A N N U A L R E P O R T
2 0 2 1
Vysarn Limited (ABN 41 124 212 175) and incorporated entities for the financial year ending 30 June 2021
We have a diverse and
talented management
team, a core business on
the cusp of steady state
earnings, robust financial
capacity and a clearly
defined growth strategy.
Contents
Corporate Directory
Chairmans Letter
to Shareholders
Managing Director’s Report
Directors’ Report
Remuneration Report (Audited)
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
3
5
6
13
19
28
29
Consolidated Statement of Financial Position
30
Consolidated Statement of Changes in Equity
31
Consolidated Statement of Cash Flows
32
Notes to the Consolidated Financial Statements 33
Directors’ Declaration
Independent Auditor’s Report
Additional Shareholder Information
63
65
71
Annual Report for the financial year ending 30 June 2021
1
…a keen strategic focus on
taking the Company from
driller to a whole of life, end
to end water service provider.
2
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Corporate Directory
Directors
Peter Hutchinson Chairman
James Clement Managing Director and CEO
Sheldon Burt
Executive DirecTor
Company Secretary
Matthew Power
Registered Office
108 Outram Street
West Perth, WA 6005
Ph: +61 8 6144 9777
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
Westpac Banking Corporation
Level 3, Tower Two, Brookfield Place
123 St Georges Terrace
Perth, WA 6000
Securities Exchange Listing
ASX Limited
Level 40, Central Park 152-158 St Georges Terrace
Perth, WA 6000
ASX Code – VYS
Annual Report for the financial year ending 30 June 2021
3
The paradox of water is that,
despite its scarcity, almost
everywhere it remains the most
misgoverned, economically
undervalued, inefficiently
allocated, and egregiously
wasted critical natural resource
Steven Solomon,
The Huffington Post
4
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Chairman’s Letter
to Shareholders
Dear Shareholders
It is my pleasure to present the 2021 Annual Report for Vysarn
Limited (Vysarn) and the financial results for the company’s first
full year of operations since its relisting on the Australian Securities
Exchange on 11 September 2019.
Entering the 2021 financial year Vysarn’s prime focus was the
establishment of its wholly owned subsidiary Pentium Hydro Pty
Ltd (Pentium) as a premium and preferred tier one service provider
in the hydrogeological drilling sector while positioning it to reach
operational and earnings steady state where all staff and assets are
fully utilised for the foreseeable future. The board and management
also maintained a broad strategic focus to move Vysarn from being
a single service provider of hydrogeological drilling to become a
vertically integrated water service specialist. During the year Vysarn
continued to make quiet and considered progress in this next phase
of the company’s strategic growth plan.
Several major milestones were achieved by Pentium throughout
the financial year such as consolidating Master Service Agreement
extensions with Fortescue Metals Group and Roy Hill Iron Ore,
obtaining formal ISO accreditation in safety, environment and
quality, the rebuilding of two Foremost Dual Rotary rigs and the
conversion of a conventional rig to one capable of Dual Tube
Flooded Reverse. In the background to these milestones, group
employee numbers more than doubled to in excess 100 staff
members despite a challenging domestic labour market.
The consolidated group entity produced earnings before interest tax
and deprecation of $5.0 million, with a balance sheet showing net
tangible assets of $24.76 million, of which $6.56 million was cash
and cash equivalents.
Vysarn is well positioned as it enters the new financial year. We
have a diverse and talented management team, a core business on
the cusp of steady state earnings, robust financial capacity and a
clearly defined growth strategy.
I would like to take this opportunity to thank management and
staff for their collective efforts over the last 12 months. The task of
sourcing, rebuilding and deploying the company’s suite of assets in
such a condensed timeframe has been no mean feat, particularly in
light of persistent domestic service provider and labour shortages,
as well as other supply chain constraints.
On behalf of the Board I would like to thank you for your ongoing
support. In return we will work hard to provide our shareholders
with long term sustainable value.
Sincerely,
Peter Hutchinson
Chairman
Annual Report for the financial year ending 30 June 2021
5
Managing Director’s Report
Vysarn Limited (Vysarn or the Company) is reporting its first full 12 months of operations since its relisting
on the Australian Securities Exchange in September 2019. It has been a year where management primarily
focussed on the full deployment of the Company’s capital, people and equipment. This enabled the group
to position the core of the business for an opportunity to reach operational and earnings steady state as it
enters the new financial year.
During this phase the Company has been able to produce credible earnings while maintaining a keen
strategic focus on taking the Company from driller to a whole of life, end to end water service provider.
Financial Performance
Vysarn’s revenue from operations to 30 June 2021
of $25.82 million exceeded previous corresponding
period revenue from operations by $13.91 million.
Revenue from operations represented an average of
seven out of the Company’s twelve drill rigs being
deployed at any one time during the twelve months
to 30 June 2021. Drill rig deployment peaked at
ten rigs in the June quarter as final contracts were
secured to enable 100% drill rig deployment entering
the new financial year. While secured contracts
enabled full drill rig deployment late in the period,
timing and availability of third-party critical services
(for rig modifications and upgrades) and supply
chain constraints resulted in delays in rig readiness
and subsequent actual mobilisations. These delays
adversely affected anticipated revenue, particularly in
the June quarter.
Average monthly corporate overheads for the period
were approximately $0.37 million per month. Monthly
corporate overheads peaked at $0.45 million in
the June quarter as the Company prepared for full
deployment of Company drilling assets and drilling
staff. Maintainable consolidated corporate overheads
(excluding interest and depreciation) are anticipated
to stabilise at approximately $0.44 million per month
other than cost increases associated with future
growth initiatives.
Earnings Before Interest, Tax, Depreciation and
Amortisation (EBITDA) were $5.00 million as guided
in May 2021. The Company made a deliberate
and strategic decision during the June quarter to
attract and retain key drilling employees in a highly
competitive labour market. This decision was to
ensure the availability of guaranteed labour in
anticipation of full rig utilisation in early FY2022.
6
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Managing Director’s Report Key Finanical Metrics
Description
Operational Revenue
Normalised EBITDA
Plant and Equipment
FY20 (A)
FY21 (A)
FY22 (F)
$
$
$
11,912,589
25,824,506
52,000,000
(1,166,073)
5,001,161
10,000,000
24,707,782
29,548,656
30,800,000
1. FY20 EBITDA is normalised noting it was inclusive of a $7.2 million gain on bargain purchase (non-cash)
2. FY22 (F) is the Company’s budget which is subject to maintaining 100% rig utilisation. Earnings are conditional upon wet weather,
unforeseen repairs and maintenance and other unbudgeted operational expenses
Operational Revenue
Normalised EBITDA
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
-2,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
Plant and Equipment
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
FY20 (A)
FY21 (A)
FY22 (F)
FY20 (A)
FY21 (A)
FY22 (F)
FY20 (A)
FY21 (A)
FY22 (F)
Annual Report for the financial year ending 30 June 2021
7
60000000
50000000
40000000
30000000
20000000
10000000
0
-10000000
Operational Revenue
Normalised EBITDA
Plant and Equipment
FY20 (A)
FY21 (A)
FY22 (F)
Managing Director’s Report
Managing Director’s Report
Financial Performance continued…
Consequently, the labour overhead in the June
quarter was disproportionately high compared to the
average number of rigs utilised in the same period
which impacted on EBITDA in the final quarter.
The approximate $1.0 million impact was a result
of not having all rigs operational from early in the
June quarter and the additional drilling labour costs
incurred pertaining to these rigs.
Net Profit Before Tax (NPBT) was $1.14 million for
the 12 months to 30 June 2021. In the period the
Company utilised the ATO’s instant asset write-off
which increased the Company’s existing deferred
tax liability and created an income tax expense of
$0.79 million (non-cash). The Company is currently
carrying tax losses of $9.2 million that can be used to
offset future taxable income.
The Company’s balance sheet shows Net Tangible
Assets of $24.76 million and Net Current Assets of
$3.93 million. Cash and Cash Equivalent position was
$6.56 million and net debt was $6.24 million as at
Balance Sheet date of 30 June 2021.
Operational Update
Throughout FY2021 Vysarn’s wholly owned subsidiary
Pentium Hydro Pty Ltd (Pentium) primarily focussed
on positioning itself to reach an operational and
earnings steady state where all staff and equipment
is deployed and fully utilised.
Pentium successfully executed significant Master
Service Agreement extensions in FY2021 with key
clients Fortescue Metals Group (3 years plus a 2
year option) and Roy Hill Iron Ore (3.5 years and 1
year option). These two contracts are anticipated
to provide long term utilisation for up to 75% of the
Pentium fleet for the mid to long term.
Pentium also executed a 12 month scope of work
contract with Australian Potash, a 6 month scope
of work contract with past client Iluka Resources
and extended a dry hire agreement with Easternwell
Minerals in the period.
The contract pipeline established in FY2021 gives the
Company the opportunity to deploy and maintain
100% utilisation of Pentium’s entire fleet of 12 Company
owned drill rigs and ancillary equipment in the 2022
financial year. Contracted work is currently in excess of
Company fleet capacity. Pentium has supplemented
rig numbers via rental arrangements to meet the
demand and is on the cusp of having 13 rigs deployed
while establishing short term capacity to deploy up to
14 rigs should further demand materialise.
The domestic labour market for hydrogeological
drilling professionals continues to be challenging.
Despite this backdrop the Company has been able
to grow employee headcount during FY2021 from 55
staff members to in excess of 100 staff members
across hydrogeological operations management and
drilling contractors.
Pentium has now successfully completed the rebuild
of two Foremost Dual Rotary rigs purchased from
New Zealand in 2020 and upgraded a Schramm
T130XD from a casing advance/conventional drill
rig to Dual Tube Flooded Reverse. The most recent
rig improvement has meant that Pentium has
become one of the largest pure hydrogeological
drilling companies in Australia and to the Company’s
knowledge is the only domestic hydrogeological
drilling company that can provide three drilling
services across Dual Rotary, Dual Tube Flooded
Reverse and Conventional drilling. Strategically
this positions Pentium with the ability to service
any client in any geography, commodity or ground
setting across Australia subject to the availability of
equipment.
While the Dual Rotary component of Pentium’s fleet
has proven to be a significant competitive moat
for the Company with sustained high demand for
this equipment, the upgrade of a rig to Dual Tube
8
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Managing Director’s Report
Continuous
Improvement in Safety
The board and management are committed
to the continuous improvement in our safety
standards to provide our employees and clients
safe environments to work. Safety is one of our
Company’s core values empowering our people
to stop the job should they have a safety concern
or query. We continue to improve by providing our
people with ongoing training programs and robust
safety management systems.
The ISO accreditation achieved in safety during
the period underpins our commitment to meeting
these exacting standards.
Annual Report for the financial year ending 30 June 2021
9
Operational Update continued…
Flooded Reverse has attracted considerable industry
interest from both current and prospective clients.
The Company is in a position to consider two further
upgrades of Pentium owned T130XDs should there
be a continued level of interest from current and
prospective clients for Dual Tube Flooded Reverse
drilling services.
Pentium formally achieved ISO accreditation in
occupational health and safety management systems
(ISO 45001:2018), quality management systems (ISO
9001:2015) and environmental management systems
(ISO 14001:2015) in the financial year. As anticipated,
this has proven to be invaluable in helping the
Company to position itself as a preferred contractor
for all tiers of current and prospective clients across
multiple industry sectors requiring hydrogeological
drilling services.
Leading into the new financial year Pentium is
positioned to meet the continued demand for water
well services. Management anticipates that Pentium’s
current contractual arrangements in hand with an
identified future tender pipeline for hydrogeological
drilling services will help support opportunities for
ongoing full asset utilisation and sustained steady
state earnings.
Managing Director’s Report
Outlook and Strategy
The hydrogeological drilling market continues
to experience strong trading conditions which is
reflected in the Company’s current contract pipeline.
Current contracts in hand underpin the opportunity
to maintain full utilisation of Pentium’s rig fleet
throughout FY2022. As such, subject to maintaining
100% rig utilisation the Company is budgeting FY2022
EBITDA (earnings before interest, tax, depreciation
and amortisation) to be between $10.0 million and
$11.0 million, noting that earnings are also conditional
upon unbudgeted wet weather events, unforeseen
repairs and maintenance and other unbudgeted
operational expenses.
In addition to Pentium targeting sustained full
asset utilisation, the Company’s broader strategic
focus is to move from being a hydrogeological
drilling specialist in FY2021 to becoming a vertically
integrated whole of life end to end water service
provider in FY2022 and beyond. In line with this
strategy, the board and management of Vysarn are
actively looking to execute organic or acquisitive
entries into services upstream and downstream
of hydrogeological drilling. In September 2021
the Company entered into a binding Share Sale
Agreement to acquire Yield Test Pumping.
The ongoing strength in the mine related water
thematic and the continued interest from current
and prospective clients to offer them a broader range
of water related services than just hydrogeological
drilling has the potential to provide Vysarn with a
unique growth opportunity.
The Company has subsequently refined its expansion
strategy over the last 12 months to focus on four
broad stages of the water vertical that varying
water related mining services fall into. These stages
cover services in design, extraction, transfer and
storage (use) of mine related water. While the
Pentium business unit currently operates in only
one small band of the water vertical, management
has identified a range of services adjacent to
hydrogeological drilling that could provide the
Company with an initial entry point into becoming a
multi-faceted water service provider.
Driving an increase in shareholder value remains
a key focus of Vysarn’s board and management.
A successful execution of a vertical integration
strategy would provide shareholders with a reduction
in the concentration risk currently associated
with the capital intensive, single service nature
of hydrogeological drilling. Providing multiple
services also provides the Company a broader
and differentiated competitive moat by being able
to better service clients across multiple fronts as
well providing cross selling opportunities across
commodities, projects and specific clients. With
diversification also comes the opportunity for an
expansion in valuation multiples as the market
recognises a diverse portfolio of services across
water, diversified revenue streams and a balanced
mix of capital light and capital intensive business
units.
Vysarn is well positioned entering FY2022.
The Company is sufficiently funded, budgeting
sustainable steady state earnings in its core
business, has a clearly defined strategy with multiple
growth prospects and is well placed to deliver long
term, sustainable value for its shareholders.
10
Vysarn Limited (ABN 41 124 212 175) and controlled entities
… a clearly defined
strategy with multiple
growth prospects
and is well placed
to deliver long term,
sustainable value for
its shareholders.
Annual Report for the financial year ending 30 June 2021
11
Managing Director’s Report The Company focused on executing
its operational and growth strategies
throughout the period while
continuing to set the foundations of
its wholly subsidiary Pentium Hydro.
12
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Directors’ Report
The Directors present their report together with the consolidated financial statements of Vysarn Limited
(“the Company”) and its controlled entity (“the Group”) for the financial year ended 30 June 2021 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
Resigned
Peter Hutchinson
Chairman
27 October 2017
James Clement
Sheldon Burt
Managing Director and CEO
3 February 2020
Executive Director
15 May 2019
-
-
-
Christopher Brophy
Non-Executive Director
28 October 2019
28 January 2021
2. Significant Changes in
State of Affairs
In the opinion of the directors, other than as outlined
in this report, there were no significant changes in
the state of affairs of the Group that occurred during
the financial year.
3. Dividends Paid or
Recommended
There were no dividends paid, recommended or
declared during the current or previous financial year.
4. Review of Operations
This is the second annual report from the Company
since it was reinstated on the ASX on 11 September
2019 and commenced operations. It is also the
Company’s first full financial year of operations since
that date.
The Company focused on executing its operational
and growth strategies throughout the period while
continuing to set the foundations of its wholly
subsidiary Pentium Hydro Pty Ltd ("Pentium Hydro").
The Company actively pursued horizontal and vertical
integration opportunities to supplement Pentium
Hydro’s core business of hydrogeological drilling.
Organic and acquisitive entries into new services
upstream and downstream of hydrogeological drilling
were also investigated.
Employee numbers increased significantly during the
period as Pentium Hydro nears full deployment of its
entire hydrogeological drilling fleet.
The Company continues to receive strong demand for
its services from major mining companies focusing on
production across a diverse range of commodities.
5. Likely Developments
The Company will continue to pursue new contract
opportunities in Australia for its hydrogeological and
dewatering business activities.
6. Financial Performance
The profit for the Company after providing for income
tax amounted to $0.34 million (30 June 2020: $4.84
million).
Working capital, being current assets less current
liabilities, was $3.93 million (30 June 2020: $7.10
million). The Company had positive cash flows from
operating activities for the year amounting to $1.71
million (2020: $1.99 million).
Operational revenue for the year ended 30 June 2021
was $25.8 million (2020: $11.9 million). The strong
growth was generated primarily from obtaining new
water well drilling contracts and deploying additional
drill rigs.
The table below provides a comparison of the key
results for the year ended 30 June 2021 to the
preceding year ended 30 June 2020:
Statement of
Profit or Loss
Revenue from
operations
Reported profit / (loss)
after tax 1
30 June
2021
30 June
2020
($)
($)
25,824,506
11,912,589
344,819
4,835,295
1. FY20 NPAT was inclusive of a $7.2 million gain on bargain
purchase (non-cash).
Annual Report for the financial year ending 30 June 2021
13
Directors’ Report
6. Financial Performance continued…
Statement of
Financial Position
30 June
2021
30 June
2020
Net Assets
Total Assets
($)
($)
24,762,964
24,334,908
45,334,680
40,861,623
Cash and cash equivalents
6,555,486
9,706,113
7. Principal Activities
The Company currently operates a hydrogeological
and dewatering drilling business and is located at a
number of mine sites across Western Australia.
The Company aims to become a significant provider
of production critical services and solutions to the
resources, construction and utilities industries.
8. Event Subsequent
to Reporting Date
The Company released an ASX announcement titled
Investor Presentation 5 July 2021 that contained an
operational, strategic and earning update.
There is no other matter or circumstance that has
arisen since 30 June 2021 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.
9. Industry & Geographic
Exposures
The Company is exposed to the Australian mining
industry. On a geographic basis, the Company is
predominantly exposed to Western Australia.
10. Environmental
Regulation
In the normal course of business, there are no
environmental regulations or requirements that the
Company is currently subject to.
14
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Directors’ Report
11. Information on Directors & Company Secretary
Peter Hutchinson
Chairman
(Appointed 27 October 2017)
Experience and Expertise:
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 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. 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. He also currently chairs Western Plant Hire
Holdings Ltd.
Mr Hutchinson has substantial experience in mergers
and acquisitions, 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 listed directorships:
N/A
Former listed directorships (last 3 years):
Mareterram Limited (ceased 23 November 2017)
Interests in shares:
56,000,000 fully paid ordinary shares
Interests in options:
10,000,000 options
James Clement
Managing Director and CEO
(Appointed 3 February 2020)
Experience and Expertise:
Mr Clement holds a Master of Business
Administration, a Bachelor of Science, a Graduate
Diploma of Agribusiness, a Graduate Certificate in
Applied Finance and is a Graduate of the Australian
Institute of Company Directors. He is an experienced
ASX company director with a demonstrated history of
successfully managing and leading businesses in the
finance and agribusiness industries.
Prior to his appointment at Vysarn Ltd, Mr Clement
was previously the Managing Director and CEO of
sustainable agricultural company Mareterram Ltd.
He led the cornerstone asset acquisitions, the ASX
listing of the company and its subsequent successful
takeover at a significant premium to the market
price.
Mr Clement is currently a director of the Fremantle
Football Club and is a past director and vice
chairman of the Western Australia Fishing Industry
Council. He also has over a decade of experience
in finance and investment during his time as an
institutional dealer and retail fund manager for
financial service companies specialising in Western
Australian small cap industrial and resource
companies.
Other current listed directorships:
N/A
Former listed directorships (last 3 years):
Mareterram Limited (ceased 15 April 2019)
Interests in shares:
13,366,315 fully paid ordinary shares
Interest in options:
10,000,000 options
Interest in performance rights:
5,000,000 performance rights
Annual Report for the financial year ending 30 June 2021
15
Directors’ Report
11. Information on Directors and Company Secretary continued…
Sheldon Burt
Executive Director
(Appointed 15 May 2019)
Experience and Expertise:
Matthew Power
Company Secretary
(Appointed 30 June 2021)
Experience and Expertise:
Mr Power is a finance professional who has acquired
public company experience whilst previously
employed as group financial controller for Babylon
Pump & Power Limited, a Perth based ASX mining
services company. Experienced in financial reporting
and analysis, and company secretarial duties in
the public company environment, Mr Power holds
a Bachelor of Commerce from Curtin University
(double major in Accounting & Finance) and a
Graduate Diploma of Chartered Accounting with the
Chartered Accountants, Australia and New Zealand.
Prior to working in the Australian listed company
space, Mr Power worked in professional services,
working across a variety of industry sectors including
resources and mining, mining services, agribusiness
and retail in insolvency and restructuring.
Kyla Garic
Former Company Secretary
(resigned 30 June 2021)
Experience and Expertise:
Ms Garic was appointed as Company Secretary on 15
November 2017. Ms Garic is a Chartered Accountant,
Chartered Secretary, a Fellow of the Governance
Institute and Director of Onyx Corporate. Onyx
Corporate provides financial reporting, accounting
and company secretarial services to ASX listed
companies. Ms Garic has acted as a non-executive
Director and Company Secretary for a number of ASX
listed companies.
Mr Burt is a drilling industry professional with over
35-years national and international experience. His
career started as a Drillers Offsider in 1986 and
over the following years has held many differing
roles within the drilling industry including field
based, operational, senior management, executive
management and company ownership.
Mr Burt’s international experience extends from
Southeast Asia to the Middle East and West Africa. In
2004 he co-founded and was the Managing Director
of SBD Drilling, a Perth based exploration drilling
company with successful operations in Australia and
West Africa, before selling his shareholding in July 2011.
From 2012 to 2018 Mr Burt was the General Manager
of Easternwell Minerals prior to co-founding Pentium
Hydro in January 2019 and joining the Vysarn Board in
May of the same year.
Other current listed directorships:
N/A
Former listed directorships (last 3 years):
N/A
Interests in shares:
6,117,315
Interest in performance rights:
5,000,000
Christopher Brophy
Former Non-Executive Director
(appointed as Executive Director on 15 May 2019,
transition to Non-Executive Director on 28 October
2019, resigned 28 January 2021)
Experience and Expertise:
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
Economics and is a member of the Australian
Institute of Company Directors (MAICD).
Other current listed directorships:
N/A
Former listed directorships (last 3 years):
N/A
Interests in shares:
N/A
Interests in shares:
N/A
16
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Directors’ Report
12. Meetings Of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June
2021, and the number of meetings attended by each Director is set out below:
Peter Hutchinson
James Clement
Sheldon Burt
Chris Brophy
Board Meetings
Audit and Risk
Committee Meetings
Remuneration
Committee Meetings
Held
Attended
Held
Attended
Held
Attended
11
11
11
7
11
11
11
7
3
3
3
2
3
3
3
2
1
1
1
1
1
1
1
1
‘Held’ Represents the number of meetings held during the time the Directors held office.
Given the size of the Company, the full Board meet in their capacity as Audit and Risk Committee and
Remuneration and Nomination Committee (“Committees”) and all matters are dealt with by the full Board in
their capacity as members of the Committees.
13. Indemnity & 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.
14. Shares Under Option
At 30 June 2021 and as at the date of this report, the unissued ordinary shares of the Company under options
are as follows:
Grant Date
05-Jul-19
03-Feb-20
03-Feb-20
Total
Expiration Date
Exercise Price
Under Option
05-Jul-24
03-Feb-23
03-Feb-23
-
($)
0.054
0.075
0.075
-
(Number)
10,000,000
5,000,000
5,000,000
20,000,000
No shares have been issued during or since the year end as a result of the exercise of options.
Annual Report for the financial year ending 30 June 2021
17
Directors’ Report
15. Shares Under Performance Rights
At 30 June 2021 and as at the date of this report, the unissued ordinary shares of the Company under
performance rights are as follows:
Grant Date
Date of Vesting
Vesting Conditions
Number Under
Performance Rights
28-Aug-19
28-Aug-19
28-Aug-19
30-Jan-20
30-Jan-20
30-Jan-20
Total
30-Jun-22
30-Jun-23
30-Jun-24
30-Jun-22
30-Jun-23
30-Jun-24
Employment and cumulative EPS condition
Employment and cumulative EPS condition
Employment and cumulative EPS condition
Employment and cumulative EPS condition
Employment and cumulative EPS condition
Employment and cumulative EPS condition
1,666,666
1,666,666
1,666,668
1,666,666
1,666,666
1,666,668
10,000,000
16. 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.
17. Non-Audit Services
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.
30-June-
21
30-June-
20
$
$
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
20,750
19,669
20,750
19,669
In the event that non-audit services are provided
by Pitcher Partners BA&A Pty Ltd or related entities,
the Board has established certain procedures to
ensure that the provision of non-audit services
are compatible with, and do not compromise,
the auditors independence requirement of the
Corporation Act 2001. These procedures include:
V 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 other general principles to
independence as set out in APES 110 Code of
Ethics for Professional Accountants (including
Independence Standards); and
V 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.
V Decision on non-audit services were decided
upon by the full Board in the absence of any audit
committee meetings.
18. 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 2021 has been
received and can be found on page 21 of the financial
report.
19. 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).
18
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Remuneration Report (Audited)
The remuneration report for the year ended 30 June
2021 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.
The remuneration report is set out under the
following main headings:
1. Introduction
2. Remuneration governance
3. Executive remuneration arrangement
4. Non-Executive Director fee arrangement
5. Details of remuneration
6. Share-based compensation
7. Loans to Directors and executives
8. Other transactions and balances with KMP and
their related parties
9. Key performance indicators of the Company over
the last 5 years
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 2021 are set
out below:
Key Management Personnel covered under this report are as follows:
Name
Peter Hutchinson
Status
Chairman
Appointed
27 October 2017
James Clement
Managing Director and CEO
3 February 2020
Sheldon Burt
Executive Director
15 May 2019
Resigned
-
-
-
Christopher Brophy
Non-Executive Director
28 October 2019
28 January 2021
1. Introduction
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:
V Competitiveness and reasonableness;
V Acceptability to shareholders;
V Performance linkage/alignment of executive
compensation;
V Transparency; and
V 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. 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:
V Focusing on shareholder value and returns; and
V Attracting and retaining high caliber executives.
V Additionally, the reward framework should seek to
enhance executives' interests by:
V Rewarding capability and experience;
V Reflecting a competitive reward for contribution to
growth in shareholder wealth;
V Providing a clear structure for earning rewards; and
V Providing recognition for contribution.
Annual Report for the financial year ending 30 June 2021
19
Remuneration Report (Audited)
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 Arrangement
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.
Remuneration for certain individuals is directly
linked to the performance of the Company. A portion
of cash bonus and incentive payments, including
performance rights, are dependent on defined
earnings per share targets being met. The remaining
portion of the cash bonus and incentive payments
are at the discretion of the Board.
Consolidated Entity Performance and
Link to Remuneration
The Board is of the opinion that the continued
improved results can be attributed in part to the
adoption of performance-based compensation and
is satisfied that this improvement will continue to
increase shareholder wealth if maintained over the
coming years.
Voting and comments made at the company's 2020
Annual General Meeting (“AGM”)
The Company received more than 99% of "yes" votes
on its remuneration report for the 2020 financial
year. The Company did not receive any specific
feedback at the AGM or throughout the year on its
remuneration practices.
The compensation structures take into account:
V The capability and experience of the executive;
V The executive’s ability to control the relevant
segment’s performance; and
V The Company’s performance including:
V The Company’s earnings; and
V The growth in share price and delivering
constant returns on shareholder wealth.
The short-term incentives (“STI”) program is designed
to align the targets of the business units with the
performance hurdles of executives. STI payments
are granted to executives based on specific annual
targets and key performance indicators (“KPI's”) being
achieved. KPI's include profit contribution, customer
satisfaction, leadership contribution and product
management. The long-term incentives (“LTI”) include
long service leave and share-based payments.
Shares are awarded to executives based on long-
term incentive measures. These include increase
in shareholders’ value relative to the entire market.
The Board reviewed the long-term equity-linked
performance incentives specifically for executives
during the year ended 30 June 2021.
20
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Remuneration Report (Audited)
3. Executive Remuneration Arrangement continued…
The key terms of Mr Burt and Mr Clement’s agreements are set out below;
James Clement
Managing Director and CEO
A. Term of Agreement
Sheldon Burt
Executive Director
A. Term of Agreement
Commencing 3 February 2020 with indefinite
duration.
Commencing 15 May 2019 with indefinite
duration.
B. Remuneration:
B. Remuneration
i. a base salary of $350,000 per annum,
including mandatory superannuation
contributions;
i. a base salary of $300,000 per annum,
including mandatory superannuation
contributions;
ii. a short-term incentive of up to $150,000
ii. a short-term incentive of up to $150,000
per annum, subject to the achievement of
certain short-term incentive key performance
indicators; and
per annum, subject to the achievement of
certain short-term incentive key performance
indicators; and
iii. a long-term incentive being the issue of
iii. a long-term incentive being the issue of
5,000,000 performance rights and 10,000,000
options upon commencement.
C. General termination:
The agreement can be terminated:
i. by either party for no reason by giving 3
months’ notice in writing to the other party;
and
ii. 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.
5,000,000 performance rights.
C. General Termination
The agreement can be terminated:
i. by either party for no reason by giving 3
months’ notice in writing to the other party;
ii. 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
iii. 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.
D. 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
ii. 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..
Annual Report for the financial year ending 30 June 2021
21
Remuneration Report (Audited)
The table below summarises the annual fees payable
to non-executive Directors for the 2021 financial year
(inclusive of superannuation):
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 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
Board Fees – per annum
30,000
42,000
Board
Chair
$
Committee
Total
$
-
-
$
42,000
30,000
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 is subject to approval by shareholders at the
general meeting. Fees for non-executive Directors are
not linked to the performance of the Company.
Non-executive Directors may be reimbursed for
expenses reasonably incurred in attending to the
Company’s affairs. Non-executive Directors do not
receive retirement benefits. The Company or the
non-executive Directors can terminate the above
arrangements at any time upon written notice being
provided, with no minimum notice period applicable.
5. Details of Remuneration
Details of the remuneration of key management personnel of the Company are set out in the following tables.
Short-term benefits
Post-
employment
Equity
Short-term
Salary, Fees &
Commissions
STI cash
bonus
Non-
monetary
benefits
Other
employee
benefits
Post-
employment
Superannuation
Share-based
payments
2021
$
$
$
$
$
$
Total
$
Chairman
Peter Hutchinson
38,356
Executive Directors
James Clement1,2
Sheldon Burt2
309,919
278,306
Former Non-Executive Director
Christopher Brophy2,3
15,982
Total
642,563
-
-
-
-
-
-
18,444
-
-
18,444
-
-
-
-
-
3,644
-
42,000
21,637
21,694
44,552
43,742
394,552
343,742
1,518
-
17,500
48,493
88,294
797,794
1. The amount of $18,444 disclosed as a non-monetary benefit for Mr Clement is a salary sacrificed amount pertaining to a novated
lease on a motor vehicle.
2. Refer to section “6. Share-based Compensation” on page 24 of this remuneration report for further information pertaining to
share-based payment expenses recognised for key management personnel.
3. Resigned 28 January 2021
22
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Remuneration Report (Audited)
5. Details of Remuneration continued…
Short-term benefits
Post-
employment
Equity
Short-term
Salary, Fees &
Commissions
STI cash
bonus
Non-
monetary
benefits
Other
employee
benefits
Post-
employment
Superannuation
Share-
based
payments
$
$
Total
$
2021
$
Chairman
Peter Hutchinson4
12,785
$
-
Executive Directors
James Clement1
Sheldon Burt2
137,082
258,498
25,000
75,000
Christopher Brophy3
147,500
Non-Executive
Director
Christopher Brophy3
9,132
Former Directors
Faldi Ismail5
Nicholas Young5
-
-
-
-
-
-
$
-
6,118
-
-
-
-
-
Total
564,997
100,000
6,118
$
-
-
-
-
-
-
-
-
1,215
1,078,000
1,092,000
8,751
17,615
3,613
868
-
-
123,000
299,952
-
-
-
351,113
151,113
10,000
229,500
229,500
229,500
229,500
32,062
1,660,000
2,363,178
1. The amount of $6,118 disclosed as a non-monetary benefit for Mr Clement is a salary sacrificed amount pertaining to a novated lease
on a motor vehicle. The STI of $25,000 is a cash incentive payable on accomplishment of certain role-specific, financial and non-
financial measures determined by the Board and remained unpaid as at 30 June 2020.
2. Mr Burt, per his respective employment agreement, was entitled to a short-term incentive (STI) in the form of a cash bonus payment.
The amount shown as STI of $75,000 is a cash incentive payable on accomplishment of company set short-term incentive criteria that
were based on achievement of financial performance, role-specific non-financial measures and a service retention component. The STI
period was for the period 1 July 2019 to 30 June 2020 and remained unpaid as at 30 June 2020. $14,000 of the above amount paid to Mr
Burt for services rendered was paid to his related party Connada Pty Ltd for his time as a non-executive Director.
3. Mr Brophy was originally employed as an executive Director before transitioning to the role of non-executive on 28 October 2019.
Included within Mr Brophy’s remuneration were fees of $151,113 and $10,000 respectively for executive and non-executive services
provided. $89,000 of the above amounts paid to Mr Brophy was paid to his related party, Insight Ecosys Pty Ltd.
4. $837,000 of the share-based payments amount recognised for Mr Hutchinson related to the Director past services offer, approved
at the General Meeting on 5 July 2019. Mr Hutchinson did not receive any remuneration from the Company since his appointment
as Chairman in October 2017 until completion of the Acquisitions. The Company subsequently agreed to pay Mr Hutchinson a fee of
$837,000 (value in cash or shares) on completion of the Acquisitions. The remaining amount in share-based payments provided to Mr
Hutchinson was for options provided in lieu of remuneration for the first 6 months of his appointment as Chairman. Refer to section
“6. Share-based Compensation” on page 24 of this remuneration report for further information.
5. Mr Ismail and Mr Young’s share-based payments related to the Director past services offer, approved at the General Meeting on 5 July
2019. Mr Ismail and Mr Young both resigned as non-executive Directors on 29 August 2019.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed Remuneration
At Risk STI
At Risk LTI
2021
2020
2021
2020
2021
2020
Directors
Peter Hutchinson
James Clement
Sheldon Burt
Chris Brophy
Faldi Ismail
Nicholas Young
100%
89%
87%
100%
-
-
78%
51%
79%
100%
100%
100%
-
-
-
-
-
-
-
8%
21%
-
-
-
-
11%
13%
-
-
-
22%
41%
-
-
100%
100%
Cash bonuses are dependent on meeting defined performance measures. The amount of the bonus is
determined having regard to the satisfaction of performance measures and weightings. The maximum bonus
values are established at the start of each financial year and amounts payable are determined in the final
month of the financial year by the Board.
Annual Report for the financial year ending 30 June 2021
23
Remuneration Report (Audited)
6. Share-based Compensation
A. Issue of Shares
During the year ended 30 June 2021 no share-based
payments in the form of ordinary shares were issued
by the Company to key management personnel as
remuneration.
Since the end of the financial year no ordinary shares
have been granted to key management personnel.
B. Executive Performance Rights
During the year ended 30 June 2021, the Company
did not issue any performance rights as performance
incentives to key management personnel.
i. Movements in performance rights
The movement during the reporting period in the
number of performance rights in the Company
held, directly, indirectly or beneficially, by each
key management personnel, including their
related parties, is as follows:
Key Management
Personnel
Opening
balance
Granted as
compensation
Exercised
Unvested,
Lapsed and
Cancelled
Closing
balance
Vested
during the
year
2021
No.
No.
No.
No.
No.
No.
Peter Hutchinson
James Clement
Sheldon Burt
-
5,000,000
5,000,000
Christopher Brophy
-
Total
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
5,000,000
-
10,000,000
-
-
-
-
-
ii. Performance rights on issue at year end
At 30 June 2021, the unissued ordinary shares of the Company under performance rights are as follows:
Tranche
1
2
3
Under
Performance
Rights
($)
3,333,332
3,333,332
3,333,336
Total
10,000,000
Value at
Grant Date
Date of
Vesting
Management
Probability
Assessment
30-Jun-21
191,666
191,667
191,667
575,000
30-Jun-22
30-Jun-23
30-Jun-24
-
75%
0%
0%
-
Fair Value
($)
143,750
-
-
143,750
Each performance right will convert on a 1:1 basis to fully paid ordinary shares upon achievement of their
relevant vesting conditions (refer below).
Tranche
1
2
3
Where the:
Number of
Performance
Rights on Issue
3,333,333
3,333,333
3,333,334
Condition Test
Date
30 June 2022
30 June 2023
30 June 2024
Vesting Condition
V Employment condition
V Cumulative EPS condition
V Employment condition – means the holder of the Rights remains employed by the Company at the
condition Test Date; and
V Cumulative EPS condition – means the earnings per share (EPS) based on the achievement of compound
annual growth in the Company’s EPS of 15% per annum from the financial year 30 June 2020, subject to a
minimum EPS of $0.01 for the financial year ending 30 June 2020. The EPS calculation will be based on the
Company’s cumulative net profit after tax up until the relevant condition test date divided by the weighted
average number of shares on issue over the relevant period, taking into account any new shares issued (or
cancelled by the Company in the relevant period).
24
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Remuneration Report (Audited)
6. Share-based Compensation continued…
The executive performance rights have been valued
based on the Company’s share price as at the date of
their approval for issue. A total valuation of $575,000
has been determined, assuming satisfaction of
performance conditions in full and 100% vesting rate.
At 30 June 2021, the Company has assessed
the likelihood of the achievement of the vesting
conditions in respect of tranches 1 – 3 of the
executive performance rights and determined
that the achievement of the vesting conditions is
uncertain at this point in time.
As a result, Management have applied varying
probabilities of the performance conditions being
met, resulting the fair value of the performance
rights at 30 June 2021 to be $143,750 (2020: nil). An
expense of $88,293 has been recognised (2020: nil) in
line with the vesting periods per class, representing
the Company’s best estimate of the performance
rights that will eventually vest.
C. Options
During the year ended 30 June 2021, no options
over ordinary shares have been granted to key
management personnel as remuneration. Further,
during the reporting period, there were no shares
issued on the exercise of options previously granted
as compensation.
i. Options over equity instruments
During and since the end of the financial year,
the Company did not issue ordinary shares as
a result of the exercise of options (there are no
amounts unpaid on the shares issued).
The movement during the reporting period in the
number of options over ordinary shares in the
Company held, directly, indirectly or beneficially,
by each key management personnel, including
their related parties, is as follows:
30 June
2021
30 June
2020
$
$
Share Based Payment Expense - Performance Rights
Share based payments
Total
88,293
88,293
-
-
n
o
i
t
a
s
n
e
p
m
o
c
s
a
d
e
t
n
a
r
G
-
-
-
-
-
d
e
s
i
c
r
e
x
E
-
-
-
-
-
g
n
i
r
u
d
d
e
t
s
e
V
r
a
e
y
e
h
t
t
a
e
l
b
a
s
i
c
r
e
x
e
e
h
t
f
o
d
n
e
e
h
t
d
n
a
d
e
t
s
e
V
r
a
e
y
g
n
i
s
o
l
C
e
c
n
a
l
a
b
10,000,000
- 10,000,000
10,000,000
10,000,000
10,000,000
-
-
-
-
-
-
20,000,000 10,000,000 20,000,000
d
e
r
i
p
x
E
-
-
-
-
-
Key
Management
Personnel
i
g
n
n
e
p
O
e
c
n
a
l
a
b
Peter Hutchinson 10,000,000
James Clement
10,000,000
Sheldon Burt
Chris Brophy
-
-
Total
20,000,000
iii. Shareholding
e
l
b
a
s
i
c
r
e
x
e
t
o
n
d
n
a
d
e
t
s
e
v
n
U
f
o
d
n
e
e
h
t
t
a
r
a
e
y
e
h
t
-
-
-
-
-
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 2021
Opening
balance
Granted as
compensation
Received on
exercise of
options
Purchases
Other
Peter Hutchinson
56,000,000
James Clement
Sheldon Burt
Chris Brophy 1
Total
13,366,315
6,117,315
2,925,000
78,408,630
1. Resigned on 28 January 2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Closing
balance
56,000,000
13,366,315
6,117,315
-
-
-
(2,925,000)
-
(2,925,000)
75,483,630
Annual Report for the financial year ending 30 June 2021
25
Remuneration Report (Audited)
6. Share-based Compensation continued…
30 June 2020
Opening
balance
Granted as
compensation
Received on
exercise of
options
Purchases
Other
Peter Hutchinson
16,978,955
15,500,000
James Clement
Sheldon Burt 1
Chris Brophy 1
Faldi Ismail 2
Nicholas Young 2
-
-
-
-
-
-
-
-
4,250,000
4,250,000
Total
16,978,955
24,000,000
1. Received as consideration under the Pentium Hydro offer
2. Resigned 29 August 2020
-
-
-
-
-
-
-
Closing
balance
-
-
56,000,000
13,366,315
23,521,045
13,366,315
3,192,315
2,925,000
6,117,315
-
-
-
2,925,000
2,925,000
(4,250,000)
(4,250,000)
-
-
40,079,675
(2,650,000)
78,408,630
7. Loans to Directors and Executives
There are no loans to Directors or other KMP of the Company during the year ended 30 June 2021 (2020 $Nil).
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.
Related party
Nature of transactions
Transaction value
Payable balance
Connada Pty Ltd / Mr
Sheldon Burt 1
Insight Ecosys Pty Ltd / Mr
Chris Brophy 2
Otsana Pty Ltd trading as
Otsana Capital / Mr Faldi
Ismail and Mr Nicholas
Young
Onyx Corporate Pty Ltd /
Mr Nicholas Young, Mr Faldi
Ismail and Ms Kyla Garic
Shares issued under
the Pentium Hydro offer
(acquisition)
Shares issued under
the Pentium Hydro offer
(acquisition)
Lead manager and capital
raising services
Accounting and company
secretarial services
$
$
$
$
-
-
-
157,950
157,950
642,701
-
-
-
-
-
11,000
61,047
224,251
5,533
11,034
1. Contend Pty Ltd an entity controlled by Mr Burt received *2,925,000 shares under the Pentium Hydro offer equivalent to consideration
of $157,950.
2. Insight Ecosys Pty Ltd an entity controlled by Mr Brophy received *2,925,000 shares under the Pentium Hydro offer equivalent to
consideration of $157,950.
There were no trade receivables to related parties for the financial year ending 30 June 2021 (2020: $Nil).
* Mr Burt and Brophy received 5,850,000 collectively of the 7,800,000 shares issued under the Pentium Hydro
offer. Artificial Holdings Pty Ltd a nominee of Mr Sheldon Burt and Mr Chris Brophy received 1,170,000 shares
under the Pentium Hydro offer equivalent to consideration of $63,180. STRK Corporate Pty Ltd a nominee of
Mr Sheldon Burt and Mr Chris Brophy received 780,000 shares under the Pentium Hydro offer equivalent to
consideration of $42,120.
26
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Remuneration Report (Audited)
9. Key Performance Indicators of the Company
Over the Last 5 Years
Consolidated
30-June-21
30-June-20
30-June-19
30-June-18
30-June-17
$
$
$
$
$
Revenue
25,824,506
11,912,589
163,459
132,453
75,008
Net profit / (loss) before tax
1,137,420
2,472,743
(483,826)
296,558
37,842
Net profit / (loss) after tax
344,819
4,835,295
(483,826)
296,558
37,842
Share price at start of year
Share price at end of year
Interim and final dividend
0.05
0.10
-
N/A
0.05
-
N/A
N/A
-
N/A
N/A
-
0.350
0.350
-
Basic profit / (loss) per share (cents)
0.0009
0.0178
(0.3550)
0.2180
(0.4160)
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
James Clement
Managing Director and Chief Executive Officer
Dated 27 August 2021
Annual Report for the financial year ending 30 June 2021
27
Auditor’s Independence Declaration
Auditor’s Independence
Declaration
Under Section 307C of the Corporations Act 2001
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF VYSARN LIMITED
VYSARN LIMITED
ABN 41 124 212 175
In relation to the independent audit for the year ended 30 June 2021, to the best of my
knowledge and belief there have been:
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
(i) No contraventions of the auditor independence requirements of the Corporations Act
2001; and
Other Information
(ii) No contraventions of APES 110 Code of Ethics for Professional Accountants
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does
This declaration is in respect of Vysarn Limited and the entity it controlled during the year.
not include the financial report and our auditor’s report thereon.
(including Independence Standards).
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
PITCHER PARTNERS BA&A PTY LTD
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
PAUL MULLIGAN
Responsibilities of the Directors for the Financial Report
Executive Director
Perth, 27 August 2021
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities
Adelaide Brisbane Melbourne Newcastle Perth Sydney
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
28
Vysarn Limited (ABN 41 124 212 175) and controlled entities
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
70
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
AUDITORʼS INDEPENDENCE DECLARATION TO THE DIRECTORS OF VYSARN LIMITED 20 In relation to the independent audit for the year ended 30 June 2021, to the best of my knowledge and belief there have been: (i) No contraventions of the auditor independence requirements of the Corporations Act 2001; and (ii) No contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards).This declaration is in respect of Vysarn Limited and the entity it controlled during the year. PITCHER PARTNERS BA&A PTY LTD PAUL MULLIGAN Executive Director Perth, 27 August 2021 Pitcher Partners BA&A Pty LtdAn independent Western Australian Company ABN 76 601 361 095.Level 11, 12-14 The Esplanade, Perth WA 6000Registered Audit Company Number 467435.Liability limited by a scheme under Professional Standards Legislation.Adelaide Brisbane Melbourne Newcastle Perth SydneyPitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.AUDITORʼS INDEPENDENCE DECLARATION TO THE DIRECTORS OF VYSARN LIMITED 20 In relation to the independent audit for the year ended 30 June 2021, to the best of my knowledge and belief there have been: (i) No contraventions of the auditor independence requirements of the Corporations Act 2001; and (ii) No contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards).This declaration is in respect of Vysarn Limited and the entity it controlled during the year. PITCHER PARTNERS BA&A PTY LTD PAUL MULLIGAN Executive Director Perth, 27 August 2021 Pitcher Partners BA&A Pty LtdAn independent Western Australian Company ABN 76 601 361 095.Level 11, 12-14 The Esplanade, Perth WA 6000Registered Audit Company Number 467435.Liability limited by a scheme under Professional Standards Legislation.Adelaide Brisbane Melbourne Newcastle Perth SydneyPitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Financial Statements
Consolidated Statement of
Profit or Loss and Other
Comprehensive Income
For The Year Ended 30 June 2021
Notes
30 June 2021
30 June 2020
$
$
Revenue
Revenue from contracts with customers
Other income
Expenses
Administration and corporate expense
Employee benefits expense
Depreciation and amortisation expense
Finance costs
Consumables and other direct expenses
Profit / (loss) before income tax
Income tax benefit / (expense)
Profit / (loss) after income tax expense
Profit / (loss) 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
Other comprehensive income for the year, net of tax
Total comprehensive income / (loss) for the year
attributable to the owners of Vysarn Limited
Basic earnings per share for profit/(loss)
attributable to the owners of Vysarn Limited
Diluted earnings per share for profit/(loss)
attributable to the owners of Vysarn Limited
4
5
6
6
6
6
6
7
9
9
25,824,506
542,722
11,912,589
7,383,749
(1,383,824)
(10,574,043)
(3,436,923)
(435,819)
(9,399,199)
1,137,420
(792,601)
344,819
(1,267,399)
(6,724,729)
(2,987,580)
(595,036)
(5,248,851)
2,472,743
2,362,552
4,835,295
344,819
4,835,295
-
-
344,819
4,835,295
0.0009
0.0008
0.0178
0.0160
The accompanying Notes form part of these financial statements.
Annual Report for the financial year ending 30 June 2021
29
Financial Statements
Consolidated Statement of
Financial Position
As at 30 June 2021
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Assets classified as held for sale
Prepayments and deposits
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Right of use asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Borrowings
Trade and other payables
Employee liabilities
Lease liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liability
Employee liabilities-non-current
Deferred tax liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Reserves
Retained earnings
SHAREHOLDERS’ EQUITY
Notes
30 June 2021
30 June 2020
$
$
10
11
12
13
14
15
16
17
18
19
17
19
7
20
21
6,555,486
4,983,227
2,518,854
968,257
-
244,145
15,269,969
29,548,656
516,055
30,064,711
45,334,680
5,616,854
5,050,530
458,468
218,784
11,344,636
7,183,223
334,575
4,781
1,704,501
9,227,080
20,571,716
9,706,113
2,766,495
2,641,305
-
152,727
161,871
15,428,512
24,707,782
725,330
25,433,112
40,861,623
3,070,264
4,852,027
215,488
186,473
8,324,252
6,707,770
581,895
-
912,798
8,202,463
16,526,715
24,762,964
24,334,908
19,130,558
452,293
5,180,113
19,135,614
364,000
4,835,294
24,762,964
24,334,908
The accompanying Notes form part of these financial statements.
30
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Financial Statements
Consolidated Statement of
Changes in Equity
For The Year Ended 30 June 2021
Issued Capital
Share Based
Payment
Reserve
Retained
earnings /
(Accumulated
losses)
Total
$
$
$
$
Balance at 1 July 2019
Profit for the period
Other comprehensive income
Total comprehensive income for the period
29,912,298
-
-
-
Transactions with owners in their capacity as owners:
Issue of shares
Capital raising costs
Share based payments
12,735,593
(524,126)
-
364,000
-
-
-
-
-
-
(22,988,152)
6,924,146
4,835,295
4,835,295
-
-
4,835,295
4,835,295
-
-
-
12,735,593
(524,126)
364,000
Reduction in capital not represented by
available assets
Total transactions with owners
Balance at 30 June 2020
(22,988,151)
(10,776,684)
19,135,614
-
22,988,151
-
364,000
364,000
22,988,151
12,575,467
4,835,294
24,334,908
19,135,614
364,000
4,835,294
24,334,908
Balance at 1 July 2020
Profit for the period
Other comprehensive income
Total comprehensive income for the period
-
-
-
Transactions with owners in their capacity as owners:
Issue of shares
Capital raising costs
Share based payments
Total transactions with owners
-
(5,056)
-
(5,056)
Balance at 30 June 2021
19,130,558
The accompanying Notes form part of these financial statements.
-
-
-
-
-
88,293
88,293
452,293
344,819
344,819
-
-
344,819
344,819
-
-
-
-
-
(5,056)
88,293
83,237
5,180,113
24,762,964
Annual Report for the financial year ending 30 June 2021
31
Financial Statements
Consolidated Statement of
Cash Flows
For The Year Ended 30 June 2021
Notes
30 June 2021
30 June 2020
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other costs of finance paid
Net cash provided by operating activities
10a
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for completion of Ausdrill Transaction
Purchase of plant and equipment
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Gross proceeds from the issue of shares
Proceeds from borrowings
Repayment of borrowings
Payments for principal portion of lease liabilities
Payment of capital/transaction costs
Net cash provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at the end of financial year
10
The accompanying Notes form part of these financial statements.
26,255,351
(24,145,714)
9,001
(411,553)
1,707,085
10,120,793
(7,844,838)
27,255
(313,909)
1,989,299
-
(16,000,000)
(6,694,451)
376,593
(4,149,691)
661,710
(6,317,858)
(19,487,981)
-
5,085,684
(3,388,595)
(230,987)
(5,954)
1,460,148
(3,150,627)
9,706,113
6,555,486
11,018,593
10,961,993
(1,159,037)
(76,559)
(524,126)
20,220,864
2,722,182
6,983,931
9,706,113
32
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated
Financial Statements
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 25
August 2021. 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, modified,
where applicable, by the measurement at fair value
of selected non-current assets, financial assets
and financial liabilities. Amounts are presented in
Australian dollars and have been rounded off to the
nearest dollar, unless stated otherwise.
i. Critical Accounting Estimates
The preparation of financial statements in
conformity with AASBs requires management to
make judgements, estimates and assumptions
that affect the application of accounting policies
and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ
from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are
recognised in the period in which the estimate
is revised and in any future periods affected.
The judgements estimates and assumptions
that have a significant risk of causing a material
adjustment to the carrying amounts of assets
and liabilities within the next financial year are
discussed in “Note 2AC” on page 40.
ii. Changes In Accounting Estimates - Plant
and Equipment
Depreciation of plant and equipment
constitutes a substantial operating cost for
the Group. The cost of fixed assets Is charged
as a depreciation expense over the estimated
useful lives of the respective assets using the
straight-line method and Its reflected In the
Group’s statement of profit or loss and other
comprehensive Income.
The Group decided to revise the useful life of
certain classes of plant and equipment during
the half year, from 7 years to 10 years. The basis
of this change was as a result of a number of
Internal factors including;
V A greater understanding of asset conditions
and their expected operating useful lives,
gained over the last 12 months since the
Group established its operation;
V Industry considerations and guidance
Including peer reviews conducted; and
V Discussions with suitably qualified and
experienced Internal personnel as to Group’s
assets and their past experience with similar
plant and equipment.
In implementing the revised useful lives, the
Group has applied the change in depreciation
based on an assessment of individual asset
useful lives prospectively, from 1 July 2020,
as required under Australian Accounting
Standards. As a result of the change in estimate,
depreciation for the 30 June 2021 year decreased
from approximately $3,802,993 to $3,227,648.
Further information on the Group’s Plant and
Equipment Is contained within “Note 15” on page
48 of this report
Annual Report for the financial year ending 30 June 2021
33
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
C. Going Concern
E. Principles of Consolidation
The financial statements have been prepared on
the basis that the entity is a going concern, which
contemplates the continuity of normal business
activity, realisation of assets and settlement of
liabilities in the normal course of business.
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.
D. Adoption of New Accounting
Standards
The Company has adopted all of the new, revised or
amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board
(‘AASB’) that are mandatory for the current reporting
period
Other than the changes described below, the
accounting policies adopted are consistent with
those of the previous financial year.
AASB 2019-1 Amendments to Australian Accounting
Standards - References to the “Conceptual
Framework”
AASB 2019-1 amends Australian Accounting Standards
to reflect the issue of the Conceptual Framework. The
revised Conceptual Framework is applicable to annual
reporting periods beginning on or after 1 January 2020
and early adoption is permitted. The Conceptual
Framework contains new definition and recognition
criteria as well as new guidance on measurement
that affects several Accounting Standards. Where
the Company has relied on the existing framework in
determining its accounting policies for transactions,
events or conditions that are not otherwise dealt
with under the Australian Accounting Standards, the
Company may need to review such policies under the
revised framework. The application of AASB 2019-1 has
not materially impacted the financial statements of
the group.
AASB 2019-5 Amendments to Australian Accounting
Standards – Disclosure of the Effect of New IFRS
Standards Not Yet Issued in Australia
AASB 2019-5 makes amendments to AASB 1054
Australian Additional Disclosures by adding a
disclosure requirement for an entity intending
to comply with IFRS Standards to disclose the
information required by paragraph 30 of AASB 108
(regarding disclosing the effect of new standards not
yet issued) to IFRS Standards that have not yet been
issued by the Australian Accounting Standards Board.
AASB 2019-5 mandatorily applies to annual reporting
periods commencing on or after 1 January 2020 and
will be first applied by the Group in the financial year
commencing 1 July 2020. The application of AASB
2019-5 has not materially impacted the financial
statements of the group.
The consolidated financial statements comprise the
financial statements of the Group and its subsidiary
as at 30 June 2021. Control is achieved when the
Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the
ability to affect those returns through its power over
the investee. Specifically, the Group controls an
investee if and only if the Group has:
V Power over the investee (i.e. existing rights that give
it the current ability to direct the relevant activities
of the investee);
V Exposure, or rights, to variable returns from its
involvement with the investee, and
V The ability to use its power over the investee to
affect its returns.
When the Group has less than a majority of the voting
or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether
it has power over an investee, including:
V The contractual arrangement with the other vote
holders of the investee,
V Rights arising from other contractual
arrangements,
V The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls
an investee if facts and circumstances indicate
that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the
subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and
expenses of a subsidiary acquired or disposed of
during the year are included in the statement of
profit or loss and other comprehensive income from
the date the Group gains control until the date the
Group ceases to control the subsidiary.
F. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand,
deposits available on demand with banks with
original maturity of three months or less.
G. Trade Receivables
Trade receivables are amounts due from customers
for goods or services performed in the ordinary
course of business. They are generally due for
settlement within 30 days and therefore are
all classified as current. Trade receivables are
recognised initially at the amount of consideration
that is unconditional which is considered to be
fair value; none of the Group’s trade receivables
contain a financing component. The Group holds the
trade receivables with the objective to collect the
contractual cashflows and therefore measures them
subsequently at amortised cost using the effective
interest method.
The Group applies the AASB 9 simplified approach
to measuring expected credit losses which uses
a lifetime expected loss allowance for all trade
receivables and contract assets.
34
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
To measure the expected credit losses, trade
receivables have been grouped based on share
credit risk characteristics and the days past due. The
expected loss rates are based on existing market
conditions and forward-looking estimates at the end
of each reporting period.
H. Inventories
Inventories, including raw materials and stores,
work in progress and contract fulfilment costs
are measured at the lower of cost and net
realisable value. The cost of inventories comprises;
expenditure incurred in acquiring the inventories and
the costs incurred in bringing them to their existing
location and condition, including direct materials,
direct labour and an appropriate proportion of
variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating
capacity. Net realisable value is the estimated selling
price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
I. Plant & Equipment
Each class of plant and equipment is carried at cost
or fair value less, where applicable, any accumulated
depreciation. Historical cost includes expenditure
that Is directly attributable to the acquisition of the
items.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the Item will
flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance
are charged to profit or loss during the financial
period in which they are incurred.
Gains and losses on disposal of an item of property,
plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount
of property, plant and equipment and are recognised
net within other income / (expense) in the statement
of profit or loss. The carrying amount of plant and
equipment is reviewed annually by Directors to
ensure it is not in excess of the recoverable amount
from these assets.
i. Depreciation
Depreciation is a systematic allocation of the
depreciable amount of an asset over its useful
life. The depreciable amount is the cost of
the asset, less its residual value. An asset is
depreciated from the date it is ready for use,
meaning the date it reaches the location and
condition required for it to operate in the
manner intended by management. Depreciation
is recognised in profit or loss on a straight-
line basis over the estimated useful lives of
each part of the fixed asset item, since this
most closely reflects the expected pattern of
consumption of the future economic benefits
embodied in the assets.
The estimated useful lives are as follows:
V Plant and equipment – 2 - 10 years;
V Computer equipment – 3 years; and
V Trucks, trailers and light vehicles – 4 - 10
years.
Depreciation methods, useful lives and residual
values are reviewed at the end of each reporting
period and adjusted if appropriate.
J. Right-of-use Assets
A right-of-use asset is recognised at the
commencement date of a lease. The right-of-use
asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as
applicable, any lease payments made at or before
the commencement date net of any lease incentives
received, any initial direct costs incurred, and,
except where included in the cost of inventories,
an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-
line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever is
the shorter. Where the consolidated entity expects
to obtain ownership of the leased asset at the
end of the lease term, the depreciation is over its
estimated useful life. Right-of use assets are subject
to impairment or adjusted for any remeasurement of
lease liabilities.
The consolidated entity has elected not to recognise a
right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and
leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
K. Lease Liabilities
A lease liability is recognised at the commencement
date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be
made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot
be readily determined, the consolidated entity’s
incremental borrowing rate. Lease payments comprise
of fixed payments less any lease incentives receivable,
variable lease payments that depend on an index or
a rate, amounts expected to be paid under residual
value guarantees, exercise price of a purchase option
when the exercise of the option is reasonably certain
to occur, and any anticipated termination penalties.
The variable lease payments that do not depend on
an index or a rate are expensed in the period in which
they are incurred.
Lease liabilities are measured at amortised cost
using the effective interest method. The carrying
amounts are remeasured if there is a change
in the following: future lease payments arising
from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase
option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if
Annual Report for the financial year ending 30 June 2021
35
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
the carrying amount of the right-of-use asset is fully
written down.
L. Trade and Other Payables
Liabilities for trade creditors and other amounts
carried at cost which is the fair value of the
consideration to be paid in the future for goods and
services received, whether or not billed to the Group.
Interest, when charged by the lender, is recognised
as an expense on an accruals basis.
M. Provisions
Provisions are recognised when the Group has a
legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of
economic benefits will result and that outflow can be
reliably measured. Provisions are measured using the
best estimate of the amounts required to settle the
obligation at the end of the reporting period.
either over time in accordance with specified
units of production (for example meters drilled
or hours worked) or a point in time when risks
and rewards pass to the customer under those
contracts (for example the sale of certain items
including consumables).
For rental of equipment, as the customer
simultaneously receives and consumes the
benefits, the Group has an enforceable right
to payment and as such the performance
obligation is satisfied over time.
The Group has no material contracts where
the period between the transfer of the
promised goods or services to the customer
and payment by the customer exceeds one
year. As a consequence, the Group does not
adjust any of the transaction prices for the
time value of money.
N. Borrowings
ii. Contract Assets and Liabilities
AASB 15 uses the terms “contract asset”
and “contract liability” to describe what is
commonly known as “accrued revenue” and
“deferred revenue.” Accrued revenue arises
where work has been performed however is
yet to be invoiced. Deferred revenue arises
where payment Is received prior to work being
performed and is allocated to the performance
obligations within the contract and recognised
on satisfaction of the performance obligation.
iii. Contract Fulfilment Costs
Costs generally incurred prior to the
commencement of a contract may arise due
to mobilisation/site setup costs as these costs
are incurred to fulfil a contract. Where the
costs are expected to be recovered, they are
capitalised and expensed over the period of
revenue recognition. Where the costs, or a
portion of these costs, are reimbursed by the
customer, the amount received is recognised as
deferred revenue.
Contract fulfilment costs are capitalised as
an asset when all the following are met: (i)
the costs relate directly to the contract or
specifically identifiable proposed contract; (ii)
the costs generate or enhance resources of the
consolidated entity that will be used to satisfy
future performance obligations; and (iii) the
costs are expected to be recovered. Contract
fulfilment costs are amortised on a straight-line
basis over the term of the contract, or a period
of 12 months for long term contracts greater
than 12 months in duration.
Borrowings are initially recognised at fair value,
net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in
the profit or loss over the period of the borrowings
using the effective interest method. Fees paid on
the establishment of loan facilities, which are not
incremental costs relating the actual draw-down
of the facility, are recognised as prepayments and
amortised on a straight -line basis over the term of
the facility.
Borrowings are classified as current liabilities unless
the Group has an unconditional right to defer
settlement of the liability for at least 12 months after
the reporting date.
O. Equity and reserves
Share capital represents the fair value of shares that
have been issued. Any transaction costs associated
with the issuing of shares are deducted from share
capital, net of any related income tax benefits. The
share-based payment reserve records the value of
share-based payments.
P. Revenue Recognition
i. Revenue from Contracts with Customers
The Group provides drilling services and hires drill
rigs and related equipment to the exploration and
mining industry pursuant to service contracts
with a variety of clients in the sector.
The revenue associated with drilling contracts is
recognised in accordance with AASB 15 Revenue
From Contracts from Customers, that is in a
manner that depicts the transfer of promised
goods or services to customers in an amount
that reflects the consideration to which the
Group is expected to be entitled in exchange for
those goods or services. Revenue from customer
contracts is recognised upon satisfaction of a
performance obligation under those contracts
36
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
iv. 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.
v. Government grants
Government grants are recognised where there
is reasonable assurance that the grant will
be received and all attached conditions will
be complied with. When the grant relates to
an expense item, it is recognised as income
on a systematic basis over the periods that
the related costs, for which it is intended to
compensate, are expensed.
When the grant relates to an asset, it is
recognised as reducing the carrying amount of
the asset.
vi. Other revenue
Other revenue is recognised when it is received
or when the right to receive payment is
established.
Q. Borrowing Costs
Borrowing costs are recognised in profit or loss in the
period in which they are incurred.
R. Employee Benefits
i. Wages, Salaries and Annual Leave
Liabilities for wages and salaries and annual
leave are recognised and measured as the
amount unpaid at the reporting date at current
pay rates in respect of employees’ services up
to that date.
ii. Superannuation
Contributions to employee superannuation
plans are charged as an expense as the
contributions are paid or become payable.
iii. Short-term employee benefits
Liabilities for wages and salaries, including
non-monetary benefits, annual leave and long
service leave expected to be settled wholly
within 12 months of the reporting date are
measured at the amounts expected to be paid
when the liabilities are settled.
iv. Other long-term employee benefits
The liability for annual leave and long service
leave not expected to be settled within 12
months of the reporting date are measured at
the present value of expected future payments
to be made in respect of services provided by
employees up to the reporting date using the
projected unit credit method. Consideration is
given to expected future wage and salary levels,
experience of employee departures and periods
of service. Expected future payments are
discounted using market yields at the reporting
date on corporate bonds with terms to maturity
and currency that match, as closely as possible,
the estimated future cash outflows.
v. Equity-settled compensation
Share-based payments to Directors are
measured at the fair value of the instruments
issued and amortised over the vesting
periods see v. The fair value of performance
rights is determined using the satisfaction
of certain non-market performance criteria
(performance milestones). The number of share
options and probability of performance rights
expected to vest is reviewed and adjusted at
the end of each reporting period such that
the amount recognised for services received
as consideration for the equity instruments
granted is based on the number of equity
instruments that eventually vest. The fair value
is determined using a Black Scholes or Hoadley
pricing model.
S. Fair Value Measurement
When an asset or liability, financial or non-financial,
is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that
would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market
participants at the measurement date; and assumes
that the transaction will take place either: in the
principal market; or in the absence of a principal
market, in the most advantageous market.
Fair value is measured using the assumptions that
market participants would use when pricing the
asset or liability, assuming they act in their economic
best interests. For non-financial assets, the fair value
measurement is based on its highest and best use.
Valuation techniques that are appropriate in the
circumstances and for which sufficient data are
available to measure fair value, are used, maximising
the use of relevant observable inputs and minimising
the use of unobservable inputs.
Assets and liabilities measured at fair value are
classified into three levels, using a fair value hierarchy
that reflects the significance of the inputs used
in making the measurements. Classifications are
reviewed at each reporting date and transfers
between levels are determined based on a
reassessment of the lowest level of input that is
significant to the fair value measurement.
For recurring and non-recurring fair value
measurements, external valuers may be used when
internal expertise is either not available or when
the valuation is deemed to be significant. External
valuers are selected based on market knowledge
Annual Report for the financial year ending 30 June 2021
37
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
and reputation. Where there is a significant change
in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a
verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with
external sources of data.
T. Earnings Per Share
Basic earnings per share is calculated by dividing:
V the profit attributable to member of the parent
entity, excluding any costs of servicing equity other
than ordinary shares
V by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during
the year (if any).
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account:
V the after income tax effect of interest and other
financing costs associated with dilutive potential
ordinary shares; and
V the weighted average number of additional
ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential
ordinary shares.
U. Non-Current Assets Held For Sale
Non-current assets that are expected to be
recovered primarily through sale rather than through
continuing use are classified as held for sale.
Immediately before classification as held for sale,
the assets are remeasured in accordance with the
Group’s accounting policies. Thereafter generally the
assets are measured at the lower of their carrying
amount and fair value less cost to sell. Impairment
losses on initial classification as held for sale and
subsequent gains or losses on re-measurement are
recognised in profit or loss. Gains are not recognised
in excess of any cumulative impairment loss.
V. Share Based Payments
Share-based payments are measured at the fair
value of goods or services received or the fair value
of the equity instruments issued, if it is determined
the fair value of the goods or services cannot be
reliably measured, and are recorded at the date
the goods or services are received. Share-based
payment transactions are recognised in equity if
the goods or services were received in an equity-
settled share-based payment transaction, or as a
liability if the goods and services were acquired in a
cash settled share-based payment transaction. The
fair value of options is determined using a Black-
Scholes or Hoadley pricing model. The number of
share options and performance rights expected to
vest is reviewed and adjusted at the end of each
reporting period such that the amount recognised
for services received as consideration for the equity
instruments granted is based on the number of
equity instruments that eventually vest.
The Group initially measures the cost of equity-
settled transactions with employees by reference
to the fair value of the equity instruments at the
date at which they are granted. Estimating fair value
for share-based payment transactions requires
determination of the most appropriate valuation
model, which is dependent on the terms and
conditions of the grant.
This estimate also requires determination of the most
appropriate inputs to the valuation model including
the expected life of the share option, volatility and
dividend yield and making assumptions about
them, as well as an assessment of the probability of
achieving non-market based vesting conditions.
The probability of achieving non-market based
vesting conditions of performance rights is assessed
at each reporting period.
The Company has applied judgement in assessing
the likelihood of achieving the performance
milestones in relation to the performance rights
issued in the period.
W. Foreign Currency Translation
Foreign currency transactions
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.
X. Income Tax
The income tax expense or benefit for the period
is the tax payable on that period’s taxable income
based on the applicable income tax rate for each
jurisdiction, adjusted by the changes in deferred
tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised
for temporary differences at the tax rates expected
to be applied when the assets are recovered or
liabilities are settled, based on those tax rates that
are enacted or substantively enacted, except for:
V 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
V 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.
38
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
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.
i. Tax consolidation
The Group and its wholly owned Australian
resident entity formed a tax-consolidated group
effective 28 August 2019. As a consequence,
all members of the tax-consolidated group are
taxed as a single entity from that date. The
head entity within the tax-consolidated group is
Vysarn Limited.
Current tax expense/income, deferred tax
liabilities and deferred tax assets arising from
temporary differences of the members of the
tax-consolidated group are recognised in the
separate financial statements of the members
of the tax-consolidated group using the
“separate taxpayer within group” approach by
reference to the carrying amounts of assets and
liabilities in the separate financial statements
of each entity and the tax values applying under
tax consolidation.
Any current tax liabilities (or assets) and
deferred tax assets arising from unused tax
losses of the subsidiaries are assumed by
the head entity in the tax-consolidated group
and are recognised by the Group as amounts
payable (receivable) to/(from) other entities in
the tax-consolidated group in conjunction with
any tax funding arrangement amounts (refer
below). Any difference between these amounts
is recognised by the Group as an equity
contribution or distribution.
The Group recognises deferred tax assets
arising from unused tax losses of the tax-
consolidated group to the extent that it is
probable that future taxable profits of the
tax-consolidated group will be available against
which the asset can be utilised.
Any subsequent period adjustments to deferred
tax assets arising from unused tax losses as a
result of revised assessments of the probability
of recoverability is recognised by the head
entity only.
Y. Financial Instruments
i. Initial recognition and measurement
Financial assets and financial liabilities are
recognised 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 (i.e. trade date
accounting is adopted).
ii. 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.
iii. 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.
Annual Report for the financial year ending 30 June 2021
39
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
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:
V the right to receive cash flows from the asset
has expired or been transferred;
V all risk and rewards of ownership of the asset
have been substantially transferred; and
V 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).
Z. Impairment of Non-financial Assets
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.
AA. 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.
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.
40
Vysarn Limited (ABN 41 124 212 175) and controlled entities
AB. New Accounting Standards not
yet adopted
Australian Accounting Standards and interpretations
that have recently been issued or amended but are
not yet mandatory, have not been early adopted
by the Company for the annual reporting period
ended 30 June 2021. The Company’s assessment
of the impact of these new or amended Accounting
Standards and interpretations, most relevant to the
Company, are set out below.
AASB 2020-1: Amendments to Australian Accounting
Standards – Classification of Liabilities as Current or
Non-current
AASB 2020-1 amends AASB 101 Presentation of
Financial Statements to clarify requirements for the
presentation of liabilities in the statement of financial
position as current or non-current. AASB 2020-
1 mandatorily applies to annual reporting periods
commencing on or after 1 January 2023 and will
be first applied by the Group in the financial year
commencing 1 July 2023.
AASB 2020-3 Amendments to Australian Accounting
Standards – Annual Improvements 2018 – 2020 and
Other Amendments
AASB 2020-3 amends AASB 1 First-time Adoption of
Australian Accounting Standards, AASB 3 Business
Combinations, AASB 9 Financial Instruments,
AASB 116 Property, Plant and Equipment, AASB 137
Provisions, Contingent Liabilities and Contingent
Assets and AASB 141 Agriculture as a consequence
of the recent issuance by IASB of the following IFRS:
Annual Improvements to IFRS Standards 2018-2020,
Reference to the Conceptual Framework, Property,
Plant and Equipment: Proceeds before Intended Use
and Onerous Contracts – Cost of Fulfilling a Contract.
AASB 2020-3 mandatorily applies to annual reporting
periods commencing on or after 1 January 2022 and
will be first applied by the Group in the financial year
commencing 1 July 2022.
The likely impact of the above accounting standards
not yet adopted on the financial statements of the
Company is yet to be determined.
AC. Critical accounting judgements,
estimates and assumptions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in
the financial statements. Management continually
evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements,
estimates and assumptions on historical experience
and on other various factors, including expectations of
future events, management believes to be reasonable
under the circumstances. The resulting accounting
judgements and estimates will seldom equal the
related actual results. The judgements estimates and
assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets
and liabilities (refer to the respective Notes) within the
next financial year are discussed below.
i. Coronavirus (COVID-19) pandemic
iv. Share-Based Payments
Notes to the Consolidated Financial Statements
Note 2: Summary Of Significant Accounting Policies continued…
Judgement has been exercised in considering
the impacts that the Coronavirus (COVID-19)
pandemic has had, or may have, on the
consolidated entity based on known
information. This consideration extends to
the nature of the products and services
offered, customers, supply chain, staffing and
geographic regions in which the consolidated
entity operates. Other than as addressed
in specific Notes, there does not currently
appear to be either any significant impact upon
the financial statements or any significant
uncertainties with respect to events or
conditions which may impact the consolidated
entity unfavourably as at the reporting date or
subsequently as a result of the Coronavirus
(COVID-19) pandemic.
ii. Allowance for expected credit losses
The allowance for expected credit losses
assessment requires a degree of estimation and
judgement. It is based on the lifetime expected
credit loss, grouped based on days overdue,
and makes assumptions to allocate an overall
expected credit loss rate for each group. These
assumptions include recent sales experience,
historical collection rates, the impact of
the Coronavirus (COVID-19) pandemic and
forward-looking information that is available.
The allowance for expected credit losses, as
disclosed below, is calculated based on the
information available at the time of preparation
as detailed in “Note 23” on page 55. The
actual credit losses in future years may be
higher or lower.
iii. Income tax
The Company is subject to income taxes in the
jurisdictions in which it operates. Significant
judgement is required in determining the
provision for income tax. There are many
transactions and calculations undertaken
during the ordinary course of business for which
the ultimate tax determination is uncertain. The
Company recognises liabilities for anticipated
tax audit issues based on the Company’s
current understanding of the tax law. Where
the final tax outcome of these matters is
different from the carrying amounts, such
differences will impact the current and deferred
tax provisions in the period in which such
determination is made as detailed in “Note 7”
on page 44.
The Company measures the cost of equity-
settled transactions with suppliers and
employees by reference to the fair value of the
goods or services received provided this can be
estimated reliably. If a reliable estimate cannot
be made the value of the goods or services is
determined indirectly by reference to the fair
value of the equity instrument granted. The
fair value of the equity instruments granted
is determined using the Black-Scholes option
pricing model taking into account the terms
and conditions upon which the instruments
were granted as detailed in “Note 22” on
page 52. The accounting estimates and
assumptions relating to equity-settled share-
based payments would have no impact on
the carrying amounts of assets and liabilities
within the next annual reporting period but may
impact profit or loss and equity.
v. Revenue from contracts with customers
The Company has applied the following
judgements that significantly affect the
determination of the amount and timing of
revenue from contracts with customers.
Revenue from customer contracts is recognised
upon satisfaction of a performance obligation
under those contracts either over time. For
drilling services provided under contract,
revenue is recognised in accordance with a
specified unit of production based on rates
agreed to with the customer (for example
meters drilled or hours worked).
Dry Hire revenue is also recognised over a
period of time based on set day rates for
supply, as the customer simultaneously
receives and consumes the benefits provided
by the Company.
The sale of goods (consumables) is recognised
at a point in time when control of the goods
passes to the customer under those contracts
(for example the sale of certain items
including consumables).
Mobilisation/demobilisation revenue are distinct,
separately identifiable contractual performance
obligations and are recognised as revenue upon
completion of the mobilisation/demobilisation
event, once this performance obligation has
been satisfied.
vi. Estimation of useful lives of assets
The Group determines the estimated useful lives
and related depreciation for its property, plant
and equipment. The useful lives could change
significantly as a result of technical innovations
or other events. The depreciation charge will
increase where the useful lives are less than
previously estimated, or technically obsolete or
non-strategic assets have been abandoned or
sold will be written off or written down.
Annual Report for the financial year ending 30 June 2021
41
Notes to the Consolidated Financial Statements
Note 3: Operating Segments
The Company has one reportable segment, Pentium
Hydro which is the Group’s operational business unit
Revenue received from this business unit is received
solely from external Australian customers.
The Group 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.
The major results of the Group’s sole operating
segment are consistent with the presentation of
these consolidated financial statements.
The Group derived approximately 94% (2020: 84%)
of its revenue from contract with customers from
5 Tier-1 Mining Companies with operations based
within the state of Western Australia.
Note 4: Revenue From Contracts With Customers
30 June 2021
30 June 2020
$
$
Revenue recognised over a period of time from contracts with Australian customers:
Drilling services
Dry-hire revenue
Sub-total
18,905,624
1,549,210
20,454,834
Revenue recognised at a point in time from contracts with Australian customers
6,933,556
1,855,250
8,788,806
2,802,737
321,046
3,123,783
11,912,589
4,544,529
825,143
5,369,672
25,824,506
30 June 2021
30 June 2020
$
9,001
33,650
77,077
150,000
-
-
272,994
542,722
$
24,356
-
4,626
50,000
7,197,076
(1,346)
109,037
7,383,749
Sale of goods (consumables)
Mobilisation / demobilisation
Sub-total
Total revenue
Note 5: Other Income
Finance income
Fuel tax rebate
Other revenue
Cash boost stimulus (COVID-19)
Gain on bargain purchase
Realised currency gains / (losses)
Net gain on disposal of assets
Total
42
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Note 6: Expenses
Breakdown of expenses by nature:
Administration and Corporate expense
Office expenses
Corporate costs and compliance
Other expenses
Total
Employee benefits expense
Notes to the Consolidated Financial Statements
30 June 2021
30 June 2020
$
$
469,762
896,195
17,867
1,383,824
289,987
791,934
185,478
1,267,399
Wages and salaries (inclusive of superannuation)
9,063,328
4,530,043
Superannuation
Employment related taxes
Share-based payment expense
Other employment related expenses
Total
Depreciation and Amortisation Expense
Plant and equipment depreciation
Land and buildings lease amortisation
Total
Finance Costs
Interest expense
Borrowing expense
Bank fees
Transactions costs
Total
Consumables and other direct expenses
Consumables
Other direct expenses
Total
803,778
536,003
88,293
82,641
10,574,043
3,227,648
209,275
3,436,923
427,532
-
8,287
-
435,819
6,167,769
3,231,430
9,399,199
338,851
140,669
1,660,000
55,166
6,724,729
2,883,962
103,618
2,987,580
329,888
16,768
5,557
242,823
595,036
3,466,551
1,782,300
5,248,851
Annual Report for the financial year ending 30 June 2021
43
Notes to the Consolidated Financial Statements
Note 7: Income Tax Expense
A. Components of Income Tax Expense
Current tax
Deferred tax
Under / (over) provision in prior years
Revaluation of deferred tax position due to change in tax rate
Income tax expense / (benefit)
B. Prima Facie Tax Payable
30 June 2021
30 June 2020
$
$
-
194,756
684,997
(87,152)
792,601
-
(2,362,552)
-
-
(2,362,552)
The prima facie tax payable on profit before income tax is reconciled to the income tax expense as follows:
Prima facie income tax payable on profit before income tax at 26%
295,732
680,004
Add/(less) tax effect of:
Entertainment
Inventory
Plant and equipment
Share based payments
Non-assessable cash boost payment
Under provision in prior period
Revaluation of deferred tax position due to change in tax rate
Income tax expense / (benefit) attributable to profit
C. Current Tax Liability
Current tax relates to the following:
Current tax liabilities / (assets)
Opening balance
Income tax
Instalments paid
D. Deferred Tax
Deferred tax relates to the following:
Deferred tax assets balance comprises:
Plant and equipment under lease
Accruals
Provisions - annual and long service leave
Borrowing costs
Capital raising costs
Business related costs
Tax losses
9
(84,940)
-
22,956
(39,000)
684,996
(87,152)
792,601
-
-
-
-
148,717
142,391
37,860
2,350
82,482
4,686
2,399,234
2,817,720
2,358
266,482
(3,331,471)
33,825
(13,750)
-
-
(2,362,552)
-
-
-
-
655,638
94,742
12,501
3,661
115,308
8,385
753,656
1,643,891
44
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 7: Income Tax Expense continued…
30 June 2021
30 June 2020
$
$
(26,930)
(395,599)
(3,266)
(175,523)
(3,908,261)
(1,545,739)
(134,174)
(57,257)
(4,522,221)
(1,704,501)
(639,180)
(192,981)
(2,556,689)
912,798
Deferred tax liabilities balance comprises:
Prepayments
Accrued income
Plant and equipment
Plant and equipment under lease
Spare parts
Net deferred tax
E. Deferred Income Tax Related to Items Charged or Credited Directly to Equity
Decrease / (increase) in deferred tax assets
144,135
898
(Decrease) / increase in deferred tax liabilities
-
-
F. Deferred Itax (Revenue)/Expense Included in Income Tax
expense comprises:
Decrease / (increase) in deferred tax assets
(Decrease) / increase in deferred tax liabilities
Under provision in prior period
(428,737)
623,494
684,997
879,754
(1,991,832)
(370,720)
-
(2,362,552)
At 30 June 2021, the Company has carried forward revenue tax losses of $9,227,823 (2020: $2,740,568). 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 8: Remuneration of Auditors
During the financial year the following fees were paid or payable for services provided by the auditor of the Company:
30 June 2021
30 June 2020
$
$
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
Total
45,533
20,750
66,283
39,659
19,669
59,328
Annual Report for the financial year ending 30 June 2021
45
Notes to the Consolidated Financial Statements
Note 9: Earnings Per Share
30 June 2021
30 June 2020
$
$
A. Earnings Per Share for (Loss)/Profit
Profit / (Loss) after income tax attributes to the owners of Vysarn Limited
344,819
4,835,295
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
Number
Number
386,955,864
272,320,484
416,955,864
302,320,484
Cents
0.00089
0.00083
Cents
0.0178
0.0160
B. Accounting Policy for Earnings Per Share
i. Basic earnings per share
ii. Diluted earnings per share
Basic earnings or loss per share is calculated
by dividing the profit or loss attributable to the
owners of the Company, 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 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.
46
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 10: Current Assets – Cash and Cash Equivalents
Cash at bank
Cash and cash equivalents - term deposit
Total
30 June 2021
30 June 2020
$
6,555,486
-
6,555,486
$
8,372,780
1,333,333
9,706,113
A. Accounting Policy for Cash and Cash Equivalents
Cash and cash equivalents are short term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents
includes cash on hand and deposits held at call with financial institutions with a short maturity period of 90
days or less.
i. CASH FLOW INFORMATION
Profit / (loss) after income tax expense for the year
344,819
4,835,295
30 June 2021
30 June 2020
$
$
Non-cash flows in result from continuing activities:
Share based payments (benefit) / expense
Depreciation and amortisation
Tax expense / (benefit)
Gain on bargain purchase
(Profit)/ loss on disposal of PPE
Changes in assets and liabilities:
(Increase) / decrease in inventories
(Increase) / decrease in trade and other receivables
Increase / (decrease) in employee entitlements
Increase / (decrease) in trade and other payables
Increase / (decrease) in other assets and liabilities
Net cash provided by operating activities
88,293
3,436,923
792,601
1,660,000
2,987,580
(2,362,552)
-
-
(272,994)
(7,197,076)
129,440
(2,277,340)
247,761
229,510
(1,011,928)
1,707,085
(2,641,305)
(2,730,289)
215,488
4,741,535
2,480,623
1,989,299
Annual Report for the financial year ending 30 June 2021
47
Notes to the Consolidated Financial Statements
Note 11: Current Assets –
Trade and Other
Receivables
30 June
2021
30 June
2020
$
$
Trade receivables
4,983,227
2,766,495
GST receivable
Other receivable
-
-
-
-
Total
4,983,227
2,766,495
For further information regarding trade and other
receivables see “Note 23” on page 55. Recoverability
is based on the underlying terms of the contract.
Note 12:
Inventories
Consumables and
spare parts
30 June
2021
30 June
2020
$
$
2,518,854
2,641,305
Total
2,518,854
2,641,305
Inventory is stated at the lower of cost or net
realisable value.
Current trade receivables are non-interest bearing
and generally on 30-day end of month terms.
A. Impairment and Risk Exposure
Trade and other receivables are assessed for
recoverability based on the underlying terms of the
contract. A provision for impairment is recognised
when there is objective evidence that an individual
trade or other receivable is impaired. No impairment
provision was recorded at 30 June 2021 based on
management’s assessment.
Information about the impairment of trade
receivables and the group’s exposure to credit risk,
foreign currency risk and interest rate risk can be
found in the “Note 23” on page 55.
Note 13:
Other Current Assets
30 June
2021
30 June
2020
$
$
Contract fulfilment costs
968,257
Total
968,257
-
-
Contract fulfilment costs are costs generally incurred
prior to the commencement of a contract and are
expected to be recovered. Contract fulfilment costs
are amortised on a straight-line basis over the term
of the contract, or a period of 12 months for long term
contracts greater than 12 months in duration. Refer to
“Note 2P” on page 36 for further information.
Note 14:
Prepayments and Deposits
Note 15:
Plant and Equipment
30 June
2021
30 June
2020
$
63,388
180,757
244,145
$
53,438
108,433
161,871
30 June
2021
30 June
2020
$
$
35,637,057
27,591,744
Cost
Accumulated depreciation
(6,088,401)
(2,883,962)
Net carrying amount
29,548,656
24,707,782
Deposits
Prepayments
Total
48
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 15: Plant and Equipment continued…
Plant and
equipment
Trucks,
trailers and
light vehicles
Office
Equipment
Assets Not
Held Ready
for Use
Consolidated Group
$
$
$
$
Total
$
Carrying amount at 30 June 2019
Additions
Disposals
17,052,820
8,356,230
76,769
2,105,925
27,591,744
Depreciation expense
(1,869,804)
(1,003,605)
(10,553)
-
(2,883,962)
Balance as at 30 June 2020
15,183,016
7,352,625
Carrying amount at 30 June 2020
15,183,016
7,352,625
Additions
Disposals 1
5,924,335
2,003,827
(60,508)
(17,637)
Transfers from assets
not held ready for use
2,105,925
Transfer of Asset Held for Sale 2
127,264
-
-
Depreciation expense
(2,247,210)
(936,643)
Balance at 30 June 2021
21,032,822
8,402,172
66,216
66,216
90,432
-
-
-
(42,986)
113,662
2,105,925
24,707,782
2,105,925
24,707,782
-
-
8,018,594
(78,145)
(2,105,925)
-
-
-
-
127,264
(3,226,839)
29,548,656
1. Several items of plant and equipment were sold during the period resulting in a gain on disposal of assets of $272,994.
2. $127,264 was reclassified from assets held for sale back into Plant and Equipment and depreciation commenced in line with the
Company’s estimated useful life for relevant asset classes.
Depreciation methods, useful lives and residual values
are reviewed at each reporting date and adjusted if
appropriate. As detailed within “Note 2B”, the Group
undertook a detailed review of its current depreciation
policy during the period and increased the useful lives
of certain asset classes from 7 years to 10 years. The
change in useful life affected a number of individual
assets within the below asset classes:
V Plant and equipment; and
V Trucks, trailers and light vehicles.
The change in accounting estimate has been
accounted for prospectively, with effect from 1
July 2020, as required under Australian Accounting
Standards. For further details on the basis and
impact of this change in accounting estimate, refer to
“Note 2B” on page 33.
Note 16:
Right-of-use Assets
Note 17: Borrowings
30 June
2021
30 June
2020
$
$
CURRENT
30 June
2021
30 June
2020
$
$
NON-CURRENT
Land and buildings -
right-of-use
Less: accumulated
amortisation
828,948
828,948
(312,893)
(103,618)
Insurance premium
funding (a)
-
27,120
Asset finance facilities (b)
3,196,246
708,066
Current maturities of
long-term bank loan (c)
2,420,608
2,335,078
Total
516,055
725,330
Sub-total
5,616,854
3,070,264
NON-CURRENT
Asset finance facilities (b)
4,437,800
1,030,013
Long-term bank loan, net
of current maturities (c)
Sub-total
Total
2,745,423
5,677,757
7,183,223
6,707,770
12,800,077
9,778,034
Annual Report for the financial year ending 30 June 2021
49
Notes to the Consolidated Financial Statements
Note 17: Borrowings continued…
A. Insurance premium
The insurance premium funding bears interest at
prevailing market rates and repayable over 11 months.
B. Asset finance facilities including
vendor loan agreement
The asset finance facilities bear fixed interest at
prevailing market rates (ranging from 3.3% to 4%) and
are primarily repayable over 1 to 4 years. The asset
finance facilities and the vendor loan agreement are
secured via a registered GSA over vehicles and drill rigs
which were purchased under the relevant agreements.
C. Long-term bank loan
The Group has a long-term bank loan with a major
bank which bears interest at 4.41% per annum and
repayable over 4 years. The loan is secured by items of
plant and equipment obtained as part of the acquisition
from Ausdrill (refer to “Note 25” on page 61); the
Group has also provided a general security agreement
to the bank in respect of the Group’s existing and future
assets. The loan is repayable in monthly instalments
until its expiry in July 2023.
Note 19:
Employee Liabilities
30 June
2021
30 June
2020
$
$
140,835
45,457
317,633
458,468
170,031
215,488
4,781
4,781
-
-
463,249
215,488
CURRENT
Provision for annual
leave
Superannuation liability
Sub-total
NON-CURRENT
Provision for long
service leave
Sub-total
Total
The Group’s exposure to liquidity risk related
to trade and other payables is disclosed in
“Note 23” on page 55.
Note 18:
Trade and Other Payables
Note 20:
Share Capital
30 June
2021
30 June
2020
$
$
Trade payables
3,649,783
3,610,317
GST liability
(409)
119,376
(a) Share Capital
30 June
2021
30 June
2020
$
$
PAYG withholdings payable
-
Accruals
ATO client account
Deferred Revenue
Other payables
326,916
290,210
738,302
45,728
544,499
500,044
-
-
386,955,864 (30 June
2020: 386,955,864) fully
paid ordinary shares
19,130,558
19,135,614
77,791
A. Ordinary shares
Total
5,050,530
4,852,027
During the 12-month period ended 30 June 2021, the
Group did not issue any ordinary shares (30 June
2020: 250,727,248). All issued shares are fully paid.
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.
50
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 20: Share Capital continued…
B. Movement in Ordinary Capital
Ordinary Shares
No.
$
No.
$
At the beginning of the reporting period
386,955,864
19,135,614
136,228,616
29,912,298
30-June-21
30-June-21
30-June-20
30-June-20
28 August 2019
Shares issued under the public offer
28 August 2019
Shares issued under the Director
past services offer to Directors as
remuneration for past services
28 August 2019
Shares issued under the Pentium
Hydro offer to Pentium Hydro vendors
as consideration for the Company’s
acquisition of the entire issued capital of
Pentium Hydro
30 June 2020
Issued of shares under rights issue 2
Transaction costs
Reduction in capital not represented by
available assets 1
-
-
-
-
-
-
-
-
-
-
129,629,630
7,000,000
24,000,000
1,296,000
7,800,000
421,200
89,297,618
4,018,393
(5,056)
-
-
-
(524,126)
(22,988,151)
Total
386,955,864
19,130,558
386,955,864
19,135,614
1. As at 30 June 2019, the Company had accumulated losses of $22,988,151 from it’s previous operating activities. During the year, the
Company acquired water well drilling assets and associated inventory from Ausdrill. This Transaction represented a significant change
in the nature and scale of the activities of the Company from previous periods.
On 27 August 2020, the Board of Directors resolved to reduce the Company’s share capital by $22,988,151, in accordance with section
258F or the Corporations Act 2001, reducing accumulated losses deemed to be of a permanent nature by the same amount.
There is no impact on shareholders from the capital reduction as no shares have been cancelled or rights varied, and there is no
change in the net asset position of the Company. There is also no impact on the availability of the Company’s tax losses from this
capital reduction
2. On 18 May 2020, the Company announced it was undertaking a 3 for 10 non-renounceable rights issue of up to 89.3 million fully paid
ordinary shares at an issue price of $0.045 per share to raise up to approximately $4 million. The offer was open to all shareholders
with a registered address within Australia or New Zealand who held shares on the record date of Wednesday, 3 June 2020. The offer
closed on 23 June 2020, with the Company receiving applications exceeding the amount offered of $4.02 million. On 30 June 2020,
the Company subsequently issued 89,297,618 shares at an issue price of $0.045 per share raising $4.02 million (before costs) under a
non-renounceable rights issue.
C. 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. Refer to “Note 23” on page 55
for further information on the Company’s capital management policy.
Annual Report for the financial year ending 30 June 2021
51
Notes to the Consolidated Financial Statements
Note 21: Reserves
A. Share Based Payment Reserve
30 June 2021
30 June 2020
20,000,000 options (30 June 2020: 20,000,000) and 10,000,000
performance rights (30 June 2020: 10,000,000l) on issue
$
$
452,293
364,000
B. Movement in Share Based Payment Reserve
30 June 2021
30 June 2020
$
$
Share Based Payment Reserve
At the beginning of the period
364,000
28 August 2019
10,000,000 options issued under the Chairman
options offer
28 August 2019
10,000,000 performance rights issued as
performance incentives to executive Directors
28 October 2019
5,000,000 unvested performance rights lapsed
and cancelled
3 February 2020
10,000,000 options issued under the Managing
Director options offer
3 February 2020
5,000,000 performance rights issued to the
Managing Director
-
-
-
-
-
30 June 2021
Share based payments
Total
88,293
452,293
-
241,000
-
-
123,000
-
-
364,000
Refer to “Note 22: Share Based Payments” on page 52 below which outlines the movement in the current
period’s share-based payment expense.
Note 22: Share Based Payments
During the year ended 30 June 2021 the Company recorded the following share-based payments:
A. Share Issue
During the year ended 30 June 2021 no share-based payments in the form of ordinary shares were issued by
the Company to key management personnel as remuneration. Since the end of the financial year no ordinary
shares have been granted to key management personnel.
B. Options
During the year ended 30 June 2021 no options over ordinary shares have been granted to key management
personnel as remuneration. Further, during the reporting period, there were no shares issued on the exercise of
options previously granted as compensation.
Options
No.
$
No.
$
At the beginning of the reporting period
20,000,000
364,000
-
-
30-Jun-21
30-Jun-21
30-Jun-20
30-Jun-20
Options issued under the Chairman
options offer
Options issued under the Managing
Director options offer
-
-
-
-
10,000,000
241,000
10,000,000
123,000
Total
20,000,000
364,000
20,000,000
364,000
During the year ended 30 June 2020 the Company issued the following options over ordinary shares to
Directors as part of compensation that were outstanding as at 30 June 2021.
52
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 22: Share Based Payments continued…
C. Chairman Option Offer
D. Managing Director Option Offer
The issue of 10,000,000 options exercisable at
$0.054 on or before 28 August 2024 as performance
incentives under the Chairman options offer.
The options were issued to Chairman Mr Peter
Hutchinson in lieu of cash fees for the first 6 months
following completion of the Acquisitions.
The issue of 10,000,000 options to Managing Director
Mr James Clement as part of his remuneration
package. The shares were valued based on the
public offer price of $0.054.
The options have been valued using a Hoadley option
pricing model.
E. Fair Value
The Hoadley option pricing model was used to determine the fair value of the unlisted options issued. The
Hoadley inputs and valuation were as follows:
Options
Number of options
Grant date
Share price at grant date
Issue date
Exercise price
Expected volatility
Implied option life
Expected dividend yield
Risk free rate
Performance hurdle
Valuation per option $
Total valuation
Chairman
Options
10,000,000
5-Jul-19
$0.033
28-Aug-19
$0.054
100%
5 years
-
1.50%
-
Managing Director Options
Class A
5,000,000
3-Feb-20
$0.67
3-Feb-20
$0.075
100%
3 years
-
0.70%
Class B
5,000,000
3-Feb-20
$0.67
3-Feb-20
$0.075
100%
3 years
-
0.70%
30 day VWAP
of $0.085
30 day VWAP
of $0.100
$0.0241
$241,000
$0.012734
$63,670
$0.011866
$59,330
F. Performance Rights
During the year ended 30 June 2021, the Company did not issue any performance rights as performance
incentives to key management personnel.
30-June-21
30-June-21
30-June-20
30-June-20
Performance rights
No.
$
At the beginning of the reporting period
10,000,000
28 August 2019- performance rights
issued as performance incentives to
executive Directors
28 October 2019 – unvested performance
rights lapsed and cancelled
30 January 2020 – performance rights
issued as performance incentives to the
Managing Director
-
-
-
No.
-
$
10,000,000
(5,000,000)
5,000,000
-
-
-
-
Total
10,000,000
-
10,000,000
-
-
-
-
-
Annual Report for the financial year ending 30 June 2021
53
Notes to the Consolidated Financial Statements
Note 22: Share Based Payments continued…
As at 30 June 2021, 10,000,000 performance rights were on issue and outstanding. Each performance right
will convert on a 1:1 basis to fully paid ordinary shares upon achievement of their relevant vesting conditions
(refer below).
Tranche
Number of Performance
Rights on Issue
Condition Test Date
Vesting Condition
1
2
3
Where the:
3,333,333
3,333,333
3,333,334
30 June 2022
30 June 2023
30 June 2024
V Employment condition
V Cumulative EPS condition
V Employment condition – means the holder of the Rights remains employed by the Company at the
condition Test Date; and
V Cumulative EPS condition – means the earnings per share (EPS) based on the achievement of compound
annual growth in the Company’s EPS of 15% per annum from the financial year 30 June 2020, subject to a
minimum EPS of $0.01 for the financial year ending 30 June 2020. The EPS calculation will be based on the
Company’s cumulative net profit after tax up until the relevant condition test date divided by the weighted
average number of shares on issue over the relevant period, taking into account any new shares issued (or
cancelled by the Company in the relevant period).
i. Movements in Performance Rights
The movement during the reporting period in the number of performance rights in the Company held, directly,
indirectly or beneficially, by each key management personnel, including their related parties, is as follows:
Key Management
Personnel
Opening
balance
Granted as
compensation
Exercised
Cancelled
Closing
balance
Vested
during the
year
2021
Peter Hutchinson
James Clement
Sheldon Burt
Total
No.
No.
No.
No.
No.
No.
-
5,000,000
5,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
5,000,000
10,000,000
-
-
-
-
ii. Performance Rights
At 30 June 2021, the unissued ordinary shares of the Company under performance rights are as follows:
Class
Number Under
Performance Rights
Value at
Grant Date
Date of
Vesting
Management
Probability Assessment
A
B
C
3,333,332
3,333,332
3,333,336
Total
10,000,000
$
191,666
191,667
191,667
575,000
30-Jun-22
30-Jun-23
30-Jun-24
-
30 June 2021
75%
0%
0%
-
Fair Value
$
143,750
-
-
143,750
The executive performance rights have been valued
based on the Company’s share price as at the date of
their approval for issue. A total valuation of $575,000
has been determined, assuming satisfaction of
performance conditions in full and 100% vesting rate.
At 30 June 2021 the Company has assessed
the likelihood of the achievement of the vesting
conditions in respect of tranches 1 – 3 of the
executive performance rights and determined
that the achievement of the vesting conditions is
uncertain at this point in time.
As a result, Management have applied varying
probabilities of the performance conditions being
met, resulting the fair value of the performance
rights at 30 June 2021 to be $143,750 (2020: nil). An
expense of $88,293 has been recognised (2020: nil) in
line with the vesting periods per class, representing
the Company’s best estimate of the performance
rights that will eventually vest.
54
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 22: Share Based Payments continued…
G. Share Based Payments Expense
Share based payment expense is comprised as follows:
24,000,000 shares issued to Directors as remuneration for past
services
20,000,000 options as performance incentives
Performance rights payments
Total share-based payments expense
30 June 2021
30 June 2020
$
$
-
-
88,293
88,293
1,296,000
364,000
1,660,000
Note 23: Financial Instruments & Fair Value Measurement
A. Fair Values
A number of the Group’s accounting policies and
disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities.
Fair values have been determined for measurement
and/or disclosure purposes based on the following
methods. Where applicable, further information about
the assumptions made in determining fair values is
disclosed in the Notes specific to that asset or liability.
i. 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.
ii. Fair Value Hierarchy
Financial instruments carried at fair value are
determined by valuation level, as determined
in accordance with the relevant accounting
standard. The different levels have been
defined as:
V Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities;
V Level 2: inputs other than quoted prices
included within Level 1 that are observable
for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices);
and
V Level 3: inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).
There have been no transfers between levels
during the current or prior year.
All financial assets and liabilities carried at fair
value have been deemed to be level 2 within
the fair value hierarchy. With respect to specific
financial assets and liabilities, the following
valuation methods have been used:
Term receivables and fixed interest securities
are determined by discounting the cash flows,
as at the market interest rates of similar
securities, to their present value.
Other loans and amounts due are determined
by discounting the cash flows, at market rates
of similar borrowings, to their present value.
Other assets and other liabilities approximate
their carrying value. The carrying amount
of all financial assets and financial liabilities
approximate their fair value at reporting date.
B. 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.
This Note presents information about the Group’s
exposure to each of the above risks, its objectives,
policies and processes for measuring and managing
risk, and the management of capital.
C. Risk Management Framework
The Board of Directors has overall responsibility
for the establishment and oversight of the risk
management framework. Due to the size of the
Group, and its low nature of risk with respect
to financial risk management, the Board is of
the opinion that there is no need to establish a
Risk Management Committee for developing and
monitoring risk management policies.
Risk management policies are established to identify
and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor
risks and adherence to limits. Risk management
policies and systems are reviewed regularly to
reflect changes in market conditions and the
Group’s activities. The Group, through its training
Annual Report for the financial year ending 30 June 2021
55
Notes to the Consolidated Financial Statements
Note 23: Financial Instruments & Fair Value Measurement continued…
and management standards and procedures, aims
to develop a disciplined and constructive control
environment in which all employees understand their
roles and obligations.
D. Market Risk
Market risk is the risk that changes in market prices,
such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the
value of its holdings of financial instruments. The
objective of market risk management is to manage
and control market risk exposures within acceptable
parameters, while optimising the return.
E. Foreign Currency Risk
The Company is not exposed to any significant foreign
currency risk. The Group is exposed to currency risk
on administration costs, purchases of spare parts and
plant and equipment that are denominated in New
Zealand dollars (NZD) and US dollars (USD). The Group
does not use currency hedging for administration
expenses as the receipts in NZD and USD are used
to meet the liability obligations of the Group entities
denominated in NZD and USD.
The use of currency hedging for exposures relating
to spare parts and plant and equipment purchases
are assessed on a case by case basis. During the
financial year ended 30 June 2021, the Group did not
enter into any forward foreign currency contracts.
F. Interest Rate Risk
Exposure to interest rate risk arises on financial
assets and financial liabilities recognised at the end
of the reporting period whereby a future change in
interest rates will affect future cash flows or the fair
value of fixed rate financial instruments. The Group
is also exposed to earnings volatility on floating rate
instruments.
The financial instruments which primarily expose
the Group to interest rate risk are borrowings and
cash and cash equivalents. The Group manages its
exposure to changes in interest rates on borrowings
by using a mix of fixed and floating rate debt. The
Group is exposed to movements in market interest
rates on short term deposits. The Directors monitor
the Group’s cash position relative to the expected
cash requirements. Where appropriate, surplus
funds are placed on deposit earning higher interest.
The Group also has short- or long-term debt, and
therefore the risk is minimal.
The Company’s only exposure to interest rate risk is
in relation to deposits held. Deposits are held with
reputable banking financial institutions.
i. Profile
At the reporting date the interest rate profile of
the Group’s variable interest-bearing financial
instruments was:
Variable rate
instruments
Carrying Amount
30 June 2021 30 June 2020
$
$
Financial assets
1,715,130
9,706,113
Financial liabilities
-
-
Total
1,715,130
9,706,113
The table below illustrates 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 2021
Cash and equivalents
30 June 2020
Cash and equivalents
50
50
8,576
8,576
6,667
6,667
50
50
(8,576)
(8,576)
(6,667)
(6,667)
56
Vysarn Limited (ABN 41 124 212 175) and controlled entities
G. Price Risk
The Company is not exposed to any significant price risk.
The Group’s debt-to-adjusted capital ratio at the end
of the reporting period was as follows:
Notes to the Consolidated Financial Statements
Note 23: Financial Instruments & Fair Value Measurement continued…
H. Operational Risk
Capital Management
30 June
2021
30 June
2020
$
$
Operational risk is the risk of direct or indirect loss
arising from a wide variety of causes associated
with the Group’s processes, personnel, technology
and infrastructure, and from external factors other
than credit, market and liquidity risks such as those
arising from legal and regulatory requirements
and generally accepted standards of corporate
behaviour. Operational risks arise from all of the
Group’s operations.
The Group’s objective is to manage operational
risk so as to balance the avoidance of financial
losses and damage to the Group’s reputation with
overall cost effectiveness and to avoid control
procedures that restrict initiative and creativity. The
primary responsibility for the development and
implementation of controls to address operational
risk is assigned to senior management within each
business unit.
This responsibility is supported by the development
of overall Group standards for the management of
operational risk in the following areas:
V Requirements for appropriate segregation of
duties, including the independent authorisations of
transactions;
V Requirements for the reconciliation and monitoring
of transactions;
V Compliance with regulatory and other legal
requirements;
V Documentation of controls and procedures;
V Requirements for the periodic assessment of
operational risks faced, and the competency
of personnel, adequacy of controls and risk
management procedures to address the risks
identified;
V Training and professional development;
V Ethical and business standards; and
V Risk mitigation, including insurance where this is
effective.
I. Capital Management
The Board’s policy is to maintain adequate capital
so as to maintain investor, creditor and market
confidence and to sustain future development of
the business.
The Group’s debt and capital structure includes
ordinary share capital and loans and borrowings. The
Group is not subject to externally imposed capital
requirements. Management effectively manages the
Group’s capital by assessing the Group’s financial
risk and adjusting its capital structure in response
to changes in these risks and in the market. These
responses include the management of debt levels,
distributions to shareholders and share issues.
Total liabilities
20,571,716
16,526,715
Less: cash and cash
equivalents
Net debt
Total capital
(6,555,486)
(9,706,113)
14,016,230
6,820,602
24,762,964 24,334,908
Debt-to-capital ratio at
the end of the period
0.57
0.28
J. Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails
to meet its contractual obligations and arises principally
from the Group’s receivables from customers.
Management has established a credit policy under
which each new customer and counterparties
to transactions are analysed individually for
creditworthiness before the Group’s standard
payment and delivery terms and conditions are
offered. The Group’s review includes the use of
external ratings, when available. Such monitoring is
used in assessing receivables for impairment.
Risk is also minimised through investing surplus
funds in financial institutions that maintain a
high credit rating. The Group’s exposure to credit
risk is influenced mainly by the individual credit
characteristics of each customer. 100% of revenue is
attributable to Australian entities.
Details with respect to credit risk of trade and other
receivables are provided below. Trade and other
receivables that are neither past due nor impaired
are considered to be of high credit quality. Aggregates
of such amounts are detailed below.
K. Impairment of Financial Assets
The Group hold trade receivables that are subject
to the expected credit loss model. While cash and
cash equivalents are also subject to the impairment
requirements of AASB 9, the identified impairment
loss was immaterial.
L. Trade Receivables
The Group applies the AASB 9 simplified approach
to measuring the expected credit losses which
uses a lifetime expected loss allowance for all trade
receivables. The expected credit losses have been
grouped based on shared credit risk characteristics
and the days past due.
The historical loss rates are adjusted to reflect
current and forward- looking information on
macroeconomic factors affecting the ability of the
customers to settle the receivables.
Annual Report for the financial year ending 30 June 2021
57
Notes to the Consolidated Financial Statements
Note 23: Financial Instruments & Fair Value Measurement continued…
On that basis, the loss allowance as at 30 June 2021 and 1 July 2020 was determined as follows for trade
receivables:
Current
%
0%
2,766,495
2,766,495
1-July-20
Expected loss rate
Gross carrying amount -
trade receivables
Loss allowance
30-June-21
Expected loss rate
0%
Gross carrying amount -
trade receivables
Loss allowance
5,043,834
5,043,834
< 30
%
0%
-
-
0%
-
-
31 - 60
61 - 120
> 120
%
0%
-
-
0%
-
-
%
0%
-
-
0%
-
-
%
3%
-
-
3%
-
-
Total
$
2,766,495
2,766,495
5,043,834
5,043,834
Trade receivables are written off when there is no
reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery
include, amongst others, the failure of a debtor to
engage in a repayment plan with the Group and
failure to make contractual payments for a period of
greater than 120 days past due.
Impairment losses on trade receivables are
presented as net impairment losses within operating
profit. Subsequent recoveries of amounts previously
written off are credited against the same line item.
The Group has not recognised and impairment
losses recognised in the statement of profit or
loss as at 30 June 2021 arising from contracts with
customers. The Group’s receivables consist of Tier
1/Tier 2 Mining companies on 30-day net terms
with no noted debtor payment issues to date since
commencement of current activities.
i. Exposure to Credit Risk
The carrying amount of the Group’s financial assets
represents the maximum credit exposure. The
credit risk on liquid funds is limited because the
counterparties are banks with a minimum credit
rating of AA assigned by reputable credit rating
agencies. The Group’s maximum exposure to credit
risk at the reporting date was:
Exposure to credit risk
Cash and cash
equivalents - AA Rated
30 June
2021
30 June
2020
$
$
6,555,486
9,706,113
Trade receivables
4,983,227
2,766,495
Total
11,538,713
12,472,608
58
Vysarn Limited (ABN 41 124 212 175) and controlled entities
M. 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.
Notes to the Consolidated Financial Statements
Note 23: Financial Instruments & Fair Value Measurement continued…
i. 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.
1 year or less
Between 1 and
2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
cash flows
$
$
$
$
$
30 June 2021
Non-derivatives
Interest bearing
borrowings
Lease liability
Non-interest bearing
Trade and other
payables
5,616,854
4,630,439
218,784
237,203
2,552,783
125,908
5,081,537
-
-
Total non-derivatives
10,917,175
4,867,642
2,678,691
30 June 2020
Non-derivatives
Interest bearing
Lease liability
Trade payables
3,070,264
3,625,564
3,082,206
186,473
218,784
363,111
Non-interest bearing
Trade and other payables
5,022,059
-
-
-
-
-
Total non-derivatives
8,278,796
3,844,348
3,445,317
-
-
-
-
-
-
-
-
-
12,800,076
-
5,081,537
17,881,613
9,778,034
-
-
5,022,059
14,800,093
Annual Report for the financial year ending 30 June 2021
59
Notes to the Consolidated Financial Statements
Note 24: Related Party Transactions
A. Individual Directors and Executives Compensation Disclosures
Information regarding individual Directors and executives’ compensation and some equity instruments
disclosures as permitted by Corporations Regulations 2M.3.03 is provided in the remuneration report section
of the Directors’ Report. Apart from the details disclosed in this Note, no director has entered into a material
contract with the Group since the end of the previous financial year and there were no material contracts
involving Directors’ interests existing at year-end.
Details of the remuneration of key management personnel of the Company are set out in the following tables.
Short-term benefits
Post-employment
Equity
&
s
e
e
F
,
y
r
a
l
a
S
s
n
o
i
s
s
i
m
m
o
C
m
r
e
t
-
t
r
o
h
S
$
s
u
n
o
b
h
s
a
c
I
T
S
$
2021
Chairman
Peter Hutchinson
38,356
Executive Directors
James Clement 1 , 2
Sheldon Burt2
309,919
278,306
Former Non-Executive Director
Christopher Brophy
Total
15,982
642,563
-
-
-
-
-
y
r
a
t
e
n
o
m
-
n
o
N
$
s
t
fi
e
n
e
b
-
18,444
-
-
18,444
n
o
i
t
a
u
n
n
a
r
e
p
u
S
t
n
e
m
y
o
l
p
m
e
-
t
s
o
P
e
e
y
o
l
p
m
e
s
t
fi
e
n
e
b
r
e
h
t
O
$
$
s
t
n
e
m
y
a
p
d
e
s
a
b
-
e
r
a
h
S
$
l
a
t
o
T
$
-
-
-
-
-
3,644
-
42,000
21,637
21,694
44,552
43,742
394,552
343,742
1,518
-
17,500
48,493
88,294
797,794
1. The amount of $18,444 disclosed as a non-monetary benefit for Mr Clement is a salary sacrificed amount pertaining to a novated
lease on a motor vehicle.
2. Refer to section “6. Share-based Compensation” on page 24 for further information pertaining to share-based payment expenses
recognised for key management personnel.
B. Subsidiaries
All inter-company loans and receivables are eliminated on consolidation and are interest free with no set
repayment terms.
C. Other key management personnel and director transactions
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.
60
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Notes to the Consolidated Financial Statements
Note 24: Related Party Transactions continued…
Related party
Nature of transactions
30-Jun-21
30-Jun-20 30-Jun-21
30-Jun-20
Transaction value
Payable balance
Connada Pty Ltd /
Mr Sheldon Burt 1
Shares issued under the
Pentium Hydro offer
Insight Ecosys Pty Ltd /
Mr Chris Brophy 2
Shares issued under the
Pentium Hydro offer
Otsana Pty Ltd trading as
Otsana Capital / Mr Faldi
Ismail and Mr Nicholas Young
Onyx Corporate Pty Ltd /
Mr Nicholas Young, Mr Faldi
Ismail and Ms Kyla Garic
Lead manager and
capital raising services
Accounting and company
secretarial services
$
$
$
$
-
-
-
157,950
157,950
642,702
-
-
-
-
-
11,000
61,047
213,216
5,533
11,034
1. Connada Pty Ltd an entity controlled by Mr Burt received 2,925,000 shares under the Pentium Hydro offer equivalent to consideration
of $157,950.
2. Insight Ecosys Pty Ltd an entity controlled by Mr Brophy received 2,925,000 shares under the Pentium Hydro offer equivalent to
consideration of $157,950.
There were no trade receivables to related parties for the financial year ending 30 June 2021 (2020: $Nil).
Artificial Holdings Pty Ltd a nominee of Mr Sheldon Burt and Mr Chris Brophy received 1,170,000 shares under the Pentium Hydro offer
equivalent to consideration of $63,180. STRK Corporate Pty Ltd a nominee of Mr Sheldon Burt and Mr Chris Brophy received 780,000
shares under the Pentium Hydro offer equivalent to consideration of $42,120.
Note 25: Parent Entity Disclosures
A. Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Share capital
Reserves
Retained losses
Total Equity
B. Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive income
30 June 2021
30 June 2020
$
$
16,293,613
3,620
17,220,148
1,652
16,297,233
17,221,800
116,873
169,688
286,561
16,010,672
19,130,558
452,293
(3,572,179)
208,348
-
208,348
17,013,452
19,135,614
364,000
(2,486,162)
16,010,672
17,013,452
(1,086,016)
-
(1,086,016)
(57,215)
-
(57,215)
i. Guarantees provided in relation to subsidiaries
The Company provides a parent-company guarantee in respect to finance facilities established by
Pentium Hydro.
Annual Report for the financial year ending 30 June 2021
61
Notes to the Consolidated Financial Statements
Note 26: Controlled Entity
The ultimate legal parent entity of the Group is Vysarn Limited, incorporated and domiciled in Australia. The
consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policies described above.
Controlled entity
Pentium Hydro Pty Ltd
Country of
Incorporation
Australia
Percentage Owned
30-Jun-21
100%
30-Jun-20
100%
The entire issued capital of Pentium Hydro was acquired by the Company on 28 August 2019.
Note 27: Commitments and Contingencies
The Directors are not aware of any other commitments or any contingent liabilities that may arise from the
Group’s operations as at 30 June 2021.
Note 28: Events Subsequent After The Reporting Date
There are no matters or circumstances that have arisen since 30 June 2021 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.
Note 29: Registered Office and Principal Place
of Business
The registered office of The Company is:
The principal place of business of The Company is:
108 Outram St, West Perth
Western Australia 6005
11 Gavranich Way, Wangara
Western Australia 6065
62
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Directors’ Declaration
Directors’ Declaration
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) Giving a true and fair view of the Company’s financial position as at 30 June 2021 and of its
performance for the financial year ended on that date; and
(b) Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations), International Financial Reporting Standards and the Corporations Regulations
2001.
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
3. 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 2021.
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:
James Clement
Managing Director and Chief Executive Officer
Dated 27 August 2021
Annual Report for the financial year ending 30 June 2021
63
64
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Independent Auditor’s Report
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
VYSARN LIMITED
ABN 41 124 212 175
TO THE MEMBERS OF
VYSARN LIMITED
Report on the Audit of the Financial Report
Opinion
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
Other Information
We have audited the financial report of Vysarn Limited (the “Company”) and its controlled
entity (the “Group”), which comprises the consolidated statement of financial position as at 30
June 2021, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the Directors’ declaration.
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(a) giving a true and fair view of the Group’s consolidated financial position as at 30 June 2021
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
and of its financial performance for the year then ended; and
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
Responsibilities of the Directors for the Financial Report
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements
of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) “the Code” that are relevant to our
audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the Directors of the Company, would be in the same terms if given to the Directors
as at the time of this auditor’s report.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
concern and using the going concern basis of accounting unless the directors either intend to
basis for our opinion.
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Key Audit Matters
Auditor’s Responsibilities for the Audit of the Financial Report
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners BA&A Pty Ltd
•
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Annual Report for the financial year ending 30 June 2021
65
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
70
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
Independent Auditor’s Report
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
VYSARN LIMITED
ABN 41 124 212 175
TO THE MEMBERS OF
Key Audit Matter
VYSARN LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
How our audit addressed the key audit
matter
Other Information
Revenue recognition
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
Refer to Note 2(p) and Note 4 of the
Financial Report
For the year ended 30 June 2021, the Group
had revenue of $25,824,506 from contracts
with customers for it’s hydrogeological and
dewatering business activities
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
Our procedures included, amongst others:
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
Understanding and evaluating the design
and implementation of the relevant controls
associated with the treatment of revenue,
including, but not limited to, those relating
to identification of performance obligations,
discounts, incentives and rebates.
The determination of revenue recognition
requires Management judgements in
accounting for revenue, obligations, discounts,
incentives and rebates in accordance with the
Group’s identified performance obligations
as part of the transaction, as required
under AASB 15 Revenue from contracts with
customers (“AASB 15”).
Responsibilities of the Directors for the Financial Report
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Reviewing significant new contracts to
understand their terms and conditions,
including specified performance obligations
included within and whether Managements’
assessment for recognition of revenue under
The directors of the Company are responsible for the preparation of the financial report that
these contract terms is in accordance with
gives a true and fair view in accordance with Australian Accounting Standards and the
AASB 15.
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
Testing a sample of transactions by sighting
evidence of signed contracts, related invoices
and comparing the revenue amount recognised
to the timing of when the Group satisfies
performance obligations associated with the
transaction in accordance with AASB 15.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
Considering the adequacy of the disclosures
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
included within Note 2(p) and Note 4 of the
financial report.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
66
Pitcher Partners BA&A Pty Ltd
Vysarn Limited (ABN 41 124 212 175) and controlled entities
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
70
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
Independent Auditor’s Report
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
VYSARN LIMITED
ABN 41 124 212 175
TO THE MEMBERS OF
VYSARN LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
How our audit addressed the key audit
matter
Key Audit Matter
Other Information
Carrying value of plant and equipment
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
Refer to Note 2(i) and Note 15 of the financial
report
At 30 June 2021, plant and equipment totalling
$29,548,665 represent a significant portion
of the Group’s consolidated statement of
financial position.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
Our procedures included, amongst others:
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
Understanding and evaluating the design
and implementation of the relevant controls
associated with the recognition of plant
and equipment including capitalisation of
expenditure.
The evaluation of the recoverable amount of
these assets requires significant Management
judgement in determining the key assumptions
including revenue and cost projections
supporting the expected future cash flows
(“forecast models”) of the business and the
utilisation of the relevant assets.
Responsibilities of the Directors for the Financial Report
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Critically evaluating and challenging the
methodology and key assumptions around
revenue and cost projections of management
in their preparation of forecast models of the
Group which has been deemed a single cash
generating unit (“CGU”) encompassing plant
and equipment on hand at 30 June 2021.
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Evaluating and assessing the Group’s
Corporations Act 2001 and for such internal control as the directors determine is necessary to
assessment for impairment indicators
enable the preparation of the financial report that gives a true and fair view and is free from
associated with its plant and equipment as a
material misstatement, whether due to fraud or error.
single CGU.
Auditor’s Responsibilities for the Audit of the Financial Report
In preparing the financial report, the directors are responsible for assessing the ability of the
Checking the mathematical accuracy of
Group to continue as a going concern, disclosing, as applicable, matters related to going
forecast models and agreeing what has
been provided to the latest Board approved
concern and using the going concern basis of accounting unless the directors either intend to
forecasts.
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Assessing the Group’s accounting policy and
disclosures for plant at equipment as set out
Our objectives are to obtain reasonable assurance about whether the financial report as a
within Note 2(i) and Note 15 to the financial
report.
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
Annual Report for the financial year ending 30 June 2021
Adelaide Brisbane Melbourne Newcastle Perth Sydney
70
67
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
Independent Auditor’s Report
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
VYSARN LIMITED
ABN 41 124 212 175
TO THE MEMBERS OF
Key Audit Matter
VYSARN LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
How our audit addressed the key audit
matter
Other Information
Share-based Payments
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
Refer to Note 2(v) and Note 22 of the Financial
Report
Our procedures included, amongst others:
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
At 30 June 2021, a share-based payment
expense of $88,293 has been recorded.
Share-based payments involve significant
Management estimates and judgement in their
determination.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
Understanding and evaluating the design
and implementation of the relevant controls
associated with the preparation of the
valuation model used to assess the fair value
of share-based payments, including in relation
to volatility of the underlying security and
If, based on the work we have performed, we conclude that there is a material misstatement of
the appropriateness of the model used for
this other information, we are required to report that fact. We have nothing to report in this
valuation.
regard.
Share-based payments must be recorded
at fair value of the service provided, or in
the absence of such, at the fair value of the
underlying equity instrument granted. In
calculating the fair value there are a number
of management judgements including but not
limited to:
Responsibilities of the Directors for the Financial Report
Assessing the appropriateness of sharebased
payment expensed during the year pursuant
to the requirements of Australian Accounting
Standards.
The directors of the Company are responsible for the preparation of the financial report that
▪ Assessing the probability of achieving key
gives a true and fair view in accordance with Australian Accounting Standards and the
performance milestones in relation to
vesting conditions; and
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
▪ Assessing the fair value of the share price
material misstatement, whether due to fraud or error.
on grant date, estimate of expected future
share price volatility, expected dividend yield
In preparing the financial report, the directors are responsible for assessing the ability of the
and risk-free rate of interest.
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Assessing the Group’s accounting policy as
set out within Note 2(v) and disclosures within
Note 22 for compliance with the requirements
of AASB 2 Share-based Payment.
Other Information
Auditor’s Responsibilities for the Audit of the Financial Report
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2021, but does not
include the financial report and our auditor’s report thereon.
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
Our opinion on the financial report does not cover the other information and accordingly we do
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
not express any form of assurance conclusion thereon.
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
As part of an audit in accordance with the Australian Auditing Standards, we exercise
of this other information, we are required to report that fact. We have nothing to report in this
professional judgement and maintain professional scepticism throughout the audit. We also:
regard.
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
68
Pitcher Partners BA&A Pty Ltd
Vysarn Limited (ABN 41 124 212 175) and controlled entities
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
70
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
Independent Auditor’s Report
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
VYSARN LIMITED
ABN 41 124 212 175
TO THE MEMBERS OF
Responsibilities of the Directors for the Financial Report
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
VYSARN LIMITED
Other Information
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations
Act 2001 and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
Auditor’s Responsibilities for the Audit of the Financial Report
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole
is free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with the Australian Auditing Standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
▪ Identify and assess the risks of material misstatement of the financial report, whether due to
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
▪ Obtain an understanding of internal control relevant to the audit in order to design audit
Auditor’s Responsibilities for the Audit of the Financial Report
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
accounting estimates and related disclosures made by the directors.
▪ Evaluate the appropriateness of accounting policies used and the reasonableness of
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
▪ Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
and, based on the audit evidence obtained, whether a material uncertainty exists related to
Standards will always detect a material misstatement when it exists. Misstatements can arise
events or conditions that may cast significant doubt on the Group’s ability to continue as
from fraud or error and are considered material if, individually or in the aggregate, they could
a going concern. If we conclude that a material uncertainty exists, we are required to draw
reasonably be expected to influence the economic decisions of users taken on the basis of
attention in our auditor’s report to the related disclosures in the financial report or, if such
this financial report.
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
As part of an audit in accordance with the Australian Auditing Standards, we exercise
may cause the Group to cease to continue as a going concern.
professional judgement and maintain professional scepticism throughout the audit. We also:
•
▪ Evaluate the overall presentation, structure and content of the financial report, including the
Identify and assess the risks of material misstatement of the financial report, whether due
disclosures, and whether the financial report represents the underlying transactions and events
to fraud or error, design and perform audit procedures responsive to those risks, and
in a manner that achieves fair presentation.
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
Annual Report for the financial year ending 30 June 2021
Adelaide Brisbane Melbourne Newcastle Perth Sydney
70
69
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
Independent Auditor’s Report
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
VYSARN LIMITED
ABN 41 124 212 175
TO THE MEMBERS OF
VYSARN LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
▪ Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
Other Information
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
From the matters communicated with the directors, we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
Report on the Remuneration Report
Opinion on the Remuneration Report
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
We have audited the Remuneration Report included in pages 10 to 19 of the directors’ report for
the year ended 30 June 2021. In our opinion, the Remuneration Report of Vysarn Limited, for the
year ended 30 June 2021, complies with section 300A of the Corporations Act 2001.
Responsibilities
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
PITCHER PARTNERS BA&A PTY LTD
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
•
PAUL MULLIGAN
Executive Director
Perth, 27 August 2021
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
70
Pitcher Partners BA&A Pty Ltd
Vysarn Limited (ABN 41 124 212 175) and controlled entities
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
70
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
AUDITORʼS INDEPENDENCE DECLARATION TO THE DIRECTORS OF VYSARN LIMITED 20 In relation to the independent audit for the year ended 30 June 2021, to the best of my knowledge and belief there have been: (i) No contraventions of the auditor independence requirements of the Corporations Act 2001; and (ii) No contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards).This declaration is in respect of Vysarn Limited and the entity it controlled during the year. PITCHER PARTNERS BA&A PTY LTD PAUL MULLIGAN Executive Director Perth, 27 August 2021 Pitcher Partners BA&A Pty LtdAn independent Western Australian Company ABN 76 601 361 095.Level 11, 12-14 The Esplanade, Perth WA 6000Registered Audit Company Number 467435.Liability limited by a scheme under Professional Standards Legislation.Adelaide Brisbane Melbourne Newcastle Perth SydneyPitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.AUDITORʼS INDEPENDENCE DECLARATION TO THE DIRECTORS OF VYSARN LIMITED 20 In relation to the independent audit for the year ended 30 June 2021, to the best of my knowledge and belief there have been: (i) No contraventions of the auditor independence requirements of the Corporations Act 2001; and (ii) No contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards).This declaration is in respect of Vysarn Limited and the entity it controlled during the year. PITCHER PARTNERS BA&A PTY LTD PAUL MULLIGAN Executive Director Perth, 27 August 2021 Pitcher Partners BA&A Pty LtdAn independent Western Australian Company ABN 76 601 361 095.Level 11, 12-14 The Esplanade, Perth WA 6000Registered Audit Company Number 467435.Liability limited by a scheme under Professional Standards Legislation.Adelaide Brisbane Melbourne Newcastle Perth SydneyPitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Additional Shareholder
Information
Additional information required by the ASX Listing
Rules and not disclosed elsewhere in this report is
set out below. The information is effective as at 17
September 2021.
Corporate Governance
The Company’s 2021 Corporate Governance
Statement can be accessed at https://vysarn.com.
au/corporate-governance/
Ordinary Share Capital
386,955,864 fully paid ordinary shares are held by
1,101 individual holders.
Voting Rights
Subject to the ASX Listing Rules, the Company’s
constitution and any special rights or restrictions
attached to a share, at a meeting of shareholders,
voting rights attached to each class of equity security
are as follows:
V Ordinary Shares: On a show of hands each
shareholder present at a meeting of shareholders
in person or by proxy shall have one vote and, on a
poll, has one vote for each fully paid share held.
V Unlisted Options and Performance Rights: Unlisted
Options and Performance Rights do not carry any
voting rights.
Mr Anthony John Power & Mrs Susan Janet Power
14,145,135
1
2
3
4
5
6
7
8
9
Twenty Largest Shareholders
Rank
Holder Name
Molonglo Pty Ltd
Garrison Holdings Pty Ltd
Molonglo Pty Ltd
Invia Custodian Pty Limited
Mr Anastasios Karafotias
Lonesearch Pty Ltd
Richcab Pty Limited
Ah Super Pty Ltd
10 Mr Debesh Bhattarai
11
12
13
Bnp Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd
Allora Equities Pty Ltd
Connada Pty Ltd
14 Mr Richard William Balston
15
16
Bnp Paribas Nominees Pty Ltd
Yulgering Super Pty Ltd
17 Mondo Electronics Pty Ltd
18
19
20
Richcab Pty Ltd
Benito Toscana Pty Ltd
Cornucopia Assets Pty Ltd
Holding
% IC
40,000,000
10.34%
16,938,542
16,000,000
14,592,325
9,745,000
9,366,315
8,676,098
6,620,000
6,312,500
6,290,000
6,160,962
6,117,315
6,000,000
5,825,066
5,000,000
4,846,114
4,375,340
4,250,000
4,000,000
4.38%
4.13%
3.77%
3.66%
2.52%
2.42%
2.24%
1.71%
1.63%
1.63%
1.59%
1.58%
1.55%
1.51%
1.29%
1.25%
1.13%
1.10%
1.03%
Total top 20 holders of fully paid ordinary shares
Total remaining holders balance
195,260,712
50.46%
386,955,864
100.00%
Annual Report for the financial year ending 30 June 2021
71
Additional Shareholder Information
Substantial Shareholder
Unquoted Securities
The names of Vysarn Limited’s substantial holders
and number of shares in which each has a relevant
interest, as disclosed in substantial holding notices
received by Vysarn Limited as at 17 September 2021,
are listed below:
As at 17 September 2021 the Company has on issue
20,000,000 Unlisted Options to two holders and
10,000,000 Performance Rights to two holders.
The names of substantial security holders holding more
than 20% of an unlisted class of security are as follows:
Holder Name
Holding Balance
Molonglo Pty Ltd
56,000,000
% IC
14.47
Distribution of Shares
A distribution schedule of the number of holders of
shares is set out below.
Fully Paid
Ordinary Shares
Holders
Total Units
%
Holder
Unlisted
Options
Performance
Rights
Molonglo Pty Ltd
Connada Pty Ltd
Lonesearch Pty Ltd
Holders individually less
than 20%
10,000,000
-
-
5,000,000
10,000,000
5,000,000
-
-
5,957
0.002
Total
20,000,000 10,000,000
Unmarketable Parcels
Holdings of less than a marketable parcel of
ordinary shares:
Holders: 136
Units: 281,336
On-market Buy Back
There is no current on-market buy-back.
Use of Capital
Pursuant to the requirements of ASX Listing Rule 4.10.19,
the Company has used the cash and assets that were
readily convertible to cash that it had at the time of
reinstatement of its securities to official quotation on
the ASX, for the whole of the reporting period, in a way
consistent with its business objectives.
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
70
47
89
546
349
1,101
168,433
0.044
729,044
0.188
21,431,553
5.539
364,620,877 94.228
386,955,864
100%
Restricted Securities
As at 17 September 2021 the Company does not have
any securities held in escrow.
72
Vysarn Limited (ABN 41 124 212 175) and controlled entities
Vysarn Limited | ABN: 41 124 212 175 | ACN: 124 212 175
108 Outram St, West Perth WA 6005, Australia
PO Box 1974, West Perth WA 6872
T +61 (0) 8 6144 9777 | E info@vysarn.com.au
www.vysarn.com.au