ANNUAL REPORT
For the fiscal year 30 June 2023
VivoPower International PLC
VivoPower International PLC
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2021
VivoPower is an award-winning global sustainable energy solutions B Corporation company
focused on electric solutions for customised and ruggedised fleet applications, battery and
microgrids, solar and critical power technology and services. The Company’s core purpose is
to provide its customers with turnkey decarbonisation solutions that enable them to move
toward net-zero carbon status. VivoPower has operations and personnel in Australia, Canada,
the Netherlands, the United Kingdom, the United States, the Philippines, and the United Arab
Emirates.
Nasdaq: VVPR
Contents
The Reports
Highlights
Chairman and Chief Executive’s Review
Strategic Report
Directors’ Report
Corporate Governance
Remuneration Report
Independent Auditor’s Report to the Members of VivoPower International PLC
Financial Statements and Notes
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flow
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Parent Company Financial Statements and Notes
Company Statement of Financial Position
Company Statement of Cash Flow
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Other Information
Company Information
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Highlights
VivoPower International PLC for the year ended 30 June 2023
Highlights
Results for the Year ended 30 June 2023
Total Revenues^ declined to $15.1 million primarily due to the disposal of the J.A. Martin business
and a reduction in the number of Aevitas Solar projects completed in the year. Continuing
Operations revenue declined 28% on a year-on-year constant AUD/USD FX basis.
Gross profit^ declined to a ($2.3) million loss reflecting the impact of severe one-off weather events
on the Edenvale project, which incurred a $3.9 million loss. Excluding one off cost overruns, Gross
Profit was $1.6 million.
Adjusted EBITDA^ declined to a ($9.9) million loss due to the reduction in gross profit and loss on
sale of J.A. Martin business only partially offset by reductions in General and Administrative
expenses. Adjusted EBITDA for continuing operations was ($5.7) million, a significantly narrower
loss from ($9.1) million in the prior fiscal year.
Statutory net after-tax loss^ of ($24.4) million for FY23 and loss per share (“EPS”) of ($0.99) per
share, as compared to a ($22.1) million loss and ($1.06) per share in FY22. Annual adjusted net
after-tax loss^^ of ($14.2) million and adjusted EPS1 of ($0.58) per share narrowed from a ($19.1)
million loss and ($0.92) per share respectively for FY22.
Cash balance decreased from $1.3 million as of June 30, 2022 to $0.6 million as of June 30, 2023.
Post balance date the Company received an aggregate of $2.2 million of cash from earnout
proceeds from the J.A. Martin ex-solar sale, initial cash investment received from UAE private
investment office and loans from AWN Holdings.
Tembo increased order and commitment book by 160% from 5,000 kits to 13,000 kits (excluding
MOUs) during FY2023 and upscaled engineering team in the Netherlands, UK and Australia,
doubling cumulative direct EV experience to over 100 years.
Strategic direct investment into Tembo secured reflecting a $120 million pre money valuation.
Post balance date, Tembo has entered into a definitive JV agreement with E-Francisco Motors
(Francisco) to electrify the iconic jeepneys of the Philippines. Francisco has a pipeline of 37,000
jeepneys for which Tembo will provide the EV drivetrains.
*All references to $ are references to USD unless otherwise noted.
^ Amounts include discontinued operations
^^ Amounts relate to continuing operations, adjusted for restructuring and other non-recurring items
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Highlights
VivoPower International PLC for the year ended 30 June 2023
Year Ended 30 June
(US dollars in thousands, except per share data)
2023
Revenue ^
Gross (loss)/profit ^
Operating loss ^
Adjusted EBITDA ^ (1)
Basic loss per share (dollars) ^
Adjusted loss per share (dollars)(2)
2022
(restated)
37,616
1,585
15,060
(2,262)
(15,521)
(15,125)
(9,942)
(0.99)
(0.58)
(8,956)
(1.06)
(0.92)
2021
40.411
6,327
(4,781)
(1,448)
(0.49)
(0.32)
1. Adjusted EBITDA is a non-IFRS financial measure. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and
amortisation, impairment of assets, impairment of goodwill, one-off non-recurring costs including restructuring expenses and non-cash
equity remuneration. We believe that Adjusted EBITDA and Adjusted earnings per share provides investors and other users of our financial
information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and
facilitates comparisons with our peer companies, many of which use similar non-IFRS or generally accepted accounting principles in the
United States (“GAAP”) financial measure to supplement their IFRS or GAAP results, as applicable.
2. Adjusted earnings per share (EPS) is a non-IFRS financial measure. We define Adjusted EPS as net earnings less restructuring and non-
recurring costs, divided by the weighted average number of shares on issue during the period.
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Chairman and Chief Executive’s Statement and Review
The financial year ended June 30, 2023 (“FY23”) was challenging. We delivered considerable progress on
Tembo operationally and commercially but at a group level we were adversely impacted by the negative
consequences of unexpected and prolonged adverse weather conditions and skills shortages in Australia,
where the majority of our revenue, gross profit and earnings are currently generated. Both have now abated
and we are looking at a much more promising Fiscal Year 2024 (“FY24”) with a resumption of growth expected
across all of our business units.
Key achievements during the financial year included:
•
•
•
•
•
•
•
Tembo’s first version of the EUV23 conversion kit was available since December (material upgrade on
previous generation 28 kWh battery platform) and tested extensively.
Tembo increased order and commitment book by 160% from 5,000 kits to 13,000 kits (excluding MOUs)
during FY23:
•
•
•
•
In November 2022, the Company signed a definitive agreement with ETC Mauritius in Kenya for
the distribution of 4,000 conversion kits, which marked Tembo's largest agreement to date and
its entry into the second hand light utility vehicle market.
In that same month, it signed a supply agreement with Evolution Group Holdings to convert their
fleet of Toyota Hilux ICE vehicles in Australia and New Zealand to battery-electric, making
Evolution the first traffic management company to commit to the conversion of its fleet to EVs.
In February, it signed a definitive agreement with Ulti-Mech in Australia to distribute 1,000
conversion kits, adding to its geographic coverage the important Western Australia mining
region, a leading destination in the world for mining investment.
In June, it signed a definitive agreement with Fourche Maline, an engineering and technical
services company in Ghana, one of the largest mining countries in the world and the number one
gold mining country in Africa, for 2,500 conversion kits.
An MOU was signed with Al Taif, the UAE’s leading provider of maintenance, repair, and overhaul (MRO)
services for military equipment and a subsidiary of EDGE Group, with the agreement spanning
distribution of conversion kits, R&D, training in electric mobility and high voltage, local assembly in the
UAE.
Tembo upscaled its engineering team in the Netherlands, UK and Australia, doubling cumulative direct
EV experience to over 100 years.
Strategic direct investment into Tembo was secured reflecting a $120m pre-money valuation.
Kenshaw’s focus on higher quality revenue through contracted maintenance services delivered good
results with multiyear contracts entered into with key data centre, mining and mining services clients.
Newly acquired AS/NZS3800 (Electrical equipment for explosive atmospheres) certification opened
new line of business for Kenshaw with strong pipeline of work expected to materially impact FY24
results.
Post balance date, we were able to execute on the following:
•
Tembo entered into a definitive JV agreement with E-Francisco Motors (Francisco) to electrify the iconic
jeepneys of the Philippines. Francisco has a pipeline of 37,000 jeepneys for which Tembo will provide
the EV drivetrains.
• On the Caret front, we have signed a term sheet with Backbone Digital, contributing 2 of our Texas solar
projects (totalling 96.5MW-DC) at a valuation of US$7.7m.
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
As mentioned before and notwithstanding the above achievements, VivoPower’s revenue and profits
declined versus the prior financial year. Key financial results and metrics for the fiscal year ended 30 June
2023 were as follows:
•
•
•
•
Annual group revenue from continuing operations declined 33% year-on-year ("y-o-y") to $15.1 million,
primarily due to fewer solar projects being executed at Aevitas Solar, with ongoing skills shortages in
the Australian electrical and building & construction industry causing difficulties in resourcing projects
to meet demand, as well as a further decline in the Australian dollar versus the US dollar. Excluding the
effect of movements in the AUD/USD exchange rate, annual group revenue from continuing operations
declined by 28%.
Annual group gross loss from continuing operations decreased y-o-y to ($2.3) million from $0.3 million
gross profit in Fiscal Year 2022 ("FY22") due to unseasonal wet weather conditions in Australia (as a
result of the La Niña weather phenomenon) which delayed works. The loss recognized during the period
for the Edenvale solar farm in Aevitas Solar amounted to $3.9 million. Excluding this one-off loss, group
gross profit was $1.6 million.
Annual net after-tax loss from continuing operations of ($20.1) million and earnings per share ("EPS") of
($0.82) per share, improved from a ($21.4) million loss and ($1.03) per share for FY22. Annual adjusted
net after-tax loss of ($14.2) million and adjusted EPS of ($0.58) per share narrowed from a ($19.1) million
loss and ($0.92) per share respectively for FY22.
Annual underlying group adjusted EBITDA loss from continuing operations was ($5.7) million,
representing an improvement versus ($9.1) million EBITDA loss from continuing operations for FY22,
reflecting lean management modus operandi.
Notwithstanding the above, given the strong pipeline of contracted opportunities we have for both our
Electric Vehicle and Critical Power Services business units, we are confident of the medium to long term
outlook.
For the financial year ending 30 June 2024, we have set the following company objectives:
•
•
•
•
•
•
Deliver Tembo EV kits commitments on schedule and budget.
Continue R&D programme for Tembo and secure funding.
Expand Tembo addressable market & partnership base.
Grow Critical Power, expand capabilities & diversify customer base.
Grow SES business with new capabilities and partnerships.
Execute on corporate initiatives to enable sustainable growth.
On behalf of the rest of the Board, I would like to take this opportunity to thank all of our stakeholders for
their continued support and engagement. I would also like to thank colleagues at VivoPower for their
relentless commitment to execution excellence. As a company, the VivoPower team remains focused on
achieving its medium to long term strategic, financial and impact goals.
Kevin Chin
Chairman and Chief Executive Officer
27 November 2023
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Strategic Report
Principal Activities
VivoPower is an award-winning global sustainable energy solutions B Corporation company focused on
electric solutions for customised and ruggedised fleet applications, battery and microgrids, solar and critical
power technology and services. The Company’s core purpose is to provide its customers with turnkey
decarbonisation solutions that enable them to move toward net-zero carbon status. VivoPower has
operations and personnel in Australia, Canada, the Netherlands, the United Kingdom, the United States, the
Philippines, and the United Arab Emirates.
Management analyzes our business in five reportable segments: Critical Power Services, Electric Vehicles,
Sustainable Energy Solutions, Solar Development and Corporate Office.
Critical Power Services is represented by VivoPower’s wholly owned-subsidiary Aevitas. In turn,
Aevitas wholly owns Kenshaw Electrical Pty Limited (“Kenshaw”) and Kenshaw Solar Pty Ltd
(previously J.A. Martin) (“Aevitas Solar”), both of which operate in Australia with a focus on the
design, supply, installation and maintenance of critical power, control and distribution systems,
including for solar farms.
Electric Vehicles is represented by Tembo e-LV B.V. (“Tembo Netherlands”) and Tembo EV Australia
Pty Ltd (“Tembo Australia”), (in combination “Tembo”) a specialist battery-electric and off-road
vehicle company delivering electric vehicles (“EV”) for mining and other industrial customers
globally.
Sustainable Energy Solutions (“SES”) is the design, evaluation, sale and implementation of
renewable energy infrastructure to customers, both on a standalone basis and in support of Tembo
EVs.
Solar Development is represented by Caret and comprises seven active utility-scale solar projects
under development in the United States.
Corporate Office is the Company’s corporate functions, including costs to maintain the Nasdaq
public company listing, comply with applicable SEC reporting requirements, and related investor
relations and is located in the U.K.
See Note 4.2 to our consolidated financial statements included herein for a breakdown of our financial
results by reportable segment while our key performance indicators are reported within the highlights at
the start of this report.
Critical Power Services
VivoPower, by way of a holding entity known as Aevitas, which was established in 2013 and subsequently
acquired in December 2016, wholly owns two Australian subsidiaries: Kenshaw and Aevitas Solar. Aevitas is
a key player in the manufacture, distribution, installation and servicing of essential energy infrastructure
solutions. Its portfolio spans the design, procurement, installation, and upkeep of power and control
systems, including those catering to utility and industrial scale solar farms.
Aevitas’ reputation as reliable power consultants enables it to serve a diverse range of clients, spanning
governmental, commercial, and industrial sectors. From their headquarters located in Newcastle, within
New South Wales' Hunter Valley region, these businesses extend their operations across Australia's Eastern
seaboard with additional locations in Canberra and Sydney. Owing to their strategic positioning, they are
well-equipped to capitalize on the robust growth from public and private sector investments within the
infrastructure, renewable energy, mining, and data center industries.
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
The Hunter Valley region is Australia's foremost regional economy, larger than Tasmania, the Northern
Territory, and the Australian Capital Territory. With an estimated 322,000 jobs and a GDP valued at $28 billion,
the region has a diverse economic landscape and skilled workforce. Traditional strengths in mining and
advanced manufacturing, are being supplemented by rapidly expanding sectors such as defense, food and
agribusiness, and renewables.
The region holds a favorable position to reap the benefits from overarching trends influencing the Australian
economy. Factors such as an aging population and increased integration into the global economy present
significant opportunities for economic advancement and growth in the Hunter Valley.
The Critical Power Services businesses have several core competencies, encompassing a range of electrical
and mechanical services. In addition, the businesses are responsible for delivering electrical services and
infrastructure to support VivoPower’s EV and SES offerings, including on-site renewable generation, batteries
and microgrids, EV charging stations, and emergency backup power solutions.
Kenshaw Electrical Pty Limited
Established in 1981, Kenshaw is a specialist in the provision of essential electrical and mechanical power
services, with its headquarters situated in Newcastle, within Australia's Hunter Valley region.
Kenshaw operates out of three locations across New South Wales and the Australian Capital Territory, with
its head office in Newcastle and additional branches in Canberra and Sydney. The business’s longstanding
history of quality is attributed to its highly skilled personnel, whose abilities span a comprehensive array of
critical power generation solutions, products, and services. Their expertise covers the entire life cycle of
electric motors, power generators, and mechanical equipment.
Kenshaw holds ISO9001 (Quality Management), ISO45001 (Occupational Health and Safety) and the newly
acquired AS/NZS3800 (Electrical equipment for explosive atmospheres) certification as evidence of its
commitment to quality and safety. With a proactive and responsive approach, the business delivers
programmed and as-needed services to a dedicated clientele that exceeds 500 in number. This diverse client
base spans local, national, and multinational entities, incorporating sectors from data centers and health
infrastructure to mine operators and agriculture. Furthermore, it serves aged care facilities, transport
providers, and utility services. Offering both contract-based and ad-hoc services, Kenshaw has built a strong
reputation for reliable and timely service among its wide-ranging clientele.
Kenshaw’s core competencies include: generator design, turn-key sales and installation; generator servicing
and emergency breakdown services; customized motor modifications; wheel cartridge motor electric repair
and refurbishment; and industrial electrical services.
The data center sector remains an important market for Kenshaw. Propelled by the ongoing trend of digital
transformation, the rise and persistence of remote work, online education, and virtual entertainment amid
and subsequent to the COVID-19 pandemic, demand for Kenshaw's services has seen significant growth. This
surge is further amplified by the burgeoning influence, processing and storage needs of artificial intelligence.
VivoPower believes Kenshaw will continue to benefit from the growth in the data center market through its
long-term relationship with data center and facility management service providers. While Kenshaw has
traditionally been focused on new data center builds, this stage of the market is increasingly being
dominated by original equipment manufacturers (OEMs) such as Cummins and Penske, increasing
competition and making margins unattractive. As a consequence, Kenshaw has pivoted to focus more
heavily on data center maintenance services, both ad-hoc and scheduled. The nature of this revenue is of a
higher quality given it is at a higher margin, more predictable and in some cases, multiyear contracted.
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
The growing base of both Kenshaw and third party completed installation projects provides a fertile
environment for the business to provide the ongoing monitoring and maintenance of these critical
Uninterruptible Power Supply ("UPS") assets, through its Generator Service division. The Canberra and
Sydney branches, form an integral part of this offering by allowing for locally stored equipment and locally
available personnel with an aim for Kenshaw to become entrenched at its clients’ sites for the entire lifecycle
of these assets.
In addition to the data center sector, the infrastructure sector continues to be a growing contributor for
Kenshaw. In the 2022-23 budget season, a record $168 billion in general government expenditure was
allocated to infrastructure over the four years to FY2025-26. This is $4.5 billion higher than the 2021-22 budget
season. Of particular relevance to Kenshaw, the New South Wales state government allocated $58 billion to
infrastructure, an increase of $1.8 billion over the prior year, and equivalent to 17.9% of general government
expenditure.
A key part of the infrastructure sector and where Kenshaw has enjoyed good growth is the rail sector.
Australian railways activity across construction and maintenance rose to a record $8.5 billion in 2021-22, with
activity forecast to average $9.5 billion over the next five years as a swathe of large and predominantly
publicly funded projects ramp up across Australia. Railway construction work increased in real terms by 2.9%
to $7 billion in 2021-22, a record level of activity. This represents the sixth consecutive year of growth in rail
construction driven predominantly by publicly funded projects, which have increased by 287% since 2014-
15. Overall, $85 billion in rail civil construction and maintenance is forecast for the coming decade to 2031-
32, compared to $63 billion over the last decade. Over the next 15 years, $101 billion in rail construction work
is expected.
Kenshaw benefits from the continued increase in public sector spending on infrastructure, and in particular
rail projects, through the provision of custom critical power backup solutions and generator maintenance to
clients such as civil construction contractors, government agencies and government departments.
Kenshaw's traditional clientele also extends to entities operating within or servicing Australia's mining
sector—the nation's predominant industry as gauged by GDP contribution. Over the past year, the Australian
mining sector has maintained strong performance, fortifying Kenshaw's position in the industry.
Furthermore, with the mining sector's increasing commitment towards sustainability and acceleration
towards achieving net-zero objectives, mine site electrification, particularly with renewable energy, emerges
as a significant growth opportunity for both Kenshaw and VivoPower. Given Kenshaw's established track
record in the sector, it is optimally poised to capitalize on future expansion in the Australian mining industry,
particularly in its pursuit of decarbonization.
Revenue earned within Australia is comprised of the following activities:
(US dollars in thousands)
Generator sales and installation
Generator service and non-
destructive testing
Motor sales and overhaul
Total revenue
Year Ended 30 June
2023
2,159
2,372
6,474
11,005
2022
5,206
1,767
5,315
12,288
2021
11,479
1,761
5,169
18,409
There is no material seasonality which impacts Kenshaw, however in FY2023, the business continued to be
adversely impacted by supply chain challenges, with most electrical equipment manufactured outside of
Australia. The business has had to adapt to longer lead times from suppliers caused by the COVID-19 induced
disruption to supply chains and crisis in Ukraine. In addition, inflationary impact has seen an increase in cost
of goods sold, the majority of which has been passed on to clients.
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Relationships with its primary suppliers enables Kenshaw to sell and service their equipment as a dealer or
agent. The business is a primary supplier and service agent for Cummins, Deutz and CAT generators, and
WEG electric motors, and maintains long-term relationships with other equipment manufacturers such as
Siemens, Toshiba and Teco. This allows Kenshaw to offer a complete solution to its clients with flexibility of
product choice.
With almost 500 active customers for the year ended June 30, 2023, the business is not solely reliant on one
customer, nor is the business reliant on any one patent, license, material contract, or process. Further, there
are no government regulations which are material to the business, beyond those generally applicable to all
businesses within the same statutory regime.
VivoPower continues to believe that Kenshaw, through its experience, capability, and track record, is well
positioned competitively to benefit from the strong growth outlook for Australian data centers, aged and
health care infrastructure as well as the continued strength of the Australian mining sector, particularly as it
transitions towards decarbonization.
Aevitas Solar
Aligning with VivoPower's strategic vision to concentrate on its primary businesses - electrical vehicle,
renewable critical power, and sustainable energy solutions - the non-solar segment of J.A. Martin was
identified as non-essential. As a result, it was divested to ARA on July 1, 2022. Subsequently, the solar-focused
division of J.A. Martin has been rebranded as Aevitas Solar and is now overseen by the Kenshaw leadership
team.
Aevitas Solar remains committed to fulfilling existing contracts established prior to the divestiture, such as
those related to the Blue Grass and Edenvale Solar Farms. Concurrently, the company actively explores new
ventures in the solar sector as part of the Aevitas Solar expansion strategy. However, it maintains a prudent
approach, being keenly aware of the inherent risks tied to such projects.
Results of J.A. Martin's non-solar activities have been classified under discontinued operations. Included in
the net assets divested to ARA of the discontinued operation is a Newcastle-based facility, which specializes
in manufacturing industrial switchboards and motor control centers. Additionally, this facility oversees end-
to-end project installations, provides maintenance services, and offers both design and engineering
expertise. Complementing this is an office and workshop facility situated in the Hunter Valley, dedicated to
serving the mining and industrial sectors.
Despite its longstanding history and focus on the industrial, manufacturing, and mining sectors, Aevitas Solar
has, in the past four years, carved out a commendable reputation and standing within the Australian solar
market. In the recent fiscal year, Aevitas Solar marked significant milestones by finalizing the electrical
installations and services for both its ninth and tenth solar farms, the 200MWdc Blue Grass Solar Farm and
the 204MWdc Edenvale Solar Farm.
Revenue earned within Australia of continuing operations is comprised of the following activities:
(US dollars in thousands)
Electrical installation projects
Total revenue
Year Ended 30 June
2023
2,591
2,591
2022
8,671
8,671
2021
4,172
4,172
Aevitas Solar’s solar division continued to be materially affected by high levels of rainfall along the east coast
of Australia in the second half of 2022, continuing into 2023. Nationally-averaged rainfall was 26% above the
1961–1990 average at 587.8 mm, which made 2022 the ninth-wettest year on record for Australia. In eastern
Australia in particular, persistent rain saw significant flooding affecting large areas multiple times during the
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
year, including Aevitas Solar project locations. As a consequence, the occurrence of delays attributable to
adverse weather have risen, resulting in delayed project completions and higher costs due to the fixed price,
low margin nature, and disproportionate and unfavorable risk allocation contained within contracts in the
industry.
Given the structural nature of these risks and the likely ongoing effects of climate change, Aevitas Solar is
targeting opportunities with more favorable risk allocation and higher margins. These tend to be smaller,
industrial projects that are behind-the-meter but where Aevitas Solar can leverage its experience and skills,
without taking on burdensome contractual terms and working capital requirements.
Aevitas Solar selects its materials from an expansive network of both domestic and international suppliers.
The criteria for this selection hinge on competitive pricing, timely delivery, product efficacy, and established
business relations. These supplier relationships stand central to Aevitas Solar's ability to achieve its
commercial objectives and its capacity to satisfy customer demands in a competitive environment.
Given that a majority of electrical equipment is manufactured overseas, the company has adjusted to
extended supplier lead times. This is primarily a result of supply chain disruptions instigated by the COVID-
19 pandemic and, more recently, the conflict in Ukraine. Despite these adaptations, the challenges in the
supply chain have not been entirely alleviated and continue to present operational hurdles.
With the sale of the non-solar J.A. Martin operations, Aevitas Solar will need to diversify its customer-base in
order to reduce its reliance on its key solar partner, Grupo Gransolar, S.L. The business is not dependent on
any one patent, license, material contract, or process. Further, there are no government regulations which
are material to the business, beyond those generally applicable to all businesses within the same statutory
regime.
Electric Vehicles
Tembo e-LV B.V. ("Tembo"), with subsidiaries Tembo 4x4 e-LV B.V. and FD 4x4 Centre B.V. (“Tembo
Netherlands”), as well as Tembo Technologies Pty Ltd (“Tembo Australia”) are specialist battery-electric and
off-road vehicle companies that design and build electric battery conversion kits to replace internal
combustion engines (“ICE”) in light utility vehicle fleets. Tembo customers are located across the globe and
are mainly in the mining, infrastructure, government services, humanitarian, tourism, agriculture and utilities
sectors. At present, Tembo is focused on completing the testing of its new generation LandCruiser LC70 EUV
conversion kits ("EUV23") and preparing to commence production later in the year. It is anticipated that
Tembo will start shipping these new generation LandCruiser conversion kits late in the second half of
calendar year 2023.
With a secular trend of increasing Electric Vehicle ("EV") adoption globally by consumers and continuing
pressure from governments and investors for companies to implement concrete decarbonization measures,
VivoPower believes that Tembo is well placed to satisfy fleet owners' demand for its conversion kits, which
are aimed at sectors with stringent requirements on reliability and safety.
Order book pipeline, deliveries and key agreements
During FY2023, Tembo successfully negotiated several large distribution agreements with partners around
the globe. In August 2022, VivoPower entered into memorandum of understanding with a State-Owned
Enterprise for 1,000 conversion kits in Jordan, which aligns with Tembo’s strategy to expand its commercial
activities and operations in the Middle East, one of the largest market for LandCruisers in the world. In
November 2022, the Company signed a definitive agreement with ETC Mauritius in Kenya for the distribution
of 4,000 conversion kits, which marked Tembo’s largest agreement to date and its entry into the second-
hand light utility vehicle market. In that same month, it signed a supply agreement with Evolution Group
Holdings to convert their fleet of Toyota Hilux ICE vehicles in Australia and New Zealand to battery-electric,
making Evolution the first traffic management company to commit to the conversion of its fleet to EVs. In
February, it signed a definitive agreement with Ulti-Mech in Australia to distribute 1,000 conversion kits,
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Strategic Report
VivoPower International PLC for the year ended 30 June 2023
adding to its geographic coverage the important Western Australia mining region, a leading destination in
the world for mining investment. In March, it signed a memorandum of understanding with Petrosea, a key
supplier to the mining and oil & gas sectors in Indonesia, to distribute 2,000 conversion kits. In June, it signed
a definitive agreement with Fourche Maline, an engineering and technical services company in Ghana, one
of the largest mining countries in the world and the number one gold mining country in Africa, for 2,500
conversion kits.
Also in June, Tembo signed a memorandum of understanding with Al Taif to form a partnership spanning
distribution of Tembo EUV conversion kits, research & development, training in electric mobility and high
voltage, as well as local assembly operations in the UAE. AL TAIF is a subsidiary of the EDGE Group, one of
the world’s leading advanced technology groups, established to develop disruptive solutions for defence
and beyond. Its customers include defence and police organizations in the UAE, the Middle East and
Northern Africa ("MENA") region and extending to other regions.
With regard to orders, in January, Tembo hosted Acces, its distribution partner in Canada, to test drive the
newest version of Tembo's converted LandCruiser 70 Series pickup truck in Italy. Acces subsequently placed
an initial order for a large proportion of Tembo’s scheduled 2023 production, which are scheduled for
delivery in the final quarter of 2023. Customer deliveries of ruggedised electric vehicles were executed for
existing partners, including for GHH in South Africa and Jankel in the U.K in March.
Tembo continued to invest in marketing for its EUV23 kit, organizing drive days in the UAE and in Brisbane
to showcase its electric LandCruiser to potential customers and partners, which resulted in new business
opportunities actively pursued by Tembo's management. Tembo was also selected to showcase its
technology and know-how by large companies in the mining and utilities sectors, for example in the case of
the Future Forum organized by Endeavour Energy, the operator of the electrical distribution network for
Greater Western Sydney, the Blue Mountains, the Southern Highlands and the Illawarra region of New South
Wales.
Non EV operations in FD 4x4 for vehicle spec conversion including ruggedization of ICE vehicles comprised
primarily an order to ruggedize 15 vehicles from Boliden in Ireland, delivered in December 2022. The order
was not completely fulfilled due to the lack of availability of certain parts.
Post June 30 2023, Tembo signed a landmark joint venture agreement with Francisco Motors, the pioneering
manufacturer of jeepneys in the Philippines. Under the agreement, Tembo will develop and supply EUV
electrification kits for a new generation of electric jeepneys. One of the country’s cultural icons, jeepneys are
the most common utility vehicle in the Philippines and the main mode of public transportation, accounting
for just over 40% of public transportation in the country. There are more than 200,000 jeepneys on the road
in the Philippines, of which more than 90% are at least 15 years old and running on second-hand diesel
engines. Under the Public Utility Vehicle Modernization Program, the Philippine Government requires that
all jeepneys and other public utility vehicles with at least 15 years of service be replaced with Euro 4-
compliant or electric-powered vehicles. This creates a US$10bn+ addressable market for the replacement of
the old jeepneys. Francisco Motors and Tembo have already secured their first orders and have commenced
work to deliver on those orders. The agreement will also give Tembo access to low-cost assembly in the
Philippines.
Investment
In June, VivoPower announced a strategic direct equity investment into Tembo at a pre-money valuation of
$120 million. Tembo secured an initial investment commitment of $2.5 million from a private investment
office backed by a member of the ruling Al Maktoum family of Dubai. The investor, under the agreement
terms, retains the option to increase its cumulative investment in subsequent closings, up to $10 million.
This investment underscores Tembo's progress and commitment to the UAE and surrounding markets.
Page | 12
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Vehicle quality, reliability, certification and safety
In mid-December 2022, Tembo released the first version of its new generation EUV conversion kit fully
integrated into a vehicle, the EUV23. This vehicle was undergoing extensive testing and validation
throughout the second half of FY2023. Additional pilot vehicles in various configurations, i.e. 2-door and 4-
door plus left hand and right-hand were also being built and readied for testing in this period. The EUV23 has
a 250 newton-meter torque electric drive train, providing up to 200 kilometres of range and is managed by
Tembo’s purpose-built software control systems. In January, Tembo and Toyota Motor Corporation
Australia Limited concluded the Design Services Agreement with Toyota Australia for the electrified
LandCruiser 70 Series.
In planning for its next stage of growth, Tembo has implemented systems, procedures, and policies to
underpin a smooth and seamless execution from the time it engages with a prospect through to the on-going
support as required by customers as they replace ICE vehicles in their fleets. As part of this, industry-grade,
scalable, cloud-based software was implemented in various processes to ensure reliability and continuity of
service.
In the third quarter of FY2023, Tembo underwent an annual ISO recertification audit for its ISO9001 (Quality
Management System) and ISO14001 (Environmental Management System) certifications. Both audits were
successfully passed. Additionally, Tembo started two new ISO certification journeys: ISO45001 for
Occupational Health & Safety and ISO27001 for Information Security. These additional certifications will add
significantly to the overall safety and security of its staff as well as the data held on staff, customers and
suppliers. Tembo has also completed its internal assessment in support of its B Corp Certification
application and is continuing work on reducing its greenhouse gas (GHG) emissions, for example by
optimising its supply chain for proximity to assembly and packing facilities. Tembo expects to obtain its B
Corp Certification in the second half of FY2024 if B Lab's independent audit is successfully passed.
Tembo’s electric vehicles achieved a significant quality and reliability milestone with its longest-serving
electric LandCruiser, which crossed the 5-year mark of active service with an uninterrupted safety record at
an operating mine site owned by Boliden in the first quarter of calendar year 2023. Tembo believes this to be
the longest actively serving electrified light utility vehicle in the mining industry globally.
In preparation for the official production launch of its battery electric EUV23 conversion kits, Tembo
launched Tembo Academy which is aimed at ensuring that its partners and customers are adequately
trained on all aspects of onboarding an electric battery vehicle fleets, covering operation, maintenance as
well as Health & Safety. Tembo set up a cross-functional project team, combining members of its engineering
and safety teams and advisory council, in order to deliver carefully structured and practical course materials.
An introductory training course was held in Eindhoven in October 2022 with its global partner GHH, who sent
technical staff from India and Germany with positive feedback from course attendees.
Talent pool and hiring
Throughout FY2023, Tembo continued to hire despite retrenchments in other parts of the industry, taking
advantage of experienced talent available on the market. Tembo selectively recruited high-quality talent in
the Netherlands and the United Kingdom and invested in Engineering, Procurement, Quality and Testing. It
continued to be open to hiring experienced talent in its key markets.
Tembo assembled a team of EV and OEM industry leaders, several of them pioneers in their field, to advise
on various aspects of its scale-up journey. Their input has already proven tactically invaluable for Tembo and
will be leveraged tangibly in FY2024 for the production scale-up phase.
VivoPower appointed Eduardo Nebot as a new member of the VivoPower Advisory Council. Based in Sydney,
Eduardo is currently an Emeritus Professor at the University of Sydney and a consultant on autonomous
systems for various industries, including transport and mining automation. He is a pioneer in the research,
development, and deployment of autonomous systems and safety and has worked with both private
Page | 13
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
companies and government organizations in Australia and internationally. Another key recruitment was
Choon Lim as Senior Engineering Director. Having worked for Bosch, Tesla and Rivian, he has considerable
experience in developing safety critical control systems, self-driving cars and electric cars. In his most recent
role as a Senior Director he has been responsible for a significant portion of the firmware at Rivian. He led
teams for System Engineering, Software Functional Safety, System Architecture, Integration Testing and
Controls Algorithms for the domains of Propulsion, Chassis Controls, Suspension Controls, Body Controls
and Over The Air Updating.
Revenue earned within the Netherlands is comprised of the following activities:
(US dollars in thousands)
Conversion kits
Vehicle spec conversion
Accessories
Total revenue
Year Ended 30 June
2023
-
1,394
70
1,464
2022
789
301
400
1.490
2021
137
1,219
38
1,394
No EUV conversion kits were sold in FY2023, although orders were received (reflected in deferred revenue),
whilst the development programme testing continued, nevertheless, vehicle spec conversions for non EV
variants increased from $0.3 million in the prior year to $1.4 million in FY2023, primarily as a result of Boliden
orders.
Sustainable Energy Solutions (“SES”)
Augmenting its Electric Vehicle business, which deploys EUV conversion products and services to fleet
owners, VivoPower is also focused on an SES strategy with its core mission being to help corporate
customers achieve their decarbonization goals. The SES business delivers full-suite, holistic SES to industrial
customers and other large energy users and is comprised of four key elements:
●
●
●
●
Critical power “electric-retrofit” of customer’s sites to enable optimised EV battery charging,
encompassing charging stations, renewables, battery storage and microgrids;
EV and battery leasing;
EV battery reuse and recycling; and
Change management services
In Australia, the SES business draws on the experience and capabilities of VivoPower’s Australian Critical
Power Services businesses (Kenshaw Electrical and Aevitas Solar) to deliver solutions to customers directly,
whilst in other markets, it partners with experienced local critical power services and charging infrastructure
companies.
Since its establishment in FY2021, the SES business has signed several key agreements to complete its
offering. In December 2021, VivoPower executed a Memorandum of Understanding signed with Relectrify, a
leading supplier of battery energy storage systems utilizing second-life EV batteries, with the collaboration
extended to explore future redeployment of Tembo batteries. In August 2022 the Company invested in Green
Gravity Energy Pty Ltd, an Australian company specializing in energy storage solutions in former mining
locations. In May 2023, VivoPower signed a definitive partnership agreement for VivoPower to market and
distribute Vital EV Solutions (“Vital EV”) fleet charging solutions globally. Vital EV is a specialist U.K-
headquartered company, offering a comprehensive range of electric vehicle charging solutions for fleet
owners and is the official re-seller of Kempower charging stations and service solutions in the U.K and across
Africa. Kempower, headquartered in Finland, has high-speed EV fleet charging solutions including for off-
Page | 14
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
highway working environment applications. Under the Agreement, VivoPower will be able to offer to its
customers and partners a wide range of EV fleet charging products and services from Vital EV and Kempower
for an initial term of 3 years. These products include multi-voltage lightweight movable rapid chargers, hub-
and-spoke rapid and ultra-rapid charging systems, satellite dispensers as well as conventional station
chargers.
Given that the SES business segment was established in FY2021, it has generated minimal revenues to date.
VivoPower is actively working to originate new SES projects for both new and existing customers of the
VivoPower group of companies, with significant projects already proposed to major mining and utilities
companies. The impending release of Tembo's EUV23 conversion kits later in the 2023 calendar year
provides a strong impetus for customers to proceed with the electrification of their light vehicle fleet and, in
tandem, implement the correct charging infrastructure, which will require the whole suite of SES offerings
depending on customer site infrastructure readiness. The Company therefore expects significant growth
from this segment going forward.
Solar Development
Historic Solar Development Business
As a consequence of the Company’s strategic pivot to an SES strategy in FY2021, VivoPower no longer intends
to engage in solar project development activities in isolation, unless it is a component of a sustainable
energy solution for a corporate customer that is helping it to achieve decarbonization goals. This segment
has historically been characterized as the Solar Development segment and encompassed the Company’s
solar development activities in the U.S. and Australia. The Company no longer has solar development
activities in Australia following the sale of its interests in solar farm projects in the country in FY2021.
VivoPower’s historic strategy in relation to solar development has been to minimize capital intensity and
maximize return on invested capital by pursuing a business model predicated on developing and selling
projects prior to construction and continually recycling capital rather than owning assets. The stages of solar
development can be broadly characterized as: (i) early stage; (ii) mid-stage; (iii) advanced stage; (iv)
construction; and (v) operation. Our business model has been to work through the development process
from early stage through to advanced stage, and then sell those projects that have completed the advanced
stage of development, also known as “shovel-ready” projects, to investors who will finance construction and
ultimately own and operate the project.
Successful solar development requires an experienced team that can manage multiple work streams on a
parallel path, from initially identifying attractive locations, to land control, permitting, interconnection,
power marketing, and project sale to investors. Rather than build a substantial team internally to accomplish
all of these activities, our business model has been to joint venture on a non-exclusive basis with existing
experienced project development teams so that multiple projects can be advanced simultaneously and
allow us to focus on provision of capital, project management, and marketing and sale of projects. In
Australia we partnered with ITP Renewables (“ITP”), a global leader in renewable energy engineering,
strategy and construction, and energy sector analytics. In the U.S., we entered into a development joint
venture with ISS in April 2017 and in June 2021, VivoPower announced that it had secured full ownership of
the remaining 50% of the equity interest in the portfolio from ISS for a nominal consideration of $1.
United States Solar Development
Vivopower's focus for its solar business remains to monetise its portfolio of US solar projects, with the aim of
using the funds generated to advance the Company's SES strategy.
In July 2021 VivoPower announced that it had gained full ownership of the equity interest in the solar
portfolio which was previously owned by an affiliate of ISS. Shortly thereafter, the Company effected the
name change of the subsidiary from Innovative Solar Ventures I, LLC to Caret LLC.
Page | 15
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
The Company’s portfolio of U.S. solar projects is held by its wholly owned subsidiary, Caret. Caret owns a
solar project portfolio comprising 38 projects in total, of which 7 projects totalling 365 MW-DC are being
actively developed, and a further 31 projects totalling approximately 1,479 MW-DC, have either been
previously discontinued or are not currently being developed.
The actively developed projects are dispersed throughout Texas and are strategically situated in regions with
minimal solar power penetration. Each of these projects has reached an advanced phase of development,
with substantial interconnection studies and environmental evaluations completed, and the required land
secured for a duration of up to 40 years. Despite the strides made in executing our Power-to-X strategy and
the passing of the Inflation Reduction Act in August 2022, which heightened investor confidence in the US
solar power sector, all these projects are still carried at cost.
The Company is assessing the viability of Power-to-X development possibilities with both active and
discontinued projects collaborating with data infrastructure developers who intend to place their data
centres in proximity to solar farms integrated “behind-the-meter”. Solar energy's power generation pattern
aligns with ERCOT's spot electricity cost curve, which allows operators at the load site to curb peak hour rate
surges.
The company envisages that any income generated from the monetization of its US solar projects, inclusive
of those related to Power-to-X developments, will be channelled to bolster its primary SES strategy.
Page | 16
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
The Company does not intend to acquire any additional utility-scale solar projects in the United States at
this time and is focused on maximizing value from its current portfolio of projects.
JOBS Act
Based on the market capitalisation of the Company as at June 30, 2023, the Company meets the requirement
for being a smaller reporting company and non-accelerated filer and is therefore exempt from an auditor
attestation of internal control under SOX 404(b).
In previous reporting periods, the Company met the requirements under the JOBS Act as an “emerging
growth company” to (i) not provide an auditor’s attestation report on its system of internal controls over
financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation
disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall
Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the
PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional
information about the audit and the financial statements (auditor discussion and analysis), or (iv) disclose
certain executive compensation-related items such as the correlation between executive compensation and
performance and comparisons of our chief executive officer’s compensation to median employee
compensation.
Financial Results
Year Ended 30 June
2023
2022 (restated)
(US dollars in thousands) Continuing Discontinued
Revenue from contracts
with customers
15,060
-
Total Continuing Discontinued
Total
15,060
22,448
15,168
37,616
Costs of sales
(13,472)
-
(13,472)
(20,308)
(13,842)
(34,150)
Cost of sales – non-recurring
events
(3,850)
-
(3,850)
(1,881)
-
(1,881)
Gross profit
(2,262)
-
(2,262)
259
1,326
1,585
General and administrative
expenses
Other Gains/(losses)
Other income
Depreciation of property
and equipment
Amortisation of intangible
assets
(7,620)
-
(7,620)
(13,811)
(1,485)
(15,296)
30
119
(4,207)
(4,177)
(13)
-
-
119
662
324
(13)
986
(750)
-
(750)
(770)
(445)
(1,215)
(831)
-
(831)
(850)
(322)
(1,172)
Operating loss
(11,314)
(4,207)
(15,521)
(14,523)
(602) (15,125)
Restructuring and other
non-recurring costs
Finance income
Finance expense
(2,084)
-
(2,084)
(443)
-
(443)
1,156
-
1,156
173
2
175
(7,366)
-
(7,366)
(8,604)
(174)
(8,778)
Loss before income tax
(19,608)
(4,207)
(23,815)
(23,397)
(774) (24,171)
Income tax
Loss for the year
Adjusted EBITDA
(540)
-
(540)
1,968
149
2,117
(20,148)
(4,207)
(24,355)
(21,429)
(625) (22,054)
(5,735)
(4,207)
(9,942)
(9,122)
166
(8,956)
Page | 17
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Management analyzes our business in five reportable segments: Critical Power Services, Electric Vehicles,
Sustainable Energy Solutions, Solar Development, and Corporate Office.
During the year ended June 30, 2023, the Group (including discontinued operations) generated total revenue
of $15.1 million, gross loss of $2.3 million, operating loss of $15.3 million and a net loss of $22.4 million. Of
these amounts, continuing operations of the Group generated revenue of $15.1 million, gross loss of $2.3
million, operating loss of $11.1 million and a net loss of $18.1 million. For the year ended June 30, 2022, the
Group (including discontinued operations) generated total revenue of $37.6 million, gross profit of $1.6
million, operating loss of $15.1 million and a net loss of $22.1 million. Of these amounts, continuing
operations of the Group generated revenue of $22.4 million, gross profit of $0.3 million, operating loss of
$14.5 million and a net loss of $21.4 million, including $0.5 million prior year adjustments relating to timing
on the recognition of general and administration expenses from 2023 to 2022.
Adjusted EBITDA (including discontinued operations) for the year ended June 30, 2023 was a loss of $9.9
million, compared to a loss of $9.0 million for the previous year. Adjusted EBITDA for continuing operations
was a loss of $5.7 million, compared to a loss of $9.1 million for the previous year, restated for $0.5 million of
general and administration expenses from 2023 to 2022. Adjusted EBITDA is a non-IFRS financial measure.
We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, impairment of
assets, impairment of goodwill, other finance income and expenses, one-off non-recurring costs including
restructuring expenses and non-cash equity remuneration.
The results for the year ended June 30, 2023 reflect a reduction in the number of Aevitas Solar projects
completed in the year and the impact of severe one-off weather events on the Edenvale project, which
incurred a $3.9 million loss.
Revenue in Critical Power Services (excluding discontinued operations) declined by $7.4 million to $13.6
million in the year, impacted by $6 million from a reduction in the number of solar projects undertaken by
Aevitas Solar. Kenshaw, which expanded into an additional facility in Newcastle, New South Wales due to
increasing demand, saw revenues flat compared to the previous year on a constant AUD to USD exchange
rate, with an increase in higher margin sales in generator service and motor sales and overhaul, offset by a
reduction in generator sales and installation due to competitive market conditions and constrained supply
chain. Electric Vehicles contributed $1.5 million revenue in the year, predominantly from non-EV
ruggedization conversions, whilst EV activity is focused entirely on product development. There was no
revenue contribution from Solar Development or Sustainable Energy Solutions in the year ended June 30,
2023 (year ended June 30, 2022: nil).
Gross profit (including discontinued operations) decreased by $3.8 million to a loss of $2.3 million, although
on a continuing basis excluding J.A. Martin ex-Solar operations, gross profit decreased by $2.5 million to a
loss of $2.3 million. In percentage terms, gross margin from continuing operations fell from 1% to (14%),
largely driven by one-off extreme weather events impact on Aevitas Solar projects in FY2023, having a more
significant impact than COVID-19 lockdowns and impact on supply chain in the prior year. Gross loss in
FY2023 includes $3.9 million specific costs of non-recurring extreme weather events on Edenvale project for
Aevitas Solar. In the prior year, $1.9 million of non-recurring costs on the Blue Grass project were also
incurred in Aevitas Solar, due to state border closures during the project execution phase. Excluding these
non-recurring costs, gross margin for continuing operations increased from 9.5% in the prior year, to 10.5%
in FY2023, reflecting increased focus on high margin service revenues in Kenshaw. Electric Vehicles
contributed nil gross profit (prior year: nil) while Solar Development contributed nil (prior year: nil).
The gain on Solar Development projects from continuing operations was net nil for the year ended June 30,
2023. Included within discontinued operations was a $4.2 million loss on disposal of J.A. Martin ex-solar
operations in July 2022. Compared to the book value of assets less liabilities held for sale as at June 30, 2023,
the loss results primarily from a reduction in the contingent consideration payable based on the earn out fee
calculated as a multiple of the post disposal earnings of J.A. Martin ex-solar in FY2023.
Page | 18
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Other gains/(losses) were nil for the year ended June 30, 2023. This compares to a nil gain in the year ended
June 30, 2022, comprising a $0.1 million write-off of costs incurred on uneconomic projects in Caret, offset
by $0.1 million gain on sale of tangible assets in Critical Power Systems.
The results for the year ended June 30, 2023, also reflect a restated $6.2 million decrease in general and
administrative costs related to continuing operations to $7.6 million. The decrease includes a $1.1 million
decrease in marketing expenses, a $1.7 million decrease in non-cash equity remuneration, and a $3.6 million
decrease in salaries and other overheads from reduction in Tembo and Aevitas executive management and
administrative team.
The results of operations for the year ended June 30, 2023, include $2.1 million restructuring and other non-
recurring costs primarily due a provision in respect of fiscal refunds on prior receivables, which the Company
is defending.
Net finance costs from continuing operations of $6.2 million for the year ended June 30, 2023, include $3.8
million interest on related party loans, $1.6 million net foreign exchange losses and $0.8 million combined
costs from dividends from Aevitas Preference Shares, interest on leases and interest on other debt.
As at June 30, 2023, the Group’s current assets were $10.3 million (as at June 30, 2022: $21.7 million restated;
June 30, 2021: $24.5 million restated), representing a decrease from June 30, 2022, mostly due to the disposal
of assets held for sale relating to the J.A. Martin ex-solar segment (as at June 30, 2022: $8.2 million) upon the
sale of the business to ARA in July 2022. Current assets were comprised of $0.6 million of cash and cash
equivalents (as at June 30, 2022: $1.3 million; June 30, 2021: $8.6 million), $0.6 million of restricted cash (as
at June 30, 2022: $1.2 million; June 30, 2021: $1.1 million;), and $7.0 million of trade and other receivables (as
at June 30, 2022: $9.1 million; June 30, 2021: $12.8 million), and $2.1m of inventory (as at June 30, 2022: $1.9
million; June 30, 2021: $2.0 million). 30 June 2022 and 30 June 2021 current assets were restated for a $0.5m
reclassification from Intangible Assets to Deposits.
Current liabilities were $18.9 million as at June 30, 2023 (as at June 30, 2022, $23.3 million restated; June 30,
2021: $13.4 million). The decrease from prior year reflects negotiation of shareholder loans and accrued
interest to non-current terms, and disposal of liabilities held for sale (as at June 30, 2022, $1.5 million)
following sale of J.A. Martin ex-solar to ARA in July 2022. 30 June 2022 current liabilities were restated for an
accrual of $0.5m expenses relating to 2022 but incurred in 2023.
Current asset-to-liability ratio as at June 30, 2023 was 0.54:1 (as at June 30, 2022 restated: 0.93:1; June 30,
2021 restated: 1.82:1).
As at June 30, 2023, the Company had net assets of $3.7 million (as at June 30, 2022 restated, $21.6 million;
June 30, 2021: $40.4 million), including intangible assets of $42.2 million (as at June 30, 2022 restated: $39.6
million; June 30, 2021 restated: $47 million). Property, plant and equipment remained at $3.7 million as at
June 30, 2023 (as at June 30, 2022, $3.7 million), mainly reflecting $0.6 million capital expenditure on plant
and equipment, an additional leased property in Kenshaw, offset by depreciation charges. 30 June 2022 and
30 June 2021 were restated for a $0.5m reclassification from Intangible Assets to Deposits.
Cash outflow for the year ended June 30, 2023, was $0.7 million, arising from cash outflows from operating
activities of $8.6 million and from cash used in investing activities of $1.9 million partially offset by cash inflow
from financing activities of $9.8 million. At June 30, 2023, the Company had cash reserves of $0.6 million
(June 30, 2022: $1.3 million) and debt of $32.4 million (June 30, 2022: $28.6 million), giving a net debt position
of $31.8 million (June 30, 2022: $27.3 million).
Net cash outflows from investing activities of $1.9 million in the current year comprised $1.0 million net
purchases of property, plant and equipment and $3.9 million investment in additional intangible assets
pertaining to the EUV23 development project in Tembo, offset by the $2.9 million proceeds from the J.A
Martin sale.
Page | 19
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Cash inflows from financing activities of $9.8 million in the year ended June 30, 2023 comprises $5.1 million
net proceeds from the Nasdaq shelf raise in July 2022 and $3.6 million bridging loans from related party AWN,
$1.3 million additional debtor financing, less $0.9 million repayments of related party and other borrowings
paid.
Page | 20
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Year Ended 30 June 2023 Compared to Year Ended 30 June 2022:
Year Ended 30 June 2023
(US dollars in thousands)
Revenue from contracts with customers
Costs of sales – other
Cost of sales – non-recurring events
Gross profit
General and administrative expenses
Other gains/(losses)
Other income
Depreciation and amortization
Operating profit/(loss)
Restructuring and other non-recurring
costs
Finance expense - net
Profit/(loss) before income tax
Income tax
Loss for the year
Critical
Power
Services
13,596
(11,900)
(3,850)
(2,154)
(1,390)
-
50
(895)
(4,389)
(1)
(6,841)
(11,231)
(619)
(11,850)
Continuing operations
Discontinued
operations
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
Continuing
Critical
Power
Services
-
-
-
-
(297)
-
69
-
1,464
(1,572)
-
(108)
(1,005)
-
-
(673)
-
-
-
-
-
-
-
-
(367)
(4,561)
30
-
(3)
-
-
15,060
(13,472)
(3,850)
(2,262)
(7,620)
30
119
(10)
(1,581)
Total
15,060
(13,472)
(3,850)
(2,262)
(7,620)
-
-
-
-
-
(4,207)
(4,177)
-
-
119
(1,581)
-
-
(2,084)
(6,210)
(228)
(1,786)
(340)
(4,571)
(11,314)
(4,207)
(15,521)
-
(214)
-
(1,869)
(2,084)
(34)
936
(262)
(1,064)
-
(40)
(262)
(1,104)
(50)
(390)
119
(271)
(221)
(6,210)
(6,661)
(19,608)
(4,207)
(23,815)
-
(540)
-
(540)
(6,661)
(20,148)
(4,207)
(24,355)
Page | 21
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Continuing operations
Discontinued
operations
Year Ended 30 June 2022 (restated)
(US dollars in thousands)
Revenue from contracts with customers
Costs of sales - other
Cost of sales – COVID-19 disruption
Gross profit
General and administrative expenses
Other gains/(losses)
Other income
Depreciation and amortization
Operating profit/(loss)
Restructuring and other non-recurring
costs
Finance expense – net
Profit/(loss) before income tax
Income tax
Loss for the year
Critical
Power
Services
20,958
(18,804)
(1,881)
273
(1,568)
103
662
(1,165)
(1,695)
45
(7,470)
(9,120)
1,349
(7,771)
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
Continuing
-
-
-
-
(80)
(139)
-
-
1,490
(1,504)
-
(14)
(2,901)
-
-
(443)
-
-
-
-
-
-
-
-
22,448
(20,308)
(1,881)
259
(1,660)
(7,602)
(13,811)
23
-
(3)
-
-
(9)
(13)
662
(1,620)
(219)
(3,358)
(1,640)
(7,611)
(14,523)
-
-
(429)
(974)
-
23
(59)
(10)
(443)
(8,431)
(219)
(4,761)
(1,617)
(7,680)
(23,397)
-
575
192
(148)
1,968
(219)
(4,186)
(1,425)
(7,828)
(21,429)
Critical
Power
Services
Total
15,168
37,616
(13,842)
(34,150)
-
(1,881)
1,326
1,585
(1,485)
(15,296)
-
324
(13)
986
(767)
(2,387)
(602)
(15,125)
-
(443)
(172)
(8,603)
(774)
(24,171)
149
2,117
(625)
(22,054)
Page | 22
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Principal Risks and Uncertainties
VivoPower is exposed to a number of risks and uncertainties which could have a material impact on the
Group’s long-term performance and could cause actual results to differ materially from historical and
expected results.
Ability to secure capital at attractive rates and terms
Our operations and our future plans for expansion are capital intensive requiring significant investment in
operational expenditures and capital expenditures to realize the growth potential of our electric vehicle,
critical power services, sustainable energy solutions and solar development businesses. In addition, we are
subject to substantial and ongoing administrative and related expenses required to operate and grow a
public company. Together these items impose substantial requirements on our cash flow and the specific
timing of cash inflows and outflows may fluctuate substantially from period to period. As a result, we expect
to require some combination of additional financing options in order to execute our strategy and meet the
operating cash flow requirements necessary to operate and grow our business. We may need or want to
raise additional funds through the issuance of equity, equity-related or debt securities or through obtaining
credit from financial institutions to fund, together with our principal sources of liquidity, the costs of
developing and manufacturing our current or future products, to pay any significant unplanned or
accelerated expenses or for new significant strategic investments, or to refinance our significant
consolidated indebtedness, even if not required to do so by the terms of such indebtedness. We may not be
able to obtain the additional or requisite funding on favourable terms when required, or at all, in order to
execute our strategic development plans or to meet our cash flow needs. Our inability to obtain funding or
engage in strategic transactions could have a material adverse effect on our business, our strategic
development plan for future growth, our financial condition, and our results of operations.
Ability to maintain sufficient liquidity to sustain our operations and continue as a Going Concern
We experienced a loss of $24.3 million, $22.1 million and $8.0 million for the years ended June 30, 2023, 2022
and 2021, respectively. If we are unable to generate sufficient revenue from the operation of our businesses,
grow our electric vehicle sales, and generate sales of SES projects, or if we are unable to reduce our expenses
sufficiently, we may continue to experience substantial losses.
The accompanying consolidated financial statements are prepared on a going concern basis and do not
include any adjustments that result from uncertainty about our ability to continue as a going concern.
However, if losses continue, and if we are unable raise additional financing on sufficiently attractive terms or
generate cash through sales of solar projects or other material assets or other means, then we may not have
sufficient liquidity to sustain our operations and may not be able to continue as a going concern. Similarly,
the report of our independent registered public accounting firm on our consolidated financial statements
as of and for the year ended June 30, 2023 includes an explanatory paragraph indicating that a material
uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern. Our
consolidated financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
Market demand for our products and services
Our business and revenues depend on the demand for our products and services. The market demand for
electric vehicles, critical power services, sustainable energy solutions and solar development projects is
heavily influenced by a range of factors that include the governmental economic, fiscal, and political polices
at both the national and state levels in the U.S., Australia, Europe, the United Kingdom and the rest of the
world, as well as global economic and political factors affecting the cost, availability, and desirability of
renewable energy, other energy sources. Other external factors such as the COVID-19 pandemic and
geopolitical tension in Ukraine may also affect demand for our products and services.
Page | 23
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Competitiveness of our products and services
Our products and services need to be competitive in terms of price and quality with competition in each of
our markets. Tembo in particular operates in a market that is relatively new, rapidly evolving, characterized
by rapidly changing technologies, new competitors, evolving government regulation and industry
standards, frequent new vehicle announcements and changing consumer demands and behaviors. In order
to stay competitive and relevant, it needs to continuously innovate and invest in product development and
new technologies. Our critical power services businesses face pricing pressure in a competitive market and
must continually improve cost efficiencies.
Operational scale up of electric vehicle assembly and delivery capabilities
Tembo faces operational risks as a maker of battery-electric ruggedized and offroad vehicles embarking on
an exponential scale up of its assembly and delivery capabilities. Growth is dependent on securing
appropriate premises and equipment, achieving design and manufacturing process goals, achieving
compliance with safety regulations and standards, recruiting and retaining suitably qualified personnel,
overcoming any delays and, resolving any supply chain shortages, to be able to deliver the volume and
quality of products required to meet customer commitments.
Delivering electric vehicle products and services to customers requirements and regulatory standards
Following the acquisition of Tembo, we signed distribution agreements with a number of partners globally,
to sell Tembo EUV conversion kits. Meeting the technical specifications, quality and safety standards of our
customers and partners is a key driver of ensuring Tembo’s brand, reputation, revenue and future prospects.
Product failures in service could leave us exposed to future warranty claims. Failure to meet the required
regulations and standards in the markets we serve could require product recalls and fines and penalties.
Development and scale up of the SES solutions business
Whilst we have experience in developing, financing, building and operating solar power systems and
distributed generation solar systems, we have limited experience and track record in combining this
experience to then develop and offer a complete SES solution with microgrids, battery recycling and reuse
and are still in the process of building the capabilities in the team. Developing and/or acquiring these
capabilities is a key factor in expanding our SES solutions business.
Supply chain execution
Materials deliveries from suppliers are at risk of disruption due to external events and factors such as COVID-
19, semiconductor shortages and conflict in Ukraine. Overcoming challenging supply chain issues is a key
factor in our businesses being able to deliver goods and services to our customers in line with their
requirements and meet our revenue growth targets.
Inflation
The economic volatility attributable initially to COVID-19 and then to Russia’s invasion of Ukraine is part of
and contributing to a larger trend of rising inflation around the globe, which may have a significant adverse
effect on economic activity and our business.
Ability to secure capital at attractive rates and terms
Our businesses are capital intensive requiring significant investment in operational expenditure and capital
expenditure to realize the growth potential of our electric vehicle, critical power services, sustainable energy
solutions and solar development businesses. In addition, we are subject to significant and ongoing
administrative and related expenses required to operate and grow a public company. Together these items
impose substantial legal and financial compliance costs. As a result, we expect to require some combination
of additional financing options in order to execute our strategy and meet the operating cash flow
requirements necessary to operate and grow our business.
Page | 24
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Currency fluctuations
We conduct business in the U.S., Australia, United Arab Emirates, the Netherlands and the U.K. As a result,
we are exposed to risks associated with fluctuations in currency exchange rates, particularly between the
U.S. dollar, the British Pound, the Euro and the Australian dollar.
Ability to attract and retain talent
We are looking to rapidly hyperscale our business in the face of fierce competition for talent and short
timeframes. To achieve our operational goals, we need to attract high calibre talent quickly.
Employees
People are central to our business and the contribution of talented and motivated employees is vital to the
continued success of the Group. The Group has a policy of keeping employees informed of, and engaged in,
its business strategy through regular briefings and team meetings. Employee involvement at all levels is
encouraged.
It is a policy of the Group to recruit, develop and promote people on merit and to treat everyone equally
regardless of their race, ethnic origin or nationality, age, gender, sexual orientation, disability, religion or
belief.
The Group gives every consideration to applications for employment from disabled persons where the
requirements of the position may be adequately covered by the abilities of the applicant concerned. In the
event of members of staff becoming disabled, ways are examined to ensure that their employment with the
Group continues and that the appropriate training is arranged. It is the policy of the Group to ensure that the
training, career development and promotion of disabled employees should, as far as possible, be the same
as that of other employees.
The table shows the number of staff of each gender employed at the Company and their level of seniority.
Directors
Senior Manager
Employees
Total
Health and Safety
Female
Male
Total
1
4
11
16
4
9
69
82
5
13
80
98
The health and safety of the Group’s employees, customers, and visitors is of primary importance. The Group
is committed to creating and maintaining a safe and healthy working environment. Health and safety audits
and risk assessments, including fire risk assessments, are carried out regularly.
The Environment
The Group recognises the importance of environmental responsibility and believes that its direct activities
have a positive impact on the environment as the Company facilitates greater use of renewable energy. In
addition, lightly damaged solar panels, that would have otherwise been bound for landfill, are donated to
charity.
Page | 25
Strategic Report
VivoPower International PLC for the year ended 30 June 2023
Communities
VivoPower has maintained an active program of community involvement in the locations we operate,
including support for local children’s sport teams and engagement with other worthwhile causes supported
by our employees. In addition, as noted above, the Company donates lightly damaged solar panels to a
charity that provides aid to the impoverished, supports local education initiatives, and assists with charitable
renewable energy projects.
B Corporation Certification
VivoPower became certified as a B Corporation in April 2018. VivoPower recertified as a B Corporation in 2022
and was recognized in the Best For The World program as being in the top 5% amongst B Corporations for
Governance. Consistent with this certification, the shareholders approved changes to the Articles of
Association of the Company at the annual general meeting on August 20, 2018, to include:
(i)
the purposes of the Company are to promote the success of the Company for the benefit of its members
as a whole and, through its business and operations, to have a material positive impact on society and
the environment, taken as a whole;
(ii)
in exercising the powers of the Company, a Director shall have regard to, among other matters,
stakeholder interests such as:
a.
b.
the likely consequences of any decision in the long term;
the interests of the Company's employees;
c.
the need to foster the Company's business relationships with suppliers, customers and others;
d.
the impact of the Company's operations on the community and the environment;
e.
the desirability of the Company maintaining a reputation for high standards of business conduct;
and
f.
the need to act fairly as between members of the Company.
As a B Corporation, the Company is committed to continuously improve its B Corporation score and deliver
on the B Corporation triple bottom line of Planet, People and Profit.
The Directors consider the Company’s ongoing commitment to B Corporation certification and continual
improvement thereunder as the primary means by which the Directors have had regard to the matters set
out in section 172(1) of the Companies Act 2006 when performing their duty to act in the way most likely to
promote the success of the Company for the benefit of its members as a whole.
The Strategic Report comprising pages 7 to 24 was approved by the Board and signed on its behalf by:
Kevin Chin
Executive Chairman
27 November 2023
Page | 26
Directors’ Report
VivoPower International PLC for the year ended 30 June 2023
Directors’ Report
The Directors are pleased to present their report and the audited financial statements of VivoPower
International PLC (“the Company”) and its subsidiary undertakings (together “the Group”) for the year ended
30 June 2023. Subsidiary and associated undertakings are listed in Note 15 to the financial statements.
Directors
The following table sets forth the names, ages and positions of our directors and executive officers. Unless
otherwise indicated, the business address for all of our directors and executive officers is The Scalpel, 18th
Floor, 52 Lime Street, London EC3M 7AF, UK.
Name
Directors:
Kevin Chin (1)
Peter Jeavons (1)(2)(3)(4)
William Langdon (1)(2)(3)(4)
Michael Hui
Gemma Godfrey (1)(2)(3)(4)
Age Position
Appointed
50 Chairman
58 Non-Executive Director
62 Non-Executive Director
43 Non-Executive Director
39 Non-Executive Director
27 April 2016
16 June 2020
16 June 2020
22 January 2020
15 December 2020
Executive Officers:
Kevin Chin (1)(4)
(1)
(2)
(3)
(4)
50 Chief Executive Officer
25 March 2020
Member (or in the case of Mr. Chin, non-voting observer) of the Audit and Risk Committee.
Member of the Remuneration Committee.
Member of the Nomination Committee.
Member of the Sustainability Committee
The following sets forth biographical information regarding our directors and executive officers. There are
no family relationships between any director or executive officer and any other director or executive officer.
There are no other arrangements or understandings with major shareholders, customers, suppliers or
others, pursuant to which any person referred to above was selected as a director or member of senior
management, except that: Kevin Chin, our Chairman, beneficially owns 48.5% of VVPR at June 30, 2023,
through his holdings as the Chairman of AWN, which is a beneficial owner of 39.5% of VivoPower as of June
30, 2023 for which Mr. Chin has shared voting power.and individually is the beneficial owner of 9.0% of
VivoPower as of June 30, 2023.
Kevin Chin
Kevin Chin is the founder of Arowana, a B Corporation certified investment group with operating companies
across the U.K., U.S., Europe, Asia and Australia, as well as owning other unlisted companies and
investments. One of those operating companies is AWN, which is listed on the Australian Securities
Exchange. AWN is the largest shareholder in VivoPower, as well as owning other unlisted companies and
investments.
Over his 25-plus year career, Mr. Chin has accumulated extensive experience in “hands on” strategic and
operational management having served as CEO, CFO and COO of various public and private companies
across a range of industries, including solar energy, software, traffic management, education, funds
management and vocational education. He is the author of the business book, HyperTurnaround! which
chronicles the privatization, rapid turnaround and subsequent global scale up of a software company called
RuleBurst Haley culminating in a sale to Oracle. Mr. Chin regularly writes for Inc.com on topics such as
turnarounds and growing pains challenges. He also has significant international experience in private equity,
buyouts of public companies, mergers and acquisitions and capital raisings as well as funds management,
accounting, litigation support and valuations with prior roles at LFG, J.P. Morgan, PWC and Deloitte.
Page | 27
Directors’ Report
VivoPower International PLC for the year ended 30 June 2023
Mr. Chin holds a Bachelor of Commerce degree from the University of New South Wales where he was one of
the inaugural University Co-Op Scholars with the School of Banking and Finance. He is also a qualified
Chartered Accountant and a Fellow of FINSIA, where he was a curriculum writer and lecturer in the Master of
Applied Finance program. Mr. Chin divides his time between the UK, UAE and Australasia.
William Langdon
William Langdon has had a 25-plus year career in the software, technology and enterprise data sectors after
starting his career at Disney in finance and marketing. He served as CFO of venture-backed OmniTicket
Network and after served in a series of senior management roles at digital mapping leader NAVTEQ (acquired
by Nokia). After starting in European Sales, he became General Manager of the global Distribution division
and President of NAVTEQ’s first acquisition, a digital mapping company based in Seoul, South Korea. Since
that time, he has served in a series of senior management roles with venture-backed French technology start-
ups including Goldman Sachs backed Nuxeo and Intersec, backed by Highland Europe.
Mr. Langdon received his MBA from Yale University and is a member of the Board of Directors of Tech2Deal,
a private French company, and Singula Institute, a New York City based mental health non-profit
organization. He resides in Long Island outside of New York City, United States.
Mr. Langdon serves as Chairman of the Audit and Risk Committee of the Company.
Peter Jeavons
Peter Jeavons has over 30 years’ experience working in a number of executive-level international roles
predominantly focused on leading technology and enterprise software solutions across many industry
sectors. His career has been spent working for small start-ups, medium-sized and large corporate
businesses, helping to drive strong growth, turnarounds and with involvement from both sides in successful
merger and acquisition activities. He specializes in policy, regulatory and legislative compliance-based
solutions and has a strong interest in how technology can help to drive sustainability and save the planet.
Mr. Jeavons was part of the global leadership team of RuleBurst Haley, which was acquired by Oracle and
then successfully relaunched their regulatory compliance solution as a native SaaS platform internationally.
During his career he has also worked for companies including Infor, who are another large enterprise
software company and was responsible for the European business at Nuxeo, a Goldman Sachs backed, open
source, enterprise content management software provider. He recently completed an interim CEO role for a
next generation events management SaaS business.
He currently works as an advisor to several SaaS businesses and start-ups, specialising in innovative
technologies that make the world better, less complex, and more sustainable. Mr. Jeavons completed his
Non-Executive Director’s diploma with Pearson in 2013. He resides in the Cotswolds, United Kingdom.
Mr. Jeavons is the Senior Independent Director at Vivopower and Chairman of the Remuneration and
Sustainability Committees of the Company.
Michael Hui
Michael Hui brings a unique background to the Board given his dual Information Technology and Law
degrees and experiences. During his career, he has built significant expertise across a diverse range of sectors
in both an investment as well as an operational capacity.
Mr. Hui serves as Managing Director (Australasia) for VivoPower’s largest shareholder, AWN, and also the
broader Arowana group. In 2011, he joined Arowana as an Investment Director, and since then he has worked
across a range of Arowana’s operating businesses including education and asset management. Mr. Hui led
the formation and structuring of the Arowana Australasian Special Situations Fund (AASSF) and most
recently, the building of Arowana’s education business, EdventureCo. His primary focus at present is driving
corporate development (including mergers and acquisitions and technology-based transformation),
working alongside the leadership teams of Aevitas and EdventureCo. Previously, Michael was Co-founder
Page | 28
Directors’ Report
VivoPower International PLC for the year ended 30 June 2023
and CEO of an online-payments business, and spent more than 10 years as a lawyer practicing corporate and
commercial law. He resides in Brisbane, Australia.
Gemma Godfrey
Gemma Godfrey is a non-executive director and advisor with experience across financial services,
technology, media, public policy and sustainable energy. With a 20-year career, her track record of strategic
planning, innovation and consumer insight helps ambitious businesses achieve their goals.
Ms. Godfrey is a non-executive director for Saga plc, Oberon Investments, Kingswood Holdings and Eight
Capital Partners. She was the Founder and CEO of an FCA-authorized digital investing service, which was
acquired by FTSE 250 insurer JLT. She pioneered new technology and went on to launch a digital media
business for News U.K., part of News Corp.
A former boardroom adviser to Arnold Schwarzenegger on ‘The Apprentice,’ Ms. Godfrey is a business expert
on ITV and Sky News. She was previously Head of Investment Strategy at FTSE-AIM wealth manager, Brooks
Macdonald. She started her career at Goldman Sachs and GAM, with a background in quantum physics. She
resides in London, United Kingdom.
Ms. Godfrey serves as Chairman of the Nomination Committee of the Company.
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and Accounts for the Group and parent
company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent company financial statements for the
financial period. Under that law they have elected to prepare the Group financial statements in accordance
with UK-adopted international accounting standards and applicable law and have elected to prepare the
financial statements for Company under the same methodology.
Under company law the directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group and parent company and of their profit or
loss for that period. In preparing each of the Group and parent company financial statements, the directors
are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
state whether applicable UK-adopted international accounting standards have been followed, subject
to any material departures disclosed and explained in the financial statements; and,
• prepare the financial on the going concern basis unless it is inappropriate to presume that the Group
and parent company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s and parent company’s transactions and disclose with reasonable accuracy at any time
the financial position of the Group and parent company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group and parent company and to prevent and
detect fraud and other irregularities.
This annual report and financial statements together with the Notice of Annual General Meeting and other
information regarding the Group may be viewed on the Company’s website at www.vivopower.com.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK governing the preparation and dissemination of
the financial statements may differ from the legislation in other jurisdictions in which the Company operates,
including the U.S. and Australia.
Page | 29
Directors’ Report
VivoPower International PLC for the year ended 30 June 2023
The Directors consider the Company’s ongoing commitment to B Corp certification and continual
improvement thereunder, as discussed on page 21 of the Strategic Report, as the primary means by which
the Directors have had regard to the matters set out in section 172(1) of the Companies Act 2006 when
performing their duty to act in the way most likely to promote the success of the Company for the benefit of
its members as a whole.
Directors’ Insurance and Indemnities
The Directors have the benefit of the indemnity provisions contained in the Company’s Articles of Association
and the Company has maintained throughout the year directors’ and officers’ liability insurance for the
benefit of the Company, the Directors and its officers.
The Company has entered into qualifying third-party indemnity arrangements for the benefit of all its
Directors in a form and scope which comply with the requirements of the Companies Act 2006 and which
were in force throughout the year and remain in force.
Future Developments
A detailed description of the Group’s business operations, results for the year ended 30 June 2023, and likely
future developments are presented in detail in the Strategic Report.
Financial Instruments
The Group’s principal financial instruments are bank balances, cash and medium-term loans. The main
purpose of these financial instruments is to manage the Group’s funding and liquidity requirements. The
Group also has other financial instruments such as trade receivables and trade payables which arise directly
from its operations. The Board has overall responsibility for the establishment and oversight of the Group’s
risk management framework. Policy for managing risks is set by the Chief Executive Officer and is
implemented by the Group’s finance department. All risks are managed centrally with a tight control of all
financial matters. For additional information on the composition of financial instruments, management
objectives and policies, risk exposure and mitigation refer to Note 30 of the financial statements.
Going Concern
The financial statements have been prepared on a going concern basis.
As at June 30, 2023, the Company had unrestricted cash totalling $0.6 million, compared to $1.3 million as
at June 30, 2022 and $8.6 million as at June 30, 2021. It also has outstanding debt and borrowing totaling
$32.4 million, compared to $28.6 million as at June 30, 2022 and $23.1 million as at June 30, 2021. Most of
these borrowings do not fall due for repayment until 1 April 2025 and are thus classified under long-term
liabilities.
Over the next twelve months, the Company expects significant growth in revenues and continued EBITDA
generation in critical power systems, a material increase in revenue and costs in scaling up the Electric
Vehicles business as the operation scales series production of its EUV23 conversion kits to match the
demand from its signed partnerships. The Company will also be investing in further capitalized development
costs in electric vehicles in preparation for Tembo series production. In addition, it expects to fund selective
development of the U.S. solar portfolio to maximize future sales proceeds, as well as development of
microgrid, EV charging and battery energy storage capabilities, as part of the scaling up of the SES business
unit. The Company will also be investing in property, plant and equipment, particularly in Tembo.
This expected growth implies sizeable funding requirements over FY2024, which the Company is planning to
finance through significant equity capital raises, asset-backed financing, debtor financing, working capital
optimization with suppliers and customers, and tax relief on R&D expenditure, either at Group or subsidiary
levels depending on what is best suited to the Company’s growth needs and optimizing for cost of capital.
Page | 30
Directors’ Report
VivoPower International PLC for the year ended 30 June 2023
To ensure success of the business, the directors have reviewed additional plans to mitigate any cash flow
risk that may arise during the next twelve months. These include:
• Regular re-forecasting process and flexing of opex and capex cost growth according to liquidity needs;
• Phased approach to hiring of personnel to sustain growth of the Tembo business;
• Staging the timing of property, plant and equipment and software capex to match asset-backed
financing inflows;
• Obtain Research & Development grants in the U.K., Europe and Australia to help fund investment in
electric, solar and battery technologies;
• Careful project planning and commercial structuring of SES projects;
• Possible sale, spin off, or distribution in specie of Caret, LLC ("Caret"), formerly Innovative Solar Ventures
I, LLC ("ISV");
• Purchase order financing, debtor financing facilities;
• Staging the timing of equity raises to minimize dilution; and
• Renegotiation of terms on loans and supply chain.
Based on the foregoing expectations of funding needs, and actions prepared and presented by management
to the Board of Directors, the Directors consider that these actions can provide sufficient cash to support
business operations and meet funding requirements as they become due, despite financial, economic and
political uncertainty. If we continue to experience losses and we are not able to raise additional financing to
provide the funding to grow the revenue streams of the Company to become profit making, or generate cash
through sales of assets, we may not have sufficient liquidity to sustain our operations and to continue as a
going concern, accordingly there is a material uncertainty that may cause significant doubt about the going
concern nature of the Group. Our consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Legal Proceedings
On February 26, 2018, the Company’s former Chief Executive Officer, Phillip Comberg, filed a legal claim
alleging the Company committed a repudiatory breach of his service agreement in connection with the
termination of his employment on October 4, 2017. On April 9, 2018, the Company filed a defense and
counterclaim, denying that a repudiatory breach was committed by the Company and denying the other
claims asserted by Mr. Comberg, claiming that Mr. Comberg was terminated for cause. On November 26,
2018, the Company agreed to a settlement of the counterclaims against Mr. Comberg for an undisclosed
amount. After aborted attempts at settlement, the matter was heard in the U.K. High Court, with judgement
ruled in September 2020. The Company was successful in defending the majority of the claims, with a total
of £0.62 million ($0.90 million) of the claims being settled in favor of Mr. Comberg. However final costs and
interest awarded to him were $1.76 million. Of the remaining provision as at June 30, 2021 of $0.5 million
for unpaid costs, $0.4 million was spent in the year ended June 30, 2022, resulting in a $0.1 million release
of the remaining unutilized provision.
Additionally, on May 31, 2022 the William Q. Richards Estate (the “Plaintiff” or the “Estate”) filed a complaint
against VivoPower USA LLC, Caret, LLC (“Caret”), formerly Innovative Solar Ventures I, LLC (“ISV”), and
related entities (the "VivoPower Defendants") alleging the VivoPower Defendants improperly included land
owned by the Estate in the reinvestment zone of the tax abatement agreements executed on March 14,
2022 between Cottle County, Texas and the Company’s subsidiaries Innovative Solar 144, LLC and
Innovative Solar 145, LLC. The complaint sought to nullify and/or declare the tax abatement agreements
void. The Estate filed an amended complaint on August 18, 2022, further detailing their claims and
requesting unspecified damages. On September 16, 2022, the VivoPower Defendants filed a motion to
Page | 31
Directors’ Report
VivoPower International PLC for the year ended 30 June 2023
dismiss Plaintiff’s Amended Complaint, which the Court subsequently granted on January 23, 2023, stating
that the Plaintiff had failed “to establish that the amount in controversy had been met.” On February 20,
2023, the Estate filed a second amended complaint to argue that the amount in controversy was met.
Regina, widow of the late William Q. Richards, was added as a plaintiff in the second amended complaint.
On March 6, 2023, the VivoPower Defendants filed a new motion to dismiss the Plaintiffs’ second amended
complaint. On May 5, 2023, the Plaintiffs filed an instant opposition to the VivoPower Defendants’ motions
to dismiss. On May 19, 2023, the VivoPower Defendants submitted a reply supporting their motion to
dismiss requesting the dismissal of the Plaintiffs' claim. The Company does not expect the Plaintiff to be
successful in its complaint. Accordingly no provision has been recorded as at June 30, 2023 in relation to
this matter.
Donations
During the year ended 30 June 2023, the Group made no political donations nor other political expenditures.
Greenhouse Gas Emissions
The Company has taken exemption from reporting on Greenhouse Gas emissions on the basis it consumed
less than 40,000kWh during the period in the UK. For the Group, worldwide data is not reported within this
Annual Report for the year ended 30 June 2023 but it is something the group will consider to report going
forward.
Share Capital
As at 30 June 2023, there were 25,651,140 Ordinary Shares in issue. No shares were repurchased during the
year. Please refer to Note 26 to the consolidated financial statements for a reconciliation of movement
during the financial year.
There are no specific restrictions on the transfer of shares in the Company, which is governed by the Articles
of Association and prevailing legislation, nor is the Company aware of any agreements between holders of
securities that may result in restrictions on the transfer of shares or that may result in restrictions on voting
rights.
There are no persons holding securities carrying special rights regarding control of the Company, no special
rights attaching to shares under employee share schemes, no restrictions on voting rights, nor any significant
agreements that take effect, alter or terminate on change of control of the Company following a takeover,
with the exception of the conversion rights attached to the convertible preference shares and convertible
loan notes in Aevitas Group Limited as described in Note 26 to the consolidated financial statements.
Substantial Interests
The following table sets forth information with respect to beneficial ownership of our Ordinary Shares as of
August 1, 2023 by each person known to us to beneficially own 5% and more of our Ordinary Shares.
The beneficial ownership of VivoPower’s Ordinary Shares is determined based on 25,788,260 Ordinary Shares
issued and outstanding on August 31, 2023. Beneficial ownership is determined according to the rules of the
SEC, which generally provide that a person has beneficial ownership of a security if such person has or shares
the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right
to acquire such powers within 60 days.
Number of Shares
Percentage of Issued Capital
AWN Holdings Limited (1)
Armistice Capital Master Fund Ltd(2)
10,136,145
4,230,779
39.3%
14.1%
(1) According to a Schedule 13D filed January 31, 2017, on behalf of AWN (formerly Arowana International Limited), Arowana Australasian
Special Situations Fund 1 Pty Limited (“Arowana Fund Co”), Arowana Australasian VCMP 2, LP (“Arowana Fund GP”), Arowana Australasian
Special Situations Partnership 1, LP (“Arowana Fund”), Arowana Energy Holdings Pty Ltd. (“Arowana Energy”), AWN, as the controlling
shareholder of each of Arowana Fund Co, Arowana Fund GP, Arowana Fund and Arowana Energy, may be deemed to beneficially own
Page | 32
Directors’ Report
VivoPower International PLC for the year ended 30 June 2023
8,176,804 Ordinary Shares. This amount included 5,718,879 Ordinary Shares held directly by AWN, 488,435 Ordinary Shares directly held
by certain entities controlled by AWN, 1,027,203 Ordinary Shares held by Arowana Fund and 942,287 Ordinary Shares held by Arowana
Energy. The business address of these entities is c/o AWN Holdings Limited., at Level 11, 153 Walker Street, North Sydney, New South
Wales 2060, Australia.
On July 21, 2021, AWN was issued a further 1,959,339 restricted Ordinary Shares, pursuant to the contracted terms of conversion of Aevitas
convertible preferred shares and convertible notes. As at June 30, 2022, AWN held a 47.5% equity interest in the Company. As at June 30,
2023, AWN held a 39.5% equity interest in the Company, which was reduced to 39.3% following the vesting of Omnibus Incentive Plan
related shares in August 2023.
(2) Consists of 4,230,770 Ordinary Shares issuable upon the exercise of the Series A Warrants subject to certain beneficial ownership
limitations held by the selling shareholder. The Ordinary Shares upon exercise would be directly held by Armistice Capital Master Fund
Ltd., a Cayman Islands exempted company (the “Master Fund”), and may be deemed to be indirectly beneficially owned by:
(i) Armistice Capital, LLC (“Armistice Capital”), as the investment manager of the Master Fund; and (ii) Steven Boyd, as the Managing
Member of Armistice Capital. Armistice Capital and Steven Boyd disclaim beneficial ownership of the Ordinary Shares except to the
extent of their respective pecuniary interests therein. The address of Armistice Capital Master Fund Ltd. is c/o Armistice Capital, LLC, 510
Madison Avenue, 7th Floor, New York, NY 10022.
Dividends
The Company has never declared or paid any dividends on our Ordinary Shares, and we currently do not
plan to declare dividends on our Ordinary Shares in the foreseeable future. Any determination to pay
dividends to holders of our Ordinary Shares will be at the discretion of our board of directors and will depend
upon many factors, including our financial condition, results of operations, projections, liquidity, earnings,
legal requirements, restrictions in our debt arrangements and other factors that our board of directors deem
relevant.
Articles of Association
The Company’s Articles of Association may only be amended by special resolution at a general meeting of
shareholders.
Auditors
PKF Littlejohn LLP has indicated its willingness to continue as auditor. In accordance with s489 of the
Companies Act 2006, a resolution to re-appoint them as auditors for the ensuing year will be put to the
members at the forthcoming Annual General Meeting.
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are
each aware, there is no relevant audit information of which the Company’s auditors are unaware; and each
director has taken all the steps that he ought to have taken as a director to make himself aware of any
relevant audit information and to establish that the Company’s auditors are aware of that information. This
confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies
Act 2006.
The Directors’ Report comprising pages 27 to 33 was approved by the Board and signed on its behalf by:
Kevin Chin
Chairman
27 November 2023
Page | 33
Corporate Governance
VivoPower International PLC for the year ended 30 June 2023
Corporate Governance
The Company’s shares have been listed on NASDAQ since 29 December 2016. The Board is accountable to
the Company’s shareholders for good governance and this statement describes principles of corporate
governance that have been applied by the Company.
The Directors believe that good corporate governance, involving risk appraisal and management, prudent
decision-making, open communication and business efficiency, is important for the long-term benefit of the
stakeholders in the Group.
Board of Directors
The Board is collectively responsible for providing leadership of the Group within a framework of prudent
and effective controls and constructively challenges and helps to develop and communicate the Group’s
strategic aims.
The Board is comprised of the Chief Executive Officer and Chairman, and four non-executive directors. The
Board has determined that Peter Jeavons, Gemma Godfrey and William Langdon are independent in
accordance with the listing rules of Nasdaq. All directors are given regular access to the Company’s
operations and personnel as and when required. Their biographies on pages 23 to 25 illustrate their relevant
corporate and industry experience to bring judgement on issues of strategy, performance, resources and
standards of conduct which are vital to the success of the Group.
The Board considers the overall strategic direction, development and control of the Group and reviews
trading performance, investment opportunities and other matters of significance to the Group. Various
decisions require Board approval, including but not limited to the approval of the annual budget, larger
capital expenditure proposals, acquisitions and disposals. Board papers, which are distributed to all
directors in advance of each meeting, follow a set agenda although further subjects are added for discussion
as the need arises.
The Board is scheduled to meet normally no less than six times per year to enable the Board to discharge its
duties effectively and to consider those matters which specifically require Board review and decision. In
addition, meetings are also convened on an ad hoc basis when there is urgent or delegated business which
cannot wait until the next scheduled meeting.
The following table sets out the number of meetings of the Board, excluding ad hoc meetings, and its
committees during the year ended 30 June 2023 and the attendance of the members at those meetings
(attended/eligible to attend):
Board
Audit and Risk
Committee
Remuneration
Committee
Sustainability
Committee
Nominations
Committee
7/ 7
7/ 7
7/ 7
7/ 7
7/ 7
- / -
-/ -
4/ 4
4/ 4
4/ 4
3/ 3*
- / -
3/ 3
3/ 3
3/ 3
-/-
-/-
1/ 1
1/ 1
1/ 1
-/-
-/-
- / -
-/-
-/-
Kevin Chin
Michael Hui
Peter Jeavons
William Langdon
Gemma Godfrey
* attended as an observer
Page | 34
Corporate Governance
VivoPower International PLC for the year ended 30 June 2023
Audit and Risk Committee
The Audit and Risk Committee is comprised of William Langdon (who is Chair of the Audit and Risk
Committee), Gemma Godfrey and Peter Jeavons. All members have been determined by the Board to be
independent under the applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the
committee on 16 June 2020. Gemma Godfrey joined the committee on 01 July 2021.
The company was compliant with the Nasdaq’s audit committee requirements as set forth in Listing Rule
5605, which requires a minimum of three independent directors on the committee.
An Invitation is also extended to the auditors to attend meetings of the Audit and Risk Committee in order to
discuss issues relating to the audit and financial control of the Group. The auditors also have direct access,
should they so require, to the Audit and Risk Committee. The Audit and Risk Committee has responsibility
within the terms of reference for, among other things, the planning and review of the Group’s annual and
interim financial statements, the supervision of its auditors in the review of such financial statements and
the review and monitoring of their independence.
The Audit and Risk Committee focuses particularly on the Group’s compliance with legal requirements and
accounting standards, and on ensuring that effective systems for internal financial control are maintained.
Remuneration Committee
The Remuneration Committee is comprised of Peter Jeavons (Chair of the Remuneration Committee),
William Langdon and Gemma Godfrey, each of whom the Board has determined is independent under the
applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the committee on 16 June
2020, and Gemma Godfrey joined the committee on 01 July 2021.
Nominations Committee
The Nomination Committee of the board of directors is comprised of Gemma Godfrey (who is Chair of the
Nomination Committee), William Langdon, and Peter Jeavons, each of whom the Board has determined is
independent under the applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the
committee on 16 June 2020 and Gemma Godfrey joined the committee on 17 March 2022. Matthew Cahir
served on the committee from 16 June 2020 until his resignation on 17 March 2022.
Sustainability Committee
The Sustainability Committee was formed on 18 December 2020 and is comprised of Peter Jeavons (Chair of
the Sustainability Committee), William Langdon and Gemma Godfrey. The Sustainability Committee’s duties
include, but are not limited, to overseeing and monitoring of the Company’s Safety and Health policies, B
Corp certification, environmental policies, community and staff engagement, and corporate social
responsibility policies.
Internal Control
The Board oversees management’s activities in relation to the systems of internal control. Management has
responsibility for maintaining the Group’s system of internal control and for reviewing its effectiveness. The
system of internal control is designed to manage rather than eliminate the risk of failure to achieve the
Group’s strategic business objectives and can only provide reasonable assurance against material
misstatement or loss.
The key elements of the system of internal control are:
Control environment
There is sufficient segregation of duties and authorisation controls on approval of customer and supplier
contracts, recruitment of staff, approval of purchases and payment of suppliers.
Page | 35
Corporate Governance
VivoPower International PLC for the year ended 30 June 2023
Financial reporting
The senior management team has regular meetings to discuss all aspects of the business and review
financial performance against budget and provides a monthly summary report to the Board. The Group has
a sustainable system of financial reporting and forecasting covering profits, assets, liabilities, cash flow and
capital expenditure. The systems include regular monitoring of cash, monthly reporting of financial results.
Budgets and business plans are prepared annually and reviewed by the Board.
Capital investment
For any significant investment, a detailed proposal is first approved by the Company’s Investment
Committee, then by the board of directors of VivoPower International Services Limited (“Services Board”).
Any major investment is always approved by the Board or the Services Board. The Company’s Investment
Committee process contains five stages to ensure the Company has an explicit understanding of a portfolio’s
purpose, objective and a clear definition of success in determining whether the portfolio achieves that
purpose and meets that objective. The five stages include:
(i) Completion of a Lead Qualification Form to provide a project overview, indicative returns, capital
required, risks, timeline and areas to consider in future diligence;
(ii) First Investment Committee Meeting (‘IC1’) to provide a comprehensive summary of the project
including detailed legal, technical, financial information and risks;
(iii) Second Investment Committee Meeting (‘IC2’) which includes everything in IC1 plus summary of
transaction documentation and update on diligence;
(iv) Board approval to fund the project, and formally recommend that project executes transaction
documentation; and
(v) Board approval to execute the transaction documentation.
Communications with Shareholders
The Company encourages two-way communications with shareholders. The Board endeavours to maintain
good relationships with its institutional shareholders by holding regular meetings after results are published
with further dialogue as requested.
The Company’s Annual General Meeting will be held on 28 December 2023. The notice of the meeting is sent
to shareholders at least 21 days before the meeting.
This annual report and financial statements together with the Notice of Annual General Meeting and other
information regarding the Group may be viewed on the Company’s website at www.vivopower.com.
Page | 36
Directors’ Remuneration Report
VivoPower International PLC for the year ended 30 June 2023
Remuneration Report
This report has been prepared in accordance with the provisions of the UK Companies Act 2006 and
Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
(as amended in 2013).
Statement by the Chairman of the Remuneration Committee
On behalf of the Remuneration Committee (the “Committee”), I am pleased to present the Remuneration
Report for the year ended 30 June 2023.
The Remuneration Committee is comprised of Peter Jeavons (Chair of the Remuneration and Sustainability
Committee), William Langdon and Gemma Godfrey, each of whom the Board has determined is independent
under the applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the committee
on 16 June 2020. Gemma Godfrey joined the committee on 01 July 2021.
The Committee has a written charter, a form of which is available free of charge on VivoPower’s website at
www.vivopower.com. The Committee’s duties, which are specified in our Remuneration Committee Charter,
include, but are not limited to:
•
•
setting the remuneration policy for all executive directors and executive officers, including pension rights
and any compensation payments.
reviewing the appropriateness and relevance of the remuneration policy.
• determining total individual compensation packages.
•
reviewing and designing share incentive and share option plans, determining awards thereunder and
administering such plans.
• approving design of and targets for performance-related pay schemes.
• determining pension arrangements.
• appointing compensation consultants.
• approving contractual appointment terms for directors and senior executives; and
•
related duties.
The Company’s objective with respect to remuneration of directors is to attract and retain high-calibre
individuals who are able to bring an appropriately senior level of experience and judgement to bear on issues
of strategy, performance, resources and standard of conduct.
No changes are proposed to the Directors Remuneration Policy for Executive and Non-Executive Directors
as approved by shareholders on 5 September 2017.
The Company's Annual Report on Remuneration, disclosing the compensation paid to directors in respect
of the year ended 30 June 2023 is provided below.
Annual Report on Remuneration (audited)
Executive Directors
Kevin Chin was appointed as Executive Chairman and Chief Executive Officer of the Company with effect
from 25 March 2020. Prior to Mr Chin’s appointment, the Company had no Executive Directors since Carl
Weatherley-White, former Chief Executive Officer, resigned as a Director on 28 December 2017.
Page | 37
Directors’ Remuneration Report
VivoPower International PLC for the year ended 30 June 2023
Directors
The amount earned by each Director for the years ended 30 June 2023, 2022 and 2021 is set out in the table
below:
Directors
Kevin Chin
(Chairman)
Peter Jeavons
William Langdon
Michael Hui
Gemma Godfrey
Matthew Cahir
Salary
and
fees
Bonus
and
LTIP
Pension
and other
Benefits
Long
Term
Incentive
£68,000
£60,456
£54,245
£41,408
£57,558
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
£60,456
£54,245
£6,096
£47,504
-
-
£57,558
-
2023
Total
2022
Total
2021
Total
£68,000
£68,000
£104,885
£52,127
£46,461
£44,360
£43,817
£28,962
£82,289
£82,289
£89,997
£57,003
£82,289
Mr. Chin is paid a salary of £68,000 ($81,819) per annum as Chairman during the year, payable to Arowana
Partners Group Pty Ltd, while he also received remuneration in his capacity as CEO which is further disclosed
on page 40.
Mr. Jeavons is paid fees of $50,000 per annum during the year. Mr. Jeavons also received an annual fee of
$7,500 as chair of the sustainability committee, $7,500 annual fee as chair of the remuneration committee,
$4,000 annual fee as member of the audit and risk committee and $4,000 annual fee as member of the
nomination committee. Mr. Jeavons elected to receive 100% of his fees for the year in cash. $12,777
remaining accrued and payable as at June 30, 2023.
Mr. Langdon is paid fees of $50,000 per annum during the year. Mr. Langdon also received an annual fee of
$7,500 as chair of the audit and risk committee, $4,000 annual fee as member of the remuneration
committee, $4,000 annual fee as member of the nomination committee and $4,000 annual fee as member
of the sustainability committee. Mr. Langdon elected to receive 100% of his fees in cash. $16,500 remaining
accrued and payable as at June 30, 2023.
Mr. Hui is paid fees of $50,000 per annum during the year. Mr. Hui elected to receive 100% of his fees in cash.
$25,000 remaining accrued and payable as at June 30, 2023. Mr. Hui also receives equity-based remuneration
in relation to his involvement in management of Critical Power Services segment, and the hyperturnaround
and hyperscaling program. Of the 17,500 ($13,125) annual retention Restricted Stock Units ("RSUs") granted
on April 1, 2020, vesting annually from June 2021 to June 2026, 3,500 RSUs ($2,625) vested in the current year.
Of the 52,500 ($39,375) performance RSUs vesting quarterly from September 2020 to June 2023, dependent
on meeting quarterly performance goals, 6,314 RSUs ($4,736) vested in the current year. A further 20,000
annual retention RSUs ($5,200) were granted to Mr. Hui on January 11, 2023, vesting annually from December
2023 to December 2025.
Mrs. Godfrey is paid fees of $50,000 per annum during the year. Mrs. Godfrey also received an annual fee of
$7,500 as chair of the nomination committee, $4,000 annual fee as member of the audit and risk committee,
$4,000 as member of the remuneration committee and $4,000 annual fee as member of the sustainability
committee. Mrs. Godfrey elected to receive 100% of her fees in cash. $9,217 remaining accrued and payable
as at June 30, 2023.
There are no pension benefits available to Directors nor any additional benefit if a Director were to retire
early.
No discretion was exercised in the award of Directors’ remuneration.
Page | 38
Directors’ Remuneration Report
VivoPower International PLC for the year ended 30 June 2023
No payments were made to any past Director during the period nor in connection with a Director’s loss of
office during the period.
There are no agreements with the Company and its Directors or employees for compensation for loss of
office or employment that occurs because of a takeover bid.
Directors’ Interests
The Directors’ beneficial interest in the 25,788,260 issued Ordinary Shares of the Company as at 31 August
2023 are detailed below.
Number of
Shares
Beneficially
Owned
Unvested
scheme
interests (not
subject to
performance
measures)
12,557,349(3)
54,880
43,489
27,000
38,936
37,926
5,934
20,000
20,000
20,000
12,683,634
141,880
Total of all share
interests and
outstanding
scheme
interests, at 31
August 2023
Vested but
unexercised
scheme interests
-
-
-
-
-
-
12,612,229
48.7%
70,489
58,936
57,926
25,934
<1%
<1%
<1%
<1%
12,825,514
49.2%
Kevin Chin (2)
Michael Hui
William Langdon
Peter Jeavons
Gemma Godfrey
All directors and
executive officers as
a group (5 persons)
(1) Unless otherwise indicated, the business address of each of the individuals is c/o VivoPower International PLC, The Scalpel, 18th Floor, 52
Lime Street, London EC3M 7AF, U.K.
(2) The business address is c/o AWN Holdings Limited, at Level 11, 110 Mary Street, Brisbane, QLD 4000, Australia.
(3) Represents shares held by Arowana Partners Group Pty Ltd, Borneo Capital Pty Limited, The Panaga Group Trust and KTFC
Superannuation Fund, of which Mr. Chin is a beneficiary and one of the directors of the corporate trustee of such fund, and AWN Holdings
Limited for which Mr. Chin has shared voting power.
Minimum shareholding requirements
The Company currently does not have any applicable shareholding guidelines. The Remuneration
Committee reserves the right to implement shareholding guidelines. If shareholding guidelines are
implemented, these will be disclosed in the relevant Annual Report on Remuneration.
Comparison to Company Performance
Performance graph and table and comparison to Chief Executive Officer pay
The following graph shows total shareholder return (“TSR”) for the Company for the period from its listing on
29 December 2016 to 30 June 2023, relative to the Nasdaq Composite Index. The Nasdaq Composite Index
is considered an appropriate comparator for VivoPower:
Page | 39
Directors’ Remuneration Report
VivoPower International PLC for the year ended 30 June 2023
VivoPower and Nasdaq
300
250
200
150
100
50
0
30-Jun-23
29-Dec-16
30-Jun-17
30-Jun-18
30-Jun-19
30-Jun-20
30-Jun-21
30-Jun-22
VivoPower
Nasdaq
The following table shows details of the compensation paid to the individual(s) in the role of Chief Executive
Officer:
Single figure of remuneration
Bonus as % of maximum
LTIP
Year ended 30 June
Year ended 30 June
Year ended 30 June
2023
2022
2021
2023
2022
2021
2023
2022
2021
Kevin Chin
£378,938
£367,428
£365,898
0%
0%
0%
£259,353 £206,273
£84,383
As CEO, Mr. Chin is paid £325,000 base fees and £38,000 annual professional development allowance. Of
the base salary £325,000, 4 months were paid in cash, whilst for 8 months, Mr. Chin agreed to receive
payment in the form of 541,666 cashless warrants in VivoPower shares, exerciseable in the period 3 June
2024 to 3 June 2029 at an exercise price of $0.60. Shares issued following exercising of warrants will remain
restricted for 12 months. Mr. Chin has allocated these warrants to a benevolent cause, the ASEAN
foundation.
Mr. Chin receives equity-based remuneration in relation to his involvement in leading the hyper-
turnaround and hyperscaling program. Of the 87,200 ($65,400) annual retention RSUs granted on April 1,
2020, vesting annually from June 2021 to June 2026, 17,440 RSUs ($13,080) vested in the current year. Of
the 261,600 ($196,200) performance RSUs vesting quarterly from September 2020 to June 2023, dependent
on meeting quarterly performance goals, 31,456 RSUs ($23,592) vested in the current year. In December
2021, the Remuneration Committee approved an equity award of RSUs in relation to short term incentives
for the year ended June 30, 2022, vesting in June 2023 deferred from June 2022. The award vested 94,291
RSUs ($275,330), based on Mr. Chin's base salary £325,000 x 1.3237 exchange rate x 64% performance
measurement / $2.92 VWAP share price. A further 20,000 annual retention RSUs ($5,200) were granted to Mr.
Chin on January 11, 2023, vesting annually from December 2023 to December 2025.
Page | 40
Directors’ Remuneration Report
VivoPower International PLC for the year ended 30 June 2023
Relative importance of pay
The table below shows the total pay for all of the Group’s employees compared to other key financial
indicators.
(US dollars)
Year Ended
30 June 2023
Year Ended
30 June 2022
Year Ended
30 June 2021
Employee remuneration
6,630,000
18,223,000
17,395,000
Distributions to shareholders
NIL
NIL
NIL
Implementation of Remuneration Policy
Executive Directors
The Company has had no Executive Directors since Carl Weatherley-White, former Chief Executive Officer,
resigned as a Director on 28 December 2017, until the appointment of Kevin Chin as Executive Chairman and
Chief Executive Officer on 25 March 2020.
Cash and Equity Compensation
Mr. Chin is employed by a related company, Arowana Partners Group Pty Ltd, which charges fees for Mr.
Chin’s services to VivoPower International Services Limited. Pursuant to a deed of variation dated 29 June
2020, Mr. Chin’s original non-executive directorship appointment, dated 1 August 2016, was varied to reflect
Mr. Chin assuming the positions of Executive Chairman and Chief Executive Officer of VivoPower
International PLC, effective from 25 March 2020. The cost of Mr. Chin’s executive service agreement is paid
by VivoPower International Services Limited and incorporates the cost of any support resources required by
Mr. Chin to fulfil the role.
Following a review by Pearl Meyer of Mr. Chin’s compensation plan as Chief Executive Officer, to align to the
new strategy and additional responsibilities, the remuneration committee approved an increase to Mr.
Chin’s remuneration to £325,000 base salary and £38,000 annual professional development allowance,
effective 1 July 2020.
Mr. Chin has also been granted 87,200 RSUs and 261,600 PSUs in the Company, issued pursuant to the
Company’s Omnibus Incentive Plan adopted on 5 September 2017, at an issue price of $0.75 per share, based
on the Company share price on 25 March 2020. The RSUs vest annually over 5 years. The PSUs vest quarterly
over 3.25 years and are subject to achieving performance goals. This was approved by the Remuneration and
Nomination Committee of the Board on 16 June 2020.
In December 2021, the Remuneration Committee approved an equity award of RSUs in relation to short term
incentives for the year ended June 30, 2022, vesting in June 2023 deferred from June 2022. The award vested
94,291 RSUs ($275,330), based on Mr. Chin's base salary £325,000 x 1.3237 exchange rate x 64% performance
measurement / $2.92 VWAP share price. A further 20,000 annual retention RSUs ($5,200) were granted to Mr.
Chin on January 11, 2023, vesting annually from December 2023 to December 2025
Amounts vesting in the year ended 30 June 2023 are detailed above.
Non-Executive Directors
Cash and Equity Compensation
The Company will pay annual retainers to non-executive directors in line with the remuneration policy
approved by shareholders on 5 September 2017. The Company intends to keep the value of annual retainers
under review and will consider from time to time whether the amount and terms on which retainers are
payable are appropriate given the Company’s economic position and wider market conditions. Any changes
to retainers will be compliant with the remuneration policy and will be disclosed in the Remuneration Report
for the relevant financial year.
Page | 41
Directors’ Remuneration Report
VivoPower International PLC for the year ended 30 June 2023
The fee levels are reviewed on an annual basis and may be increased by the Company, taking into account
factors such as the time commitment of the role and market levels in companies of comparable size and
complexity. Fees may be amended before any annual review to reflect any changes to the Director’s role or
Board committee memberships which occur during the period or when making a new appointment.
An independent review and market benchmarking exercise by Pearl Meyer was conducted in the year ended
30 June 2021, following which the Remuneration Committee approved the increases to Board remuneration
detailed below. No further changes to Directors remuneration have occurred in the current year.
Directors receive an annual retainer for service on the Board, payable monthly in arrears, with supplementary
retainers payable for additional Board responsibilities, including membership of committees, as follows:
Annual retainer for Board membership
$50,000
(increased from $48,000 effective 1 January 2021);
Annual retainer for the Chairman of the Board
£68,000
(effective 1 July 2020).
Directors are also entitled to an additional fee for each committee they are a member or chairman of, except
for unpaid committee membership for the Nomination and Sustainability Committees, as follows:
Annual retainer for Committee Chairmanship
Annual retainer for the Committee membership
$7,500
$4,000
(Membership fee only applicable from 1 July 2021 onwards);
Directors can individually elect to receive their retainer remuneration as an RSU, or in cash, or a combination
of RSUs and cash.
In addition to the retainer paid monthly noted above, on 14 December 2020, each director was granted 7,788
($50,000) RSUs (“Restricted Stock Units”) vesting in December 2020, to bring compensation in line with
market levels as benchmarked by Pearl Meyer. A further 20,000 annual retention RSUs were granted to each
director on January 11, 2023, vesting annually from December 2023 to December 2025. The directors were
also granted points in a Long Term Incentive Plan (LTIP) at each of Tembo e-LV BV and VivoPower USA LLC.
These LTIPs allow participants to benefit from any potential future trade sale, IPO, recapitalization or merger
of Tembo e-LV BV and VivoPower USA LLC. In the event of such a corporate event, participants will earn Long
Term Incentive ("LTI") points according to an allocation decided by the Remuneration Committee of a profit
share of 20% of the net gain made by the Company from the corporate action, less previously invested
amounts.
Mr. Hui has also been granted 17,500 RSUs and 52,500 PSUs in the Company, in relation to his involvement
in management of Critical Power Services segment, and the hyper-turnaround programme. The Award was
issued pursuant to the Company’s Omnibus Incentive Plan adopted on 5 September 2017, at an issue price
of $0.75 per share, based on the Company share price on 25 March 2020. The RSUs vest annually over 5 years.
The PSUs vest quarterly over 3.25 years and are subject to achieving performance goals. Amounts vesting in
the year ended 30 June 2022 are detailed above.
Benefits
The Company will provide benefits to Non-Executive directors in line with the remuneration policy approved
by shareholders on 5 September 2017. The Company intends to keep the value of benefits under review and
will consider whether the amount and terms on which benefits are provided are appropriate given the
Company’s economic position and wider market conditions. Any changes to benefits will be compliant with
the remuneration policy outlined above and will be disclosed in the Remuneration Report for the relevant
financial year.
Page | 42
Directors’ Remuneration Report
VivoPower International PLC for the year ended 30 June 2023
Consideration of Matters Relating to Directors’ Remuneration
Remuneration Committee
The members of the Committee during the year ended 30 June 2023 and their attendance at meetings of
the Committee, are set out below:
William Langdon
Peter Jeavons
Gemma Godfrey
Attendance
3/ 3
3/ 3
3/ 3
No Non-Executive Directors are involved in deciding their own remuneration.
The Committee retained Pearl Meyer to advise the Committee on various matters, including the Equity
Incentive Plan and changes to remuneration levels for the Board of Directors and Chief Executive. Pearl Meyer
is a signatory to the Remuneration Consultants’ Code of Conduct. The Committee has reviewed the
operating processes in place at Pearl Meyer and is satisfied that the advice it receives is independent and
objective.
Shoosmiths LLP and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. provide the Company with legal
advice. Advice from Shoosmiths LLP and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is made available
to the Remuneration Committee, where it relates to matters within its remit.
Statement of voting at general meeting
The Annual Report on Remuneration for the year ended 30 June 2022 was approved by shareholders at the
Annual General Meeting held on 10 November 2022. The resolution to approve the report was approved by
98.38% of voting shareholders.
The Annual Report on Remuneration for the year ended 30 June 2021 was approved by shareholders at the
Annual General Meeting held on 26 October 2021. The resolution to approve the report was approved by
99.37% of voting shareholders.
The Remuneration Report was approved by the Board and signed on its behalf by:
Peter Jeavons
Chair of the Remuneration Committee
27 November 2023
Page | 43
Independent Auditor’s Report to the Members of VivoPower International PLC
VivoPower International PLC for the year ended 30 June 2023
Independent Auditor’s Report to the Members of VivoPower
International PLC
Opinion
We have audited the financial statements of VivoPower International Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 30 June 2023 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and parent company Statement of Financial Position, the
Consolidated and parent company Statement of Cash Flows, the Consolidated and parent company
Statement of Changes in Equity and notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and
UK-adopted international accounting standards and as regards the parent company financial statements,
as applied in accordance with the provisions of Companies Act 2006.
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 June
•
•
2023 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-
adopted international accounting standards and as applied in accordance with the provisions of
the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. 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 2.1 in the financial statements, which indicates that the group has significant
outstanding liabilities and needs to raise funds either through debt or equity in order to meet its obligations
as they fall due and to support the planned growth of the Group during the going concern period. As stated
in note 2.1, these events or conditions, along with the other matters as set forth in note 2.1, indicate that a
material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the company’s ability to continue to adopt the going concern basis of accounting included
obtaining an understanding of the basis of preparation of Board approved budgets and cash flow forecasts,
assessing the accuracy of historic forecasts to actual results, testing the key underlying assumptions and
Page | 44
Independent Auditor’s Report to the Members of VivoPower International PLC
VivoPower International PLC for the year ended 30 June 2023
performing sensitivity analysis on possible changes which could impact the available headroom. We also
reviewed and evaluated the Board approved memorandum on going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative
thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope
of our audit and the nature, timing and extent of our audit procedures on the individual financial statement
line items and disclosures and in evaluating the effect of misstatements, both individually and on the
financial statements as a whole.
Based on our professional judgement, we determined materiality for the group financial statements as a
whole to be $315,000 (2022 - $672,000). This was calculated by applying 3.5% of net assets (2022 – average
of 1.5% of revenue and 3% of net assets). We selected net assets as the materiality benchmark as we
considered this to be the most significant determinant of the group’s performance. The group has a portfolio
of solar project assets in Australia and the United States of America and other intangible assets in the
Netherlands. There is a change to the materiality benchmark in the current year due primarily to the revenue
reduction following the disposal of the JA Martin business and we set materiality based on net assets as this
is deemed to be the most relevant benchmark throughout the group.
The parent company materiality was $42,000 (2022 - $100,000) based upon 2% of expenses (2022 - 2% of
expenses) in order to ensure adequate coverage of expenditure.
Performance materiality is the application of materiality at the individual account or balance level set to
reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole. Performance materiality for the
group and parent company was set at 70% of overall materiality to reflect the risk associated with the
judgemental and key areas of management estimation in the financial statements.
Overall component materiality for significant and/or material subsidiary undertakings ranged from $16,000
to $210,000 (2022 - $25,000 to $370,000). Performance materiality for all components was set at 70% of
overall component materiality.
We agreed with the Audit and Risk Committee that we would report to them all individual audit differences
identified during the course of our audit in excess of $15,750 (2022 – $33,600) for the group and $2,100 (2022
- $5,000) for the parent company.
Our approach to the audit
In designing our audit, we determined materiality, as above, and assessed the risk of material misstatement
in the financial statements. In particular, we looked at where the directors made subjective judgements, for
example in respect of significant accounting estimates. We also addressed the risk of management override
of internal controls, including evaluating whether there was evidence of bias in determining judgements and
estimates by the directors that represented a risk of material misstatement due to fraud.
The accounting records of all significant and/or material subsidiary undertakings in Australia were audited
by component auditors and in Netherlands by a subcontractor, under the oversight of us as group auditor in
accordance with International Standard on Auditing 600, based upon component materiality and the risk to
the group.
Page | 45
Independent Auditor’s Report to the Members of VivoPower International PLC
VivoPower International PLC for the year ended 30 June 2023
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements 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.
Key Audit Matter
Revenue recognition
Revenue
for the year ended 30 June 2023
amounted to $15.1 million and details of the
related critical judgements and estimates are
disclosed in note 3.1.
There is a risk of misstatement of revenue from
contracts with customers to include:
•
Identification of performance obligations in
customer contracts;
• Judging the timing and satisfaction of
performance obligations;
• Allocation of transaction price;
• Measuring the stage of completion for long
term contracts; and
• Determining the costs incurred to obtain or
fulfil contracts with customers.
How our scope addressed this matter
Our work in this area included:
• Updating our understanding of the internal
control environment for the significant
revenue streams, and checking by
walkthrough tests our understanding of the
internal control environment for the
significant income streams;
• Reviewing the work undertaken by
component auditors in accordance with the
issued component instructions, including
regular communication throughout the
audit;
• Performing controls testing on the key
controls applicable to the contract and
revenue cycle;
• Substantively testing a sample of contracts
concluded and in progress at the year-end,
including contract assets and liabilities and
deferred and accrued income, and testing
the stage of completion;
• Reviewing post year-end cash receipts and
documents to test the completeness, cut-off
and accuracy of revenue around the year-
end; and
• Ensuring the revenue related disclosures in
the financial statements are complete and
accurate.
Page | 46
Independent Auditor’s Report to the Members of VivoPower International PLC
VivoPower International PLC for the year ended 30 June 2023
Recoverability of intangible assets and tests for
impairment.
As at 30 June 2023 the carrying value of goodwill
and intangible assets was $42.5 million. Details of
these assets and the related critical judgements
and estimates are disclosed in notes 3.2 and 14.
The carrying value of goodwill and other
intangible assets is significant and at risk of non-
recoverability. The estimated recoverable amount
of these balances is subjective due to the inherent
uncertainty involved in forecasting and
discounting cash flows.
In particular, the carrying value of goodwill and
intangible assets within a subsidiary’s cash
generating unit has historically had no headroom
and the value in use calculations were sensitive to
any change in the key assumptions. In addition, the
future revenue forecasts are directly linked to the
successful completion and commercialisation of
the electric vehicle technology within another
subsidiary.
Our work in this area included:
• Reviewing and challenging management’s
value in use calculations including the
rationale behind the key assumptions and
cash flow forecasts;
• Checking the mathematical accuracy of the
value in use calculations;
• Performing sensitivity analysis on
reasonably possible changes in key
assumptions and the impact on the
headroom;
• Assessing the accuracy of budgets and
forecasts used in prior periods to actual
results;
• Performing an independent assessment to
identify any indicators of impairment; and
• Assessing the appropriateness of the group’s
disclosure in respect of the judgements and
estimates, on whether an impairment exists
and the sensitivity analysis on the headroom
(refer to Note 14).
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
Page | 47
Independent Auditor’s Report to the Members of VivoPower International PLC
VivoPower International PLC for the year ended 30 June 2023
•
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been
received from branches not visited by us; or
•
the financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
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 ISAs (UK) 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 these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
• We obtained an understanding of the group and parent company and the sector in which it operates
to identify laws and regulations that could reasonably be expected to have a direct effect on the
financial statements. We obtained our understanding in this regard through discussions with
management, industry research, application of cumulative audit knowledge and experience of the
sectors.
Page | 48
Consolidated Statement of Comprehensive Income
VivoPower International PLC for the year ended 30 June 2023
Consolidated Statement of Comprehensive Income
(US dollars in thousands, except per share
amounts)
Revenue from contracts with customers
Note
4
Cost of sales
Cost of sales – non-recurring
Gross (loss)/profit
General and administrative expenses
Other gains/(losses)
Other income
Depreciation of property, plant and equipment
Amortisation of intangible assets
Operating loss
Restructuring and other non-recurring costs
Finance income
Finance expense
Loss before income tax
Income tax
Loss for the continuing operations
(Loss)/profit from discontinued operations
Loss for the period
Losses attributed to:
Equity owners of VivoPower International Plc
Non-controlling interests
Other comprehensive income/(expense)
Items that may be reclassified subsequently to profit or
loss:
Currency translation differences recognised directly in
equity
Total comprehensive loss for the period
attributable to owners of the company
Earnings per share attributable to the owners
of the company (dollars)
Continuing Operations
Basic
Discontinued Operations
Basic
5
6
13
14
7
8
10
10
11
28
28
Year Ended 30 June
2023
15,060
(13,472)
(3,850)
(2,262)
(7,620)
30
119
(750)
(831)
2022
(restated)
22,448
(20,308)
(1,881)
259
(13,811)
(13)
662
(770)
(850)
(11,314)
(14,523)
(2,084)
1,156
(7,366)
(443)
173
(8,604)
2021
23,975
(19,614)
-
4,361
(9,651)
769
960
(638)
(815)
(5,014)
(2,877)
2,176
(2,450)
(19,608)
(23,397)
(8,165)
(540)
(20,148)
(4,207)
1,968
(21,429)
(625)
(24,355)
(22,054)
138
(8,027)
69
(7,958)
(24,355)
(22,054)
-
-
(7,571)
(387)
(24,355)
(22,054)
(7,958)
1,236
1,043
1,601
(23,119)
(21,011)
(6,357)
(0.82)
(1.03)
(0.49)
(0.17)
(0.03)
(0.00)
Page | 50
Consolidated Statement of Financial Position
VivoPower International PLC for the year ended 30 June 2023
Consolidated Statement of Financial Position
(US dollars in thousands)
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Investments accounted for using the equity method
Total non-current assets
Current assets
Cash and cash equivalents
Restricted cash
Trade and other receivables
Inventory
Assets classified as held for sale
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
Income tax liability
Provisions
Loans and borrowings
Liabilities classified as held for sale
Total current liabilities
Non-current liabilities
Other payables
Loans and borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
EQUITY
Share capital
Share premium
Cumulative translation reserve
Other reserves
Accumulated deficit
Equity and reserves attributable to owners
Non-Controlling interest
TOTAL EQUITY
TOTAL EQUITY AND LIABILITIES
Year Ended 30 June
Note
2023
2022
(restated)
2021
(restated)
13
14
11
16
17
18
19
20
21
23
24
25
22
23
25
24
11
26
26
27
3,742
42,175
5,136
66
51,119
553
608
7,021
2,115
-
10,297
61,416
14,597
156
1,778
2,384
-
18,915
6,443
30,004
76
2,232
38,755
57,670
308
105,018
1,203
(6,492)
(96,291)
3,746
-
3,746
61,416
3,743
39,577
4,668
-
47,988
1,285
1,195
9,088
1,887
8,214
21,669
69,657
15,457
132
1,104
5,109
1,497
23,299
-
23,452
57
1,234
24,743
48,042
256
99,418
(139)
(5,984)
(71,936)
21,615
-
21,615
69,657
2,575
46,945
2,495
-
52,015
8,604
1,140
12,785
1,968
-
24,497
76,512
8,917
708
2,802
1,004
-
13,431
-
22,087
165
411
22,663
36,094
222
76,229
(1,465)
15,314
(49,882)
40,418
-
40,418
76,512
These financial statements were approved by the Board of Directors on 27 November 2023 and were signed
on its behalf by:
Kevin Chin, Chairman
Page | 51
Consolidated Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2023
Consolidated Statement of Cash Flow
Year Ended 30 June
2023
2022
(restated)
Note
(US dollars in thousands)
Cash flows from operating activities
Loss from continuing operations
(Loss)/profit from discontinued operations
22
Income tax
Finance income
Finance expense
Depreciation of property, plant and equipment
Amortisation of intangible assets
Other gains/(losses)
Shared based payments
Decrease/(increase) in trade and other receivables
(Increase)/decrease in inventory
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Net cash used in operating activities
Cash flows from investing activities
Proceeds on sale of property plant and equipment
Purchase of property, plant and equipment
Investment in capital projects
Proceeds on disposal of J.A. Martin ex-solar business
Proceeds on sale of capital projects
Acquisitions–- consideration
Acquisitions–- cash acquired
13
14
7
13
14
22
7
(20,148)
(4,207)
561
-
4,917
750
831
(30)
147
5,903
(228)
2,278
674
(21,429)
(625)
(1,926)
-
5,334
770
1,172
13
2,010
3,459
81
6,583
(572)
2021
(8,027)
69
(115)
(2,397)
2,889
1,089
1,167
(769)
1,078
(813)
-
(9,453)
(95)
(8,552)
(5,130)
(15,377)
110
(1,029)
(3,857)
2,874
47
(66)
-
57
(1,165)
(4,254)
-
19
-
-
36
(937)
-
-
366
(7,089)
4,942
Net cash used in investing activities
(1,921)
(5,343)
(2,682)
Page | 52
Consolidated Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2023
(US dollars in thousands)
Cash flows from financing activities
Other (repayments)/borrowings
Lease repayments
Proceeds from investor
Capital raise proceeds
Equity instruments and capital raise costs
Debtor finance borrowings/(repayments)
Loans from related parties
Repayment of loans from related parties
Bank loan (repayments)/borrowings
Chattel mortgage (repayments)/borrowings
Finance expense
Transfer from/(to) restricted cash
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the
period
Effect of exchange rate movements on cash held
Note
25
25
26
27
25
25
25
25
25
10
18
17
Cash and cash equivalents at the end of the period
17
Year Ended June 30
2023
(108)
(43)
300
5,500
(397)
1,297
3,572
(370)
(138)
(267)
(129)
587
2022
(restated)
(85)
-
-
243
(47)
(4)
4,231
2021
18
(360)
-
34,866
(2,819)
(518)
-
-
(2,226)
(166)
74
(636)
(55)
(33)
32
(5,296)
(127)
9,804
3,555
23,537
(669)
1,285
(63)
553
(6,918)
8,604
(401)
1,285
5,478
2,824
302
8,604
Non-cash investing and financing transactions during the year-ended 30 June 2023 comprise:
•
102,252 shares issued to Incentive Award participants at nominal value: $0.1 million;
• Right-of-use assets additions and the related lease liability during the year: $0.2 million and $0.2 million (refer
to Note 25)
Page | 53
Consolidated Statement of Changes in Equity
VivoPower International PLC for the year ended 30 June 2023
Consolidated Statement of Changes in Equity
(US dollars in
thousands)
Share
capital
Share
premium
Cumulative
translation
reserve
Other
reserves
Accumulated
deficit
Non-
controlling
interest
Total
At 30 June 2020
163
40,215
(3,307)
21,408
(40,773)
184
17,890
Loss for the year
Other comprehensive
income/(expense)
-
-
-
-
-
-
(7,571)
(387)
(7,958)
1,842
(241)
-
-
1,601
163
40,215
(1,465)
21,167
(48,344)
(203)
11,533
1,326
(283)
-
-
1,043
222
76,229
(139)
15,031
(71,936)
-
19,407
Transactions with owners in their capacity as owners
Equity instruments
-
-
Capital raises
49
34,317
Other share issuances
Employee share awards
Non-controlling interest
1
9
-
736
961
-
-
(3,141)
-
(2,804)
-
-
-
(15)
107
-
At 30 June 2021
Loss for the year
Prior year adjustments
Other comprehensive
income/(expense)
Other share issuances
Employee share awards
Conversion of Aevitas
equity instruments
59
36,014
-
(5,853)
222
76,229
(1,465)
15,314
-
-
-
-
-
-
-
-
-
-
1
8
217
2,287
-
-
-
(122)
(144)
(283)
24
20,442
-
(20,466)
34
23,189
- (21,149)
Transactions with owners in their capacity as owners
Capital raises
1
243
-
-
-
-
(1,538)
(1,538)
(49,882)
(21,569)
(485)
-
(3,141)
-
31,562
-
-
722
1,077
203
(1,335)
203
28,885
-
40,418
-
(21,569)
-
(485)
-
-
-
-
-
(71,936)
(24,355)
-
-
-
-
122
74
2,012
-
-
2,208
-
21,615
-
(24,355)
At 30 June 2022
256
99,418
(139)
(5,984)
Loss for the year
Other comprehensive
income/(expense)
-
-
-
-
-
-
1,342
(106)
-
-
1,226
256
99,418
1,203
(6,090)
(96,291)
-
(1,504)
Transactions with owners in their capacity as owners
Capital raises
Equity instruments
Employee share awards
51
5,449
-
1
-
151
52
5,600
-
-
-
-
(446)
49
(5)
(402)
-
-
-
-
At 30 June 2023
308
105,018
1,203
(6,492)
(96,291)
For further information on Other Reserves please see Note 27.
-
-
-
-
-
5,054
49
281
3,746
3,746
Page | 54
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
1. Reporting entity
VivoPower International PLC (“VivoPower” or the “Company”) is a public company limited by shares and
incorporated under the laws of England and Wales and domiciled in the United Kingdom. The address of the
Company’s registered office is The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF, United Kingdom.
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries (together referred to as the ‘Group’ and individually as ‘Group entities’). Since June 30, 2021, the
Company no longer has an ultimate controlling party, as AWN Holdings Limited holds less than 50% equity
interest in the Company, being 39.5% as at June 30, 2023. In prior periods, the ultimate controlling party and
the results into which these financials were consolidated was AWN Holdings Limited, a company registered
in Australia.
2. Significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below.
These policies have been consistently applied to all periods presented, unless otherwise stated.
2.1. Basis of preparation
VivoPower International PLC consolidated financial statements were prepared in accordance with UK
adopted International Accounting Standards (UK IAS),IFRIC interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. The consolidated financial statements have been prepared
under the historical cost convention, except when accounting for acquisitions, whereby fair values have been
applied.
The preparation of financial statements with adopted UK IAS requires the use of critical accounting
estimates. It also requires the management to exercise judgement in the process of applying the Company’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where the
assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.
The financial statements have been prepared on a going concern basis.
As at June 30, 2023, the Company had unrestricted cash totalling $0.6 million, compared to $1.3 million as
at June 30, 2022 and $8.6 million as at June 30, 2021. It also has outstanding debt and borrowing totaling
$32.4 million, compared to $28.6 million as at June 30, 2022 and $23.1 million as at June 30, 2021. Most of
these borrowings do not fall due for repayment until 1 April 2025 and are thus classified under long-term
liabilities.
Over the next twelve months, the Company expects significant growth in revenues and continued EBITDA
generation in critical power systems, a material increase in revenue and costs in scaling up the Electric
Vehicles business as the operation scales series production of its EUV23 conversion kits to match the
demand from its signed partnerships. The Company will also be investing in further capitalized development
costs in electric vehicles in preparation for Tembo series production. In addition, it expects to fund selective
development of the U.S. solar portfolio to maximize future sales proceeds, as well as development of
microgrid, EV charging and battery energy storage capabilities, as part of the scaling up of the SES business
unit. The Company will also be investing in property, plant and equipment, particularly in Tembo.
This expected growth implies sizeable funding requirements over FY2024, which the Company is planning to
finance through significant equity capital raises, asset-backed financing, debtor financing, working capital
optimization with suppliers and customers, and tax relief on R&D expenditure, either at Group or subsidiary
levels depending on what is best suited to the Company’s growth needs and optimizing for cost of capital.
Page | 55
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
To ensure success of the business, the directors have reviewed additional plans to mitigate any cash flow
risk that may arise during the next twelve months. These include:
●
Regular re-forecasting process and flexing of opex and capex cost growth according to
liquidity needs;
●
●
Phased approach to hiring of personnel to sustain growth of the Tembo business;
Staging the timing of property, plant and equipment and software capex to match asset-
backed financing inflows;
●
Obtain Research & Development grants in the U.K., Europe and Australia to help fund
investment in electric, solar and battery technologies;
●
●
Careful project planning and commercial structuring of SES projects;
Possible sale, spin off, or distribution in specie of Caret, LLC ("Caret"), formerly Innovative
Solar Ventures I, LLC ("ISV");
●
●
●
Purchase order financing, debtor financing facilities;
Staging the timing of equity raises to minimize dilution; and
Renegotiation of terms on loans and supply chain.
Based on the foregoing expectations of funding needs, and actions prepared and presented by management
to the Board of Directors, the Directors consider that these actions can provide sufficient cash to support
business operations and meet funding requirements as they become due, despite financial, economic and
political uncertainty. If we continue to experience losses and we are not able to raise additional financing to
provide the funding to grow the revenue streams of the Company to become profit making, or generate cash
through sales of assets, we may not have sufficient liquidity to sustain our operations and to continue as a
going concern, accordingly there is a material uncertainty that may cause significant doubt about the going
concern nature of the Group. Our consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
All financial information presented in US dollars has been rounded to the nearest thousand.
2.2. Basis of consolidation
The consolidated financial statements include those of VivoPower International PLC and all of its subsidiary
undertakings.
Subsidiary undertakings are those entities controlled directly or indirectly by the Company. The Company
controls an investee when it is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. The results of the
subsidiaries acquired are included in the Consolidated Statement of Comprehensive Income from the date
of acquisition using the same accounting policies of those of the Group. All business combinations are
accounted for using the purchase method. The consideration transferred in a business combination is the
fair value at the acquisition date of the assets transferred and the liabilities incurred by the Group and
includes the fair value of any contingent consideration arrangement. Acquisition-related costs are
recognized in the income statement as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair value at the acquisition date.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with those used by other members of the Group.
All intra-group balances and transactions, including any unrealized income and expense arising from intra-
group transactions, are eliminated in full in preparing the consolidated financial statements. Unrealized
gains arising from transactions with equity accounted investees are eliminated against the investment to the
extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized
gains, but only to the extent that there is no evidence of impairment.
Page | 56
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
2.3. Business combination
The acquisition method of accounting is used to account for all business combinations, regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the acquisition
of a subsidiary comprises the:
fair values of the assets transferred
liabilities incurred to the former owners of the acquired businesses
•
•
• equity interests issued by the Company
•
•
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes
any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expenses as incurred.
The excess of the:
consideration transferred
•
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less
than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly
in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value, with changes in fair value recognized in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains
or losses arising from such remeasurement are recognized in profit or loss.
2.4. Intangible assets
All intangible assets, except goodwill, are stated at fair value less accumulated amortization and any
accumulated impairment losses. Goodwill is not amortized and is stated at cost less any accumulated
impairment losses. Any gain on a bargain purchase is recognized in profit or loss immediately.
Goodwill
Goodwill arose on the effective acquisition of VivoPower Pty Ltd, Aevitas O Holdings Limited (“Aevitas”) and
Tembo e-LV B.V. Goodwill is reviewed annually to test for impairment.
Negative goodwill arose on the acquisition of the remaining 50% share in the ISS Joint Venture, constituting
a bargain purchase. The gain was immediately recognized in the profit and loss during the year ended June
30, 2021.
Page | 57
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Other intangible assets
Intangible assets acquired through a business combination are initially measured at fair value and then
amortized over their useful economic lives. Subsequent expenditure is capitalized only when it increases the
future economic benefits embodied in the specific asset to which it relates.
Development expenditure includes the product development project for ruggedized electric vehicles in
Tembo, pre-series-production expenditure on developing vehicle specifications and production processes.
Capitalized costs include primarily internal payroll costs, external consultants and computer software.
Development expenditure on U.S. solar projects includes securing land rights, completing feasibility studies,
negotiating power purchase agreements, and other costs incurred to prepare project sales for Notice to
Proceed with construction and hence sale to a partner as a shovel ready project.
For both electric vehicles product development project, and U.S. solar development projects, it is the
Company’s intention to complete the projects. It expects to obtain adequate technical, financial and other
resources to complete the projects, and management consider that it is probable for the future economic
benefits attributable to the development expenditure to flow to the entity; and that the cost of the asset can
be measured reliably. Accordingly, the development expenditure is recognized under IAS 38 – Intangible
Assets as an intangible asset.
All other expenditure, including expenditure on internally generated goodwill and brands, and research
costs, are recognized in profit or loss as incurred.
Amortization is calculated on a straight-line basis to write down the assets over their useful economic lives
at the following rates:
• Development expenditure – 5 to 10 years
• Customer relationships – 5 to 10 years
• Trade names – 15 to 25 years
•
• Other – 5 years
Favourable supply contracts – 15 years
2.5. Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated
impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and
the costs directly attributable to bringing the asset into use.
When parts of an item of property, plant and equipment have different useful lives, they are accounted as
separate items (major components) of property, plant and equipment.
Depreciation is calculated on a straight-line basis so as to write down the assets to their estimated residual
value over their useful economic lives at the following rates:
Fixtures and fittings– 3 to 20 years
• Computer equipment– 3 years
•
• Motor vehicles– 5 years
• Plant and equipment – 3.5 to 10 years
• Right-of-use assets – remaining term of lease
Page | 58
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
2.6. Assets classified as held for sale and discontinued operations
Assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and a sale is considered highly probable. They are measured
at the lower of their carrying value and fair value less costs to sell. An impairment loss is recognised for any
subsequent write-down of the asset to fair value less costs to sell.
A discontinued operation is a component of the Company that has been disposed of or is classified as held
for sale and represents a separate major line of business or geographical area of operations. The results of
discontinued operations are presented separately in the statement of profit or loss.
2.7. Inventory
Inventories are stated at the lower of cost and net realizable value, in accordance with IAS 2 – Inventories.
The cost includes all direct and indirect variable production expenses, plus fixed expenses based on the
normal capacity of each production facility. The net realizable value of inventories intended to be sold
corresponds to their selling price, as estimated based on market conditions and any relevant external
information sources, less the estimated costs necessary to complete the sale.
2.8. Leases
The Group leases offices, workshops, motor vehicles, and equipment for fixed periods of 2 months to 8 years
but may have extension options. Extension options are not recognized by the Group in the determination of
lease liabilities unless renewals are reasonably certain.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the
contract to the lease and non-lease components based on their relative stand-alone prices. However, for
leases of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease
components and instead accounts for these as a single lease component.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants other than the security interests in the
leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis, with lease payments
discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Group’s
incremental borrowing rate is used. The Group presents lease liabilities in loans and borrowings in the
Statement of Financial Position.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the
Statement of Comprehensive Income over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period.
Right-of-use assets are presented in property, plant and equipment and depreciated over the shorter of the
asset's useful life and the lease term on a straight-line basis.
Page | 59
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
2.9. Impairment of non-financial assets
Goodwill is allocated to cash-generating units for the purposes of impairment testing. The recoverable
amount of the cash-generating unit (‘CGU’) to which the goodwill relates is tested annually for impairment
or when events or changes to circumstances indicate that it might be impaired.
The carrying values of property, plant and equipment, investments and intangible assets other than goodwill
are reviewed for impairment only when events indicate the carrying value may be impaired.
In an impairment test the recoverable amount of the cash-generating unit or asset is estimated in order to
determine the existence or extent of any impairment loss. The recoverable amount is the higher of fair value
less costs to sell and the value in use to the Group. An impairment loss is recognized to the extent that the
carrying value exceeds the recoverable amount. In determining a cash-generating unit’s or asset’s value in
use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time-value of money and risks specific to the cash-generating unit
or asset that have not already been included in the estimate of future cash flows. All impairment losses are
recognized in the Statement of Comprehensive Income.
An impairment loss in respect of goodwill is not reversed. In the case of other assets, impairment losses
recognized in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. These impairment losses are reversed if there has been any change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent so
that the asset’s carrying amount does not exceed the carrying value that would have been determined, net
of depreciation or amortization, if no impairment loss had been recognised.
2.10.
Financial Instruments
Financial assets and liabilities are recognised in the Group’s Statement of Financial Position when the Group
becomes a party to the contracted provision of the instrument. The following policies for financial
instruments have been applied in the preparation of the consolidated financial statements.
The Company classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value through profit or loss; and,
those to be measured at amortised cost.
The classification depends on the business model for managing the financial assets and the contractual
terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria
are met:
•
•
the asset is held within a business model whose objective is to collect contractual cash flows; and,
the contractual terms give rise to cash flows that are solely payments of principal and interest.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:
•
•
in the principal market for the asset or liability; or,
in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset
or a liability is measured using the assumptions that market participants would use when pricing the asset
or liability, assuming that market participants act in their economic best interest.
Page | 60
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
•
•
•
Level 1–- quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2–- valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable; and
Level 3–- valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
Cash and cash equivalents
For the purpose of preparation of the Statement of Cash Flow, cash and cash equivalents includes cash at
bank and in hand.
Restricted cash
Restricted cash are cash and cash equivalents whose availability for use within the Group is subject to
certain restrictions by third parties.
Bank borrowings
Interest-bearing bank loans are recorded at the proceeds received. Direct issue costs paid on the
establishment of loan facilities are recognised over the term of the loan on a straight-line basis. The initial
payment is taken to the Statement of Financial Position and then amortised over the full-length of the facility.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less any allowance for the expected future issue of credit notes and
for non-recoverability due to credit risk. The Group applies the IFRS 9 – Financial Instruments simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade
receivables and contract assets. To measure expected credit losses, trade receivables and contract assets
have been grouped based on shared risk characteristics.
Trade and other payables
Trade and other payables are non-interest bearing and are stated at amortised cost using the effective
interest method.
Share capital
Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of Ordinary
Shares are recognised as a deduction from equity, net of any tax effects.
Repurchase of share capital (treasury shares)
When share capital recognised as equity is repurchased as equity by the Company the amount of the
consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a
deduction from equity, and excluded from the number of shares in issue when calculating earnings per
share.
Page | 61
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
2.11.
Taxation
Income tax expense comprises current and deferred tax.
Current tax is recognized based on the amounts expected to be paid or recovered under the tax rates and
laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is provided on temporary timing differences that arise between the carrying amounts of assets
and liabilities for financial reporting purposes and their corresponding tax values. Liabilities are recorded on
all temporary differences except in respect of initial recognition of goodwill and in respect of investments in
subsidiaries where the timing of the reversal of the temporary difference is controlled by the Group and it is
probable that it will not reverse in the foreseeable future. Deferred tax assets are recognized to the extent
that it is probable that future taxable profits will be available against which the asset can be offset. Deferred
tax is measured on an undiscounted basis using the tax rates and laws that have been enacted or
substantively enacted by the end of the accounting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets
and liabilities, they relate to income taxes levied by the same tax authority and the Group intends to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized
simultaneously.
Current and deferred tax are recognized in the Statement of Comprehensive Income, except when the tax
relates to items charged or credited directly to equity, in which case it is dealt with directly in equity.
2.12.
Provisions
Provisions are recognized when the Group has a present obligation because of a past event, it is probable
that the Group will be required to settle that obligation, and it can be measured reliably.
Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation
at the date of Statement of Financial Position.
Where the time value of money is material, provisions are measured at the present value of expenditures
expected to be paid in settlement.
2.13.
Earnings per share
The Group presents basic (“EPS”) data for Ordinary Shares. Basic EPS is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by the weighted average number of Ordinary
Shares, excluding the shares held as treasury shares.
2.14.
Foreign currencies
The Company’s functional and presentational currency is the US dollar. Items included in the separate
financial statements of each Group entity are measured in the functional currency of that entity. Transactions
denominated in foreign currencies are translated into the functional currency of the entity at the rates of
exchange prevailing at the dates of the individual transactions. Foreign currency monetary assets and
liabilities are translated at the rates of exchange prevailing at the end of the reporting period.
Exchange gains and losses arising are charged to the Statement of Comprehensive Income within finance
income or expenses. The Statement of Comprehensive Income and Statement of Financial Position of
foreign entities are translated into US dollars on consolidation at the average rates for the period and the
rates prevailing at the end of the reporting period respectively. Exchange gains and losses arising on the
translation of the Group’s net investment foreign entities are recognized as a separate component of
shareholders’ equity.
Page | 62
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Foreign currency denominated share capital and related share premium and reserve accounts are recorded
at the historical exchange rate at the time the shares were issued, or the equity created.
2.15.
Revenue from contracts with customers
Revenue comprises the fair value of the consideration received or receivable for the sale of services in the
ordinary course of the Group’s activities. Revenue is shown net of discounts, value-added tax, other sales
related taxes, and after the elimination of sales within the Group.
Revenue comprises development revenues, electrical installations, electrical servicing and maintenance,
generator sales, vehicle spec conversion and conversion kits. Revenue is recognized upon satisfaction of
contractual performance obligations.
The Group has a number of different revenue streams and the key components in determining the correct
recognition are as follows:
Development revenue, which is revenue generated from development services relating to the building and
construction of solar projects, is recognized on a percentage completion basis as the value is accrued by the
end user over the life of the contract. The periodic recognition is calculated through weekly project progress
reports.
On longer-term power services projects such as large-scale equipment provision and installation, the
performance obligation of completing the installation is satisfied over time, and revenue is recognized on a
percentage completion basis using an input method. Revenue for stand-alone equipment sales is
recognized at the point of passing control of the asset to the customer. Other revenue for small jobs and
those completed in a limited timeframe are recognized when the job is complete and accepted by the
customer.
Revenue for sale of electric vehicles, kits for electric vehicles and related products is recognized upon delivery
to the customer. Where distribution agreements are agreed with external parties to participate in the
assembly of vehicles, revenue recognition will be assessed under IFRS 15 - Revenue from Contracts with
Customers, to establish the principal and agent in the relationship between the parties and with the end
customer.
Warranties are of short duration and only cover defective workmanship and defective materials. No
additional services are committed to which generate a performance obligation.
No adjustment is made for the effects of financing, as the Company expects, at contract inception, that the
period between when the goods and services are transferred to the customer and when the customer pays,
will be one year or less.
If the revenue recognized for goods and services rendered by the Company exceeds amounts that the
Company is entitled to bill the customer, a contract asset is recognized. If amounts billed exceed the revenue
recognized for goods and services rendered, a contract liability is recognized.
Incremental costs of obtaining a contract are expensed as incurred.
2.16.
Other income
Other income in relation to government grants, is recognized in the period that the related costs, for which
the grants are intended to compensate, are expensed.
Page | 63
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
2.17.
Employee Benefits
Pension
The employer pension contributions are associated with defined contribution schemes. The costs are
therefore recognised in the month in which the contribution is incurred, which is consistent with recognition
of payroll expenses.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive obligation to pay this amount because of past service
provided by the employee and the obligation can be reliably measured.
Short-term compensated absences
A liability for short-term compensated absences, such as holidays, is recognised for the amount the Group
may be required to pay because of the unused entitlement that has accumulated at the end of the reporting
period.
Share-based payments
Shares issued to employees and other participants under the Omnibus Incentive Plan 2017 are recognised
over the expected vesting period, using the grant date share price, in accordance with IFRS 2 Share-based
Payments.
2.18.
Restructuring and other non-recurring costs
Restructuring and other non-recurring costs are by nature one-time incurrences and do not represent the
normal trading activities of the business and accordingly are disclosed separately on the Consolidated
Statement of Comprehensive Income in accordance with IAS 1 – Presentation of Financial Statements in
order to draw them to the attention of the reader of the financial statements. Restructuring costs are defined
in accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent Assets as being related to sale
or termination of a line of business, closure of business locations, changes in management structure, or
fundamental reorganizations.
Other non-recurring costs include litigation expenses for former employees, including fees for legal services
and provisions under IAS 37 for legal fee dispute resolutions that are probable to result in a quantifiable
financial outflow by the Company.
Other non-recurring costs also include legal and professional costs for project review and investigation
detailed review and sales campaign for solar projects managed by the ISS joint venture partner.
Other non-recurring costs also include one-off costs resulting from acquisition of Tembo e-LV and
subsidiaries and impairment and write-off of nonrecoverable items.
Other non-recurring costs also include provisions in respect of fiscal refunds on prior receivables, which the
Company is defending.
Page | 64
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
2.19.
New standards, amendments and interpretations
At the date of authorisation of these financial statements the following Standards and Interpretations
which have not been applied in these financial statements were in issue but not yet effective:
International Accounting Standards (amendments)
IAS 1 - Amendments regarding the classification of liabilities
IAS 1, IFRS Practice Statement 2 - Amendments to IAS 1 and IFRS Practice Statement
2
IAS 1 - Amendments regarding non-current liabilities with covenants
IAS 8 (amendments) - Accounting Policies, Changes in Accounting Estimates and
Errors – Definition of Accounting Estimates
Effective date*
1 January 2023
1 January 2023
1 January 2024
1 January 2023
IFRS 16 - Amendments regarding lease liability in a sale and leaseback
1 January 2024
* Years beginning on or after
The Directors do not expect that the adoption of the standards listed above will have a material impact on
the financial statements of the Group or Company in future periods.
3. Significant accounting judgements and estimates
In preparing the consolidated financial statements, the directors are required to make judgements in
applying the Group’s accounting policies and in making estimates and making assumptions about the
future. These estimates could have a significant risk of causing a material adjustment to the carrying value
of assets and liabilities in the future financial periods. The critical judgements that have been made in arriving
at the amounts recognised in the consolidated financial statements are discussed below.
3.1. Revenue from contracts with customers – determining the timing of satisfaction of
services
As disclosed in Note 2.15 to the Financial Statements the Group concluded that Solar Development revenue
and revenue from other long-term projects is recognized over time as the customer simultaneously receives
and consumes the benefits provided. The Group determined that the percentage completion basis is the
best method in measuring progress because there is a direct relationship between the Group’s effort and the
transfer of services to the customer. The judgement used in applying the percentage completion basis affects
the amount and timing of revenue from contracts.
3.2. Impairment of non-financial assets
The carrying values of property, plant and equipment, investments and intangible assets other than goodwill
are reviewed for impairment only when events indicate the carrying value may be impaired. Goodwill is
tested annually for impairment or when events or changes to circumstances indicate that it might be
impaired.
Impairment assessments require the use of estimates and assumptions. To assess impairment, estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time-value of money and risks specific to the related cash-generating unit.
Judgement was applied in making estimates and assumptions about the future cash flows, including the
appropriateness of discounts rates applied, as further disclosed in Note 14. These estimates and
assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in
Page | 65
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
circumstances will impact these projections, which may impact the recoverable amount of assets and/or
CGUs.
3.3. Operating profit/(loss)
In preparing the consolidated financial statements of the Group, judgement was applied with respect to
those items which are presented in the Consolidated Statement of Comprehensive Income as included
within operating profit/(loss). Those revenues and expenses which are determined to be specifically related
to the on-going operating activities of the business are included within operating profit/(loss). Expenses or
charges to earnings which are not related to operating activities, are one-time costs determined to be not
representative of the normal trading activities of the business, or that arise from revaluation of assets, are
reported below operating profit/(loss).
3.4. Litigation provision
No litigation provision was recorded at June 30, 2023. The provision of $0.5 million for disputed legal
success fees related to the Mr. Comberg litigation recorded at June 30, 2021 was estimated by
management, making a judgement in conjunction with advice from legal counsel, on the likely outcome of
the claim. $0.4 million of this provision was utilized in the year ended June 30, 2022, and the remainder
released.
3.5. Capitalization of product development costs
The Group capitalizes costs for product development projects in the EV segment. The capitalization of costs
is based on management’s judgement that technological and economic feasibility is confirmed, and all other
recognition criteria within IAS 38 can be demonstrated. In determining the amounts to be capitalized,
management makes assumptions regarding the expected future cash generation, discount rates to be
applied and the expected period of benefits. As of June 30, 2023, the carrying amount of capitalized
development costs were $ 7.8 million (2022: $3.8 million).
3.6. Contingent consideration on disposals
Included within the assessment of recoverable value for impairment purposes of assets held for sale related
to the sale of the J.A. Martin ex-solar business, as at June 30, 2022, were estimates of the contingent
consideration included within the sale agreement. The contingent consideration receivable 12 months
following sale, is based on a multiple of earnings before interest, tax, depreciation and amortization of the
business. The fair value of contingent consideration of $4.5 million applied a contracted 4.5x multiple to year
1 forecast EBITDA of AUD$2.7 million, less purchase price paid, discounted at 10% to net present value, less
purchase price paid. Final settlement of the contingent consideration was paid in August 2023, and the
receivable amount and loss on disposal adjusted accordingly.
3.7. Income taxes
In recognizing income tax assets and liabilities, management makes estimates of the likely outcome of
decisions by tax authorities on transactions and events whose treatment for tax purposes is uncertain. Where
the outcome of such matters is different, or expected to be different, from previous assessments made by
management, a change to the carrying value of the income tax assets and liabilities will be recorded in the
period in which such determination is made. The carrying values of income tax assets and liabilities are
disclosed separately in the Consolidated Statement of Financial Position.
Page | 66
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
3.8. Deferred tax assets
Deferred tax assets for unused tax losses amounting to $4.3 million at June 30, 2023 (June 30, 2022: $4.1
million; June 30, 2021: $1.9 million) are recognized to the extent that it is probable that sufficient taxable
profit will be available against which the losses can be utilized. Management judgement is required to
determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level
of future taxable profits. To the extent that future cash flows and taxable income differ significantly from
estimates, the ability of the Company to realize the deferred tax assets recorded at the reporting date could
be impacted.
3.9. Exchangeable preference shares and exchangeable notes
As part of the IPO listing process VivoPower acquired Aevitas. The instruments previously issued by Aevitas
were restructured to become exchangeable into VivoPower shares. The Company considered IAS 32
paragraph 16 in determining the accounting treatment. The Company has determined the instruments to be
treated as equity under the “fixed-for-fixed” rule meaning that both the amount of consideration
received/receivable and the number of equity instruments to be issued must be fixed for the instrument to
be classified as equity. Both elements are satisfied within the instruments.
Whilst the majority of the Aevitas exchangeable preference shares and exchangeable notes were converted
into Ordinary Shares in VivoPower in July 2021 a minority of investors in the instruments elected to accept
new Aevitas Preference Shares. The Company considered IAS 32 paragraph 16 in determining the accounting
treatment, and has determined the new Aevitas Preference Shares instruments should be treated as equity.
3.10.
Fair value measurement
The fair values of financial assets and liabilities recorded in the statement of financial position are measured
using valuation techniques including discounted cash flow (DCF) models. The inputs to these models are
taken from observable markets where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Changes in assumptions about these factors could affect the reported
fair value. When the fair values of non-financial assets/CGUs need to be determined, for example in business
combinations and for impairment testing purposes, they are measured using valuation techniques including
the DCF model.
4. Revenue and segmental information
The Group determines and presents operating segments based on the information that is provided internally
to the board of directors of the Company (the "Board"), which is the Group’s chief operating decision maker.
Management analyzes our business in five reportable segments: Critical Power Services, Electric Vehicles,
Sustainable Energy Solutions, Solar Development and Corporate Office. Critical Power Services is
represented by VivoPower’s wholly owned subsidiary Aevitas. In turn, Aevitas wholly owns Kenshaw Solar
Pty Ltd (previously J.A. Martin) (“Aevitas Solar”) and Kenshaw Electrical Pty Limited (“Kenshaw”), both of
which operate in Australia with a focus on the design, supply, installation and maintenance of critical power,
control and distribution systems, including for solar farms. Electric Vehicles is represented by Tembo e-LV
B.V. (“Tembo”), a Netherlands-based specialist battery-electric and off-road vehicle company delivering
electric vehicles (“EV”) for mining and other rugged industrial customers globally. Sustainable Energy
Solutions (“SES”) is the design, evaluation, sale and implementation of renewable energy infrastructure to
customers, both on a standalone basis and in support of Tembo EVs. Solar Development is represented by
Caret and comprises 12 solar projects in the United States. Corporate Office is the Company’s corporate
functions, including costs to maintain the Nasdaq public company listing, comply with applicable SEC
reporting requirements, and related investor relations and is located in the U.K.
Page | 67
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including any revenues and expenses that relate to the transactions with
any of the Group’s other components. Operating segments results are reviewed regularly by the Board to
assess its performance and make decisions about resources to be allocated to the segment, and for which
discrete financial information is available.
Segment results that are reported to the Board include items directly attributable to a segment as well as
those that can be allocated to a segment on a reasonable basis.
4.1. Revenue
Revenue from continuing operations by geographic location is as follows:
(US dollars in thousands)
Year ended 30 June
Australia
Netherlands
United Kingdom
United States
Total revenue
2023
13,596
1,464
-
-
2022
20,958
1,490
-
-
2021
22,582
1,393
-
-
15,060
22,448
23,975
Revenue from continuing operations by product and service is as follows:
(US dollars in thousands)
Year ended 30 June
Electrical products and related services
Development fees
Vehicle spec conversion
Conversion kits
Accessories
Total revenue
2023
13,596
-
-
1,394
70
15,060
2022
20,958
-
789
301
400
2021
22,396
185
137
1,219
38
22,448
23,975
The Group had one customer representing more than 10% of revenue for the year ended 30 June 2023 (year
ended 30 June 2022: none; year ended 30 June 2021: none).
Page | 68
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
4.2. Operating segments
a) Segment results of operations
Results of operations by reportable segment are as follows:
Year Ended 30 June 2023
(US dollars in thousands)
Revenue from contracts with customers
Costs of sales - other
Cost of sales – non-recurring events
Gross loss
General and administrative expenses
Other gains/(losses)
Other income
Depreciation and amortization
Operating loss
Restructuring and other non-recurring
costs
Finance expense - net
Loss before income tax
Income tax
Loss for the year
Critical
Power
Services
13,596
(11,900)
(3,850)
(2,154)
(1,390)
-
50
(895)
(4,389)
(1)
(6,841)
(11,231)
(619)
(11,850)
Discontinued
operations
Critical
Power
Services
-
-
-
-
-
(4,207)
-
-
Total
15,060
(13,472)
(3,850)
(2,262)
(7,620)
(4,177)
119
(1,581)
Continuing operations
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
Continuing
-
-
-
-
-
-
-
-
(367)
(4,561)
15,060
(13,472)
(3,850)
(2,262)
(7,620)
30
119
-
-
(10)
(1,581)
-
-
-
-
(297)
-
69
-
1,464
(1,572)
-
(108)
(1,005)
-
-
(673)
-
(34)
(262)
-
(214)
936
(1,064)
(40)
(262)
(1,104)
30
-
(3)
(50)
(390)
119
(271)
-
(1,869)
(2,084)
(221)
(6,210)
-
-
(2,084)
(6,210)
(6,661)
(19,608)
(4,207)
(23,815)
-
(540)
-
(540)
(6,661)
(20,148)
(4,207)
(24,355)
Page | 69
(228)
(1,786)
(340)
(4,571)
(11,314)
(4,207)
(15,521)
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Year Ended 30 June 2022 (restated)
(US dollars in thousands)
Revenue from contracts with customers
Costs of sales - other
Cost of sales – COVID-19 disruption
Gross profit/(loss)
General and administrative expenses
Other gains/(losses)
Other income
Depreciation and amortization
Operating loss
Restructuring and other non-recurring
costs
Finance expense - net
Loss before income tax
Income tax
Loss for the year
Critical
Power
Services
20,958
(18,804)
(1,881)
273
(1,568)
103
662
(1,165)
(1,695)
45
(7,470)
(9,120)
1,349
(7,771)
-
-
-
-
(80)
(139)
-
-
1,490
(1,504)
-
(14)
(2,901)
-
-
(443)
Continuing operations
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
Continuing
Discontinued
operations
Critical
Power
Services
15,168
Total
37,616
(13,842)
(34,150)
-
(1,881)
1,326
1,585
-
-
-
-
-
-
-
-
22,448
(20,308)
(1,881)
259
(1,660)
(7,602)
(13,811)
(1,485)
(15,296)
23
-
(3)
-
-
(9)
(13)
662
(1,620)
-
324
(767)
(13)
986
(2,387)
(219)
(3,358)
(1,640)
(7,611)
(14,523)
(602)
(15,125)
-
-
(429)
(974)
-
23
(59)
(10)
(443)
(8,431)
(219)
(4,761)
(1,617)
(7,680)
(23,397)
-
575
192
(148)
1,968
-
(443)
(172)
(8,603)
(774)
(24,171)
149
2,117
(219)
(4,186)
(1,425)
(7,828)
(21,429)
(625)
(22,054)
Page | 70
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Year Ended 30 June 2021
(US dollars in thousands)
Revenue from contracts with customers
Costs of sales - other
Cost of sales – COVID-19 disruption
Gross profit
General and administrative expenses
Other gains/(losses)
Other income
Depreciation and amortization
Operating profit/(loss)
Restructuring & other non-recurring costs
Finance expense - net
Profit/(loss) before income tax
Income tax
Profit/(loss) for the year
Critical
Power
Services
22,396
(18,322)
-
4,074
(1,522)
36
960
(1,099)
2,449
(24)
1,824
4,249
(691)
3,558
Continuing operations
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
Continuing
185
-
-
185
(1,309)
733
-
(4)
1,394
(1,292)
-
102
(1,923)
-
-
(346)
(395)
(2,167)
-
(24)
(631)
(1)
(419)
(2,799)
96
733
(323)
(2,066)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,897)
-
-
(4)
(4,901)
(2,222)
(2,073)
23,975
(19,614)
-
4,361
(9,651)
769
960
(1,453)
(5,014)
(2,877)
(274)
(9,196)
(8,165)
-
138
(9,196)
(8,027)
Discontinued
operations
Critical
Power
Services
16,436
Total
40,411
(14,470)
(34,084)
-
-
1,966
6,327
(1,482)
(11,133)
-
552
(803)
233
(3)
(137)
93
(24)
69
769
1,512
(2,256)
(4,781)
(2,880)
(411)
(8,072)
114
(7,958)
Page | 71
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
b)
Segment net assets
Net assets by reportable segment are as follows:
As at 30 June 2023
(US dollars in thousands)
Assets
Liabilities
Critical
Power
Services
18,034
(15,539)
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
12,726
17,483
10,343
2,819
61,416
-
(7,564)
(645)
(33,921)
(57,670)
Net assets/(liabilities)
2,495
12,726
9,929
9,698
(31,102)
3,746
As at 30 June 2022
(US dollars in thousands)
Assets
Liabilities
Net assets/(liabilities)
As at 30 June 2021
(US dollars in thousands)
Assets
Liabilities
Net assets/(liabilities)
Critical
Power
Services
30,878
(13,452)
17,426
Critical
Power
Services
35,604
(9,442)
26,162
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
22,505
14,202
1,170
903
69,657
(377)
(4,528)
(485)
(29,200)
(48,042)
22,128
9,673
685
(28,297)
21,615
Solar
Development
Electric
Vehicles
Sustainable
Energy
Solutions
Corporate
Office
Total
24,693
9,027
(767)
(2,093)
23,926
6,934
-
-
-
7,188
76,512
(23,792)
(36,094)
(16,604) 40,418
5. Other gains/(losses)
(US dollars in thousands)
Australia solar projects
ISS Joint Venture - 50% share of discontinued
projects
Gain on acquisition of remaining 50% ISV from ISS
Other (losses)/gains
Total other gains/(losses)
Year Ended 30 June
2023
30
-
-
-
30
2022
23
-
-
(36)
(13)
2021
(165)
(6,950)
7,848
36
769
Page | 72
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
The Company recorded a net loss for solar projects in Australia, related primarily to the sale of its 50%
interest in the Yoogali Solar Farm on June 1, 2021. The loss on sale of $0.2 million comprised disposal of $0.2
million net book value of intangible assets. Additionally, the Company recognized $0.1 million gain on the
disposal of Daisy Hill.
The Company recorded a loss of $7.0 million in respect of its share of discontinued Solar Development
projects in the joint venture, Caret, prior to acquisition of the remaining 50% interest by the Company on
June 30, 2021.
On June 30, 2021, the Company completed its acquisition of the remaining 50% share in Caret. As detailed
in Note 12.b, the difference between consideration of $5.4 million, being the fair value of pre-acquisition
equity interest held by VivoPower, and fair value of acquired net assets of $13.2 million, resulted in a gain of
$7.8 million. Results of operations for the portfolio are reported within the Solar Development segment.
6. Other income
The Australian government’s Jobkeeper allowance helped keep Australian citizens in jobs and supported
businesses affected by the significant economic impact of the COVID-19 pandemic. The allowance is
included in other income and recognized in the period that the related costs, for which it is intended to
compensate, are expensed. There are no unfulfilled conditions or other contingencies attaching to these
grants. The Group did not benefit directly from any other forms of government assistance. This also includes
a previous year deposit which was refunded in March 2023.
7. Operating profit/(loss)
Operating profit/(loss) from continuing operations is stated after charging/(crediting):
(US dollars in thousands)
Year Ended June 30
Amortisation of intangible assets
Depreciation of property, plant and equipment
Auditors’ remuneration – audit fees
Auditors’ remuneration – tax services
Directors’ emoluments
Other (gains)/losses
2023
831
750
218
8
719
(30)
2022
850
770
177
12
693
13
2021
815
638
163
12
676
(769)
Page | 73
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
8. Restructuring and other non-recurring costs
(US dollars in thousands)
Corporate restructuring – professional fees
Corporate restructuring – litigation provision
Fiscal refunds provision
Impairment and write-off
Relocation
Remediation
Acquisition related costs
Total
Year Ended June 30
2023
200
-
1,768
422
-
(361)
55
2,084
2022
189
(128)
-
-
-
382
-
443
2021
179
2,039
-
-
27
-
632
2,877
In the year ended June 30, 2023, the Company incurred non-recurring costs related to a provision in respect
of fiscal refunds on prior receivables, which the Company is defending of $1.8 million, restructuring activities
of $0.2 million and provision for inventory obsolescence and write-off of bad debts of $0.4 million, offset by
$0.4 million release of remediation provision.
In the year ended June 30, 2022, the Company incurred non-recurring costs related to restructuring activities
of $0.2 million and one-off remediation expenses of $0.4 million, offset by $0.1 million release of unutilized
provision related to the Comberg Claims.
In the year ended June 30, 2021, the Company also incurred non-recurring costs for legal, accounting, tax
advisory and due diligence costs of $0.6 million related to the acquisition of Tembo e-LV in November 2020.
Restructuring and other non-recurring costs by nature are one-time incurrences, and therefore, do not
represent normal trading activities of the business. These costs are disclosed separately in order to draw
them to the attention of the reader of the financial information and enable comparability in future periods.
In FY 2021, the Board undertook a strategic restructuring of the business to align operations, personnel, and
business development activities to focus on a fewer number of areas of activity. Associated with this
restructuring was the departure of a number of employees and contractors from the business. The workforce
reduction cost represents the total salary, benefit, severance, and contract costs paid in the year or accruing
to these individuals in the future for which no services will be rendered to the Company. Professional fees
represent legal fees incurred to resolve certain disputes related to some of these separations in both the
current and prior year.
9. Staff numbers and costs
The average number of employees (including directors) during the period was:
Sales and Business Development
Central Services and Management
Production
Total
Year Ended June 30
2023
11
18
64
93
2022
13
29
212
254
2021
13
35
164
212
Page | 74
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Their aggregate remuneration costs comprised:
(US dollars in thousands)
Salaries, wages and incentives
Social security costs
Pension contributions
Short-term compensated absences
Total
Year Ended 30 June
2023
5,465
430
369
366
6,630
2022
(restated)
15,372
730
844
1,277
18,233
2021
14,550
795
850
1,200
17,395
Directors’ emoluments for the year ended 30 June 2023 were $347,179 (year ended 30 June, 2022: $376,043;
year ended 30 June, 2021: $675,807) of which the highest paid director received $81,819 (year ended 30 June,
2022: $91,029; year ended 30 June, 2021: $92,119). Director emoluments include employer social security
costs.
Key Management Personnel:
(US dollars in thousands)
Salaries, wages and incentives
Social security costs
Pension contributions
Equity incentives
Short-term compensated absences
Year Ended 30 June
2023
1,120
38
60
-
-
2022
1,578
151
114
392
-
Total
1,218
2,235
2021
1,949
101
64
244
2
2,361
Key management personnel are those below the Board level that have a significant impact on the operations
of the business. The number of key management personnel, including directors for the year ended 30 June
2023 was 10 (year ended 30 June 2022: 10; year ended 30 June 2021: 10).
10. Finance income and expense
(US dollars in thousands)
2023
2022
2021
Year Ended 30 June
Finance income
Foreign exchange gain
Interest income
Total finance income
1,150
6
1,156
173
-
173
2,176
-
2,176
Page | 75
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Year Ended 30 June
2023
2022
3,801
254
-
-
100
171
47
2,704
289
3,351
217
-
-
24
133
3
4,709
167
2021
1,986
1,228
(995)
-
7
42
-
92
90
7,366
8,604
2,450
(US dollars in thousands)
Finance expense
Related party loan interest payable
Convertible loan notes and preference shares
interest payable
Waived dividends and interest on convertible
preference shares and loan notes
Financing agreement finance cost payable
Debtor invoice finance cost payable
Lease liabilities interest payable
Bank interest payable
Foreign exchange losses
Other finance costs
Total finance expense
11. Taxation
a) Tax (charge)/credit
(US dollars in
thousands)
Current tax
UK tax
Foreign tax
Total current tax
Deferred tax
Current year
UK tax
Foreign tax
Total deferred
tax
Year Ended 30 June
Year Ended 30 June
Year Ended 30 June
2023
Dis-
2022
Dis-
Continuing
continued Total Continuing
continued Total Continuing
2021
Dis-
continued Total
-
(924)
(924)
-
382
382
-
-
-
(924)
- (924)
(52)
818
766
-
-
-
(52)
818
766
-
(825)
(825)
-
(23)
(848)
(23)
(848)
-
-
-
-
382
(96)
1,297
-
(96)
149 1,446
(51)
1,014
-
(51)
- 1,014
382
1,201
149 1,350
963
-
963
Total income tax
(541)
- (541)
1,968
149 2,117
138
(23)
115
The difference between the total tax charge and the amount calculated by applying the weighted average
corporation tax rates applicable to each of the tax jurisdictions in which the Group operates to the profit
before tax is shown below.
Page | 76
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
(US dollars in thousands)
Loss before income tax
Group weighted average corporation tax rate
Tax at standard rate
Effects of:
Expenses that are not deductible for tax
purposes
Adjustment to prior year tax provisions
Year Ended 30 June
2023
(17,604)
29.1%
2022
2021
(23,397)
(8,165)
26.6%
22.2%
5,118
6,224
1,813
-
-
-
-
(833)
137
Deferred tax assets not recognised on tax losses
(5,660)
(4,256)
(979)
Total income tax for the period Recognised
in the Consolidated Statement of
Comprehensive Income/(Loss)
(541)
1,968
138
b) Deferred tax
(US dollars in thousands)
Deferred tax assets
Deferred tax liabilities
Net deferred tax asset
These assets and liabilities are analysed as follows:
Deferred tax assets
Tax losses
30 June 2020
Credit to comprehensive
income
Acquisitions
30 June 2021
Credit/(charged) to
comprehensive income
814
776
263
1,853
As at 30 June
2023
2022
5,136
4,668
(2,232)
(1,234)
2021
2,495
(411)
2,904
3,434
2,084
Other timing
differences
533
109
-
642
Total
1,347
885
263
2,495
2,227
(54)
2,173
30 June 2022
4,080
588
4,668
Credit to comprehensive
income
30 June 2023
196
4,276
272
860
468
5,136
Page | 77
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Deferred tax liabilities
30 June 2020
Credit to comprehensive income
Accelerated
allowances
Other timing
differences
-
-
-
78
Total
-
78
Acquisition of subsidiary (Note 12)
-
(489)
(489)
30 June 2021
-
(411)
(411)
Charged to comprehensive income
-
(823)
(823)
30 June 2022
-
(1,234)
(1,234)
Charged to comprehensive income
-
(998)
(998)
30 June 2023
-
(2,232)
(2,232)
Deferred tax has been recognised in the current period using the tax rates applicable to each of the tax
jurisdictions in which the Group operates. Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities.
Page | 78
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
12. Business Combination
(a) Tembo e-LV
On 5 November 2020, VivoPower International PLC acquired 51% of the ordinary issued share capital of
Tembo e-LV B.V. a specialist battery-electric and off-road vehicle company located in The Netherlands. The
non-controlling interest representing 49% of the ordinary issued share capital was acquired on 2 February
2021.
Purchase consideration
(Amounts in thousands)
Cash consideration for 51% acquisition
The assets and liabilities recognised as a result of the acquisition are as follows:
(Amounts in thousands)
Cash and cash equivalents
Trade and other receivables
Inventory
Property, plant and equipment (Note 13)
Deferred tax asset (Note 11)
Trade and other payables
Related party payable
Other non-current liabilities
Deferred income
Deferred tax liability (Note 11)
Remediation provision
Fair value of identifiable net assets acquired
Non-controlling interests (49%)
Net assets acquired
Cash consideration for 51% acquisition
Surplus on acquisition
Allocation of surplus:
Goodwill (Note 14a)
Other intangible assets (Note 14b)
EUR
4,000
USD
4,916
EUR
4,021
100
594
167
214
(541)
(1,024)
(181)
(578)
(398)
(282)
2,092
USD
4,942
123
730
206
263
(665)
(1,259)
(222)
(711)
(489)
(336)
2,582
(1,025)
(1,260)
1,067
4,000
2,933
1,340
1,593
2,933
1,322
4,916
3,594
1,698
1,896
3,594
Page | 79
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Acquisition of Non-controlling interest:
Cash paid
Ordinary Shares issued
Total consideration for non-controlling interest
Non-controlling interest acquired:
At acquisition
Loss attributable to non-controlling interest
At date of acquisition of non-controlling interest
Surplus on acquisition of non-controlling interest
Purchase consideration - cash outflow
(Amounts in thousands)
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration - 51%
Cash consideration - 49%
Less: Balances acquired
Cash
Net outflow of cash - investing activities
EUR
USD
1,800
197
1,997
2,173
237
2,410
(1,025)
(1,259)
319
(706)
1,291
387
(873)
1,538
EUR
USD
4,000
1,800
4,021
1,779
4,916
2,173
4,942
2,147
Acquisition- related costs of $0.6 million that were not directly attributable to the issue of shares are included
within restructuring and other non-recurring costs in the income statement, and in operating activities in
the cash flow statement.
Goodwill represents the value of gaining immediate access to an established business in the Electric Vehicles
market, including the skilled workforce, which are not separately recognized and do not meet the criteria for
recognition as an intangible asset under IAS 38. None of the goodwill recognized is expected to be deductible
for income tax purposes. Separately recognized intangible assets acquired comprise $1.5 million of
customers contracts and $0.4 million of trade names, based on a purchase price allocation performed by
management.
Customer contracts are valued in years 1-5 include revenue from acquired customer relationships
representing 25% of total revenue, average attrition rate 25% per annum, average EBIT 3.7%, weighted
average cost of capital 13.0%. Trade names are valued using a relief from royalty method of the income
valuation approach over a 6-year life based on a 5% industry average royalty rate.
The Company recognizes non-controlling interests in an acquired entity at the non-controlling interests'
proportionate share of the acquired entity's identifiable net assets.
The non-controlling interest representing 49% of the ordinary issued share capital, comprising $1.3 million
at acquisition, less $0.4 million loss recorded in the profit and loss account between November 5, 2020 and
February 2, 2021, total $0.9 million, was acquired by the Company on February 2, 2021, for $2.2 million cash
and 15,793 shares in the Company ($0.2 million). The $1.5 million difference between consideration and
acquired non-controlling interest was debited directly to equity.
Page | 80
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
The remediation provision recognized was a present obligation of Tembo e-LV immediately prior to the
business combination. The execution of the remediation was not conditional upon it being acquired by the
Company.
From the date of acquisition, Tembo contributed $1.4 million of revenue and $2.8 million of loss before tax
from continuing operations in the year ended 30 June 2021. If the acquisition had taken place at the
beginning of the year ended 30 June 2021, Group revenue from continuing operations would have been $41.1
million and loss before tax from continuing operations for the Group would have been $8.3 million.
(b) ISS Joint Venture
On June 30, 2021, the Company purchased the remaining 50% share of ISV from ISS for a consideration of
$1, as part of the litigation settlement with the other 50% joint venture owners, plus the $5.4 million fair value
of pre-acquisition equity interest held by the Company.
Fair value of net assets acquired included capitalised project expenses and were recorded at fair value.
The acquisition resulted in a bargain purchase worth $7.8 million as a result of the litigation settlement and
is recognized in the Statement of Comprehensive Income within gain/loss on Solar Development as set out
Note 5.
Purchase consideration
(US dollars in thousands)
Cash
Fair value of pre-acquisition equity interest
Total consideration
Less: Fair value of acquired net assets:
Cash
Deposits
Capitalised project development expenses (Note 14b)
2
991
12,248
Gain on bargain purchase
No revenue or profit or loss has been recognized since the acquisition date.
The net cash flow resulting from the acquisition was $ nil.
-
5,393
5,393
13,241
7,848
Page | 81
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
13. Property, plant and equipment
(US dollars in thousands)
Computer
Equipment
Motor
Vehicles
Plant and
Equipment
Fittings and
Equipment
Right-of-
Use Assets
Total
Cost
At 30 June 2020
Foreign exchange
Additions
Acquisitions
Disposals
At 30 June 2021
Foreign exchange
Acquisitions
Disposals
Reclass to assets held for sale
At 30 June 2022
Reclassifications/corrections
Foreign exchange
Acquisitions
Disposals
At 30 June 2023
476
41
125
-
(80)
562
(41)
28
0
(231)
318
-
(10)
36
(37)
307
1,363
1,232
145
230
4
(174)
1,568
(154)
184
(150)
(1,015)
433
-
(23)
92
(39)
463
26
395
114
(156)
1,611
(146)
343
(48)
(320)
1,440
-
(32)
558
(250)
1,716
(US dollars in thousands)
Computer
Equipment
Motor
Vehicles
Plant and
Equipment
Fittings and
Equipment
Right-of-
Use Assets
248
3,034
Depreciation
At 30 June 2020
Foreign exchange
Charge for the period
Disposals
At 30 June 2021
Foreign exchange
Charge for the period (including
discontinued operations)
Disposals
Reclass to assets held for sale
At 30 June 2022
Reclassifications/corrections
Foreign exchange
Charge for the period
Disposals
At 30 June 2023
373
31
66
(71)
399
(33)
69
-
(197)
238
-
(5)
48
(26)
255
836
85
206
747
70
167
86
8
8
(157)
(112)
(46)
970
(95)
186
(131)
(719)
211
-
(10)
90
(28)
263
872
(93)
179
(9)
(232)
717
-
(18)
179
(171)
707
195
18
6
-
(97)
122
(10)
209
-
(74)
247
-
(9)
10
-
56
(6)
22
-
2,283
5,549
196
182
88
(58)
2,691
(214)
2,470
(53)
426
938
206
(565)
6,554
(565)
3,234
(251)
(1,295)
(2,935)
3,599
(707)
(43)
239
(54)
1,021
77
642
(58)
1,682
(167)
752
(53)
6,037
(707)
(117)
935
(380)
5,768
Total
3,063
271
1,089
(444)
3,979
(394)
1,208
(193)
(43)
(1,115)
(2,306)
29
-
(1)
22
-
50
1,099
(685)
(29)
411
(45)
751
2,294
(685)
(63)
750
(270)
2,026
Page | 82
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
(US dollars in thousands)
Computer
Equipment
Motor
Vehicles
Plant &
Equipment
Fittings &
Equipment
Right-of-
Use Assets
Net book value
At 30 June 2021
At 30 June 2022
At 30 June 2023
163
80
52
598
222
200
739
723
1,009
66
218
198
1,009
2,500
2,283
Total
2,575
3,743
3,742
The non-solar segment of Kenshaw Solar Pty Ltd was sold on July 1, 2022 and was reported in the prior
period as a discontinued operation. Revenues relating to the discontinued operation in the year ended
June 30, 2022 amounted to $15.2 million (June 30, 2021: $15.2 million). The total expenses in the year
ended June 30, 2022 amounted to $14.4 million (June 30, 2021: $17.6 million).
14. Intangible assets
(US dollars in thousands)
Goodwill
Other intangible assets
Total
a)
Goodwill
(US dollars in thousands)
As at 1 July
Reclass held for sale assets
Goodwill on acquisition of Tembo
Foreign exchange
Carrying value
As at 30 June
2022
(restated)
18,269
21,308
39,577
2023
17,697
24,478
42,175
2021
(restated)
25,794
21,151
46,945
2023
18,269
-
-
(572)
17,697
As at 30 June
2022
25,794
(5,289)
-
(2,236)
18,269
The carrying amounts of goodwill by Cash Generating Unit (“CGU”) are as follows:
(US dollars in thousands)
Aevitas O Holdings Pty Ltd (allocated to the
Critical Power Services segment)
VivoPower Pty Ltd (allocated to the Solar
Development segment)
Tembo (allocated to the Electric Vehicle
segment)
Total
As at 30 June
2022
7,222
9,451
1,595
18,269
2023
6,946
9,091
1,660
17,697
2021
21,919
-
1,698
2,177
25,794
2021
13,658
10,319
1,817
25,794
Page | 83
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
The Group conducts impairment tests on the carrying value of goodwill and intangibles annually, or more
frequently if there are any indications that goodwill might be impaired. The recoverable amount of the Cash
Generating Unit (“CGU”) to which goodwill has been allocated is determined from value in use calculations.
The key assumptions in the calculations are the discount rates applied, expected operating margin levels
and long-term growth rates. Management estimates discount rates that reflect the current market
assessments while margins and growth rates are based upon approved budgets and related projections.
The Group prepares cash flow forecasts using the approved budgets for the coming fiscal year and
management projections for the following two years. Cash flows are also projected for subsequent years as
management believe that the investment is held for the long term. These budgets and projections reflect
management’s view of the expected market conditions and the position of the CGU’s products and services
within those markets.
The CGU represented by Aevitas (being Critical Power Services) was assessed to have a value in excess of its
carrying value and hence no additional adjustments to goodwill were considered necessary. Key
assumptions used in the assessment of impairment were discount rate based on the weighted average cost
of capital of 12% (June 30, 2022: 11%; June 30, 2021: 10%) and annual growth rate of 3% per annum.
The solar element of the CGU represented by VivoPower Pty Ltd goodwill was assessed to have a value in
excess of its carrying value and hence no additional adjustments to goodwill were considered necessary. Key
assumptions used in the assessment of impairment were weighted average cost of capital of 11.3% (June
30, 2022: 11.3%, June 30, 2021: 10.7%), an average annual growth rate in years 2-5 of 60% during the rapid
growth phase of the business, with the assumption that an average of 50% of electric light vehicles sold by
the Company in fleet sizes over 50 vehicles will be sold with an additional sustainable energy solution.
The CGU represented by Tembo e-LV and subsidiaries was assessed to have a value in excess of its carrying
value. Key assumptions used in the assessment of impairment were discount rate based on the weighted
average cost of capital of 12% (June 30, 2022: 11%) and average annual growth rate of 33% per annum in
years 2-5 (June 30, 2022: 280% per annum in years 1-5). Growth rates reflect commencement of planned
series production at volume during the 5 year period, as the product development project is completed for
the current variant, to meet customer demand per sales agreements of over 15,000 units with major
international distribution partners, including Acces, Bodiz and GHH. No sensitivity analysis is provided as the
Company expects no foreseeable changes in the assumptions that would result in impairment of the
goodwill.
The CGU represented by Caret solar projects was assessed to have a value in excess of its carrying value and
hence no adjustments to capitalized development costs were considered necessary. Key assumptions used
in the assessment of impairment were weighted average cost of capital of 12.9% (June 30, 2022: 11.2%), $4
million free cash flow from project sales in years 1-4 (June 30, 2022: $2.3 million), $14.4 million development
fees from power-to-x partnerships.
Page | 84
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
b) Other intangible assets
(US dollars in
thousands)
Customer
Relationships
Trade
Names
Favourable
Supply
Contracts
Solar
Projects
Product
development
Other
Intangible
Assets
Total
Intangible
Assets
Cost
At 30 June 2020
Foreign exchange
Additions
Acquisitions
Disposals
Prior year
restatement
At 30 June 2021
restated
Foreign exchange
Additions
Disposals
Reclass to Assets
held for sale
At 30 June 2022
restated
Foreign exchange
Additions
Disposals
4,382
2,399
411
46
1,492
(550)
-
225
-
404
-
-
4,099
385
-
-
-
-
-
-
-
12,248
-
(504)
5,781
3,028
4,484
11,744
(542)
(271)
(376)
-
-
-
(9)
(2,687)
(1,385)
2,552
4
-
-
1,363
(25)
-
-
-
878
-
-
-
-
-
4,108
(157)
12,622
-
-
-
103
(47)
At 30 June 2023
2,556
1,338
3,951
12,678
-
-
513
-
-
-
513
(63)
3,355
-
-
3,805
302
3,715
-
7,832
156
13
-
-
-
-
169
(13)
19
-
-
175
(1)
29
-
203
11,036
1,034
559
14,144
(550)
(504)
25,719
(1,265)
4,252
(9)
(4,072)
24,625
123
3,857
(47)
28,558
(US dollars in
thousands)
Amortisation
At 30 June 2020
Foreign exchange
Amortisation
At 30 June 2021
Foreign exchange
Amortisation
Disposals
Reclass to Assets
held for sale
At 30 June 2022
Foreign exchange
Amortisation
Disposals
At 30 June 2023
Customer
Relationships
Trade
Names
Favourable
Supply
Contracts
Solar
Projects
Product
development
Other
Intangible
Assets
Total
Intangible
Assets
1,405
131
622
2,158
(208)
405
-
572
54
229
855
(79)
181
-
(1,232)
(462)
1,123
(1)
385
-
1,507
495
(8)
137
-
624
978
92
298
1,368
(115)
274
-
-
1,527
(61)
266
-
1,732
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
18
(2)
-
-
-
16
2
43
-
61
151
18
-
169
(13)
-
-
-
156
-
-
-
3,106
295
1,167
4,568
(417)
860
-
(1,694)
3,317
(68)
831
-
156
4,080
Page | 85
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
(US dollars in
thousands)
Net book value
At 30 June 2021
(restated)
At 30 June 2022
(restated)
At 30 June 2023
Customer
Relationships
Trade
Names
Favourable
Supply
Contracts
Solar
Projects
Product
development
Other
Intangible
Assets
Total
Intangible
Assets
3,623
2,173
3,116
11,744
495
1,429
1,049
868
714
2,581
2,219
12,622
12,678
3,789
7,771
-
19
47
21,151
21,308
24,478
Customer relationships, trade names and favorable supply contracts have an average remaining period of
amortization of 7 years, 10 years and 10 years respectively. Solar projects and electric vehicle product
development costs are incomplete and not generating revenue and therefore are not amortized in FY2023.
Additions for the year comprise $3.7 million electric vehicle product development costs in Tembo and $0.4
million of solar project development costs in Caret. $2.1 million net book value of customer relationship and
trade name intangible assets of Aevitas Solar ex-solar business sold to ARA in July 2022, was reclassified out
of intangible assets into assets held for sale as at June 30, 2022. The prior year restatement in the year 30
June 2021 relates to the reclassification of deposits originally reported within intangible assets.
15. Investment in subsidiaries
The principal operating undertakings in which the Group’s interest at 30 June 2023 is 20% or more are as
follows:
Subsidiary undertakings
VivoPower International Services Limited
VivoPower USA LLC
VivoPower US-NC-31, LLC
VivoPower US-NC-47, LLC
VivoPower (USA) Development, LLC
Caret, LLC
Caret Decimal, LLC
VivoPower Pty Ltd
Aevitas O Holdings Pty Ltd
Aevitas Group Limited
Aevitas Holdings Pty Ltd
Electrical Engineering Group Pty Limited
Tembo EV Australia Pty Ltd.*
Kenshaw Solar Pty Ltd (formerly J.A.
Martin Electrical Pty Limited)
Kenshaw Electrical Pty Limited
VivoPower International IMEA DMCC
VivoPower Philippines Inc.
VivoPower RE Solutions Inc.
V.V.P. Holdings Inc. **
Percentage of
Ordinary Shares held Registered address
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
64%
64%
40%
28 Esplanade, St Helier, Jersey, JE2
3QA
251 Little Falls Drive, Wilmington, DE,
USA 19808
153 Walker St, North Sydney
NSW, Australia 2060
Unit No: 4522, DMCC Business Centre,
Level No 1, Jewellery & Gemplex 3,
Dubai, United Arab Emirates
Unit 10A, Net Lima Building, 5th Avenue
cor. 26th Street, E-Square Zone,
Crescent Park West, Bonifacio Global
City, Taguig, Metro Manila
Page | 86
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Subsidiary undertakings
Tembo e-LV B.V.
Tembo 4x4 e-LV B.V.
FD 4x4 Centre B.V.
Percentage of
Ordinary Shares held Registered address
100%
100%
100%
Marinus van Meelweg 20, 5657 EN,
Eindhoven, Netherlands
* Name changed to Tembo Technologies Pty Ltd on August 2023.
** V.V.P. Holdings Inc. is controlled of VivoPower Pty Ltd notwithstanding only owning 40% of the ordinary share capital.
16. Investments accounted for using the equity method
In April 2017, the Company entered into a 50% joint venture with an early-stage solar development company,
ISS, to develop a diversified portfolio of 38 utility-scale solar projects in 9 different states, representing a total
electricity generating capacity of approximately 1.8 gigawatts, through an investment entity called Caret, LLC
(the “ISS Joint Venture”).
Under the terms of the ISS Joint Venture, the Company committed to invest $14.1 million in the ISS Joint
Venture for its 50% equity interest, after reducing the commitment by $0.8 million in potential brokerage
commissions that have not been required and which have been credited towards the Company’s
commitment. The $14.1 million commitment was allocated to each of the projects based on monthly capital
contributions determined with reference to completion of specific project development milestones under
an approved development budget for the ISS Joint Venture. To June 29, 2021, the Company contributed
$13.1 million of the $14.1 million commitment to the ISS Joint Venture, leaving a remaining capital
commitment at June 30, 2021, of $1.1 million, which was recorded in trade and other payables. 20 projects
within the portfolio were discontinued in the year ended June 30, 2021, resulting in a write off of capitalized
costs of $7.0 million related to those projects.
The joint venture was accounted for as an investment under the equity method at March 31, 2018. During
the year ended March 31, 2019, the Company made the decision to sell its portfolio of solar projects held
within the ISS Joint Venture, and the Joint Venture assets were reclassified as assets held for sale. In the year
ended June 30, 2020, sale of the entire portfolio was not successful, and the Company commenced a process
to take control of the portfolio from the Joint Venture partner, which was expected to result in a slower
project realization timeframe. Accordingly, the portion of the investment that was expected to be realized in
near term sales within 12 months remained in assets held for sale, whereas the remainder of the portfolio
was reclassified back to investments accounted for under the equity method.
On June 30, 2021, the Company acquired the remaining 50% of Caret from ISS, for a consideration of $1.
Accordingly, the book value of $8.1 million of the investments accounted for using the equity method have
been derecognized upon acquisition, and the fair value of 100% of the consolidated capitalized project
development costs recorded as an intangible asset upon acquisition, as detailed in Note 12b.
Page | 87
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Reconciliation of the ISS Joint Venture investment is as follows:
(US dollars in thousands)
Capital commitment
Commission credit
Discontinued projects
Acquisition costs
Total
As at 30 June
2023
-
2022
-
-
-
-
-
-
-
-
-
2021
-
-
-
-
-
Allocation of the net book value of the equity accounted investment in the ISS Joint Venture, between current
assets held for sale, and non-current investments (as disclosed in Note 16), until acquisition and
consolidation on 30 June 2021, was as follows:
(US dollars in thousands)
Assets classified as held for sale
Investments accounted for using the equity method
Total
As at 30 June
2022
-
-
-
2023
-
-
-
2021
-
-
-
The table below provides summarized financial information for the ISS Joint Venture. The information disclosed
reflects the amounts presented in the financial statements of ISS Joint Venture, amended to reflect adjustments
made by the Company when using the equity method, including fair value adjustments and modifications for
differences in accounting policy. The summarized financial information for the ISS Joint Venture does not
represent the Company’s share of those amounts.
(US dollars in thousands)
Current assets
Non-current assets
Total
Reconciliation to carrying amounts of the ISS Joint Venture:
(US dollars in thousands)
Opening net assets
Commission credit
Commission credit on abandonments
Sundry income
Project swaps
Abandoned projects
Acquisition of controlling interest
Net assets
VivoPower share in %
VivoPower share in $ (excluding funding obligation)
Commission credit
Acquisition costs
Net Assets
As at 30 June
2022
-
-
-
2023
-
-
-
2021
-
-
-
As at 30 June
2023
-
2022
-
2021
24,390
-
-
-
-
-
-
-
N/A
-
-
-
-
-
-
-
-
-
-
-
N/A
-
-
-
-
-
-
-
-
(13,900)
(10,490)
-
50%
-
-
-
-
Page | 88
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
17. Cash and cash equivalents
(US dollars in thousands)
Cash at bank and in hand
As at 30 June
2023
553
2022
1,285
2021
8,604
The credit ratings of the counterparties with which cash was held are detailed in the table below.
(US dollars in thousands)
A+
A
A-
AA-
Total
18. Restricted cash
(US dollars in thousands)
Bank guarantee security deposit
Total
As at 30 June
2022
171
-
2
1,112
1,285
As at 30 June
2022
1,195
1,195
2023
(12)
-
2
563
553
2023
608
608
2021
5,423
-
2
3,179
8,604
2021
1,140
1,140
At 30 June 2023, there is a total of $0.6 million (30 June 2022, $1.2 million; 30 June 2021, $1.1 million) of cash
which is subject to restriction as security for bank guarantees provided to customers in support of
performance obligations under power services contracts.
19. Trade and other receivables
(US dollars in thousands)
Current receivables
Trade receivables
Contract assets
Prepayments
Other receivables
Deposits
Current tax receivable
Total
As at June 30
2022
(restated)
2021
(restated)
3,866
694
787
3,055
504
182
9,088
4,959
2,723
2,837
1,580
504
182
12,785
2023
1,649
893
277
4,027
-
175
7,021
The prior year restatements in the years ending 30 June 2021 and 2022 relate to $0.5 million of deposits that
were originally reported within intangible assets and have been reclassified to current assets and $0.4 million
of inventory that was originally reported within other receivables.
In accordance with IFRS 15, contract assets are presented as a separate line item. The Company has not
recognised any loss allowance for contract assets.
Page | 89
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Analysis of trade receivables:
(US dollars in thousands)
Trade and other receivables
Less: credit note provision
Total
As at June 30
2022
3,866
-
3,866
2023
1,649
-
1,649
The maximum exposure to credit risk for trade receivables by geographic region was:
As at June 30
2022
2,684
1,181
3,866
As at June 30
2022
3,306
560
3,866
2023
1,451
198
1,649
2023
1,410
239
1,649
(US dollars in thousands)
Australia
Netherlands
Total
The aging of the trade receivables, net of provisions is:
(US dollars in thousands)
0-90 days
Greater than 90 days
Total
20. Inventory
(US dollars in thousands)
Raw materials
Total
As at June 30
2022
(restated)
1,887
1,887
2023
2,115
2,115
2021
(restated)
1,968
1,968
2021
4,959
-
4,959
2021
4,349
610
4,959
2021
4,918
41
4,959
The prior year restatements in the years ending 30 June 2021 and 2022 relate to $0.4 million of inventory
that was originally reported within other receivables.
21. Assets classified as held for sale
(US dollars in thousands)
Kenshaw Solar Pty Ltd (formerly
J.A. Martin Electrical Pty Limited)
Total
%
Owned
100%
As at 30 June
2022
8,214
8,214
2023
-
-
2021
-
-
The ex-solar operations of Kenshaw Solar Pty Ltd were sold to ARA on July 1, 2022. As disclosed in note 22,
the assets and liabilities of the disposed operation met the definition of discontinued operation under IFRS
5 at June 30, 2022. Accordingly, assets and liabilities of the discontinued operation were reclassified to
assets and liabilities held for sale as at June 30, 2022. As detailed in note 22, assets held for sale of $8.2
million as at June 30, 2022 comprised goodwill $5.3 million, intangible assets $2.1 million, property, plant
Page | 90
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
and equipment $0.6 million and trade and other receivables $0.2 million. Following sale completion, the
assets held for sale were disposed of, as detailed in note 22.
22. Discontinued operations
On July 1, 2022, the ex-solar operations of Kenshaw Solar Pty Ltd were sold to ARA. As the intention to sell
and process to locate a buyer for the business was initiated prior to June 30, 2022, but the sale only became
definitive on July 1, 2022, the results of the non-solar segment business of Aevitas Solar and adjustments
to anticipated net realisable value of disposal assets and liabilities held for sale, were reported in
discontinued operations in the year ended June 30, 2022. The associated assets and liabilities of the
discontinued operation were presented as held for sale within current assets (see Note 21) and current
liabilities as at June 30, 2022. Loss on disposal, including finalisation of sale price, including working capital
adjustments on completion, and finalisation of the deferred consideration, are recorded in discontinued
operations in the year ended June 30, 2023.
Financial information relating to the discontinued operation for the period to the date of disposal is set out
below:
Financial performance and cash flow information
The financial performance and cash flow information presented are for the years ended 30 June 2023, 2022
and 2021:
(US dollars in thousands)
Revenues
Other income
Loss on disposal of business
Expenses
(Loss)/profit before income tax
Income tax expense
(Loss)/profit from discontinued operations
Net cash (outflow)/inflow from operating
activities
Net cash inflow/(outflow) from investing
activities
Net cash inflow/(outflow) from financing
activities
Net (reduction)/increase in cash generated by
subsidiary
As at 30 June
2022
15,168
324
-
(16,266)
(774)
149
(625)
(625)
-
-
2023
-
-
(4,207)
-
(4,207)
-
(4,207)
(4,207)
-
-
2021
16,436
552
-
(16,895)
92
(23)
69
69
-
-
(4,207)
(625)
69
Page | 91
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the discontinued
operations as at June 30, 2022 and subsequently disposed of in the year ended June 30, 2023:
(US dollars in thousands)
Assets classified as held for sale
Trade and other receivables
Property, plant and equipment
Goodwill
Intangible assets
2023
-
-
-
-
2022
239
629
5,289
2,056
Total assets of disposal group classified as held for sale
-
8,214
Liabilities directly associated with assets classified as held for sale
Trade and other payables
Provisions - current
Lease liabilities - current
Provisions - non-current
Lease liabilities - non-current
Total liabilities of disposal group classified as held for sale
Consideration received or receivable
Cash
Fair value of contingent consideration
Less costs to sell
Total disposal consideration
Estimated carrying amount of net assets sold
Loss on sale
-
-
-
-
-
-
91
1,126
157
74
49
1,497
USD 000
AUD 000
2,874
624
(362)
3,136
6,989
(3,854)
4,336
941
(525)
4,752
10,143
(5,391)
Disposal consideration comprised cash purchase price including completion working capital adjustments
of $2.9 million (A$4.3 million). Initial estimate of fair value of deferred contingent consideration of $4.5
million, as recorded in July 2022, payable 12 months after completion, applied a contracted 4.5x multiple to
year 1 forecast EBITDA of $2.7 million, discounted at 10% to net present value, less purchase price paid. The
final deferred consideration of $0.6 million (A$ 0.9 million) was received in August 2023. Costs to sell
comprised advisory fees of $0.4 million (A$0.5 million). Net book value of net assets sold was $7.0 million
(A$10.1 million), resulting in a loss on disposal of $3.9 million (A$5.4 million).
Reconciliation of adjusted loss on sale
Gain on sale – as estimated at June 30, 2022
Cash consideration adjustment
Fair value of contingent consideration adjustment
Cost to sell adjustment
Carrying amount of net assets sold adjustment
Loss on sale
USD 000
AUD 000
34
378
(3,965)
(18)
(283)
(3,854)
50
529
(5,548)
(25)
(397)
(5,391)
Page | 92
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
23. Trade and other payables
(US dollars in thousands)
Trade payables
Shares to be issued
Accruals
Related party payable
Payroll liabilities
Sales tax payable
Deferred income
Other creditors
Total
Non-current other payables
Non-current accrued interest
Non-current accrued loan and other fees
Total
As at 30 June
2022
(restated)
5,692
-
4,322
477
2,210
949
974
833
2023
7,725
2,500
1,321
-
2,077
116
318
540
14,597
15,457
As at 30 June
2022
-
-
-
2023
6,129
314
6,443
2021
4,324
-
648
-
1,413
624
1,129
778
8,917
2021
-
-
-
In accordance with IFRS 15 – Revenue from Contracts with Customers, deferred income is presented as a
separate line item. Deferred income relates to the Company’s obligation to transfer goods or services to
customers for which the Company has received consideration (or the amount is due) from customers.
Deferred income is recorded as revenue when the Company fulfils its performance obligations under the
contract.
Of the $1.0 million deferred income balance at June 30, 2022, $0.9 million was recognized as revenue in the
year ended June 30, 2023. $0.9 million of the $1.1 million deferred income balance at June 30, 2021 was
recognized as revenue in the year ended June 30, 2022. It is expected that the total $0.3 million deferred
income balance will be included in revenue in the year ending June 30, 2024.
Non-current accrued interest relates to interest on AWN related party loans, where pursuant to amendments
to loan terms agreed on June 30, 2023, obligations to pay accrued interest on all loans except bridging loans
issued after December 31, 2022 are deferred until April 30, 2025.
The restatement in the year ended 30 June 2022 relates to $0.4m of expenses reclassified from the year
ended 30 June 2023 that had not been accrued for in the year ended 30 June 2022.
Page | 93
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
24. Provisions
(US dollars in thousands)
Current provisions
Employee entitlements
Fiscal
Litigation
Warranty
Remediation
Total current provisions
Non-current provisions
Employee entitlements
Total non-current provision
Total provisions
As at 30 June
2022
635
-
-
116
353
1,104
57
57
1,161
2023
502
1,174
-
102
-
1,778
76
76
1,854
2021
1,802
-
485
209
306
2,802
165
165
2,967
The entitlements include long term leave and vacation provisions. $1.13 million provisions and $0.07 million
long-term provisions relating to discontinued ex-solar J.A. Martin operations were reclassified to liabilities
held for sale in current liabilities, as at June 30, 2022.
The fiscal provision comprises a provision in respect of fiscal refunds on prior receivables, which the
Company is defending.
The remediation provision comprised additional work required on electric vehicles, comprising a
combination of remediation, testing or conversion of drivetrains to 72kwH. No further remediation work is
anticipated that is separately identifiable from ongoing capitalized development activities, accordingly the
provision has been released in FY2023.
Of the $0.5 million provision for disputed legal success fees recorded at June 30, 2021 in relation to litigation
of the Company’s former Chief Executive Officer, Mr. Comberg, for alleged breach of contract, $0.4 million
was utilized in the year ended June 30, 2022, whilst $0.1 million remained unused and was reversed in the
year ended June 30, 2022.
Warranty provisions in Australia relate to the servicing of generators and is based on a percentage of revenue
generated.
Page | 94
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
(US dollars in thousands)
At 30 June 2020
Foreign exchange
Additional provisions
Reverse unused provisions
Provisions utilised
At 30 June 2021
Foreign exchange
Additional provisions
Reverse unused provisions
Disposals and transfers to
AHFS
Unwinding of discount
Provisions utilised
At 30 June 2022
Foreign exchange
Charged to profit or loss
Reverse unused provisions
Provisions utilised
At 30 June 2023
Employee
Entitlements
Fiscal
Remediation
Onerous
Contracts
Litigation Warranty
Total
1,730
170
1,306
(67)
(1,172)
1,967
(165)
1,312
(35)
(1,200)
6
(1,192)
692
(27)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,174
(1)
(86)
578
-
-
1,174
-
-
306
-
-
306
(37)
84
-
-
-
-
353
8
(361)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,104
-
2,042
(2,661)
485
-
232
14
122
(112)
(47)
209
(18)
103
(100)
(142)
-
-
(385)
-
-
-
-
-
-
-
(37)
116
(4)
(10)
-
102
3,066
184
3,776
(179)
(3,880)
2,967
(221)
1,500
(277)
(1,200)
6
(1,614)
1,161
(23)
1,174
(372)
(86)
1,854
25. Loans and borrowings
(US dollars in thousands)
Current liabilities
Debtor invoice financing
Lease liabilities
Shareholder loans
Chattel mortgage
Project financing agreement
Bank loan
Total current liabilities
Non-current liabilities
Lease liabilities
Shareholder loan
Chattel mortgage
Project financing agreement
Bank loan
Total non-current liabilities
Total liabilities
As at 30 June
2023
2022
2021
1,329
462
32
505
497
89
-
7
2,384
1,843
28,111
50
-
-
30,004
32,388
4,285
142
-
145
5,109
1,959
21,121
264
108
-
23,452
28,561
36
669
-
88
59
152
1,004
326
21,175
244
183
159
22,087
23,091
Page | 95
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
On June 30, 2021, the Company agreed a refinancing of its existing $21.1 million shareholder loan with AWN
Holdings Limited (“AWN"), with repayment of principal from January 1, 2023 in sixty monthly instalments of
$0.35 million to loan maturity on December 31, 2027. The interest rate and line fee was agreed at 8% and
0.8% respectively, but no interest or line fee settlements were required until after a corporate liquidity event
had occurred. In addition, the Company agreed to a refinancing fee of $0.34 million in two tranches on June
30, 2022 and December 31, 2022. Security granted to AWN comprised a Specific Security Deed over the assets
of Aevitas O Holdings Pty Ltd and general security over the assets of VivoPower International PLC.
On June 30, 2022 further amendments to the loan were agreed with AWN:
(i) to defer repayment of principal to commence on October 1, 2023, with repayments over 60
months to September 30, 2028,
(ii) to defer interest payments from October 1, 2021, becoming due and payable on the earlier of a)
completion by VivoPower of a debt or equity raise of at least $25 million, and b) October 1, 2023.
(iii) to increase the interest rate and line fee to 10.00% and 2.00% per annum respectively during the
period from October 1, 2021 to the earlier of a) September 30, 2023 or b) the date a minimum prepayment of
$1,000,000 is made.
(iv) the initial refinancing fee of $0.34 million is to be amended to accrue incrementally at 1.6% per
annum from July 1, 2021 and become payable at the earlier of a) $1.0 million prepayment being made or b)
October 1, 2023.
(v) a new fixed facility extension fee of $0.355 million is payable in return for this amendment, to
accrue immediately but becoming payable on October 1, 2023.
On January 11, 2023, further amendments to the loan were agreed with AWN:
(i) to defer repayment of principal to commence on April 1, 2025, with repayments over 60 months
to March 31, 2030.
(ii) to defer interest payments from October 1, 2023, becoming due and payable on the earlier of a)
completion by VivoPower of a debt or equity raise of at least $25 million, and b) October 1, 2024.
(iii) to extend the increased interest rate and line fee of 10.00% and 2.00% per annum respectively
commenced on October 1, 2021 to the earlier of a) March 31, 2025 or b) the date a minimum Prepayment of
$1,000,000 is made.
(iv) to extend the initial refinancing fee accruing incrementally at 1.6% per annum from July 1, 2021
and become payable at the earlier of a) $1.0 million prepayment being made or b) April 1, 2025.
(v) to defer the repayment date of the previous fixed facility extension fee of $0.355 million,
becoming payable on April 1, 2025.
(vi) In addition to previously agreed refinancing fees, an additional $0.855 million fixed refinancing
fee will accrue immediately and become payable on April 1, 2025.
On June 30, 2023, further amendments to the loan were agreed with AWN:
(i) to defer interest payments from October 1, 2024 to April 1, 2025, and to replace the conditional
requirement to repay accrued interest upon completion by VivoPower of a debt or equity raise of at least $25
million, with the conditional requirement to make repayments of interest and/or principal to meet the
mandatory repayment schedule described in sections (ii) and (iii) below following a qualifying liquidity event.
(ii) upon completion by VivoPower International PLC of a qualifying liquidity event of at least $5.0
million, Aevitas O Holdings Pty Limited are required to make mandatory prepayment of principal and interest
to AWN in accordance with the following schedule:
a) proceeds $5 million to $7.5 million - pay 25% of amounts raised;
Page | 96
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
b) proceeds $7.5 million to $12.5 million - pay $1.875 million plus 45% of amounts raised;
c) proceeds $12.5 million and above - pay $4.125 million plus 50% of amounts raised.
(iii) for the purposes of the mandatory prepayment requirement, a ‘qualifying liquidity event’
excludes direct investments into VivoPower’s subsidiary, Tembo, and debt raised in respect of working
capital finance facilities, but includes:
a) equity or debt raise;
b) trade sale of underlying subsidiary or business unit (including, for example, Aevitas and Caret);
and
c) loan repayment from Tembo to VivoPower. “Note 32 - Subsequent Events” refers to the loan
between VivoPower International PLC and Tembo, repayable in 2026.
(iv) as consideration for the concessions agreed with AWN, VivoPower International PLC committed
to issue AWN with 500,000 warrants, with a duration of 12 months, at an exercise price of $0.67 per share.
In December 2021, a short term loan of $1.1 million (A$1.5 million) was provided from AWN to Aevitas O
Holdings Pty Limited at an interest rate of 10.0%, increasing to 12.5% from January 1, 2022. The loan is set to
expire on April 1, 2025 (initially set as April 30, 2022, then extended on June 30, 2022, to October 1, 2023, then
extended on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion by
VivoPower International PLC of a debt or equity raise of at least $25 million was dropped on June 30, 2023.
Facility extension fees of $29,000 (A$40,000) and $43,500 (A$60,000) are payable upon maturity, relating to
the two extensions respectively.
On February 22, 2022, a short term $3.0 million loan was provided from AWN to Aevitas O Holdings Pty
Limited, with interest rate of 10.00% per annum payable on the principal sum upon maturity. The loan is set
to expire on April 1, 2025 (initially set as May 13, 2022, then extended on June 30, 2022, to October 1, 2023,
then extended on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion
by VivoPower of a debt or equity raise of at least $25 million was dropped on June 30, 2023. Facility extension
fees of $85,000 and $110,000 are payable upon maturity, relating to the two extensions respectively.
On December 22, 2022, a short term $3.0 million loan was provided from AWN to Aevitas O Holdings Pty
Limited, with interest rate of BBSY bid floating rate (on average 3.6% for the period from inception to June
30, 2023) plus fixed margin of 15.0% per annum payable on the principal sum upon maturity. A 1% facility
establishment fee of $30,000 was deducted upon initial loan drawdown, and a further 3% exit fee of $90,000
is payable on expiry. The loan is set to expire on April 1, 2025 (initially set as October 1, 2023, then extended
on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower
of a debt or equity raise of at least $25 million was agreed on January 11, 2023, then dropped on June 30,
2023. A facility extension fee of $115,000 is payable upon maturity.
In February and March 2023, further short term loans of A$0.5 million and A$0.25 million were established
between AWN and Aevitas O Holdings Pty Limited, drawn down between February and May 2023. The loans
have interest rate of BBSY bid floating rate plus fixed margin of 15.0% per annum payable on the principal
sum upon maturity, with expiry dates of June 30, 2023. 1% facility establishment fees of total A$7,500 were
deducted upon loan drawdowns, and further 3% exit fees of total A$22,500 are payable on expiry. On June
30, 2023, the expiry of the loans was amended to August 31, 2023.
Following the sale of ex-solar J.A. Martin operations on July 1, 2022, the J.A. Martin debtor finance facility was
cancelled, but a new facility with a limit of A$2.5 million and variable interest rate (initial rate 7.75%) was
opened by Kenshaw, as well as a trade finance facility of $0.5 million. The debtor finance facility was partially
drawn down at June 30, 2023, with an outstanding balance of $1.3 million (A$2.0 million), due to timing of
operating activities (nil: June 30, 2022).
Lease liabilities have decreased by $0.2 million in the year to $2.3 million, following $0.2 million capitalization
of a new right-of-use asset in June 2023 in Kenshaw Electrical Pty Ltd, on entry into a new lease of an
Page | 97
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
additional workshop facility in Newcastle, New South Wales, offset by $0.4 million lease payments in the
year. Depreciation expense on right-of-use assets and interest expense on associated lease liabilities for the
year ended June 30, 2023 amounting to $0.8 million and $0.1 million respectively, are recognized in the
Consolidated Statement of Comprehensive Income. Total lease payments for the year ended June 30, 2023
amounted to $0.4 million (June 30, 2022: $0.4 million).
The obligations under lease liabilities are as follows:
Minimum lease Payments
As at 30 June
Present value of minimum lease
payments
As at 30 June
2023
2022
2021
2023
2022
2021
576
546
2,223
2,546
2,799
(494)
2,305
3,091
(627)
2,464
683
379
1,062
(67)
995
462
1,843
2,305
444
2,020
2,464
-
-
2,305
2,464
669
326
995
-
995
As at 30 June
2023
2022
2021
$307,815
25,651,140
$307,815
$255,819
21,318,118
$255,819
$222,074
18,506,064
$222,074
Amounts payable under
lease liabilities:
Less than one year
Later than one year but not
more than five
Future finance charges
Total lease obligations
26. Called up share capital
(US dollars in thousands)
Allotted, called up and fully paid
Ordinary Shares of $0.012 each
Number allotted
Ordinary Shares of $0.012 each
At the Company’s last Annual General Meeting on November 10, 2022, the Directors were given a new authority
to allot shares up to an aggregate nominal amount of $180,000.00.
Page | 98
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Movements in Ordinary Shares:
Shares
Par value
Share premium
Total
No.
USD 000
USD 000
USD 000
At 30 June 2020
Capital raises1
THFC investment2
Employee share scheme issues3
Acquisition of non-controlling interest in
subsidiary4
At 30 June 2021
Conversion of equity instruments3
Capital raises1
Other share issuances6
Employee share scheme issues2
At 30 June 2022
Capital raises1
Employee share scheme issues2
At 30 June 2023
13,557,376
4,091,019
49,750
792,126
15,793
18,506,064
2,005,190
82,644
42,000
682,220
21,318,118
4,230,770
102,252
25,651,140
163
49
1
9
-
222
24
1
1
8
256
51
1
308
40,215
40,378
34,317
34,366
499
961
237
500
970
237
76,229
76,451
20,442
20,466
243
217
244
218
2,287
2,295
99,418
99,674
5,449
151
5,500
152
105,018
105,326
1. On July 29, 2022, the Company entered into a Securities Purchase Agreement to issue and sell, in a registered direct offering directly to an
investor, (i) an aggregate of 2,300,000 Ordinary Shares (the “Shares”), nominal value $0.012 per share, at an offering price of $1.30 per
share and (ii) an aggregate of 1,930,770 pre-funded warrants exercisable for Ordinary Shares at an offering price of $1.2999 per pre-funded
warrant, for gross proceeds of approximately $5.5 million before deducting the placement agent fee and related offering expenses. The
pre-funded warrants were sold to the Investor whose purchase of Ordinary Shares in the Registered Offering would otherwise result in the
Investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the Company’s outstanding
Ordinary Shares immediately following the consummation of the Registered Offering, in lieu of Ordinary Shares. Each pre-funded warrant
represents the right to purchase one ordinary share at an exercise price of $0.0001 per share. The pre-funded warrants were exercised on
November 22, 2022.
In a concurrent private placement, the Company agreed to issue to the investor, Series A Warrants exercisable for an aggregate of 4,230,770
Ordinary Shares at an exercise price of $1.30 per share. Each Series A Warrant will be exercisable on February 2, 2023 and will expire on
February 2, 2028. The Series A Warrants and the Ordinary Shares issuable upon the exercise of the Series A Warrants were offered pursuant
to the exemption provided in Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b)
promulgated thereunder.
During the year ended June 30, 2021, the Company completed a series of capital raises on Nasdaq. A total of 4,091,019 Ordinary Shares
were issued, comprising 3,382,350 Ordinary Shares issued on October 19, 2020 as an underwritten public offering pursuant to an F-1
registration statement filed with the SEC on October 14, 2020, and 708,669 Ordinary Shares issued during June 2021, at the market price
(an ATM offering), pursuant to an F-3 registration statement filed with the SEC on December 21, 2020. In the year ended June 30, 2022, a
further 82,644 Ordinary Shares were issued under the same registration statement.
In February 2021, 49,750 ordinary shares were issued to Tottenham Hotspurs Football Club (“THFC”) as part of the exclusive global battery
partnership agreement.
2.
3. During the year ended June 30, 2023, 102,252 shares (year ended June 30, 2022: 682,220; year ended June 30, 2021: 792,126) were issued
4.
to employees and directors of the Company and consultants to the Company under the Omnibus Incentive agreement.
In February 2021, 15,793 restricted ordinary shares were issued as part consideration for the purchase of the non-controlling interest in
Tembo e-LV B.V.
5. On June 30, 2021, holders of convertible preference shares and convertible loan notes in Aevitas Group Limited, exercised their right to
convert the debt instruments into Ordinary Shares in VivoPower International PLC. A total of 2,005,190 restricted Ordinary Shares were
issued at a contracted price of $10.20 on July 21, 2021. Of the 2,005,190 Ordinary Shares issued, 1,959,339 were issued to entities owned
by AWN Holdings Limited, the Company’s largest individual shareholder
6. During the year ended June 30, 2022, 21,000 restricted shares were issued to Corporate Profile LLC and 21,000 restricted shares were
issued to FON Consulting Ltd in exchange for investor relations services.
Page | 99
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Each share has the same right to receive dividends and repayment of capital and represents one vote at
shareholders’ meetings. Proceeds received in addition to the nominal value of the shares issued during the
year have been included in share premium. The costs associated with the issuance of new shares are
included within other reserves (see note 27). Share premium has also been recorded in respect of the share
capital related to employee share awards.
Page | 100
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
27. Other reserves
(US dollars in thousands)
At 30 June 2020
Conversion to Aevitas preference shares
Interest on equity instruments
Equity instruments payments
Conversion to ordinary shares pending issue in VivoPower International PLC
(20,466)
Capital raising costs
Share issuance costs
Equity incentives cost less shares issued
Other movements
At 30 June 2021
Issuance of shares
Share issuance costs
Capital raising costs
Equity incentives cost less shares issued
Other movements
At 30 June 2022
Interest on equity instruments
Equity instruments payments
Capital raising costs
Equity incentives cost less shares issued
Other movements
At 30 June 2023
(390)
210
3,270
20,466
(8,828)
1,422
(971)
(45)
15,314
Equity
instruments1
Preference
shares1
27,057
(2,998)
114
(3,317)
-
-
-
-
-
-
-
-
-
-
2,998
185
(123)
-
-
-
-
-
-
-
-
-
-
3,270
-
-
-
-
-
198
(149)
-
-
-
-
3,319
Shares
pending
issue2
-
-
-
-
20,466
-
-
-
-
Capital
raising
costs3
(6,009)
Equity
incentive
costs4
344
-
-
-
-
(2,804)
(15)
-
-
-
-
-
-
-
-
1,078
-
Share
awards
issuance4
-
-
-
-
-
-
-
(971)
Foreign
exchange
Total
16
21,408
-
-
-
-
-
-
-
-
299
(3,440)
-
(2,804)
(15)
107
-
(61)
(241)
(20,466)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(122)
-
-
1,452
-
-
-
(20,466)
(1,879)
-
-
-
-
-
-
(1,879)
(122)
1,452
(283)
(283)
(8,950)
2,874
(2,850)
(328)
(5,984)
-
-
-
-
-
-
-
-
-
-
-
198
(149)
(446)
(7)
147
(154)
-
-
(104)
(104)
(436)
-
-
(9,386)
3,021
(3,004)
(432)
(6,492)
Page | 101
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
1.
Equity instruments held at 30 June 2020 were convertible preference shares and convertible loan notes in Aevitas Group Limited (“Aevitas
Group”) which must convert to shares of VivoPower at $10.20 per share no later than 30 June 2021. The Company classified these
instruments as equity under the “fixed-for-fixed” rule meaning that both the amount of consideration received/receivable and the
number of equity instruments to be issued is fixed.
There were 2,473,367 convertible preference shares outstanding with a face value of AU$3.00 per share and a value held in reserves of
AU$11,059,348 at 30 June 2020, representing their face value plus dividends accrued. Convertible preference shares were subordinated
to all creditors of Aevitas Group, ranked equally amongst themselves, and ranked in priority to Ordinary Shares of Aevitas Group.
There were 2,473,367 convertible loan notes outstanding with a face value of AU$7.00 per share and a value held in reserves of
AU$25,075,203, representing their face value plus the dividends accrued. The convertible loan notes ranked equally with the unsecured
creditors of Aevitas Group.
Dividends or interest were payable quarterly in arrears at a rate of 7% on the capitalised value to December 29, 2016, the date at which
they became convertible to VivoPower shares. At maturity, or if a trigger event such as a change of control of Aevitas Group or VivoPower,
a listing event, or a disposal of substantially all of the assets of Aevitas Group had occurred, the convertible preference shares and
convertible loan notes in Aevitas Group convert to VivoPower Ordinary Shares at a price of US$10.20 per share
On August 7, 2020, the Company offered one new Aevitas Preference Share, with an issue price of $10, in exchange for each combined
convertible note and convertible preference share, with an issue price of $7 and $3 respectively. Dividends are payable quarterly, in
arrears, at a rate of 7%. Of the 2,473,367 holders of combined convertible note and convertible preference shares, 426,528 holders
accepted the terms of the new Aevitas Preference Shares and received 426,528 Aevitas Preference Shares (A$4,265,280) on 31 August
2020, in exchange for the combined convertible notes and convertible preference shares previously held. The new Aevitas Preference
Shares are subordinated to all creditors of Aevitas Group, rank equally amongst themselves, and rank in priority to Aevitas Group Limited
Ordinary Shares for the payment of dividends.
The 426,528 holders which exchanged on 31 August 2020, had earned $26,708 interest on the convertible loan note in the year ended 20
June 2021, up until exchange, and this was paid in full along with $11,447 dividends that accrued over the same pre-exchange period on
the convertible preference shares. Post-exchange, $185,480 dividends of the Aevitas Preference Shares have been earned, with $121,905
of those paid by 30 June 2021. And the 426,528 Aevitas Preference Shares have a face value of $3,208,922 (A$10 per share), recognised
together with the dividends payable.
On 30 June 2021, the remaining 2,005,190 holders of convertible preference shares and convertible loan notes in Aevitas Group Limited
(“Aevitas Group”), exercised their right to convert the instruments into Ordinary Shares in VivoPower International PLC. The cumulative
balance of face value and accrued unpaid interest and dividends outstanding of the convertible preference shares and convertible loan
notes at 30 June 2021 of $20.5 million, was redeemed on that date, and VivoPower International PLC recognised the requirement to issue
2,005,190 restricted Ordinary Shares, based on a contracted conversion price of $10.20 per share.
During the year ended 30 June 2021, $20.5 million was recognized in equity of the 2,005,190 restricted Ordinary Shares pending issuance
at a contracted conversion price of $10.20 per share. The 2,005,190 restricted Ordinary Shares were issued on 21 July 2021.
The $0.4 million of transaction costs incurred in the year ended June 30, 2023 (year ended June 30, 2022: $0.1 million; year ended June
30, 2021: $2.8 million) relate primarily to capital raises on Nasdaq.
During the year ended June 30, 2023, $0.1 million was expensed towards share incentive awards to employees, directors, and consultants
of the Company under the 2017 Omnibus Incentive Plan (year ended June 30, 2022: $1.9 million). Amounts are expensed at the award
grant price over the vesting period, adjusted for actual quantities upon vesting. Of the expenses recorded, $0.1 million of shares were
delivered to participants (year ended June 30, 2022: $1.9 million).
2.
3.
4.
During the years ended 30 June 2022 and 30 June 2023, the following awards under the Incentive Plan
have been granted, and have vested or forfeit:
Outstanding at 30 June 2021
Granted
Vested
Forfeit
Outstanding at 30 June 2022
Granted
Vested
Forfeit
Outstanding at 30 June 2023
Number of
RSUs, PSUs
and BSAs
(thousands)
$’000
Weighted
average grant
date fair value
460
706
(755)
(132)
279
912
(356)
(178)
657
$1,186
1,838
(1,877)
(676)
471
303
(123)
(320)
331
Page | 102
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
28. Loss per share
The loss and weighted average numbers of Ordinary Shares used in the calculation of loss per share are as
follows:
(US dollars in thousands)
Loss for the year/period attributable to equity
owners
Weighted average number of shares in issue
(‘000s)
Basic loss per share (dollars)
Diluted loss per share (dollars)
29. Pensions
As at 30 June
2023
(24,355)
2022
(22,054)
2021
(7,571)
24,672
20,722
16,306
(0.99)
(0.99)
(1.06)
(1.06)
(0.49)
(0.49)
The Company’s principal pension plan comprises the compulsory superannuation scheme in Australia,
where the Company contributed 10.5% during the year, and for FY2024, the Company will contribute 11%. A
pension scheme is also in place for U.K. employees, where the Company contributes 7% (year ended June
30, 2022: 7%; year ended June 30, 2021: 7%). A pension scheme is also in place for Netherlands employees
where the Company contributes 10.3%. The pension charge for the year represents contributions payable
by the Group which amounted to $0.4 million (year ended June 30, 2022: $0.9 million; year ended June 30,
2021: $0.8 million).
30. Financial instruments
(US dollars in thousands)
Financial assets at amortised cost
Trade and other receivables
Cash and cash equivalents
Restricted cash
Total
Financial liabilities at amortised cost
Loans and borrowings
Trade and other payables
Total
As at 30 June
2022
6,921
1,285
1,195
9,401
28,561
11,324
39,885
2023
6,506
553
608
7,667
32,388
16,029
48,417
2021
6,539
8,604
1,140
16,283
23,091
5,750
28,841
The amounts disclosed in the above table for trade and other receivables and payables do not agree to the
amount reported in the Consolidated Statement of Financial Position as they exclude prepaid expenses,
payroll and sales tax payable, current tax receivables and contract assets and liabilities which do not meet
the definition of financial assets or liabilities.
Page | 103
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
(a)
Financial risk management
The Group’s principal financial instruments are bank balances, cash and medium-term loans. The main
purpose of these financial instruments is to manage the Group’s funding and liquidity requirements. The
Group also has other financial instruments such as trade receivables and trade payables which arise directly
from its operations.
The Group is exposed through its operations to the following financial risks:
•
Liquidity risk
• Credit risk
•
•
Interest rate risk
Foreign currency risk
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework. Policy for managing risks is set by the Chief Executive Officer and is implemented
by the Group’s finance department. All risks are managed centrally with a tight control of all financial matters.
(b) Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders, while protecting
and strengthening the Group balance sheet through the appropriate balance of debt and equity funding.
The Group manages its capital structure (net debt plus equity) and makes adjustments to it in light of
changes to economic conditions and the strategic objectives of the Group either through the issuance of
new shares, capital raisings or borrowing facilities to meet the requirements of each local business.
Refer to Note 26 for the Group statement of changes in equity for the value of the Group’s equity.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group considers that liquidity risk is effectively managed and mitigated. The Group held unrestricted cash
resources of $0.6 million at June 30, 2023 (June 30, 2022: $1.3m; June 30, 2021: $8.6m). The ratio of current
assets to current liabilities at June 30, 2023 is 0.54 (June 30, 2022: 0.93; June 30, 2021: 1.82).
Following sale of ex-solar J.A. Martin operations on July 1, 2022, the A$2.1 million J.A. Martin debtor finance
facility (drawn down at June 30, 2022: nil; June 30, 2021: nil) was cancelled and a new facility with a limit of
A$2.5 million and variable interest rate that is currently 7.75% was established by Kenshaw, as well as a trade
finance facility of $0.5 million.
The Group maintains near-term cash flow forecasts that enable it to identify its borrowings requirement so
that remedial action can be taken if necessary.
Contractual maturities of financial liabilities, including interest payments, are as follows:
Year ended 30 June 2023
(US dollars in thousands)
Less than
1 year
1-3
years
3-5
years
More than 5
years
Total
Contractual maturity of financial liabilities
Trade and other payables (financial liabilities)
16,029
16,029
-
-
Borrowings
Lease liabilities
Total
30,083
2,305
1,922
12,323
8,447
462
1,375
415
48,417
18,413
13,698
8,862
-
7,391
53
7,444
Page | 104
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Year ended 30 June 2022
(US dollars in thousands)
Less than
1 year
1-3
years
3-5
years
More than 5
years
Total
Contractual maturity of financial liabilities
Trade and other payables (financial liabilities)
10,973
10,973
-
-
Borrowings
Lease liabilities
Total
26,097
2,464
4,604
11,283
10,211
506
846
1,112
39,534
16,083
12,129
11,323
-
-
-
-
Year ended 30 June 2021
(US dollars in thousands)
Total
Less than
1 year
1-3
years
3-5
years
More than
5 years
Contractual maturity of financial liabilities
Trade and other payables (financial liabilities)
5,751
Borrowings
Lease liabilities
Total
(d) Credit risk
22,096
995
28,842
5,751
411
669
-
-
11,424
10,261
326
-
6,831
11,750
10,261
-
-
-
-
The primary risk arises from the Group’s receivables from customers and contract assets. The majority of the
Group’s customers are long standing and have been a customer of the Group for many years. Losses have
occurred infrequently. The Group is mainly exposed to credit risks from credit sales, but the Group has no
significant concentrations of credit risk and keeps the credit status of customers under review. Credit risks of
customers of new customers are reviewed before entering into contracts. The debtor exposure is monitored
by Group finance and the local entities review and report their exposure on a monthly basis.
The Group does not consider the exposure to the above risks to be significant and has therefore not
presented a sensitivity analysis on the identified risks.
The credit quality of debtors neither past due nor impaired is good. Refer to Note 19 for further analysis on
trade receivables.
(e) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk on sales and purchases that are
denominated in currencies other than the respective functional currencies of the Group entities to which
they relate, primarily between USD, AUD, EUR and GBP.
The Group’s investments in overseas subsidiaries are not hedged as those currency positions are either USD
denominated and/or considered to be long-term in nature.
The Group is exposed to foreign exchange risk on the following balances at 30 June 2023:
• Cash and cash equivalents $0.54 million denominated in AUD, $0.02 million denominated in EUR and
($0.03) million denominated in GBP.
• Restricted cash $0.6 million denominated in AUD.
• Trade and other receivables $3.4 million denominated in AUD, $1.0 million denominated in EUR and
$2.6 million denominated in GBP.
• Trade and other payables $5.0 million denominated in AUD, $2.0 million in EUR and $2.7 million in
GBP.
Page | 105
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
• Borrowings $2.9 million denominated in AUD and $0.9 million in EUR.
• Provisions $0.7 million denominated in AUD and $1.2 million in GBP.
Of the total shareholder loan of $28.6 million, $27.1 million is denominated in USD and $1.5 million is
denominated in AUD.
(f)
Interest rate risk
As a result of the related party loan agreement the Group is exposed to interest rate volatility. However, the
interest rate is fixed for the medium term, therefore, the risk is largely mitigated for the near future. The Group
will continue to monitor the movements in the wider global economy.
31. Related party transactions
AWN is not the ultimate controlling party of VivoPower, but retains a significant influence. As at June 30, 2023,
AWN held a 39.5% equity interest in the Company.
Kevin Chin, Chairman and Chief Executive Officer of VivoPower, is also Chief Executive of AWN. During the
period, a number of services were provided to the Company from AWN and its subsidiaries; the extent of the
transactions between the two groups is listed below.
On January 11, 2023, amendments to the related party loan were agreed with AWN:
(i) to defer repayment of principal to commence on April 1, 2025, with repayments over 60 months
to March 31, 2030.
(ii) to defer interest payments from October 1, 2023, becoming due and payable on the earlier of a)
completion by VivoPower of a debt or equity raise of at least US$25 million, and b) October 1, 2024.
(iii) to extend the increased interest rate and line fee of 10.00% and 2.00% per annum respectively
commenced on October 1, 2021 to the earlier of a) March 31, 2025 or b) the date a minimum Prepayment of
US$1,000,000 is made.
(iv) to extend the initial refinancing fee accruing incrementally at 1.6% per annum from July 1, 2021
and become payable at the earlier of a) US$1.0 million prepayment being made or b) April 1, 2025.
(v) to defer the repayment date of the previous fixed facility extension fee of $0.355 million,
becoming payable on April 1, 2025.
(vi) In addition to previously agreed refinancing fees, an additional $0.855 million fixed refinancing
fee will accrue immediately and become payable on April 1, 2025.
On June 30, 2023, further amendments to the loan were agreed with AWN:
(i) to defer interest payments from October 1, 2024 to April 1, 2025, and to replace the conditional
requirement to repay accrued interest upon completion by VivoPower of a debt or equity raise of at least
US$25 million, with the conditional requirement to make repayments of interest and/or principal to meet
the mandatory repayment schedule described in sections (ii) and (iii) below following a qualifying liquidity
event.
(ii) upon completion by VivoPower International PLC of a qualifying liquidity event of at least $5.0
million, Aevitas O Holdings Pty Limited is required to make mandatory prepayment of principal and interest
to AWN Holdings in accordance with
the following schedule:
a) proceeds $5 million to $7.5 million - pay 25% of amounts raised;
b) proceeds $7.5 million to $12.5 million - pay $1.875 million plus 45% of amounts raised;
Page | 106
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
c) proceeds $12.5 million and above - pay $4.125 million plus 25% of amounts raised.
(iii) for the purposes of the mandatory prepayment requirement, a ‘qualifying liquidity event’
excludes direct investments into VivoPower’s subsidiary, Tembo, and debt raised in respect of working
capital finance facilities, but includes:
a) equity or debt raise;
b) trade sale of underlying subsidiary or business unit (including, for example, Aevitas and Caret);
and
c) loan repayment from Tembo to VivoPower. Note 32 - Subsequent Events refers to the loan
between VivoPower International PLC and Tembo, repayable in 2026.
(iv) as consideration for the concessions agreed with AWN, VivoPower International PLC committed
to issue AWN with 500,000 warrants, with a duration of 12 months, at an exercise price of $0.67 per share.
In December 2021, a short-term loan of $1.1 million (A$1.5 million) was provided from AWN to Aevitas O
Holdings Pty Limited at an interest rate of 10.0%, increasing to 12.5% from January 1, 2022. The loan is set to
expire on April 1, 2025 (initially set as April 30, 2022, then extended to the earlier of October 01, 2023, then
extended on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion by
VivoPower International PLC of a debt or equity raise of at least S$25 million was dropped on June 30, 2023.
Facility extension fees of A$29,000 (A$40,000) and $43,500 (A$60,000) are payable upon maturity, relating to
the two extensions respectively.
On February 22, 2022, a short-term $3.0 million loan was provided from AWN Holdings to Aevitas O Holdings
Pty Limited, with an interest rate of 10.00% per annum payable on the principal sum upon maturity. The loan
is set to expire on April 1, 2025 (initially set as May 13, 2022, then extended to the earlier of October 1, 2023,
then extended on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion
by VivoPower International PLC of a debt or equity raise of at least S$25 million was dropped on June 30,
2023. Facility extension fees of $85,000 and $110,000 are payable upon maturity, relating to the two
extensions respectively.
On December 22, 2022, a short-term $3.0 million loan was provided from AWN to Aevitas, with an interest
rate of BBSY bid floating rate (on average 3.60% for the period from inception to June 30, 2023) plus fixed
margin of 15.0% per annum payable on the principal sum upon maturity. A 1% facility establishment fee of
$30,000 was deducted upon initial loan drawdown, and a further 3% exit fee of $90,000 is payable on expiry.
The loan is set to expire on April 1, 2025 (initially set as October 1, 2023, then extended on January 11, 2023
to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower International PLC of
a debt or equity raise of at least S$25 million was agreed on January 11, 2023, then dropped on June 30,
2023. A facility extension fee of $115,000 is payable upon maturity.
In February and March 2023, further short term loans of A$0.5 million and A$0.25 million were established
between AWN Holdings and Aevitas O Holdings Pty Limited, drawn down between February and May 2023.
The loans have an interest rate of BBSY bid floating rate plus fixed margin of 15.0% per annum payable on
the principal sum upon maturity, with expiry dates of June 30, 2023. 1% facility establishment fees of total
A$7,500 were deducted upon loan drawdowns, and further 3% exit fees of total A$22,500 are payable on
expiry. On June 30, 2023, the expiry or the loans was amended to August 31, 2023.
Mr. Hui is paid fees of $50,000 per annum during the year. Mr. Hui elected to receive 100% of his fees in cash.
$25,000 remaining accrued and payable as at June 30, 2023. Mr. Hui also receives equity-based remuneration
in relation to his involvement in management of Critical Power Services segment, and the hyper-turnaround
and hyperscaling program. Of the 17,500 ($13,125) annual retention RSUs granted on April 1, 2020, vesting
annually from June 2021 to June 2026, 3,500 RSUs ($2,625) vested in the current year. Of the 52,500 ($39,375)
performance RSUs vesting quarterly from September 2020 to June 2023, dependent on meeting quarterly
performance goals, 6,314 RSUs ($4,736) vested in the current year. A further 20,000 annual retention RSU's
Page | 107
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
($5,200) were granted to Mr. Hui on January 11, 2023, vesting annually from December 2023 to December
2025.
From time to time, costs incurred by AWN on behalf of VivoPower are recharged to the Company. During the
year ended June 30, 2023, $1,138,346 was recharged to the Company (year ended June 30, 2022: $343,806,
year ended June 30, 2021: $1,028,096). At June 30, 2023, the Company has a payable to AWN in respect of
recharges of $1,392,203 (June 30, 2022: $313,688, June 30, 2021: $4,345).
Aevitas is indebted to The Panaga Group Trust, of which Mr. Kevin Chin is a beneficiary and one of the
directors of the corporate trustee of such trust, with 4,697 Aevitas Preference Shares, of face value A$46,970.
The Panaga Group Trust earned A$3,302 ($2,188) dividends on the Aevitas Preference Shares during the year
ended June 30, 2023.
Chairman’s fees for Kevin Chin in the amount of £68,000 ($81,819) were charged to the Company by Arowana
Partners Group Pty Ltd (“APG”) in the current year. A further $130,863 costs incurred by APG on behalf of the
Company were recharged to the Company in the year. At June 30, 2023, the Company had an account
payable of $157,036 in respect of these services. Mr. Chin is a shareholder and director of Arowana Partners
Group Pty Ltd during the year ended June 30, 2023.
As CEO, Mr Chin is paid £325,000 base fees, £38,000 annual professional development allowance. Of the base
salary, 4 months were paid in cash, whilst for 8 months, Mr Chin agreed to receive payment in the form of
541,666 cashless warrants in VivoPower shares, exerciseable in the period June 3, 2024 to June 3, 2029 at an
exercise price of $0.60. Shares issued following exercising of warrants will remain restricted for 12 months.
Mr Chin has allocated these warrants to a benevolent cause, the ASEAN Foundation.
Mr. Chin receives equity-based remuneration in relation to his involvement in leading the hyper-turnaround
and hyperscaling program. Of the 87,200 ($65,400) annual retention RSUs granted on April 1, 2020, vesting
annually from June 2021 to June 2026, 17,440 RSUs ($13,080) vested in the current year. Of the 261,600
($196,200) performance RSUs vesting quarterly from September 2020 to June 2023, dependent on meeting
quarterly performance goals, 31,456 RSUs ($23,592) vested in the current year. In December 2021, the
Remuneration Committee approved an equity award of RSUs in relation to short-term incentives for the year
ended June 30, 2022, vesting in June 2023 deferred from June 2022. The award vested 94,291 RSU's
($275,330), based on Mr Chin's base salary £325,000 x 1.3237 exchange rate x 64% performance measurement
/ $2.92 VWAP share price. A further 20,000 annual retention RSU's ($5,200) were granted to Mr. Chin on
January 11, 2023, vesting annually from December 2023 to December 2025.
On November 26, 2021, APG provided a loan of $0.37 million to Caret to provide working capital assistance.
The loan incurred interest during the year of $22,895 at 8% plus a 2% facility fee, plus a one-off establishment
fee of $7,400. The loan plus interest were repaid in August 2022.
32. Subsequent events
An extraordinary general meeting of shareholders was held on July 6, 2023, which included a consideration
and approval, in accordance with section 618 of the Companies Act 2006, that the Company (acting by its
Board) be and is hereby authorised to consolidate, or consolidate and divide, all or such number of its
existing Ordinary Shares of $0.012 each into such reduced number of Ordinary Shares of such increased
nominal value as the Company’s Board may at any time prior to 23 October 2023 determine is appropriate
in order to ensure that the Company remains compliant with the applicable rules of Nasdaq concerning the
minimum trading price of the Company’s shares. The Ordinary Shares existing after any exercise of this power
by the Company shall have the same rights and be subject to the same restrictions (save as to nominal value)
as the existing Ordinary Shares of $0.012 each in the capital of the Company as set out in the Company’s
articles of association for the time being. This resolution was approved by The Company’s shareholders by
no less than 96% of votes cast.
Page | 108
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2023
Tembo signed a landmark joint venture agreement with Francisco Motors, the pioneering manufacturer of
jeepneys in the Philippines. Under the agreement, Tembo will develop and supply EUV electrification kits for
a new generation of electric jeepneys. One of the country’s cultural icons, jeepneys are the most common
utility vehicle in the Philippines and the main mode of public transportation, accounting for just over 40% of
public transportation in the country. There are more than 200,000 jeepneys on the road in the Philippines, of
which more than 90% are at least 15 years old and running on second-hand diesel engines. Under the Public
Utility Vehicle Modernization Program, the Philippine Government requires that all jeepneys and other public
utility vehicles with at least 15 years of service be replaced with Euro 4-compliant or electric-powered
vehicles. This creates a US$10bn+ addressable market for the replacement of the old jeepneys. Francisco
Motors and Tembo have already secured their first orders and have commenced work to deliver on those
orders. The agreement will also give Tembo access to low-cost assembly in the Philippines.
33. Key management personnel compensation
Key management personnel, which are those roles that have a Group management aspect to them are
included in Note 9 to the consolidated financial statements.
34. Ultimate controlling party
As at June 30, 2023, AWN held a 39.5% equity interest in the Company. Since June 30, 2021, the Company
no longer has an ultimate controlling party.
In prior periods, the ultimate controlling party and the results into which these financials were consolidated
was AWN, a company registered in Australia.
Key management personnel, which are those roles that have a Group management aspect to them, are
included in Note 9 to the consolidated financial statements.
35. Prior year adjustments
For the year ended 30 June, 2022, $0.5 million of expenses were erroneously not booked until 2023 that
related to services provided in the year end 30 June 2022 for which no accruals had been created. These
expenses included $0.4 million professional services but also included $0.1 million equity incentives. The
impact was a reduction in the profit and loss of $0.5 million, a $0.4 million increase current liabilities and
$0.1 million increase in equity accounts.
For the year ended 30 June 2021, $0.5 million of deposits had been incorrectly classified as intangible
assets for which these deposits were refunded in the year ended 30 June 2023. The reclassification resulted
in current assets increasing by $0.5 million and an opposite reduction in long term assets with no impact
on profit and loss or gross assets.
For the years ended 30 June, 2022 and 30 June, 2021, it was noted that $0.4 million of inventory had
incorrectly been classified within other receivables. This has now been corrected with an increase in
inventory in both years of $0.4 million and a reduction in other receivables.
Page | 109
Company Statement of Financial Position
VivoPower International PLC for the year ended 30 June 2023
Company Statement of Financial Position
(US dollars in thousands)
Note
2023
30 June
2022
(restated)
2021
(restated)
ASSETS
Non-current assets
Deferred tax assets
Investments
Intercompany loan receivable
Total non-current assets
Current assets
Cash and cash equivalents
Other receivables
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Equity
Share capital
Share premium
Other reserves
Retained deficit
Total Equity
TOTAL EQUITY AND
LIABILITIES
Registered number 09978410
38
39
40
41
42
42
43
-
14,542
-
14,542
(24)
59,049
59,025
73,567
2,105
1,175
3,280
308
105,018
(9,379)
(25,660)
70,287
73,567
-
14,513
-
14,513
9
54,573
54,582
69,095
2,235
-
2,350
256
99,418
(8,927)
(23,887)
66,860
69,095
-
14,513
-
14,513
5,256
51,508
56,764
71,277
1,786
485
2,271
222
76,229
12,087
(19,532)
69,006
71,277
As allowed by S408 Companies Act 2006, no profit and loss account is presented in respect of the parent
company. The loss for parent company after taxation for the year ended 30 June 2023 was $1,773,000) (year
ended 30 June 2022 was $4,355,000 (restated); year ended 30 June 2021 was $4,192,000 (restated)).
These financials were approved by the Board of Directors on 27 November 2023 and signed on its behalf by:
Kevin Chin
Chairman
Page | 110
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2023
Company Statement of Cash Flow
(US dollars in thousands, except per share
amounts)
Cash flows from operating activities
Loss for the period
Income tax
Foreign exchange loss
Finance income
Finance expense
Increase/(decrease) in provisions
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Year ended 30 June
2022
2021
Note
2023
(restated)
(restated)
(1,773)
(4,355)
(4,192)
-
49
-
17
1,175
(1,374)
(130)
-
30
-
13
(485)
815
449
-
87
-
2
(620)
1,291
(1,203)
Net cash used in operating activities
(2,036)
(3,533)
(4,636)
Cash flows from investing activities
Acquisition of subsidiary
Intercompany loan repayments
Net cash used in investing activities
Cash flows from financing activities
Capital movements - net
Finance expense
Net cash from financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of the
period
Cash and cash equivalents at the end of the
period
(29)
(3,152)
(3,181)
5,200
(17)
5,183
(34)
9
-
(7,125)
(3,909)
(14,859)
(3,909)
(21,984)
2,208
(13)
2,195
31,570
-
31,570
(5,247)
4,950
5,256
306
(24)
9
5,256
Page | 111
Company Statement of Changes in Equity
VivoPower International PLC for the year ended 30 June 2023
Company Statement of Changes in Equity
(US dollars in thousands)
Share
Capital
Share
Premium
Other
Reserves
Retained
Deficit
Total
At 30 June 2020
163
40,215
19,185
(15,339)
44,224
Total comprehensive loss for the
period
Prior year adjustments
Restated loss for the year
Capital raises
Equity instruments
Other share issuances
Employee share awards
At 30 June 2021
Total comprehensive loss for the
period
Prior year adjustments
Restated loss for the year
Capital raises
Equity instruments
Other share issuances
Employee share awards
At 30 June 2022
Total comprehensive income for the
period
Capital raises
Other share issuances
Employee share awards
At 30 June 2023
-
-
-
-
-
-
-
-
-
49
34,317
(2,821)
(4,344)
(4,344)
151
(4,193)
-
-
-
-
(4,116)
151
(4,193)
31,545
(4,383)
737
1,077
24,782
69,006
(4,116)
(239)
(239)
(4,355)
(4,355)
-
736
961
36,014
76,229
-
-
-
(4,383)
-
107
-
-
-
(7,098)
(4,193)
12,087
(19,532)
243
(121)
20,442
(20,466)
217
2,287
(10)
(417)
-
-
-
-
23,189
(21,148)
(4,355)
99,418
(8,927)
(23,887)
-
-
(1,773)
5,449
-
151
5,600
(445)
(134)
127
(318)
-
-
-
(1,773)
123
-
208
1,878
(2,280)
66,860
(1,773)
5,055
(134)
279
3,561
105,018
(9,379)
(25,660)
70,287
-
1
9
59
222
-
-
-
1
24
1
8
34
256
-
51
-
1
52
308
For further information on “Other Reserves” please see Note 43 within the consolidated financial
statements.
Page | 112
Company Information
VivoPower International PLC for the year ended 30 June 2023
Notes to the Company Financial Statements
36. Reporting entity
VivoPower International PLC company financial statements were prepared in accordance with with UK
adopted International Accounting Standards (UK IAS), IFRIC interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. The financial statements have been prepared under the
historical cost convention.
As allowed by S408 Companies Act 2006, no profit and loss account is presented in respect of the parent
company.
37. Basis of preparation
(a) Foreign exchange - The Company’s functional and presentational currency is the US dollar.
Transactions denominated in foreign currencies are translated into the functional currency of the entity at
the rates prevailing at the dates of the individual transactions. Foreign currency monetary assets and
liabilities are translated at the rates prevailing at the balance sheet date. Exchange gains and losses arising
are charged or credited to the profit and loss account.
(b) Taxation - Deferred taxation is provided in full for material timing differences except where
recoverability of a deferred tax is considered to be remote in the foreseeable future. Deferred tax balances
are not discounted unless the effects are considered to be material the Company’s results.
(c)
Investments - Investments held as non-current assets are shown at cost less provision for impairment.
(d) Related party transactions - Details of the related party transactions can be found in Note 31 within
the consolidated financial statements.
38. Investment
(US dollars in thousands)
Shares in group undertakings
Investment in Tembo e-LV
Investment in VivoPower International Services Limited
Investment in Vivopower International IMEA DMCC
As at 30 June
2023
2022
2021
7,125
7,388
29
7,125
7,388
-
7,125
7,388
-
Total
14,542
14,513
14,513
On 5 November 2020, the Company acquired 51% of the ordinary issued share capital of Tembo e-LV B.V.
for $4.9 million. Tembo e-LV B.V. is a specialist battery-electric and off-road vehicle company located in The
Netherlands. The non-controlling interest representing 49% of the ordinary issued share capital was
acquired on 2 February 2021 for $2.2 million and 15,793 shares in the Company ($0.2 million).
The details of the principal undertakings in which the Group’s interest at the period-end was more than
20%, all of which are referred to in Note 15 in the consolidated financial statements.
Page | 113
Company Information
VivoPower International PLC for the year ended 30 June 2023
39. Other receivables
(US dollars in thousands)
Amounts owed by group undertakings
Other receivables
Prepaid expenses
Total
As at 30 June
2022
2021
(restated)
(restated)
53,514
862
197
54,573
49,635
660
1,213
51,508
2023
56,616
2,265
168
59,049
For the year ended 30 June 2022, $220,000 of inter-co management recharges had not been charged in the
year they relate. The impact was an increase in the loss for the year of $220,000 and an opposite reduction
of $220,000 in inter-co receivables.
For the year ended 30 June 2021, $151,000 of inter-co management recharges had not been charged in the
year they relate. The impact was a reduction in the loss for the year of $151,000 and an opposite increase
of $151,000 in inter-co receivables.
40. Trade and other payables
(US dollars in thousands)
Trade payables
Accrued expenses
Payroll tax liabilities
Other borrowings
Total
As at 30 June
2022
(restated)
1,319
856
28
32
2,235
2023
1,514
536
55
-
2,105
2021
1,334
401
15
36
1,786
For the year ended 30 June 2022, $19,000 of professional services had not been charged in the year they
relate. The impact was an increase in the loss for the year of $19,000 and an opposite reduction of $19,000
in accrued expenses while $134,000 of accrued expenses were settled through equity incentives.
Page | 114
Company Information
VivoPower International PLC for the year ended 30 June 2023
41. Provisions
(US dollars in thousands)
At 30 June 2021
Charged/(credited) to profit or loss:
Additional provisions
Provisions utilised
At 30 June 2022
Charged/(credited) to profit or loss:
Additional provisions
Provisions utilised
At 30 June 2023
42. Share capital
(US dollars in thousands)
Allotted, called up and fully paid:
Ordinary Shares of $0.012 each
Number allotted:
Fiscal
Litigation
-
-
-
-
-
1,175
-
-
1,175
485
(100)
(385)
-
-
-
-
-
Total
485
(100)
(385)
-
1,175
-
-
1,175
As at 30 June
2022
2023
2021
$307,815
$255,819
$ 222,074
Ordinary Shares of $0.012 each
25,651,140
21,318,118
18,506,064
At 30 June 2020
Capital raises1
THFC investment2
Employee share scheme issues3
Acquisition of non-controlling interest in subsidiary4
At 30 June 2021
Conversion of equity instruments5
Capital raises1
Other issuances6
Employee share scheme issues3
At 30 June 2022
Capital raises1
Employee share scheme issues3
At 30 June 2023
Par
value
USD
000
163
Share
premium
USD 000
40,215
Total
USD 000
40,378
49
34,317
34,366
1
9
-
499
961
237
500
970
237
Shares
No.
13,557,376
4,091,019
49,750
792,126
15,793
18,506,064
2,005,190
222
24
76,229
76,451
20,442
20,466
82,644
42,000
682,220
1
1
8
243
217
244
218
2,287
2,295
21,318,118
256
99,418
99,674
4,230,770
102,252
51
1
5,449
151
5,500
152
25,651,140
308
105,018
105,326
Page | 115
Company Information
VivoPower International PLC for the year ended 30 June 2023
1
2
3
4
5
6
In the year ended 30 June, 2021, the Company completed a series of capital raises on Nasdaq. A total of 4,091,019 Ordinary Shares
were issued, comprising 3,382,350 Ordinary Shares issued on 19 October 2020 as an underwritten public offering pursuant to an F-1
registration statement filed with the SEC on 14 October 2020, and 708,669 Ordinary Shares issued during June 2021, as at the market
price, pursuant to an F-3 registration statement filed with the SEC on December 21, 2020.
In the year ended 30 June 2022, a further 82,644 Ordinary Shares were issued under the same registration statement.
On July 29, 2022, the Company entered into a Securities Purchase Agreement to issue and sell, in a registered direct offering directly
to an investor, (i) an aggregate of 2,300,000 Ordinary Shares (the “Shares”), nominal value $0.012 per share, at an offering price of $1.30
per share and (ii) an aggregate of 1,930,770 pre-funded warrants exercisable for Ordinary Shares at an offering price of $1.2999 per pre-
funded warrant, for gross proceeds of approximately $5.5 million before deducting the placement agent fee and related offering
expenses. The pre-funded warrants were sold to the Investor whose purchase of Ordinary Shares in the Registered Offering would
otherwise result in the Investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the
Company’s outstanding Ordinary Shares immediately following the consummation of the Registered Offering, in lieu of Ordinary
Shares. Each pre-funded warrant represents the right to purchase one Ordinary Share at an exercise price of $0.0001 per share. The
pre-funded warrants were exercised on November 22, 2022.
In February 2021, 49,750 Ordinary Shares were issued to Tottenham Hotspurs Football Club (“THFC”) as part of the exclusive global
battery partnership agreement.
During the year ended 30 June 2023, 102,252 shares (year ended 30 June 2022: 682,220; year ended 30 June 2021: 792,126) were issued
to employees and directors of the Company and consultants to the Company under the Omnibus Incentive Plan.
In February 2021, 15,793 restricted Ordinary Shares were issued as part consideration for the purchase of the non-controlling interest
in Tembo e-LV B.V.
On 30 June 2021, holders of convertible preference shares and convertible loan notes in Aevitas Group Limited, exercised their right to
convert the debt instruments into Ordinary Shares in VivoPower International PLC. A total of 2,005,190 restricted Ordinary Shares were
issued at a contracted price of $10.20 on 21 July 2021. Of the 2,005,190 Ordinary Shares issued, 1,959,339 were issued to entities owned
by AWN Holdings Limited, the Company’s largest individual shareholder.
During the year ended 30 June 2022, 21,000 restricted shares were issued to Corporate Profile LLC and 21,000 restricted shares were
issued to FON Consulting Ltd in exchange for investor relations services.
Each share has the same right to receive dividends and repayment of capital and represents one vote at
shareholders’ meetings. Proceeds received in addition to the nominal value of the shares issued during the
year have been included in share premium. The costs associated with the issuance of new shares are
included within other reserves (see note 43). Share premium has also been recorded in respect of the share
capital related to employee share awards.
Page | 116
Company Information
VivoPower International PLC for the year ended 30 June 2023
43. Other reserves
(US dollars in
thousands)
Equity
instruments
Shares
pending
issue
Capital
raising
costs
Equity
incentive
costs
Share
awards
issuance
Foreign
exchange
Total
At 30 June 2020
27,079
-
(6,009)
-
(2,821)
-
(20,466)
20,466
(4,384)
-
-
-
-
-
-
-
-
(27,079)
20,466
(2,821)
20,466
(8,830)
(20,466)
-
-
-
-
-
-
(121)
-
-
Capital raises
Equity instruments -
conversion
Equity instruments -
other
Equity incentives
Other movements
(2,229)
At 30 June 2021
Equity instruments -
conversion
Share issuance
costs
Capital raising costs
Equity incentives
(restated)
Other movements
At 30 June 2022
Capital raising costs
Equity incentives
At 30 June 2023
-
-
-
-
-
-
-
-
-
-
-
-
350
-
-
-
-
-
-
-
1,078
(971)
-
1,078
1,428
-
-
-
1,452
(6)
-
(971)
(971)
-
(1,879)
-
-
-
(2,235)
19,185
-
-
-
-
2,229
2,229
(2,821)
-
(4,384)
107
-
(7,098)
(6)
12,087
-
-
-
-
6
6
-
-
-
-
-
(20,466)
(1,879)
(121)
1,452
-
(21,014)
(8,927)
(445)
(7)
(452)
(9,379)
(20,466)
(121)
1,446
(1,879)
-
(8,951)
2,874
(2,850)
-
-
-
(445)
-
(445)
-
147
147
-
(154)
(154)
-
(9,396)
3,021
(3,004)
44. Employee and directors
The company did not employ any members of staff during the course of the year. Contractual agreements
are in place for five directors to serve on the board of VivoPower International PLC.
See the Directors’ Report in the consolidated financial statements for full details of the directors.
45. Prior year adjustments
For the year ended 30 June, 2022, $239,000 of expenses were erroneously not booked until 2023 that
related to services provided in the year end 30 June 2022 for which no accruals had been created. These
expenses included $220,000 related to inter-company management fees and $19,000 related to
professional services. The impact was a reduction in the profit and loss of $239,000, a $220,000 reduction
in inter-co receivables and $19,000 increase in trade and other payables.
For the year ended 30 June 2022, $134,000 of accrued expenses were settled through equity incentives.
Page | 117
Company Information
VivoPower International PLC for the year ended 30 June 2023
For the year ended 30 June 2021, $151,000 of inter-co management recharges had not been charged in the
year they relate. The impact was a reduction in the loss for the year of $151,000 and an opposite increase
of $151,000 in inter-co receivables.
Page | 118
Company Information
VivoPower International PLC for the year ended 30 June 2023
Company Information
Advisors
Company Registrars
Computershare Inc.
250 Royall Street
Canton, MA, USA 02021
Correspondence address:
Computershare Inc.,
P.O. Box 505000,
Louisville, KY, USA 40233
Independent Auditors
PKF Littlejohn LLP,
15 Westferry Circus,
Canary Wharf,
London, UK E14 4HD
Legal Advisers
Shoosmiths LLP
1 Bow Churchyard,
London, UK, EC4M 9DQ
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
44 Montgomery Street, San Francisco, CA 94104
Principal Bankers
Barclays Bank PLC,
Level 16, 1 Churchill Place,
Canary Wharf,
London, UK E14 5HP
Company Secretary
JTC (UK) Limited
The Scalpel, 18th Floor
52 Lime Street
London, UK EC3M 7AF
Shareholder Information
Country of Incorporation and Main Number of Securities in Issue
Countries of Operation
VivoPower International PLC is incorporated in England & Wales. The Company operates in the United Kingdom,
United States, Australia, Canada, and Netherlands.
Main Number of Securities in Issue
As of 31 August 2023, the Company’s issued share capital consists of 25,788,260 Ordinary Shares with a nominal
value of $0.012 each.
Company Registration
Registered office:
The Scalpel, 18th Floor
52 Lime Street
London, EC3M 7AF, UK
Registered in England & Wales
Company number: 09978410
Financial Calendar
Annual General Meeting (“AGM”)
The Company’s AGM will be held on 28 December 2023. The notice of the meeting will be sent to shareholders
at least 21 days before the meeting.
Page | 119