More annual reports from Vysarn Limited:
2023 ReportVYSARN LIMITED
ABN 41 124 212 175
ANNUAL REPORT
for the year ended 30 June 2019
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ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2019
CONTENTS
Corporate directory
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Vysarn Limited
Corporate governance statement
Additional Shareholder information
Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
CORPORATE DIRECTORY
Directors
Peter Hutchinson
Faldi Ismail
Nicholas Young
Sheldon Burt
Christopher Brophy
Company Secretary
Kyla Garic
Registered office
108 Outram Street
West Perth, WA 6005
Ph: +61 8 9486 7244
Auditor
Pitcher Partners BA&A Pty Ltd
Level 11, 12-14 The Esplanade
Perth, WA 6000
Share Registry
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth, WA 6000
Bankers
National Australia Bank
Level 1, 1238 Hay Street
West Perth, WA 6005
Westpac Banking Corporation
Level 3, Tower Two, Brookfield Place
123 St Georges Tce
Perth, WA 6000
Securities Exchange Listing
ASX Limited
Level 40, Central Park 152-158 St Georges Terrace
Perth, WA 6000
ASX Code – VYS
1 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
The Directors present their report together with the financial statements of Vysarn Limited (“the Company”), for the financial
year ended 30 June 2019 and auditor’s report thereon.
1. DIRECTORS
The names and the particulars of the Directors of the Company during the year and to the date of this report are:
Name
Status
Appointed
Peter Hutchinson
Executive Chairman
Appointed 27 October 2017
Faldi Ismail
Nicholas Young
Sheldon Burt
Non-Executive Director
Appointed 20 December 2016
Non-Executive Director
Appointed 20 December 2016
Non-Executive Director
Appointed 15 May 2019
Christopher Brophy
Non-Executive Director
Appointed 15 May 2019
2. COMPANY SECRETARY
The following person held the position of Company Secretary at the end of the financial year:
Kyla Garic
Ms Garic was appointed as Company Secretary on 15 November 2017. Ms Garic is a Chartered Accountant and Director of
Onyx Corporate. Onyx Corporate provides financial reporting, accounting, company secretarial and other services primarily
to ASX listed companies. Ms Garic has acted as a Non-Executive Director and Company Secretary for a number of ASX listed
companies.
3. PRINCIPAL ACTIVITIES
During the financial year, the principal activities of the Company consisted of the assessment of new opportunities to facilitate
the relisting of the Company on the ASX with a view to increasing shareholder value, whilst preserving the Company’s cash
reserves. In April 2019 the Company entered an agreement with Ausdrill Northwest Pty Ltd and Pentium Hydro Pty Ltd under
which it will acquire various waterwell drilling assets and associated inventory as described in the Review of Operations
section below (Transaction). Upon completion, the Transaction will result in a significant change to the nature and scale of
the Company’s activities and the Company will be reinstated to the Official List of the ASX as a provider of production critical
waterwell drilling services.
4. DIVIDENDS PAID OR RECOMMENDED
There were no dividends paid, recommended or declared during the current or previous financial year.
5. REVIEW OF OPERATIONS
On 11 April 2019 the Company announced it had entered into an Asset Sale Agreement with Pentium Hydro Pty Ltd (Pentium)
and Ausdrill Northwest Pty Ltd (a subsidiary of Ausdrill Limited (ASX:ASL)) (Ausdrill) to acquire various waterwell drilling assets
(and associated inventory) used by Ausdrill to conduct its hydrogeological drilling business known as ‘Connector Drilling’. In
consideration for the acquisition of the Assets, the Company has agreed to pay Ausdrill $16 million at completion. The
consideration will be paid by the Company from existing cash, funds from a Public Offer of Shares to raise at least $5M and
up to $7M and an $8.8M Debt Facility obtained from Westpac Banking Corporation Ltd.
The Asset Sale Agreement is the result of a comprehensive identification and evaluation process by the Board over the past
~2 years seeking to acquire assets that it believes can provide future value for shareholders. Following Shareholder approval
of the Transaction obtained at the General Meeting held on 5 July 2019, completion of the acquisition of the Assets remains
conditional upon satisfaction of the various conditions precedent including the Company obtaining finance to satisfy the
purchase price under the agreement and ASX approval.
In connection with the Asset Sale Agreement, the Company also entered into the Share Sale Agreement with Insight Ecosys
Pty Ltd (controlled by Mr Brophy) and Connada Pty Ltd (controlled by Mr Burt), pursuant to which the Company will acquire
the entire issued share capital of Pentium from the Pentium Vendors. In consideration for the acquisition of Pentium, the
Company has agreed to issue to Pentium Vendors (and/or their nominees) a total of 7,800,000 shares. Completion of the
Share Sale Agreement will take place just prior to completion of the Asset Sale Agreement, and Pentium will become a wholly
owned (and primary operating) subsidiary of the Company.
2 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
5. REVIEW OF OPERATIONS (CONTINUED)
Completion of the acquisition of Pentium remains subject to all the conditions precedent to the Asset Sale Agreement being
satisfied.
On 15 May 2019, Messers Burt and Brophy were appointed as Non-Executive Directors of the Company. Mr Burt and Mr
Brophy have key roles in implementing the Transaction and will move into Executive Director positions following completion
of the Transaction.
LIKELY DEVELOPMENTS
6.
Subject to satisfying the conditions precedent to the Transaction as outlined above Pentium (as a wholly owned subsidiary of
the Company) intends to commence drilling services operations.
FINANCIAL PERFORMANCE
7.
The loss for the Company after providing for income tax amounted to $483,826 (30 June 2018: Profit of $296,558).
Working capital, being current assets less current liabilities, was $6,924,146 (30 June 2018: $7,407,972). The Company had
negative cash flows from operating activities for the year amounting to $422,620 (2018: Positive cash flows from operating
activities of $227,166).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
8.
Significant changes in the Company’s state of affairs during the year are presented in the Review of Operations section above.
Changes subsequent to year end are presented in the Events Subsequent to Reporting Date section below. There were no
other significant changes in the Company’s state of affairs during the year.
9. EVENT SUBSEQUENT TO REPORTING DATE
On 5 July 2019, the Company’s shareholders approved at its General Meeting:
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
Change to the Nature and Scale of Company’s Activities;
Ratification of prior election of Messers Burt and Mr Brophy as Directors;
Issue of 7,800,000 Pentium Vendor shares to the Pentium Vendors pursuant to the share sale agreement on
completion of the Transaction;
Issue of up to 129,629,630 fully paid ordinary shares at an issue price of $0.054 per share under a Public Offer;
Related party’s participation in Public Offer for Mr Hutchinson to the extent of up to 20,129,630 shares at an issue
price of $0.054 per share for a subscription amount up to $1,087,000;
Related party’s participation in Public Offer for Mr Ismail to the extent of up to 5,175,926 shares at an issue price
of $0.054 per share for a subscription amount up to $279,500;
Related party’s participation in Public Offer for Mr Young to the extent of up to 5,175,926 shares at an issue price
of $0.054 per share for a subscription amount up to $279,500;
Related party’s participation in Public Offer for Mr Burt to the extent of up to 1,851,852 shares at an issue price of
$0.054 per share for a subscription amount up to $100,000;
Related party’s participation in Public Offer for Mr Brophy to the extent of up to 1,851,852 shares at an issue price
of $0.054 per share for a subscription amount up to $100,000;
Issue up to 15,500,000 shares, or cash payment, up to $837,000 to Mr Hutchinson or his nominee for consideration
of past service to the Company on completion of the Transaction;
Issue up to 4,250,000 shares, or cash payment, up to $229,500 to Mr Ismail or his nominee for consideration of past
service to the Company on completion of the Transaction;
Issue up to 4,250,000 shares, or cash payment, up to $229,500 to Mr Young or his nominee for consideration of
past service to the Company on completion of the Transaction;
5,000,000 Performance Rights to Mr Burt have been approved which was contemplated by the Burt ESA and to be
issued on completion of the Transaction;
5,000,000 Performance Rights to Mr Brophy have been approved which was contemplated by the Brophy ESA and
to be issued on completion of the Transaction; and
10,000,000 Options to Mr Hutchinson to be issued as per NED agreement on completion of the Transaction.
On 10 July 2019 the Company, together with Pentium, entered into a binding conditional financing agreement with Westpac
Banking Corporation Limited. Under the facility, subject to the satisfaction of specified conditions, Westpac will provide debt
funding of $8.8 million as part of the funding for the acquisition by the Company and Pentium of various waterwell drilling
assets (and associated inventory) from Ausdrill.
3 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
9. EVENT SUBSEQUENT TO REPORTING DATE (CONTINUED)
On 11 July 2019, the Company lodged a prospectus to ASIC for its offer to the public of up to 129,629,630 shares at an issue
price of $0.054 each to raise a total of up to $7million (before costs). It was also announced that ASX has extended the
Company’s de-listing deadline to the commencement of trading on 11 October 2019. The extension was granted on the basis
that the Company is in the final stages of completing the Transaction.
On 26 July 2019, the Company lodged a supplementary prospectus with ASIC under which the Company announced that it
had entered into a deed of assignment with Pentium, Hancock Prospecting Pty Ltd (Hancock) and Ausdrill under which
Ausdrill’s rights and obligation under its existing drilling services contract with Hancock will be assigned to the Company and
Pentium with effect from completion of the Asset Sale Agreement.
On 14 August 2019, the Company lodged a second supplementary prospectus with ASIC noting that it had received strong
demand from investors under the Public Offer in excess of the full subscription amount of $7,000,000 and extended the
closing date of the public offer (and ancillary offers) to Monday 26 August 2019 to allow investors sufficient time to transfer
funds and return application forms.
On 16 August 2019, the Company lodged a third supplementary prospectus with ASIC under which the Company announced
that Pentium had entered into a hire agreement with Easternwell in which under the agreement, will hire, on a dry hire
arrangement, two rigs (and ancillary equipment) for use at BHP’s mining operation in Olympic Dam, South Australia.
There is no other matter or circumstance that has arisen since 30 June 2019 other than mentioned above that has significantly
affected, or may significantly affect the Company’s operations, the results of those operations, or the Company’s state of
affairs in future financial years.
10. ENVIRONMENTAL REGULATION
In the normal course of business, there are no environmental regulations or requirements that the Company is currently
subject to.
11. INFORMATION ON DIRECTORS
Peter Hutchinson
Experience and Expertise:
Executive Chairman (Appointed 27 October 2017)
Mr Hutchinson holds a Bachelor of Commerce (UWA) and is a Fellow of
both the Australian Institute of Company Directors and Certified Practicing
Accountants. Mr Hutchinson has at the most senior level managed a
in manufacturing, engineering,
diverse portfolio of
construction and property over a 30-year period.
investments
Mr Hutchinson was a Non-Executive Director of Zeta Resources (formerly
Kumarina Resources Ltd). Mr Hutchinson was the founding director of ASX
listed Forge Group Ltd, floated in 2007 with a market capitalisation of
$12m and reaching over $450m at the time of Mr Hutchinson’s resignation
as CEO and final sell down in July 2012. More recently Mr Hutchinson has
chaired ASX listed company Resource Equipment Ltd and was the
founding shareholder and Chairman of Mareterram Ltd, both the subject
of successful takeover bids at significant premiums to market prices.
Mr Hutchinson has substantial experience
in M&A. prospectus
preparation, ASX listing, compliance and corporate governance, company
secretarial requirements and exit strategies, and has been a Member of
Audit, Remuneration and Nomination Committees, often as Chairman.
Other current directorships:
-
Former directorships (last 3 years):
Mareterram Limited (ceased 23 November 2017)
Interests in shares:
16,978,955 fully paid ordinary shares
4 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
11. INFORMATION ON DIRECTORS (CONTINUED)
Faldi Ismail
Experience and Expertise:
Non-Executive Director (Appointed 20 December 2016)
Mr Ismail has significant experience working as a corporate advisor
specialising in the restructure and recapitalisation of various of ASX listed
companies having many years of investment banking experience covering
a wide range of sectors. Mr Ismail has significant cross border experience,
having advised on numerous overseas transactions including capital
raisings, structuring of acquisitions and joint ventures in numerous
countries.
Other current directorships:
Ookami Limited
Former directorships (last 3 years):
Dotz Nano Limited (ceased 1 February 2018)
Flamingo AL Limited (ceased 27 June 2017)
Quantify Technology Holdings Limited (ceased 1 March 2017)
TV2U International Limited (ceased 21 October 2016)
Interests in shares:
N/A
Nicholas Young
Experience and Expertise:
Non-Executive Director (appointed 20 December 2016)
Mr Young holds a Bachelor of Commerce, majoring in Accounting and
Finance, is a Chartered Accountant and has completed the Insolvency
Education Program at the Australian Restructuring Insolvency and
Turnaround Association. Mr Young commenced his career in the
Corporate Restructuring division of an accounting firm and has gained
valuable experience in Australia and Southern Africa, across a wide range
of
including mining and exploration, mining services,
renewable energy, professional services, manufacturing and transport. Mr
Young has been involved in the recapitalisation and transformation of
various ASX-listed companies.
industries,
Other current directorships:
Bunji Corporation Limited
Former directorships (last 3 years):
Raiden Resources Limited (ceased 25 March 2019)
Calidus Resources Limited (ceased 13 June 2017)
Interests in shares:
N/A
Christopher Brophy
Experience and Expertise:
Non-Executive Director (appointed 15 May 2019)
Mr Brophy is an accomplished business leader with 15+ years of senior
leadership and consulting experience with the Mining, Oil & Gas and
Infrastructure industries. Mr Brophy is a specialist in strategy, portfolio
growth, financial and operational restructuring.
Mr Brophy currently holds the role of CEO for OnContrator and prior to
this was Maintenance Service Director for the TRACE JV and Woodside
Offshore Portfolio Manager Boardspectrum.
Mr Brophy holds a Master of Business Administration, a Masters of
Science in Mineral and Energy Economic and is a member of the Australian
Institute of Company Directors (MAICD).
Other current directorships:
Former directorships (last 3 years):
Interests in shares:
N/A
N/A
N/A
5 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
11. INFORMATION ON DIRECTORS (CONTINUED)
Sheldon Burt
Experience and Expertise:
Non-Executive Director (appointed 15 May 2019)
Mr Burt is a drilling industry professional with over 30 years national and
international experience. Mr Burt started his career as a Drillers Offsiders
in 1986 and has held differing roles over the years including field based,
operations, senior management and directorship.
Mr Burt’s international experience extends to South East Asia, the Middle
East and West Africa. In 2004 he co-founded and was the Managing
Director of SBD Drilling, an exploration drilling company with successful
operations in Australia and West Africa.
Mr Burt was General Manager of Easternwell Minerals and Gorey & Cole
Drillers. Easternwell is subsidiary of Broadspectrum (formerly Transfield
Services Ltd)
Other current directorships:
Former directorships (last 3 years):
Interests in shares:
N/A
N/A
N/A
12. MEETINGS OF DIRECTORS
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2019, and the
number of meetings attended by each Director was:
Full Board
Attended
Held
Peter Hutchinson
Faldi Ismail
Nicholas Young
Sheldon Burt
Chris Brophy
3
3
3
-
-
3
3
3
-
-
Held: Represents the number of meetings held during the time the Directors held office.
There is no separate committee and all matters are dealt with by the full Board. The Board met informally on a number of
occasions to discuss ongoing opportunities with formal board meetings held intermittently to fully assess such
opportunities and perform government activities.
13. INDEMNITY AND INSURANCE OF OFFICERS
To the extent permitted by law, the Company has indemnified the Directors and executives of the Company for costs incurred,
in their capacity as a Director or executive, for which they may be held personally liable.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers in the Company, and any other payments arising from liabilities incurred by
the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a
wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage
for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
6 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
14. SHARES UNDER OPTION
At the date of this report there are nil unissued ordinary share under option of Vysarn Limited.
15. PROCEEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
16. NON-AUDIT SERVICES
During the last financial year, Pitcher Partners BA&A Pty Ltd consented to, and was appointed, as the Company’s auditors.
The Company may decide to employ the auditor on assignments in addition to their statutory audit duties where the auditor’s
expertise and experience with the Company are important. Non-audit services provided during the financial year by the
auditor are detailed below. The Directors are satisfied that the provision of non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Acts 2001.
Amount paid/payable to Pitcher Partners BA&A Pty Ltd or related entities
for non-audit services
Pitcher Partners Accountants & Advisors WA Pty Ltd – Taxation compliance
services
Total auditors’ remuneration for non-audit services
30 June 2019
30 June 2018
$
$
4,555
4,555
-
-
In the event that non-audit services are provided by Pitcher Partners, the Board has established certain procedures to ensure
that the provision of non-audit services are compatible with, and do not compromise, the auditor independence requirement
of the Corporation Act 2001. These procedures include:
-
-
-
Non-audit services will be subject to the corporate governance procedures adopted by the Company and will be
reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor; and
Ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a management
or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing risks and
rewards.
Decision on non-audit services were decided upon by the full Board in the absence of any audit committee
meetings.
17. AUDITOR’S INDEPENDENCE DECLARATION
The auditor's independence declaration as required under section 307C of the Corporations Act 2001 (Cth) for the year ended
30 June 2019 has been received and can be found on page 14 of the Annual Report.
18. ROUNDING OF AMOUNTS
In accordance with ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument 2016/191, the amounts in the
Directors’ report and in the financial report have been rounded to the nearest $1 (where rounding is applicable).
REMUNERATION REPORT (AUDITED)
The remuneration report for the year ended 30 June 2019 outlines the remuneration arrangement of the Company in
accordance with the requirements of the Corporations Act 2001 (Cth), as amended (the Act) and its regulations. This
information has been audited, as required by section 308(3C) of the Act.
7 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the following main headings:
Introduction
1.
2. Remuneration governance
3. Executive remuneration arrangement
4. Non-Executive Director fee arrangement
5. Details of remuneration
6.
7.
8. Other transactions and balances with KMP and their related parties
Loans to Directors and executives
Share-based compensation
Details of the nature and amount of each element of the remuneration of each of the Key Management Personnel (“KMP”)
of the Company (the Directors and executives) for the year ended 30 June 2019 are set out below:
Key Management Personnel covered under this report are as follows:
Name
Peter Hutchinson
Faldi Ismail
Nicholas Young
Sheldon Burt
Christopher Brophy
1.
Introduction
Status
Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Appointed
Appointed 27 October 2017
Appointed 20 December 2016
Appointed 20 December 2016
Appointed 15 May 2019
Appointed 15 May 2019
KMP have authority and responsibility for planning, directing and controlling the major activities of the Group. KMP comprise
the Directors of the Company.
Compensation levels for KMP are competitively set to attract and retain appropriately qualified and experienced Directors
and executives. The Board may seek independent advice on the appropriateness of compensation packages, given the trend
in comparative companies both locally and internationally and objectives of the Company’s compensation strategy.
Principles used to determine the nature and amount of remuneration
The objective of the Company's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
•
•
•
•
•
Competitiveness and reasonableness;
Acceptability to shareholders;
Performance linkage/alignment of executive compensation;
Transparency; and
Capital management.
The Board is responsible for determining and reviewing remuneration arrangements for its Directors and executives. The
performance of the Company depends on the quality of its Directors and executives. The remuneration philosophy is to
attract, motivate and retain high performing and high quality personnel.
The Company has structured a market competitive executive remuneration framework.
8 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
REMUNERATION REPORT (AUDITED) (CONTINUED)
1.
Introduction (continued)
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it
should seek to enhance shareholders' interests by:
•
•
Focusing on shareholder value and returns; and
Attracting and retaining high calibre executives.
Additionally, the reward framework should seek to enhance executives' interests by:
•
•
•
•
Rewarding capability and experience;
Reflecting a competitive reward for contribution to growth in shareholder wealth;
Providing a clear structure for earning rewards; and
Providing recognition for contribution.
Given the extent of the Company’s operations in the current and previous financial year, no aspects of KMP compensation
has been dependent on the satisfaction of performance conditions.
2. Remuneration governance
The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the
establishment of a separate remuneration committee. Accordingly, all remuneration matters are considered by the full Board
of Directors, in accordance with a nomination and remuneration committee charter. During the financial year, the Company
did not engage any remuneration consultants.
3. Executive remuneration arrangements
The compensation structures are designed to attract suitably qualified candidates, reward the achievement of strategic
objectives, and achieve the broader outcome of creation of value for shareholders. Compensation packages may include a
mix of fixed compensation, equity-based compensation, as well as employer contributions to superannuation funds. Shares
and options may only be issued to Directors subject to approval by shareholders in a general meeting.
At this stage the Board does not consider the Company’s earnings or earnings related measures to be an appropriate key
performance indicator (KPI). In considering the relationship between the Company’s remuneration policy and the
consequences for the Company’s shareholder wealth measures such as successful completion of business development and
corporate activities are considered.
The Company has entered into an executive services agreement on 24 June 2019 with each of Mr Burt and Mr Brophy in
respect of their proposed employment as Executive Directors of the Company, subject to the completion of the Acquisition.
The terms of Mr Burt and Mr Brophy’s agreements are the same, and the key terms are set out below;
(i)
(ii)
(iii)
(a) Remuneration: Each Executive Director will receive:
a commencement fee of $10,500;
a base salary of $300,000 per annum, excluding mandatory superannuation contributions;
a short term incentive of up to $150,000 per annum, subject to the achievement of certain short term
incentive key performance indicators; and
a long term incentive being the issue of 5,000,000 Performance Rights.
(iv)
(b) General termination: the agreement can be terminated:
(i)
(ii)
(iii)
by either party for no reason by giving 3 months’ notice in writing to the other party;
by the Executive Director if the Company breaches the agreement and does not remedy the breach within
10 business days on notice of breach; and
by the Company effective immediately in the event the Executive Director is guilty of gross misconduct,
becomes bankrupt or insolvent, is convicted of a criminal offence or other similar grounds.
9 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. Executive remuneration arrangements
(c) Termination on material diminution: an Executive Director can terminate the agreement if he suffers material
diminution in his status or position in the Company. If this occurs:
(i)
within 2 years of employment, the Company will pay the Executive Director an amount equal to 3 months
base salary, and 50% of the Performance Rights held by him shall vest subject to any restrictions the Board
may impose; and
after 2 years of employment, the Company will pay the executive Director an amount equal to 3 months
base salary, and all of the Performance Rights held by him shall vest subject to any restrictions by the Board
may impose.
(ii)
4. Non-Executive Director fee arrangement
Fees and payments to non-executive Directors reflect the demands and responsibilities of their role. Non-executive Directors'
fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent
remuneration consultants to ensure non-executive Directors' fees and payments are appropriate and in line with the market.
The Executive Chairman's fees are determined independently to the fees of other non-executive Directors based on
comparative roles in the external market. The Chairman is not present at any discussions relating to the determination of his
own remuneration. Non-executive Directors do not receive share options or other incentives.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is presently limited to an aggregate of
$200,000 per annum and any change in subject to approval by shareholder at the general meeting. Fees for Non-Executive
Directors are not linked to the performance of the Company.
Voting and comments made at the company's 2018 Annual General Meeting ('AGM')
Vysarn Limited received more than 90% of "yes" votes on its remuneration report for the 2018 financial year. The Company
did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
5. Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Company are set out in the following tables.
No percentage of the remuneration paid to KMP’s in the year was performance based (2018: $NIL)
2019
Chairman:
Peter Hutchinson
Non-Executive Directors:
Faldi Ismail1
Nicholas Young1
Christopher Brophy2
Sheldon Burt2
Total
Short-term Salary,
Fees & Commissions
Post-employment
Superannuation
Other
Share-based
payments
Total
$
$
$
$
$
-
66,000
66,000
21,000
21,000
174,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66,000
66,000
21,000
21,000
174,000
1 Mr Ismail and Mr Young’s director fees are for the period November 2017 to March 2019.
2 Mr Brophy and Mr Burt were appointed as Non-Executive Directors on 15 May 2019. For the financial year ending 30
June 2019, Mr Brophy and Mr Burt did not receive director fee payments. The payments made to Mr Brophy and Mr Burt
were for project management and consultation services received in relation to the Ausdrill Transaction (refer to the Review
of Operations on page 2 for further information on the Transaction).
10 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. Details of remuneration (continued)
2018
Chairman:
Peter Hutchinson1
Non-Executive Directors:
Faldi Ismail2
Nicholas Young3
Bryn Hardcastle4
Total
Short-term Salary,
Fees & Commissions
Post-employment
Superannuation
Other
Share-based
payments
Total
$
$
$
$
$
-
16,000
16,000
16,000
48,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,000
16,000
16,000
48,000
1 Mr Peter Hutchinson was appointed as Chairman on 27 October 2017.
2 Mr Faldi Ismail was appointed as Non-Executive Director on 20 December 2016.
3 Mr Nicholas Young was appointed as Non-Executive Director on 20 December 2016.
4 Mr Bryn Hardcastle resigned as Non-Executive Director on 27 October 2017.
Bonuses
No bonuses have been awarded during the financial year ending 30 June 2019 (2018: Nil).
6. Share-based compensation
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation.
Options
There were no options over ordinary shares issued to Directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2019.
There were no options over ordinary shares granted to or vested by Directors and other key management personnel as part
of compensation during the year ended 30 June 2019.
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Company, including their personally related parties, is set out below;
30 June 2019
Balance at the start
of the year
Peter Hutchinson
16,978,955
Faldi Ismail
Nicholas Young
Sheldon Burt
Christopher Brophy
-
-
-
-
Total
16,978,955
Granted as
Remuneration
during the year
Issued on exercise
of options during
the year
Other changes
Balance at
during the year
end of Year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,978,955
-
-
-
-
16,978,955
11 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
REMUNERATION REPORT (AUDITED) (CONTINUED)
6.
Share-based compensation
30 June 2018
Peter Hutchinson
Faldi Ismail
Nicholas Young
Bryn Hardcastle
Total
Balance at the start
of the year
Granted as
Remuneration
during the year
Issued on exercise of
options during the
year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other changes
Balance at
during the year
end of Year
16,978,955
16,978,955
-
-
-
-
-
-
16,978,955
16,978,955
7. Loans to Directors and executives
There are no loans to Directors or other KMP of Vysarn Limited.
8. Other transactions and balances with KMPs and their related parties
Purchases from and sales to related parties are made on terms equivalent to those that prevail in arm’s length transactions.
The Company acquired the following services from entities that are controlled by members of the Company’s KMP.
Some Directors, or former Directors of the Company, hold or have held positions in other companies, where it is considered
they control or significantly influence the financial or operating policies of those entities. Transactions between related
parties are on normal commercial terms and conditions no more favourable than those available to other parties unless
otherwise stated.
Key Management Personnel
2019
$
2018
$
Payment for goods and services:
Payment for services to Onyx Corporate
Payment for services to Otsana Capital
Payment for services to Bellanhouse Legal
Mr Nicholas Young
Mr Faldi Ismail / Mr Nicholas Young
Mr Bryn Hardcastle
54,150
30,000
-
28,000
5,000
12,765
Onyx Corporate Pty Ltd, an entity associated with Mr Nicholas Young, received payments totalling $54,150 in relation to
accounting and Company secretarial services provided to the Company (2018: $28,000).
During the year, the Company engaged with Otsana Pty Ltd trading as Otsana Capital (Otsana), an entity associated with
Messers Ismail and Young, to act as corporate advisor and lead manager in relation to the Transaction. The mandate will
continue until the date of transaction completion, being successful reinstatement of the Company to the Official List of ASX
or when either party terminates the agreement. Under the terms of the mandate, the Company will pay the Lead Manager
(and/or its nominee) a fee of $180,000 (excluding GST) for corporate advisory and project management services provided in
connection with the Transaction and a capital raising fee of 6% (excluding GST) on the amount raised under the Public Offer.
The services are otherwise being provided on terms standard for an agreement of this nature. During the year ended 30 June
2019, the Company has paid Otsana $30,000 (2018: $5,000). Commitments of $150,000 remain at the end of reporting period
(2018: Nil).
Bellanhouse Legal, an entity associated with former Director Mr Bryn Hardcastle, received payments in financial year 2018 of
$12,765 in relation to legal services provided to the Company.
There were no trade receivables from or trade payables to related parties for the financial year ending 30 June 2019 (2018:
Nil).
There were no loans to / from related parties for the financial year ending 30 June 2019 (2018: Nil).
12 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
REMUNERATION REPORT (END)
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
Signed in accordance with a resolution of the Board of Directors
Peter Hutchinson
Chairman
Dated 23 August 2019
13 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Revenue
Income
Other income
Expenses
Administration expense
Accounting and company secretarial expense
Auditor remuneration
Corporate consulting expense
Employee benefit expense
Insurance expense
Legal fees
Business development expense
Transaction costs
Other expenses
(Loss)/profit before income tax
Income tax expense
(Loss)/profit after income tax expense
(Loss)/profit after income tax expense for the year attributable to the owners
of Vysarn Limited
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Loss on the revaluation of assets
Other comprehensive loss for the year, net of tax
30 June 2019
30 June 2018
Note
$
$
4
7
6
5
163,459
-
(30,455)
(57,097)
(33,545)
(11,000)
(174,000)
(19,222)
(14,341)
(34,061)
(238,711)
(34,853)
(483,826)
-
132,453
460,499
(41,407)
(72,620)
(27,000)
(33,690)
(48,000)
(24,920)
(37,242)
-
-
(11,515)
296,558
-
(483,826)
296,558
(483,826)
296,558
-
-
-
(15,366)
(135,000)
(150,366)
Total comprehensive (loss)/income for the year attributable to the owners
of Vysarn Limited
(483,826)
146,192
Basic and diluted earnings per share for (loss)/profit attributable to the
owners of Vysarn Limited
(0.355)
0.218
The accompanying notes form part of these financial statements.
15 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Accumulated losses
SHAREHOLDERS’ EQUITY
Note
30 June
2019
$
30 June
2018
$
9
10
11
12
6,983,931
7,411,551
36,206
14,501
18,839
9,068
7,034,638
7,439,458
7,034,638
7,439,458
110,492
110,492
110,492
31,486
31,486
31,486
6,924,146
7,407,972
13
29,912,298
29,912,298
(22,988,152)
(22,504,326)
6,924,146
7,407,972
The accompanying notes form part of these financial statements.
16 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Issued Capital
Reserves
Accumulated
Losses
Total
$
$
$
$
Balance at 1 July 2017
29,912,298
150,366
(22,800,884)
7,261,780
Profit after income tax expense for the year
Other comprehensive loss for the year, net of
tax
Total comprehensive income/(loss) for the year
-
-
-
-
296,558
296,558
(150,366)
-
(150,366)
(150,366)
296,558
146,192
Balance at 30 June 2018
29,912,298
-
(22,504,326)
7,407,972
Balance at 1 July 2018
29,912,298
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive loss for the year
-
-
-
-
-
-
-
(22,504,326)
7,407,972
(483,826)
(483,826)
-
-
(483,826)
(483,826)
Balance at 30 June 2019
29,912,298
-
(22,988,152)
6,924,146
The accompanying notes form part of these financial statements.
17 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (inclusive of GST)
Payments for business development
Payment for transaction costs
Interest received
R&D tax offset
30 June
2019
$
(379,523)
(57,460)
(164,745)
179,108
-
Net cash (used in)/provided by operating activities
9a
(422,620)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equity investments
Payment for disposal of assets
Proceeds from disposal of property, plant and equipment
Net cash provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Transaction costs related to loans and borrowings
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Effects of exchange rate changes on cash and cash equivalents
30 June
2018
$
(293,697)
-
-
113,905
406,958
227,166
289,355
(15,000)
(1,059)
273,296
-
-
-
-
(5,000)
(5,000)
-
-
(427,620)
500,462
7,411,551
6,926,219
-
(15,130)
Cash and cash equivalents at the end of financial year
9
6,983,931
7,411,551
The accompanying notes form part of these financial statements.
18 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: GENERAL INFORMATION
Vysarn Limited is a listed public Company limited by shares, incorporated and domiciled in Australia. The Company is a for-
profit entity. Its registered office and principal place of business is 108 Outram Street, West Perth, WA 6005.
The financial statements are presented in Australian dollars, which is Vysarn Limited's functional and presentation currency.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 23 August 2019. The
Directors have the power to amend and reissue the financial statements.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards (“AASBs”) (including Australian interpretations) adopted by the Australian Accounting Standard Board
(“AASB”) and the Corporations Act 2001. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
b) Basis of preparation
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on
historical costs.
Comparatives
The comparatives include the results of Alreco Pty Ltd, MHM Corporation USA LLC and Goldstock Ease Africa Limited (former
subsidiaries). During the year ended 30 June 2018 the Company disposed of its 100% interest in the subsidiaries. The financial
statements at 30 June 2019 are for the Company as a single entity. Supplementary information about the parent entity for
financial year ending 30 June 2018 is disclosed in Note 15.
Historical cost convention
The financial statements have been prepared on an accrual basis and are based on historical cost modified, where applicable,
by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
Critical accounting estimates
The Directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge
and available current information. Estimates assume a reasonable expectation of future events and are based on the current
trends and economic data, obtained both externally and within the Company.
Foreign currency translation
c)
Foreign currency transactions
In the prior year, 30 June 2018, foreign currency transactions are translated into Australian dollars using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss.
Foreign operations
In the prior year, 30 June 2018, the assets and liabilities of foreign operations are translated into Australian dollars using the
exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars
using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
19 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d) Revenue recognition
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to
the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
e)
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Current and non-current classification
f)
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Company’s
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Company’s normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Financial Instruments
g)
Initial recognition and measurement
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions to
the instrument. For financial assets, this is the date that the Company commits itself to either the purchase or sale of the
assets (ie, trade date accounting is adopted).
20 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g)
Financial Instruments (continued)
Classification and subsequent measurement
Financial liabilities
Financial instruments are subsequently measured at amortised cost using the effective interest methods.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest
expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of the financial asset
or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the expected life of the
instrument to the net carrying amount at initial recognition.
Financial assets
Financial assets are subsequently measured at fair value through profit or loss.
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option on
initial classification and is irrevocable until the financial asset is derecognised.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement of
financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie, when the obligation in the contract is discharged, cancelled or expires).
An exchange of an existing financial liability for a new one with substantially modified terms, or a substantial modification to
the terms of a financial liability is treated as an extinguishment of the existing liability and recognition of a new financial
liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable,
including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder’s contractual rights to its cash flows expire, or the asset is transferred in
such a way that all the risks and rewards of ownership are substantially transferred.
All the following criteria need to be satisfied for derecognition of financial assets:
-
-
-
the right to receive cash flows from the asset has expired or been transferred;
all risk and rewards of ownership of the asset have been substantially transferred; and
the Company no longer controls the asset (ie, the Company has no practical ability to make a unilateral decision to
sell the asset to a third party).
Impairment of non-financial assets
h)
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-
generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a
cash-generating unit.
i) Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
21 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
i) Goods and Services Tax ('GST') and other similar taxes (continued)
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Research and Development Incentive refund
j)
To the extent the Company incurs eligible expenditure, annual R&D claims will continue to be made. Claims are submitted
based on expenditure incurred during the year and independently verified for eligibility. The accounting policy adopted by
the Company is to recognise the claims once reviewed by an independent expert and submitted to the ATO. During the year,
the Company has not received R&D tax incentive refund (2018: $406,958 R&D tax incentive refund received).
k) New Accounting Standards adopted for the period
The following Australian Accounting Standards have been issued or amended and are applicable to financial report of the
Company for the first time at 30 June 2019.
AASB 9 ‘Financial Instruments’
AASB 9 supersedes pronouncement AASB 139 ‘Financial Instruments: Recognition and Measurement’ and was adopted by
the Company effective 1 July 2018. The standard brings together all three aspects of the accounting for financial instruments:
classification and measurement, impairment, and hedge accounting. With the exception of hedge accounting, the Company
has applied AASB 9 retrospectively, with the initial application date of 1 July 2018, as mentioned above. The Company does
not currently apply hedge accounting.
As at the date of initial application, and following assessment by management, the effect of adopting AASB 9 did not have a
material impact on the transactions and balances recognised in the financial statements.
The Company’s accounting policies for financial instruments from 1 July 2018 are as follows:
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit and loss.
The classification of financial instruments at initial recognition depends on the financial asset’s contractual cashflow
characteristics and the Company’s business model for managing them. With the exception of the Company’s trade receivables
that do not contain a significant financing component, the Company initially measures the financial asset at its fair value plus,
in the case of a financial asset not at fair value through profit and loss, transaction costs. Trade receivables that do not contain
a significant financing component are measured at the transaction price determined in accordance with the Company’s
accounting policy for revenue recognition.
The Company applies the simplified approach in calculating Expected Credit Loss (ECLs) in respect to trade receivables.
Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs
at each reporting date. In determining the provision required, the Company utilises its historical credit loss experience,
adjusted only where appropriate for forward-looking factors specific to the debtors and economic environment.
Financial liabilities are classified, at initial recognition, as financial liabilities through fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs.
The Company’s financial liabilities include trade creditors and other payables which are carried at amortised cost.
22 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k) New Accounting Standards adopted for the period (continued)
AASB 15 ‘Revenue from Contracts with Customers’
AASB 15 supersedes AASB 111 ‘Construction Contracts’, AASB 118 ‘Revenue’ and related interpretations and it applies with
limited exceptions, to all revenue arising from contracts with its customers. AASB 15 established a five-step model to account
for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
AASB 15 requires the Company to exercise judgement, taking into account all the relevant facts and circumstances when
applying each step of the model to contracts with customers. At the initial date of application (1 July 2018), the effect of
adopting AASB 15 did not have a material impact on the transactions and balances recognised in the financial statements.
The Company’s accounting policy for revenue and other income from 1 July 2018 is as follows:
Revenue is measured at the fair value of the consideration received or receivable after taking into account any discounts and
rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that
is generally accepted in the market for similar arrangements. Revenue from contracts with customers is recognised when
control of services is transferred to the customer at an amount of that reflects the consideration to which the Company
expects to be entitled in exchange for those services. This standard has no impact as there is no revenue for the year ended
30 June 2019.
l) New Accounting Standards not yet adopted
AASB 16 ‘Leases’
AASB 16 requires leases to account for all leases under a single on balance sheet model in a similar way to finance leases
under AASB 117 ‘Leases’. The standard includes two recognition exemptions for leases of ‘low-value’ assets (e.g., personal
computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease,
a lessee will recognise a liability to make lease payment (I.e., the lease liability) and an asset representing the right to use the
underlying asset during the lease term (i.e., the right-of-use asset).
Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on
the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease
term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The
lessee will generally recognise the amount of the re-measurement of the lease liability as an adjustment to the right-of-use
asset.
Lessor accounting is substantially carries forward the lessor accounting requirements in AASB 117. Accordingly, a lessor
continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.
AASB 16 also requires enhanced disclosure to be provided by lessors that will improve information disclosed about a lessor’s
risk exposure, particularly to residual value risk. This standard will have no impact on transition. The Transaction occurred
after the balance date and hence do not impact the Company at 1 July 2019.
The Company has not early adopted any standards, interpretations or amendments that have been issued but are not yet
effective.
m) Going concern
The financial statements have been prepared on a going concern basis. The Company is currently in process of completing
the acquisition of various waterwell drilling assets from Ausdrill Limited (refer to Note 18 for further details) and expects to
complete the Transaction and commence drilling service within the first half of the 2020 financial year.
Subsequent to year end, the Company has entered a binding conditional financing agreement with Westpac Banking
Corporation Limited for a $8.8 million debt funding facility. The Company has also lodged a prospectus to raise a total of up
to $7 million before costs (refer to note 18 for further information).
23 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m) Going concern
The Directors have reviewed a budget/forecast and having considered the above, are of the opinion that the use of the going
concern basis is appropriate and that the Company will be able to pay its debts as and when they fall due for the next 12
months.
n) Critical accounting judgement, estimates and assumption
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations of future events, management believes to be
reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual
results. Following is the significant management judgements made in applying the accounting policies of the Company.
Business combination/asset acquisition (Transaction)
As announced on 11 April 2019, the Company has entered into:
-
an Asset Sale Agreement with Pentium Hydro Pty Ltd (“Pentium”) and Ausdrill Northwest Pty Ltd (“Ausdrill”) to acquire
waterwell drilling assets (and associated inventory) for $16,000,000 cash. The acquisition underpins the Company’s aim
to become a significant provider of production critical services and solutions to the resources, construction and utilities
industry.
a Share Sale Agreement with the shareholders of Pentium Hydro Pty Ltd (“Pentium”) to acquire all the issued shares of
Pentium in consideration for the issue of 7,800,000 shares in the Company at which point Pentium will become
subsidiary of the Company.
-
At the date of this report the Transaction has not been completed and the accounting treatment for the transaction is yet to
be assessed and finalised.
NOTE 3: OPERATING SEGMENTS
Identification of reportable operating segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by the Board
of Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
Accounting policy for operating segments
The operating segments were previously identified by management based on the nature of activities. The financial
information presented to the chief operating decision makers is consistent with that presented in the statement of profit and
loss and other comprehensive income, statement of financial position and statement of cash flows for the current and prior
year.
NOTE 4: OTHER INCOME
Net gain in sale of equity investments
R&D tax incentive refunds
Total Other income
30 June 2019
30 June 2018
$
-
-
-
$
53,541
406,958
460,499
To the extent the Company incurs eligible expenditure, annual R&D claims will continue to be made. Claims are submitted
based on expenditure incurred during the year and independently verified for eligibility. The accounting policy adopted by
the Company is to recognise the claims once reviewed by an independent expert and submitted to the ATO, therefore, no
amount has been recorded for a potential R&D tax incentive refund as at 30 June 2019.
24 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 5: INCOME TAX EXPENSE
Numerical reconciliation of income tax expense and tax at the statutory rate
(Loss)/Profit before income tax expense from continuing operations
Tax at the statutory tax rate of 30% (2018: 30%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
2019
$
2018
$
(483,826)
(145,148)
296,558
88,968
R&D incentive recognised in other income not taxable
-
(122,087)
-
-
Unrecognised DTA on tax losses
Income tax expense attributable to (loss)/profit
145,148
-
33,119
-
At 30 June 2019, the Company has carried forward revenue tax losses of $512,951 (2018: $29,125). These losses remain
available to offset against future taxable income amounts subject to passing the Ownership and business continuity tests as
required by the Australian Taxation Office.
NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION
The total of remuneration paid to Key Management Personnel during the year are as follows:
Short-term employee benefits (1)
Total KMP Compensation
2019
$
174,000
174,000
2018
$
48,000
48,000
(1) Short-term employee benefits for 30 June 2019 include $42,000 payment to Mr Sheldon Burt and Mr Chris Brophy for
project management and consultation services received in relation to the Ausdrill Transaction and $66,000 payment each for
Mr Faldi Ismail and Mr Nicholas Young’s director fees for the period from November 2017 to March 2019.
Loans to Key Management Personnel
There were no loans made to Key Management Personnel during the financial year (2018: Nil).
Other Key Management Personnel Transactions
Refer to Note 16 for detailed notes on other transactions with Key Management Personnel.
NOTE 7: REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by the auditor of the Company:
Remuneration of the auditor of the Company (Pitcher Partners BA&A Pty Ltd
and its related entities) for:
-
-
Auditing or reviewing the financial reports
Non-audit services
In the prior year, the Company’s auditor was Pitcher Partners Corporate (WA) Pty Ltd.
2019
$
2018
$
28,990
4,555
33,545
27,000
-
27,000
25 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 8: EARNINGS PER SHARE
Earnings per share for (loss)/profit
(Loss)/profit after income tax attributes to the owners of Vysarn Limited
Weighted average number of ordinary shares used in calculating basic and
diluted earnings per share
Basic and diluted (loss)/earnings per share
Accounting policy for earnings per share
2019
$
2018
$
(483,826)
296,558
Number
Number
136,228,616
136,228,616
Cents
Cents
(0.355)
0.218
Basic earnings per share
Basic earnings or loss per share is calculated by dividing the profit or loss attributable to the owners of Vysarn Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
NOTE 9: CURRENT ASSETS – CASH AND CASH EQUIVALENTS
Cash at bank
30 June 2019
30 June 2018
$
$
6,983,931
6,983,931
7,411,551
7,411,551
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand and deposits held at call with financial institutions.
NOTE 9a: CASH FLOW INFORMATION
(Loss)/profit after income tax expense for the year
(483,826)
296,558
Adjustments for:
Exchange (gain)/loss
Net gain on sale of equity investments
Transaction costs related to loans/borrowings
Change in operating assets and liabilities:
-
-
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash (used in)/provided by operating activities
-
-
5,000
(22,800)
79,006
(422,620)
(237)
(54,355)
-
596
(15,396)
227,166
26 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 10: CURRENT ASSETS – TRADE AND OTHER RECEIVABLES
30 June 2019
30 June 2018
GST receivable
Interest receivable
Trade and other receivables are held at amortised cost.
NOTE 11: CURRENT ASSETS – OTHER
Prepayments
NOTE 12: CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
Trade payables
Other payables
$
$
33,307
2,899
36,206
291
18,548
18,839
30 June 2019
30 June 2018
$
$
14,501
14,501
9,068
9,068
30 June 2019
30 June 2018
$
$
68,824
41,668
110,492
3,977
27,509
31,486
Refer to Note 14 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
NOTE 13: EQUITY - ISSUED CAPITAL
30 June 2019
30 June 2018
30 June 2019 30 June 2018
Number
Number
$
$
Ordinary shares - fully paid
136,228,616
136,228,616
29,912,298
29,912,298
136,228,616
136,228,616
29,912,298
29,912,298
There were no movement in the issued capital of the Company for the current financial year and previous financial year.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Options
There were no Options on issue at the end of the financial year (2018: Nil).
27 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13: EQUITY - ISSUED CAPITAL (CONTINUED)
Capital risk management
The Company's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity as recognised in the statement of financial position.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
NOTE 14: FINANCIAL INSTRUMENTS
Financial risk management objectives
The Company’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Company. The Company uses different methods to measure different types of risk to which it is exposed.
Financial risk management objectives
These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis
for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Market risk
Foreign currency risk
The Company is not exposed to any significant foreign currency risk.
Price risk
The Company is not exposed to any significant price risk.
Interest rate risk
The Company’s only exposure to interest rate risk is in relation to deposits held. Deposits are held with reputable banking
financial institutions.
The weighted average effective interest rate of the Company’s deposit was 2.29% (2018: 1.60%).
The table below illustrate the impact on profit before tax based upon expected volatility of interest rates using market date
and analysis forecasts.
Basis points
change
Basis points
increase effect
on profit before
tax
Effect on
equity
Basis points
% change
Basis points
decrease effect
on profit before
tax
Effect on
equity
30 June 2019
Cash and equivalents
50
35,989
35,989
50
(35,989)
(35,989)
30 June 2018
Cash and equivalents
50
37,058
37,058
50
(37,058)
(37,058)
28 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 14: FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance
with approved Board policy. Such policy requires that surplus funds are only invested with counterparties with a Standard
and Poor’s rating of at least AA-. The Company has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The maximum exposure to credit risk at the reporting date to
recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements. The Company does not hold any collateral.
The following table provides information regarding the credit risk relating to cash and money market securities based on
Standard and Poor’s counterparty credit ratings.
Note
30 June 2019
$
30 June 2018
$
Cash and cash equivalents – AA Rated
9
6,983,931
6,983,931
7,411,551
7,411,551
Liquidity risk
Liquidity risks arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting
its obligation related to financial liabilities. Vigilant liquidity risk management requires the Company to maintain sufficient
liquid assets (mainly cash and cash equivalents) to be able to pay debts as and when they become due and payable.
The Company manages liquidity risk by maintaining adequate cash reserves and continuously monitoring actual and forecast
cash flows.
Remaining contractual maturities
The following tables detail the Company’s remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
30 June 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
30 June 2018
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
$
$
$
$
Remaining
contractual
maturities
$
68,824
41,668
110,492
3,977
27,509
31,486
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
68,824
41,668
110,492
3,977
27,509
31,486
29 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 14: FINANCIAL INSTRUMENTS (CONTINUED)
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments approximate their fair value. The carrying amounts of
trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair
value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest
rate that is available for similar financial instruments.
NOTE 15: PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity for financial year ending 30 June 2018. During the
year ended 30 June 2018 the Company disposed of its 100% interest in the subsidiaries.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
-
-
-
Issued capital
Reserves
Accumulated losses
Total equity
Parent
2018
$
164,394
164,394
Parent
2018
$
7,439,458
7,439,458
31,486
31,486
29,912,298
-
(25,204,326)
7,407,972
NOTE 16: RELATED PARTY TRANSACTIONS
Purchases from and sales to related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Some Directors, or former Directors of the Company, hold or have held positions in other companies, where it is considered
they control or significantly influence the financial or operating policies of those entities. Transactions between related
parties are on normal commercial terms and conditions no more favourable than those available to other parties unless
otherwise stated.
Key Management Personnel
2019
$
2018
$
Payment for goods and services:
Payment for services to Onyx Corporate
Payment for services to Otsana Capital
Payment for services to Bellanhouse Legal
Mr Nicholas Young
Mr Faldi Ismail / Mr Nicholas Young
Mr Bryn Hardcastle
54,150
30,000
-
28,000
5,000
12,765
30 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16: RELATED PARTY TRANSACTIONS (CONTINUED)
Onyx Corporate Pty Ltd, an entity associated with Mr Nicholas Young, received payments totalling $54,150 in relation to
accounting and Company secretarial services provided to the Company (2018: $28,000).
During the year, the Company engaged with Otsana Pty Ltd trading as Otsana Capital (Otsana), an entity associated with
Messers Ismail and Young, to act as corporate advisor and lead manager in relation to the Transaction with Ausdrill Northwest
Pty Ltd. The mandate will continue until the date of transaction completion, being successful reinstatement of the Company
to the Official List of ASX or when either party terminates the agreement. Under the terms of the Mandate, the Company will
pay the Lead Manager (and/or its nominee) a fee of $180,000 (excluding GST) for corporate advisory and project management
services provided in connection with the Acquisition and a capital raising fee of 6% (excluding GST) on the amount raised
under the Public Offer. The services are otherwise being provided on terms standard for an agreement of this nature. During
the year ended 30 June 2019, the Company has paid Otsana $30,000 (2018: $5,000). Commitments of $150,000 remain at
the end of reporting period (2018: Nil).
Bellanhouse Legal, an entity associated with former Director Mr Bryn Hardcastle, received payments in financial year 2018 of
$12,765 in relation to legal services provided to the Company.
There were no trade receivables from or trade payables to related parties for the financial year ending 30 June 2019 (2018:
Nil).
There were no loans to / from related parties for the financial year ending 30 June 2019 (2018: Nil).
NOTE 17: COMMITMENTS AND CONTINGENCIES
On 11 April 2019 the Company announced it had entered into an Asset Sale Agreement with Pentium Hydro Pty Ltd (Pentium)
and Ausdrill Northwest Pty Ltd (a subsidiary of Ausdrill Limited (ASX:ASL)) (Ausdrill) to acquire various waterwell drilling assets
(and associated inventory) used by Ausdrill to conduct its hydrogeological drilling business known as ‘Connector Drilling’. In
consideration for the acquisition of the Assets, the Company has agreed to pay Ausdrill $16 million at completion. The
consideration will be paid by the Company from existing cash, funds from a Public Offer of Shares to raise at least $5M and
up to $7M and an $8.8M Debt Facility obtained from Westpac Banking Corporation Ltd.
The Asset Sale Agreement is the result of a comprehensive identification and evaluation process by the Board over the past
~2 years seeking to acquire assets that it believes can provide future value for shareholders. Following Shareholder approval
of the Transaction obtained at the General Meeting held on 5 July 2019, completion of the acquisition of the Assets remains
conditional upon satisfaction of the various conditions precedent including the Company obtaining finance to satisfy the
purchase price under the agreement and ASX approval.
In connection with the Asset Sale Agreement, the Company also entered into the Share Sale Agreement with Insight Ecosys
Pty Ltd (controlled by Mr Brophy) and Connada Pty Ltd (controlled by Mr Burt), pursuant to which the Company will acquire
the entire issued share capital of Pentium from the Pentium Vendors. In consideration for the acquisition of Pentium, the
Company has agreed to issue to Pentium Vendors (and/or their nominees) a total of 7,800,000 shares. Completion of the
Share Sale Agreement will take place just prior to completion of the Asset Sale Agreement, and Pentium will become a wholly
owned (and primary operating) subsidiary of the Company.
Completion of the acquisition of Pentium remains subject to all the conditions precedent to the Asset Sale Agreement being
satisfied.
The Company has entered into corporate advisor and lead manager mandate with Otsana (an entity associated with Mr Faldi
Ismail). Under the terms of the Mandate, the Company will pay the Lead Manager (and/or its nominee) a fee of $180,000
(excluding GST) for corporate advisory and project management services provided in connection with the Acquisition (please
refer to Note 2(n)) and a capital raising fee of 6% (excluding GST) on the amount raised under the Public Offer. The services
are otherwise being provided on terms standard for an agreement of this nature. During the financial year ended 30 June
2019, the Company has paid Otsana $30,000. Commitments of $150,000 remain at the end of reporting period (2018: Nil).
31 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 18: EVENTS SUBSEQUENT AFTER THE REPORTING DATE
On 5 July 2019, the Company’s shareholders approved at its General Meeting:
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
Change to the Nature and Scale of Company’s Activities;
Ratification of prior election of Messers Burt and Mr Brophy as Directors;
Issue of 7,800,000 Pentium Vendor shares to the Pentium Vendors pursuant to the share sale agreement on
completion of the Transaction;
Issue of up to 129,629,630 fully paid ordinary shares at an issue price of $0.054 per share under a Public Offer;
Related party’s participation in Public Offer for Mr Hutchinson to the extent of up to 20,129,630 shares at an issue
price of $0.054 per share for a subscription amount up to $1,087,000;
Related party’s participation in Public Offer for Mr Ismail to the extent of up to 5,175,926 shares at an issue price
of $0.054 per share for a subscription amount up to $279,500;
Related party’s participation in Public Offer for Mr Young to the extent of up to 5,175,926 shares at an issue price
of $0.054 per share for a subscription amount up to $279,500;
Related party’s participation in Public Offer for Mr Burt to the extent of up to 1,851,852 shares at an issue price of
$0.054 per share for a subscription amount up to $100,000;
Related party’s participation in Public Offer for Mr Brophy to the extent of up to 1,851,852 shares at an issue price
of $0.054 per share for a subscription amount up to $100,000;
Issue up to 15,500,000 shares, or cash payment, up to $837,000 to Mr Hutchinson or his nominee for consideration
of past service to the Company on completion of the Transaction;
Issue up to 4,250,000 shares, or cash payment, up to $229,500 to Mr Ismail or his nominee for consideration of past
service to the Company on completion of the Transaction;
Issue up to 4,250,000 shares, or cash payment, up to $229,500 to Mr Young or his nominee for consideration of
past service to the Company on completion of the Transaction;
5,000,000 Performance Rights to Mr Burt have been approved which was contemplated by the Burt ESA and to be
issued on completion of the Transaction;
5,000,000 Performance Rights to Mr Brophy have been approved which was contemplated by the Brophy ESA and
to be issued on completion of the Transaction; and
10,000,000 Options to Mr Hutchinson to be issued as per NED agreement on completion of the Transaction.
On 10 July 2019 the Company, together with Pentium, entered into a binding conditional financing agreement with Westpac
Banking Corporation Limited. Under the facility, subject to the satisfaction of specified conditions, Westpac will provide debt
funding of $8.8 million as part of the funding for the acquisition by the Company and Pentium of various waterwell drilling
assets (and associated inventory) from Ausdrill.
On 11 July 2019, the Company lodged a prospectus to ASIC for its offer to the public of up to 129,629,630 shares at an issue
price of $0.054 each to raise a total of up to $7million (before costs). It was also announced that ASX has extended the
Company’s de-listing deadline to the commencement of trading on 11 October 2019. The extension was granted on the basis
that the Company is in the final stages of completing the Transaction.
On 26 July 2019, the Company lodged a supplementary prospectus with ASIC under which the Company announced that it
had entered into a deed of assignment with Pentium, Hancock Prospecting Pty Ltd (Hancock) and Ausdrill under which
Ausdrill’s rights and obligation under its existing drilling services contract with Hancock will be assigned to the Company and
Pentium with effect from completion of the Asset Sale Agreement.
On 14 August 2019, the Company lodged a second supplementary prospectus with ASIC noting that it had received strong
demand from investors under the Public Offer in excess of the full subscription amount of $7,000,000 and extended the
closing date of the public offer (and ancillary offers) to Monday 26 August 2019 to allow investors sufficient time to transfer
funds and return application forms.
On 16 August 2019, the Company lodged a third supplementary prospectus with ASIC under which the Company announced
that Pentium had entered into a hire agreement with Easternwell in which under the agreement, Easternwell will hire, on a
dry hire arrangement, two rigs (and ancillary equipment) for use at BHP’s mining operation in Olympic Dam, South Australia.
There is no other matter or circumstance that has arisen since 30 June 2019 other than mentioned above that has significantly
affected, or may significantly affect the Company’s operations, the results of those operations, or the Company’s state of
affairs in future financial years.
32 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2019
In the opinion of the Directors of Vysarn Limited:
1.
The financial statements and notes thereto are in accordance with the Corporations Act 2001, including:
(a)
(b)
Giving a true and fair view of the Company’s financial position as at 30 June 2019 and of its performance for
the financial year ended on that date; and
Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001.
2.
3.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2019.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for an on behalf of the
Directors by:
Peter Hutchinson
Chairman
Dated 23 August 2019
33 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
35 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
36 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
37 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
CORPORATE GOVERNANCE STATEMENT
Introduction
Vysarn Limited (Company) has established a corporate governance framework, the key features of which are set out in this
statement. In establishing its corporate governance framework, the Company refers to the recommended corporate
governance practices for ASX listed entities set out in the ASX Corporate Governance Council Principles and
Recommendations (Principles and Recommendations). During the period 1 July 2018 to 30 June 2019 (Reporting Period),
the Company's governance framework was established with reference to the 3rd edition of the Principles and
Recommendations. Subsequent to the Reporting Period , on 10 July 2019, the Company adopted a new corporate governance
framework with reference to the 4th edition of the Principles and Recommendations.
This Corporate Governance Statement discloses the extent to which the Company followed the recommendations set out in
the Principles and Recommendations (Recommendations) for the Reporting Period. The Recommendations are not
mandatory, however, the Recommendations not followed have been identified and reasons have been provided for not
following them along with what (if any) alternative governance practices the Company adopted in lieu of the
recommendation.
The 4th edition of the Principles and Recommendations will take effect for the Company's first full financial year commencing
on or after 1 January 2020. For the purposes of this statement, the Company has reported against the 3rd edition of the
Principles and Recommendations.
The information in the statement is current at 31 October 2019 and was approved by a resolution of the Board on the 31
October 2019.
Corporate governance policies and procedures
The Company has adopted the following suite of corporate governance policies and procedures (together, the Corporate
Governance Policies):
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Board Charter;
Audit and Risk Committee Charter;
Nomination and Remuneration Committee Charter;
Policy and Procedure for the selection and (Re)Appointment of Directors;
Process for performance evaluations;
Risk Management Policy;
Shareholder Communication and Investor Relations Policy;
Securities Trading Policy;
Code of Conduct;
Anti-Bribery and Corruption Policy
Whistleblower Policy;
Diversity Policy;
Continuous Disclosure Policy; and
Continuous Disclosure Compliance Procedures.
The Company’s Corporate Governance Policies are available on the Company’s website at www.vysarn.com.au
Recommendations
Comply
Explanation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should have and disclose a charter which:
(a)
sets out the respective roles and responsibilities of the
board, the chair and management; and
includes a description of those matters expressly reserved
to the board and those delegated to management.
(b)
Yes
The Company has established the respective roles and responsibilities
of its Board and management, and those matters expressly reserved to
the Board and those delegated to management, and has documented
this in its Board Charter, which is disclosed on the Company’s website.
38 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Recommendations
Comply
Explanation
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a
person, or putting forward to security holders a candidate
for election, as a director; and
(b) provide security holders with all material information
relevant to a decision on whether or not to elect or re-
elect a director.
Recommendation 1.3
A listed entity should have a written agreement with each
director and senior executive setting out the terms of their
appointment.
Yes
The Board undertakes appropriate checks to verify the suitability of the
new candidates prior to their appointment. These checks were
undertaken for all Directors appointed during the Reporting Period.
The Company has appropriate procedures in place to ensure that
material information relevant to election or re-election of a director,
was disclosed in the Notice of Meeting provided to Shareholders. The
Company provided all material information to Shareholders in relation
to the re-election of Director Faldi Ismail at the annual general meeting
held on 27 November 2018.
Yes
The Company has a written agreement with each of its Directors,
including its Executive Directors. The Company did not have any Senior
Executives during the Reporting Period.
Yes
No
Recommendation 1.4
The company secretary of a listed entity should be accountable
directly to the board, through the chair, on all matters to do with
the proper functioning of the board.
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which includes requirements for
the board to set measurable objectives for achieving
gender diversity and to assess annually both the
objectives and the entity’s progress in achieving them;
(b) disclose that policy or a summary or it; and
(c) disclose as at the end of each reporting period:
(i)
the measurable objectives for achieving gender
diversity set by the board in accordance with the
entity’s diversity policy and its progress towards
achieving them; and
(ii) either:
(A)
(B)
the respective proportions of men and
women on the board, in senior executive
positions and across the whole organisation
(including how the entity has defined “senior
executive” for these purposes); or
if the entity is a “relevant employer” under
the Workplace Gender Equality Act, the
entity’s most recent “Gender Equality
Indicators”, as defined in and published
under the Workplace Gender Equality Act.
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of the board, its committees and individual
directors; and
(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
period in accordance with that process.
No
The Board Charter outlines the Company’s requirement to have a
written agreement with each Director and senior executive of the
Company which sets out the terms of that Director’s or senior
executive’s appointment.
The Board Charter outlines the roles, responsibility and accountability
of the Company Secretary. The Company Secretary was during the
Reporting Period accountable directly to the Board, through the Chair,
on all matters to do with the proper functioning of the Board.
The Company has a Diversity Policy, which is disclosed on the
Company's website. The Diversity Policy does not include requirements
for the Board to set measurable objectives for achieving gender
diversity and to assess annually both the objectives and the Company’s
progress in achieving them. The Board has not set measurable
objectives for achieving gender diversity.
Given the Company’s stage of development and the number of
employees, the Board considers it is not practical to set measurable
objectives for achieving gender diversity at this time.
The respective proportions of men and women on the Board, in senior
executive positions and across the whole organisations are set out in
the following table. Senior executives for these purposes means those
person who report directly to the chief executive officer (or equivalent):
Male
Female
Total
Board of Vysarn
Senior executives
Balance of employees
Total
5
-
-
5
-
1
-
1
5
1
-
6
During the Reporting Period the full Board in its capacity as the
Nomination and Remuneration Committee was responsible for
conducting a performance evaluation of the Board, its Committees (if
any) and individual Directors. The Company did not have an established
process for performance evaluation.
No performance evaluation of the Board or individual Directors was
conducted during the Reporting Period. Performance evaluations were
deferred due to the anticipated changes to the Board as a result of the
completion of the transaction under the Asset Sale Agreement, for full
details refer to Section 5. Review of Operations, in the Annual Report
commencing at page 5.
Subsequent to the Reporting Period the Company has now adopted a
Process for Performance Evaluations which is disclosed on the
Company’s website.
39 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Recommendations
Comply
Explanation
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of its senior executives; and
(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
period in accordance with that process.
Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
No
No performance evaluation for senior executives was undertaken
during the Reporting Period, as there were no senior executives during
the Reporting Period.
Subsequent to the Reporting Period the Company has now adopted a
Process for Performance Evaluations which is disclosed on the
Company’s website.
Yes
The Company did not have a separate Nomination and Remuneration
Committee.
(i)
has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,
(ii)
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or
(b)
if it does not have a nomination committee, disclose that
fact and the processes it employs to address board
succession issues and to ensure that the board has the
appropriate balance of skills, experience, independence
and knowledge of the entity to enable it to discharge its
duties and responsibilities effectively.
Given the current size and composition of the Board, the Board believes
that there would be no efficiencies gained by establishing a separate
Nomination and Remuneration Committee. Accordingly, the Board as
a whole performed the role of the Nomination and Remuneration
Committee.
Although the Board did not establish a separate Nomination and
Remuneration Committee,
it did adopt a Nomination and
Remuneration Committee Charter, which describes the role,
composition and responsibilities of the full Board in its capacity as the
Nomination and Remuneration Committee which is disclosed on the
Company’s website.
During the Reporting Period, items that are usually required to be
discussed by a Nomination and Remuneration Committee are marked
as separate agenda items at Board meetings when required, and when
the Board convened to address matters as the Nomination and
Remuneration Committee it carried out the functions which are
delegated to it in the Company’s Nomination and Remuneration
Committee Charter. The Board deals with any conflicts of interest that
occur when
it performs the functions of a Nomination and
Remuneration Committee by ensuring that any Director with a
conflicting interest is not party to the relevant discussions.
Recommendation 2.2
A listed entity should have and disclose a board skill matrix
setting out the mix of skills and diversity that the board currently
has or is looking to achieve in its membership.
Yes
The details of the current skill set of the current Directors are set out in
the description of each Director in the Annual Report commencing at
page 4.
Key Skill sets identified as being appropriate by the Board include:
-
-
-
-
strategic expertise;
public company director experience;
mining and resource drilling and water management
services;
human resources occupational health and safety
40 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Recommendations
Comply
Explanation
Recommendation 2.3
A listed entity should disclose:
(a)
the names of the directors considered by the board to be
independent directors;
if a director has an interest, position, association or
relationship of the type described in Box 2.3 of the ASX
Corporate Governance Principles and Recommendation
(3rd Edition), but the board is of the opinion that it does
not compromise the independence of the director, the
nature of the interest, position, association or relationship
in question and an explanation of why the board is of that
opinion; and
the length of service of each director
(b)
(c)
Yes
The board considered the independence of Directors with regards to
factors set out in Box 2.3 of the ASX Principle and Recommendations.
During the Reporting Period the Company had two independent
directors Messrs Ismail and Young (former directors). These directors
were independent for the period 1 July 2018 to 19 June 2019. The
former directors became non-independent with the execution of a
mandate with Vysarn Limited to provide Corporate Advisor and Lead
Manager services to the Company.
Recommendation 2.4
A majority of the board of a listed entity should be independent
directors.
No
The Company does not currently have any independent directors.
Names of Directors during the Reporting Period and their length of
service up to the date of this statement, or their resignation date is
noted below:
Name
Mr Peter Hutchinson (Chairman)
Mr Faldi Ismail
Mr Nicholas Young
Mr Sheldon Burt
Mr Christopher Brophy
Length of Service
2 years1
2 years and 8 months2
2 years and 8 months3
5 months4
5 months 5
As set out in the Company's Board Charter, where practical and
consistent with the Company’s stage of development, a majority of the
Board should be comprised of independent directors, and the
Chairman should be an independent non-executive director.
However, following the Company’s re-admission to the Official List, the
Board had no independent directors as Messrs Brophy and Burt
perform an executive role with the Company, and Mr Hutchinson is a
substantial shareholder of the Company.
Subsequent to the Reporting Period, on 28 October 2019, Mr Brophy
resigned from his executive position with the Company, and remains as
a Non-executive Director of the Company. However, due to his
previous executive role with the Company, he remains a non-
independent Director.
The Board recognises the importance of the appropriate balance
between independent and non-independent representation on the
Board. However, the Board considered that a Board weighted towards
industry and technical experience is appropriate at the stage of the
Company’s development.
As the Company's operations progress, the Board will review the
composition of the Board, including independence of its Directors.
1 At the date of this statement
2 At the date of resignation 29.08.2019
3 At the date of resignation 29.08.2019
4 At the date of this statement
5 At the date of this statement
41 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Recommendations
Comply
Explanation
Recommendation 2.5
The chair of the board of a listed entity should be an
independent director and, in particular, should not be the same
person as the CEO of the entity.
Recommendation 2.6
A listed entity should have a program for inducting new
directors and providing appropriate professional development
opportunities for continuing directors to develop and maintain
the skills and knowledge needed to perform their role as a
director effectively.
No
Yes
The Non-executive Chairman of the Board is Mr Hutchinson. Mr
Hutchinson is a substantial security holder of the Company who acted
in the capacity of CEO during the Reporting Period. Notwithstanding the
lack of independence, the Board deemed Mr Hutchinson to be the most
appropriate person as the Chair or the Company given his:
-
-
experience in the role of Chairman; and
extensive Public Company experience
Subsequent to the end of the Reporting Period Mr Hutchinson moved
into the role of the non-executive Chairman.
During the Reporting Period, the Board Charter stated the Company
was committed to the development of its Directors. The Board was
responsible for the approval and review of induction and continuing
professional development programs and procedures for Directors to
ensure that they can effectively discharge their responsibilities.
The Company now has an induction program for its executive and
senior executives that was adopted subsequent to the Reporting
Period.
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its directors, senior executives
Yes
and employees; and
(b) disclose that code or a summary of it.
During the Reporting Period, the Company had a Corporate Code of
Conduct for its directors, senior executive and employees, which was
disclosed on the Company's website.
Subsequent to the Reporting Period, the Company adopted a new Code
of Conduct, Anti-Bribery and Corruption Policy and Whistle-blower
Policy, all of which are available on the Company’s website.
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
(i)
(ii)
has at least three members, all of whom are non-
executive directors and a majority of whom are
independent directors; and
is chaired by an independent director, who is not
the chair of the board,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the relevant qualifications and experience of the
members of the committee; and
in relation to each reporting period, the number
of times the committee met throughout the
period and the individual attendances of the
members at those meetings; or
(b)
if it does not have an audit committee, disclose that fact
and the processes it employs that independently verify
and safeguard the integrity of its financial reporting,
including the processes for the appointment and removal
of the external auditor and the rotation of the audit
engagement partner.
Yes
The Company did not have a separate Audit and Risk Committee.
Given the current size and composition of the Board, the Board believes
that there would be no efficiencies gained by establishing a separate
Audit and Risk Committee. Accordingly, the Board performs the role of
the Audit and Risk Committee.
Although the Board does not have a separate Audit and Risk
Committee, it had adopted an Audit and Risk Committee Charter,
which is disclosed on the Company’s website.
During the Reporting Period, items that are usually required to be
discussed by an Audit and Risk Committee are marked as separate
agenda items at Board meetings when required, and when the Board
convened to address matters as the Audit and Risk Committee it carried
out the functions which are delegated to it in the Company’s Audit and
Risk Committee Charter. The Board deals with any conflicts of interest
that occur when it performs the functions of an Audit and Risk,
Committee by ensuring that any Director with a conflicting interest is
not party to the relevant discussions.
During the Reporting Period, the Board was responsible for the initial
appointment of the external auditor and the appointment of a new
external auditor when any vacancy arises. Candidates for the position
of external auditor must demonstrate complete independence from
the Company through the engagement period. The Board may
otherwise select an external auditor based on criteria relevant to the
Company's business and circumstances. The performance of the
external auditor was reviewed on an annual basis by the Board.
Subsequent to the end of the Reporting Period the Company has
established a Procedure for the Selection, Appointment and Rotation
of its External Auditor, which is an appendix to the Audit and Risk
Committee Charter.
42 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Recommendations
Comply
Explanation
Recommendation 4.2
The board of a listed entity should, before it approves the
entity’s financial statements for a financial period, receive from
its CEO and CFO a declaration that the financial records of the
entity have been properly maintained and that the financial
statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and
performance of the entity and that the opinion has been
formed on the basis of a sound system of risk management and
internal control which is operating effectively.
Recommendation 4.3
A listed entity that has an AGM should ensure that its external
auditor attends its AGM and is available to answer questions
from security holders relevant to the audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
(a) have a written policy for complying with its continuous
disclosure obligations under the Listing Rules; and
(b) disclose that policy or a summary of it.
Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and its
governance to investors via its website.
Recommendation 6.2
A listed entity should design and implement an investor
relations
two-way
program
communication with investors.
effective
facilitate
to
Recommendation 6.3
A listed entity should disclose the policies and processes it has
in place to facilitate and encourage participation at meetings of
security holders.
Recommendation 6.4
A listed entity should give security holders the option to receive
communications from, and send communications to, the entity
and its security registry electronically.
Yes
Yes
Yes
Yes
Yes
Yes
During the Reporting Period, the Board received, prior to approving the
Company’s financial statements, from the CEO and CFO the declaration
required that in their opinion the financial records of the entity had
been properly maintained and that the financial statements complied
with the appropriate accounting standards and gave a true and fair
view of the financial position and performance of the Company and
that the opinion had been formed on the basis of a sound system of risk
management and internal control which was operating effectively.
The Company ensures that its external auditor attends its Annual
General Meeting (AGM) and are available to answer questions from
security holders relevant to the audit.
A representative from the Company’s auditors Pitcher Partners (Perth)
attended the AGM held on 27 November 2018.
During the Reporting Period, the Company had a Continuous Disclosure
Policy which set out the processes the Company followed to comply
with its continuous disclosure obligations under the ASX Listing Rules.
During the Reporting period, the Continuous Disclosure Policy was
disclosed on the Company's website.
Subsequent to the Reporting Period, the Company adopted an updated
Continuous Disclosure Policy and Continuous Disclosure Compliance
Procedures, both of which are available on the Company website.
Information about the Company and its governance practices is
available on its website at www.vysarn.com.au
During the Reporting Period, the Company had a Shareholder
Communications Strategy, which aimed to promote and facilitate
effective two-way communication with investors. During the Reporting
Period, the Shareholder Communications Strategy was available on the
Company’s website.
Subsequent to Reporting Period the Company adopted a Shareholder
Investor Relations and Communications Policy, which is available on the
Company's website.
Shareholders are encouraged to participate at all Shareholder meetings
of the Company. Upon the despatch of any Notice of Meeting to
Shareholders, the Company Secretary shall send out material with that
Notice of Meeting stating that all Shareholders are encouraged to
participate at the meeting.
Subsequent to the Reporting Period, the Company adopted a
Shareholder Investor Relations and Communications Policy, which is
available on the Company's website. The policy outline the processes
the Company has place to facilitate and encourage participation at
meetings by Shareholders.
Yes
During the Reporting Period Shareholders were given the option to
receive and send communications electronically, this was a service
provided through the Company Share Registry.
43 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Recommendations
Comply
Explanation
Principle 7: Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of
Yes
The Company did not have a separate Risk Committee.
Please refer to disclosure in relation to Recommendation 4.1 above.
which:
(i)
(ii)
and disclose:
(iii)
(iv)
(v)
has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or
(b)
if it does not have a risk committee or committees that
satisfy (a) above, disclose that fact and the process it
employs for overseeing the entity’s risk management
framework.
Recommendation 7.2
The board or a committee of the board should:
(a)
review the entity’s risk management framework with
management at least annually to satisfy itself that it
continues to be sound, to determine whether there have
been any changes in the material business risks the entity
faces and to ensure that they remain within the risk
appetite set by the board; and
(b) disclose in relation to each reporting period, whether such
a review has taken place.
Recommendation 7.3
A listed entity should disclose:
(a)
(b)
if it has an internal audit function, how the function is
structured and what role it performs; or
if it does not have an internal audit function, that fact and
the processes it employs for evaluating and continually
improving the effectiveness of its risk management and
internal control processes.
Yes
Yes
The Board reviewed the Company's risk management framework
during the Reporting Period in conjunction with the ASX reinstatement
process and the establishment of the Company’s new governance
framework.
The Company does not have an internal audit function. To evaluate and
continually
improve the effectiveness of the Company’s risk
management process and internal control process. The Board relies on
the ongoing reporting and discussion of the management of material
business risk as part of the risk management framework, which is now
outlined in its risk management policy.
Recommendation 7.4
A listed entity should disclose whether, and if so how, it has
regard to economic, environmental and social sustainability
risks and, if it does, how it manages or intends to manage those
risks.
Yes
During the Reporting Period the Company did not have material
exposure to economic, environmental or social sustainability risks.
44 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Recommendations
Comply
Explanation
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(i)
(ii)
(iii)
(iv)
(v)
has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,
and disclose:
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or
(b)
if it does not have a remuneration committee, disclose
that fact and the processes it employs for setting the level
and composition of remuneration for directors and senior
executives and ensuring that such remuneration is
appropriate and not excessive.
Recommendation 8.2
A listed entity should separately disclose its policies and
practices regarding the remuneration of non-executive
directors and the remuneration of executive directors and other
senior executives.
Recommendation 8.3
A listed entity which has an equity-based remuneration scheme
should:
(a) have a policy on whether participants are permitted to
enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of
participating in the scheme; and
(b) disclose that policy or a summary of it.
Yes
The Company did not have a separate Remuneration Committee.
Please refer to disclosure in relation to Recommendation 2.1 above.
Yes
Details of the Company's policies and practices regarding the
remuneration of non-executive directors and the remuneration of
executive directors and other senior executives for the Reporting
Period are set out in the Company's Remuneration Report commencing
on page 7 of the Annual Report.
N/A
The Company does not have an equity-based remuneration scheme in
place.
45 | Vysarn Limited ABN 41 124 212 175 – Annual Report 30 June 2019
ASX ADDITIONAL INFORMATION
ADDITIONAL SHAREHOLDER INFORMATION
FOR THE YEAR ENDED 30 JUNE 2019
The following information is current as at 29 October 2019.
Ordinary Share Capital
297,658,246 Shares are held by 1,121 individual holders.
Voting Rights
The voting rights attached to each class of equity security are as follows:
• Ordinary Shares: On a show of hands every member present at a meeting in person or by proxy shall have one
vote and upon a poll each share shall have one vote.
• Unlisted Options and Performance Rights: Unlisted Options and Performance Rights do not carry any voting
rights.
Twenty Largest Shareholders
Position Holder Name
1
2
3
4
5
6
MOLONGLO PTY LTD
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