5,000
323,171
864,723
11,539
50,842
25,292
27,383
526
21,875
1,002,180
*
Represents remuneration from date of appointment and/or to date of resignation
**
Represents changes in the accrued amounts of annual leave over the year
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash
salary
Super-
Employee
Share
and fees
Other**
Bonus
annuation
leave
Options
grants
Total
2023
$
$
$
$
$
$
$
$
Non-Executive
Directors:
P Graham
120,000
-
-
-
-
-
-
120,000
J D’Angelo
75,000
-
-
-
-
-
-
75,000
S White
75,000
-
-
-
-
-
-
75,000
C Stynes*
31,250
-
-
-
-
-
-
31,250
D McCulloch*
12,500
-
-
-
-
-
-
12,500
Other Key
Management
Personnel:
J Wilson
218,182
(2,409)
-
22,909
18,444
3,185
6,875
267,186
M Vecchio*
175,000
-
-
14,840
-
-
-
189,840
S Van Es*
222,715
(6,250)
-
20,726
-
-
-
237,191
C Kelliher
118,012
-
22,282
-
-
483
-
140,777
1,047,659
(8,659)
22,282
58,475
18,444
3,668
6,875
1,148,744
*
Represents remuneration from date of appointment and/or to date of resignation
**
Represents changes in the accrued amounts of annual leave over the year
TZ Limited
Directors' report
30 June 2024
11
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
Name
2024
2023
2024
2023
2024
2023
Non-Executive Directors*:
P Graham
100%
100%
-
-
-
-
J D'Angelo
100%
100%
-
-
-
-
S White
100%
100%
-
-
-
-
C Stynes
100%
100%
-
-
-
-
D McCulloch
-
100%
-
-
-
-
Other Key Management
Personnel:
M Vecchio
-
100%
-
-
-
-
S Van Es
-
100%
-
-
-
-
J Wilson
88%
96%
8%
-
4%
4%
C Kelliher
92%
84%
6%
16%
2%
-
*
Per company policy the Directors ONLY receive Director’s Fees. The Directors are NOT entitled to STI or LTI benefits.
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
John Wilson
Title:
Chief Executive Officer
Agreement commenced:
1 July 2023 Updated
Term of agreement:
No fixed term
Details:
Remuneration of AU$300,000 plus superannuation and notice period of 3 months.
In addition to total annual remuneration and subject to any approval required by the
shareholders or regulatory approvals pursuant to the Company’s constitution, access to
the Company’s incentive program.
Short Term Incentives (STI) against established and agreed Key Performance indicators
(KPI’s) which are to be determined by the Board from time to time.
Further entitlement to participate in the Long-Term Employee Incentive Plan that may
be offered from time to time at the discretion of the Board.
Name:
Chris Kelliher
Title:
President of US Operations
Agreement commenced:
1 September 2023 Updated
Term of agreement:
No fixed term
Details:
Remuneration of US$190,000 plus entitlements and notice period of 3 months
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
TZ Limited
Directors' report
30 June 2024
12
Share-based compensation
Issue of shares
The Company issued 5,050,000 fully paid ordinary shares to eligible participants of its Equity Incentive Plan during the year
ended 30 June 2024. 1,800,000 of these shares were issued to key management personnel.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Number of
Fair value
options
Exercise
per option
Name
granted
Grant date
Expiry date
price
at grant date
J Wilson
165,000
6 August 2019
31 August 2024
$0.25
$0.0605
J Wilson
165,000
6 August 2019
31 August 2025
$0.40
$0.0679
J Wilson
165,000
6 August 2019
31 August 2026
$0.45
$0.0654
C Kelliher
25,000
6 August 2019
31 August 2024
$0.25
$0.0605
C Kelliher
25,000
6 August 2019
31 August 2025
$0.40
$0.0679
C Kelliher
25,000
6 August 2019
31 August 2026
$0.45
$0.0654
Additional information
The earnings of the consolidated entity for the five years to 30 June 2024 are summarised below:
2024
2023
2022
2021
2020
$
$
Restated
$
$
$
Sales revenue
13,937,328
13,808,095
20,401,634
16,378,223
12,852,402
Adjusted EBITDA *
780,178
(4,673,012)
(750,124)
137,364
(3,739,568)
Profit/(loss) after income tax
99,352
(5,985,562)
(1,996,149)
(1,658,204)
(5,120,229)
*
Earnings before interest, tax, depreciation, amortisation and other non-operating items (refer to note 4 for reconciliation
of EBITDA)
The factors that are considered to affect total shareholder remuneration ('TSR') are summarised below:
2024
2023
2022
Restated
2021
2020
Share price at financial year end ($)
0.0300
0.0260
0.1100
0.1100
0.0300
Basic earnings /(loss) per share (cents per
share)
0.0387
(2.5920)
(0.9550)
1.5490
(6.3600)
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
Balance at
the start of
the end of
the year
Additions
Disposals
Other **
the year
Ordinary shares
J D’Angelo *
2,000,000
297,190
-
-
2,297,190
P Graham
14,041,074
-
-
-
14,041,074
J Wilson
195,730
-
-
1,200,000
1,395,730
C Kelliher
32,550
-
-
600,000
632,550
16,269,354
297,190
-
1,800,000
18,366,544
*
On market purchase
**
Shares issued as remuneration
TZ Limited
Directors' report
30 June 2024
13
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and other members
of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
Balance at
the start of
the end of
the year
Granted
Expired
Forfeited
the year
Options over ordinary shares
J Wilson
495,000
-
-
-
495,000
C Kelliher
75,000
-
-
-
75,000
570,000
-
-
-
570,000
No options were exercised during the year ended 30 June 2024.
Other transactions with key management personnel and their related parties
There were no other transactions with KMP personnel and their related parties during the year ended 30 June 2024.
This concludes the remuneration report, which has been audited.
Shares issued as remuneration
The Company issued 5,050,000 fully paid ordinary shares to eligible participants of its Equity Incentive Plan during the year
ended 30 June 2024. 1,800,000 of these shares were issued to key management personnel.
Shares under option
Unissued ordinary shares of TZ Limited under option at the date of this report are as follows:
Exercise
Number
Grant date
Expiry date
price
under option
6 August 2019
31 August 2024
$0.2500
215,000
6 August 2019
31 August 2025
$0.4000
215,000
6 August 2019
31 August 2026
$0.4500
697,000
23 March 2023
23 March 2025
$0.0750
15,000,000
16,127,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of TZ Limited issued on the exercise of options during the year ended 30 June 2024 and up to
the date of this report.
Indemnity and insurance of officers
The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and Executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
TZ Limited
Directors' report
30 June 2024
14
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 26 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 26 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor; and
●
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants (including independence standards) issued by the Accounting Professional and
Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-
making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of PKF Brisbane Audit
There are no officers of the Company who are former partners of PKF Brisbane Audit.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Peter Graham
Chairman
28 August 2024
Sydney
PKF Brisbane Pty Ltd is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separately owned legal entity and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). Liability limited by a scheme approved under
Professional Standards Legislation.
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF TZ LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2024, there have
been no contraventions of:
(a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
This declaration is in respect of TZ Limited and the entities it controlled during the year.
PKF BRISBANE AUDIT
SHAUN LINDEMANN
PARTNER
BRISBANE
28 AUGUST 2024
PKF Brisbane Audit
ABN 33 873 151 348
Level 2, 66 Eagle Street
Brisbane, QLD 4000
Australia
+61 7 3839 9733
brisbane@pkf.com.au
pkf.com.au
15
TZ Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$
$
The above statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes
16
Revenue
5
13,937,328
13,808,095
Other income
6
335,654
3,511
Interest income
2,737
1,126
Expenses
Raw materials and consumables used
(6,932,432)
(8,407,647)
Employee benefits expense
(4,380,487)
(7,424,832)
Occupancy expense
7
(217,119)
(272,903)
Depreciation and amortisation expense
7
(644,573)
(804,745)
Communications expense
(42,281)
(57,062)
Professional and corporate services
(584,760)
(556,020)
Travel and accommodation expense
(225,683)
(349,560)
Net foreign currency exchange gain/(losses)
50,959
(110,592)
Other expenses
7
(829,289)
(1,501,916)
Finance costs
7
(384,493)
(278,927)
Profit/(loss) before income tax benefit/(expense)
85,561
(5,951,472)
Income tax benefit/(expense)
13,791
(34,090)
Profit/(loss) after income tax benefit/(expense) for the year attributable to the
owners of TZ Limited
99,352
(5,985,562)
Other comprehensive income/(losses)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
79,080
(770,831)
Other comprehensive income/(losses) for the year, net of tax
79,080
(770,831)
Total comprehensive income/(losses) for the year attributable to the owners of
TZ Limited
178,432
(6,756,393)
Cents
Cents
Basic earnings/(loss) per share
32
0.0387
(2.5920)
Diluted earnings/(loss) per share
32
0.0387
(2.5920)
TZ Limited
Statement of financial position
As at 30 June 2024
Consolidated
Note
2024
2023
$
$
The above statement of financial position should be read in conjunction with the accompanying notes
17
Assets
Current assets
Cash and cash equivalents
8
1,049,797
862,946
Trade and other receivables
9
1,668,483
1,781,913
Contract assets
10
246,336
878,771
Inventories
11
1,467,048
1,878,250
Other current assets
12
425,778
607,533
Total current assets
4,857,442
6,009,413
Non-current assets
Property, plant and equipment
90,513
120,876
Right-of-use assets
13
1,148,929
339,811
Intangibles
14
849,285
706,176
Total non-current assets
2,088,727
1,166,863
Total assets
6,946,169
7,176,276
Liabilities
Current liabilities
Trade and other payables
15
2,891,055
3,663,621
Contract liabilities
16
2,550,109
2,867,579
Borrowings
17
3,300,000
3,500,000
Lease liabilities
18
204,987
224,622
Provisions
19
529,726
461,206
Total current liabilities
9,475,877
10,717,028
Non-current liabilities
Lease liabilities
18
964,832
144,562
Provisions
19
46,010
35,571
Total non-current liabilities
1,010,842
180,133
Total liabilities
10,486,719
10,897,161
Net liabilities
(3,540,550)
(3,720,885)
Equity
Issued capital
20
228,421,700 228,420,393
Reserves
21
(4,991,549)
(5,071,225)
Accumulated losses
(226,970,701) (227,070,053)
Total deficiency in equity
(3,540,550)
(3,720,885)
TZ Limited
Statement of changes in equity
For the year ended 30 June 2024
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
Total
deficiency in
equity
Issued
capital
Reserves
Accumulated
losses
Consolidated
$
$
$
$
Balance at 1 July 2022
227,279,703
(4,304,544) (221,084,491)
1,890,668
Loss after income tax expense for the year
-
-
(5,985,562)
(5,985,562)
Other comprehensive losses for the year, net of tax
-
(770,831)
-
(770,831)
Total comprehensive losses for the year
-
(770,831)
(5,985,562)
(6,756,393)
Transactions with owners in their capacity as owners:
Contributions of equity (note 20)
1,200,000
-
-
1,200,000
Less: transaction costs on shares issued (note 20)
(59,310)
-
-
(59,310)
Share-based payments (note 33)
-
4,150
-
4,150
Balance at 30 June 2023
228,420,393
(5,071,225) (227,070,053)
(3,720,885)
Total
deficiency in
equity
Issued
capital
Reserves
Accumulated
losses
Consolidated
$
$
$
$
Balance at 1 July 2023
228,420,393
(5,071,225) (227,070,053)
(3,720,885)
Profit after income tax benefit for the year
-
-
99,352
99,352
Other comprehensive income for the year, net of tax
-
79,080
-
79,080
Total comprehensive income for the year
-
79,080
99,352
178,432
Transactions with owners in their capacity as owners:
Share-based payments (note 33)
-
596
-
596
Shares issued under employee incentive scheme - Escrow
2 (note 20)
126,250
-
-
126,250
Shares cancelled under employee incentive scheme - Escrow
1 (note 20)
(110,000)
-
-
(110,000)
Shares cancelled under employee incentive scheme - Escrow
1 (note 20)
(14,943)
-
-
(14,943)
Balance at 30 June 2024
228,421,700
(4,991,549) (226,970,701)
(3,540,550)
TZ Limited
Statement of cash flows
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$
$
The above statement of cash flows should be read in conjunction with the accompanying notes
19
Cash flows from operating activities
Receipts from customers (inclusive of GST)
14,174,441
16,387,533
Payments to suppliers and employees (inclusive of GST)
(13,271,561) (19,115,737)
Interest received
2,737
1,126
Government grants received
335,654
3,511
Interest and other finance costs paid
(199,937)
(166,378)
Income taxes refunded
13,791
-
Income taxes paid
-
(34,089)
Net cash from/(used in) operating activities
31
1,055,125
(2,924,034)
Cash flows from investing activities
Payments for property, plant and equipment
(32,717)
(24,208)
Payments for intangibles
14
(474,979)
(166,456)
Net cash used in investing activities
(507,696)
(190,664)
Cash flows from financing activities
Proceeds from issue of shares
20
-
1,200,000
Transaction costs on shares issued
-
(59,310)
Proceeds from borrowings
(200,000)
1,000,000
Repayment of lease liabilities
(290,616)
(208,852)
Net cash from/(used in) financing activities
(490,616)
1,931,838
Net (decrease)/increase in cash and cash equivalents
56,813
(1,182,860)
Cash and cash equivalents at the beginning of the financial year
862,946
2,051,162
Effects of exchange rate changes on cash and cash equivalents
130,038
(5,356)
Cash and cash equivalents at the end of the financial year
8
1,049,797
862,946
TZ Limited
Notes to the financial statements
30 June 2024
20
Note 1. General information
The financial statements cover TZ Limited as a consolidated entity consisting of TZ Limited and the entities it controlled at the
end of, or during, the year. The financial statements are presented in Australian dollars, which is TZ Limited's functional and
presentation currency.
TZ Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Registered office and principal place of business
Level 2, 40 Gloucester Street
The Rocks NSW 2000 Australia
A description of the nature of the consolidated entity's operations and its principal activities are included in the Directors' report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 28 August 2024. The
Directors have the power to amend and reissue the financial statements.
Note 2. Material accounting policy information
The accounting policies that are material to the consolidated entity are set out below. The accounting policies adopted are
consistent with those of the previous financial year, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
New and revised accounting standards and amendments thereof, and interpretations effective for the current year that are
relevant to the consolidated entity include:
Material accounting policy information
The Australian Accounting Standards Board has released guidance on what is considered to be material accounting policy
information. Accounting policy information is expected to be material if the users of an entity's financial statements would need
it to understand other material information in the financial statements. For example, an entity is likely to consider accounting
policy information material to its financial statements if that information relates to material transactions, other events or
conditions and:
●
A change in accounting policy during the reporting period and this change resulted in a material change to the information
in the financial statements;
●
A choice of accounting policy permitted by Australian Accounting Standards (e.g. choice to measure an asset at historical
cost or fair value);
●
An accounting policy developed (in accordance with AASB 108) in the absence of an accounting standard that specifically
applies;
●
The policy relates to a significant area of judgement or estimate (which also require disclosure); or
●
Transactions, other events or conditions which are complex and the accounting policy information is required in order for
the users of financial statements to understand them.
Consequently, the quantum of accounting policy information disclosed in these financial statements has been reduced from
the previous financial reporting year.
TZ Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
21
Going concern
The Group demonstrated a turnaround of business performance from a net loss after tax of $5,985,562 (30 June 2023) to a
profit of $99,352 (30 June 2024). The Group recorded a net current asset deficiency of $4,618,435 (30 June 2023 $4,707,615)
and net liabilities of $3,540,550 (30 June 2023 $3,720,855).
In assessing the appropriateness of the going concern basis, the Directors believe that with the restructured organisation, new
pricing models and new business fundamentals in place, the enabling conditions are in place to sustain and grow a profitable
business.
The business has demonstrated historically that it has been able to successfully raise funds from the equity capital markets
and financiers as and when required. The Directors expect the Company will continue to have options available should further
funding be required.
In making their assessment, the Directors have relied upon the above considerations, and the financial statements have been
prepared on the going concern basis for the above reasons.
Accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of recorded
assets or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as
a going concern.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Rounding
Amounts in this report have been rounded off to the nearest dollar.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 29.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of TZ Limited ('Company' or
'parent entity') as at 30 June 2024 and the results of all subsidiaries for the year then ended. TZ Limited and its subsidiaries
together are referred to in these financial statements as the 'consolidated entity' or 'the Group'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
TZ Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
22
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM are responsible for the
allocation of resources to operating segments and assessing their performance.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into the entity's functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, where this approximates the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity:
identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price;
allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of
each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in
a manner that depicts the transfer to the customer of the goods or services promised.
Sale of software and hardware
Sales of software and hardware are recognised at the point of sale, which is where the customer has taken delivery of the
goods.
Rendering of installation and commissioning services
Rendering of installation and commissioning services revenue is recognised at the point in time when software and hardware
has been installed.
Rendering of maintenance services
Revenue from maintenance services is typically paid in advance on an annual, quarterly or monthly basis. Revenue is
recognised over the period the customer support/hosting relates to (the coverage period). Fees received in advance of the
performance of services are deferred and recognised as contract liabilities.
TZ Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
23
Government grant - Research and development incentive
Government grant - Research and development incentive represents reimbursements received from the Australian
Government for eligible research and development expenditure incurred by the consolidated entity. The consolidated entity
recognises government grants upon receipt of funds.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
●
when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Reclassification
Comparative figures in the statement of profit or loss and other comprehensive income and in the statement of financial
position have been reclassified to conform to the current year presentation.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it
is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30-
60 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses. To measure the expected
credit losses, trade receivables have been grouped based on days overdue. Aged receivable amounts over 120 days have
been individually assessed for possible losses.
TZ Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
24
Contract assets
Contract assets are recognised when the consolidated entity has transferred goods or services to the customer but where the
consolidated entity is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets
for impairment purposes.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life
of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the
end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases
with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or
loss as incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets
are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently
measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of
the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the
expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.
Patents
Expenditure directly attributable to the registration of patents is capitalised at cost and is amortised over the useful life of 15
years.
Research and development costs
Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised if the
product or service is technically feasible, adequate resources are available to complete the project, it is probable that future
economic benefits will be generated and expenditure attributable to the project can be measured reliably. Expenditure
capitalised comprises costs of materials, services, direct labour and an appropriate portion of overheads.
Capitalised development expenditure is stated at cost less accumulated amortisation and any impairment losses and are
amortised over the period of expected future sales from the related projects which vary from 3 to 5 years.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
TZ Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
25
Contract liabilities
Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are recognised
when a customer pays consideration, or when the consolidated entity recognises a receivable to reflect its unconditional right
to consideration (whichever is earlier) before the consolidated entity has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Finance Costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written
down.
Provisions
Inventory provision
Inventory provision for obsolescence is estimated based on historical inventory movement, for example, purchases / sales
and knowledge of inventory products on hand.
Warranties provision
The consolidated entity provides warranties on hardware sales which generally covers a period of 12 months from the date of
sale. The consolidated entity has initiated accruing warranty provision at 1% of the sales based on historical warranty claims.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries and other employee benefits expected to be settled wholly within 12 months of the reporting
date are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
Employee benefits not expected to be settled within 12 months of the reporting date are measured at the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration
is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using
the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution,
the share price at grant date, expected price volatility of the underlying share, the expected dividend yield, the risk free interest
rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity
receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
TZ Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
26
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification had not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, they are treated as if they had vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award are treated as if they were a modification.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of TZ Limited, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of additional ordinary shares that would have been outstanding assuming conversion of all dilutive potential
ordinary shares.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2024. The consolidated
entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Inventory provision
Inventory provision for obsolescence is estimated based on historical inventory movement, for example, purchases / sales
and knowledge of inventory products on hand. The Group has provided 100% obsolescence provision at cost on hand for
inventory items that have no movement in the past 2 years.
Warranties provision
Refer to policy in note 2.
TZ Limited
Notes to the financial statements
30 June 2024
Note 3. Critical accounting judgements, estimates and assumptions (continued)
27
Revenue from contracts with customers
Determining when to recognise revenues from maintenance services recognised over time is dependent on the extent to which
the performance obligations have been satisfied. For maintenance service agreements, revenue recognition requires an
understanding of the customer’s use of the related products, historical experience and knowledge of the market.
Recognised amounts of contract revenues and related receivables reflect management’s best estimate of each contract’s
outcome and stage of completion. This includes the assessment of the profitability of ongoing contracts and the order backlog.
For more complex contracts in particular, costs to complete and contract profitability are subject to significant estimation
uncertainty.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience, historical collection rates and forward-looking
information that is available. The allowance for expected credit losses, as disclosed in note 9, is calculated based on the
information available at the time of preparation. The actual credit losses in future years may be higher or lower. Aged
receivable amounts over 120 days have been individually assessed for possible losses.
Capitalised development costs
Distinguishing the research and development phases of a new project and determining whether the recognition requirements
for the capitalisation of development costs are met requires judgement. After capitalisation, management monitors whether
the recognition requirements continue to be met and whether there are any indicators that capitalised costs may be impaired.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may
lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves assessing
the value of the asset at fair value less costs of disposal and using value-in-use models which incorporate a number of key
estimates and assumptions.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Incremental borrowing rate (IBR)
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is
based on what the consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain an
asset of a similar value to the right-of-use asset, with similar terms, security and economic environment. The IBR for Sydney
Office lease starting May 2024 has been determined on the basis of the interest rate per the Group’s borrowing agreement
with First Samuel Limited.
Note 4. Operating segments
Identification of reportable operating segments
The consolidated entity operates in four operating segments being Australia, United States of America ('USA'), Europe
(including the United Kingdom), Middle East and Africa ('EMEA') and Asia. The principal activities of each operating segment
are identical, being the sale of hardware and software products, maintenance and support services, and installation and
commissioning services. These segments are based on the internal reports that are reviewed and used by the Board of
Directors (being the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation
of resources.
Other segments represent the activities of the corporate headquarters.
The information reported to the CODM, on at least a monthly basis, is profit or loss and adjusted earnings before interest, tax,
depreciation and amortisation and other specific items ('Adjusted EBITDA').
For information about revenue from products and services, refer to note 5.
TZ Limited
Notes to the financial statements
30 June 2024
Note 4. Operating segments (continued)
28
Intersegment transactions
Transactions between segments are carried out at arm’s length and are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment receivables, payables and loans are eliminated on consolidation.
Major customers
One customer contributed 21.75% of the consolidated entity for the year ended 30 June 2024. During the year ended 30 June
2023, two customers contributed more than 10% to the external revenue of the consolidated entity.
Operating segment information
Other
Australia
USA
EMEA
Asia
segments
Total
Consolidated - 2024
$
$
$
$
$
$
Revenue
Sales to external customers
5,744,459
6,909,996
231,119
1,051,754
-
13,937,328
Interest
-
-
-
-
2,737
2,737
Total revenue
5,744,459
6,909,996
231,119
1,051,754
2,737
13,940,065
Adjusted EBITDA
395,188
891,056
123,215
170,374
(799,655)
780,178
Depreciation and amortisation
(644,573)
Interest revenue
2,737
Finance costs
(384,493)
Government grants
331,712
Profit before income tax
benefit
85,561
Income tax benefit
13,791
Profit after income tax benefit
99,352
Other
Australia
USA
EMEA
Asia
segments
Total
Consolidated - 2023
$
$
$
$
$
$
Revenue
Sales to external customers
4,863,707
6,978,721
719,372
1,246,295
-
13,808,095
Interest
-
-
-
-
1,126
1,126
Total revenue
4,863,707
6,978,721
719,372
1,246,295
1,126
13,809,221
Adjusted EBITDA
400,533
(5,031,627)
(92,226)
69,612
(19,304)
(4,673,012)
Depreciation and amortisation
(804,745)
Impairment
(195,914)
Interest revenue
1,126
Finance costs
(278,927)
Loss before income tax
expense
(5,951,472)
Income tax expense
(34,090)
Loss after income tax
expense
(5,985,562)
All assets and liabilities, including taxes are not allocated to the operating segments as they are managed on an overall group
basis, and therefore this information is not reported to the CODM.
TZ Limited
Notes to the financial statements
30 June 2024
Note 4. Operating segments (continued)
29
Geographical information
Geographical non-current
assets
2024
2023
$
$
Australia
1,778,657
794,833
United States of America
309,187
370,182
EMEA
883
1,472
Asia (Singapore)
-
376
2,088,727
1,166,863
Note 5. Revenue
Consolidated
2024
2023
$
$
Sale and service revenue
13,937,328
13,808,095
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated
2024
2023
$
$
Major product and service lines
Sale of hardware and software
9,892,958
9,584,908
Installation and commissioning services
542,440
882,335
Maintenance and support services
3,501,930
3,340,852
13,937,328
13,808,095
Timing of revenue recognition
Goods and services transferred at a point in time
10,435,398
10,467,243
Services transferred over time
3,501,930
3,340,852
13,937,328
13,808,095
Refer to note 4 for details of revenue disaggregated by geographical regions.
Note 6. Other income
Consolidated
2024
2023
$
$
Government grant - Research and development incentive
331,712
3,511
Other
3,942
-
Other income
335,654
3,511
TZ Limited
Notes to the financial statements
30 June 2024
30
Note 7. Expenses
Consolidated
2024
2023
$
$
Profit/(loss) before income tax includes the following specific expenses:
Depreciation
Plant and equipment
19,787
63,764
Office equipment
43,293
61,981
Right-of-use assets
249,623
220,358
Total depreciation
312,703
346,103
Amortisation
Development costs
331,870
458,642
Total depreciation and amortisation
644,573
804,745
Inventory
Inventory write-downs / (write-ups)
(92,500)
485,126
Finance costs
Interest and finance charges paid/payable on borrowings
351,983
251,809
Interest and finance charges paid/payable on lease liabilities
32,510
27,118
Finance costs expensed
384,493
278,927
Leases
Short-term lease payments
217,119
272,462
Defined contribution superannuation expense
246,064
329,942
Other expenses
Bad debts
133,524
-
Insurance
132,854
266,943
Marketing
172,047
192,080
Other expenses
162,984
740,625
Subscriptions
227,880
302,268
Total other expenses
829,289
1,501,916
Share-based payments
Options
4,287
6,446
Share grants
71,948
26,144
76,235
32,590
Note 8. Cash and cash equivalents
Consolidated
2024
2023
$
$
Current assets
Cash held at bank
1,049,797
862,946
TZ Limited
Notes to the financial statements
30 June 2024
31
Note 9. Trade and other receivables
Consolidated
2024
2023
$
$
Current assets
Trade receivables
1,770,861
1,781,913
Less: Allowance for expected credit losses
(102,378)
-
1,668,483
1,781,913
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
2024
2023
2024
2023
2024
2023
Consolidated
%
%
$
$
$
$
Not overdue
-
-
1,328,067
1,209,716
-
-
0 to 3 months overdue
-
-
337,975
436,113
-
-
3 to 6 months overdue
94.717%
-
46,204
40,933
43,763
-
Over 6 months overdue
100.000%
-
58,615
95,151
58,615
-
1,770,861
1,781,913
102,378
-
Refer to note 3 for credit loss estimation method.
Note 10. Contract assets
Consolidated
2024
2023
$
$
Current assets
Contract assets
246,336
878,771
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below:
Opening balance
878,771
1,137,355
Additions
8,585,452
19,647,454
Transfer to trade receivables
(9,217,887) (19,906,038)
Closing balance
246,336
878,771
Allowance for expected credit losses
The allowance for expected credit losses on contract assets for the year ended 30 June 2024 is $nil (2023: $nil).
TZ Limited
Notes to the financial statements
30 June 2024
32
Note 11. Inventories
Consolidated
2024
2023
$
$
Current assets
Finished goods - at cost
1,743,422
2,365,560
Less: Provision for impairment
(276,374)
(487,310)
1,467,048
1,878,250
Refer to note 3 for details of estimation of inventory obsolescence provision.
Note 12. Other current assets
Consolidated
2024
2023
$
$
Current assets
Prepayments and deferred expenses
334,524
484,705
Security deposits
91,254
122,828
425,778
607,533
Note 13. Right-of-use assets
Consolidated
2024
2023
$
$
Non-current assets
Land and buildings - right-of-use
1,249,790
805,775
Less: Accumulated depreciation
(100,861)
(465,964)
1,148,929
339,811
The consolidated entity leases various premises under non-cancellable operating leases expiring between 4 and 5 years, in
some cases, with no options to extend. The above commitments do not include commitments for any renewal options on
leases. Lease conditions do not impose any restrictions on the ability of TZ Limited and its subsidiaries from borrowing further
funds or paying dividends. TZI Administration has renewed the lease for existing office premises with agreed fixed annual
increase of 3%.
TZ Limited
Notes to the financial statements
30 June 2024
Note 13. Right-of-use assets (continued)
33
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Right-of-use
assets
Consolidated
$
Balance at 1 July 2022
378,325
Additions
183,566
Disposals
(2,906)
Exchange differences
1,184
Depreciation expense
(220,358)
Balance at 30 June 2023
339,811
Additions
1,057,928
Exchange differences
813
Depreciation expense
(249,623)
Balance at 30 June 2024
1,148,929
Note 14. Intangibles
Consolidated
2024
2023
$
$
Non-current assets
Re-acquired right (Intevia Licence) - at cost *
-
10,138,090
Less: Accumulated amortisation *
-
(8,035,887)
Less: Impairment *
-
(2,102,203)
-
-
Patents - at cost **
3,565,316
2,842,881
Less: Accumulated amortisation **
(1,312,346)
(819,128)
Less: Impairment **
(2,089,579)
(1,840,886)
163,391
182,867
Development costs - at cost ***
4,210,742
11,059,116
Less: Accumulated amortisation ***
(2,732,909)
(6,034,807)
Less: Impairment ***
(791,939)
(4,501,000)
685,894
523,309
849,285
706,176
*
The fully amortised and impaired intangible assets were held in a subsidiary which was disposed during the year ended
30 June 2024.
**
The movement in cost, amortisation and impairment of intangible assets were in relation to patent costs held in a
subsidiary which was disposed during the year ended 30 June 2024.
*** The movement in cost, amortisation and impairment of intangible assets were in relation to development costs held in a
subsidiary which was disposed during the year ended 30 June 2024.
TZ Limited
Notes to the financial statements
30 June 2024
Note 14. Intangibles (continued)
34
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Patents
Development
costs
Total
Consolidated
$
$
$
Balance at 1 July 2022
196,318
795,398
991,716
Additions
-
166,456
166,456
Exchange differences
6,645
-
6,645
Amortisation expense
(20,096)
(438,545)
(458,641)
Balance at 30 June 2023
182,867
523,309
706,176
Additions
-
473,823
473,823
Exchange differences
1,155
1
1,156
Amortisation expense
(20,631)
(311,239)
(331,870)
Balance at 30 June 2024
163,391
685,894
849,285
Impairment testing
At 30 June 2024, the cash generating units ('CGU') to which intangible assets belong was tested for impairment. Despite
growth in revenue and small profit, results were less than budgeted hence an impairment indicator existed at year end, which
required a full impairment analysis to be undertaken. For the purpose of impairment testing, the Package Asset Delivery
('PAD') CGU is determined to be the sole CGU that benefits from the core patented technology and product development
costs. The net carrying value of the CGU is as follows:
Consolidated
2024
2023
$
$
Package Asset Delivery – PAD
685,893
523,309
Impairment test performed
The recoverable value of the CGU was assessed on the value in use model.
The value in use hierarchy within which the value in use measurement of the asset is categorised in its entirety is Level 3.
The valuation techniques used to measure the value in use less likely costs of disposal were the Relief from Royalty Method
and Multi Period Excess Earnings Method. Cashflow for 6 years were projected in assessing the impairment testing.
Management used the following key estimates and assumptions in the valuation calculation:
Key items
2024
2023
Growth rate
1.50%
1.50%
Discount rate
12.80%
12.40%
Royalty rate
5.00%
5.00%
Customer attrition rate
10.00%
10.00%
EBITDA margin
50.00%
50.00%
Impairment test results
Based on the testing performed, the recoverable amount of the CGU exceeded the carrying value and no impairment existed
at 30 June 2024 (30 June 2023: no impairment).
Impairment test sensitivity
A reasonable possible change in the key assumptions used to determine the recoverable amount of the CGU would not cause
the remaining carrying value of the CGU to exceed its recoverable amount.
TZ Limited
Notes to the financial statements
30 June 2024
35
Note 15. Trade and other payables
Consolidated
2024
2023
$
$
Current liabilities
Trade payables
1,540,308
2,227,204
Employee expense payables
53,136
269,969
Goods and services tax payable
390,497
146,930
Other payables
907,114
1,019,518
2,891,055
3,663,621
Refer to note 23 for further information on financial instruments.
Note 16. Contract liabilities
Consolidated
2024
2023
$
$
Current liabilities
Contract liabilities
2,550,109
2,867,579
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below:
Opening balance
2,867,579
4,275,853
Amounts invoiced in advance
11,306,018
12,530,112
Restatement of comparative (2022)
-
(765,307)
-Transfer to revenue - included in the opening balance
(2,867,579)
(3,510,545)
Transfer to revenue - performance obligations satisfied in previous periods
(8,755,909)
(9,662,534)
Closing balance
2,550,109
2,867,579
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the
reporting period was $2,550,109 as at 30 June 2024 ($2,867,579 as at 30 June 2023) and is expected to be recognised as
revenue in future periods as follows:
Consolidated
2024
2023
$
$
Within 6 months
1,951,351
2,198,698
Greater than 6 months
598,758
668,881
2,550,109
2,867,579
Note 17. Borrowings
Consolidated
2024
2023
$
$
Current liabilities
Loan - First Samuel Limited ("First Samuel")
3,300,000
3,500,000
TZ Limited
Notes to the financial statements
30 June 2024
Note 17. Borrowings (continued)
36
Refer to note 23 for further information on financial instruments.
Loan - First Samuel Limited ("First Samuel")
The full debenture facility was established with First Samuel Limited on 30 June 2021 and originally matured on 31 January
2024, an entity with significant influence (by virtue of shareholdings). This facility carries a coupon rate of BBSW + 4.5% per
annum and a facility fee of 1% per annum payable in advance. First Samuel Limited is a related party of the Group. Refer to
note 28 for further information on related party transactions and balances.
On 9 December 2022, the Company extended the debenture facility with First Samuel Limited from $2,500,000 to $3,500,000.
During the year ended 30 June 2024, pursuant to a Third Deed of Variation and additional informal agreements (“the
variations”) entered into between the Company and First Samuel Limited, the repayment dates of its debenture facilities were
extended to future dates as outlined below:
●
$2,500,000 to 30 June 2025;
●
$200,000 paid in April 2024; and
●
$800,000 to be agreed between the Company and First Samuel.
Total secured liabilities
The total secured liabilities are as follows:
Consolidated
2024
2023
$
$
Loan - First Samuel Limited
3,300,000
3,500,000
Assets pledged as security
The facilities are secured by first ranking security interest over the assets of the consolidated entity.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
2024
2023
$
$
Total facilities
Loan - First Samuel Limited (current facility)
3,500,000
3,500,000
Used at the reporting date
Loan - First Samuel Limited (current facility)
3,300,000
3,500,000
Unused at the reporting date
Loan - First Samuel Limited (current facility)
200,000
-
TZ Limited
Notes to the financial statements
30 June 2024
37
Note 18. Lease liabilities
Consolidated
2024
2023
$
$
Current liabilities
Lease liability
204,987
224,622
Non-current liabilities
Lease liability
964,832
144,562
1,169,819
369,184
Refer to note 23 for further information.
Reconciliations
Reconciliations of the lease liability (current and non-current) at the beginning and end of the current financial year are set out
below:
Consolidated
2024
2023
$
$
Opening balance
369,184
406,082
Additions
1,057,928
183,566
Payments - principal
(289,395)
(235,970)
Payments - interest
32,509
27,118
Exchange difference
(407)
(11,612)
Closing balance
1,169,819
369,184
Note 19. Provisions
Consolidated
2024
2023
$
$
Current liabilities
Employee benefits
462,223
461,206
Warranty provision
67,503
-
529,726
461,206
Non-current liabilities
Employee benefits
46,010
35,571
575,736
496,777
Note 20. Issued capital
Consolidated
2024
2023
2024
2023
Shares
Shares
$
$
Ordinary shares - fully paid
256,583,114
252,708,114
228,421,700 228,420,393
TZ Limited
Notes to the financial statements
30 June 2024
Note 20. Issued capital (continued)
38
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
1 July 2022
222,708,114
227,279,703
Issue of shares - equity incentive plan
23 March 2023
30,000,000
$0.0400
1,200,000
Less: share issue costs
-
$0.0000
(59,310)
Balance
30 June 2023
252,708,114
228,420,393
Shares issued under employee incentive scheme –
Escrow 2
6 July 2023
5,050,000
$0.0250
126,250
Shares cancelled under employee incentive scheme -
Escrow 1
6 July 2023
(1,000,000)
$0.1100
(110,000)
Shares cancelled under employee incentive scheme
28 March 2024
(175,000)
$0.0850
(14,943)
Balance
30 June 2024
256,583,114
228,421,700
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders
should the company be wound up, in proportions that consider both the number of shares held and the extent to which those
shares are paid up. The fully paid ordinary shares have no par value and the company does not have a limited amount of
authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Unquoted options
At 30 June 2024, there were 1,127,000 (2023: 1,415,000) options on issue associated with share-based payment
arrangements (see note 33). Each option entitles the holder to subscribe for one fully paid share in the company upon exercise
at any time from the date the vesting conditions have been satisfied until expiry of the options.
Capital risk management
The consolidated entity's objectives when managing capital are to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company or invest in growth
was seen as value adding.
The capital risk management policy remains unchanged from the 30 June 2023 Annual Report.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
TZ Limited
Notes to the financial statements
30 June 2024
39
Note 21. Reserves
Consolidated
2024
2023
$
$
Foreign currency reserve
(5,031,066)
(5,110,146)
Share-based payments reserve
39,517
38,921
(4,991,549)
(5,071,225)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on the net investments in foreign operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration,
and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign
Share-based
currency
payments
Total
Consolidated
$
$
$
Balance at 1 July 2022
(4,339,315)
34,771
(4,304,544)
Foreign currency translation
(770,831)
-
(770,831)
Share-based payments
-
4,150
4,150
Balance at 30 June 2023
(5,110,146)
38,921
(5,071,225)
Foreign currency translation
79,080
-
79,080
Share-based payments
-
596
596
Balance at 30 June 2024
(5,031,066)
39,517
(4,991,549)
Note 22. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 23. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
consolidated entity. The consolidated entity uses different methods to measure different types of risk to which it is exposed.
These methods include sensitivity analysis in the case of interest rate and foreign exchange risks and ageing analysis for
credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the consolidated entity's
operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
TZ Limited
Notes to the financial statements
30 June 2024
Note 23. Financial instruments (continued)
40
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash
flow forecasting.
The consolidated entity's foreign exchange risk is managed to ensure sufficient funds are available to meet foreign currency
commitments in a timely and cost-effective manner. The consolidated entity will continually monitor this risk and consider
entering into forward foreign exchange, foreign currency swap and foreign currency option contracts if appropriate.
Creditors and debtors as at 30 June 2024 were reviewed to assess currency risk at year end. The value of transactions
denominated in a currency other than the functional currency of the respective subsidiary was insignificant and therefore the
risk was determined as immaterial.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity's main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose
the consolidated entity to interest rate risk. Borrowings issued at fixed rates expose the consolidated entity to fair value interest
rate risk.
The consolidated entity invests surplus cash in term deposits with fixed returns. The Board makes investment decisions after
considering advice received from professional advisors.
The consolidated entity monitors its interest rate exposure continuously.
As at the reporting date, the consolidated entity had the following variable rate exposures:
2024
2023
Weighted
average
interest rate
Balance
Weighted
average
interest rate
Balance
Consolidated
%
$
%
$
Cash and cash equivalents
-
1,049,797
-
862,946
Loan - First Samuel Limited
8.94%
(3,300,000)
8.74%
(3,500,000)
Net exposure to cash flow interest rate risk
(2,250,203)
(2,637,054)
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
The consolidated entity has a net cash deficit totalling $2,250,203 (2023: net cash deficit $2,637,054). An official
increase/decrease in interest rates of 100 basis point (2023: 100 basis point) percentage point would have an
adverse/favourable effect on profit before tax of $22,502 (2023: adverse/favourable $26,371) per annum. The percentage
change is based on the expected volatility of interest rates using market data and analysts' forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming
references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate
credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements. The consolidated entity does not hold any collateral.
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the consolidated entity based on recent sales experience, historical collection rates
and forward-looking information that is available.
TZ Limited
Notes to the financial statements
30 June 2024
Note 23. Financial instruments (continued)
41
The consolidated entity does not have any concentration of credit risk exposure from its customers as at 30 June 2024 and
30 June 2023.
There is a concentration of credit risk for cash at bank and cash on deposit as most monies in Australia are held with one
financial institution, St George Bank.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments
for a period greater than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Consolidated
2024
2023
$
$
Loan - First Samuel Limited (current facility)
200,000
-
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Remaining
contractual
maturities
Consolidated - 2024
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
1,540,308
-
-
-
1,540,308
Employee expenses payable
-
53,136
-
-
-
53,136
Other payables
-
907,114
-
-
-
907,114
GST payable
-
390,497
-
-
-
390,497
Interest-bearing - variable
Loan - First Samuel Limited
8.94%
3,300,000
-
-
-
3,300,000
Interest-bearing - fixed rate
Lease liability
8.86%
204,987
234,980
729,852
-
1,169,819
Total non-derivatives
6,396,042
234,980
729,852
-
7,360,874
TZ Limited
Notes to the financial statements
30 June 2024
Note 23. Financial instruments (continued)
42
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Remaining
contractual
maturities
Consolidated - 2023
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
2,227,204
-
-
-
2,227,204
Employee expenses payable
-
269,969
-
-
-
269,969
Other payables
-
1,019,518
-
-
-
1,019,518
GST payable
-
146,930
-
-
-
146,930
Interest-bearing - variable
Loan - First Samuel Limited
8.74%
3,500,000
-
-
-
3,500,000
Interest-bearing - fixed rate
Lease liability
8.24%
224,622
43,898
100,664
-
369,184
Total non-derivatives
7,388,243
43,898
100,664
-
7,532,805
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Note 24. Fair value measurement
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade
receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair value of
financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is
available for similar financial instruments.
Note 25. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity
is set out below:
Consolidated
2024
2023
$
$
Short-term employee benefits
927,104
1,061,282
Post-employment benefits
25,292
76,919
Long-term benefits
27,383
-
Share-based payments
-
3,185
979,779
1,141,386
TZ Limited
Notes to the financial statements
30 June 2024
43
Note 26. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by PKF Brisbane Audit, the auditor of
the Company:
Consolidated
2024
2023
$
$
Audit services - PKF Brisbane Audit
Audit or review of the financial statements
115,625
74,000
Other services - PKF Brisbane
Tax compliance services
15,000
12,000
130,625
86,000
Note 27. Contingent liabilities
As at 30 June 2024, there are $72,101 (30 June 2023: nil) held in St. George Bank Limited, representing a bank guarantee.
The consolidated entity does not have any other contingent liabilities at 30 June 2024 (as at 30 June 2023: nil).
Note 28. Related party transactions
Parent entity
TZ Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 and note 33 and the remuneration report included
in the Directors' report.
Consolidated
2024
2023
$
$
Payables to Directors:
Amounts owed to Directors for outstanding Director fees
-
27,500
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
2024
2023
$
$
Payment for other expenses:
Interest expense for the year (including interest payable at year end below) to First Samuel
Limited - an entity with significant influence (by virtue of shareholdings)
308,326
221,230
Interest payable outstanding at year end to First Samuel Limited - an entity with significant
influence (by virtue of shareholdings)
152,046
-
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date, with the
exception of the following amounts:
TZ Limited
Notes to the financial statements
30 June 2024
Note 28. Related party transactions (continued)
44
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
2024
2023
$
$
Current borrowings:
Loan from First Samuel Limited - an entity with significant influence (by virtue of
shareholdings)
3,300,000
3,500,000
Terms and conditions
Refer to note 17 for details of terms and conditions on the First Samuel Limited loan facility.
Note 29. Parent entity information
Parent
2024
2023
Financial performance
$
$
Loss for the year
(1,126,839)
(492,578)
Parent
2024
2023
Financial position
$
$
Total current assets
5,610,503
10,511,841
Total assets
7,198,994
12,112,655
Total current liabilities
(3,748,939)
(7,536,067)
Total liabilities
(3,748,939)
(7,536,067)
Net assets
3,450,055
4,576,588
Issued capital
228,417,393
228,420,394
Reserves
39,517
38,921
Accumulated losses
(225,006,857) (223,882,727)
Total equity
3,450,053
4,576,588
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2024 and 30 June 2023.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June 2023.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except
for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
TZ Limited
Notes to the financial statements
30 June 2024
45
Note 30. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 2:
Ownership interest
Principal place of business /
2024
2023
Name
Country of incorporation
%
%
Telezygology, Inc
United States of America
100.00%
100.00%
TZ Holdings Inc *
United States of America
-
100.00%
TZ Development Technologies Inc *
United States of America
-
100.00%
TZ Tooling Inc *
United States of America
-
100.00%
TZI Australia Pty Limited
Australia
100.00%
100.00%
TZ Administration Services Pty Ltd
Australia
100.00%
100.00%
TZI Singapore Pte Ltd
Singapore
100.00%
100.00%
TZI UK Limited
United Kingdom
100.00%
100.00%
* Deregistered on 29 September 2023.
Note 31. Cash flow information
Reconciliation of profit/(loss) after income tax to net cash from/(used in) operating activities
Consolidated
2024
2023
$
$
Profit/(loss) after income tax benefit/(expense) for the year
99,352
(5,985,562)
Adjustments for:
Depreciation and amortisation
644,573
804,745
Share-based payments
1,903
4,150
Foreign exchange differences
(50,959)
(793,818)
Interest expense on lease liabilities
32,510
153,042
Change in operating assets and liabilities:
Decrease in trade and other receivables
113,430
2,348,318
Decrease in contract assets
632,435
258,585
Decrease in inventories
411,202
808,591
Decrease in other assets
181,755
594,436
Increase/(decrease) in trade and other payables
(772,564)
404,854
Decrease in contract liabilities
(317,470)
(1,408,275)
Increase/(decrease) in provisions
78,958
(113,100)
Net cash from/(used in) operating activities
1,055,125
(2,924,034)
Non-cash investing and financing activities
Consolidated
2024
2023
$
$
Additions to the right-of-use assets
1,057,928
183,566
Shares issued
-
1,200,000
1,057,928
1,383,566
TZ Limited
Notes to the financial statements
30 June 2024
Note 31. Cash flow information (continued)
46
Changes in liabilities arising from financing activities
Loan - First
Samuel
Limited
Lease
liabilities
Total
Consolidated
$
$
$
Balance at 1 July 2022
2,500,000
406,082
2,906,082
Net cash from/(used in) financing activities
1,000,000
(208,852)
791,148
Lease additions
-
183,566
183,566
Exchange differences
-
(11,612)
(11,612)
Balance at 30 June 2023
3,500,000
369,184
3,869,184
Net cash used in financing activities
(200,000)
(290,613)
(490,613)
Lease additions
-
1,057,928
1,057,928
Exchange differences
-
33,320
33,320
Balance at 30 June 2024
3,300,000
1,169,819
4,469,819
Note 32. Earnings/(Loss) per share
Consolidated
2024
2023
$
$
Profit/(loss) after income tax attributable to the owners of TZ Limited
99,352
(5,985,562)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
256,657,363
230,927,292
Weighted average number of ordinary shares used in calculating diluted earnings per share
256,657,363
230,927,292
Cents
Cents
Basic earnings/(loss) per share
0.0387
(2.5920)
Diluted earnings/(loss) per share
0.0387
(2.5920)
For the purpose of calculating the diluted loss per share the denominator has excluded 16,127,000 options (2023: 1,415,000)
as the effect would be anti-dilutive.
Note 33. Share-based payments
TZ Limited's employee Equity Incentive Plan
TZ Limited's employee Equity Incentive Plan ('EIP') was approved by shareholders during the Company's 2021 Annual
General Meeting held on 27 January 2022. The Plan was designed to attract, retain, motivate and reward eligible persons
(employees and directors) of the Company (collectively the 'Participants') by issuing securities to the Participants. The vesting
of those securities may be subject to certain performance criteria to be determined by the Board.
TZ Limited
Notes to the financial statements
30 June 2024
Note 33. Share-based payments (continued)
47
Set out below are summaries of options granted under the plan:
2024
Balance at
Balance at
Exercise
the start of
Forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
Expired
the year
06/08/2019
31/08/2024
$0.2500
359,000
-
-
(144,000)
215,000
06/08/2019
31/08/2025
$0.4000
359,000
-
-
(144,000)
215,000
06/08/2019
31/08/2026
$0.4500
697,000
-
-
-
697,000
1,415,000
-
-
(288,000)
1,127,000
Weighted average exercise price
$0.3866
$0.0000
$0.0000
$0.3250
$0.4023
2023
Balance at
Balance at
Exercise
the start of
Forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
Expired
the year
06/08/2019
31/08/2024
$0.2500
697,000
-
-
(338,000)
359,000
06/08/2019
31/08/2025
$0.4000
697,000
-
-
(338,000)
359,000
06/08/2019
31/08/2026
$0.4500
697,000
-
-
-
697,000
2,091,000
-
-
(676,000)
1,415,000
Weighted average exercise price
$0.3667
$0.0000
$0.0000
$0.3250
$0.3667
Note 34. Events after the reporting period
No matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
TZ Limited
As at 30 June 2024
Consolidated entity disclosure statement
48
Entity name
Body Corporate,
Partnership or
Trust
Place
incorporated/
formed
% of share
capital held
directly or
indirectly by the
Company
Australian or
Foreign tax
resident
Jurisdiction for
Foreign tax
resident
TZ Limited
Body Corporate
Australia
N/A (Parent
Entity)
Australian
N/A
TZI Australia Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
TZ Administration Services
Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Telezygology Inc
Body Corporate
United States of
America
100%
Australian
Dual*
TZI Singapore Pte Ltd
Body Corporate
Singapore
100%
Australian
Dual - Singapore
TZI UK Limited
Body Corporate
United Kingdom
100%
Australian
Dual**
* - United States of America
** - United Kingdom
TZ Limited
Directors' declaration
30 June 2024
49
In the Directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
●
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
●
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
30 June 2024 and of its performance for the financial year ended on that date;
●
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable; and
●
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Peter Graham
Chairman
28 August 2024
Sydney
PKF Brisbane Pty Ltd is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separately owned legal entity and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). Liability limited by a scheme approved under
Professional Standards Legislation.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TZ LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of TZ Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2024, 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 year then ended, and notes to the
consolidated financial statements, including material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
In our opinion the financial report of TZ Limited is in accordance with the Corporations Act 2001, including:
a)
giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance
for the year ended on that date; and
b)
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 Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & 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.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 of the financial report which describes the events and/or conditions which give
rise to the existence of a material uncertainty that may cast significant doubt about the Group’s ability to
continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the
normal course of business. Our conclusion is not modified in respect of this matter.
PKF Brisbane Audit
ABN 33 873 151 348
Level 2, 66 Eagle Street
Brisbane, QLD 4000
Australia
+61 7 3839 9733
brisbane@pkf.com.au
pkf.com.au
50
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. 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.
Carrying amount of intangible assets with finite useful lives
Why significant
How our audit addressed the key audit matter
As at 30 June 2024, the carrying value of intangible
assets with finite useful lives was $849,285 (2023:
$706,176), as disclosed in Note 14.
The Group’s accounting policy in respect of intangible
assets with finite useful lives is outlined in Note 2.
The carrying amount of intangible assets with finite
useful lives is a key audit matter due to:
•
the significant audit effort required to test the
carrying amount of intangible assets with
finite useful lives; and
•
the level of judgement applied in evaluating
management’s assessment of impairment.
As outlined in Notes 2 and 3, management assessed
the carrying amount of intangible assets with finite
useful lives through impairment testing utilising a fair
value less costs of disposal model in which significant
judgements
are
applied
in
determining
key
assumptions. The judgements made in determining
the underlying assumptions in the model have a
significant impact on the carrying amount of intangible
assets with finite useful lives, and accordingly the
amount of any impairment charge, to be recorded in
the current financial year.
In assessing this key audit matter, we involved
senior audit team members who understand
the industry.
Our audit procedures included, amongst
others:
•
evaluating management’s methodology
for determining the carrying amount of
intangible assets with finite useful lives
by comparing the fair value less costs of
disposal model with generally accepted
valuation methodology and accounting
standard requirements;
•
conducting sensitivity analysis on key
assumptions such as weighted average
cost of capital (WACC) and growth rates,
within reasonable foreseeable ranges;
•
challenging the key assumptions used in
the value in use model by:
- assessing growth rates used in
comparison to historical results;
- evaluating the WACC rate used in
comparison to market and industry
information available;
- assessing yearly revenue forecasts in
comparison to historical results and
approved budgets; and
- assessing the impact of economic
environment on all key assumptions;
•
assessing the appropriateness of the
Group’s accounting policy for the
capitalisation of development costs;
•
obtaining a list of additions to intangible
assets and assessing against the
recognition criteria of AASB 138
Intangible Assets; assessing manage-
ment's estimate of future economic
benefits related to the costs capital-
ised; and
•
assessing the appropriateness of the
related discloses in Note 2, 3 and 14.
51
2.
Revenue recognition
Why significant
How our audit addressed the key audit
matter
As at 30 June 2024 the recorded revenue from
continuing operations of the group was $13,937,328
(2023: $13,808,095), as disclosed in Note 5.
As disclosed in the accounting policy in Note 2, the
group has multiple revenue streams including
contracts with customers, sale of software and
hardware, rendering of installation and commissioning
services, maintenance services and professional
services. As disclosed in Note 3, management
judgement is required in relation to revenue
recognition for maintenance services recognised over
time.
Revenue recognition is considered a Key Audit Matter
(KAM) due to:
•
The significance of the balance;
•
The different categories of revenue recognised
which in some cases require management
judgement; and
•
Errors identified in a prior period relating to
revenue.
Our work included, but was not limited to, the
following procedures:
•
Understanding
the
Group’s
accounting policies and processes for
recognising contract revenue;
•
Tracing revenue samples to contracts,
and assessing management’s revenue
recognition based on the five steps
required under AASB 15 Revenue
from Contracts with Customers;
•
Performing cut-off testing to ensure
revenue transactions around the year
end have been recorded in the correct
period and any contract assets or
contract liabilities have been properly
accounted for;
•
Reviewing related balance sheet
accounts, including accrued revenue
and customer deposits to ensure the
completeness
and
accuracy
of
recorded revenue; and
•
Reviewing the disclosures in Note 2,
3, 5, 10, and 16 to ensure that they
are appropriate and in accordance
with AASB 15 Revenue from Contracts
with Customers.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, 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.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or has 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 an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
52
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/ Home.aspx. This description forms part of
our auditor’s report.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2024.
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.
Opinion
In our opinion, the Remuneration Report of TZ Limited for the year ended 30 June 2024 complies with section
300A of the Corporations Act 2001.
PKF BRISBANE AUDIT
SHAUN LINDEMANN
PARTNER
BRISBANE
28 August 2024
53
TZ Limited
Shareholders information
30 June 2024
Following is a summary of shareholder information as at 31 July 2024.
Equity security holders
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
Holdings Ranges
Ordinary Shares
Unquoted Options
Holders
Total Units
%
Holders
Total Units
%
1-1,000
1,265
283,069
0.10
-
-
-
1,001-5,000
340
887,552
0.35
-
-
-
5,001-10,000
133
1,075,310
0.42
-
-
-
10,001-100,000
315
12,160,255
4.74
6
375,000
2.33
100,001-999,999,999
181
242,176,928
94.39
24
15,752,000
97.67
Totals
2,234
256,583,114
100.00
30
16,127,000
100.00
Holding less than a marketable parcel
Based on the closing share price on 31 July 2024 of A$ 0.0240 per share, there were 1,848 holders of less than a marketable parcel of
ordinary shares, holding 3,925,766 shares in aggregate.
Voting Rights
All issued ordinary shares carry one vote per share.
All options do not carry the right to vote.
Top 20 largest holders of ordinary shares
Name
Balance as at
31 July 2024
%
FIRST SAMUEL LTD ACN 086243567
60,882,104
23.73
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
21,387,449
8.34
MR SCOTT JOSEPH BOGUE
20,000,000
7.79
DELCOR ADVISORY INVESTMENT GROUP PTY LTD
14,041,074
5.47
ONE MANAGED INVESTMENT FUNDS LIMITED
12,944,403
5.04
MR DAVID FREDERICK OAKLEY
7,398,174
2.88
MR ERICH GUSTAV BROSELL
6,050,000
2.36
BOURSE SECURITIES PTY LTD
6,000,570
2.34
APPWAM PTY LTD
6,000,000
2.34
ONE MANAGED INVESTMENT FUNDS LIMITED
3,701,993
1.44
MR DAVID FREDERICK OAKLEY
3,563,684
1.39
PRICE SUPERANNUATION SERVICES PTY LTD
3,000,000
1.17
EXELMONT PTY LTD
2,443,545
0.95
JOHN ANTHONY D'ANGELO + FONNIE KANLIS
2,297,190
0.90
GUTHRIE CAD/GIS SOFTWARE PTY LTD
2,279,771
0.89
MR PHILIP ANTHONY FEITELSON
2,012,352
0.78
SURFLODGE PTY LTD
1,995,670
0.78
PRICE FINANCIAL INTELLIGENCE PTY LTD
1,750,000
0.68
GUTHRIE CAD/GIS SOFTWARE PTY LTD
1,700,000
0.66
MISS CHIA - HUI HSU
1,656,678
0.65
Total Securities of Top 20 Holdings
181,104,657
70.58
Total Securities of remaining shareholders
75,478,457
29.42
Total of Securities
256,583,114
100.00
TZ Limited
Shareholders information
30 June 2024
Substantial Holders
Substantial holders in the Company, with their respective voting power known to the Company, are set out below:
Name
Number held
% of total
shares issued
First Samuel Ltd ACN 086243567 (ANF ITS MDA Clients A/C)
60,882,104
23.73
SG Hiscock & Company Limited
20,448,109
7.97
Scott Joseph Bogue
20,000,000
7.79
Technical Investing Pty Ltd
18,146,396
7.07
Delcor Advisory Investment Group Pty Ltd
14,041,074
5.47
Securities subject to voluntary escrow
Class
Escrow end date
Number of Securities
Ordinary Shares
27 January 2025
787,500
Ordinary Shares
6 July 2026
4,750,000
On-market buy-back
There is no current on-market buy-back
Closing Date for Director Nominations for Annual General Meeting
An election of Directors will be held at the Company’s 2024 Annual General Meeting on 21 November 2024. Notice is hereby given in
accordance with ASX Listing Rules 3.13.1 and the Company’s constitution that the closing date for receipt of nominations from persons
wishing to be considered for election as a Director is 2 October 2024 (‘Closing Date’).
Nomination must be received in writing no later than 5.00pm (Melbourne Time) on the Closing Date at the Company’s registered office.