Uscom – Growth and Vision
www.uscom.com.au
Uscom Limited
Annual Report
FY2024
FY2024
Chairman’s Letter
Directors Report
Finanicial Report
Directors Declaration
Independent Audit Report
Shareholder Information
3
18
26
50
51
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Contents
www.uscom.com.au
FY2024
FY24 saw the return of growth to the financial results of Uscom with sales of products increased by 43%,
while total revenue increased by 33% as we ended the year with Q4 cash flow positive operations and $2.52m
cash on hand. While challenging global markets persisted throughout the year in multiple jurisdictions,
Uscom’s visionary strategy of diversification and expansion ensured that the consolidated entity returned
strong results for FY24 and set the foundations for on-going growth in FY25.
FY24 was a year of focused management of our accelerating activities as we strategically planned our
corporate next steps and monitored global risks. Despite the challenges in global markets Uscom’s
financial results in the final quarters showed strong growth sending promising signals for the year ahead as
global markets continued their tentative recovery and Uscom’s share of these markets grew. The strategic
restructuring of Uscom’s international operations and the development of a manufacturing partnership
centred in Asia promises to transform the company and positions it well as global markets stabilize,
inflationary pressures recede, and new products are fed into a manufacturing system of scale and an
expanded distribution network.
Uscom’s new CV-2 software platform has recently been released marking the first step in the development of
a new generation of USCOM 1A with expanded functionality and new parameters. This enhancement allows
users to gain a unique view of cardiovascular physiology and enabling clinicians to make more informed
decisions and improve outcomes for patients. Uscom devices are continually evolving and improving, and
the CV-2 represents an inflection point providing a flexible software platform for development of future
iterations of the USCOM 1A and a foundation for integration of multiple other monitoring modules to
enhanced clinical utility.
Uscom’s global strategy has been to grow our activities in all our markets as we adapt to capitalise on
predictable opportunities while diversifying to optimise results from our more challenging markets. Each
market is different and changing, and requires a continuously finessed approach to ensure success. China,
SE Asia, Europe and the US all remain segments of the global market for which we are developing unique
strategies to position for stronger results in the coming periods. These diversified opportunities plus
expanded distribution combined with a refined operational skill and new products will preserve our growth
Associate Professor Rob Phillips
Chairman and Executive Director
momentum. Even if some markets remain constrained this strategy will provide optimal results from under-
performing markets while providing leveraging opportunities off strong and positively growing markets.
In summary, FY24 was a year of convincing operational recovery for Uscom as markets around the world
continue to languish. The achievement of 43% product sales growth was significant given the challenges
presented by all global markets. The corporate strategy of diversifying activities into all markets acts as a
hedge against regional market under-performance and foreign exchange volatility is a sound one which
underwrote our results. We have also focused on developing the clinical capabilities of all our current devices
and are planning the development of new devices over the coming years. Our IP inventory is large and
continuing to grow forming the foundation for new products which are being scheduled for development.
This new generation of products will head a second wave of practice changing Uscom technologies to lead
future clinical practice. Establishing the internal scale and acquiring the resources to support these next
steps is the current objective of management.
It is a time of great opportunity as Uscom leverages off its current growth and transitions to a complex global
MedTech enterprise of scale building on established products and markets while acquiring and developing
new technologies to feed into an expanded global distribution network. As world markets recover over
the next few years the prospects for Uscom achieving real scale in response to our programme of market
restructuring and increased products is exciting; our strategy Is in place.
Thanks to Uscom’s global staff, our Board, and our investors and supporters who have all contributed to
Uscom’s growth this year and been vital for creating this time of opportunity as we look forward to further
crystalising outcomes from our visionary strategies in FY25. We are all contributing to write the history of
Uscom – one of Australia’s most significant MedTech enterprises.
Uscom has rebounded in FY24 and is now an investment opportunity poised for growth while Uscom
management remain strategically committed to investigating options to optimise shareholder value.
Professor Rob Phillips
Uscom Chairman and CEO
3-4
Uscom’s total revenue over 13 years demonstrating
a continuous growth trend only interrupted by
geopolitics conflict and international COVID measures
(* budgeted).
For FY24 sales of products of the consolidated entity
grew by 43% while regional sales showed strong 66%
growth in Rest of World sales through Uscom Head
Office, while Asia sales grew by 45% and the US grew
significantly off a low base. Europe sales were down
2% from FY23.
FY24 was a year of rebound for Uscom with sales of
products up 43% and total revenue up 33% on FY23,
with a cash flow positive final quarter leaving us
with $2.52m cash on hand. Continued growth is also
forecast for FY25 following significant second half
FY24 growth in sales.
Importantly FY24 growth was near universal with the
43% sales of products growth coming from Asia, the
“rest of the world” and the US while Europe maintained
its solid performance of last year.
FY24 growth was the result of Uscom’s global strategy
of market and product diversification and our
continued focus on the global strategy of growing
each market with a target of restoring our 9-year pre-
COVID growth rate of 24% per annum.
Costs from ongoing activities were increased by 6%
in FY24 with this increase mostly contributed by
small rises in advertising and marketing, occupancy,
employee costs, audit and administrative expenses.
Cash on Hand $2.52m
Sale of products $3.69m up 43% from $2.59m
Total Revenue $4.21mil, up 33%
Strong growth of H2 and Q4 sales and revenue
Cash on Hand = $2.52m, up 16%
Finances
The measure of life.
5-6
Trend values for Q4 sales over 13 years
demonstrating record values for FY24 and a
growth trend despite FY20, FY21 and FY22 being
restricted by COVID measures.
Trend values for sales revenue, total revenue and
cash receipts over the last 3 years demonstrating
a rebound in all categories as markets recovered
from the impacts of COVID and forecast continued
FY25 growth.
Uscom is prepared for continued growth from
all regional jurisdictions as we focus separately
on each segment targeting regional and global
growth drivers generated from novel initiatives.
US
US
The US is showing strong signs of take up with USCOM 1A rapidly becoming recognised as a standard of care
for maternal health nationally and internationally. As more US academic studies are published, we anticipate
a continued growth in orders and sales. As BP+ and SpiroSonic complete their US regulatory process we are
optimistic that specialist distributors of scale will partner with us to distribute the world’s leading cardiovascular
and pulmonary monitoring devices in the world’s largest medical device market.
Europe
Europe
Uscom Europe has undergone a complete restructure and is now settling into an organisation that is reaching
into Europe, Middle East and South America. Sales significantly improved in the second half but will take some
time to settle as new and larger distributors begin to sell our devices. The war in Ukraine is definitely impacting
confidence and sales in all regions and we are looking forward to the winding back of this conflict so sales and
trade can normalise and Uscom can restore its European growth trajectory.
Uscom’s largest market, China, is experiencing its most significant
downturn in recent history coming immediately on the heels of the
3-year COVID recession, a “Made in China” policy and more recently
direct restructuring of the entire medical device market. During
this time, we have invested in preparations for when the market
recovers; we developed our Foxconn partnership to support local
manufacturing and rationalise cost, expanded our in-house sales
and marketing team and listed new products for approval from
NMPA for sale in the Chinese market. By mid FY25 we anticipate
we will have current NMPA regulatory approvals for each of our
three lines of clinical monitoring technologies covering the USCOM
1A non-invasive cardiac haemodynamic monitoring devices, BP+
suprasystolic central blood pressure monitors including a new range
of lower price home use devices, and SpiroSonic digital ultrasonic
spirometers for high fidelity lung function monitoring in the clinic
and in the home. In addition to this we will have an expanded
distribution model with greater regional reach to increase product
sales across the country. Despite the challenges in the Asian market
over the last 3 years FY24 demonstrated sales growth of 45%, with
a continued rebound in response to the impact of our growth
strategy. Asia contributes approximately 35% of Uscom’s global
sales revenue so any rebound will have a significant impact on
revenue of the consolidated entity.
China
China
South East Asia
South East Asia
SEAsia has begun to grow sales following the establishment of Uscom Singapore regional HQ and the appoint-
ment of a dedicated regional head of sales to cover the diverse markets and cultures of SE Assia, a region
containing some of the world’s fastest growing economies. Given the long sales lead time for USCOM 1A and
a growing order pipeline Uscom is optimistic that the personal focus on sales in this fast-growing region will
yield a further increase in sales for the year ahead.
Operations
7-8
Patents and IP
Patents and IP
Uscom continues to develop and file novel patents to both consolidate the
defence of our current products and establish the foundation for new products.
Uscom has now registered approximately 100 global patents and owns another
150 copyrights and trademarks in addition to an intricate web of business
secrets implemented in various jurisdictions world-wide. Cardiovascular and
pulmonary technologies are often complex in concept and require novel and
innovative solutions which require original thought which are the foundations
of global IP. Importantly the value in patents is the protection of revenue and a
broad and a complex IP strategy covering patents, copyrights trademarks and
business secrets is critical to sustaining long term corporate value in MedTech
enterprises. IP protection is expensive and excess patents can be difficult to
monetise and be a financial load for early MedTech companies. However, IP
does represent corporate value and is an indicator of and investment in future
product pipelines and revenue. This is an activity in which Uscom is very strong.
Science
Science
Commercial Value
Commercial Value
Uscom retains its position as a global scientific leader as its clinical recognition
from advanced cardiac haemodynamics is expanded into hypertension,
vascular health and pulmonary monitoring and new BP+ and SpiroSonic
devices approach broad market release. While the USCOM 1A has more than
1000 peer-reviewed publications supporting the effectiveness of its clinical
use, Uscom BP+ and SpiroSonic devices are now also being recognised as
leaders in hypertension and vascular health and high-fidelity pulmonary
function testing by global academics. Uscom devices are increasingly gaining
global recognition and making significant clinical contributions across various
disciplines of medical care in pediatrics, ICU, and maternal health and covering
fluid management, hypertension, heart failure, cancer care, asthma, and
COPD. These conditions collectively account for approximately 75% of global
mortality, demonstrating the ongoing utility and importance of Uscom devices
in the medical landscape and re-enforcing the commercial opportunities that
lay ahead for MedTech companies providing clinically valuable solutions. While
the time for validation and adoption is long the rewards are significant and
enduring.
The ASX remains a challenge for small cap companies with global footprints and particularly those in the MedTech
space where development times, and validation and adoption cycles are long and markets are complex and
often Government policy influenced and prone to unannounced change. For Uscom this is particularly so with
a significant disparity between Uscom’s on market price and its real value with its performance and price during
FY24 performing erratically with Uscom’s sales of products increasing 43% while the share price fell 77%.
Uscom has also established a global business which is a powerful platform for expansion. Uscom has regional
HQs in Sydney, Singapore, Beijing, Budapest and California and conducts business in all jurisdictions. These
operations are significant investments and bring forward considerable expense in advance of revenue, yet
ultimately the effect of this investment in globalisation is to broadly hedge Uscom operations and establish
operational beach-heads for future growth. These hedges include:
- Market diversification: While Uscom’s largest market is China, Uscom products are sold into 53 countries
world-wide so while the Chinese market contracted slightly in FY24, Uscom sales of products increased 43%. This
diversification acts to damp and limit the impact of regional market disruptions.
- Income diversification: In volatile times foreign exchange movements can be significant and consume
profits so with operations across all major currency regions Uscom benefits by earning revenues in USD, Euro,
RMB, SGD and AUD creating a natural currency hedge against major currency shifts.
These strategic strengths of Uscom’s global operations combine to create a powerful
platform on which to build global commercial expansion and represents significant
off balance sheet value.
MedTech remains one of the most attractive and expanding investments
internationally and given Uscom’s strong growth history, its high profile cardiovascular
and pulmonary product portfolio combined with exposure to China and SE Asia its
current price represents a significant undervaluation. Uscom management are alert
to this commercial anomaly and continue to seek strategic opportunities to optimise
value for shareholders.
IP and Science
The measure of life.
9-10
Global Markets
Global Markets
The world remains unpredictable and macro-economic headwinds persist with talk of trade wars, recession, currency
wars, the war in Ukraine and the US election all combining to be considerations which impact business plans and
future strategies. This congestion of uncertainty for global enterprises is addressed by global diversification and scale,
objectives which Uscom will continue to pursue in FY25. Uscom will continue its strategy of diversifying into various
markets, developing distribution, increasing product ranges for market, and collaborating with various partners and
expanding operations in wider markets and jurisdictions.
While mitigating global risk and volatility is a complex endeavour, Uscom has established a risk control strategy as
part of its transition into global expansion. Increased scale, more sales, more products and enhanced technology and
intellectual property all contribute to risk mitigation in the face of unforeseeable changes in the global markets.
Uscom’s transition to a global entity and transformational partnerships with global leading precision electronics
manufacturer Foxconn ensures the supply chain certainty required to grow global sales while contributing to risk
control in the event of unpredictable changes in global markets.
1.
Expanded distribution and sales initiatives in China and SEAsia: A significantly
restructured medical device market place in China has created opportunities for Uscom China to expand its
distribution and sales organisation. This expanded system will involve on-boarding of a new organisation
to mesh with our current in-house regional distribution model to increase our sales coverage of China.
This is expected to shift distribution coverage from 12 to 25 provinces as our distribution becomes both
wider and deeper. Current projections for this restructure are that sales will significantly improve as the
new distribution platform can be deployed to distribute current Uscom products, new Uscom products and
newly acquired 3rd party products. This model is planned to link up with our SE Asia distribution network
to boost our already growing SE Asia organisation to create an integrated Asian distribution organisation.
2.
New Products and IP: Uscom has a deep IP platform with a number of creative and innovative
ideas for next generation Uscom products and new devices that will continue to improve clinical care
the world over. Internal regulatory efficiency is also developing so the pathway to market is becoming
more streamlined. As Uscom continues developing new products and registering them for regulatory
approval in various global jurisdictions, this will lead to improved quality of distribution both in China and
internationally. Distributors are always seeking high quality well validated devices and preferably with a
wide range of products. Uscom’s commitment to research and development ensures a pipeline of cutting-
edge technologies, and supported by the expert Foxconn product development team the time to market
can be accelerated and fed into the globally expanded distribution network generating incremental revenue
growth.
3.
Singapore Regional HQ: Singapore remains the hub of the fastest growing economies in the
world and Uscom’s new regional HQ is already taking root and generating strong regional sales growth and
healthy pipelines. This Singapore HQ connects China to Singapore then to Australia, Europe and the US to
create a rational distribution pathway for global products. With the establishment of the Singapore HQ,
Uscom aims to tap into the world’s largest and fastest-growing medical device markets. The increasing sales
and marketing activities of a regional sales marketing and business development manager further supports
market expansion in this region with results already showing in increased regional revenues.
4.
Marketing initiatives: Consolidating marketing resources across the world simplifies and
expands market reach and consumer access and information. The integration of global digital marketing
activities will provide for centralisation and rationalisation of delivering Uscom’s expanding range of
technologies across the globe and consolidates the concept of centralised operational hub with radial
delivery arms.
5.
Incremental growth opportunities: As international markets recover Uscom is well-
positioned to explore and capitalize on strategic corporate partnership opportunities. These collaborations
can further fuel growth and market penetration and provide new opportunities for shareholders to realize
investment value.
Risks
China
China
China remains Uscom’s major market despite being the subject of significant changes in the past 4 years, all of which
have inhibited Uscom’s free growth in China. Policies surrounding COVID, domestic manufacturing and medical
device distribution have combined with a recessionary economy to impede our growth in China. However, China is
the largest and most sophisticated medical device market in the world and its medical consumers some of the most
discriminating. Therefore Uscom’s world leading technologies will always be in demand in China and Uscom remains
firmly committed to the Chinese market and firmly believes it will return to be a significant driver of world and Uscom
growth.
Growth Drivers FY2025
20-21
11-12
Distributors
Distributors
Distribution is the link between products
and revenue worldwide so an emphasis on
“globalisation” and efficiencies of scale makes
great sense, while increased number and quality
of distributors across more jurisdictions is the
formula for growth. This can then be supported
by strategic global planning and more effective
marketing so simplifying the sales process
and encouraging distributors of scale to sell
our products. Uscom is continuously seeking
quality distributors to cover un-serviced or
poorly serviced distribution territories and
increase sales.
Regulatory
Regulatory
Regulatory certification remains a challenge across all
jurisdictions with an increasing trend to use regulatory
approvals as tools of trade protection despite the
overarching objective of regulation being to assure
consumers of product safety and efficacy. Uscom
continues developing its in-house regulatory resources
by directly employing regulatory specialist within
the company. The partnership with Foxconn provides
further access to an extensive team of manufacturing
and regulatory experts and will ultimately reduce time
for product approvals and by-pass expensive and less
reliable outsourcing.
Key Personnel
Key Personnel
Uscom is a high-technology enterprise requiring world level
expertise in all aspects of the business. The departure of any
key personnel from the organization is a potential threat to our
global growth ambitions.
The solution is to rapidly expand and achieve scale and expand
critical skill sets in-house, particularly in Uscom China and Uscom
Europe as a safeguard against potential key personnel risks. The
outsourcing of device development and manufacture which
can be performed by Foxconn will also act to outsource product
development and manufacturing risks and increase global
efficiencies.
Other Risks
Other Risks
Competitive risks, patent breaches, scale-up stress, geopolitical
instability and pandemics all pose potential threats to Uscom’s
growth expectations. These challenges could all potentially
impact cash flow and equity adequacy, necessitating the
focused attention of management. Management is continuously
monitoring operational activity and cash flow to detect any
changes and ensure financial predictions and strategies remain
supported by market conditions.
13-14
Australia is the extinction capital of the world, and over the last 15
years, the list of threatened species has increased by 36%. Critically,
87% of Australia’s mammal species, 93% of our reptiles, 94% of
our frogs, and 45% of our bird species are found only in Australia,
so if they are lost from Australia, they are extinct. The Australian
Wildlife Conservancy (AWC) is working to redress Australia’s tragic
record, and every Australian should proudly support them in
their scientifically directed strategy to improve the environment
and increase the survival of Australia’s unique plants and animals.
Rob Phillips personally supports AWC on behalf of Uscom Limited
Corporate Social Responsibility
15-16
Australian Wedge-tailed Eagle
26
Professor Rob Phillips
Uscom Chairman and CEO
In FY24, Uscom experienced a resurgence in financial performance, with product sales rising by
43% and total revenue growing by 33%, accompanied by expanding operations and investment
in innovations to support future growth. Uscom increased sales for all devices and gained
increasing global market recognition for the scientific leadership of Uscom products. Despite a
globally challenging year for all markets Uscom’s growth was recognition of the quality of the
company, its people and management and its long-term strategies.
As global markets continue to recover from the last 3 uncertain years Uscom is ideally poised
for growth with plans for organic and incremental growth activities. Uscom has created a
global platform for development and marketing of advanced and innovative cardiovascular
and pulmonary technologies that treat diseases responsible for ~75% of global mortality. The
need for Uscom’s devices is universal, our devices are outstanding and the opportunity for our
business is great as results from the previous three years planning and investment materialise.
Uscom is a unique MedTech company creating innovative and life saving cardiovascular and
pulmonary devices that are changing clinical care worldwide. Uscom is at a stage of evolutionary
transition as 20 years of conception, establishment and development are converging to create a
company of global impact and accelerating commercial value.
Summary
17
18
The Directors present their report on Uscom Ltd and its Controlled Entities for the financial year ended 30
June 2024. The following persons were Directors of Uscom Ltd during the whole of the financial year and
up to the date of this report, unless otherwise stated.
Associate Professor Rob Phillips
Rob Phillips is the founder of Uscom Ltd, and the Chief Execu-
tive Officer, Chairman and Chief Scientist of the Company. Rob
has 20 years experience in corporate management since taking
Uscom public in 2003, and has taken the company global with
regional head quarters in Singapore, Beijing and Budapest with
offices in Delawere. Rob has a PhD and MPhil in Cardiovascular
Medicine from The University of Queensland where he is an
Adjunct Associate Professor of Medicine.
Chairman and Executive Director
Mr Christian Bernecker
Mr Christian Bernecker is a Non-Executive Director of Uscom
Ltd since November 2011. Christian has more than 10 years of
broad investment experience across capital raising, acqui-
sitions and divestments. Christian qualified as a Chartered
Accountant in Australia and holds a Bachelor of Commerce
from Ballarat University.
Non-executive Director
Mr Brett Crowley
Brett Crowley was appointed as a Non-Executive Director of
Uscom Ltd on 23 August 2018. He is a practicing solicitor and
a former Partner of Ernst & Young in Hong Kong and Australia,
and of KPMG in Hong Kong, and has worked in China estab-
lishing and managing JV companies there. Mr Crowley is an
experienced chairman, finance director and company secretary
of ASX-listed companies, and is a former Senior Legal Member
of the NSW Civil and Administrative Tribunal.
Non-executive Director and Company Secretary
Mr Xianhui Meng
Xianhui Meng is an experienced international value investor,
with qualifications in economics, engineering management and
business administration. Mr Meng has 10 years experience as a
China government departmental head, and 20 years experi-
ence as the Executive Manager and Executive Director of a HK
Listed Chinese Pharma specialising in sales and distribution. Mr
Meng brings both his international corporate management and
strategic skills to the Uscom Board.
Non-executive Director
Directors Report
Uscom Limited | Annual Report 2024
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Company secretary
Brett Crowley
Meetings of Directors
Directors
Directors
Directors
Directors
Board of Directors
Board of Directors
Board of Directors
Board of Directors
Meetings held while a Director
No. of meetings attended
R A Phillips
3
3
C Bernecker
3
1
B Crowley
3
2
X Meng
3
3
Principal activities
Uscom Ltd is engaged in the development, design, manufacture and marketing of premium non-invasive cardiovascular and
pulmonary medical devices. Uscom Ltd owns a portfolio of intellectual property relating to the technology and techniques
associated with these devices and manages a worldwide network of regional headquarters and distribution partners for the sale
of its equipment to hospitals and other medical care locations. Uscom Ltd owns 100% of Uscom Inc, a company engaged in the
sale and promotion of Uscom products primarily in the United States, and owns 100% of Uscom Kft, a company that manufactures
respiratory devices based in Hungary. Uscom Ltd owns 100% of Beijing Uscom Consulting Co. Ltd, a company that manages and
sells Uscom products in China, Uscom Ltd owns 100% of Uscom SNG Pte Ltd, a company engaged in the sale and promotion of
Uscom products primarily in the Singapore and South East Asia.
Operating result
The loss of the Company after providing for income tax amounted to $2,074,749 (2023: $2,590,888).
Dividends
No dividends were declared or recommended for the financial year ended 30 June 2024 (2023: nil).
Significant changes in state of affairs
There were no significant changes in state of affairs during the financial year.
Corporate Governance Statement
Refer to the investor page of Uscom Limited’s website www.uscom.com.au/for-investors.
Operating and financial review
The operating and financial review is stated per the Chairman’s letter on pages 3-17.
Events after the reporting date
No matters or circumstances have arisen since the end of the financial year to the date of this report, that has significantly affected
or may significantly affect the activities of the Consolidated Entity, the results of those activities or the state of affairs of the
Company in the ensuing or any subsequent financial year.
Future developments
Other than the business activities described in the annual report and, in particular, those matters discussed in the Operating and
Financial Review, the Board is not aware of any likely developments in the foreseeable future which may materially impact on the
financial outlook of the Consolidated Entity.
Environmental regulations
The Consolidated Entity’s operations are not subject to significant environmental regulation under the law of the Commonwealth
and State.
Indemnifying officers
The Company has paid premiums to insure all Directors and Executives against liabilities for costs and expenses incurred by them
in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other
than conduct involving a wilful breach of duty in relation to the Company.
Uscom Limited | Annual Report 2024
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Indemnity of auditors
To the extent permitted by law, the Company has not agreed to indemnify its auditors, BDO Audit Pty Ltd, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit. No payment has been made to indemnify
BDO Audit Pty Ltd during or since the financial year.
Proceedings on behalf of the Consolidated Entity
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Consolidated Entity, 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.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their audit duties where the auditor’s expertise
and experience with the Company are important.
The Directors are of the opinion that the provision of non-audit services as disclosed in Note 25 in the financial report does not
compromise the external auditor’s independence as outlined in 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 the Code of Conduct
APES110 Code of Ethics of Professional Accountants issued by the Accounting.
•
Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in management
decision making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Refer to Note 25 of the financial statements for details of auditors’ remuneration.
The auditor’s independence declaration as required under section 307C of the Corporation Act is set out on page 27.
BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
Remuneration report (Audited)
This remuneration report has been prepared by the Directors of Uscom Ltd to comply with the Corporations Act 2001 and the
key management personnel (KMP) disclosures required under Australian Accounting Standards AASB 124 – Related Party
Disclosures.
Key management personnel
The following were key management personnel of the Entity at the start of the financial year to the date of this report unless
otherwise stated:
Non-Executive Directors
Christian Bernecker, Non-Executive Director
Brett Crowley, Non-Executive Director
Xianhui Meng, Non-Executive Director
Executive Directors
Rob Phillips, Executive Director, Chairman, Chief Executive Officer
Senior Executives
Nick Schicht, General Manager
In the Directors’ opinion, there are no other Executives of the Entity.
Remuneration policies
The Board is responsible for reviewing the remuneration policies and practices of the Consolidated Entity, including the
compensation arrangements of Executive Directors, Non-Executive Directors and Senior Executives.
The Company has adopted remuneration policies based on performance and contribution for determining the nature and amount
of emoluments of Board Members and Senior Executives. The objective of these policies is to:
•
Make Uscom Ltd and its Controlled Entities an employer of choice
Uscom Limited | Annual Report 2024
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•
Attract and retain the highest calibre personnel
•
Encourage a culture of reward for effort and contribution
•
Set incentives that reward short and medium term performance for the Uscom Ltd and its Controlled Entities
•
Encourage professional and personal development
In the case of Senior Executives, a recommendation for compensation review will be made by the Chairman to the Board, which
will conduct performance reviews.
Non-Executive Directors
The Board determines the Non-Executive Director remuneration by independent market data for comparative Companies.
As at the date of this report the maximum aggregate remuneration payable out of the funds of the Entity to Non-Executive
Directors of the Company for their services as Directors including their service on a committee of Directors is $155,000 per annum.
Non-Executive Directors do not receive any performance related remuneration, therefore they do not receive bonuses or non-
cash benefits.
Non-Executive Directors’ retirement payments are limited to compulsory employer superannuation.
Executive Directors and Senior Executives remuneration
The Consolidated Entity’s remuneration policy directs that the remuneration package appropriately reflects the Executives’ duties
and responsibilities and that remuneration levels attract and retain high calibre Executives with the skills necessary to successfully
manage the Consolidated Entity’s operations and achieve its strategic and financial objectives.
The total remuneration packages of Executive Directors and Senior Executives are on a salary basis. In addition to base salary,
the Company has a policy of rewarding extraordinary contribution to the growth of the Company with the grant of an annual
discretionary cash bonus and options under the Consolidated Entity’s Employee Share Option Plan.
Executives are also entitled to be paid for their reasonable travel, accommodation and other expenses incurred in consequence
on the execution of duties.
Other than the Uscom Ltd Employee Share Option Plan, the Company does not provide any other non-cash benefits in lieu of
base salary to Executives.
Remuneration packages for Executive Directors and Senior Executives generally consist of three components:
•
Fixed remuneration which is made up of cash salary, salary sacrifice components and superannuation
•
Short term incentives
•
Long term incentives which include issuing options pursuant to the Uscom Ltd Employee Share Option Plan.
Fixed remuneration
Senior Executives who possess a high level of skill and experience are offered a competitive base salary. The performance of each
Executive will be reviewed annually. Following the review, the Company may in its sole discretion increase the salary based on
that Executive’s performance, productivity and such other matters as the Board considers relevant. Superannuation contribution
by the Company is limited to the statutory level of wages and salaries.
Short-term incentives
The remuneration of Uscom Ltd Senior Executives does not include any short-term incentive bonuses as part of their employment
conditions. The Board may however approve discretionary bonuses to Executives in relation to certain milestones being achieved.
Long-term incentives
The Company has adopted an Equity Incentive Plan for the benefit of the Executive Director, an employee, contractor, consultant
or any other person whom the Board determines to be eligible to participate in the Plans.
The Board, at its discretion, may approve the issue of options and rights under the Equity Incentive Plan to the Senior Executives.
The vesting of options and rights issued may be conditional upon the achievement of performance hurdles determined by the
Board from time to time. The Board may propose the issue of options and rights to Directors, however this will be subject to
shareholder approval at the Annual General Meeting.
Independent data from applicable sources may be requested by the Board to assess whether the performance hurdles have been
met.
Service agreements
The Company has entered into an employment agreement with the Executives that:
Uscom Limited | Annual Report 2024
22
•
Outlines the components of remuneration payable; and
•
Specifies termination conditions.
Details of the employment agreement are as follows:
Each Executive may not, during the term of the employment agreement, perform work for any other person, corporation or
business without the prior written consent of the Consolidated Entity.
The employment terms do not prescribe the duration of employment for executives.
Due to the small number of Executives the remuneration committee comprises the Board of Directors which is made up of three
Non-Executive Directors. Reference is made to external market information in order to retain the most suitable Executives for
meeting the entity’s goals. Executive Directors are excluded from discussions on their remuneration. The remuneration of key
Executives are not linked with the Consolidated Entity’s performance as the focus is on retention of key Executives to ensure
growth and traction in what is a new market. The Board of Directors will consider linking executive remuneration to the
Consolidated Entity’s performance once the Company has sufficient market traction.
Termination
Despite anything to the contrary in the agreement, the Company or the Executive may terminate the employment at any time by
giving the other party 3 months’ notice in writing.
If either the Company or the Executive gives notice of termination, the Company may, at its discretion, choose to terminate the
Executive’s employment immediately or at any time during the notice period and pay the Executive an amount equal to the salary
due to them for the residual period of notice at the time of termination.
Where the Executive gives less than 3 months’ written notice, the Company may withhold from the Executive’s final payment an
amount equal to the shortfall in the notice period.
The employment of each Executive may be terminated immediately without notice or payment in lieu in the event of any serious
or persistent breach of the agreement, any serious misconduct or wilful neglect of duties, in the event of bankruptcy or any
arrangement or compensation being made with creditors, on conviction of a criminal offence, permanent incapacity of the
Executive or a consistent failure to carry out duties in a manner satisfactory to the Consolidated Entity.
Service contracts have been entered into by the Company with non-executive directors, describing the components and amounts
of remuneration applicable on their initial appointment. These contracts are at fixed fees for their service.
Service contracts have been entered into by the Company with key management personnel, describing the components and
amounts applicable on their initial appointment, including terms and performance criteria for performance-related cash bonuses.
These contracts do not fix the amount of remuneration increases from year to year. Remuneration levels are reviewed generally
each year by the Board of Directors to align with changes in job responsibilities and market salary expectations. All contracts are
for on ongoing period.
Key management personnel remuneration
Remuneration includes salaries, benefits and superannuation contributions in respect of the financial year 2024.
Short term benefits
Post-employment
benefits
Long term
benefits
Equity
Total
remuneration
Performance
related
Directors’
Base Fee
$
Base
salary
$
Annual
leave cash
out
$
Annual
leave
accrued
$
Superannuation
$
Long
service
leave
$
Share-based
payment
$
$
%
Non
Non
Non
Non-
Executive
Executive
Executive
Executive
Director
Director
Director
Director
C Bernecker
38,325
-
-
-
-
-
-
38,325
-
B Crowley
46,982
-
-
-
5,168
-
-
52,150
-
X Meng
38,630
-
-
-
-
-
-
38,630
-
Executive
Executive
Executive
Executive
Director
Director
Director
Director
R Phillips
-
250,755
-
24,110
-
5,224
233,088
513,177
45.4%
Senior
Senior
Senior
Senior
Executive
Executive
Executive
Executive
N Schicht
-
235,000
-
66,185
25,850
23,859
-
350,894
-
Total
Total
Total
Total
123,937
485,755
-
90,295
31,018
29,083
233,088
993,176
23.5%
Uscom Limited | Annual Report 2024
23
Remuneration includes salaries, benefits and superannuation contributions in respect of the financial year 2023.
Short term benefits
Post-employment
benefits
Long term
benefits
Equity
Total
remuneration
Performanc
e related
Directors’
Base Fee
$
Base
salary
$
Annual
leave cash
out
$
Annual
leave
accrued
$
Superannuation
$
Long
service
leave
$
Share-based
payment
$
$
%
Non
Non
Non
Non-Executive
Executive
Executive
Executive
Director
Director
Director
Director
C Bernecker
38,325
-
-
-
-
-
-
38,325
-
B Crowley
34,959
-
-
-
3,670
-
-
38,629
-
X Meng
-
-
-
-
-
-
-
-
-
Executive
Executive
Executive
Executive
Director
Director
Director
Director
R Phillips
-
250,755
16,797
3,214
-
695
167,722
439,183
38.2%
Senior
Senior
Senior
Senior
Executive
Executive
Executive
Executive
N Schicht
-
220,000
-
58,975
23,100
18,218
-
320,294
-
Total
Total
Total
Total
73,284
470,755
16,797
62,189
26,770
18,913
167,222
836,430
20.1%
Equity Incentive Plan
The Company has adopted an Equity Incentive Plan for the benefit of an employee, contractor, consultant or executive director
of the Group or any other person whom the Board determines to be eligible to participate in the Plans. The objective of the EIP
is to provide reward and incentive to valuable personnel while preserving cash.
The purpose of the Plan is to:
•
provide Eligible Persons with an incentive plan which rewards ongoing contribution to the achievement by the Company of
its strategic goals thereby encouraging the mutual interdependence of Participants and the Company;
•
align the interests of Participants with shareholders of the Company through the sharing of a personal interest in the future
growth and development of the Company as represented in the price of the Company’s ordinary fully paid shares;
•
encourage Eligible Persons to improve the performance of the Company and its total return to Shareholders; and
•
provide a means of attracting and retaining skilled and experienced employees.
Under the Plan, the Company will be able to grant short-term incentive and long-term incentive awards to Eligible Employees
(including Executive Directors). The Plan will provide the Board with the flexibility to grant equity incentives to Eligible Persons in
the form of Plan Shares, rights or Options, will only vest on the satisfaction of appropriate hurdles.
Number of rights over ordinary shares held by Directors and Senior Executives
Balance
Granted
Exercised
Lapsed /
Cancelled
Balance
Total Vested
Total
Unexercisable
1 July
2023
During
FY2024
During
FY2024
During FY2024
30 June 2024
30 June 2024
30 June 2024
No.
No.
No.
No.
No.
No.
No.
Non
Non
Non
Non-Executive Director
Executive Director
Executive Director
Executive Director
C Bernecker
-
-
-
-
-
-
-
B Crowley
-
-
-
-
-
-
-
X Meng
-
-
-
-
-
-
-
Executive Director
Executive Director
Executive Director
Executive Director
R Phillips (a)
3,164,557
4,756,891
(3,164,557)
-
4,756,891
-
-
Senior Executive
Senior Executive
Senior Executive
Senior Executive
N Schicht (b)
550,000
-
-
-
550,000
-
-
Total
Total
Total
Total
3,714,557
4,756,891
(3,164,557)
-
5,306,891
-
-
Further details of the options and rights are disclosed in Note 19 of the financial statements.
Uscom Limited | Annual Report 2024
24
Details of rights outstanding as at end of year
Holders No.
Grant date
Exercisable
at 30 June 2024
Vesting date
30 June 2024
Outstanding Right
Exercise
Price
Issued date
fair value
%
No.
$
$
2 (Executives)
26-Oct-23
0%
1 July 2024
4,756,891
0.00
0.049
26-Nov-14
100%
1 July 2020
150,000
0.00
0.190
24-Aug-21
100%
1 July 2022
200,000
0.00
0.145
01-Apr-22
100%
1 July 2024
200,000
0.00
0.098
Total
Total
Total
Total
5,306,891
(a) 4,756,891 indeterminate rights were issued to Rob Phillips on the terms and conditions approved by shareholders at the AGM
on 26 October 2023 under the Equity Incentive Plan, vesting dependent on performance hurdles on 1 July 2024. Consideration
payable upon vesting is $nil. Upon meeting the performance hurdles, a total of 4,756,891 rights were exercised on 2 July 2024
after the reporting date.
(b) 450,000 Performance rights were issued to Nick Schicht on 26 November 2014 under the Equity Incentive Plan, vesting
dependent on performance hurdles on 1 July 2018, 1 July 2019 and 1 July 2020. 300,000 were exercised on 28 August 2020 and
remaining balance is 150,000 as the reporting date. 200,000 performance rights were granted to Nick Schicht on 24 August 2021
and 200,000 on 1 April 2022 under the Equity Incentive Plan, vesting dependent on performance hurdles on 1 July 2022, and 1
July 2024. Consideration payable upon vesting is $nil.
Number ordinary shares held by Directors and Senior Executives
Balance
Received as
Options/Rights
Subscribed as
Balance
01 July 2023
Remuneration
Exercised
Non-Renounceable
Rights Issue
Purchased
on market
30 June
2024
No.
No.
No.
No.
No.
No.
Non
Non
Non
Non-Executive
Executive
Executive
Executive
Director
Director
Director
Director
C Bernecker
-
-
-
-
-
-
B Crowley
200,000
-
-
-
-
200,000
X Meng
42,718,650(1)
-
-
12,205,328
-
54,923,978(1)
Executive Director
Executive Director
Executive Director
Executive Director
R Phillips
44,069,380(2)
-
3,164,557
32,297,936
-
79,531,873(2)
Senior Executive
Senior Executive
Senior Executive
Senior Executive
N Schicht
720,463(3)
-
-
-
-
720,463(3)
Total
Total
Total
Total
87,708,493
-
3,164,557
44,503,264
-
135,376,314
*Net change other refers to share purchased or sold during the financial year, or cessation of categorisation as a Director or Senior
Executive.
(1) All these ordinary shares are held by Smart Top Overseas Limited managed by Citicorp Nominees Pty Limited. Smart Top
Overseas Limited subscribed 12,205,328 ordinary shares on 4 March under non renounceable right issue.
(2) R Phillips subscribed 13,495,411 ordinary shares on 4 March 2024 and 18,802,525 on 5 March 2024 under non renounceable
right issue.
(3) 5,000 of these ordinary shares are held by a family associate.
Additional Information
The earnings of the Company for the five years to 30 June 2024 are summarised below:
2024
2023
2022
2021
2020
Sales Revenue ($)
4,213,454
2,664,166
3,858,081
3,479,758
2,844,138
Loss after income tax ($)
(2,074,749)
(2,590,888)
(924,243)
(1,331,335)
(1,389,398)
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
2024
2023
2022
2021
2020
Share Price at financial year end ($)
0.02
0.05
0.07
0.16
0.22
Total dividends declared (cents per share)
-
-
-
-
-
Basic earnings declared (cents per share)
(1.2)
(1.5)
(1.1)
(0.6)
(0.9)
Uscom Limited | Annual Report 2024
25
This concludes the remuneration report, which has been audited.
This Directors’ report is signed in accordance with a resolution of the Board of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
Professor Rob Phillips
Chairman
29 August 2024
Auditors Independence Declaration
27
Statement of Cash Flows
31
Statement of Changes in Equity
30
Notes to Financial Statements
32
Statement of Financial Position
29
Statement of Profit and Loss & Other
28
Financial Report
Uscom Limited | Annual Report 2024
27
AUDITOR’S INDEPENDENCE DECLARATION
Uscom Limited | Annual Report 2024
28
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
& OTHER COMPREHENSIVE INCOME
For the Year Ended 30 June 2024
Note
Note
2024
$
2023
$
Revenue
3
3,726,845
2,664,166
Other Income
3
486,609
492,059
Raw materials and consumables used
(611,150)
(418,703)
Expenses from continuing activities
4
(5,629,626)
(5,294,150)
Loss before income tax
Loss before income tax
Loss before income tax
Loss before income tax
(2,027,322
(2,027,322
(2,027,322
(2,027,322)
(2,556,628)
(2,556,628)
(2,556,628)
(2,556,628)
Income tax expense
5
47,427
34,260
Loss after income tax
Loss after income tax
Loss after income tax
Loss after income tax
6
(2,074,749
(2,074,749
(2,074,749
(2,074,749)
(2,590,888)
(2,590,888)
(2,590,888)
(2,590,888)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation difference for foreign operations, net of tax
(55,316)
28,466
Other comprehensive income for the year, net of tax
(55,316)
28,466
Total comprehensive
Total comprehensive
Total comprehensive
Total comprehensive (loss
loss
loss
loss) for the year
for the year
for the year
for the year
(2,130,065
(2,130,065
(2,130,065
(2,130,065)
(2,562,422)
(2,562,422)
(2,562,422)
(2,562,422)
Attributable to:
Owners of the Company
(2,130,065)
(2,130,065)
(2,130,065)
(2,130,065)
(2,562,422)
(2,562,422)
(2,562,422)
(2,562,422)
Total comprehensive
Total comprehensive
Total comprehensive
Total comprehensive (loss
loss
loss
loss) for the year
for the year
for the year
for the year
(2,130,065)
(2,130,065)
(2,130,065)
(2,130,065)
(2,562,422)
(2,562,422)
(2,562,422)
(2,562,422)
Earnings per share attributable to the owners of the Company
Earnings per share attributable to the owners of the Company
Earnings per share attributable to the owners of the Company
Earnings per share attributable to the owners of the Company
Earnings per share (EPS)
Basic earnings per share (cents per share)
7
(1.2)
(1.5)
Diluted earnings per share (cents per share)
7
(1.2)
(1.5)
This Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the attached
Notes.
Uscom Limited | Annual Report 2024
29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
Note
Note
2024
$
2023
$
Current assets
Current assets
Current assets
Current assets
Cash and cash equivalents
8
2,519,911
2,178,740
Trade and other receivables
9
301,266
367,890
Inventories
10
623,626
753,758
Tax asset
11
421,555
441,533
Total current assets
3,866,358
3,741,922
Non
Non
Non
Non-current assets
current assets
current assets
current assets
Other assets
12
83,456
83,456
Plant and equipment
13
24,867
37,842
Intangible assets
14
420,532
497,947
Right-of-use assets
15
739,412
818,944
Total non-current assets
1,268,267
1,438,190
Total assets
5,134,625
5,180,112
Current liabilities
Current liabilities
Current liabilities
Current liabilities
Trade and other payables
16
709,658
764,483
Provisions
17
269,377
187,706
Lease liabilities
15
299,547
262,783
Total current liabilities
1,278,582
1,214,971
Non
Non
Non
Non-current liabilities
current liabilities
current liabilities
current liabilities
Provisions
17
105,262
92,309
Lease liabilities
15
689,731
828,804
Total non-current liabilities
794,993
921,112
Total liabilities
2,073,575
2,136,083
Net assets
Net assets
Net assets
Net assets
3,061,050
3,061,050
3,061,050
3,061,050
3,044,029
3,044,029
3,044,029
3,044,029
Equity
Equity
Equity
Equity
Issued capital
18
40,423,139
38,509,140
Reserves
19
4,216,230
4,038,458
Accumulated losses
6
(41,578,319)
(39,503,569)
Total equity
Total equity
Total equity
Total equity
3,061,050
3,061,050
3,061,050
3,061,050
3,044,029
3,044,029
3,044,029
3,044,029
This Consolidated Statement of Financial Position is to be read in conjunction with the attached Notes.
Uscom Limited | Annual Report 2024
30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2024
Issued
Capital
$
Options and rights
Reserve
$
Accumulated
Losses
$
Foreign Currency
Translation
Reserve
$
Total
$
Balance
Balance
Balance
Balance at 1 July 202
at 1 July 202
at 1 July 202
at 1 July 2022
39,136,673
39,136,673
39,136,673
39,136,673
3,638,461
3,638,461
3,638,461
3,638,461
(36,912,681)
(36,912,681)
(36,912,681)
(36,912,681)
72,804
72,804
72,804
72,804
5,935,256
5,935,256
5,935,256
5,935,256
Loss for the year
-
-
(2,590,888)
-
(2,590,888)
Other comprehensive income
-
-
-
28,466
28,466
Total Comprehensive Income
for the year
-
-
(2,590,888)
28,466
(2,562,422)
Transactions with Owners in
Transactions with Owners in
Transactions with Owners in
Transactions with Owners in
their capacity as owners:
their capacity as owners:
their capacity as owners:
their capacity as owners:
Shares issued (Note 18)
(619,679)
-
-
-
(619,679)
Transaction costs on shares
issued (Note 18)
(22,854)
-
-
-
(22,854)
Share-based payments (Note
18) (Note 19)
15,000
298,728
-
-
313,728
Balance at 30 June 202
Balance at 30 June 202
Balance at 30 June 202
Balance at 30 June 2023
38,509,140
38,509,140
38,509,140
38,509,140
3,937,189
3,937,189
3,937,189
3,937,189
(39,503,569)
(39,503,569)
(39,503,569)
(39,503,569)
101,269
101,269
101,269
101,269
3,044,029
3,044,029
3,044,029
3,044,029
Loss for the year
-
-
(2,074,749)
-
(2,074,749)
Other comprehensive income
-
-
-
(55,316)
(55,316)
Total Comprehensive Income
for the year
-
-
(2,074,749)
(55,316)
(2,130,065)
Transactions with Owners in
Transactions with Owners in
Transactions with Owners in
Transactions with Owners in
their capacity as owners:
their capacity as owners:
their capacity as owners:
their capacity as owners:
Shares issued (Note 18)
2,000,000
-
-
-
2,000,000
Transaction costs on shares
issued (Note 18)
(86,001)
-
-
-
(86,001)
Share-based payments (Note
18) (Note 19)
-
233,088
-
-
233,088
Balance at 30 June 202
Balance at 30 June 202
Balance at 30 June 202
Balance at 30 June 2024
40,423,139
40,423,139
40,423,139
40,423,139
4,170,277
4,170,277
4,170,277
4,170,277
(41,578,319)
45,95
45,95
45,95
45,953
3,061,050
3,061,050
3,061,050
3,061,050
This Consolidated Statement of Changes in Equity is to be read in conjunction with the attached Notes.
Uscom Limited | Annual Report 2024
31
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2024
Note
Note
2024
$
2023
$
Cash flows from operating activities
Cash flows from operating activities
Cash flows from operating activities
Cash flows from operating activities
Receipts from customers (inclusive of GST)
3,732,289
2,862,711
Interest received
46,043
55,421
Interest expense (lease)
15
(75,508)
(89,964)
Interest expenses (other)
(41,156)
(723)
Payments to suppliers and employees (inclusive of GST)
(5,264,859)
(4,636,540)
Grant and other income received
439,798
385,073
Net cash (used in) operating activities
21
(1,163,393)
(1,424,022)
Cash flows from investing activities
Cash flows from investing activities
Cash flows from investing activities
Cash flows from investing activities
Purchase of patents and trademarks
14
(49,678)
(134,747)
Purchase of plant and equipment
13
(7,871)
(17,190)
Net cash used in investing activities
(57,549)
(151,937)
Cash flows from financing activities
Cash flows from financing activities
Cash flows from financing activities
Cash flows from financing activities
Proceeds from issue of shares
18
804,976
-
Proceeds from shareholder’s loan (subsequently settled through share
issues)
29
1,195,024
-
Payments for Equal Access Share Buy-Back
18
-
(619,679)
Payment of lease (Principal)
15
(341,067)
(310,430)
Share issue costs
18
(86,001)
(22,854)
Net cash provided by/(used in) financing activities
1,572,932
(952,962)
Net
Net
Net
Net increase/(decrease) in cash held
increase/(decrease) in cash held
increase/(decrease) in cash held
increase/(decrease) in cash held
351,988
351,988
351,988
351,988
(2,528,922)
(2,528,922)
(2,528,922)
(2,528,922)
Cash and cash equivalents at the beginning of the year
2,178,740
4,704,185
Exchange rate adjustment for opening balance
(10,817)
3,477
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the end of the year
8
2,519,911
519,911
519,911
519,911
2,178,740
2,178,740
2,178,740
2,178,740
This Consolidated Statement of Cash Flows is to be read in conjunction with the attached Notes.
Uscom Limited | Annual Report 2024
32
NOTES TO FINANCIAL STATEMENTS
For the Year Ended 30 June 2024
Note 1: Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial report are set out below. The financial report covers
the Company of Uscom Limited and its Controlled Entities (“Consolidated Entity” or the “Group”). Uscom Limited is a listed
public company, incorporated and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial report.
The accounting policies have been consistently applied to all years presented, unless otherwise stated.
Basis of preparation
The financial report is a general-purpose financial report that has 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-profit oriented entities.
(i) Statement of compliance
These financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board [“IASB”].
(ii) Historical cost convention
•
The financial report has been prepared on an accrual basis under the historical cost convention.
•
The financial report is presented in Australian dollars, which is the Parent Company’s functional and presentational currency.
•
The financial statements have been approved and authorised for issue by the Board of Directors on the 28 August 2024.
Going concern
The Company incurred an operating cash outflow of $1,163,393 during the year ended 30 June 2024 (2023: outflow $1,424,022).
The total comprehensive loss for the year ended 30 June 2024 was $2,130,065 (2023: $2,562,422) and the cash on hand as at 30
June 2024 was $2,519,911 (2023: $2,178,740).
The Company’s forecasts and projections for the next twelve months take into account the current status, operational changes
and projected future trading performance, and indicate that, in the directors’ opinion, the Company will be able to operate as a
going concern. The timing and sales volumes may vary from those forecast by management, however, this forecast is reliant upon
the receipt of the regulatory approvals from China and the successful securement of various large customer contracts. Both
conditions indicate a material uncertainty that may cast significant doubt about the Company's ability to continue as a going
concern. As such the timing of operating cash flows may differ to those forecast by management. Should the timing of operating
cash flow be significantly different to those forecast the Company may need to seek alternative financing to enable it to settle its
labilities as they fall due.
Notwithstanding the above, the Directors have historically been successful in obtaining financing through equity raises and are
actively managing the expenditure of the Company to ensure that cash is maintained whilst executing the strategy and are
confident that should the need arise further funding can be raised through either debt or equity.
Should the Company be unable to continue as a going concern it may be required to realise its assets and discharge its liabilities
other than in the normal course of business and at amounts different to those stated in the financial statements. The financial
statements do not include any adjustments relating to the recoverability and classification of assets carrying amount or the amount
of liabilities that might result should the company be unable to continue as a going concern and meet its debts as and when they
fall due.
Principles of consolidation
A Controlled Entity is any entity Uscom Limited has the power to control the financial and operating policies of so as to obtain
benefits from its activities.
In Note 23 Consolidated Entity Disclosure Statement lists all Controlled Entities.
All Controlled Entities contained to the financial statements and have a June financial year-end.
All inter-company balances and transactions between Entities in the Group, including any unrealised profits or losses, have been
eliminated on consolidation. Accounting policies of Subsidiaries have been changed where necessary to ensure consistencies
with those polices applied by the Parent Entity.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated at exchange rates prevailing at the
reporting dates. Income and expense items are translated at the average exchange rates for the period unless exchange rates
Uscom Limited | Annual Report 2024
33
fluctuate significantly. Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and are
recognised in statement of profit or loss and other comprehensive income on disposal of the foreign operation.
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the
asset or as part of an item of the expense. Receivables and payables in the Statement of Financial Position are shown inclusive of
GST.
New accounting standards and interpretations
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the 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. These standards, amendments or interpretation are not expected to have a material
impact on the Group in the current or future reporting periods and on foreseeable future transactions.
Note 2: Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends and
economic data, obtained both externally and within the company.
Key estimates – valuation of intangible and other non-current assets
The impairment tests are performed at the level of operating segments. The criteria used for these evaluations include
management’s estimate of the asset’s continuing ability to generate positive income from operations and positive cash flow in
future periods compared to the carrying value of the asset, as well as the strategic significance of any identifiable intangible asset
in the business objectives. If assets are considered to be impaired, impairment expenses recorded for the amount by which the
carrying value of the assets exceeds their fair value. Factors that would influence the likelihood of a material change in the reported
results include significant changes in the asset’s ability to generate positive cash flow, a significant decline in the economic and
competitive environment on which the asset depends, significant changes in the strategic business objectives, utilisation of the
asset, and a significant change in the economic and/or political conditions in certain countries.
Key estimates – valuation of employee share option plan shares
At each reporting date, the entity revises its estimate of the number of rights that are expected to become exercisable. The
employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to the
original estimates, is recognised in profit or loss with a corresponding adjustment to equity. The fair value is measured at grant
date and recognised over the period during which the employee becomes unconditionally entitled to the shares or options.
Key Judgements - research and development claim
Judgement is required in determining the amount of grant revenue relating to the research and development claim. There are
certain transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination
may be subject to change. The company calculates its research and development claim based on the company’s understanding
of the tax law. Where the final outcome of these matters is different from the amounts that were initially recorded, such differences
will impact the profit or loss in the year in which such determination is made.
Note 3: Revenue and other income
2024
$
2023
$
Operating revenue
Operating revenue
Operating revenue
Operating revenue
Sale of products
3,692,732
2,590,461
Services revenue
34,113
73,705
3,726,845
2,664,166
Other income
Other income
Other income
Other income
Grants - R&D incentive
439,798
429,073
Interest received
46,043
55,383
Sundry income
768
7,604
Total other income
486,609
492,059
Total revenues and other
Total revenues and other
Total revenues and other
Total revenues and other income from continuing operations
income from continuing operations
income from continuing operations
income from continuing operations
4,213,454
4,213,454
4,213,454
4,213,454
3,156,225
3,156,225
3,156,225
3,156,225
Uscom Limited | Annual Report 2024
34
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Australia
$
Asia
$
Americas
$
Europe
$
Consolidated
$
2024
Sales of products
1,239,375
1,300,245
253,652
899,460
3,692,732
Services revenue
15,818
217
854
17,224
34,113
Total
Total
Total
Total
1,255,193
1,255,193
1,255,193
1,255,193
1,300,462
1,300,462
1,300,462
1,300,462
254,506
254,506
254,506
254,506
916,684
916,684
916,684
916,684
3,726,845
3,726,845
3,726,845
3,726,845
Goods transferred at a point in time
1,239,375
1,300,245
253,652
899,460
3,692,732
Services transferred over time
15,818
217
854
17,224
34,113
Total
Total
Total
Total
1,255,193
1,255,193
1,255,193
1,255,193
1,300,462
1,300,462
1,300,462
1,300,462
254,50
254,50
254,50
254,506
916,684
916,684
916,684
916,684
3,726,84
3,726,84
3,726,84
3,726,845
2023
Sales of products
740,957
895,745
40,073
913,687
2,590,461
Services revenue
17,330
-
1,412
54,963
73,705
Total
Total
Total
Total
758,287
758,287
758,287
758,287
895,745
895,745
895,745
895,745
41,485
41,485
41,485
41,485
968,650
968,650
968,650
968,650
2,664,166
2,664,166
2,664,166
2,664,166
Goods transferred at a point in time
740,957
895,745
40,073
913,687
2,590,461
Services transferred over time
17,330
-
1,412
54,963
73,705
Total
Total
Total
Total
758,287
758,287
758,287
758,287
895,745
895,745
895,745
895,745
41,485
41,485
41,485
41,485
968,650
968,650
968,650
968,650
2,664,166
2,664,166
2,664,166
2,664,166
Recognition and measurement
Revenue is measured at the fair value of the consideration received or receivable. Amounts are disclosed as revenue net of returns,
discounts, allowances and goods and services tax (GST).
•
Sale of goods
Revenue from the sale of goods is recognised when control of the products has transferred, being the point in time when the
products are delivered to the customer’s specified location.
•
Revenue from rendering of services
Rendering of services consists of training, repair and product maintenance supplied to customers. Revenue is recognised
when contractual obligations are expired and services are provided.
•
Interest revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
•
Research and developments tax incentive
R&D tax incentives are recognised when there is reasonable assurance that the entity will comply with the conditions attaching
to them and the rebates will be received. R&D tax incentives are recognised as income on a systematic basis over the periods
in which the entity recognises as expenses the related costs for which the rebates are intended to compensate.
Note 4: Expenses from continuing activities
2024
$
2023
$
Depreciation and amortisation expenses
143,703
144,081
Depreciation – right-of-use assets
242,784
238,593
Employee benefits expense
3,126,857
2,888,595
Research and development expenses
21,943
48,592
Advertising and marketing expenses
1,068,437
953,544
Occupancy expenses
25,051
36,814
Auditors remuneration (audit and review)
117,016
106,800
Regulatory expenses
204,060
234,938
Administrative expenses
541,810
510,003
Exchange losses
6,440
29,273
Finance costs
131,525
102,917
Total expenses from continuing
Total expenses from continuing
Total expenses from continuing
Total expenses from continuing activities
activities
activities
activities
5,629,626
5,629,626
5,629,626
5,629,626
5,294,150
5,294,150
5,294,150
5,294,150
Uscom Limited | Annual Report 2024
35
Employee benefits expenses
Employer contributions to defined contribution superannuation plans are recognised as an expense in the profit or loss as they
are paid or payable. Refer to Note 17 for details on provisions for employee benefits. Share based expenses of $233,088 in 2024
contents equity reserves $233,088 (2023: $313,728) are included in employee benefits expenses above.
Research and development expenses
Research & development costs are charged to the statement of profit or loss and other comprehensive income as incurred, or
deferred where it is probable that sufficient future benefits will be derived so as to recover those deferred costs.
Note 5: Income tax
2024
$
2023
$
Major components of income tax
Major components of income tax
Major components of income tax
Major components of income tax
Current income tax
47,427
34,260
Income tax
Income tax
Income tax
Income tax expense
expense
expense
expense
47,427
47,427
47,427
47,427
34,260
34,260
34,260
34,260
Reconciliation between income tax credit and prima facie tax on accounting loss
Reconciliation between income tax credit and prima facie tax on accounting loss
Reconciliation between income tax credit and prima facie tax on accounting loss
Reconciliation between income tax credit and prima facie tax on accounting loss
Accounting loss before income tax
(2,027,322)
(2,556,628)
(Tax benefit) at 25% in Australia, 28% in USA, 12% in Hungary, 25% in China and 17% in
Singapore (2023: 25% in Australia, 28% in USA, 12% in Hungary, 25% in China and 17% in
Singapore)
(420,570)
(551,819)
Tax effect on non-taxable income and non-deductible expenses
85,411
230,937
Temporary differences not brought to account
80,438
50,839
Deferred tax assets on tax losses not brought to account
302,148
304,303
Income tax
Income tax
Income tax
Income tax expense
expense
expense
expense
47,427
47,427
47,427
47,427
34,260
34,260
34,260
34,260
The Company currently has carried forward losses of $23.2m (2023: $22.1m). Potential deferred tax assets attributable to tax
losses carried forward for the Company, have not been brought to account as the directors believe it is not appropriate to regard
realisation of the deferred tax asset as probable. The benefit will only be obtained if:
•
The Company derives future assessable income of a nature and amount sufficient to enable the benefits from the
deductions for the losses to be realised;
•
The Company continues to comply with the conditions for deductibility imposed by the law;
•
The losses are available under the continuity of ownership or same business tests;
•
No changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.
The table below has summarised the tax losses estimate derived from different jurisdictions.
Australia
$
USA
$
Hungary
$
China
$
Singapore
$
Total
$
2024
Tax losses
18,227,665
1,449,881
958,472
858,182
1,711,344
23,205,544
Tax credit
4,556,916
405,729
115,017
214,546
290,929
5,583,137
2023
Tax losses
18,571,351
1,403,872
629,458
356,417
1,023,887
21,984,985
Tax credit
4,642,838
392,854
69,240
89,104
174,061
5,368,097
Note 6: Accumulated Losses
2024
$
2023
$
Accumulated losses at the beginning of the financial year
(39,503,569)
(36,912,681)
Loss for the year
(2,074,749)
(2,590,888)
Accumulated losses at the end of the financial year
Accumulated losses at the end of the financial year
Accumulated losses at the end of the financial year
Accumulated losses at the end of the financial year
(41,578,319)
(41,578,319)
(41,578,319)
(41,578,319)
(39,503,569)
(39,503,569)
(39,503,569)
(39,503,569)
Uscom Limited | Annual Report 2024
36
Note 7: Earnings per share
2024
$
2023
$
Loss after tax used in calculation of basic and diluted EPS
(2,074,749)
(2,590,888)
Weighted average number of ordinary shares during the year used in calculation of basic
EPS
176,462,058
173,340,851
Weighted average number of options outstanding
-
-
Weighted average number of rights outstanding
1,527,722
1,447,167
Weighted average number of ordinary shares outstanding during the year used in
calculation of diluted EPS
177,989,780
174,788,018
Basic earnings per share (cents per share)
(1.2)
(1.5)
Diluted earnings per share (cents per share)
(1.2)
(1.5)
The options and rights in existence have an anti-dilutive effect on EPS, therefore there is no difference between basic earnings
per share and diluted earnings per share as shown above
Note 8: Cash and cash equivalents
2024
$
2023
$
Cash on hand
Bank: Cheque accounts
934,710
1,808,299
Bank: Cash management
112,327
70,441
Bank: Term deposits
1,472,874
300,000
Total cash and cash equivalents
Total cash and cash equivalents
Total cash and cash equivalents
Total cash and cash equivalents
2,519,911
2,519,911
2,519,911
2,519,911
2,178,740
2,178,740
2,178,740
2,178,740
Cash at bank and on hand bears floating interest rates. The interest rate relating to cash and cash equivalents for the year was
between 3.25% and 4.01% (2023: between 3.25% and 4.37%)
Note 9: Trade and other receivables
2024
$
2023
$
Current
Current
Current
Current
Trade receivables (a)
156,910
134,384
Other receivables (b)
144,356
233,506
Total current receivables
Total current receivables
Total current receivables
Total current receivables
301,266
301,266
301,266
301,266
367,890
367,890
367,890
367,890
Trade receivables and other receivables represent the principal amounts due at reporting date plus accrued interest and less,
where applicable, any unearned income and provision for doubtful accounts. An estimated doubtful debt is made when collection
of the full amount is no longer probable.
a. Past due but not impaired and impairment of receivables
Trade receivables are non-interest bearing and on an average of 45-day terms. Customers with balances past due without
provisions for impairment of receivables amount to $Nil as at 30 June 2024 ($Nil as at 30 June 2023). The company has recognised
a loss of $NIL (2023: $NIL) in profit and loss in respect of impairment of receivables for the year ended 30 June 2024.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables. The ECL assessment completed by the Group as at 30 June 2024 has resulted in an immaterial
credit loss and no impairment allowance has been recognised by the Group (2023: $Nil).
b. Other receivables
These amounts related to prepayments, accrued interest and net GST refunds receivable. None of these receivables are impaired
or past due but not impaired.
c. Fair value and credit risk
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value.
Information about the company’s exposure to fair value and credit risk in relation to trade and other receivables is provided in
Note 22.
Uscom Limited | Annual Report 2024
37
Note 10: Inventories
2024
$
2023
$
Current inventories at cost
Current inventories at cost
Current inventories at cost
Current inventories at cost
Raw materials
454,974
613,911
Finished products
168,652
139,847
Total inventories
Total inventories
Total inventories
Total inventories
623,626
623,626
623,626
623,626
753,758
753,758
753,758
753,758
Inventories are measured at the lower of cost or net realisable value. Costs are assigned on the basis of weighted average costs.
Cost comprises all costs of purchase and conversion and an appropriate proportion of fixed and variable overheads, net of
settlement discounts. Overheads are applied on the basis of normal operative capacity. The costs are recognised when materials
are delivered to the Company. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
Inventories generally have no expiry dates. However various factors affect the assessment of recoverability of the carrying value
of inventory including regulatory approvals and future demand for the Company’s product. These factors are taken into
consideration in determining the appropriate level of provisioning for inventory. Nil provision provided for 30 June 2024 (Nil: 30
June 2023).
Note 11: Tax asset
2024
$
2023
$
Income tax credit
(17,445)
2,533
R & D tax incentive
439,000
439,000
Total tax asset
Total tax asset
Total tax asset
Total tax asset
421,555
421,555
421,555
421,555
441,533
441,533
441,533
441,533
Income tax
Income taxes are accounted for using the Balance Sheet liability method whereby:
•
The tax consequences of recovering (settling) all assets (liabilities) are reflected in the financial statements;
•
Current and deferred tax is recognised as income or expenses except to the extent that the tax relates to equity items or to a
business combination;
•
A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available to realise the
asset;
•
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
realised or the liability settled.
The charge for current income tax expense/credit is based on the profit or loss for the year adjusted for any non- assessable or
disallowed items. It is credited using tax rates that have been enacted or are substantively enacted by the reporting date.
Deferred tax is accounted for using the Balance Sheet liability method in respect of temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled.
Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which
case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which
deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse
change will occur in income taxation legislation and the anticipation that the Company will derive sufficient future assessable
income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
R & D tax incentive
The Company is eligible for a research and development (R&D) grant which is received on an annual basis after the Australia Tax
Office processes the Company’s tax return. The amount of R&D grant receivable is accrued based on eligible expenses incurred
during the respective financial year.
Uscom Limited | Annual Report 2024
38
Note 12: Other assets
2024
$
2023
$
Non-Current
Bank guarantee
83,456
83,456
Total other non
Total other non
Total other non
Total other non-current assets
current assets
current assets
current assets
83,456
83,456
83,456
83,456
83,456
83,456
83,456
83,456
The parent entity has provided a guarantee in respect of obligations under premises lease of $83,456 (2023: $83,456).
Note 13: Plant and equipment
2024
$
2023
$
Plant and equipment at cost
740,472
740,472
Accumulated depreciation – including foreign exchange impact
(727,784)
(717,777)
12,688
22,695
Office furniture and equipment at cost
186,303
186,303
Accumulated depreciation – including foreign exchange impact
(185,361)
(184,620)
942
1,683
Computer software at cost
69,231
67,797
Accumulated depreciation – including foreign exchange impact
(58,924)
(55,723)
10,307
12,073
Low value asset pool at cost
38,542
38,542
Accumulated depreciation – including foreign exchange impact
(37,612)
(37,151)
930
1,391
Total plant and equipment
Total plant and equipment
Total plant and equipment
Total plant and equipment
24,867
24,867
24,867
24,867
37,842
37,842
37,842
37,842
Movements in carrying amounts
Movements in carrying amounts
Movements in carrying amounts
Movements in carrying amounts
Plant and
equipment
Office furniture
and equipment
Computer
software
Low value
asset pool
Total
Useful life
2-7 years
2-7 years
3 years
3 years
$
$
$
$
$
Company
Company
Company
Company
Carrying amount at 1 July 2023
22,695
22,695
22,695
22,695
1,683
1,683
1,683
1,683
12,073
12,073
12,073
12,073
1,391
1,391
1,391
1,391
37,842
37,842
37,842
37,842
Additions
-
34
7,837
-
7,871
Disposals
-
-
-
-
-
Depreciation expense
(10,742)
(660)
(4,687)
(521)
(16,610)
Effects of foreign currency exchange differences
735
(115)
(4,916)
60
(4,236)
Carrying amount at 30 June 202
Carrying amount at 30 June 202
Carrying amount at 30 June 202
Carrying amount at 30 June 2024
12,688
12,688
12,688
12,688
94
94
94
942
10,307
10,307
10,307
10,307
930
930
930
930
24,86
24,86
24,86
24,867
Property, plant and equipment are included at cost. Assets in plant and equipment are depreciated on diminishing value basis
over their estimated useful lives covering a period of two to seven years.
On disposal of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of
the asset is recognised as a gain or loss in the statement of profit or loss and other comprehensive income.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
- Plant & Equipment
20% - 25%
- Office Furniture & Equipment
20%
- Computer Software
25%
- Low Value Pool
37.5%
Uscom Limited | Annual Report 2024
39
Note 14: Intangible assets
2024
$
2023
$
Non
Non
Non
Non-current
current
current
current
Patents at cost
2,296,492
2,246,814
Accumulated amortisation
(1,875,960)
(1,748,867)
Impairment
-
-
Carrying amount at 30 June
Carrying amount at 30 June
Carrying amount at 30 June
Carrying amount at 30 June
420,532
420,532
420,532
420,532
497,947
497,947
497,947
497,947
Regulatory approvals -acquisitions through business combinations
630,730
630,730
Accumulated amortisation
(630,730)
(630,730)
Carrying amount at 30 June
-
-
Total intangible assets
Total intangible assets
Total intangible assets
Total intangible assets
420,532
420,532
420,532
420,532
497,947
497,947
497,947
497,947
Movements in carrying amounts
Movements in carrying amounts
Movements in carrying amounts
Movements in carrying amounts
Patents carrying amount at 1 July
497,947
477,010
Additions
49,678
134,747
Impairment
-
-
Amortisation
(127,093)
(113,810)
Patents carrying amount at 30 June
Patents carrying amount at 30 June
Patents carrying amount at 30 June
Patents carrying amount at 30 June
420,532
420,532
420,532
420,532
497,947
497,947
497,947
497,947
Recognition and Measurement
Intangibles are carried at cost less accumulated amortisation and impairment losses where applicable. Intangible assets acquired
separately are capitalised at cost or if arising from a business combination at fair value as at the date of acquisition.
Intangible Assets comprise Intellectual Property in the form of Patents and Regulatory approvals (NMPA, FDA and CE). Patents
and Regulatory approvals have finite useful lives. The current amortisation charge in respect of Patents and Regulatory approvals
is included under Expenses from Continuing Activities in the Statement of Profit or Loss and Other Comprehensive Income.
Patents and Trademarks are valued in the financial statements at cost of acquisition less accumulated amortisation and are
amortised on a diminishing value basis at 12.5% per annum.
Impairment of assets
Intangible assets are monitored by management at the level of the four operating segments identified in Note 26.
A segment-level summary of the intangible allocation is presented below:
Australia
$
Asia
$
Americas
$
Europe
$
Consolidated
$
2024
Patent from cardiovascular products
74,536
27,420
47,394
271,182
420,532
Less: Impairment provided
-
-
-
-
-
Total
Total
Total
Total
74,536
27,420
47,394
271,182
420,532
2023
Patent from cardiovascular products
74,770
23,655
27,287
372,236
497,947
Less: Impairment provided
-
-
-
-
-
Total
Total
Total
Total
74,770
23,655
27,287
372,236
497,947
The Company tests whether intangible assets have suffered any impairment on an annual basis or any indications present that an
asset may be impaired. For the 2024 and 2023 reporting periods, the recoverable amount of the cash-generating units (CGUs)
was determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow
projections based on financial budgets approved by management covering a five-year period.
No impairment identified from the assessment in 2024 (2023: Nil).
Uscom Limited | Annual Report 2024
40
Note 15: Right-of-use assets and Lease liabilities
2024
$
2023
$
Right-of-use assets
739,412
818,944
Lease liabilities - current
(299,547)
(262,783)
Lease liabilities – non current
(689,731)
(828,804)
(989,278)
(1,091,587)
Reconciliation of movement in lease liabilities:
Reconciliation of movement in lease liabilities:
Reconciliation of movement in lease liabilities:
Reconciliation of movement in lease liabilities:
Lease liability recognise at 1 July
1,091,587
1,312,052
Additions
163,250
-
Interest expense
75,508
89,964
Repayment of lease liabilities
(341,067)
(310,430)
Total lease liabilities as at 30 June
Total lease liabilities as at 30 June
Total lease liabilities as at 30 June
Total lease liabilities as at 30 June
989,278
989,278
989,278
989,278
1,091,587
1,091,587
1,091,587
1,091,587
The Company leases business premises (offices and laboratories). Rental contracts are typically for a fixed period of 12 months to
60 months and may include extension options. From 1 July 2019 leases are recognised as a right of use asset and a corresponding
liability at the date at which the lease is available for use by the Company. Assets and liabilities are measured on a present value
basis.
Lease payments are discounted using the interest rate implicit in the lease. Where a rate cannot be readily determined from the
lease (generally the case) then the lessee’s incremental borrowing rate will be used, being the rate the lessee would have to pay
to borrow the funds to obtain the equivalent asset. As the Company does not have any borrowings the incremental borrowing
rate has been determined using a build-up approach whereby the risk-free rate is adjusted for credit risk, considering factors such
as term, country, and currency. Right of use assets are depreciated on a straight-line basis over the term of the lease. The Company
has no variable lease payments in its leases.
Lease payments for operating leases of low value items or for a period of less than 12 months, where substantially all the risks and
benefits remain with the lessor, are charged as expense in the period in which they are incurred.
Note 16: Trade and other payables
2024
$
2023
$
Current
Current
Current
Current
Trade payables
300,935
277,819
Sundry payables and accrued expenses
238,043
338,907
Employee related payables
170,680
147,757
Total payables
Total payables
Total payables
Total payables
709,658
709,658
709,658
709,658
764,483
764,483
764,483
764,483
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received
by the Company during the reporting period which remains unpaid. The balance is recognised as a current liability with the
amount being normally paid within 30 days of recognition of the liability.
The carrying amounts of the Company’s trade and other payables are denominated in Australian Dollars. For an analysis of the
financial risks associated with trade and other payable refer to Note 22.
Uscom Limited | Annual Report 2024
41
Note 17: Provisions
2024
$
2023
$
Current
Current
Current
Current
Provision for annual leave
162,765
151,663
Provision for long service leave
106,612
36,043
269,377
187,706
Non
Non
Non
Non-current
current
current
current
Provision for long service leave
30,395
39,303
Provision for warranties
26,650
19,650
Provision for make good
48,217
33,355
105,262
92,309
(a) Aggregate employee benefits
(a) Aggregate employee benefits
(a) Aggregate employee benefits
(a) Aggregate employee benefits
299,772
299,772
299,772
299,772
227,010
227,010
227,010
227,010
(b) Movement in employee benefits
(b) Movement in employee benefits
(b) Movement in employee benefits
(b) Movement in employee benefits
Balance at beginning of the year
227,010
224,194
Additional provision
299,772
210,906
Amounts used
(227,010)
(208,090)
Balance at end of the year
Balance at end of the year
Balance at end of the year
Balance at end of the year
299,772
299,772
299,772
299,772
227,010
227,010
227,010
227,010
(c) Movement in warranties
(c) Movement in warranties
(c) Movement in warranties
(c) Movement in warranties
Balance at beginning of the year
19,650
22,150
Additional provision
11,000
180
Amounts used
(4,000)
(2,680)
Balance at end of the year
Balance at end of the year
Balance at end of the year
Balance at end of the year
26,650
26,650
26,650
26,650
19,650
19,650
19,650
19,650
(d) Movement in make good
(d) Movement in make good
(d) Movement in make good
(d) Movement in make good
Balance at beginning of the year
33,355
21,124
Additional provision
14,862
12,231
Amounts used
-
-
Balance at end of the year
Balance at end of the year
Balance at end of the year
Balance at end of the year
48,217
48,217
48,217
48,217
33,355
33,355
33,355
33,355
Short term employee benefits
Short term employee benefits are employee benefits (other than termination benefits and equity compensation benefits) which
fall due wholly within 12 months after the end of the period in which employee services are rendered. They comprise wages,
salaries, social security obligations, short-term compensation absences, and profit sharing and bonuses payables within 12 months
and non-mandatory benefits such as medical care, housing, car and service goods.
The provision for employee entitlements to wages, salaries and annual leave represents the amount that the Company has a
present obligation to pay resulting from employee services provided up to reporting date. The provision has been calculated
after taking into consideration estimated future increases in wages and salaries and past experience regarding staff departures
and includes related on-costs.
The undiscounted amount of short-term benefits expected to be paid is recognised as an expense.
Long term employee benefits
Long term employee benefits include long-service leave, long-term disability benefits, deferred compensation and profit sharing
and bonuses payable 12 months or more after the end of the period in which employee services are rendered.
Warranties
Provision is made in respect of the Company’s estimated liability on all products and services under warranty at reporting date.
The provision is measured at the present value of future cash flows estimated to be required to settle the warranty obligation.
The future cash flows have been estimated by reference to the Company’s history of warranty claims.
Lease Make Good
A provision for Lease Make Good is recognised in relation to the properties held under operating lease. The Company recognises
the provision for property leases which contain specific clauses to restore the property to a specific condition. The provision at
balance date represents management’s best estimate of the present value of the future make good costs required.
Uscom Limited | Annual Report 2024
42
Note 18: Issued capital
2024
Number
2023
Number
2024
$
2023
$
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Fully paid ordinary shares
244,587,610
187,368,999
40,423,139
38,509,140
Total contributed equity
Total contributed equity
Total contributed equity
Total contributed equity
244,587,610
244,587,610
244,587,610
244,587,610
187,368,999
187,368,999
187,368,999
187,368,999
40,423,139
40,423,139
40,423,139
40,423,139
38,509,140
38,509,140
38,509,140
38,509,140
Movement in issued capital
Movement in issued capital
Movement in issued capital
Movement in issued capital
Shares on issue at the beginning of the year
187,368,999
196,768,333
38,509,140
39,136,673
Ordinary share issued for cash **
54,054,054
-
2,000,000
-
Ordinary share issued for in lieu of salary
3,164,557
1,867,551
-
15,000
Ordinary share (Equal Access Share Buy-Back)
-
(11,266,885)
-
(619,679)
Share issue costs
-
-
(86,001)
(22,854)
Issued Equity at the end of the year
Issued Equity at the end of the year
Issued Equity at the end of the year
Issued Equity at the end of the year
244,587,610
244,587,610
244,587,610
244,587,610
187,368,999
187,368,999
187,368,999
187,368,999
40,423,139
,423,139
,423,139
,423,139
38,509,140
38,509,140
38,509,140
38,509,140
The Company’s authorised share capital amounted to 244,587,610 ordinary shares of no-par value at 30 June 2024.
Fully paid ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number
of shares held. At shareholders meetings, each ordinary share is entitled to one vote when a poll is called, or via a show of hands.
** On 27 February 2024, the company conducted off-market offer a non-renounceable right issue offer to all shareholders. The
offer was set at 3.7c per share. On the offer cessation date 4 March 2024, 54,054,054 ordinary shares were subscribed by the
shareholders in return for $804,976 received in cash and $1,195,024 loan payable to the Director that was settled in shares.
Note 19: Options and rights reserve
The Company has adopted an Equity Incentive Plan for the benefit of an employee, contractor, consultant and executive director
of the Company or any other person whom the Board determines to be eligible to participate in the Plans. The objective of the
EIP is to provide reward and incentive to valuable personnel while preserving cash. The Board may impose conditions, including
performance related conditions, on the right to exercise any options and rights granted under the Equity Incentive Plan.
The purpose of the Plan is to:
•
provide Eligible Persons with an incentive plan which rewards ongoing contribution to the achievement by the Company of
its strategic goals thereby encouraging the mutual interdependence of Participants and the Company;
•
align the interests of Participants with shareholders of the Company through the sharing of a personal interest in the future
growth and development of the Company as represented in the price of the Company’s ordinary fully paid shares;
•
encourage Eligible Persons to improve the performance of the Company and its total return to Shareholders; and
•
provide a means of attracting and retaining skilled and experienced employees.
Under the Plan, the Company will be able to grant short-term incentive and long-term incentive awards to Eligible Employees
(including Executive Directors). The Plan will provide the Board with the flexibility to grant equity incentives to Eligible Persons
in the form of Plan Shares, Rights or Options, will only vest on the satisfaction of appropriate hurdles.
2024
$
2023
$
Options and rights reserves (i)
4,170,277
3,937,189
Foreign currency translation reserves
45,953
101,269
Total reserves
Total reserves
Total reserves
Total reserves
4,216,2
4,216,2
4,216,2
4,216,230
30
30
30
4,038,458
4,038,458
4,038,458
4,038,458
2024
Number
2023
Number
2024
$
2023
$
(i) Movement in options and rights reserves
Opening balance
3,174,557
2,186,782
3,937,190
3,638,461
Granted during the period (a)
4,756,891
3,164,557
-
-
Exercised during the period
(3,164,557)
(1,636,782)
-
-
Lapsed during the period
-
-
-
-
Share-based payment expenses
-
-
233,088
313,728
Fair value of shares issued to employees
-
-
-
(15,000)
Rights at the end of the period
Rights at the end of the period
Rights at the end of the period
Rights at the end of the period
5,306,891
5,306,891
5,306,891
5,306,891
3,714,557
3,714,557
3,714,557
3,714,557
4,170,27
4,170,27
4,170,27
4,170,277
3,937,189
3,937,189
3,937,189
3,937,189
Uscom Limited | Annual Report 2024
43
(a) 4,756,891 indeterminate rights were issued to Rob Phillips on the terms and conditions approved by shareholders at the AGM
on 26 October 2023 under the Equity Incentive Plan, vesting dependent on performance hurdles on 1 July 2024. Consideration
payable upon vesting is $nil. Upon meeting the performance hurdles, a total of 4,756,891 rights were exercised on 2 July 2024
after the reporting date.
Performance rights were issued during the year, pursuant to the Equity Incentive Plan. Fair values at grant date are determined
using a Black-Scholes Pricing Model that takes into account the exercise price, the term of the rights, the share price at the grant
date, the expected volatility of the underlying share, and risk-free interest rate for the term of the option. The model inputs for
options granted during the year ended 30 June 2024 are noted below:
Grant date
#
Granted
Vesting
date
Vesting
period
(months)
Exercise
price
Share price
at issue
date
Fair value
at issue
date
Est.
volatility
Expected
dividend
yield
Average
risk-free
rate
26-Oct-23
4,756,891
01-Jul-24
8
Nil
$0.049
$0.049
67%
0
4.31%
01-Apr-22
200,000
01-Jul-23
12
Nil
$0.098
$0.098
78%
0
2.50%
24-Aug-21
200,000
01-Jul-22
12
Nil
$0.145
$0.145
65%
0
0.34%
26-Nov-14
150,000
01-Jul-20
12
Nil
$0.190
$0.190
76%
0
2.21%
The Company has adopted an Employee Share Option Plan for the benefit of Executive Directors and full-time or part-time staff
members employed by the Company.
Goods or services received or acquired in a share-based payment transaction are recognised as an increase in equity if the goods
or services were received in an equity-settled share-based payment transaction or as a liability if the goods and services were
acquired in a cash settled share-based payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair value of the goods or
services received provided this can be estimated reliably. If a reliable estimate cannot be made the value of the goods or services
is determined indirectly by reference to the fair value of the equity instrument granted.
Transactions with employees and others providing similar services are measured by reference to the fair value at grant date of the
equity instrument granted.
Note 20: Foreign currency translation reserve
2024
$
2023
$
Opening balance
101,269
72,804
Translation of financial statements of foreign Controlled Entities
(55,316)
28,466
Closing balance
Closing balance
Closing balance
Closing balance
45,953
45,953
45,953
45,953
101,269
101,269
101,269
101,269
All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of
the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date.
Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.
The gains and losses from conversion of assets and liabilities, whether realised or unrealised, are included in profit or loss from
continuous operations as they arise.
Uscom Limited | Annual Report 2024
44
Note 21: Cash flow information
2024
$
2023
$
(a) Reconciliation of cash
Cash at bank and on hand
2,519,911
2,178,740
Total cash at end of year
Total cash at end of year
Total cash at end of year
Total cash at end of year
2,519,911
2,519,911
2,519,911
2,519,911
2,178,740
2,178,740
2,178,740
2,178,740
(b) Reconciliation of cash flow from operations to loss from continuing operations
after income tax
Loss from continuing operations after income tax
(2,074,749)
(2,590,888)
Non cash flows in loss from continuing operations
Depreciation
16,610
30,270
Amortisation
127,093
113,811
Depreciation on right-of-use assets
242,784
238,593
Share based payment expenses
233,088
313,728
FX Gain & Losses
(55,316)
28,466
(Increase)/decrease in assets
(Increase)/decrease in assets
(Increase)/decrease in assets
(Increase)/decrease in assets
Trade debtors and other receivables
59,128
(27,377)
Other assets
89,150
(114,085)
Inventories
130,132
118,359
Tax credit
19,978
(45,824)
Increase/(decrease) in liabilities
Increase/(decrease) in liabilities
Increase/(decrease) in liabilities
Increase/(decrease) in liabilities
Trade and other payables
(54,824)
510,857
Provision
103,533
68
Net cash from/ (used in) operating activities
Net cash from/ (used in) operating activities
Net cash from/ (used in) operating activities
Net cash from/ (used in) operating activities
(1,163,39
(1,163,39
(1,163,39
(1,163,393)
(1,424,022)
(1,424,022)
(1,424,022)
(1,424,022)
Note 22: Financial instruments
a.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria of recognition, the basis of measurement
and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity
instrument are disclosed in the financial statements.
b.
Capital risk management
The Company manages its capital to ensure that its Controlled Entities are able to continue as a going concern. The capital
structure of the Entity consists of cash and cash equivalents (Note 8) and equity attributable to equity holders of the Parent Entity,
comprising issued capital (Note 18), and accumulated losses (Note 6).
c.
Financial risk management objectives
The Company’s principal financial instruments are cash and term deposit accounts. Its financial instruments risk is with interest
rate risk on its cash and term deposits and liquidity risk for its term deposits.
The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes. The Board is updated monthly by management as to the amounts of funds available to the Company from either cash
in the bank or term deposits, and continually monitors interest rate movements.
d.
Foreign currency risk management
The Company undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations
arise. The Company does not have any forward foreign exchange contracts as at 30 June 2024 and is exposed to foreign currency
risk on sales and purchases denominated in a currency other than Australian dollars.
The currencies giving rise to this risk is primarily the USD, EUR, HUF, GBP, SGD and CNY. The Company incurs costs in USD for
its operations which provide a natural hedge for a portion of income denominated in USD.
Uscom Limited | Annual Report 2024
45
The carrying amount of the Company’s foreign currency denominated monetary assets and monetary liabilities at the reporting
date is as follows:
2024
2023
USD
USD
Cash
673,273
82,207
Current trade debtors
-
-
Current trade creditors
20,571
50,663
HUF
HUF
Cash
21,116,699
1,602,372
Current trade debtors
225,215
1,041,448
Current trade creditors
918,762
2,855,642
EUR
EUR
Cash
556,029
348,043
Current trade debtors
36,472
6,938
Current trade creditors
13,213
16,172
GBP
GBP
Cash
1,953
6,264
Current trade debtors
-
-
Current trade creditors
1,215
2,876
CNY
CNY
Cash
1,292,742
1,394,566
Current trade debtors
7,148,707
5,463,013
Current trade creditors
6,936,644
5,108,517
SGD
SGD
Cash
40,763
-
Current trade debtors
-
-
Current trade creditors
58,250
-
e.
Foreign currency sensitivity
The Company is mainly exposed to exchange rate risks arising from movements in the US dollar (USD), Euro (EUR), Pound sterling
(GBP), Hungarian forint (HUF), Singapore dollar (SGD) and Chinese yuan (CNY) against the Australian dollar (AUD), and the US
dollar from the translation of the operations of its Controlled Entity. However the entity earns in these same currencies so there
is a natural hedge against currency movements.
The analysis below demonstrates the profit impact of a 10% movement of USD and EUR (*2023: 5%), 5% movement of GBP, HUF,
SGD and CNY rates against the AUD with all other variables held constant. 10% and 5% are the sensitivity rates used when
reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible
change in foreign exchange rates.
2024
$
2023
$
Sensitivity
10% change in USD rate
81,948
29,304
10% change in EUR rate*
208,147
50,660
5% change in GBP rate
28
11,548
5% change in CNY rate
41,067
37,773
5% change in HUF rate
1,165
2,510
5% change in SNG rate
275
-
332,630
131,795
Profit/Loss
- increase
(332,630)
(131,795)
- decrease
332,630
131,795
f.
Interest rate risk management
The Company does not have any external loans or borrowings as at 30 June 2024 and is not exposed to interest rate risks related
to debt.
The Company is exposed to interest rate risk as it holds cash and term deposits at both fixed and floating interest rates. The risk
is managed by the Company maintaining an appropriate mix between both rates.
Management continually monitors its cash requirements through forecasts and cash flow projections and moves funds between
fixed and variable interest instruments to hold the maximum amount possible in instruments which pay the greater rate of interest.
Uscom Limited | Annual Report 2024
46
This limits the amount of risk associated with setting a policy on the mix of funds to be held in fixed or variable interest rate
instruments.
g.
Interest rate sensitivity
A 100-basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and
represents management’s assessment of the possible change in interest rates.
2024
$
2023
$
Profit/Loss - increase 100 basis points
4,604
5,538
- decrease 100 basis points
(4,604)
(5,538)
h.
Credit risk management
Credit risk represents the loss that would be recognised if counterparties defaulted on its contractual obligations. The Company’s
exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions
concluded is spread among approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and
approved by the management annually. Ongoing credit evaluation is also performed on the financial condition of accounts
receivable.
The Company does not have significant credit risk exposure to any single counterparty or any Company of counterparties having
similar characteristics; because the current major counterparties are alliance distributors and public hospitals with approved funds
available prior to purchases under most circumstances.
The credit risk on financial assets of the Company, as recognised on the Statement of Financial Position, is the carrying amount,
net of any allowance for doubtful debts. Credit risk in respect of cash and deposits is minimised as counterparties are recognised
financial intermediaries with acceptable credit ratings determined by a recognised rating agency.
Debtors outstanding but not impaired
2024
$
2023
$
0 - 45 days
156,910
134,384
46 – 90 days
-
-
Over 90 days
-
-
Total
Total
Total
Total
156,910
156,910
156,910
156,910
134,384
134,384
134,384
134,384
No bad debt was written off during the year (2023: $Nil). There was no doubtful debt provision as at 30 June 2024 (2023: Nil). The
outstanding debts $156,910 are not past due to the reporting date. The Company applies the AASB 9 simplified approach to
measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Details included in Note
9.
i.
Liquidity risk management
The objective for managing liquidity risk is to ensure the business has sufficient working capital or access to working capital as
and when required. The Company limits its exposure to liquidity risk by holding the majority of its assets in cash or term deposits
which can be quickly converted to cash if required.
The following table details the Company’s remaining contractual maturity for its non-derivative liabilities. The table has been
drawn up based on the undiscounted cash flows expected to be received/paid by the Company.
Consolidated
Weighted
Fixed interest rate maturing
Average
effective
interest
Floating
interest
Within 1
year
1 to 5
years
Non-interest
bearing
Total
Rate %
$
$
$
$
$
2024
Trade creditors
-
-
-
-
300,935
300,935
Payables
-
-
-
-
170,680
170,680
Lease liabilities
6.38
-
303,819
692,043
-
995,862
Total financial liabilities
Total financial liabilities
Total financial liabilities
Total financial liabilities
-
303,819
692,043
471,615
471,615
471,615
471,615
1,467,477
1,467,477
1,467,477
1,467,477
2023
Trade creditors
-
-
-
-
277,819
277,819
Payables
-
-
-
-
147,757
147,757
Lease liabilities
6.38
-
251,068
910,447
-
1,161,515
Total financial liabilities
Total financial liabilities
Total financial liabilities
Total financial liabilities
-
251,068
251,068
251,068
251,068
910,447
910,447
910,447
910,447
425,576
425,576
425,576
425,576
1587,091
1587,091
1587,091
1587,091
The carrying amounts of financial assets and financial liabilities recorded at cost approximate their fair values.
Uscom Limited | Annual Report 2024
47
Note 23: Consolidated entity disclosure statement and related party disclosure
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
For the Year Ended 30 June 2024
Name of entity
Type of entity
Place
incorporate
Percentage of share
capital held
Australian tax resident
or foreign tax resident
Foreign tax
jurisdiction
Uscom Limited
Body corporate
Australia
100%
Australian
n/a
Uscom Australia Pty Ltd
Body corporate
Australia
100%
Australian
n/a
Uscom Inc.
Body corporate
U.S.A
100%
Foreign
U.S.A
Uscom Medical Ltd
Body corporate
U.K.
100%
Foreign
U.K.
Uscom Kft
Body corporate
Hungary
100%
Foreign
Hungary
Beijing Uscom
Consulting Co. LTD
Body corporate
China
100%
Foreign
China
Uscom SNG Pte. Ltd
Body corporate
Singapore
100%
Foreign
Singapore
Consolidated
The Parent and Ultimate Parent Entity is Uscom Limited.
Key management personnel
The following were key management personnel of the Company at any time during the reporting period and unless otherwise
indicated were key management personnel for the entire period:
Non-Executive Directors
Christian Bernecker, Non-Executive Director
Brett Crowley, Non-Executive Director
Xianhui Meng, Non-Executive Director
Executive Directors
Rob Phillips, Executive Director, Chairman, Chief Executive Officer
Senior Executives
Nick Schicht, General Manager
For further remuneration information of key management personnel refer to the remuneration report in the Directors’ report on
page 22. The aggregate compensation made to Directors and other members of key management personnel of the Company
and the Company is set out below:
2024
$
2023
$
Short-term employee benefits
699,987
623,025
Post-employment benefits
31,018
26,770
Long-term benefits
29,083
18,913
Share-based payment
233,088
167,722
Total key management personnel remuneration
Total key management personnel remuneration
Total key management personnel remuneration
Total key management personnel remuneration
993,176
993,176
993,176
993,176
836,430
836,430
836,430
836,430
Uscom Limited | Annual Report 2024
48
Note 24: Parent entity information
2024
$
2023
$
Set out below is the supplementary information about the parent entity.
Statement of comprehensive income
Statement of comprehensive income
Statement of comprehensive income
Statement of comprehensive income
Loss after income tax
(2,130,057)
(2,562,421)
Total comprehensive income
(2,130,057)
(2,562,421)
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Total current assets
4,546,082
3,275,650
Total assets
3,887,151
3,794,798
Total current liabilities
726,062
659,506
Total liabilities
826,101
750,769
Equity
Equity
Equity
Equity
Contributed equity
40,423,139
38,509,140
Options reserve
4,170,277
3,937,189
Accumulated losses
(41,532,366)
(39,402,300)
Total equity
Total equity
Total equity
Total equity
3,061,050
3,061,050
3,061,050
3,061,050
3,044,029
3,044,029
3,044,029
3,044,029
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Company.
•
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.
Contingent liabilities
The parent entity has provided a guarantee in respect of obligations under premises lease of $83,456 (2023: $83,456). No liability
was recognised by the parent entity or the Company in relation to this guarantee.
Other than the guarantee mentioned above, the parent entity did not have any contingent liabilities as at 30 June 2023 or 30 June
2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Company, as disclosed in Note 1.
Note 25: Auditors’ remuneration
Audit services
2024
$
2023
$
BDO Audit Pty Limited for audit and review of financial reports
114,320
104,300
BDO Hungary for audit
1,846
1,650
BDO China for audit
850
850
Total remuneration for audit services
Total remuneration for audit services
Total remuneration for audit services
Total remuneration for audit services
117,016
117,016
117,016
117,016
106,800
106,800
106,800
106,800
Non-audit services
-
-
Total audit and
Total audit and
Total audit and
Total audit and non
non
non
non-audit services
audit services
audit services
audit services
117,016
117,016
117,016
117,016
106,800
106,800
106,800
106,800
Note 26: Operating segments
Segment information
The Company operates in the global health and medical products industry.
The Company sells two cardiovascular products, the USCOM 1A cardiac output monitor and the Uscom BP+ central blood
pressure monitor and a series of pulmonary products the Uscom SpiroSonic spirometers.
Globally the Company has five geographic sales and distribution segments Australia including other regions, Asia, the Americas,
Europe. For each segment, the CEO and General Manager review internal management reports on at least a monthly basis.
In 2024, the customers in Asia accounts for approximately 35% of the total sales (2023: 36%). For the current period USCOM 1A
comprised $2,062,840 (FY23: $1,890,768), SpiroSonic spirometers $495,645 (FY23: $551,381) and BP+ for $79,506 (FY23: $148,312)
of the total sales.
Uscom Limited | Annual Report 2024
49
Basis of accounting for purposes of reporting by operating segments
Accounting policies
Segment information is prepared in conformity with the accounting policies of the entity as disclosed in the financial report and
accounting standard AASB 8 Operating Segments which requires a ‘Management approach’ under which segment information
is presented on the same basis as that used for internal reporting purposes. This has resulted in no change to the reportable
segments as operating segments continue to be reported in a manner consistent with the internal reporting provided to the chief
operating decision maker, which is the Board of Directors.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment. Segment assets include
all assets used by a segment and consist primarily of inventories, property, plant and equipment and intangible assets. While
most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by
segments are not allocated. Segment liabilities consist primarily of trade and other creditors, employee benefits and provisions
for warranties. Segment assets and liabilities do not include deferred income taxes.
Australia
$
Asia
$
Americas
$
Europe
$
Consolidated
$
2024
Sales to external customers
1,255,193
1,300,462
254,506
916,684
3,726,845
Other income/revenue
482,706
3,129
-
774
486,609
Total segment revenue/income
1,737,899
1,303,591
254,506
917,458
4,213,454
Segment expenses
(3,700,143)
(1,506,680)
(129,112)
(904,841)
(6,240,777)
Segment result
(1,962,244)
(203,089)
125,394
12,617
(2,027,322)
Income tax expenses
-
(462)
-
(46,965)
(47,427)
Consolidated loss after income tax
(1,962,244)
(203,551)
125,394
(34,348)
(2,074,749)
Segment assets
3,775,450
962,623
87,746
308,806
5,134,625
Segment liabilities
1,670,484
200,171
28,594
174,326
2,073,575
Acquisition of plant and equipment
and intangibles
(3,559)
7,573
15,177
39,358
57,549
Depreciation and amortisation
192,387
59,080
14,323
120,697
386,487
2023
Sales to external customers
758,287
895,745
41,485
968,650
2,664,166
Other income/revenue
473,345
11,147
-
7,567
492,059
Total segment revenue/income
1,231,632
906,893
41,485
976,216
3,156,225
Segment expenses
(3,013,564)
(1,363,266)
(474,895)
(861,128)
(5,712,853)
Segment result
(1,781,934)
(456,374)
(433,410)
115,088
(2,556,628)
Income tax expenses
-
70
-
(34,330)
(34,260)
Consolidated loss after income tax
(1,781,934)
(456,304)
(433,410)
80,759
(2,590,888)
Segment assets
3,583,207
1,117,640
77,543
401,722
5,180,112
Segment liabilities
1,798,442
173,760
21,634
142,248
2,136,083
Acquisition of plant and equipment
and intangibles
30,933
32,178
13,934
74,892
151,937
Depreciation and amortisation
191,923
58,482
6,237
126,032
382,674
Note 27: Contingencies
Other than the guarantee mentioned at Note 24, the Company did not have any contingent liabilities as at 30 June 2024 or 30
June 2023.
Note 28: Events after the reporting date
No matters or circumstances have arisen since the end of the financial year to the date of this report, that has significantly affected
or may significantly affect the activities of the Company, the results of those activities or the state of affairs of the Company in the
ensuing or any subsequent financial year.
Note 29: Not-cash investing and financing activities
On 4 March 2024, $1,195,024 director loan payable was settled through subscription of 32,297,936 ordinary shares (3.7c per share)
by the director under non renounceable right issue.
Uscom Limited | Annual Report 2024
50
DIRECTORS DECLARATION
Uscom Limited and its Controlled Entity
1. The directors of the company declare that: The financial statements, comprising the statement of comprehensive
income, statement of financial position, statement of cash flows, statement of changes in equity, accompanying
Notes, are in accordance with the Corporations Act 2001 and:
a. comply with Australian Accounting Standards and the Corporations Regulations 2001; and
b. give a true and fair view of the consolidated entity’s financial position as at 30 June 2024 and of its
performance for the year ended on that date.
2. In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts
as and when they become due and payable.
3. In the directors’ opinion, the consolidated entity disclosure statement required by subsection 295(3A) of the
Corporations Act 2001 in Note 23 is true and correct.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of
the directors by:
Professor Rob Phillips
Chairman
29 August 2024
Uscom Limited | Annual Report 2024
51
INDEPENDENT AUDIT REPORT
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Uscom 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
financial report, including material accounting policy information, the consolidated entity disclosure
statement and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in 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
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Uscom Limited | Annual Report 2024
52
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
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. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Impairment and carrying value of intangible assets
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 14
Intangibles Asset of the
financial report, the carrying
value of intangible assets
were considered significant to
our audit as the carrying value
of $420,532 on 30 June 2024
is material to the financial
statements and requires
considerable judgement and
estimation by management
based on increasing uncertain
outcomes of regulatory
approvals in all jurisdictions
as well as the unpredictable
sales performance in the
future.
Our audit procedures include amongst other:
•
Evaluated management’s assessment of any impairment indicators in
accordance with AASB 136 impairment of assets.
•
Critically reviewed the Value in Use (‘VIU’) models prepared by
management based on the identified cash generating units (‘CGUs’)
through assessing the following key assumptions:
o
Forecast revenue;
o
Budgeted gross margin;
o
Other operating costs;
o
Discount rate; and
o
Long-term growth rate
•
Re-performed the valuation assessment of projected sales, growth
rates, operating expenditures, capital expenditures, terminal values
and discount factors used in discounted cash flow valuations based on
BDO sensitised results.
•
Together with BDO Corporate Finance team assessed the
reasonableness of the discount rate applied by management across
the different CGUs.
•
Reviewed patents for appropriate amortisation rates and useful
economic life.
•
Evaluated the adequacy of the impairment disclosures in the
financial report, particularly those relating to intangible assets and
to judgements and estimates.
Uscom Limited | Annual Report 2024
53
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2024, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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 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 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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
Uscom Limited | Annual Report 2024
54
Uscom Limited | Annual Report 2024
55
SHAREHOLDERS INFORMATION
Additional information required by Australian Stock Exchange Listing Rules is as follows. This information is current
as at 31 July 2024.
Distribution schedules of shareholder
Holdings Ranges
Holdings Ranges
Holdings Ranges
Holdings Ranges
Holders
Holders
Holders
Holders
Number
Ordinary Shares
Ordinary Shares
Ordinary Shares
Ordinary Shares
Number
%
1 – 1,000
40
4,760
0.000
1,001 – 5,000
23
77,349
0.030
5,001 – 10,000
29
231,789
0.090
10,001 – 100,000
296
10,516,713
4.220
100,001 – 99,999,999,999
126
238,513,690
95.660
Total
Total
Total
Total
514
249,344,501
100.000
There were 88 holders of less than a marketable parcel of 9,804 ordinary shares.
Class of shares and voting rights
All shares are ordinary shares. Each ordinary share is entitled to one vote when a poll is called, otherwise each member present
at a meeting or by proxy has one vote on a show of hands.
Substantial shareholders
The names of the substantial shareholders listed in the holding company’s register as at 31 July 2024 are:
MR ROBERT ALLAN PHILLIPS
33.511%
CITICORP NOMINEES PTY LIMITED
22.239%
NEJA PTY LTD & JETAN PTY LTD
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