Vysarn Limited (ABN 41 124 212 175) and incorporated entities
Annual Report for the financial year ending 30 June 2024
FY24
ANNUAL
REPORT
"хThe company’s evolving diversification
came to the fore with the majority of
year-on-year earnings growth coming
from subsidiaries other than Vysarn’s
foundation asset"
Contents
Corporate Directory
2
Chairman's Report
5
Managing Director's Report
7
Directors’ Report
16
Remuneration Report (audited)
23
Auditor’s Independence Declaration
31
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
33
Consolidated Statement of Financial Position
34
Consolidated Statement of Changes in Equity
35
Consolidated Statement of Cash Flows
36
Notes to the Consolidated Financial Statements
37
Directors’ Declaration
70
Independent Auditor’s Report
71
Additional Shareholder Information
78
1
Annual Report for the financial year ending 30 June 2024
2
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Directors
Peter Hutchinson
Chairman
James Clement
Managing Director and CEO
Sheldon Burt
Executive Director
Company Secretary
Matthew Power
Share Registry
Automic Registry Services
Level 5
191 St Georges Tce
Perth, WA 6000
Registered Office
and Principal Place
of Business
Level 1, 640 Murray Street
West Perth, WA 6005
Ph: +61 8 6144 9777
www.vysarn.com.au
Bankers
National Australia Bank
Level 14
100 St Georges Tce
Perth, WA 6000
Securities
Exchange Listing
ASX Limited
Level 40, Central Park
152-158 St Georges Terrace
Perth, WA 6000
ASX Code: VYS
Auditor
Pitcher Partners BA&A Pty Ltd
Level 11, 12-14 The Esplanade
Perth, WA 6000
Corporate Directory
3
Annual Report for the financial year ending 30 June 2024
Corporate Directory
"хVysarn enters the new
financial year well funded
with focus on continuing to
grow the core businesses,
completing and carefully
integrating the acquisitions
and expanding into Eastern
States marketplace."
4
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Dear Shareholders
It is with great pleasure that I present the 2024
Annual Report for Vysarn Limited (Vysarn) and
the financial results for the company. It was a
year where the company and the first phase of its
strategy to become a leading whole of life water
service provider came of age.
All four of Vysarn’s wholly owned subsidiaries
across water and environmental consultancy,
hydrogeological drilling, test pumping and
aquifer injection experienced material earnings
growth within the period, again highlighting the
robust fundamental nature of the core business
and strategy. Of note, the company’s evolving
diversification came to the fore with the majority
of year on year earnings growth coming from
subsidiaries other than Vysarn’s foundation asset
in hydrogeological drilling.
The Vysarn board has consistently stated that
with a focus on ultimately driving shareholder
value, history suggests that diversified
sustainable businesses with fundamentally driven
characteristics like that of Vysarn often get
recognised over the long term with an increase in
market value. This thesis began to play out in the
latter half of the financial year with shareholders
rewarded with a strong appreciation in the
Company’s share price.
In a considered strategic step away from
organically entering or acquiring service oriented
businesses, Vysarn Asset Management was
launched in the 2024 financial year to leverage
the company’s substantial intellectual property
to identify, secure and commercialise large scale
sustainable ground water resources in the Pilbara
region of Western Australia. Subsequent to
launching this initiative, the company entered into
an unprecedented Joint Resource Agreement (JRA)
with the Kariyarra Aboriginal Corporation, applied
for a 5C license with the Department of Water
and Environmental Regulation under the JRA and
progressed discussions with multiple potential
offtake partners for the water resource.
The consolidated Vysarn entity produced net
profit after tax of $7.96 million, a remarkable 106%
increase on the previous corresponding period.
Our Balance Sheet is strong and the company had
significant undrawn capacity under existing bank
debt facilities at year end.
As Vysarn entered the new financial year the
company executed share sale agreements for the
purchase of Waste Water Services Pty Ltd and
CMP Consulting Group Pty Ltd, both subject to
conditions precedent requirements prior to being
able to complete the transactions. In hand with
these contracted transactions Vysarn successfully
raised $38.2 million from institutional and
sophisticated investors. As such, Vysarn enters
the new financial year well funded with focus on
continuing to grow the core businesses, completing
and carefully integrating the acquisitions and
expanding into the Eastern States marketplace.
On behalf of the Board I thank management and
staff for their effort and diligence in delivering
the 2024 financial performance. A special thank
you to our CEO and Managing Director James
Clement who, particularly this year, has presided
over a remarkable increase in shareholder value.
James strives for excellence in every facet of the
businesses operations and strategic direction. As
Chairman, I am fortunate to have such an invested
chief executive to work alongside. A key part of
the company’s success has been his ability to
assemble highly motivated and talented teams
across all our business units and engaging them in
our vision and values.
At the upcoming AGM, our founding, industry and
staff respected Director Sheldon Burt will retire
and offer himself for re-election. Sheldon has
advised me that he intends to resign from the
board when an appropriate nominee has been
found and approved for appointment. He has
offered his services on a limited contractual, as
needs basis from there on in and will continue
to be a very important part of the fabric of our
community. His early contribution in getting “his
rigs up and drilling” in our formative years cannot
be overstated. Thank you for your significant
contribution to the Company, Sheldon. You are a
professional in your field of expertise and have
been a steady influence in the board room. We
wish you well as you transition to the next phase
of your contribution to Vysarn.
On behalf of the Board I would like thank
Shareholders for your ongoing support and loyalty. I
once again look forward to catching up with those
of you who attend the company’s Annual General
Meeting. We are approaching the next phase of
Vysarn’s growth journey with a sense of excitement
about our future prospects and opportunities
which we intend to use as a driver for long term
sustainable value for all of our shareholders.
Sincerely,
Peter Hutchinson
Chairman
26 September 2024
Chairman's Report
5
Annual Report for the financial year ending 30 June 2024
Vysarn's revenue from operations to 30 June 2024
of $75.89 million exceeded previous corresponding
period revenue from operations by $10.93 million.
Revenue from operations in FY2024 represents a
full twelve month operational contribution from
all of the Company’s wholly owned subsidiaries
across consultancy, hydrogeological drilling, test
pumping and managed aquifer recharge.
Net Profit Before Tax (NPBT) was $11.06 million and
Net Profit After Tax (NPAT) was $7.96 million for
the 12 months to 30 June 2024. The Company has
now exhausted its carried forward tax losses.
Each wholly owned subsidiary of Vysarn produced
year on year earnings growth, while Vysarn
corporate overheads increased by $0.72 million.
The move in corporate expenditure was primarily
due to an increase in investment to accelerate
the progression of Vysarn group water ownership
projects. The increase also includes investment
to expand the executive leadership team in
anticipation of future growth initiatives.
Operational Cashflow was $10.21 million. The
reduction in the conversion of earnings to
Operational Cash Flow compared to the previous
corresponding period is primarily a reflection of
the retention of due payments by Teir 1 debtors
and a material number of ProEng MAR unit
deliveries and sales being held back until late
June in FY2024.
The Company has Net Tangible Assets (NTA) of
$37.66 million, Net Current Assets of $11.24 million,
Cash and Cash Equivalent position was $3.73 million
and Net Cash was $0.89 million as at 30 June 2024.
Managing Director's Report
FY24 Key Metrics
FY24
FY23
Variance
$
$
$
%
Operational Revenue
75,885,416
64,957,156
10,928,260
17
EBITDA
16,322,531
12,453,788
3,868,743
31
NPBT
11,060,393
7,075,570
3,984,823
56
NPAT
7,960,510
3,872,558
4,087,952
106
Operational Cashflow
10,213,381
9,664,934
548,447
6
Group Summary
Operational Revenue
EBITDA
NPBT
FY23
FY24
Change
FY23
FY24
Change
FY23
FY24
Change
$
$
%
$
$
%
$
$
%
Vysarn
-
50,773
N/A
(2,813,661) (3,232,606)
(14.9)
(2,900,439) (3,622,957)
(24.9)
Pentium Hydro
50,982,210 55,620,392
9.1
11,945,539 13,301,920
11.4
7,330,593 9,120,036
24.4
Pentium Test
Pumping
2,759,290 3,635,896
31.8
857,228
1,117,942
30.4
430,122
524,908
22.0
Pentium Water
4,065,944
4,771,061
17.3
772,451 1,044,954
35.3
642,516
956,737
48.9
Project
Engineering
7,149,711 11,807,293
65.1
1,721,819 4,090,322
137.6
1,572,778
4,081,670
159.5
Group Total
64,957,155 75,885,416
16.8
12,483,376 16,322,531
30.8
7,075,570 11,060,393
56.3
6
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
7
Year on Year Performance
0
20
40
60
80
FY21
FY22
FY23
FY24
AUD (millions)
Operational Revenue
0
2
4
6
8
10
12
FY21
FY22
FY23
FY24
AUD (millions)
NPBT
25.8m
46.3m
64.9m
75.9m
1.14m
4.09m
7.07m
11.06m
0
3
6
9
12
15
18
FY21
FY22
FY23
FY24
AUD (millions)
EBITDA
0
2
4
6
8
10
12
FY21
FY22
FY23
FY24
AUD (millions)
Operational Cashflow
5.00m
9.07m
12.45m
16.32m
1.70m
9.50m
9.66m
10.21m
7
Annual Report for the financial year ending 30 June 2024
Managing Director's Report
8
Operations and Outlook
FY2024 proved to be another year where Vysarn
continued to successfully execute its water services
vertical integration strategy. All water service
business units contributed material earnings
growth year on year, while the Company laid the
early foundations to own and develop groundwater
water resources for the potential supply of water to
consumers in regional Western Australia.
The board and management anticipate that the
water and environment thematic will continue
to evolve and strengthen domestically, and that
the Company is well positioned to service and
subsequently benefit from this opportunity.
While Vysarn’s growth to date has primarily been
underpinned by the iron ore sector in Western
Australia, the Company is actively pursuing various
diversified growth opportunities across other water
services, commodities, sectors and geographies.
8
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Managing Director's Report
9
Pentium Water
has continued to grow staff head count, expand
its suite of advisory service offerings and in turn
has materially grown earnings.
The business aggressively targeted a 50%
increase in staff headcount over the 2024
calendar year to meet demand for its advisory
services. Pentium Water was able to execute
this growth initiative inside the second half of
FY2024 by taking staff numbers from 20 to 30
professionals primarily in the advisory areas of
groundwater and surface water.
Pentium Water continues to be instrumental
in the creation of intellectual property that
provides opportunities to identify and execute
internal projects such as securing ground water
assets for Vysarn commercial purposes as well
as projects in carbon and urban restoration.
The intellectual property provided by Pentium
Water played a major role in the formation of the
Company’s wholly owned subsidiary Vysarn Asset
Management Pty Ltd, the Company’s commercial
partnerships with traditional owner groups, and
the identification of large scale water demand in
the Pilbara region.
The outlook for domestic advisory services in
general is strong. While the short term strategy
for Pentium Water as a Western Australian
focussed business is to consolidate headcount
in FY2025 to help drive higher utilisation and
earnings growth, the Company is targeting
opportunities to expand advisory capability in
other geographies and sectors via organic or
acquisitive means. This is not only a function
of where the Company sees opportunities
for material increases in business scale and
earnings but references a core part of Vysarn’s
strategy to pursue capital light avenues for
further diversification and growth.
www.pentiumwater.com.au
9
Annual Report for the financial year ending 30 June 2024
Managing Director's Report
10
Pentium Hydro
Despite Pentium Hydro Pty Ltd (Pentium Hydro)
being Vysarn’s most mature wholly owned
subsidiary, the business produced another
financial period of material year on year earnings
growth. Of note, this result included the navigation
of operational challenges presented primarily
by the business’ exposure to the nickel sector’s
decline in the first half of FY2024, and the
developing headwinds in the iron ore sector due to
the broader global macro environment.
While operational and financial performance were
subsequently negatively affected by these short
term utilisation issues, ongoing demand for water
well rigs has meant redeployment opportunities
have already been identified with these rigs now
either recommitted to current clients or in the
process of being negotiated and reallocated to
new work streams.
Consistent with the long term Pentium Hydro
strategy, a non-core conventional rig was sold
during the period to partially fund the acquisition
and rebuild of an additional dual rotary rig
sourced internationally. The Company continues
to believe that a rig fleet mix skewed towards
primarily owning and operating dual rotary rigs will
continue to provide Pentium Hydro with a strong
competitive moat. The rebuilt dual rotary rig is
expected to be completed and deployed late in
the first half of FY2025, with the rig having already
been allocated to a current client.
Management continues to look for avenues to
keep improving Pentium Hydro’s operational
performance and optimisation of assets to meet
client demands as well as positioning the business
to be first in class in what is expected to be an
increasingly competitive environment. As such,
Pentium Hydro is participating in encouraging early
discussions with clients about opportunities in
automation and electrification.
www.pentiumhydro.com.au
10
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Managing Director's Report
11
Pentium Test Pumping
Pentium Test Pumping Pty Ltd (Pentium Test
Pumping) produced another year of credible
operational and financial performance defined by
the completed construction and deployment of a
second technologically advanced test pumping rig.
Pentium Test Pumping’s year on year earnings
growth was primarily a function of the increased
scale of the business via the addition of the
second rig. The second rig was deployed in
September of FY2024 and then had a period of
commissioning leading up to the Christmas period
mine site shutdowns. Consequently, utilisation
and earnings contribution from the second rig
only eventuated in any meaningful capacity in the
second half of the financial period.
Looking forward to FY2025, it is anticipated that
Pentium Test Pumping will produce further year on
year earnings growth due to the opportunities for
increased utilisation of the test pumping fleet over
a full financial year. In support of this opportunity,
the business has entered into a contract extension
with its key client with visibility of a solid stream
of work scopes going forward, as well as a major
multi rig extended trial with a new Tier 1 client
expected to begin late first half FY2025.
In hand with the extended trial with the new
client, Pentium Test Pumping has also invested
in a new scaled down suite of test pumping
equipment that will not only provide opportunities
to target smaller and more sporadic work scopes
with current clients, but will also enable the
provision of services to Tier 2 and non-resource
clients that the business has traditionally passed
up while it has concentrated on its core strategy
of servicing the iron ore sector with large scale
test pumping rigs. This growth initiative will not
only provide opportunities to grow earnings but
will provide Pentium Test Pumping with a level of
growing diversification in equipment, techniques
and client base.
www.pentiumtestpumping.com.au
11
Annual Report for the financial year ending 30 June 2024
Managing Director's Report
12
www.proengwa.com
Project Engineering
During FY2024 wholly owned subsidiary Project
Engineering Pty Ltd (ProEng) continued its trend
of exceptional growth. Managed aquifer recharge
(MAR) unit sales were again underpinned by the
Tier 1 iron ore miners and their growing adoption
of MAR technology as the preferred methodology
for the sustainable disposal of water. The use
of MAR technology in the Pilbara region sees
up to 180GL of an estimated 600GL of surplus
water produced annually by the iron sector now
disposed of via ProEng MAR units.
The expansion of ProEng premises during the
financial year helped establish an expanded MAR
unit production line which in turn enabled the
doubling of MAR unit production year on year.
During this phase staff numbers and expertise
were also bolstered.
Investment in ProEng will continue over future
periods with a particular focus on an expansion
in business development focusing on providing
MAR ancillary services to current customers,
developing potential adjacent services and
equipment, as well endeavoring to open new MAR
markets both domestically and internationally.
ProEng has established an early presence on the
east coast of Australia with an eye on developing
the adoption of ProEng MAR technology in
alternative sectors to resources.
The Western Australian iron ore sector in the
short term will continue to be the primary
contributor to ProEng earnings growth. While
there has been large scale adoption of MAR in
the Pilbara by several iron ore miners, the biggest
producers of surplus water in the region are yet
to fully adopt MAR. This provides ongoing growth
opportunities for ProEng with early projects and
trials anticipated to be delivered to these miners
in FY2025.
12
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Managing Director's Report
13
www.vysarnassetmanagement.com.au
Vysarn Asset Management
Vysarn Asset Management Pty Ltd (VAM) was
organically launched within the financial period.
VAM is the continuation of the Company’s strategy
to build a vertically integrated whole of life, end to
end water business. By leveraging the Company’s
extensive in-house intellectual property VAM was
established to target investment opportunities
in water, infrastructure assets and associated
opportunities to control, own and toll water.
VAM has subsequently entered into a Joint
Resource Agreement (JRA) with the Kariyarra
Aboriginal Corporation (KAC) to investigate, assess,
manage, own, control and extract sustainable
quantities of water from identified and secured
water resources on Kariyarra country.
The first resource under the terms of the
JRA was identified within the financial period
and a subsequent application to the Western
Australian Government (Department of Water and
Environmental Regulation) was made to allow KAC
to conduct a drilling and test pumping program on
Indee and Kangan Stations in the Pilbara region of
Western Australia.
Data gathered during the drilling and test pumping
program will form part of a hydrogeological
assessment for the commercial development and
approval process for an associated 5C groundwater
license that will determine the viability of the
aquifer on Indee and Kangan Stations for the
offtake of up to 10GL of water per annum.
The Company is targeting the drilling and test
pumping program to begin in the second half
of calendar year 2024. In parallel with the work
to define and develop the water resource,
discussions are progressing with potential
funding partners for infrastructure to convey
water, as well as discussions with potential
water off-takers for the long term delivery of
commercial quantities of water.
13
Annual Report for the financial year ending 30 June 2024
Managing Director's Report
14
Group
The Company produced material year on year
earnings growth while continuing to successfully
execute its vision and strategy to become a
leading end to end, whole of life vertically
integrated water service provider. The Company’s
performance in FY2024 further validates the
board and management’s strict focus on capital
allocation, strategy execution and building scale
through diversification.
The diversification across the vertical service
offering has continued to insulate the Company
from the operational and financial risks often
associated with a single service model. The
diversification to date has been Western Australian
and resource sector centric. While this centricity
has provided exceptional growth over Vysarn’s
foundation years, the board and management
think it is prudent to explore opportunities for
further geographic and sectorial diversification
away from Western Australia and resources, in
turn providing the Company with an opportunity to
establish a national footprint.
In line with this strategy Vysarn entered into a
Share Sale Agreements for the acquisition of CMP
Consulting Group Pty Ltd (CMP) and Waste Water
Services Pty Ltd (WWS).
CMP is a Victorian headquartered consulting
engineering organisation with a specific focus on
the water industry through strategic planning,
design, construction management and ongoing
asset management and maintenance.
The acquisition of CMP gives Vysarn an immediate
national presence and client base, and provides a
platform for significant growth underpinned by a
east coast water infrastructure boom.
WWS is a Western Australian based market leader
in the design, manufacture, installation and
maintenance of wastewater and potable water
plants. Its has long standing blue chip clients
across the mining, oil and gas and industrial
sectors. While WWS’ core business is currently
centred on the resource industry, Vysarn has
identified growth potential by using WWS’ modular
technology to target regional precincts with a
proven scalable, versatile and reliable wastewater
treatment solution.
Vysarn is well positioned and funded as it enters
FY2025. Subject to successfully executing a range
of growth initiatives such as CMP and WWS,
the Company anticipates opportunities for the
continuation of year on year earnings growth,
which in turn will also provide further scale and
diversification. In executing this strategy, the
Company’s board and management will continue
to focus on delivering long term and sustainable
value for its shareholders.
Sincerely,
James Clement
Managing Director and Chief Executive Officer
22 August 2024
www.vysarn.com.au
14
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Managing Director's Report
"хThe acquisition of CMP gives Vysarn
an immediate national presence and
client base, and provides a platform
for significant growth…"
15
Annual Report for the financial year ending 30 June 2024
Directors’ Report
The Directors present their report together with
the consolidated financial statements of Vysarn
Limited (“Vysarn” or “the Company”) and its
controlled entities (“the Group”) for the financial
year ended 30 June 2024 and auditor’s report
thereon.
1. Directors
The names and the particulars of the Directors of
the Company during the year and to the date of
this report are:
Name
Status
Appointed
Peter
Hutchinson
Chairman
27 October 2017
James
Clement
Managing
Director and CEO
3 February 2020
Sheldon Burt
Executive
Director
15 May 2019
2. Significant Changes in
State of Affairs
During the financial period, the Group undertook
the organic establishment of Vysarn Asset
Management Pty Ltd (“VAM”). VAM is the
continuation of the Group’s strategy to build a
vertically integrated whole of life, end to end
water business. By leveraging the Company’s
extensive in-house intellectual property, VAM
intends to target investment opportunities in
water, infrastructure assets and associated
opportunities to control, own and toll water.
The Group continued to execute its strategy to
become an industry leading vertically integrated
water and environmental services provider as
detailed in the review of operations. In the opinion
of the Directors, other than as outlined in this
report, there were no other 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
The Group’s Operations:
Vysarn is focused on becoming Australia’s leading
water services provider.
Throughout the financial period, the Group
continued to focus on providing ‘end-to-end’ water
services to various sectors, including, resources,
urban development, government and utilities. The
Group’s operational entities now include:
V Pentium Hydro Pty Ltd (“Pentium Hydro”);
V Pentium Test Pumping Pty Ltd (“PTP”);
V Pentium Water Pty Ltd (“Pentium Water”);
V Project Engineering (WA) Pty Ltd (“Project
Engineering”); and
V Vysarn Asset Management Pty Ltd (“VAM”).
Pentium Hydro, the Company’s foundation asset
in hydrogeological drilling, continued to service
primarily Tier 1 iron ore miners under a strategy
to facilitate long term opportunities for full asset
utilisation on improved terms. PTP deployed
its second test pumping unit as it continued to
expand the Company’s test pumping division and
progress opportunities for growth in injection
testing. Pentium Water continued to build a highly
credible and diverse water advisory team in water
resource engineering, urban water and mine
water and continued to provide Vysarn with an
exceptional line of sight and entry opportunities
in broader water services opportunities. Project
Engineering continued to see growing demand for
its leading managed aquifer recharge technology
in the resources sector. VAM was organically
established during the period. VAM intends
to target investment opportunities in water,
infrastructure assets and associated opportunities
to control, own and toll water.
The Group’s Business and Strategy:
Vysarn is a dynamic company, focused on the
integration and development of water specialised
services and technologies. Vysarn’s vertically
integrated model provides ‘end-to-end’ water
services to various sectors, including resources,
urban development, government, utilities and
agriculture. The efficient and environmentally
responsible management of water is a critical
and growing issue that the Company anticipates
will continue to present significant growth
opportunities, both vertically and horizontally.
The Company regularly monitors and reviews its
business risks via its enterprise-wide risk register
and the Company constantly looks at opportunities
to mitigate these identified business risks.
16
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
17
5. Likely Developments
The Group will continue to pursue new contract opportunities in Australia for its hydrogeological drilling,
test pumping, reinjection and water consultancy focused business activities.
6. Financial Performance
The profit for the Group after providing for income tax amounted to $7,960,510 (30 June 2023:
$3,872,558).
Working capital, represented by current assets less current liabilities, was $11,240,070 (30 June 2023:
$10,669,487). The Company had positive cash flow from operating activities for the year amounting to
$10,213,381 (2023: $9,664,934).
Operational revenue for the year ended 30 June 2024 was $75,885,416 (2023: $64,957,156).
The table below provides a comparison of the key results for the year ended 30 June 2024 to the
preceding year ended
30 June 2024
30 June 2023
$
$
Statement of Profit or Loss
Revenue from operations
75,885,416
64,957,156
Reported profit / (loss) after tax
7,960,510
3,872,558
Statement of Financial Position
Net assets
41,057,576
32,923,665
Total assets
65,722,895
60,079,390
Cash and cash equivalents
3,731,180
8,309,432
7. Principal Activities
The Group currently operates hydrogeological
drilling, test pumping, reinjection water services
and water consultancy businesses predominately
in Western Australia.
The Group aims to become a significant provider
of production critical water services and solutions
to industry in Australia.
8. Event Subsequent to
Reporting Date
The Company released the following material ASX
announcement post 30 June 2024:
V Appointment of Chief Operating Officer; and
V Subsequent to year end, on 2 July 2024 Mr
James Clement exercised his Managing Director
Options. As approved at the most recent Annual
General Meeting, the Company provided Mr
Clement an interest free loan of $750,000 (“Loan
Funded Shares”) for the purpose of funding the
exercise of the Managing Director Options.
17
Directors’ Report
Annual Report for the financial year ending 30 June 2024
18
Mr Clement must repay the Loan Balance to the company within 10 business days of the earlier of:
V three (3) years after the date on which Mr Clement (and/or his nominee(s)) is issued the Loan Funded
Shares on exercise of the Managing Director Options (Maturity Date);
V the date on which Mr Clement ceases to be employed or engaged by the Group; or
V where the Board has determined (in its absolute discretion) that Mr Clement engaged in serious
misconduct; or
V the date on which the last Loan Funded Shares held by Mr Clement are sold.
There is no other matter or circumstance that has arisen since 30 June 2024 that has significantly
affected, or may significantly affect the Group’s operations, the results of those operations or the
Company’s state of affairs in future financial years.
9. Industry and Geographic Exposures
The Group is exposed to the Australian mining industry, municipalities and the large scale domestic
urban development sector. On a geographic basis, the Group’s operations are predominantly exposed to
Western Australia.
10. Environmental Regulation
In the normal course of business, there are no specific environmental regulations or requirements that
the Group is currently subject to.
11. Information on Directors & Company Secretary
Peter Hutchinson
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.
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.
Chairman
Appointed: 27 October 2017
Other current listed
directorships: N/A
Former listed directorships
(last 3 years): N/A
Interests in shares:
69,100,000 fully paid ordinary
shares
Interests in options: Nil
James Clement
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.
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.
Managing Director and CEO
Appointed: 3 February 2020
Other current listed
directorships: N/A
Former listed directorships
(last 3 years): N/A
Interests in shares:
26,833,332 fully paid ordinary
shares
Interest in options: Nil
Interest in performance
rights:
1,666,668 performance rights
18
Directors’ Report
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
8. Event Subsequent to Reporting Date continued…
19
Sheldon Burt
Experience and Expertise:
Mr Burt is an Executive Director of Vysarn Limited and co-founder of
its subsidiary Pentium Hydro Pty Ltd. A drilling industry professional
with over 35-years national and international experience, Mr Burt has
held various roles over that time including field based, operational
responsibilities, senior management, executive management and
company proprietorship.
Prior to forming Pentium Hydro and joining the Vysarn board in 2019,
Mr Burt was the co-founder and Managing Director of SBD Drilling, a
Perth based exploration drilling company with successful operations in
Australia and West Africa from 2004 to 2011 before selling and moving
on to the role of General Manager at Easternwell Minerals for 6 years
between 2012 and 2018.
Mr Burt is a Member of the Australian Institute of Company Directors.
Executive Director
Appointed: 15 May 2019
Other current listed
directorships: N/A
Former listed directorships
(last 3 years): N/A
Interests in shares:
9,550,648
Interest in performance
rights: 1,666,667
performance rights
Matthew Power
Experience and Expertise:
Mr Power is a finance professional having acquired public company
experience while 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), a Graduate Diploma of Chartered Accounting
with the Chartered Accountants, Australia and New Zealand and is a
Graduate of the Australian Institute of Company Directors. Previously
Mr Power worked in professional insolvency and restructuring services,
across a variety of industry sectors including resources and mining,
mining services, agribusiness and retail.
Company Secretary
Appointed: 30 June 2021
12. Meetings of Directors
The number of meetings of the Company’s Board of Directors (‘the Board’) held during the year ended 30
June 2024, and the number of meetings attended by each Director is set out below:
Board Meetings
Audit and Risk
Committee Meetings
Remuneration
Committee Meetings
Held
Attended
Held
Attended
Held
Attended
Peter Hutchinson
10
10
2
2
1
1
James Clement
10
10
2
2
1
1
Sheldon Burt
10
10
2
2
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.
19
Directors’ Report
Annual Report for the financial year ending 30 June 2024
11. Information on Directors & Company Secretary continued…
20
13. Indemnity and Insurance of Officers
To the extent permitted by law, the Company has indemnified the Directors and executives of the
Company for costs incurred, in their capacity as a Director or executive, for which they may be held
personally liable.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The
contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers in the Company, and any other
payments arising from liabilities incurred by the officers in connection with such proceedings. This
does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers
or the improper use by the officers of their position or of information to gain advantage for themselves
or someone else or to cause detriment to the Company. It is not possible to apportion the premium
between amounts relating to the insurance against legal costs and those relating to other liabilities.
Indemnity and Insurance of Auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against a liability incurred by the auditor.
14. Shares Under Option
On 2 July 2024, 10,000,000 Incentive Options with an exercise price of $0.075 issued to Mr Clement were
exercised. As at the date of this report, there were no unissued ordinary shares of the Company under
option (2023: 10,000,000 options with an exercise price of $0.075 and expiry date of 30 June 2024).
15. Shares Under Performance Rights
At 30 June 2024 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
1-Jul-24
Employment and cumulative EPS condition
1,666,667
30-Jan-20
1-Jul-24
Employment and cumulative EPS condition
1,666,668
Total
3,333,335
The vesting conditions of the above performance rights are pending assessment and as such the
unissued shares under these performance rights have yet to be exercised.
20
Directors’ Report
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
21
16. Proceedings on Behalf of the Group
No person has applied for leave of Court under section 237 of the Corporations Act 2001 to bring
proceedings on behalf of the Company or intervene in any proceedings to which the Company or its
controlled entities is a party for the purpose of taking responsibility on behalf of the Company for all or
any part of such proceedings. The Group was not a party to any such proceedings during the year.
17. Non-audit Services
The Group 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-2024
30-June-2023
$
$
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
26,250
26,050
Total auditors’ remuneration for non-audit services
26,250
26,050
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 2024 has been received and can be found on page 31 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).
21
Directors’ Report
Annual Report for the financial year ending 30 June 2024
22
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Directors’ Report
Remuneration Report (audited)
The remuneration report for the year ended
30 June 2024 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. хother Transactions and Balances with Kmp and
Their Related Parties
9.х хkey 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 2024 are set out below:
Key Management Personnel covered under this
report are as follows:
Name
Appointed
Resigned
Peter Hutchinson
Chairman
27 October
2017
-
James Clement
Managing Director
and CEO
3 February
2020
-
Sheldon Burt
Executive Director
15 May
2019
-
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.
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 calibre 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.
23
Annual Report for the financial year ending 30 June 2024
24
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.
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 and includes an increase
in shareholders’ value. The Board reviewed the
long-term equity-linked performance incentives
specifically for executives during the year ended
30 June 2024.
Consolidated Entity Performance and Link
to Remuneration
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.
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
2023 Annual General Meeting (“AGM”)
The Company received more than 99% of “yes”
votes on its remuneration report for the 2023
financial year. The Company did not receive any
specific feedback at the AGM or throughout the
year on its remuneration practices.
The key terms of Mr Clement and Mr Burt’s
agreements are set out below for the year ended
30 June 2024;
James Clement
Managing Director and CEO
a. Term of agreement: commencing 3 February
2020 with indefinite duration.
b. Remuneration:
i. a base salary of $450,000 per annum,
including mandatory superannuation
contributions;
ii. a short-term cash incentive of up to
$200,000 per annum, subject to the
achievement of certain short-term incentive
key performance indicators; and
iii. a long-term incentive being the issue
of 5,000,000 performance rights upon
commencement and 10,000,000 options.
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.
24
Remuneration Report (audited)
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
25
Sheldon Burt
Executive Director
a. Term of agreement: commencing 15 May 2019
with indefinite duration.
b. Remuneration:
i. a base salary of $300,000 per annum,
including mandatory superannuation
contributions;
ii. a short-term cash incentive of up to
$150,000 per annum, subject to the
achievement of certain short-term incentive
key performance indicators; and
iii. a long-term incentive being the issue
of 5,000,000 performance rights 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;
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.
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.
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.
The table below summarises the annual fees
payable to non-executive Directors for the 2024
financial year (inclusive of superannuation):
Board Committee
Total
Board Fees - per annum
$
$
$
Chair
120,000
-
120,000
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.
25
Remuneration Report (audited)
Annual Report for the financial year ending 30 June 2024
3. Executive Remuneration Arrangement continued…
26
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
Total
2024
$
$
$
$
$
$
$
Chairman
Peter Hutchinson
108,108
-
-
-
11,892
-
120,000
Executive Directors
James Clement 1, 2
422,601
125,000
33,360
-
27,399
157,933
766,293
Sheldon Burt 2, 3
215,884
110,000
-
-
2,283
18,631
346,798
Total
746,593
235,000
33,360
-
41,574
176,564
1,233,091
1 The amount of $33,360 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 of this remuneration report for further information pertaining to share-based payment expenses
recognised for key management personnel.
3 As at 31st July 2023 Mr Burt resigned as an employee of Vysarn Limited. $43,167 was paid to Mr Burt during the
period as an employee. From 1 August 2024, Mr Burt’s Executive Director fees were paid to Connada Pty Ltd, an entity
controlled by Mr Burt. $285,000 was paid to Connada Pty Ltd during the period.
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
2023
$
$
$
$
$
$
$
Chairman
Peter Hutchinson
54,545
-
-
-
5,727
-
60,272
Executive Directors
James Clement 1, 2
382,475
10,000
17,233
-
25,292
270,116
705,116
Sheldon Burt 2
277,519
20,000
-
-
25,725
161,428
484,672
Total
714,539
30,000
17,233
-
56,744
431,544
1,250,060
1 The amount of $17,233 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 of this remuneration report for further information pertaining to share-based payment expenses
recognised for key management personnel.
26
Remuneration Report (audited)
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
27
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed Remuneration
At Risk STI
At Risk LTI
2024
2023
2024
2023
2024
2023
Directors
Peter Hutchinson
100%
100%
-
-
-
-
James Clement
63%
60%
16%
1%
21%
38%
Sheldon Burt
63%
63%
32%
4%
5%
33%
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, including
qualitative stretch targets and key quantitative measures. 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.
6. Share-based Compensation
Issue of Shares
During the year ended 30 June 2024 no share-based payments in the form of ordinary shares were
issued by the Company to key management personnel as remuneration.
Performance Rights
During the year ended 30 June 2024, the Company did not issue any performance rights as performance
incentives to key management personnel.
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
Vested and
exercisable at
the end of the
year
Unvested and
not exercisable
at the end of
the year
2024
No.
No.
No.
No.
No.
No.
No.
No.
Peter Hutchinson
-
-
-
-
-
-
-
-
James Clement
3,333,334
- 1,666,666
- 1,666,668 1,666,668 1,666,668
-
Sheldon Burt
3,333,334
- 1,666,667
- 1,666,667 1,666,667 1,666,667
-
Total
6,666,668
- 3,333,333
- 3,333,335
3,333,335 3,333,335
-
During the year ended 30 June 2024, 3,333,333 performance rights were exercised upon vesting for $Nil
consideration, resulting in the issue of 3,333,333 fully paid ordinary shares. The remaining 3,333,335
performance rights vested on 1 July 2024. However, these have not yet been exercised.
27
Remuneration Report (audited)
Annual Report for the financial year ending 30 June 2024
5. Details of Remuneration continued…
28
Performance Rights on Issue at Year End
At 30 June 2024, the unissued ordinary shares of the Company under performance rights are as follows:
Tranche
Number Under
Performance
Rights
Value at
Grant Date
($)
Date of
Vesting
Management
Probability
Assessment
30-Jun-24
Fair Value
($)
3
3,333,335
191,667
30-Jun-24
100%
191,667
Total
3,333,335
191,667
-
-
191,667
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
3
3,333,335
1 July 2024
V Employment condition
V Cumulative EPS condition
Where the:
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 2021, subject to
a minimum EPS of $0.01 for the financial year ending 30 June 2021. 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).
The executive performance rights were valued based on the Company’s share price as at the date of
their approval for issue. A total valuation of $191,667 has been determined for the remaining tranches,
assuming satisfaction of performance conditions in full and 100% vesting rate.
The conditions for Tranche 3 of the performance rights were successfully met during the period and have
subsequently vested. 100% of these performance rights have been expensed in full as at 30 June 2024.
$41,700 in share-based payments was recorded as an expense in the statement of profit or loss and
other comprehensive income during the year ended 30 June 2024 (30 June 2023: $341,635) in relation to
the performance rights.
Options
On 24 November 2022 the Company issued 10,000,000 Incentive Options to Mr. James Clement, with
an exercise price of $0.075 and an expiry date of 5 July 2024. No other options were issued to key
management personnel as remuneration.
The fair value of the options issued has been determined using a Black-Scholes option pricing model with
the following inputs:
Managing Director Options
Number of options
10,000,000
Grant date
24-Nov-2022
Share price at grant date
$0.085
Issue date
14-Dec-2022
Exercise price
$0.075
Expected volatility
37.33%
Implied option life
1.61 years
Expected dividend yield
-
Risk free rate
3.16%
Valuation per option $
$0.02247
Total valuation
$224,774
28
Remuneration Report (audited)
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
6. Share-based Compensation continued…
29
Mr James Clement was issued a further 10,000,000 Managing Director Options, as the previous 10,000,000
options that he held lapsed unvested in the prior period. The new options issued have an expiry date of
3 July 2024. An amount of $134,864 was recognised as an expense in the Statement of profit or loss and
other comprehensive income during the period (2023: $89,909), noting the total expense calculated as
the value of the 10,000,000 Incentive Options has been recognised over the remaining option term to 5
July 2024 as a result of their service condition.
Subsequent to year end, on 2 July 2024 Mr James Clement exercised his Managing Director Options. The
Company provided Mr Clement an interest free loan of $750,000 (“Loan Funded Shares”) for the purpose
of funding the exercise of the Managing Director Options.
Mr Clement must repay the Loan Balance to the company within 10 business days of the earlier of:
V three (3) years after the date on which Mr Clement (and/or his nominee(s)) is issued the Loan Funded
Shares on exercise of the Managing Director Options (Maturity Date);
V the date on which Mr Clement ceases to be employed or engaged by the Group; or
V where the Board has determined (in its absolute discretion) that Mr Clement engaged in serious
misconduct; or
V the date on which the last Loan Funded Shares held by Mr Clement are sold.
Options Over Equity Instruments
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:
Key Management
Personnel
Opening
balance
Granted as
compensation
Exercised
Expired
Closing
balance
Vested during
the year
Vested and
exercisable at
the end of
the year
Unvested and
not exercisable
at the end of
the year
Peter Hutchinson
-
-
-
-
-
-
-
-
James Clement
10,000,000
-
-
-
10,000,000
-
-
10,000,000
Sheldon Burt
-
-
-
-
-
-
-
-
Total
10,000,000
-
-
- 10,000,000
-
- 10,000,000
Shareholding
The number of shares in the Company held during the financial year by each Director and other members
of key management personnel of the Company, including their personally related parties, is set out below:
Opening
balance
Granted as
Received on
exercise of
options
Received on
exercise of
performance
rights
On-market
purchases
Closing
balance
30 June 2024
Peter Hutchinson
69,100,000
-
-
-
-
69,100,000
James Clement
15,166,666
-
1,666,666
-
-
16,833,332
Sheldon Burt
7,883,981
-
1,666,667
-
-
9,550,648
Total
92,150,647
-
3,333,333
-
-
95,483,980
30 June 2023
Peter Hutchinson
57,000,000
-
10,000,000
-
2,100,000
69,100,000
James Clement
13,500,000
-
-
1,666,666
-
15,166,666
Sheldon Burt
6,217,315
-
-
1,666,666
-
7,883,981
Total
76,717,315
-
10,000,000
3,333,332
2,100,000
92,150,647
7. Loans to Directors and Executives
There are no loans to Directors or other KMP of the Company during the year ended 30 June 2024 (2023 $Nil).
29
Remuneration Report (audited)
Annual Report for the financial year ending 30 June 2024
6. Share-based Compensation continued…
30
8. Other Transactions and Balances with KMPs and Their
Related Parties
During the year ended 30 June 2024, nil options were issued to the Directors under the Managing
Director Options Offer (2023: 10,000,000). Additionally, 3,333,333 ordinary shares were issued
to the Directors as a result of a number of Performance Rights vesting (2023: 3,333,332) and nil
ordinary shares were issued upon exercise of options (2023: 10,000,000). Refer to Section 6 of this
Remuneration Report for further information.
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. At 30 June 2024, $25,000 is payable to Connada Pty Ltd (2023: $nil). Transactions between
related parties are on normal commercial terms and conditions no more favourable than those available
to other parties unless otherwise stated.
There were no other purchases from or sales to related parties during the year (2023: $NIL).
9. Key Performance Indicators of the Company
Over the Last 5 Years
Consolidated
30 June
2024
30 June
2023
30-June-22
30-June-21
30-June-20
$
$
$
$
$
Revenue
75,885,416
64,957,156
46,297,406
25,824,506
11,912,589
Net profit / (loss) before tax
11,060,394
7,075,570
4,095,180
1,137,420
2,472,743
Net profit / (loss) after tax
7,960,510
3,872,558
2,856,729
344,819
4,835,295
Share price at start of year
0.132
0.073
0.095
0.05
N/A
Share price at end of year
0.29
0.132
0.073
0.095
0.05
Interim and final dividend
-
-
-
-
-
Basic profit / (loss) per share
0.0195
0.0098
0.0073
0.0009
0.0178
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
22 August 2024
30
Remuneration Report (audited)
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
31
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF VYSARN LIMITED
17
In relation to the independent audit for the year ended 30 June 2024, 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 entities it controlled during the year.
PITCHER PARTNERS BA&A PTY LTD
MICHAEL LIPRINO
Executive Director
Perth, 22 August 2024
31
Auditor’s Independence Declaration
Annual Report for the financial year ending 30 June 2024
"хThe Company’s board
and management will
continue to focus on
delivering long term and
sustainable value for its
shareholders."
32
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Consolidated Statement of
Profit or Loss and
Other Comprehensive Income
For the Year Ended 30 June 2024
Group
Notes
30 June 2024
30 June 2023
$
$
Sales revenue
4
75,885,416
64,957,156
Cost of sales
(48,933,093)
(43,336,348)
Gross Profit
26,952,323
21,620,808
Other income
5
584,517
159,000
Administration and corporate expense
6
(3,919,312)
(2,856,495)
Employee benefits expense
6
(7,294,996)
(6,439,937)
Depreciation and amortisation expense
6
(4,794,454)
(4,875,451)
Finance expense
6
(467,684)
(532,354)
Profit / (loss) before income tax
11,060,394
7,075,570
Income tax benefit / (expense)
7
(3,099,884)
(3,203,012)
Profit / (loss) after income tax expense
7,960,510
3,872,558
Profit / (loss) after income tax expense for the year
attributable to the owners of Vysarn Limited
7,960,510
3,872,558
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
7,960,510
3,872,558
Basic earnings per share for profit/(loss) attributable to
the owners of Vysarn Limited
9
0.0195
0.0098
Diluted earnings per share for profit/(loss) attributable
to the owners of Vysarn Limited
9
0.0189
0.0094
The accompanying Notes form part of these financial statements
33
Annual Report for the financial year ending 30 June 2024
Consolidated Statement of
Financial Position
As at 30 June 2024
Notes
30 June 2024
30 June 2023
$
$
CURRENT ASSETS
Cash and cash equivalents
10
3,731,180
8,309,432
Trade and other receivables
11
16,586,392
10,395,786
Inventories
12
6,317,287
4,281,967
Other current assets
13
738,854
2,175,239
Prepayments and deposits
14
823,478
886,537
TOTAL CURRENT ASSETS
28,197,191
26,048,961
NON-CURRENT ASSETS
Plant and equipment
15
33,583,208
31,346,083
Right of use asset
16
549,182
265,282
Intangible assets
17
3,393,314
2,419,064
TOTAL NON-CURRENT ASSETS
37,525,704
34,030,429
TOTAL ASSETS
65,722,895
60,079,390
CURRENT LIABILITIES
Borrowings
18
1,954,925
4,453,742
Trade and other payables
19
10,013,951
9,212,147
Income tax provision
2,960,109
-
Employee provisions
20
1,349,445
1,196,522
Lease liability
428,691
267,063
Contingent consideration payable
26
250,000
250,000
TOTAL CURRENT LIABILITIES
16,957,121
15,379,474
NON-CURRENT LIABILITIES
Borrowings
18
885,269
5,248,685
Lease liability
153,157
65,309
Employee provisions
20
130,406
61,314
Deferred tax liability
7
6,284,383
6,145,964
Contingent consideration payable
26
254,983
254,983
TOTAL NON-CURRENT LIABILITIES
7,708,198
11,776,255
TOTAL LIABILITIES
24,665,319
27,155,729
NET ASSETS
41,057,576
32,923,665
SHAREHOLDERS’ EQUITY
Issued capital
21
20,024,837
20,029,354
Reserves
22
799,775
623,211
Retained earnings
20,232,964
12,271,100
SHAREHOLDERS’ EQUITY
41,057,576
32,923,665
The accompanying Notes form part of these financial statements
34
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Consolidated Statement of
Changes in Equity
For the Year Ended 30 June 2024
Issued
Capital
Share Based
Payment
Reserve
Retained
Earnings
Total
$
$
$
$
Balance at 1 July 2022
19,495,181
555,667
8,034,542
28,085,390
Profit for the period
-
-
3,872,558
3,872,558
Other comprehensive income
-
-
-
-
Total comprehensive income for the period
-
-
3,872,558
3,872,558
Transactions with owners in their capacity as owners:
Issue of shares
540,000
-
-
540,000
Options lapsed under the Managing
Director options offer
-
(123,000)
123,000
-
Options issued under the Managing
Director options offer
-
89,909
-
89,909
Options exercised under the Chairman
options offer
-
(241,000)
241,000
-
Capital raising costs
(5,827)
-
-
(5,827)
Share based payments
-
341,635
-
341,634
Total transactions with owners
534,173
67,544
364,000
965,717
Balance at 30 June 2023
20,029,354
623,211
12,271,100
32,923,665
Balance at 1 July 2023
20,029,354
623,211
12,271,100
32,923,665
Adjustments
-
-
1,354
1,354
Profit for the period
-
-
7,960,510
7,960,510
Other comprehensive income
-
-
-
-
Total comprehensive income for the period
-
-
7,961,864
7,961,864
Transactions with owners in their capacity as owners:
Capital raising costs
(4,517)
-
-
(4,517)
Share based payments
-
176,564
-
176,564
Total transactions with owners
(4,517)
176,564
-
172,047
Balance at 30 June 2024
20,024,837
799,775
20,232,964
41,057,576
The accompanying Notes form part of these financial statements.
35
Annual Report for the financial year ending 30 June 2024
Consolidated Statement of
Cash Flows
For the Year Ended 30 June 2024
Notes
30 June 2024
30 June 2023
$
$
Cash Flows From Operating Activities
Receipts from customers
76,714,775
67,491,783
Payments to suppliers and employees
(66,117,488)
(57,397,275)
Interest received
83,778
29,587
Interest and other costs of finance paid
(467,684)
(459,161)
Net cash from operating activities
10a
10,213,381
9,664,934
Cash Flows From Investing Activities
Payment for acquisition of Project Engineering,
net of cash acquired
26
-
(2,797,775)
Purchase of plant and equipment
(7,274,703)
(4,115,884)
Proceeds from disposal of property, plant and
equipment
1,127,075
110,831
Net cash used in investing activities
(6,147,628)
(6,802,828)
Cash Flows From Financing Activities
Proceeds from the issue of shares
21
-
540,000
Proceeds from borrowings
1,268,060
6,940,546
Repayment of borrowings
(9,433,948)
(7,420,849)
Payments for principal portion of lease liabilities
(473,600)
(312,991)
Capital raising costs
(4,517)
(5,827)
Net cash used in financing activities
(8,644,005)
(259,121)
Net (decrease) / increase in cash and cash equivalents
(4,578,252)
2,602,985
Cash and cash equivalents at beginning of financial year
8,309,432
5,706,447
Cash and cash equivalents at the end of financial year
10
3,731,180
8,309,432
The accompanying Notes form part of these financial statements.
36
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Notes to the
Consolidated Financial Statements
For the Year Ended 30 June 2024
Note 1: General Information
Vysarn Limited (“Vysarn” or “the Company”)
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 Level 1, 640
Murray St, West Perth WA 6005.
The financial statements are presented in
Australian dollars, which is the functional and
presentation currency of the Company and its
controlled entities (“the Group”).
The financial statements were authorised for
issue, in accordance with a resolution of Directors,
on 22 August 2024. 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.
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 2Z" on page 43.
The Group decided to revise the useful life of its
Pentium Hydro drill rig plant and equipment during
the period, from 10 years to 14 years. The basis of
this change was as a result of a number of internal
factors including:
V The Group has now been operating for over four
years since its initial acquisition of Ausdrill’s
waterwell drilling assets. In these four years,
the Group has established its operations and
now has greater oversight over the condition of
certain assets initially acquired.
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 2023, as required
under Australian Accounting Standards. As a
result of the change in estimate, depreciation for
the drill rig plant and equipment for the twelve-
month period ended 30 June 2024 decreased from
approximately $2,073,220 to $1,450,993. Further
information on the Group’s Plant and Equipment Is
contained within Note 2 and in "Note 15" on page
53 of this report.
37
Annual Report for the financial year ending 30 June 2024
38
C. Going Concern
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 2021-5 Amendments to Australian
Accounting Standards – Deferred Tax related
to Assets and Liabilities arising from a Single
Transaction, AASB 2022-7 Editorial Corrections to
Australian Accounting Standards and Repeal of
Superseded and Redundant Standards and AASB
2021-2 Amendments to Australian Accounting
Standards –Disclosure of Accounting Policies and
Definition of Accounting Estimates
E. Principles of Consolidation
The consolidated financial statements comprise
the financial statements of the Group and its
subsidiaries as at 30 June 2024. 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.
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. 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.
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.
G. 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.
38
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 2: Summary of Significant Accounting Policies continued…
39
H. Property, 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.
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 - 14 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.
I. 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.
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. 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.
J. Intangible Assets
Goodwill
Goodwill represents the future economic
benefits arising from other assets acquired in a
business combination that are not individually
identifiable or separately recognised. Goodwill
is initially recognised at an amount equal to the
excess of: (a) the aggregate of the consideration
transferred, the amount of any non-controlling
interest, and the acquisition date fair value of
the acquirer’s previously held equity interest (in
the case of a step acquisition); over (b) the net
fair value of the identifiable assets acquired and
liabilities assumed. For accounting purposes, such
measurement is treated as the cost of goodwill
at that date. Goodwill is not amortised, but is
tested for impairment annually, or more frequently
if events or changes in circumstances indicate
that it might be impaired. Subsequent to initial
recognition, goodwill is measured at cost less any
accumulated impairment losses.
Capitalised Development Costs
Costs incurred in developing products and
technology are initially recognised as an asset
and are subsequently amortised over their
estimated useful lives commencing from the
time the product is considered commercialised.
The amortisation method applied to an
intangible asset is consistent with the estimated
consumption of economic benefits of the asset.
Subsequent to initial recognition, development
costs are recognised as an intangible asset are
measured at cost, less accumulated amortisation
and any accumulated impairment losses.
39
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 2: Summary of Significant Accounting Policies continued…
40
Note 2: Summary of Significant Accounting Policies continued…
K. Lease Liabilities
Lease liabilities are measured at amortised cost
using the effective interest method. The carrying
amounts are remeasured if there is a change
in the following: future lease payments arising
from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase
option and termination penalties. When a lease
liability is remeasured, an adjustment is made to
the corresponding right-of use asset, or to profit
or loss if the carrying amount of the right-of-use
asset is fully written down.
L. Trade and Other Payables
Liabilities for trade creditors and other amounts
are 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.
N. Borrowings
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
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 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 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).
Dry hire revenue is recognised 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.
For test pumping 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 activity
completed or hours worked).
For consultancy 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 project reports
completed, or hours worked).
For engineering services provided under contract,
revenue is recognised in accordance with a
specified unit of production based on a rate
agreed to with the customer (for example MAR
units delivered or hours worked).
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.
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.
40
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
41
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.
Q. Borrowing Costs
Borrowing costs are recognised in profit or loss in
the period in which they are incurred.
R. Employee Benefits
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.
Superannuation
Contributions to employee superannuation plans
are charged as an expense as the contributions
are paid or become payable.
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.
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.
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.
T. 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
41
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 2: Summary of Significant Accounting Policies continued…
42
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.
U. 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.
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.
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.
V. Financial Instruments
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).
Classification and Subsequent Measurement
Financial liabilities
Financial instruments are subsequently measured
at amortised cost using the effective interest
methods.
Financial assets
Financial assets are subsequently measured at fair
value through profit or loss.
Derecognition
Derecognition refers to the removal of a previously
recognised financial asset or financial liability from
the statement of financial position.
Note 2: Summary of Significant Accounting Policies continued…
42
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
43
Derecognition of Financial Liabilities
A liability is derecognised when it is extinguished
(i.e. when the obligation in the contract is
discharged, cancelled or expires). An exchange of
an existing financial liability for a new one with
substantially modified terms, or a substantial
modification to the terms of a financial liability
is treated as an extinguishment of the existing
liability and recognition of a new financial liability.
The difference between the carrying amount
of the financial liability derecognised and the
consideration paid and payable, including any non-
cash assets transferred or liabilities assumed, is
recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the
holder’s contractual rights to its cash flows
expire, or the asset is transferred in such a way
that all the risks and rewards of ownership are
substantially transferred.
W. 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.
X. 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.
Y. Rounding of Amounts
In accordance with ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191,
the amounts in the directors’ report and in the
financial report have been rounded to the nearest
one thousand dollars, or in certain cases, to the
nearest dollar (where indicated).
Z. 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 2024.
The Group’s assessment of the impact of these
new or amended Accounting Standards and
interpretations, most relevant to the Group, 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.
A liability will be classified as non-current if an
entity has the right at the end of the reporting
period to defer settlement of the liability for
at least 12 months after the reporting period.
Meaning of settlement of a liability is also clarified.
AASB 2020-1 mandatorily applies to annual
reporting periods beginning on or after 1 January
2024 (as amended by AASB 2022-6 and AASB
2020-6) and will first be applied by the Group in
the financial year commencing 1 July 2024.
AASB 2022-6 Amendments to Australian
Accounting Standards – Non-current Liabilities
with Covenants
AASB 2022-6 amends AASB 101 Presentation of
Financial Statements to improve the information
an entity provides in its financial statements
about liabilities arising from loan arrangements
for which the entity’s right to defer settlement
of those liabilities for at least twelve months
after the reporting period is subject to the entity
complying with conditions specified in the
loan arrangement.Practice Statement 2 Making
Materiality Judgements is also amended regarding
assessing whether information about covenants is
material for disclosure. AASB 2022-6 also amends
AASB 2020-1 by deferring the application date by
12 months.
This amending standard mandatorily applies
to annual reporting periods commencing on
or after 1 January 2023 regarding the deferred
application date of AASB 2020-1 and the remaining
amendments to disclosures apply to annual
reporting periods commencing on or after 1
January 2024.
Note 2: Summary of Significant Accounting Policies continued…
43
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
44
This amendment to disclosures will first be
applied by the Group in the financial year
commencing 1 July 2024.
AASB 18 replaces AASB 101 Presentation of
Financial Statements to improve how entities
communicate in their financial statements, with a
focus on information about financial performance
in the profit or loss.
AASB 18 has also introduced changes to other
accounting standards including AASB 108 Basis of
Preparation of Financial Statements (previously
titled Accounting Policies, Changes in Accounting
Estimates and Errors), AASB 7 Financial
Instruments: Disclosures, AASB 107 Statement
of Cash Flows, AASB 133 Earnings Per Share and
AASB 134 Interim Financial Reporting.
They key presentation and disclosure
requirement are:
(a) the presentation of two newly defined
subtotals in the statement or profit or
loss, and the classification of income and
expenses into operating, investing and
financing categories – plus income taxes and
discontinuing operations;
(b) the disclosure of management-defined
performance measures; and
(c) enhanced requirements for grouping
(aggregation and disaggregation) of information.
AASB 18 mandatorily applies to annual reporting
periods commencing on or after 1 January 2027
for for-profit entities excluding superannuation
entities apply AASB 1056 Superannuation Entities.
It will be first applied by the Group in the financial
year commencing 1 July 2027.
AA. 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.
Allowance for Expected Credit Losses
The allowance for expected credit losses
assessment requires a degree of estimation and
judgement. It is based on the lifetime expected
credit loss, grouped based on days overdue, and
makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions
include recent sales experience, historical
collection rates and forward-looking information
that is available. The allowance for expected credit
losses, as disclosed below, is calculated based on
the information available at the time of preparation
as detailed in "Note 24" on page 59. The actual
credit losses in future years may be higher or lower.
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 49.
Note 2: Summary of Significant Accounting Policies continued…
44
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
45
Share-based Payments
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 23" on page 57.
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.
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). For test pumping 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 activity
completed or hours worked). For consultancy
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 project report completed
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.
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.
Business Combination
The Group has determined that the acquisition
of Project Engineering (WA) Pty Ltd constitutes
a business combination in accordance with
the definitions and guidance provided by AASB
3 Business Combinations (“AASB 3”) and has
provisionally accounted for the acquisition in
accordance with that standard at 30 June 2023. In
accordance with AASB 3 the assets and liabilities
acquired have been recorded by the Group at their
acquisition date fair values, resulting in goodwill of
$2,409,334.
Impairment of Goodwill
Goodwill is allocated to a cash generating unit
or units (CGU’s) according to management’s
expectations regarding which assets will be
expected to benefit from the synergies arising
from the business combination that gave rise to
the goodwill. The recoverable amount of a CGU
is based on value in use calculations. For further
information refer to"Note 26" on page 66 .
Impairment of Non-financial Assets Other
Than Goodwill
All assets are assessed for impairment at each
reporting date by evaluating whether indicators
of impairment exist in relation to the continued
use of the asset by the Group. Impairment triggers
include declining product or manufacturing
performance, technology changes, adverse
changes in the economic or political environment
and future product expectations. If an indicator of
impairment exists, the recoverable amount of the
asset is determined. Management has determined
there is no impairment indicators for the year
ended 30 June 2024.
Note 2: Summary of Significant Accounting Policies continued…
45
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 3: Operating Segments
Identification of Reportable Segments
The Group has identified 5 reportable segments as
described below:
V Pentium Hydro: Group subsidiary specialising in
hydrogeological and dewatering drilling
V Project Engineering: Group subsidiary
specialising in managed aquifer recharge and
hydraulic engineering solutions
V Pentium Test Pumping: Group subsidiary
specialising in providing scientific data for
aquifer characterisation
V Pentium Water: Group subsidiary specialising in
water management and environmental planning
consultancy
V Other: Includes both Vysarn and Vysarn Asset
Management
The Group’s reportable segments are based on the
differences in the products and services offered
by each segment and 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. Vysarn and Vysarn Asset Management
have been aggregated in to one segment due
to the non-material products and services and
therefore, external revenues currently provided by
these entities.
Revenue received from the reportable segments
are received solely from external Australian
customers. The major results of the Group’s
reportable segments are consistent with the
presentation of these consolidated financial
statements.
Reportable Segments
30 June 2024
30 June 2023
$
$
1. Segmented External Revenues
Pentium Hydro
55,620,392
50,982,210
Project Engineering
11,807,293
7,149,711
Pentium Test Pumping
3,635,896
2,759,291
Pentium Water
4,771,061
4,065,944
Other 1
50,774
-
Total
75,885,416
64,957,156
2. Segmented Net Profit Before Tax
Pentium Hydro
9,120,036
7,330,593
Project Engineering
4,081,670
1,572,778
Pentium Test Pumping
524,908
430,122
Pentium Water
956,737
642,516
Other 2
(3,622,958)
(2,900,439)
Total
11,060,393
7,075,570
3. Segmented Depreciation and Amortisation
Pentium Hydro
3,965,542
4,334,243
Project Engineering
7,556
14,709
Pentium Test Pumping
573,787
396,630
Pentium Water
81,205
121,737
Other 2
166,364
8,133
Total
4,794,454
4,875,451
1 Other revenue comprises of Vysarn’s Joint Venture.
2 Inclusive of Vysarn Limited’s and Vysarn Asset Management’s corporate overhead.
46
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
30 June 2024
30 June 2023
$
$
4. Segmented Assets
Pentium Hydro
42,545,391
47,480,967
Project Engineering
10,302,418
5,057,288
Pentium Test Pumping
1,963,646
5,321,623
Pentium Water
2,250,001
1,517,579
Other
8,661,439
701,936
Total
65,722,895
60,079,393
5. Segmented Liabilities
Pentium Hydro
18,909,598
19,002,728
Project Engineering
2,776,498
3,643,460
Pentium Test Pumping
667,961
1,221,779
Pentium Water
736,823
747,082
Other
1,574,439
2,540,679
Total
24,665,319
27,155,728
Note 4: Revenue From Contracts with Customers
30 June 2024
30 June 2023
$
$
Revenue recognised over a period of time from contracts with Australian customers:
- Drilling services
44,406,986
38,487,910
- Engineering services
11,766,161
7,149,711
- Dry-hire revenue
1,001,100
1,682,335
- Test Pumping services
3,621,421
2,705,170
- Consultancy services
4,498,190
4,077,439
- Joint Venture income
88,248
-
Sub-total
65,382,106
54,102,565
Revenue recognised at a point in time from contracts with Australian customers
-Sale of goods (consumables)
10,311,285
10,697,240
-Mobilisation / demobilisation
192,025
157,351
Sub-total
10,503,310
10,854,591
Total revenue
75,885,416
64,957,156
47
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 3: Operating Segments continued…
Note 5: Other Income
30 June 2024
30 June 2023
$
$
Interest income
83,778
29,587
Fuel tax rebate
13,889
11,335
Other revenue
32,005
99,735
Net gain on disposal of assets
454,845
18,343
Total
584,517
159,000
Note 6: Expenses
Breakdown of expenses by nature:
30 June 2024
30 June 2023
$
$
Administration and corporate expense
- Office expenses
1,676,695
869,080
- Corporate costs and compliance
2,167,268
1,938,110
- Other expenses
75,349
49,305
Total
3,919,312
2,856,495
Employee benefits expense
- Wages and salaries
5,127,476
4,525,756
- Superannuation
488,358
304,680
- Employment related taxes
1,401,720
1,139,588
- Share-based payment expense
176,564
431,544
- Other employment related expenses
100,878
38,369
Total
7,294,996
6,439,937
Depreciation and amortisation expense
- Plant and equipment depreciation
4,365,349
4,563,098
- Land and buildings lease amortisation
429,105
312,353
Total
4,794,454
4,875,452
Finance costs
- Interest - borrowings
285,289
443,174
- Interest - leases
33,427
15,987
- Bank fees
148,968
73,193
Total
467,684
532,354
48
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 7: Income Tax Expense
30 June 2024
30 June 2023
$
$
A. Components of Income Tax Expense
Current tax
2,960,110
-
Deferred tax
431,523
2,223,380
Under / (over) provision in prior years
(291,749)
391,042
Revaluation of deferred tax position due to change in tax rate
-
588,590
Income tax expense / (benefit)
3,099,884
3,203,012
B. Prima Facie Tax Payable
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
30% (2023: 30%)
3,318,118
2,122,671
Add/(less) tax effect of:
Entertainment
20,546
14,893
Plant and equipment
-
400,360
Share based payments
52,969
102,490
Transferred losses
-
(30,826)
Other non-deductible expenses
-
14,151
Under provision in prior period
(291,749)
(9,317)
Revaluation of deferred tax position due to change in tax rate
-
588,590
Income tax expense / (benefit) attributable to profit
3,099,884
3,203,012
C. Current Tax Liability
Current tax relates to the following:
Current tax liabilities / (assets)
Opening balance
-
-
Income tax
2,960,110
-
Instalments paid
-
-
2,960,110
-
D. Deferred Tax
Deferred tax relates to the following:
Deferred tax assets balance comprises:
Plant and equipment under lease
9,800
20,128
Accruals
361,242
312,001
Provisions - annual and long service leave
250,868
196,550
Borrowing costs
-
219
Capital raising costs
3,735
33,680
Business related costs
-
259
Tax losses
-
1,228,199
625,645
1,791,036
Deferred tax liabilities balance comprises:
Prepayments
(63,449)
(47,709)
Accrued income
(1,357,414)
(1,249,514)
Plant and equipment
(5,489,165)
(6,639,777)
(6,910,028)
(7,937,000)
Net deferred tax
(6,284,383)
(6,145,964)
49
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
30 June 2024
30 June 2023
$
$
E. Deferred income tax related to items charged or credited directly to equity
Decrease / (increase) in deferred tax assets
1,355
1,748
(Decrease) / increase in deferred tax liabilities
-
-
Under / (over) provision in prior period
-
-
1,355
1,748
F. Deferred income tax (revenue)/expense included in income tax
expense comprises:
Decrease / (increase) in deferred tax assets
1,120,750
2,982,013
(Decrease) / increase in deferred tax liabilities
(689,227)
(758,633)
Change in tax rate and under/(over) provision
(291,749)
979,632
139,774
3,203,012
At 30 June 2024, the Company’s carried forward revenue tax losses have been fully utilised
(2023: $4,093,998).
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 2024
30 June 2023
$
$
Remuneration of the auditor of the Company (Pitcher Partners BA&A Pty Ltd and its related entities) for:
- Auditing or reviewing the financial reports
73,506
56,626
- Non-audit services – tax compliance
26,250
26,050
Total
99,756
82,676
Note 9: Earnings Per Share
30 June 2024
30 June 2023
$
$
Earnings per share for profit / (loss)
Profit / (loss) after income tax attributes to the owners of
Vysarn Limited
7,960,510
3,872,558
Number
Number
Weighted average number of ordinary shares used in calculating
basic earnings per share
407,957,684
396,010,657
Adjustments for the effects of dilutive potential ordinary shares:
Effect of shares issued on exercise of performance rights
3,333,335
6,666,668
Effect of shares issued on exercise of options
10,000,000
10,000,000
Weighted average number of ordinary shares used in calculating
diluted earnings per share
421,291,019
412,677,325
Basic earnings / (loss) per share
0.0195
0.0098
Diluted earnings / (loss) per share
0.0189
0.0094
50
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 7: Income Tax Expense continued…
A. Accounting Policy for Earnings Per Share
Basic 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
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account the after-income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary shares.
Note 10: Cash and Cash Equivalents
30 June 2024
30 June 2023
$
$
Cash at bank
3,731,180
8,309,432
Total
3,731,180
8,309,432
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.
A. Cash Flow Information
30 June 2024
30 June 2023
$
$
Profit / (loss) after income tax expense for the year
7,960,510
3,872,558
Non-cash flows in result from continuing activities:
Share based payments expense / (benefit)
176,564
431,544
Depreciation and amortisation
4,794,454
4,875,451
(Profit)/ loss on disposal of PPE
(454,845)
(18,343)
Tax expense / (benefit)
3,099,884
3,203,012
Changes in assets and liabilities:
(Increase) / decrease in inventories
(2,035,320)
(1,274,117)
(Increase) / decrease in trade and other receivables
(6,190,606)
(4,409,283)
Increase / (decrease) in employee entitlements
222,015
478,957
Increase / (decrease) in trade and other payables
2,066,611
3,040,102
Increase / (decrease) in other assets and liabilities
1,883,922
(534,946)
Net cash provided by operating activities
10,213,381
9,664,935
51
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 9: Earnings Per Share continued…
Reconciliation of Liabilities Arising From Financing Activities
Liabilities arising from financing activities are liabilities for which cash flows are, or will be, classified as
‘cash flows from financing activities’ in the statement of cash flows. Changes in the carrying amounts
of such liabilities, which comprise banks loans, deferred consideration for the acquisition of assets and
lease liabilities, are summarised below:
Bank loans
Contingent
consideration
Lease liabilities
$
$
$
Carrying amount at 1 July 2022
9,904,920
750,000
614,534
Net cash flows during the year
(480,303)
(245,017)
(312,991)
Non-cash changes
277,810
-
30,829
Carrying amount at 30 June 2023
9,702,427
504,983
332,372
Net cash flows during the year
(8,165,888)
-
(473,600)
Non-cash changes
1,303,655
-
723,076
Carrying amount at 30 June 2024
2,840,194
504,983
581,848
Note 11: Trade and Other Receivables
30 June 2024
30 June 2023
$
$
Trade receivables
16,586,392
10,395,786
Total
16,586,392
10,395,786
For further information regarding trade and other receivables see "Note 24" on page 59.
Impairment and Risk Exposure
No impairment provision was recorded at 30 June 2024 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 "Note 24" on page 59.
Note 12: Inventories
30 June 2024
30 June 2023
$
$
Consumables and spare parts – at cost
6,317,287
4,281,967
Total
6,317,287
4,281,967
Note 13: Other Current Assets
30 June 2024
30 June 2023
$
$
Contract fulfilment costs
635,199
591,254
Contract Assets
46,156
1,523,280
Other current assets
57,499
60,705
Total
738,854
2,175,239
Note 14: Prepayments and Deposits
30 June 2024
30 June 2023
$
$
Prepayments
823,478
886,537
Total
823,478
886,537
52
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 10: Cash and Cash Equivalents continued…
Note 15: Plant and Equipment
30 June 2024
30 June 2023
$
$
Plant and Equipment
Cost
32,718,202
30,105,854
Accumulated depreciation
(12,757,532)
(10,079,196)
Net carrying amount
19,960,670
20,026,658
Trucks, Trailers and Light Vehicles
Cost
16,488,410
13,538,268
Accumulated depreciation
(6,147,337)
(4,610,282)
Net carrying amount
10,341,073
8,927,986
Office Equipment
Cost
601,383
393,628
Accumulated depreciation
(369,297)
(224,600)
Net carrying amount
232,086
169,028
Leasehold Improvements
Cost
21,214
16,158
Accumulated depreciation
(17,211)
(11,950)
Net carrying amount
4,003
4,208
Assets Held Not Ready for Use
Cost
3,045,376
2,218,204
Net carrying amount
3,045,376
2,218,204
Total Plant and Equipment
Cost
52,874,585
46,272,113
Accumulated depreciation
(19,291,377)
(14,926,029)
Net carrying amount
33,583,208
31,346,084
Consolidated Group
Plant and
equipment
Trucks,
trailers and
light vehicles
Office
Equipment
Leasehold
Improvements
Assets Held
Not Ready
for Use
Total
$
$
$
$
$
$
Carrying amount at 30 June 2022
21,365,172
10,180,651
155,584
-
-
31,701,407
Additions
1,791,947
164,739
111,998
16,158
2,218,204
4,303,046
Disposals
(61,169)
(35,015)
(305)
-
-
(96,489)
Depreciation expense
(3,069,292)
(1,382,389)
(98,250)
(11,950)
-
(4,561,881)
Balance as at 30 June 2023
20,026,658
8,927,986
169,027
4,208
2,218,204
31,346,083
Carrying amount at 30 June 2023
20,026,658
8,927,986
169,027
4,208
2,218,204
31,346,083
Additions
3,264,328
2,957,207
220,940
5,056
827,172
7,274,703
Disposals
(651,980)
(7,065)
(13,184)
-
-
(672,229)
Depreciation expense
(2,678,336)
(1,537,055)
(144,697)
(5,261)
-
(4,365,349)
Balance at 30 June 2024
19,960,670
10,341,073
232,086
4,003
3,045,376
33,583,208
(i) Several items of plant and equipment were sold during the period resulting in a gain on disposal of assets of
$454,845.
(ii) Assets Held Not Ready for Use represent several assets of plant and equipment that are currently in the process of
being upgraded or built and are not yet ready for use.
53
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
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 10 years
to 14 years.
The change in useful life affected a number of individual assets within the Plant and equipment asset class.
The change in accounting estimate has been accounted for prospectively, with effect from 1 July 2023,
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 37.
Note 16: Right-of-use Assets
30 June 2024
30 June 2023
$
$
Leasehold Premises
NON-CURRENT
Land and buildings - right-of-use
1,042,241
1,116,125
Less: accumulated amortisation
(493,059)
(850,843)
Total
549,182
265,282
During the year, the Group renewed its lease for workshop and warehouse facilities located in Wangara.
The Group does not have an option to purchase any properties at the end of the lease term.
Interest expense is recognised within finance costs. Refer to "Note 6: Expenses" on page 48.
Note 17: Intangible Assets
Notes
30 June 2024
30 June 2023
$
$
Patents
8,514
9,730
Goodwill
26
2,409,334
2,409,334
Other intangible assets 1
975,466
-
Total
3,393,314
2,419,064
1 Other intangible assets primarily relate to the Company’s joint resource agreement as announced to the ASX on
13 May 2024. Costs capitalised represent intellectual property of the Group associated with assessing, managing,
controlling and extracting sustainable quantities of water from identified and secured resources on Kariyarra country.
54
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 15: Plant and Equipment continued…
Note 18: Borrowings
30 June 2024
30 June 2023
$
$
CURRENT
Insurance premium funding (a) – at amortised cost
-
95,825
Asset finance facilities (a) – at amortised cost
1,954,925
4,165,446
Current maturities of long-term bank loan (b) – at amortised cost
-
192,471
Sub-total
1,954,925
4,453,742
NON-CURRENT
Asset finance facilities (a) – at amortised cost
885,269
5,248,685
Sub-total
885,269
5,248,685
Total
2,840,194
9,702,427
A. Asset Finance Facilities
The asset finance facilities bear fixed interest at fixed prevailing market rates (ranging from 2.73%
to 6.5%) and are primarily repayable over 2 to 4 years. The asset finance facilities are secured via a
registered GSA over plant and equipment which were purchased under the relevant agreements.
The Group has also provided a general security agreement to the bank in respect of the Group’s existing
and future assets.
Note 19: Trade and Other Payables
30 June 2024
30 June 2023
$
$
Trade payables
7,725,073
7,147,477
GST liability
726,387
406,065
Accruals
806,070
967,867
Deferred revenue
162,539
12,555
Other payables
593,882
678,183
Total
10,013,951
9,212,147
Note 20: Employee Provisions
30 June 2024
30 June 2023
$
$
CURRENT
Provision for annual leave
705,818
559,538
Provision for long service leave
-
34,314
Superannuation liability
643,627
602,670
Sub-total
1,349,445
1,196,522
NON-CURRENT
Provision for long service leave
130,406
61,314
Sub-total
130,406
61,314
Total
1,479,851
1,257,836
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in "Note 24" on
page 59.
55
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 21: Share Capital
30 June 2024
30 June 2023
$
$
A. Share Capital
408,622,529 (30 June 2023: 405,289,196) fully paid ordinary shares
20,024,837
20,029,354
Ordinary Shares
During the 12-month period ended 30 June 2024, the Group issued 3,333,333 ordinary shares (30 June
2023: 13,333,332). All issued shares are fully paid.
The issue of 3,333,333 shares related to the vesting of tranche 2 of the Directors’ performance rights and
were issued for $NIL consideration.
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.
B. Movement in Ordinary Capital
Ordinary Shares
30 June 2024
30 June 2023
No.
$
No.
$
At the beginning of the
reporting period
405,289,196
20,029,354
391,955,864
19,495,181
12-Sep-23
Performance rights vested
during the period
3,333,333
-
3,333,332
-
Options exercised during
the period
-
-
10,000,000
540,000
Transaction costs
-
(4,517)
-
(5,827)
Total
408,622,529
20,024,837
405,289,196
20,029,354
Note 22: Reserves
30 June 2024
30 June 2023
$
$
A. Share Based Payment Reserve
10,000,000 options (30 June 2023: 10,000,000) and 3,333,334
performance rights (30 June 2023: 6,666,668) on issue
799,775
623,211
B. Movement in Share Based Payment Reserve
Share Based Payment Reserve
At the beginning of the period
623,211
555,667
Options lapsed under the Managing Director Options Offer
-
(123,000)
Transfer to retained earnings
-
(241,000)
Share based payments
176,564
431,544
Total
799,775
623,211
Refer to "Note 23" on page 57 which outlines the movement in the current period’s share-based
payment expense.
56
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 23: Share Based Payments
During the year ended 30 June 2024 the Company recorded the following share-based payments:
A. Share Issue
3,333,333 performance rights were converted to fully paid ordinary shares and issued to Executive
Directors as part of the Performance Rights Incentive. These performance rights had been expensed in
full as at 30 June 2024. No further shares were issued during the year ended 30 June 2024.
Options
No options were issued during the year ended 30 June 2024 (30 June 2023: 10,000,000).
Options
30-Jun-24
30-Jun-24
30-Jun-23
30-Jun-23
No.
(Cumulative
in $)
No.
(Cumulative
in $)
At the beginning of the reporting period
10,000,000
89,909
20,000,000
364,000
Managing Director options lapsed
during the period - transferred to
retained earnings
-
-
(10,000,000)
(264,000)
Chairman options exercised during
the period - transferred to retained
earnings
-
-
(10,000,000)
(123,000)
Options issued during the period under
the Managing Directors Options Offer 1
-
-
10,000,000
89,909
Total
10,000,000
89,909
10,000,000
89,909
1 On 24 November 2022, the Company issued 10,000,000 Incentive Options to Mr. James Clement, with an exercise price
of $0.075 and an expiry date of 5 July 2024.
2 The value of the 10,000,000 Incentive Options will be recognised over the remaining option term to their expiry on 5
July 2024 as a result of their service condition for vesting.
3 The weight average contractual life of options on issue is less than 1 year (2023: 1 year). The weighted average
exercise price of options on issue is $0.085 per option (2023: $0.085 per option).
The fair value of the options issued has been determined using a Black-Scholes option pricing model with
the following inputs:
B. Managing Director Options
Options
Number of options
10,000,000
Grant date
24-Nov-2022
Share price at grant date
$0.085
Issue date
14-Dec-2022
Exercise price
$0.075
Expected volatility
37.33%1
Implied option life
1.61 years
Expected dividend yield
-
Risk free rate
3.16%
Valuation per option $
$0.02247
Total valuation
$224,774
1 The volatility rate has been determined with reference to the entity’s historical volatility for a comparable period,
factoring in adjustments as a result of the COVID 19 Pandemic as well as the diversification of the Group’s business
into a vertically integrated water service and waterwell drilling provider.
An amount of $134,864 was recognised as an expense in the Statement of profit or loss and other
comprehensive income during the period (2023: $89,909), noting the total expense calculated as the
value of the 10,000,000 Incentive Options has been recognised over the remaining option term to 5 July
2024 as a result of their service condition.
57
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
C. Performance Rights
During the year ended 30 June 2024, the Company did not issue any performance rights as performance
incentives to key management personnel.
Performance rights
30 June 2024
30 June 2024
30 June 2023
30 June 2023
No.
(Cumulative
in $)
No.
(Cumulative
in $)
At the beginning of the reporting period
6,666,668
533,302
10,000,000
191,667
Performance rights issued during the
period
-
-
-
-
Performance Rights exercised as
performance incentives to Executive
Directors
(3,333,333)
-
(3,333,332)
-
Expense recognised in the period for
existing performance rights – over their
vesting period
-
-
-
341,635
Total
3,333,335
533,302
6,666,668
533,302
As at 30 June 2024, 3,333,335 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
3
3,333,335
1 July 2024
• Cumulative EPS condition
Where the:
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 2021, subject to
a minimum EPS of $0.01 for the financial year ending 30 June 2021. 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).
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
2024
No.
No.
No.
No.
No.
No.
Peter Hutchinson
-
-
-
-
-
-
James Clement
3,333,334
-
1,666,666
-
1,666,668
1,666,666
Sheldon Burt
3,333,334
-
1,666,667
-
1,666,667
1,666,667
Total
6,666,668
-
3,333,333
-
3,333,335
3,333,333
During the year ended 30 June 2024, 3,333,333 performance rights vested and were exercised upon their
vesting for $Nil consideration, resulting in the issue of 3,333,333 fully paid ordinary shares.
58
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 23: Share Based Payments continued…
At 30 June 2024, the unissued ordinary shares of the Company under performance rights are as follows:
Class
Number Under
Performance
Rights
Value at Grant
Date
Date of Vesting
Management
Probability
Assessment
30 June 2023
Fair Value
($)
C
3,333,335
191,667
1-Jul-24
100%
191,667
Total
3,333,335
191,667
-
-
191,667
The executive performance rights were valued based on the Company’s share price as at the date of
their approval for issue. A total valuation of $191,667 has been determined for the remaining tranches,
assuming satisfaction of performance conditions in full and 100% vesting rate.
The conditions for Tranche 2 of the performance rights were successfully met during the period and
subsequently vested on 1 July 2023. 100% of these performance rights have been expensed in full as at
30 June 2024. In respect of tranche 3 of the performance rights, it was determined that the achievement
of the vesting conditions are more likely then unlikely at this time noting the Company’s operational
steady state earnings and forecast growth rate. As a result, tranche 3 has been assessed with a 100%
probability likelihood.
$41,700 in share-based payments was recorded as an expense in the statement of profit or loss and
other comprehensive income during the year ended 30 June 2024 (30 June 2023: $341,635) in relation to
the performance rights.
D. Share Based Payments Expense
Share based payment expense is comprised as follows:
30 June 2024
30 June 2023
$
$
Options
134,864
89,909
Performance rights
41,700
341,635
Total share-based payments expense
176,564
431,544
Note 24: 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.
59
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 23: Share Based Payments continued…
With respect to specific financial assets and
liabilities, the following valuation methods have
been used:
V Contingent consideration payable is carried
at fair value and has been determined by
discounting the cash flows, at market rates of
similar borrowings, to their present value. The
probability weighted pay-out method has been
utilised by Management to determine the best
estimate of expected cashflows arising as a
result of the arrangement.
All financial assets and liabilities carried at fair
value are level 2 within the fair value hierarchy.
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 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 and interest
rates 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. As at 30
June 2024, 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).
During the financial year ended 30 June 2024,
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 Company’s only exposure to interest rate risk
is in relation to deposits held. Deposits are held
with reputable banking financial institutions.
Profile
At the reporting date the interest rate profile of
the Group’s variable interest-bearing financial
instruments was:
60
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 24: Financial Instruments & Fair Value Measurement continued
G. Variable Rate Instruments
Carrying Amount
30 June 2024
30 June 2023
$
$
Financial assets
Cash at bank
3,731,180
8,309,432
Financial liabilities
Borrowings
(100)
(2,570,214)
Total
3,731,080
(2,570,214)
The table below illustrates the impact on profit before tax based upon expected volatility of interest
rates using market date and analysis forecasts.
30 June 2024
30 June 2023
$
$
+/- 50 basis points
Impact on profit after tax
3,731,080
2,570,214
Impact on equity
3,731,080
2,570,214
H. Operational Risk
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.
61
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 24: Financial Instruments & Fair Value Measurement continued
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 at least “A-“. 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.
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.
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.
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.
The Group’s debt-to-adjusted capital ratio at the end of the reporting period was as follows:
30 June 2024
30 June 2023
$
$
Total liabilities
24,665,319
27,155,729
Less: cash and cash equivalents
(3,731,180)
(8,309,432)
Net debt
20,934,139
18,846,297
Total capital
41,057,576
32,923,664
Debt-to-capital ratio at the end of the period
0.51
0.57
62
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 24: Financial Instruments & Fair Value Measurement continued
On that basis, the loss allowance as at 30 June 2024 and 1 July 2023 was determined as follows for
trade receivables:
Current
< 30
31 - 60
61 - 120
> 120
Total
$
1-July-23
Expected loss rate
0%
0%
0%
0%
3%
Gross carrying amount -
trade receivables
10,395,786
10,186,915
208,871
-
-
10,395,786
Loss allowance
-
-
-
-
-
-
30 June 2024
Expected loss rate
0%
0%
0%
0%
1%
Gross carrying amount -
trade receivables
16,555,553
16,551,634
3,919
30,839
-
16,586,392
Loss allowance
-
-
-
-
-
-
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
2024 arising from contracts with customers. The
Group’s receivables primarily 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.
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:
30 June
2024
30 June
2023
$
$
Cash and cash
equivalents - AA Rated
3,731,180
8,309,432
Trade receivables
16,586,392
10,395,786
Total
20,317,572
18,705,218
63
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 24: Financial Instruments & Fair Value Measurement continued
K. Liquidity Risk
Liquidity risks arises from the possibility that the
Company might encounter difficulty in settling
its debts or otherwise meeting its obligation
related to financial liabilities. Vigilant liquidity risk
management requires the Company to maintain
sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when
they become due and payable.
The Company manages liquidity risk by maintaining
adequate cash reserves and continuously
monitoring actual and forecast cash flows.
Remaining Contractual Maturities
The following tables detail the Company’s
remaining contractual maturity for its financial
instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows
of financial liabilities based on the earliest date
on which the financial liabilities are required to
be paid. The tables include both interest and
principal cash flows disclosed as remaining
contractual maturities and therefore these totals
may differ from their carrying amount in the
statement of financial position.
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
Remaining
contractual
cash flows
$
$
$
$
$
30 June 2024
Non-derivatives
Interest bearing
Borrowings
2,058,858
904,260
-
-
2,963,118
Lease liability
448,883
155,078
-
-
603,961
Non-interest bearing
Trade and other payables
10,013,951
-
-
-
10,013,951
Contingent consideration
250,000
254,983
-
-
504,983
Total non-derivatives
12,771,692
1,314,231
-
-
14,086,013
30 June 2023
Non-derivatives
Interest bearing
Borrowings
4,730,547
2,861,834
1,908,105
-
9,500,486
Lease liability
254,828
72,405
-
-
327,233
Trade payables
Non-interest bearing
Trade and other payables
9,212,147
-
-
-
9,212,147
Contingent consideration
250,000
254,983
-
-
504,983
Total non-derivatives
14,447,522
3,189,222
1,908,105
-
19,544,849
64
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 24: Financial Instruments & Fair Value Measurement continued
Note 25: Related Party Transactions
During the year ended 30 June 2024, no further options were issued to the Directors. Additionally, 3,333,333
ordinary shares were issued to the Directors as a result of a number of Performance Rights vesting.
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
Short-term
Salary, Fees &
Commissions
STI cash
bonus
Non-
monetary
benefits
Other
employee
benefits
Post-
employment
Superannuation
Share-
based
payments
Total
$
$
$
$
$
$
$
2024
Chairman
Peter Hutchinson
108,108
-
-
-
11,892
-
120,000
Executive Directors
James Clement 1, 2
422,601
125,000
33,360
-
27,399
157,933
766,293
Sheldon Burt 2, 3
215,884
110,000
-
-
2,283
18,631
346,798
Total
746,594
235,000
33,360
-
41,574
176,564
1,233,091
1 The amount of $33,360 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 "Note 22" on page 56 for further information pertaining to share-based payment expenses recognised for
key management personnel.
3 As at 31st July 2023 Mr Burt resigned as an employee of Vysarn Limited. From 1 August 2024, Mr Burt’s Executive
Director fees were paid to Connada Pty Ltd, an entity controlled by Mr Burt.
B. Subsidiaries
All inter-company loans 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.
65
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 26: Business Combinations
No business combinations were acquired for the year ended 30 June 2024.
A. Acquisition of Project Engineering
On 1 July 2022 the Company entered into a binding
Share Sale Agreement for the acquisition of 100%
of the issued capital of Project Engineering. Under
the terms of the acquisition, the Company acquired
100% of the issued shares in Project Engineering for
consideration of $4,280,805 cash, adjusted for post
working capital adjustments (“Transaction”).
The Company assumed control of the trading
activities of Project Engineering with effect from
1 July 2022.
The Company paid $2,797,775 net of cash to the
vendors of Project Engineering as consideration for
all of the issued capital of Project Engineering.
Goodwill
The goodwill on acquisition comprises the
operational expertise and industry know-how
relating to the Project Engineering
business, as a specialised and industry focused
hydraulic engineering business that primarily
services the resources sector in
Western Australia. Further, cash-generating unit
is identified on a segment level making goodwill
allocated to Project Engineering.
The recoverable amount of a CGU is based on
value in use calculations. These calculations
are based on projected cash flows approved
by management covering a period of 1 year
(extrapolated to a maximum of 10 years).
Management’s determination of cash flow
projections and gross margins are based on past
performance and its expectation for the future.
The present value of future cash flows has been
calculated using an average growth rate of 3%
(2023: 3%) for cash flows in year two to five which
is based on the historical average, a terminal value
growth rate of 3% (2023: 3%) and a mid-range
discount rate of 13.6% (2023: 13%) to determine
value-in-use.
Goodwill is not deductible for tax purposes.
The recoverable amount of a CGU is based on
value in use calculations. These calculations are
based on projected cash
flows approved by management covering a period
of 1 year (extrapolated to a maximum of five
years). Management’s determination of cash flow
projections and gross margins are based on past
performance and its expectation for the future.
The present value of future cash flows has been
calculated using an average growth rate of 3% for
cash flows in year two to five which is based on
the historical average, a terminal value growth rate
of 3% and a discount rate of 13.6% to determine
value-in-use.
B. Acquisition of PTP
Contingent Consideration Payable
On 29 September 2021, the Company entered into
a binding Share Sale Agreement for the acquisition
of 100% of the issued capital of PTP. In accordance
with the Share Sale Agreement, the previous
Managing Director and majority shareholder
(the “Executive”) of PTP agreed to enter into an
executive employment agreement for a term
of three years, to lead and grow the business
under Vysarn’s ownership. Under the terms of his
agreement, the Executive may be entitled to an
Annual Incentive Payment (“AIP”) of up to $750,000
across the three year term, subject to achievement
of the following “minimum benchmarks” by the end
of each relevant financial year:
V Year one – A minimum benchmark of $650,000
in Earnings Before Interest Taxes Depreciation
and Amortisation (“EBITDA”) operating one test
pumping rig;
V Year two – A minimum benchmark of $1,200,000
in EBITDA operating two test pumping rigs; and
V Year three – A minimum benchmark of
$1,350,000 in EBITDA operating two test
pumping rigs.
In the event that the actual EBITDA earnings
achieved in any financial year exceeds the
minimum benchmarks, the Executive may retain
the excess EBITDA in that year, up to a maximum
of $250,000, for payment in future years over
the three year term. At the date of acquisition,
Management have assessed the value of the
contingent consideration based on the likelihood
that the above minimum benchmarks would be
achieved and recognised the amount payable in
full at the date of acquisition.
As at 30 June 2024, the contingent consideration
remains recognised in full as payable given
Management’s expectations that the minimum
benchmarks for payment of the AIP may be met
over the three year period. No amount was paid to
the Executive during the year ended 30 June 2024
(2023: $245,017).
66
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Note 27: Parent Entity Disclosures
A. Financial Position
30 June 2024
30 June 2024
$
$
Assets
Current assets
7,685,373
17,705,705
Non-current assets
3,288,501
(2,334,444)
Total Assets
10,973,874
15,371,261
Liabilities
Current liabilities
689,904
890,161
Non-current liabilities
847,089
1,650,518
Total Liabilities
1,536,993
2,540,679
Net Assets
9,436,881
12,830,582
Equity
Share capital
20,024,837
20,029,354
Reserves
799,775
623,211
Retained losses
(11,387,731)
(7,821,983)
Total Equity
9,436,881
12,830,582
B. Financial Performance
30 June 2024
30 June 2023
$
$
Loss for the year
(3,565,749)
(2,900,439)
Other comprehensive income
-
-
Total comprehensive (loss) / income
(3,565,749)
(2,900,439)
C. Guarantees Provided in Relation to Subsidiaries
The Company provides a parent-company guarantee in respect to finance facilities established by the
Company’s operating entities.
67
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 28: Controlled Entities
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 Entities
Country of Incorporation
Percentage Owned
30-Jun-24
30-Jun-23
Pentium Hydro Pty Ltd
Australia
100%
100%
Pentium Test Pumping Pty Ltd
Australia
100%
100%
Pentium Water Pty Ltd
Australia
100%
100%
Project Engineering (WA) Pty Ltd
Australia
100%
100%
Vysarn Asset Management Pty Ltd
Australia
100%
Nil
Note 29: 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 2024.
Note 30: Events Subsequent to the Reporting Date
The Company released the following material ASX announcement post 30 June 2024:
V Appointment of Chief Operating Officer; and
V Subsequent to year end, on 2 July 2024 Mr James Clement exercised his Managing Director Options.
As approved at the most recent Annual General Meeting, the Company provided Mr Clement an
interest free loan of $750,000 (“Loan Funded Shares”) for the purpose of funding the exercise of the
Managing Director Options.
Mr Clement must repay the Loan Balance to the company within 10 business days of the earlier of:
V three (3) years after the date on which Mr Clement (and/or his nominee(s)) is issued the Loan Funded
Shares on exercise of the Managing Director Options (Maturity Date);
V the date on which Mr Clement ceases to be employed or engaged by the Group; or
V where the Board has determined (in its absolute discretion) that Mr Clement engaged in serious
misconduct; or
V the date on which the last Loan Funded Shares held by Mr Clement are sold.
There is no other matter or circumstance that has arisen since 30 June 2024 that has significantly
affected, or may significantly affect the Group’s operations, the results of those operations or the
Company’s state of affairs in future financial years.
Vysarn Limited is required by Australian Accounting Standards to prepare consolidated financial
statements in relation to the company and its controlled entities (the “Group”).
In accordance with subsection 295(3A) of the Corporations Act 2001, this consolidated entity disclosure
statement provides information about each entity that was part of the Group at the end of the financial year.
68
Notes to the Consolidated Financial Statements
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Name of entity
Type of
entity
Place
formed or
incorporated
Percentage of
share capital
held
(if applicable)
Australian
tax resident
or foreign tax
resident
Foreign tax
jurisdiction
(if applicable)
Vysarn Limited
Body
corporate
Australia
N/A
Australian
N/A
Pentium Hydro Pty Ltd
Body
corporate
Australia
100%
Australian
N/A
Pentium Test Pumping Pty Ltd
Body
corporate
Australia
100%
Australian
N/A
Pentium Water Pty Ltd
Body
corporate
Australia
100%
Australian
N/A
Project Engineering (WA) Pty Ltd
Body
corporate
Australia
100%
Australian
N/A
Vysarn Asset Management Pty Ltd
Body
corporate
Australia
100%
Australian
N/A
At the end of the financial year, no entity within the consolidated entity was a trustee of a trust within
the consolidated entity, a partner in a partnership within the consolidated entity, or a participant in a
joint venture within the consolidated entity.
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 2024 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. The consolidated entity disclosure statement required by subsection 295(3A) of the Corporations Act
2001 is true and correct.
3. There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
4. 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 2024.
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:
Signed in accordance with a resolution of the Board of Directors.
James Clement
Managing Director and Chief Executive Officer
22 August 2024
69
Notes to the Consolidated Financial Statements
Annual Report for the financial year ending 30 June 2024
Note 30: Events Subsequent to the Reporting Date continued…
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 22 August 2024
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 2024 and of
its performance for the financial year ended on that date; and
(a) Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations), International Financial Reporting Standards and the Corporations
Regulations 2001.
2. The consolidated entity disclosure statement required by subsection 295(3A) of the
Corporations Act 2001 is true and correct.
3. There are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
4. 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 2024.
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Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
71
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
59
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Vysarn Limited (the “Company”) and its controlled
entities (the “Group”), which comprises the consolidated statement of financial position as at 30
June 2024, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the financial statements including material accounting policy
information, the consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(a)
giving a true and fair view of the Group’s consolidated financial position as at 30
June 2024 and of its financial performance for the year then ended; and
(b)
complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
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.
pitcher.com.au .
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.
71
Independent Auditor’s Report
Annual Report for the financial year ending 30 June 2024
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
60
Key Audit Matter
How our audit addressed the key audit
matter
Revenue recognition
Refer to Note 2(p), Note 4 and Note 13 of the
Financial Report
For the year ended 30 June 2024, the
Group had revenue of $65,682,106 from
contracts with customers for its
hydrogeological and dewatering business
activities and contract assets of $46,156
goods/services yet to be invoiced (accrued
revenue).
In addition, the Group tracks a number of
costs associated with contracts with
customers through its contract fulfillment
costs. As at 30 June 2024, contract
fulfillment costs amounted to $635,199.
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”).
Our procedures included, amongst others:
Understanding and evaluating the design and
implementation of the relevant controls
associated with the treatment of revenue,
contract assets, and contract fulfillment costs,
including, but not limited to, those relating to
identification of performance obligations,
discounts, incentives and rebates.
Testing the operating effectiveness of relevant
controls around revenue, contract fulfillment
costs, such as the review and approval of
progress claims and invoices by customers.
Reviewing a sample of material contracts to
understand their terms and conditions,
including specified performance obligations
included within and whether Managements’
assessment for recognition of revenue,
contract assets, and contract fulfilment costs
under these contract terms, is in accordance
with AASB 15.
Testing a sample of transactions by sighting
evidence of signed contracts, related invoices
and comparing the revenue, contract asset,
and contract fulfilment cost amount recognised
to the timing of when the Group satisfies
performance obligations associated with the
transaction in accordance with AASB 15.
Assessing the entitlement and recoverability
for a sample of transactions within contract
assets, evaluating their consistency and the
basis of Management’s approach for
determining amounts recognised,
understanding and corroborating key
assumptions made, and recalculating contract
assets recognised.
Considering the adequacy of the disclosures
included within Note 2(p), Note 4 and Note 13
of the financial report.
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Independent Auditor’s Report
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
61
Key Audit Matter
How our audit addressed the key audit matter
Recoverability of Non-current assets
Refer to Note 2(h)-(j) Note 2(w), Note 15,
and Note 26 of the financial report
Included in the consolidated statement
of financial position as at 30 June 2024
is an amount of $37,501,057 relating to
non-current assets. This amount
represents 57% of total assets.
$2,409,334 of this amount relates to
goodwill acquired in a business
combination.
AASB 136 Impairment of Assets (“AASB
136”) requires an entity to test non-
current assets where there are
indicators of impairment and to test
goodwill acquired in a business
combination for impairment annually.
The evaluation of the recoverable
amount of the Group’s cash generating
units (‘CGUs) requires significant
Management judgement in determining
the key assumptions and estimates,
including but not limited to:
▪
growth rate assumptions; and
▪
discount factors
supporting the expected future cash
flows of the business and the utilisation
of the relevant assets.
Due to the significance to the Group’s
financial report and the level of
Management judgment involved in
assessing the recoverable amount of the
Group’s CGUs, we consider this to be a
key audit matter
Our procedures included, amongst others:
Understanding and evaluating the design and
implementation of the relevant controls associated with
the recognition of non-current assets including
capitalisation of expenditure and the identification of the
CGUs.
Reviewing management’s evaluation and judgement as
to whether the costs capitalised to intangibles are in
development phase where probable future economic
benefits could be determined.
Testing the operating effectiveness of relevant controls
around expenditure capitalised as non-current assets,
such as the review and approval of expenditures as per
delegation of authority, capital improvement approvals
forms and other supporting documentation.
Assessing Management’s determination of the Group’s
CGUs based on our understanding of the nature of the
Group’s businesses and how independent cash flows
are derived.
Evaluating and assessing the Group’s assessment for
impairment indicators associated with its non-current
assets for each of it’s CGUs.
Critically evaluating and challenging the methodology
and key assumptions around revenue and cost
projections of management in their preparation of
forecast models of the CGU encompassing goodwill and
other intangible assets at 30 June 2024.
Checking the mathematical accuracy of forecast models
and agreeing what has been provided to the latest Board
approved forecasts and performing sensitivity analysis
around discount rate and growth rate.
Assessing the Group’s accounting policy and
disclosures for non-current assets as set out within Note
2(h)-(j) Note 2(w), Note 15, and Note 26 to the financial
report.
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Independent Auditor’s Report
Annual Report for the financial year ending 30 June 2024
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
62
Key Audit Matter
How our audit addressed the key audit
matter
Share-based Payments
Refer to Note 2(t) and Note 23 of the
Financial Report
At 30 June 2024, a share-based payment
expense of $176,564 has been recorded.
Share-based payments involve significant
Management estimates and judgement in
their determination.
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:
•
Assessing the probability of
achieving key performance
milestones in relation to vesting
conditions; and
•
Assessing the fair value of the
share price on grant date, estimate
of expected future share price
volatility, expected dividend yield
and risk-free rate of interest.
Our procedures included, amongst others:
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 the appropriateness of the model used
for valuation.
Critically evaluating and challenging the
methodology and assumptions of
Management in their preparation of
valuation model, including management’s
assessment of likelihood of vesting,
agreeing inputs to internal and external
sources of information as appropriate.
Assessing the appropriateness including
recalculation of share-based payment
expensed during the year, pursuant to the
requirements of Australian Accounting
Standards AASB 2 Share-based Payment
(“AASB 2”).
Assessing the Group’s accounting policy as
set out within Note 2(t) and disclosures
within Note 23 for compliance with the
requirements of AASB 2.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2024, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
74
Independent Auditor’s Report
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
63
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report (other than the consolidated entity disclosure statement) that gives
a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001; and
b)
the consolidated entity disclosure statement that is true and correct in accordance with
the Corporations Act 2001; and
for such internal control as the directors determine is necessary to enable the preparation of:
(i)
the financial report (other than the consolidated entity disclosure statement) that gives a
true and fair view and is free from material misstatement, whether due to fraud or error;
and
(ii) the consolidated entity disclosure statement that is true and correct and is free of
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
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.
•
Obtain an understanding of internal control relevant to the audit in order to design audit
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.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
75
Independent Auditor’s Report
Annual Report for the financial year ending 30 June 2024
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
64
•
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such 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 may cause the Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
•
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.
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.
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.
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 8 to 16 of the directors’ report for
the year ended 30 June 2024. In our opinion, the Remuneration Report of Vysarn Limited, for
the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001.
76
Independent Auditor’s Report
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
VYSARN LIMITED
ABN 41 124 212 175
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VYSARN LIMITED
65
Responsibilities
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.
PITCHER PARTNERS BA&A PTY LTD
MICHAEL LIPRINO
Executive Director
Perth, 22 August 2024
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Independent Auditor’s Report
Annual Report for the financial year ending 30 June 2024
Additional Shareholder Information
Twenty Largest Shareholders
Position
Holder Name
Holding
% IC
1
HSBC Custody Nominees (Australia) Limited
39,124,398
7.56%
2
Molonglo Pty Ltd
34,600,000
6.69%
3
Molonglo Pty Ltd
34,500,000
6.67%
4
Lonesearch Pty Ltd
24,500,000
4.73%
5
Citicorp Nominees Pty Limited
24,399,395
4.72%
6
J P Morgan Nominees Australia Pty Limited
18,732,126
3.62%
7
Garrison Holdings Pty Ltd
17,875,542
3.45%
8
Mr Anthony John Power & Mrs Susan Janet Power
14,555,430
2.81%
9
Mr Anastasios Karafotias
14,231,500
2.75%
10
Mr Richard William Balston
11,500,000
2.22%
11
Connada Pty Ltd
11,217,315
2.17%
12
BNP Paribas Nominees Pty Ltd
8,708,632
1.68%
13
Richcab Pty Ltd
8,676,098
1.68%
14
Mr Debesh Bhattarai
8,150,000
1.58%
15
UBS Nominees Pty Ltd
7,948,333
1.54%
16
Nj Family Pty Ltd
6,289,926
1.22%
17
Allora Equities Pty Ltd
6,160,962
1.19%
18
Yulgering Super Pty Ltd
5,000,000
0.97%
18
Mr Frank Richardson & Mrs Lisa Joy Richardson
5,000,000
0.97%
19
Mondo Electronics Pty Ltd
4,846,114
0.94%
20
BNP Paribas Noms Pty Ltd
4,500,845
0.87%
Total
310,516,616
60.01%
Total issued capital - selected security class(es)
517,444,829
100.00%
ASX Additional 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 19
September 2024.
Corporate Governance
The Company’s 2024 Corporate Governance
Statement can be accessed at
https://vysarn.com.au/corporate-governance/
Ordinary Share Capital
517,444,829 fully paid ordinary shares are held by
1,871 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.
78
Additional Shareholder Information
Vysarn Limited (ABN 41 124 212 175) and controlled entities | ASX : VYS
Substantial Shareholder
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 19 September 2024,
are listed below:
Holder Name
Holding Balance
% IC
HSBC Custody Nominees (Australia) Limited
39,124,398
7.56%
Molonglo Pty Ltd
34,600,000
6.69%
Molonglo Pty Ltd
34,500,000
6.67%
Distribution of Shares
A distribution schedule of the number of holders of shares is set out below:
Fully Paid Ordinary Shares
Holders
Total Units
%
1– 1,000
60
12,525
0.00%
1,001– 5,000
298
868,803
0.17%
5,001– 10,000
254
2,105,116
0.41%
10,001– 100,000
928
33,535,963
6.48%
100,001 and over
331
480,922,422
92.94%
Total
1,871
517,444,829
100.00%
Restricted Securities
As at 19 September 2024 the Company
does not have any ordinary fully paid
shares held in escrow.
Unmarketable Parcels
Holdings of less than a marketable parcel
of ordinary shares:
Holders: 63
Units: 15,612
Unquoted Securities
As at 19 September 2024 the Company
does not have any unquoted securities.
On-market Buy Back
There is no current on-market buy-back.
79
Additional Shareholder Information
Annual Report for the financial year ending 30 June 2024
Vysarn Limited
ABN: 41 124 212 175
Level 1, 640 Murray St, West Perth
WA 6005, Australia
PO Box 1974, West Perth WA 6872
T +61 (0) 8 6144 9777
E info@vysarn.com.au
vysarn.com.au