Ava Group (AVA) 2023年年度報告「ASX」.pdf

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1、DETECT ACCESS ILLUMINATE2023 ANNUAL REPORTCORPORATE INFORMATIONABN 67 064 089 318 DIRECTORSDavid Cronin,Chairman and Non-Executive DirectorMark Stevens,Non-Executive DirectorMike McGeever,Non-Executive DirectorMalcolm Maginnis,Group Chief Executive Officer and Executive Director(appointed on 9 Janua

2、ry 2023)Rob Broomfield,Group Chief Executive Officer and Executive Director(resigned on 9 January 2023)COMPANY SECRETARIESNeville Joyce,Kim ClarkREGISTERED OFFICE&PRINCIPAL PLACE OF BUSINESS10 Hartnett Close,Mulgrave,Victoria 3170,AustraliaTelephone:+61 3 9590 3100Facsimile:+61 3 9560 8000INVESTOR R

3、ELATIONS Email:SHARE REGISTRYBoardroom Pty Ltd Grosvenor Place,Level 12,225 George Street,Sydney,NSW 2000,AustraliaTelephone(within Australia):1300 737 760Telephone(outside Australia):+61 2 9290 9600Facsimile:+61 2 9279 0664STOCK EXCHANGEAva Risk Group Limited shares are quoted on the Australian Sec

4、urities Exchange(ASX).ASX Code:AVABANKERSWestpac Banking Corporation,275 Kent Street,Sydney,NSW 2000,AustraliaAUDITORSBDO Audit Pty Ltd,Tower 4/727 Collins St.Docklands VIC 3008WEBSITEInformation correct as at 28 August 2023.CHAIRMANS REPORT 04CHIEF EXECUTIVE OFFICERS REPORT 06DIRECTORS REPORT 10AUD

5、ITORS INDEPENDENT DECLARATION 30CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 32CONSOLIDATED STATEMENT OF FINANCIAL POSITION 34CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 36CONSOLIDATED STATEMENT OF CASH FLOWS 37NOTES TO THE FINANCIAL STATEMENTS 38DIRECTORS DECLARATION 87INDEPENDENT AUDITORS REPORT

6、 88SHAREHOLDER INFORMATION 94TABLE OF CONTENTS4|AVA GROUP ANNUAL REPORT 2023BUILDING A GLOBAL LEADER IN RISK MANAGEMENT TECHNOLOGIES DEAR FELLOW SHAREHOLDERS AND ASSOCIATESDuring FY2023 Ava Risk Group Limited(Ava Group/the Company)continued to build its position as a global leader in risk management

7、 technology,protecting critical infrastructure and high value assets.The Company remains committed to its strategy of growing revenue from its market leading technologies by increasing market share and developing adjacent applications.I am pleased to report to shareholders the significant progress t

8、hat has been accomplished during FY2023.In January 2023 Mal Maginnis commenced as Group Chief Executive Officer following the retirement of Rob Broomfield.Mals appointment reflects the Boards commitment to ensuring that the Company has access to the skills and expertise to support its growth ambitio

9、ns.Mal is a seasoned leader of global technology-enabled businesses with more than 35 years of experience in the defence,security,safety,and technology businesses.He has reoriented the business to align the Companys technology with customer solutions.In the accompanying CEO report,Mal sets out what

10、has been achieved during FY2023,his first six months and his outlook for FY2024 and beyond.In August 2022,Ava Group acquired GJD Manufacturing Limited(“GJD”)to create the Companys Illuminate segment.GJD is a leading UK based technology supplier,specialising in illumination and detection applications

11、.The acquisition provides the Company with a complementary product and technology footprint as well as an established go-to-market capability in the UK and western Europe.The growing momentum within the business is best reflected by the increase in sales order intake and revenue.The Company received

12、 sales orders of$30.9 million during FY2023,which is an increase of 71%on the previous year,a 36%increase when the acquisition of GJD is excluded.This has resulted in revenue of$28.6 million for FY2023,an increase of 54%on the previous year.The growth in both sales order intake and revenue is underp

13、inned by growth in the Detect segment and the addition of the Illuminate segment following the GJD acquisition.We continue to invest in our technology and have built on the Aura platform,leveraging the machine learning capability that the Company has developed in recent years.In March 2023 we launch

14、ed Aura Ai-X at ISC West,the worlds largest security industry trade show.Aura Ai-X is our latest generation,data driven intrusion detection system,which includes an embedded deep learning engine that enhances system performance.Market interest in the platform has been immediate with an initial order

15、 received for protection of a critical European border.Earlier in the year the Company received its first order for its conveyor belt application,highlighting the opportunity to use our technology to support adjacent applications.The Board is committed to conducting business in accordance with high

16、governance standards.We continually review policies and procedures to ensure that they fulfill Ava Groups regulatory and compliance obligations.We also ensure that the Companys technology development roadmap is consistent with our strategic direction and meets market expectations.Finally,I would lik

17、e to thank you,our shareholders and associates,for your continued support and engagement with the Ava Group as we build a world class risk management business.On behalf of my fellow Directors,I also thank the management team for their hard work,dedication,and achievements throughout FY2023.In partic

18、ular,I take this opportunity to thank Rob Broomfield for his dedication to our business across multiple roles prior to his retirement in January 2023.David L Cronin ChairmanCHAIRMANS REPORT|52023 ANNUAL REPORT AVA GROUP31 JULY 2022|ACQUISITION OF GJDAva Group announces the acquisition of GJD-an awar

19、d-winning,UK-based security equipment designer and manufacturer,specialising in security space detection and intruder detection systems.GJD products include professional grade external detector equipment as well as infrared and white-light LED illuminators and Automatic Number Plate Recognition came

20、ras and counts some of the UK and Europes most security conscious end users as customers.It also has a growing OEM sales channel across multiple sectors,including well-known multinational engineering and technology companies.3 OCTOBER 2022|APPOINTMENT OF NEW CEO Ava Group announces that Mal Maginnis

21、 will join the Company as Chief Executive Officer.A seasoned leader of global technology-enabled businesses with more than 35 years of experience in the defence,security,safety and technology industries,Mal most recently served as President of Rapiscan Systems from July 2017 until September 2022.“Ha

22、ving first met Mal more than 15 years ago,I am very confident that he is the right leader to drive the growth phase of our business.Exceptionally well-regarded within the industry,Mals extensive technology,security and defence experience as well as his business development skills will be most valuab

23、le in strengthening our partnerships,developing new strategic alliances and expanding our international sales presence.We believe his strong leadership experience will greatly enhance and accelerate Avas growth strategy.”David Cronin,Ava Group Chairman2 APRIL 2023|US$1.5M CONTRACT FOR NEW AURA Ai-XA

24、va Group announces that its Aura Ai-X fibre optic sensing technology had been selected to protect a critical European border.This contract marked the first sale of Aura Ai-X latest generation,data driven intrusion detection system.Aura Ai-X has an embedded deep learning engine that enhances system p

25、erformance by referencing algorithm upgrades backed by a global data library.With unrivalled performance and exceptional event classification accuracy,Aura Ai-X delivers high Probability of Detection(POD)combined with lowest Nuisance Alarms Rate(NAR).“Securing this contract is a vote of confidence i

26、n what we believe to be the most advanced perimeter intrusion detection technology on the market.We are confident that Aura Ai-X will fast become the solution of choice for the smart protection of critical infrastructure worldwide.”Mal Maginnis,Ava Group CEOFY2023|FOCUS ON NORTH AMERICAN ENERGY SECT

27、ORDuring the year,Ava Group secured multiple contracts for the supply and installation of its fibre optic intrusion detection at energy facilities in North America.This included the protection of further critical assets on a single site,where our advanced sensing solution is being deployed to replac

28、e a competitors technology.Further systems are also expected to be awarded as part of the customers ongoing upgrade program.These contract wins highlight the growing recognition of Ava Groups leading detection systems across the sector and provide further validation of the Companys stated strategy o

29、f targeting critical energy assets and focusing on the North American market.KEY ANNOUNCEMENTS6|AVA GROUP ANNUAL REPORT 2023REVIEW OF OPERATIONSI am pleased to have the opportunity to report to shareholders the significant progress that Ava Group has made towards becoming a world leader in the provi

30、sion of risk management technologies.Ava Group has some of the most advanced detection sensing and access control technologies in the market.Upon joining the Ava Group in January 2023,my immediate focus was to better align the technology with customer solutions.To this end,the Company has been reali

31、gned into three operating segments:DetectManufactures and markets smart fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters,pipelines,conveyors,power cables and data networks.AccessSpecialist in the development,manufacture and supply of

32、high security biometric readers,security access control and electronic locking products.IlluminateSpecialist in the development and manufacture of illuminators,ANPR cameras and perimeter detectors.The organisation of the business segments with customer solutions has resulted in a renewed focus on ou

33、r customer facing sales and support capability.We have continued to invest heavily and upskill these teams,reflecting their criticality to growing the business in the future.The initial results from these changes are encouraging,with both sales order intake and revenue growing in the second half of

34、the year.In reviewing FY2023 it is pleasing to highlight some significant milestones:Sales order intake grew to$30.9 million,up 71%on the previous year.Growth in Detect segment orders of 55%to$20.7 million.The addition of Illuminate orders of$6.3 million following the acquisition of GJD in August 20

35、22.Access segment orders of$3.9 million.In line with increased sales order intake,revenue grew by more than 50%to$28.6 million.Resultant EBITDA of$1.3 million is up 61%on the prior year.Continued growth in the Detect segment in key geographies and industry verticals.Sales order intake in North Ameri

36、ca represented 34%of orders received,up 20%on the prior year,with additional orders received from the energy sector.Orders from Europe grew significantly,notably including the first deployment of our Aura Ai-X system to the protection of a critical European border.The Detect segment was also able to

37、 fulfill its first order for our conveyor belt solution,demonstrating the ability of our core technology to be adapted to adjacent applications.The integration of GJD following its acquisition in August 2022 to create the Illuminate segment.Based in the UK,GJD provides Ava Group with complementary i

38、lluminate and detection technologies while strengthening our presence in the UK and western Europe.While the Illuminate segment has experienced challenging economic conditions in the UK during FY2023 which has impacted domestic sales,we have already provided combined customer solutions across the De

39、tect and Illuminate segments.We are confident that this is an opportunity that we can further exploit to expand the market reach for the Illuminate segment.CHIEF EXECUTIVE OFFICERS REPORT For the Access segment,FY2023 was a year of progressing compliance obligations in key distribution channels.The

40、segment recorded declining sales order intake and revenue during FY2023,however significant progress was made towards obtaining relevant product certifications which will enable an acceleration of sales via this channel in FY2024.We retain a global framework agreement for the supply of Access produc

41、ts to dormakaba International Holding GmbH,a global leader in security access control systems.It is anticipated that final certifications will be obtained during Q1 FY2024.Development of Aura Ai-X continued during FY2023 and we launched this product in March 2023.Aura Ai-X is built on the Companys A

42、ura platform and is the latest generation,data driven intrusion detection system.It has an embedded deep learning engine that enhances system performance to improve the probability of detection while minimizing nuisance alarms.This product was immediately successful in the market and was pivotal to

43、winning a significant contract to protect a critical European border.It also establishes a long term support arrangement and revenue stream with customers which gives them access to algorithms based on our global data library.A$mFY2023FY2022ChangeRevenue continuing operations28.619.09.6EBITDA*-conti

44、nuing operations1.30.80.5Profit/(loss)after tax continuing operations(1.1)(0.7)(0.4)Profit/(loss)after tax discontinued operations*33.8N/AProfit/(loss)after tax(1.1)33.1(34.2)*EBITDA excluding unrealised foreign exchange variances*Discontinued operations relate to the Services division divested duri

45、ng FY2022 FINANCIAL REVIEWThe consolidated loss after income tax attributable to the shareholders of Ava Group for the year ended 30 June 2023 was$1.1 million.This is a decrease of$34.2 million compared to the previous financial year which included a profit from discontinued operations of$33.8 milli

46、on.Revenue from continuing operations in FY2023 of$28.6 million was$9.6 million higher than the previous year(FY2022:$19.0 million),reflecting revenue growth of more than 50%.The increase in revenue reflects revenue from the Illuminate segment of$6.3m following the acquisition of GJD in August 2022,

47、and increased Detect revenue of$3.8 million due to increased sales order intake.Despite the addition of the lower margin Illuminate segment,consolidated gross margin was broadly maintained with the prior year(FY2023:64%,FY2022:65%).Gross margin within the Detect and Access segments grew from the pri

48、or year reflecting careful supply chain management including the forward buying of inventory to lock in prices and secure supply.Margin in the Illuminate segment at 48%is consistent with expectations within the distribution business but has the effect of slightly diluting consolidated gross margin.O

49、perating costs increased by$5.4 million on the prior year.The addition of the Illuminate segment during FY 2023 represented$2.9 million of the additional costs.The remaining movement is primarily driven by employee related costs associated with the significant reorganisation of the business during t

50、he second half of FY2023.Some of these costs(approximately$0.7 million)are one-off in nature and not expected to recur in the future,while some cost has been added to the business as we have upskilled the sales and business development teams.I am confident that the investment we have made in reorgan

51、ising the business will deliver significant benefit in FY2024 and beyond.Resultant Group EBITDA of$1.3 million represents growth of 63%on FY2022($0.8 million).Excluding one-off costs of$0.7 million associated with the reorganisation of the business during H2,underlying EBITDA is$2.0 million,up 150%o

52、n FY2022.Net loss from continuing operations of$1.1 million is$0.4 million higher than the previous year(FY2022:loss of$0.7 million)due to higher depreciation and interest charges associated with the acquisition of GJD.The Company had a cash balance of$5.5 million at 30 June 2023(FY2022:$15.2 millio

53、n).The movement is driven by the cash paid(and overdraft acquired)for the GJD acquisition($5.5 million)and continued technology investment in the Aura platform($1.9m).Cash flow from operations was(-$2.2 million)for the year mainly driven by increased inventory during the first half of the year to se

54、cure supply chains and lock in costs.Pleasingly,cash flow from operations during the second half of the year was positive,notwithstanding some one-off costs attributable to organisational changes.|72023 ANNUAL REPORT AVA GROUP8|AVA GROUP ANNUAL REPORT 2023FY2023 HIGHLIGHTS$CASH BALANCE$5.5M$REVENUE*

55、$28.6M(UP 50%)$EBITDA*$1.3M(UP 61%)$SALES ORDERS$30.9M(UP 71%)SALES ORDERS BY SEGMENT DETECT ACCESS ILLUMINATE SALES ODERS BY REGION EMEA APAC AMERICAS*Revenue from continuing operations.*EBITDA excluding unrealised foreign exchange variances.DETECT Secured first deployment of new Aura Ai-X to monit

56、or critical border in Europe.Continued to expand footprint in North America with sales order intake representing 34%of orders received.Fulfilled first order for conveyor belt solution demonstrating technology adaption for adjacent applications.ACCESS Recorded highest annual sales volume of YG80 Orca

57、 lock including largest single customer order.Released next generation Cobalt Single(YD30S)and Cobalt Double(YD30D).Advanced key product certifications leading to opportunities for nationwide stocking of Cobalt locks through major security distributors.ILLUMINATE Successfully integrated GJD to creat

58、e new ILLUMINATE segment.Leveraged channel management and go-to-market capabilities in UK and Western Europe.Developed integrated customer solutions with fibre optic sensing technology.|92023 ANNUAL REPORT AVA GROUPOUTLOOKWe are confident about delivering significant growth for Ava Group.Each of our

59、 operating segments has market leading technology within our fibre sensing,access controls and illumination products.Catalysts for growth exist in each of the segments and we have developed the organisational capability to execute our plans.The Detect segment is well placed to accelerate growth.The

60、Aura Ai-X product launched in March 2023 delivers unrivalled performance by using an embedded deep learning engine to improve detection rates and reduce nuisance alarms.We believe this solution will quickly become the solution of choice for the protection of critical infrastructure worldwide.The pro

61、duct has been well received by the market and has already underpinned contract awards in Europe and Asia.We have a strong global pipeline of opportunities that can be supported by this product.We also continue to expand the application of our products to pursue opportunities in adjacent markets such

62、 as telecommunications.While performance in the Access segment during FY2023 appeared slower than anticipated,we made significant progress towards opening key distribution channels.It is expected that relevant certifications will be finalised in Q1 FY2024.This is a significant milestone which will e

63、nable us to better exploit the global networks of our distribution partners.We remain very confident in the quality of our partners and believe that this will drive significant growth across the segment.The addition of the Illuminate segment remains an important accelerator of growth for the Company

64、.The product offering is complementary to our large scale solutions in the Detect segment,and its geographic location in the UK provides scale to the Companys presence in the UK and western Europe.While domestic economic conditions in the UK during FY2023 were challenging,we are confident that we ca

65、n rapidly grow export channels in the Illuminate segment,leveraging the Companys existing strong position in North America and Asia Pacific.I look forward to updating you on progress throughout FY2024.Mal Maginnis,Chief Executive OfficerDIRECTORS REPORTTABLE OF CONTENTSAUDITORS INDEPENDENT DECLARATI

66、ON 30CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 32CONSOLIDATED STATEMENT OF FINANCIAL POSITION 34CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 36CONSOLIDATED STATEMENT OF CASH FLOWS 37NOTES TO THE FINANCIAL STATEMENTS 38DIRECTORS DECLARATION 87INDEPENDENT AUDITORS REPORT 88SHAREHOLDER INFORMATION

67、9412|AVA GROUP ANNUAL REPORT 2023The directors present their report together with the financial report of the Consolidated Entity(referred to hereafter as the“Group”or“Consolidated Entity”)consisting of Ava Risk Group Limited(referred to hereafter as the“Company”or“Ava Risk Group”)and the entities i

68、t controlled for the financial year ended 30 June 2023 and auditors report thereon.DirectorsThe names of directors in office at any time during or since the end of the year are detailed in the table below.The directors have been in office since the start of the year to the date of this report unless

69、 otherwise stated.Information on Company Directors and Company SecretaryThe qualifications,experience and special responsibilities of each person who has been a director of Ava Risk Group at any time since 1 July 2022 to the date of this report is provided below with details of the company secretari

70、es as at the year end.Name,qualifications,and independence statusExperience,special responsibilities and other ASX directorshipsDavid CroninChairman of the Board(Appointed 31 August 2018)Non-Executive Director(Appointed 10 April 2018)David has over 25 years professional experience and more than 15 y

71、ears of international experience at the director/chairman board level.David is presently the Managing Director of the investment&consulting group Pierce Group Asia where he is responsible for its technology focused corporate development and investment activities.Previous to his role at Pierce Group

72、Asia,David was an investment manager for the London listed Guinness Peat Group PLC and Director of M&A for its technology focused division.Working for several large financial and non-financial institutions,David has been involved in various advisory,executive level and board positions with several e

73、arly to mid-stage technology companies.David has extensive knowledge of Ava Risk Group and the security markets that it services.He has more than 10 years of board level experience within Ava Risk Group,having previously served as a Director and Chairman of Ava Risk Group prior to its IPO.Mike McGee

74、verNon-Executive Director (Appointed 8 August 2018)Mr McGeever has over 35 years experience in the military,facilities and securities sectors.Prior to his retirement in 2015,Mr McGeever was the Managing Director and founder of Transguard Group LLC,a UAE based security and facilities management compa

75、ny and one of the largest security companies in the world,employing 55,000 staff.Prior to that he held senior positions in a range of security and facilities focused companies.Mr McGeever has a Master of Business Administration from the University of Portsmouth(England).Mark StevensNon-Executive Dir

76、ector(Appointed 11 March 2015)With more than 30 years of experience in senior management roles with multi-national corporations,Mark is a seasoned executive with broad experience in sales and general management in the telecommunications and Information technology sector.Mark has held senior position

77、s with Nortel Networks Inc.,Aircom International Limited,ECI Telecom Ltd,Transmode Systems AB,and more recently Infinera Corporation.He has lived and worked in Europe,the United States,Singapore and Australia.Mark holds a Master of Business Administration from the University of Melbourne,a Bachelor

78、of Engineering degree from Monash University and is a Graduate Member of the Australian Institute of Company Directors.Malcolm MaginnisGroup Chief Executive Officer (Appointed 9 January 2023)Mal has more than 35 years of experience in the defence,security,safety and technology industries.Most recent

79、ly,Mal served as President of Rapiscan Systems from July 2017 until September 2022 a US-headquartered global manufacturer of security equipment and systems.Prior to joining Rapiscan,Mal was head of Iveagh Technology a technology development company based in Singapore and part owner of SX Technologie

80、s,a Sydney-based detection company.He was also President of Smiths Detection from 2011 to 2014.Mal is based in Singapore.DIRECTORS REPORTRobert Broomfield(Appointed 8 August 2018,resigned 9 January 2023)Group Chief Executive Officer(Appointed 10 July 2020)Executive Director (Appointed 27 February 20

81、08)Robert is an experienced business executive with more than 30 years of management experience including more than 25 years in senior positions within companies operating in the security industry.Prior to joining Ava Risk Group,he was with Vision Systems Limited,where he served as the General Manag

82、er of Asia Pacific for their Fire and Security systems.In addition to his international sales and marketing success,Robert has extensive experience in operations management,including product engineering,procurement,manufacturing and operations.Robert has previously had 10 years experience with IBM i

83、n Australia and the United States.Robert retired on 9 January 2023 and ceased to be a KMP on that date.Joint Company SecretariesNeville JoyceAppointed 3 November 2021Neville is a highly experienced financial and commercial executive with proven expertise across multiple sectors including energy,mini

84、ng,technology and manufacturing.With extensive experience in leadership,management and strategic financial analysis,Neville has held senior finance positions at Origin and Energy Australia including roles as Chief Financial Officer and Divisional Head of Finance.Prior to joining Ava Group,Neville wa

85、s Group Chief Financial Officer at Redflex Holdings Ltd from 2017 to 2021.Neville is a CPA and holds a Bachelor of Business.Kim ClarkAppointed 20 January 2017Kim is an experienced business professional with 24 years experience in the banking and finance industries and 7 years as a Company Secretary(

86、in-house)of an ASX300 company.Her experience includes debt and capital raising,risk management,mergers and acquisitions,compliance and governance.Kim currently acts as Company Secretary to various ASX listed and unlisted companies in Australia and is the Head of Corporate Services for Boardroom Pty

87、Limiteds Queensland office.Directors MeetingsThe number of meetings of the board of directors and of each board committee held during the financial year and the number of meetings attended by each director are:Board of Directors MeetingsMeetings of Audit&Risk Committee(ARC)Meetings of Remuneration&N

88、omination Committee(REM)Eligible to AttendAttendedEligible to AttendAttendedEligible to AttendAttendedD Cronin12125511M Stevens12125511M McGeever12125511M Maginnis66-R Broomfield66-Committee Membership As at the date of this report,the company had an Audit&Risk Committee,and a Remuneration&Nominatio

89、n Committee of the Board of Directors.Members acting on the committees of the Board during the year were:Audit CommitteeRemuneration&Nomination CommitteeM Stevens(Chairman)M McGeever(Chairman)D Cronin D Cronin M McGeeverM Stevens|132023 ANNUAL REPORT AVA GROUP14|AVA GROUP ANNUAL REPORT 2023DIRECTORS

90、 REPORT Gender Diversity PolicyThe Remuneration&Nomination Committee is responsible for setting the diversity policy of the Company.The Committee has established a diversity policy for the Company,which is disclosed on the Company website.Measurable objectives for achieving gender diversity have bee

91、n set with the Company assessing annually both the objectives and the entitys progress in achieving them.The Company has set an objective to ensure that the representation of women across the business is 25%.During the year ended 30 June 2023,women represented 27%of the business.Whilst Ava Risk Grou

92、p particularly focuses on narrowing the gap in gender representation across all levels,it strives for equal development opportunities for all employees,irrespective of gender,cultural,physical capabilities,or other differences.Directors Interests in shares or optionsAs at the date of this report,the

93、 interests of the directors in the shares and performance rights of Ava Risk Group are as detailed below:Number of ordinary sharesD Cronin33,519,937M Stevens1,218,396M Mc Geever6,005,000M Maginnis10,000Principal ActivitiesThe principal activities of the Consolidated Entity during the financial year

94、were:the provision of security technology products for perimeter intrusion detection solutions;the development,manufacture and supply of high quality,high security card and biometric readers,electromechanical locks and related electronic security products;and manufacture and supply of professional e

95、xternal security and intruder detection equipment including ANPR cameras,lighting controllers and infrared and white-light LED Illuminators.OPERATING AND FINANCIAL REVIEWHighlightsFY2023 has highlighted some significant milestones:Sales order intake grew to$30.9 million,up 71%on the previous year.Gr

96、owth in Detect segment orders of 55%to$20.7 million.The addition of Illuminate orders of$6.3 million following the acquisition of GJD in August 2022.Access segment order of$3.9 million,down 17%compared to the prior year.Review of Financial ResultsA$mFY2023FY2022ChangeRevenue continuing operations28.

97、619.09.6EBITDA*-continuing operations1.30.80.5Profit/(loss)after tax continuing operations(1.1)(0.7)(0.4)Profit/(loss)after tax discontinued operations*-33.8N/AProfit/(loss)after tax(1.1)33.1(34.2)*EBITDA excluding unrealised foreign exchange variances*Discontinued operations relate to the Services

98、division divested during FY2022 In line with increased sales order intake,revenue grew by more than 50%to$28.6 million.Resultant EBITDA of$1.3 million is up 61%on the prior year.The consolidated loss after income tax attributable to the shareholders of Ava Risk Group for the year ended 30 June 2023

99、was$1.1 million.This is a decrease of$34.2 million compared to the previous financial year which included a profit from discontinued operations of$33.8 million.Revenue from continuing operations in FY2023 of$28.6 million was$9.6 million higher than the previous year(FY2022:$19.0 million),reflecting

100、revenue growth of more than 50%.The increase in revenue reflects revenue from the Illuminate segment of$6.3m following the acquisition of GJD in August 2022,and increased Detect revenue of$3.8 million due to increased sales order intake.Resultant Group EBITDA of$1.3 million represents growth of 63%o

101、n FY2022($0.8 million).Net loss from continuing operations of$1.1 million is$0.4 million higher than the previous year(FY2022:loss of$0.7 million)due to higher depreciation and interest charges associated with the acquisition of GJD.The Company had a cash balance of$5.5 million at 30 June 2023(FY202

102、2:$15.2 million).The movement is driven by the cash paid for the GJD acquisition($5.5 million)and continued technology investment in the Aura platform($1.9m).Cash flow from operations was(-$2.2 million)for the year mainly driven by increased inventory during the first half of the year to secure supp

103、ly chains and lock in costs.Operating ReviewSales order intake for Detect in North America represented 34%of orders received,up 20%on the prior year,with additional orders received from the energy sector.Orders from Europe grew significantly,notably including the first deployment of our Aura Ai-X sy

104、stem to the protection of a critical European border.The Detect segment was also able to fulfil its first order for our conveyor belt solution,demonstrating the ability of our core technology to be adapted to adjacent applications.Development of Aura Ai-X continued during FY2023 and we launched this

105、 product in March 2023.Aura Ai-X is built on the Companys Aura platform and is the latest generation,data-driven intrusion detection system.It has an embedded deep learning engine that enhances system performance to improve the probability of detection while minimizing nuisance alarms.This product w

106、as immediately successful in the market and was pivotal to winning a significant contract to protect a critical European border.It also establishes a long-term support arrangement and revenue stream with customers which gives them access to algorithms based on our global data library.The integration

107、 of GJD following its acquisition in August 2022 provides Ava Risk Group with complimentary illuminate and detection technologies while strengthening our presence in the UK and Western Europe.While the Illuminate segment has experienced challenging economic conditions in the UK during FY2023,impacti

108、ng domestic sales,we have already provided combined customer solutions across the Detect and Illuminate segments.We are confident that this is an opportunity that we can further exploit to expand the market reach for the Illuminate segment.The Access segment,was a year of progressing compliance obli

109、gations in key distribution channels.The segment recorded declining sales order intake and revenue during FY2023,however significant progress was made towards obtaining relevant product certifications which will enable an acceleration of sales via this channel in FY2024.We retain a global framework

110、agreement for the supply of Access products to dormakaba International Holding GmbH,a global leader in security access control systems.|152023 ANNUAL REPORT AVA GROUP16|AVA GROUP ANNUAL REPORT 2023DIRECTORS REPORT Significant changes in the state of affairsDuring the financial year the following eve

111、nts took place.Acquisition of GJDOn 2 August 2022,the Group entered into a Sale and Purchase Agreement to acquire 100%of the shareholding of MTD Holdings Limited,the parent company of GJD Manufacturing Limited(“GJD”).GJD is a UK-based security equipment designer and manufacturer,specialising in intr

112、uder detection systems.Its products include professional grade external detector equipment as well as infrared and white-light LED illuminators and Automatic Number Plate Recognition cameras.GJD counts some of the UK and Europes most security conscious end users as customers and has a growing OEM sa

113、les channel across multiple sectors,including well-known multinational engineering and technology companies.The acquisition price of approximately$7,537,000 was funded in cash and in AVA shares.The cash consideration has been paid and share consideration is based on the last share price on trading d

114、ay before 1 August 2022.Refer to note 2 in the Financial Statements.Likely developmentsLikely development of the operations of the Group are encompassed in the Chief Executive Officers report.Environmental regulation and performanceThe Consolidated Entitys operations are not subject to any significa

115、nt environmental Commonwealth or State regulations or laws.The Group has complied with all environmental regulations to which it is subject.Dividends recommended or declaredDuring the financial year ended 30 June 2022;the following dividends were declared.There were no dividends proposed during the

116、financial year ended 30 June 2023.2023$0002022$000Special dividend at the rate of 13 cents per share,paid on 10 March 2022-31,586Share options granted to directors and executivesThere were no options over unissued ordinary shares granted by Ava Risk Group during or since the financial year end to di

117、rectors and executives in office.Shares under optionThere are no unissued ordinary shares of Ava Risk Group under option at the date of this report.Performance Rights Shares(PSRs)During the year ended 30 June 2023,the following performance rights were issued to Executive KMP:Grant dateNumber of PSRs

118、 issuedMalcolm Maginnis*9 Jan 20231,500,000Neville Joyce6 Sep 2022308,300Jim Viscardi6 Sep 2022323,805Total2,132,105*The performance rights were granted(subject to shareholder approval)to Mal Maginnis as part of remuneration in three equal tranches,vesting on 9 January 2024,2025 and 2026,respectivel

119、y,with vesting conditions based on Share price hurdles.The performance rights were granted to Neville Joyce and Jim Viscardi as part of remuneration in two equal tranches,vesting on 31 August 2023 and 31 August 2024.The vesting conditions relating to continuity of employment and achievement of agree

120、d performance KPIs in FY 2022.Unissued ordinary shares of Ava Risk Group under performance rights at the date of this report are as follows:Date the Performance rights were grantedNumber of unissued ordinary shares under rightsExpiry date of the performance rights29/10/202035,34231/08/202330/10/2020

121、58,27731/08/20231/09/2021261,89131/08/20231/09/2021261,89531/08/202428/10/202128,80131/08/202328/10/202128,80131/08/202431/01/202214,11431/08/202331/01/202214,11431/08/20246/09/2022304,81931/08/20246/09/2022304,82331/08/20259/01/2023500,0009/01/20249/01/2023500,0009/01/20259/01/2023500,0009/01/2026T

122、otal2,812,876No performance rights holder has any right under the performance rights to participate in any other share issue of the company.Proceedings on behalf of the Consolidated EntityNo person has been granted leave of Court to bring proceedings against the Consolidated Entity.Indemnification a

123、nd Insurance of Directors and OfficersAva Risk Group maintains a Directors and Officers insurance policy that,subject to some exceptions provides insurance cover to past,present and future directors and officers of the Consolidated Entity and its subsidiaries.The Company has paid a premium for the p

124、olicy.In addition,under the Constitution of the Company,and to the extent permitted by law,each director of the Company is indemnified by the Company against liability incurred to another person(other than the Company or related body corporate)except where the liability arises out of conduct involvi

125、ng a lack of good faith.Accordingly,each director is indemnified against any liability for costs and expenses incurred by the director in defending proceedings,whether civil or criminal,in which judgement is given in favour of the director or in which the director is acquitted,or in connection with

126、an application in relation to such proceedings in which a court grants relief to the officer under the Corporations Act 2001.|172023 ANNUAL REPORT AVA GROUP18|AVA GROUP ANNUAL REPORT 2023DIRECTORS REPORT Indemnification of auditorsTo the extent permitted by law,the Company has agreed to indemnify it

127、s auditors BDO Australia,as part of the terms of its annual engagement agreement against claims by third parties arising from the audit(for an unspecified amount).No payments have been made to indemnify BDO during or since the financial year.The Company has not otherwise during or since the financia

128、l year,indemnified or agreed to indemnify a director or auditor of the Company or any related body corporate against a liability incurred as a director or auditor.Rounding of amountsIn accordance with ASIC Corporations(Rounding in Financial/Directors Reports)Instrument 2016/191,the amounts in the di

129、rectors 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).REMUNERATION REPORT(AUDITED)The Directors present the Remuneration Report(the Report)for the Company and its controlled entities for the year en

130、ded 30 June 2023.This Report forms part of the Directors Report and has been audited in accordance with section 300A of the Corporations Act 2001.The table below lists the Executives of the Company whose remuneration details are outlined in this Remuneration Report.These Executives,together with the

131、 Directors,are defined as Key Management Personnel(KMP)under Australian Accounting Standards.In this report Executive KMP(Executives)refers to the KMP other than the Non Executive Directors.Non Executive Directors have oversight of the strategic direction of the Company but have no direct involvemen

132、t in the day to day management of the business.1.Details of key management personnel(KMP)The table below lists the KMP of the Company whose remuneration details are outlined in this Remuneration Report.(i)Non-Executive DirectorsDavid Cronin Chairman(Non-Executive)appointed 31 August 2018 (Appointed

133、as Non-Executive Director on 10 April 2018)Mark Stevens Non-Executive Director appointed 11 March 2015Mike McGeever Non-Executive Director appointed 8 August 2018(ii)Executive Directors Malcolm Maginnis Group Chief Executive Officer(CEO)and Executive Director appointed on 9 January 2023.Robert Broom

134、field Group Chief Executive Officer(CEO)appointed on 10 July 2020 and Executive Director appointed 27 February 2008.Resigned and ceased to be a KMP on 9 January 2023.(iii)Other KMPs Neville Joyce Group Chief Financial Officer(CFO)and Company Secretary appointed on 3 November 2021.James Viscardi Exec

135、utive Vice President,Global Security appointed on 1 July 2022.2.Remuneration policiesThe board policy for determining the nature and amount of remuneration of key management personnel is agreed by the Board of Directors as a whole,after receiving recommendations from the Remuneration and Nomination

136、Committee.The Remuneration and Nomination Committee currently comprises three members of the Board of Directors.All members are Non-Executive Directors.The Board or the Remuneration and Nomination Committee may engage external consultants to provide independent advice where it considers it appropria

137、te to ensure that the Company attracts and retains talented and motivated directors and employees who can enhance Company performance through their contributions and leadership.During the year ended 30 June 2023 neither the Board nor the Remuneration and Nomination Committee engaged any external con

138、sultants.2.1 Non-Executive Director remuneration arrangementsThe remuneration of Non-Executive Directors(NEDs)consists of directors fees,which includes attendance at Committee meetings.NEDs do not receive retirement benefits other than compulsory superannuation scheme contributions.Each NED,includin

139、g the Chairman receives a base fee between$63,000 and$65,000 per annum exclusive of superannuation for being a director of the Company.As part of their remuneration NEDs may receive share options or performance rights in the Company and are encouraged to hold shares in the Company.This is in line wi

140、th the Companys overall remuneration philosophy and aligns NEDs with shareholder interests.The remuneration of NEDs for the year ended 30 June 2023 and 30 June 2022 is detailed on page 22 of this report.The Companys constitution and the ASX listing rules specify that the NED fee pool shall be determ

141、ined from time to time by a general meeting.The Companys current aggregate fee pool is$250,000 per year.2.2 Executive remuneration arrangementsFor executives the Company provides a remuneration package that incorporates both cash-based remuneration and share-based remuneration.The contracts for serv

142、ice between the Company and executives are on a continuing basis the terms of which are not expected to change in the immediate future.Share-based remuneration is conditional upon continuing employment and achievement of certain KPIs,thereby aligning executive and shareholder interests.FIXED REMUNER

143、ATIONThe level of fixed remuneration is set so as to provide a base level of remuneration,and is reviewed annually by the Remuneration Committee to ensure that it is both appropriate to the position and is competitive in the market.Salary packages are subject to local regulatory labour laws.SHORT-TE

144、RM INCENTIVE(STI)The objective of the STI program is to link the achievement of the Groups annual operational targets with the remuneration received by the executives charged with meeting those targets.The total potential STI available is set at a level that provides sufficient reward to the Executi

145、ve KMP for exceeding the operational targets and at such a level that the cost to the Group is reasonable in the circumstances.Actual STI payments granted to each Executive KMP depend on the extent to which specific annual operational targets set at the beginning of the financial year are met or exc

146、eeded.The CEOs targets are set by the Remuneration and Nomination Committee.The targets for all other executives are set by the CEO.STI rewards are assessed annually by the Remuneration and Nomination Committee and are usually paid in cash and performance rights.Achievement against individual target

147、s are assessed on an individual basis.Vesting conditions are assessed on a case by case basis.|192023 ANNUAL REPORT AVA GROUP20|AVA GROUP ANNUAL REPORT 2023DIRECTORS REPORT A summary of the measures and weightings are set out in the table below:ExecutiveFY 2023-Financial performance conditionsWeight

148、ingNon-financial performance conditionsWeighting Group CEONil0%Share Price Performance100%Group CFOGroup revenue and EBITDA Targets80%Systems and policies improvements20%EVP(Global)Group revenue and EBITDA Targets80%Increased market share and new market initiatives20%Performance targets are set for

149、an annual period.If performance targets(financial and non-financial)are met for the annual period and the Executive KMP remains employed on 31 August 2023,the Executive KMP will receive the cash component(typically 50%of total STI).Subject to continued employment typically 50%of the performance righ

150、ts(or 25%of the total STI)will vest on 31 August 2024 and 31 August 2025 respectively.LONG-TERM INCENTIVE(LTI)Long-term incentives are provided to certain employees through the issuance of performance rights.The performance rights are designed to provide long-term incentives for employees to deliver

151、 long-term shareholder returns.The performance rights are usually issued for nil or nominal consideration and are granted in accordance with the Companys Employee Equity Incentive Plan(EIP).Performance rights are issued for a specified period and are convertible into ordinary shares.The Performance

152、rights typically have zero exercise price.The performance rights expire on the earlier of their expiry date or three months after termination of the employees employment subject to Boards discretion.Performance rights do not vest until any vesting or performance criteria set at granting have been me

153、t in accordance with the terms and conditions of the EIP.There are no voting or dividend rights attached to performance rights.Voting rights will attach to the ordinary shares when the performance rights have been exercised.Unvested performance rights cannot be transferred and will not be quoted on

154、the ASX.3.Executive contractual arrangementsThe Company has entered into service agreements with the following key management personnel:Malcolm MaginnisGroup Chief Executive Officer(Appointed 9 January 2023)Contract of EmploymentMalcolm Maginnis is employed by BQT Solutions(SEA)Pte.Limited(based in

155、Singapore)as a permanent,full-time employee.His current base salary is SGD$330,000(approx AUD$367,300).He has a notice period of 3 months.Performance ConditionsThe contract provides for the provision of performance rights as disclosed in Sections 4 and 5.Robert BroomfieldGroup Chief Executive Office

156、r&Executive DirectorAppointed 10 July 2020,Retired 9 January 2023.Contract of EmploymentRobert Broomfield was employed by Ava Risk Group as a permanent,full-time employee.Mr Broomfield commenced his position with Ava Risk Group in July 2006.His base salary was AUD$330,000.Neville JoyceGroup Chief Fi

157、nancial Officer&Company SecretaryAppointed 3 November2021Contract of EmploymentNeville Joyce is employed by Ava Risk Group as a permanent,full-time employee.Mr Joyce commenced his position with Ava Risk Group in November 2021 and is employed on a current base salary of AUD$300,000.Performance Condit

158、ionsThe contract provided for a bonus up to 24%of base salary,inclusive of superannuation,which is payable in half in cash and half in performance rights upon meeting pre-defined KPIs(as disclosed in Sections 4 and 5)by the executive.James ViscardiExecutive Vice President Global SecurityContract of

159、EmploymentJames Viscardi is employed by Future Fibre Technologies(US)Inc.as a permanent,full-time employee.Mr Viscardi commenced employment in August 2021 as Vice President-Americas.He was appointed on 1 July 2022 as Executive Vice President Global Security.His base salary is USD$230,000(approx.AUD$

160、363,000).Performance ConditionsThe contract provided for a bonus up to 22%of base salary,which is payable in half in cash and half in performance rights upon meeting pre-defined KPIs(as disclosed in Sections 4 and 5)by the executive.|212023 ANNUAL REPORT AVA GROUP22|AVA GROUP ANNUAL REPORT 2023DIREC

161、TORS REPORT Remuneration of Key Management Personnel The table below shows the realised remuneration the Groups KMPs have received during FY2023Note Salary and FeesShort-term Cash BonusOther benefits(4)$Non-Executive DirectorsDavid Cronin65,000-Mark Stevens65,000-Mike McGeever63,000-Sub-total Non-Ex

162、ecutive Directors193,000-Executive Directors and other KMPsMalcolm Maginnis1176,858-Robert Broomfield2149,743-Neville Joyce300,00014,157-James Viscardi3356,12375,89149,694Sub-total executive KMP982,72490,04849,694Totals1,175,72490,04849,6941 Appointed as Group Chief Executive Officer on 9 January 20

163、23.2 Retired on 9 January 2023.3 Appointed as Executive Vice President Global Security on 1 July 2022.Short-term cash bonuses include Sales Commissions.4 Other benefits include Health Insurance.5 Post Employment benefits include Pension and Superannuation benefits.Remuneration of Key Management Pers

164、onnel for the year ended 30 June 2022The table below shows the realised remuneration the Groups KMPs have received during FY2022Note Salary and FeesShort-term Cash Bonus(2)Post-employment benefits(3)$Non-Executive DirectorsDavid Cronin65,000-6,500Mark Stevens65,000-6,500Mike McGeever63,000-Sub-total

165、 Non-Executive Directors193,000-13,000Executive Directors and other KMPsRobert Broomfield1289,55117,82023,568Neville Joyce2200,00040,80022,500Sub-total executive KMP489,55158,62046,068Totals682,55158,62059,0681 Retired on 9 January 2023.2 As part of the Employment contract,Neville Joyce received$30,

166、000 at the end of the Probation period.3 Post-employment benefits include Pension and superannuation benefits.Post employment benefit(5)Long Service LeaveShare-based Payment expense Total Performance Related$6,825-71,825-6,825-71,825-63,000-13,650-206,650-4,412-54,476235,74523%10,7482,51919,273182,2

167、8311%32,4584,99717,418369,0309%11,667-5,849499,22516%59,2857,51697,0161,286,283-72,9357,51697,0161,492,933-Long Service LeaveShare-based Payment expense Total Performance Related$-45,676117,17639%-45,676117,17639%-45,676108,67642%-137,028343,028-19,16527,795377,89912%-5,220268,52017%19,16533,015646,

168、419-19,165170,043989,447-|232023 ANNUAL REPORT AVA GROUP24|AVA GROUP ANNUAL REPORT 2023DIRECTORS REPORT 4.Relationship between remuneration and Company performance4.1 Remuneration not dependent on satisfaction of performance conditionThe board seeks to align remuneration policies to the long-term cr

169、eation of wealth by the Company for shareholders.4.2 Remuneration dependent on satisfaction of performance conditionA portion of the Executive Remuneration is based on attainment of performance conditions.Performance-based remuneration includes short-term cash bonuses(STIs)and Performance Share Righ

170、ts(PSRs).Short-term Performance-based remuneration granted to key management personnel has regard to Company performance over a 12-month period.The following table sets out the performance conditions used for performance-linked incentive payments:Performance MetricsFY 23 outcomeFinancialGroup CFORev

171、enue TargetPartially metEBITDA Target Not metEVP(Global)Revenue TargetPartially metEBITDA Target Not metNon-FinancialGroup CEOShare Price PerformanceUnassessedGroup CFOSystems and policies improvementsFully metEVP(Global)Increased market share and new market initiativesPartially metThese performance

172、 conditions are selected to align the goals and incentives of the KMP with the creation of shareholder wealth during the relevant period.Quantitative financial performance conditions are assessed against the Consolidated Entitys financial report for the year.Other performance conditions are assessed

173、 by the CEO,or in the case of the CEOs performance conditions,the Board giving consideration to outcomes achieved,external influences and a range of other qualitative factors.These assessments ensure clearly defined and objective assessment of financial and quantitative targets and promote fair and

174、reasonable judgements in respect of qualitative performance conditions.4.3 Impact of Companys performance on shareholder wealthThe following table summarises Company performance and key performance indicatorsFinancial performance202320222021202020192018EarningsRevenue($000)28,63718,96165,71446,64031

175、,67320,275%increase/(decrease)in revenue51%-71%41%47%56%52%Profit/(loss)for the year($000)(1,054)33,13213,7494,947(4,729)(4,241)%increase/(decrease)in profit before tax-103%141%178%205%-12%46%Shareholder valueShare price$0.20$0.18$0.38$0.16$0.15$0.12Change in share price(%)11%-53%145%3%30%-18%Divide

176、nds to shareholders($000)-31,5867,224-Return of capital($000)-7,566-KMP remunerationTotal remuneration of KMP$1,492,933$14,882,3431$3,598,456$3,052,714$1,808,625$1,485,805Total performance-based remuneration$187,064$13,587,2061$1,629,373$1,185,289$91,676$10,0001 Includes KMPs which are not included

177、in FY 2023 report.5.Performance based rewards5.1 Cash bonusThe following table sets out the terms and conditions of each grant of the performance-linked bonuses affecting compensation in current and future years.2023Maximum cash bonus$Amount awarded$%Achieved Neville Joyce70,87514,15720%James Viscar

178、di77,77315,55520%The cash bonuses associated with the achievement of these awards relating to the financial year ending 30 June 2023 will be paid during the financial year ending 30 June 2024.|252023 ANNUAL REPORT AVA GROUP26|AVA GROUP ANNUAL REPORT 2023DIRECTORS REPORT 5.2 Performance rights awarde

179、dThe following table summarises the results of the performance rights awarded and allocated to Executive Directors during FY2023.Number of performance rights awardedGrant dateFair value at Grant date$Vesting datesVesting conditionsNumber of performance rights allocated based on FY 23 KPIs achievedMa

180、lcolm Maginnis 1500,0009 Jan 20230.1259 Jan 2024Share price hurdleNot Vested500,0009 Jan 20230.1289 Jan 2025Share price hurdleNot Vested500,0009 Jan 20230.1279 Jan 2026Share price hurdleNot VestedNeville Joyce123,3206 Sep 20220.23031 Aug 2024FY 2023 Performance30,830123,3206 Sep 20220.23031 Aug 2025

181、KPI and continuity of employment30,83030,8306 Sep 20220.10731 Aug 2024Share price hurdle-30,8306 Sep 20220.10831 Aug 2025Share price hurdle-James Viscardi161,9026 Sep 20220.23031 Aug 2024FY 2023 Performance32,381161,9036 Sep 20220.23031 Aug 2025KPI and continuity of employment32,381Total2,132,105126

182、,4221 The Performance Rights are subject to an approval during the FY2023 Annual General Meeting.6.Key management personnels equity holdings6.1 Number of Shares held by key management personnel:As at end of June 2023,there were no Share Options held by any of the Key Management Personnel.(2022:nil).

183、2023NoteBalance at beginning of PeriodOn exercise of rightsNet change,otherBalance at End of Period1 July 2022 30 June 2023Non-Executive DirectorsDavid Cronin33,519,937-33,519,937Mark Stevens1,218,396-1,218,396Mike McGeever6,005,000-6,005,000Sub-total40,743,333-40,743,333ExecutivesMalcolm Maginnis-1

184、0,00010,000Robert Broomfield13,270,26685,277-3,355,543Neville Joyce-James Viscardi-Sub-total3,270,26685,27710,0003,365,543Total44,013,59985,27710,00044,108,8761 Resigned on 9 January 2023.Held the same balances disclosed at the date of resignation and at 30 June 2023.2022NoteBalance at beginning of

185、PeriodOn exercise of rightsNet change,otherBalance at End of Period1 July 2021 30 June 2022Non-Executive DirectorsDavid Cronin32,663,070-856,86733,519,937Mark Stevens1,218,396-1,218,396Mike McGeever6,005,000-6,005,000Sub-total39,886,466-856,86740,743,333ExecutiveRobert Broomfield13,107,359162,907-3,

186、270,266Sub-total3,107,359162,907-3,270,266Total42,993,825162,907856,86744,013,5991 Resigned on 9 January 2023.|272023 ANNUAL REPORT AVA GROUP28|AVA GROUP ANNUAL REPORT 2023DIRECTORS REPORT 6.2 Number of performance rights held by key management personnel 2023NoteBalance at beginning of PeriodGranted

187、 as remuneration1ExercisedForfeited/lapsedBalance at end of yearFair value of rights granted during the year1 July 2022 30 June 2023$Non-Executive DirectorsDavid Cronin200,000-(200,000)-Mark Stevens200,000-(200,000)-Mike McGeever200,000-(200,000)-Sub-total NEDs600,000-(600,000)-Executive Directors R

188、obert Broomfield2178,221-(85,277)-92,944-Neville Joyce28,228308,300-(246,640)89,88863,356Jim Viscardi-323,805-(259,043)64,76274,475Sub-total executive KMP206,449632,105(85,277)(505,683)247,594137,831Totals806,449632,105(85,277)(1,105,683)247,594137,8311 The performance rights were granted in two tra

189、nches,vesting on 31 August 2024 and 31 August 2025 with vesting conditions relating to continuity of employment.2 Held the same balances disclosed at the date of resignation and at 30 June 2023.2022NoteBalance at beginning of PeriodGranted as remuneration 3ExercisedForfeited/lapsedBalance at end of

190、yearFair value of rights granted during the year1 July 2021 30 June 2022$Non-Executive DirectorsDavid Cronin-200,000-200,00057,220Mark Stevens-200,000-200,00057,220Mike McGeever-200,000-200,00057,220Sub-total NEDs-600,000-600,000171,660 Executive Directors Robert Broomfield283,526167,939(162,907)(11

191、0,337)178,22175,607Neville Joyce-67,854-(39,626)28,22835,109Sub-total executive KMP283,526235,793(162,907)(149,963)206,449110,716Totals283,526835,793(162,907)(149,963)806,449282,3763 The performance rights were granted in two tranches,vesting on 31 August 2023 and 31 August 2024 with vesting conditi

192、ons relating to continuity of employment.7.Other transactions with key management personnelDuring the current and previous financial year,the Group transacted with related entities of directors,other than in their capacity as director as follows:The Consolidated Entity purchased consulting services

193、from Pierce Asia Pty Ltd and Pierce Group Asia Pte Ltd,related entities through Chairman and Non-Executive Director,David Cronin,for an amount of$282,000(2022:$219,000).Accounts Payable balance at 30 June 2023 totals$17,270(FY2022:$44,812).These arrangements were in the normal course of business and

194、 included amounts related to the provision of consultancy and administration services,and general office expenses provided by the related entities for the benefit of the Consolidated Entity.During the year,there were no other transactions with directors or management personnel.This concludes the Rem

195、uneration Report.|292023 ANNUAL REPORT AVA GROUP30|AVA GROUP ANNUAL REPORT 2023AUDITORS INDEPENDENCE DECLARATION Collins Square,Tower Four Level 18,727 Collins Street Melbourne VIC 3008 GPO Box 5099 Melbourne VIC 3001 Australia Tel:+61 3 9603 1700 Fax:+61 3 9602 3870 .au BDO Audit Pty Ltd ABN 33 134

196、 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,an Australian company limited by guarantee.BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd,a UK company limited by guarantee,and form part

197、 of the international BDO network of independent member firms.Liability limited by a scheme approved under Professional Standards Legislation.DECLARATION OF INDEPENDENCE BY TIM FAIRCLOUGH TO THE DIRECTORS OF AVA RISK GROUP LIMITED As lead auditor of Ava Risk Group Limited for the year ended 30 June

198、2023,I declare that,to the best of my knowledge and belief,there have been:1.No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;and 2.No contraventions of any applicable code of professional conduct in relation to the audit.This declarati

199、on is in respect of Ava Risk Group Limited and the entities it controlled during the period.Tim Fairclough Director BDO Audit Pty Ltd Melbourne,28 August 2023 32|AVA GROUP ANNUAL REPORT 2023Consolidated Statement of Comprehensive IncomeFor the year ended 30 June 2023 ConsolidatedNoteJune 2023June 20

200、22$000$000Continuing operations Revenue from contracts with customers4a28,60118,621Other income4b36340Total Revenue and other income28,63718,961Cost of raw materials and consumables used(10,393)(6,629)Employee benefit expenses(10,487)(6,357)Research and development(1,767)(1,759)Advertising and marke

201、ting(620)(386)Travel and entertainment(923)(346)Facilities and costs(695)(454)Compliance,legal,and administration(1,157)(1,262)Reversal(Provision for)impairment of receivables24(64)Depreciation and amortisation expenses12,13,15(2,068)(1,689)Finance expense(195)(27)Foreign exchange gain(net)156585Oth

202、er expenses(1,356)(931)Total expenses(29,481)(19,319)Loss before income tax(844)(358)Income tax expense5(210)(304)(Loss)for the year from continuing operations(1,054)(662)Discontinued operationsProfit from discontinued operations,net of tax27-33,794(Loss)Profit for the year(1,054)33,132For the year

203、ended 30 June 2023 (Continued)ConsolidatedNote2023June 2022$000$000Items that will not be reclassified subsequently to profit and lossExchange differences on translation of foreign operations1,021(296)Exchange differences reclassified to profit or loss on disposal of discontinued operation-575Total

204、other comprehensive income for the year1,021279Total comprehensive income for the year(33)33,411(Loss)Profit for the year attributable to:Equity holders of the parent company(1,054)33,132(Loss)Profit for the year to the equity holders of the Company relates to:(Loss)for the year from continuing oper

205、ations(1,054)(662)Profit from discontinued operations,net of tax-33,794(Loss)Profit for the year(1,054)33,132CentsCentsTotal comprehensive income for the year attributable to:Equity holders of the parent company(33)33,411Earnings per share attributable to ordinary shareholders of AVA Risk Group from

206、 continuing operationsCentsCentsBasic earnings(loss)per share20(0.41)(0.27)Diluted earnings(loss)per share20(0.41)(0.27)Earnings per share attributable to ordinary shareholders of AVA Risk GroupBasic(loss)profit per share20(0.41)13.63Diluted(loss)profit per share20(0.41)13.46The above Consolidated P

207、rofit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.|332023 ANNUAL REPORT AVA GROUP34|AVA GROUP ANNUAL REPORT 2023Consolidated Statement of Financial Position As at 30 June 2023 ConsolidatedNote20232022$000$000ASSETSCurrent AssetsCash and cash equiv

208、alents6,85,51715,226Trade and other receivables98,3884,739Inventories107,4643,256Prepayments11670400Total Current Assets22,03923,621 Non-Current Assets Plant and equipment121,114491Intangible assets1313,5845,954Right of use assets15263249Deferred tax asset57596Total Non-Current Assets15,0366,790TOTA

209、L ASSETS37,07530,411 LIABILITIES Current Liabilities Trade and other payables162,6712,254Contract liabilities17278225Borrowings231,999-Lease Liability15171131Provisions181,4081,381Total Current Liabilities6,5273,991 As at 30 June 2023(Continued)ConsolidatedNote20232022$000$000Non-Current Liabilities

210、Provisions185947Borrowings23542-Lease liabilities15118153Contract liabilities17429272Deferred tax liabilities5146-Total Non-Current Liabilities1,294472TOTAL LIABILITIES7,8214,463NET ASSETS29,25425,948 EQUITY Contributed Equity753,83150,793Accumulated losses(23,618)(22,564)Reserves(959)(2,281)TOTAL E

211、QUITY29,25425,948The above Consolidated statement of Financial Position should be read in conjunction with the accompanying notes.|352023 ANNUAL REPORT AVA GROUP36|AVA GROUP ANNUAL REPORT 2023Consolidated Statement of Changes in EquityShare CapitalShare based payment ReserveForeign Exchange Translat

212、ion ReserveOther Equity ReservesAccumulated LossesTotal Equity$000$000$000$000$000$000At 1 July 202250,7931,749(983)(3,047)(22,564)25,948Losses for the year-(1,054)(1,054)Other comprehensive income-1,021-1,021Total comprehensive income for the year-1,021-(1,054)(33)Transactions with owners in their

213、capacity as owners Shares issued as part of business combination(Note 2)3,041-3,041Share issue costs(3)-(3)Share based payments-301-301Total transactions with owners in their capacity as owners3,038301-3,339Balance at 30 June 202353,8312,05038(3,047)(23,618)29,254At 1 July 202159,0621,397(1,262)(3,0

214、47)(24,110)32,040Profit for the year-33,13233,132Other comprehensive income-279-279Total comprehensive income for the year-279-33,13233,411Transactions with owners in their capacity as owners Share buy-back(1,329)-(1,329)Capital return(7,566)-(7,566)Dividends/distributions-(31,586)(31,586)Shares iss

215、ued638-638Share issue costs(12)-(12)Share based payments-352-352Total transactions with owners in their capacity as owners(8,269)352-(31,586)(39,503)Balance at 30 June 202250,7931,749(983)(3,047)(22,564)25,948The above consolidated statement of changes in equity should be read in conjunction with th

216、e accompanying notes.Consolidated Statement of Cash Flows ConsolidatedNote20232022$000$000Cash flow from operating activitiesReceipts from customers(inclusive of GST)27,17030,800Payments to suppliers and employees(inclusive of GST)(28,628)(28,154)Interest received291Tax paid(558)(135)Finance costs(1

217、75)(5)Lease interest paid(20)(22)Net cash flows(used in)from operating activities8(2,182)2,485 Cash flow from investing activitiesPayment for intangible assets(1,961)(1,126)Payment for plant and equipment(459)(270)Purchase of business,net of cash acquired2(5,522)-Disposal of subsidiaries,net of cash

218、 and transaction costs27-36,469Net cash flows(used in)from investing activities(7,942)35,073 Cash flow from financing activitiesProceeds from share issue-638Share issue costs(3)(12)Repayment of borrowings(915)-Share buy back-(1,329)Capital return-(7,566)Dividends paid21(101)(31,232)Payment of lease

219、liabilities15(325)(226)Net cash flows(used in)financing activities(1,344)(39,727)Net(decrease)in cash and cash equivalents(11,468)(2,169)Net foreign exchange differences on cash129102Cash and cash equivalents at beginning of period15,22617,293Cash and cash equivalents at end of the period83,88715,22

220、6The above consolidated statement of cash flows includes Discontinued Operations(Refer to Note 27)and should be read in conjunction with the accompanying notes.38|AVA GROUP ANNUAL REPORT 2023Notes to the Financial Statements1.Statement of significant accounting policiesThe following is a summary of

221、significant accounting policies adopted by the Consolidated Entity in the preparation and presentation of the financial report.The accounting policies have been consistently applied,unless otherwise stated.1.1 Basis of preparation of the financial reportThis is a general purpose financial report whi

222、ch has been prepared by a for profit entity in accordance with the requirements of applicable Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board(AASB)and the Corporations Act 2001.It covers Ava Risk Group and controlled entities as a Consolidated

223、Entity.Ava Risk Group is a Company limited by shares,incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars($000)unless otherwise

224、 stated under the option available to the Company under ASIC Corporations(Rounding in Financial/Directors Reports)Instrument 2016/191.The Company is an entity to which this legislative instrument applies.The consolidated financial statements of Ava Risk Group for the year ended 30 June 2023 were aut

225、horised for issue in accordance with a resolution of the directors on 28 August 2023.Compliance with IFRSThe consolidated financial statements of Ava Risk Group also comply with the International Financial Reporting Standards(IFRS),issued by the International Accounting Standards Board(IASB).Histori

226、cal Cost ConventionThe financial report has been prepared under the historical cost convention.Significant Accounting EstimatesThe preparation of financial report requires the use of certain estimates and judgements in applying the Groups accounting policies.Those estimates and judgements significan

227、t to the financial report are disclosed in Note 1.5.1.2 Going ConcernThe financial report has been prepared on a going concern basis which assumes the Group will continue its operations and have sufficient cash to pay its debts as and when they become payable for a period of at least 12 months from

228、the date the financial report was authorised for issue.1.3 Principles of consolidationThe consolidated financial statements are those of the Consolidated Entity,comprising the financial statements of the parent entity and of all entities which the parent entity controls.The group controls an entity

229、when it is exposed,or has rights,to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.Business Combinations and goodwillThe Group accounts for business combinations using the acquisition method when control is transfer

230、red to the Group.The consideration transferred in the acquisition is measured at fair value,as are the identifiable net assets acquired.Acquisition costs are expensed as incurred,except if related to the issue of debt or equity securities.The Group determines that it has acquired a business when the

231、 acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs.The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have previously bee

232、n recognised in the acquirees financial statements prior to the acquisition.Assets acquired and liabilities assumed are measured at their acquisition-date fair values.Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.Contingent co

233、nsideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of AASB 9 Financial Instruments,is measured at fair value with the changes

234、in fair value recognised in the statement of profit or loss in accordance with IFRS 9.Other contingent consideration that is not within the scope of AASB 9 is measured at fair value at each reporting date with changes in fair value recognised in profit or loss.Goodwill is initially measured at cost(

235、being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed).If the fair value of the net assets acquired is in excess of the aggregate cons

236、ideration transferred,the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date.If the reassessment still results in an excess of the fair val

237、ue of net assets acquired over the aggregate consideration transferred,then the gain is recognised in profit or loss.After initial recognition,goodwill is measured at cost less any accumulated impairment losses.For the purpose of impairment testing,goodwill acquired in a business combination is,from

238、 the acquisition date,allocated to each of the Groups cash-generating units that are expected to benefit from the combination,irrespective of whether other assets or liabilities of the acquiree are assigned to those units.Where goodwill has been allocated to a cash-generating unit(CGU)and part of th

239、e operation within that unit is disposed of,the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal.Goodwill disposed in these circumstances is measured based on the relative values of the disposed operatio

240、n and the portion of the cash-generating unit retained.SubsidiariesThe financial statements of subsidiaries are prepared for the same reporting period as the parent entity,using consistent accounting policies.Adjustments are made to bring into line any dissimilar accounting policies,which may exist.

241、Parent entity informationIn accordance with the Corporations Act 2001,these financial statements present the results of the consolidated entity only.Supplementary information about the parent entity is disclosed in note 28.Transactions eliminated on consolidationAll inter-company balances and transa

242、ctions,including any unrealised profits or losses have been eliminated on consolidation.Subsidiaries are consolidated from the date on which control is established and are de-recognised from the date that control ceases.Equity interests in a subsidiary not attributable directly or indirectly to the

243、Group are presented as non-controlling interests.1.4 Summary of significant accounting policiesa)RevenueThe Group has three segments with the following main revenue streams:DetectManufactures and markets smart fibre optic sensing systems for security and condition monitoring for a range of applicati

244、ons including perimeters,pipelines,conveyors,power cables and data networks.AccessSpecialist in the development,manufacture and supply of high security biometric readers,security access control and electronic locking products.IlluminateSpecialist in the development and manufacture of illuminators,AN

245、PR cameras and perimeter detectors.|392023 ANNUAL REPORT AVA GROUP40|AVA GROUP ANNUAL REPORT 2023Notes to the Financial Statements Sale of GoodsAccess and Illuminate ProductThe Groups contracts with customers for the sale of equipment is one performance obligation.Revenue from sale of equipment is r

246、ecognised at the point in time when control of the equipment is transferred to the customer,which is on dispatch or on delivery,dependent on the delivery terms.Detect ProductSome contracts have multiple elements,such as hardware,software and rendered services.When there is more than one performance

247、obligation in the contract,revenue is allocated to each performance obligation on the basis of relative standalone selling prices.Revenue from the sale of the equipment is recognised at a point in time,on dispatch or upon delivery.Warranty provisionsThe Group generally provides warranties for genera

248、l repairs of defects that existed at the time of sale,as required by law.As such,most warranties are assurance-type warranties,which the Group accounts for under AASB 137 Provisions,Contingent Liabilities and Contingent Assets.However,in some contracts,the Group provides extended warranties.These wa

249、rranties are service-type warranties and,therefore,are accounted for as a separate performance obligation to which the Group allocates a portion of the revenue based on the relative standalone selling price.Revenue is subsequently recognised over time based on the time elapsed.Rendering of servicesP

250、erimeter Security ProductThe Groups Detect division provides installation services.These services are sold either separately or bundled together with the sale of equipment to a customer.The installation services can be obtained from other providers and do not significantly customise or modify the Pe

251、rimeter security product.There are two performance obligations in a contract for bundled sales of equipment and installation services,because the Group promises to transfer equipment and provide installation services are capable of being distinct and separately identifiable.Contract balancesThe timi

252、ng of revenue recognition may differ from the contract payment schedule,resulting in revenue that has been earned but not billed.These amounts are included in contract assets.Amounts billed in accordance with contracts with customers,but not yet earned,are recorded as contract liabilities.Contract l

253、iabilities are recognised as revenue when the Group performs under the contract.Interest IncomeInterest income is recognised when it becomes receivable on a proportionate basis taking into account the interest rates applicable to the financial assets.Other revenuesOther operating revenues are recogn

254、ised as they are earned and goods or services provided.(b)Foreign currency translations and balances Functional and presentation currencyThe Groups consolidated financial statements are presented in Australian Dollars(“AUD”),which is also the parent companys functional currency.For each entity,the G

255、roup determines the functional currency and items included in the financial statements are measured using the functional currency.The Group uses the direct method of consolidation and on disposal of a foreign operation,the gain or loss that is reclassified to profit or loss reflects the amount that

256、arises from using this method.Transactions and BalancesTransactions in foreign currencies are initially recorded by the Groups entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.Monetary assets and liabilities denominated in foreig

257、n currencies are translated at the functional currency spot rates of exchange at the reporting date.Differences arising on settlement of translation of monetary items are recognised in profit or loss with the exception of monetary items that are designated as part of the hedge of the Groups net inve

258、stment in a foreign operation.These are recognised in Other Comprehensive Income until the net investment is disposed of,at which time,the cumulative amount is reclassified to profit or loss.Tax charges and credits attributable to exchange differences on those monetary items are also recognised in O

259、ther Comprehensive Income.Foreign SubsidiariesEntities that have a functional currency different to the presentation currency are translated as follows:-Assets and liabilities are translated at the closing rate on reporting date;-Income and expenses are translated at actual exchange rates or average

260、 exchange rates for the period,where appropriate;and-All resulting exchange differences are recognised in other comprehensive income.c)Income tax and other taxesIncome taxThe income tax expense or benefit is the tax payable on the current periods taxable income based on the applicable income tax rat

261、e for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation auth

262、orities based on the current periods taxable income.The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.Deferred taxDeferred tax is provided on all temporary differences at the reporting date between the tax bases of assets

263、and liabilities and their carrying amounts for financial reporting purposes.Deferred tax liabilities are recognised for all taxable temporary differences except:-when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that i

264、s not a business combination and that,at the time of the transaction,affects neither the accounting profit nor taxable profit or loss;or-in respect of taxable temporary differences associated with investments in subsidiaries,associates and interests in joint ventures,when the timing of the reversal

265、of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.Deferred tax assets are recognised for all deductible temporary differences,carry forward of unused tax credits and unused tax losses,to the extent that it is p

266、robable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised,except:-When the deferred income tax asset relating to the deductible temporary difference arises from the initial recogn

267、ition of an asset or liability in a transaction that is not a business combination and,at the time of the transaction,affects neither the accounting profit nor taxable profit or loss;or-In respect of deductible temporary differences associated with investments in subsidiaries,associates and interest

268、s in joint ventures,deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.The carrying amount of deferred tax assets

269、is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the e

270、xtent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised,or the liability is settled,based on tax rates(and tax l

271、aws)that have been enacted or substantively enacted at the reporting date.|412023 ANNUAL REPORT AVA GROUP42|AVA GROUP ANNUAL REPORT 2023Notes to the Financial Statements Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax asse

272、ts against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.Tax benefits acquired as part of a business combination,but not satisfying the criteria for separate recognition at that date,would be recognised subsequen

273、tly if new information about facts and circumstances changed.The adjustment would either be treated as a reduction to goodwill(as long as it does not exceed goodwill)if it was incurred during the measurement period or in profit or loss.Indirect taxesGoods and services tax(including other indirect ta

274、xes such as Value Added Tax in foreign jurisdictions)(GST):Revenues,expenses and purchased assets are recognised net of the amount of GST except:-When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,in which case the GST is recognised as part of th

275、e cost of acquisition of the asset or as part of the expense item as applicable;and-Receivables and payables,which are stated with the amount of GST included.The net amount of GST recoverable from,or payable to,the taxation authority is included as part of receivables or payables in the consolidated

276、 statement of financial position.Cash flows are presented in the consolidated statement of cash flows on a gross basis,except for the GST component of investing and financing activities,which are disclosed as operating cash flows.Commitments and contingencies are disclosed net of the amount of GST r

277、ecoverable from,or payable to,the taxation authority.d)Tax consolidation legislationAva Risk Group has implemented the tax consolidation legislation and has formed a tax consolidated group with the Australian entities,FFT Mena Pty Ltd,MaxSec Group Pty Ltd,BQT Solutions(Australia)Pty Ltd,4C Satellite

278、s Ltd and BQT Intelligent Security Systems Pty Ltd,with Ava Risk Group Limited as the head entity.e)Impairment of non-financial assetsThe Group assesses,at each reporting date,whether there is an indication that an asset may be impaired.If any indication exists,or when annual impairment testing for

279、an asset is required,the Group estimates the assets recoverable amount.Recoverable amount is determined for an individual asset,unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.If this is the case,recoverable amount is determ

280、ined for the cash-generating unit to which the asset belongs.An assets recoverable amount is the higher of an assets or the cash generating units(CGU)fair value less costs of disposal and its value in use.The recoverable amount is determined for an individual asset,unless the asset does not generate

281、 cash inflows that are largely independent of those from other assets or groups of assets.When the carrying amount of an asset or CGU exceeds its recoverable amount,the asset is considered impaired and is written down to its recoverable amount.In assessing value in use,the estimated future cash flow

282、s are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.In determining fair value less costs of disposal,recent market transactions are taken into account.If no such transactions can

283、 be identified,an appropriate valuation model is used.These calculations are corroborated by valuation multiples,quoted share prices for publicly traded companies or other available fair value indicators.The Group bases its impairment calculation on detailed budgets and forecast calculations,which a

284、re prepared separately for each of the Groups CGUs to which the individual assets are allocated.These budgets and forecast calculations generally cover a period of five years.A long-term growth rate is calculated and applied to project future cash flows after the fifth year.Impairment losses of cont

285、inuing operations are recognised in the profit or loss in expense categories consistent with the function of the impaired asset.For assets excluding goodwill,an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longe

286、r exist or have decreased.If such indication exists,the Group estimates the assets or CGUs recoverable amount.A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was reco

287、gnised.The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount,nor exceed the carrying amount that would have been determined,net of depreciation,had no impairment loss been recognised for the asset in prior years.Such reversal is recognised in the pro

288、fit or loss.Goodwill is tested for impairment annually as at 30 June and when circumstances indicate that the carrying value may be impaired.Impairment is determined for goodwill by assessing the recoverable amount of each CGU(or group of CGUs)to which the goodwill relates.When the recoverable amoun

289、t of the CGU is less than its carrying amount,an impairment loss is recognised.Impairment losses relating to goodwill cannot be reversed in future periods.Intangible assets with indefinite useful lives are tested for impairment annually as at 30 June at the CGU level,as appropriate,and when circumst

290、ances indicate that the carrying value may be impaired.f)Cash and cash equivalentsCash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an in

291、significant risk of changes in value.For the purposes of the consolidated statement of cash flows,cash and cash equivalents consist of cash and cash equivalents as defined above,net of outstanding bank overdrafts.Bank overdrafts are included within interest-bearing loans and borrowings in current li

292、abilities on the balance sheet.g)InventoriesInventories are valued at the lower of average cost and net realisable value.The cost of manufactured products includes direct material,direct labour and a proportion of manufacturing overheads based on normal operating capacities.Net realisable value is t

293、he estimated selling price in the ordinary course of business,less the estimated costs of completion and the estimated costs necessary to make the sale.h)Plant and equipmentPlant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.Depreciati

294、on is calculated on a straight line or diminishing balance basis over the estimated useful life of the specific assets as follows:Plant and EquipmentYearsOffice furniture and equipment2-10Motor vehicles5Computer equipment2-10Production plant and equipment2-10Demonstration equipment2-5i)LeasesThe Gro

295、up assesses at contract inception whether a contract is,or contains,a lease.That is,if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.Group as a lesseeThe Group applies a single recognition and measurement approach for all

296、leases,except for short-term leases and leases of low-value assets.The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.|432023 ANNUAL REPORT AVA GROUP44|AVA GROUP ANNUAL REPORT 2023Notes to the Financial Statements

297、 Right-of-use-assetsThe Group recognises right-of-use assets at the commencement date of the lease(i.e.,the date the underlying asset is available for use).Right-of-use assets are measured at cost,less any accumulated depreciation and impairment losses,and adjusted for any remeasurement of lease lia

298、bilities.The cost of right-of-use assets includes the amount of lease liabilities recognised,initial direct costs incurred,and lease payments made at or before the commencement date less any lease incentives received.Right-of-use assets are depreciated on a straight-line basis over the shorter of th

299、e lease term and the estimated useful lives of the assets,as follows:Right-of-use-assetsYearsOffice space and IT equipment3-5Motor vehicles3-5If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option,depreciation is ca

300、lculated using the estimated useful life of the asset.The right-of-use assets are also subject to impairment.Refer to the accounting policies in section Impairment of non-financial assets.LEASE LIABILITIESAt the commencement date of the lease,the Group recognises lease liabilities measured at the pr

301、esent value of lease payments to be made over the lease term.The lease payments include fixed payments(including in-substance fixed payments)less any lease incentives receivable,variable lease payments that depend on an index or a rate,and amounts expected to be paid under residual value guarantees.

302、The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease,if the lease term reflects the Group exercising the option to terminate.Variable lease payments that do not depend on an index o

303、r a rate are recognised as expenses(unless they are incurred to produce inventories)in the period in which the event or condition that triggers the payment occurs.In calculating the present value of lease payments,the Group uses the lessees incremental borrowing rate at the lease commencement date b

304、ecause the interest rate implicit in the lease is not readily determinable.After the commencement date,the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.In addition,the carrying amount of lease liabilities is remeasured if there

305、 is a modification,a change in the lease term,a change in the lease payments(e.g.,changes to future payments resulting from a change in an index or rate used to determine such lease payments)or a change in the assessment of an option to purchase the underlying asset.The Groups lease liabilities are

306、included in Lease liabilities in the Statement of financial position(see Note 15).Short-term leases and leases of low-value assetsThe Group applies the short-term lease recognition exemption to its short-term leases(i.e.,those leases that have a lease term of 12 months or less from the commencement

307、date and do not contain a purchase option).It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value.Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.j)Int

308、angibles Trademarks and LicencesTrademarks and Licences are recognised at cost of acquisition.Trademarks and Licences have a finite life and are amortised on a systematic basis,matched to the future economic benefits over the life of the asset,less any impairment losses.Research and DevelopmentExpen

309、diture on research activities is recognised as an expense when incurred;Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:-The technical feasibility of completing the intangible asset so that the asset will be available for use or

310、sale-Its intention to complete and its ability and intention to use or sell the asset-How the asset will generate future economic benefits-The availability of resources to complete the asset-The ability to measure reliably the expenditure during developmentCapitalised development expenditure is stat

311、ed at cost less accumulated amortisation and accumulated impairment losses.Amortisation is calculated using a straight-line method to allocate the cost of the intangible assets over their estimated useful lives.Amortisation commences when the intangible asset is available for use between 5 and 10 ye

312、ars depending on the product type.During the period of development,the asset is tested for impairment annually.PatentsPatents are initially recognised at the cost on acquisition.Patents have a finite life and are amortised on a systematic basis matched to the future economic benefits over the life o

313、f the asset,less any impairment losses.Amortisation of the patents commences on approval of the patent and is matched to the timing of economic benefits flowing to the Company from the application of the technology.Patents are reviewed for impairment at the end of the financial year and more frequen

314、tly when an indication of impairment exists.Any impairment charge is recorded separately.Patents are amortised over a period of 3-10 years.Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of th

315、e asset and are recognised in the statement of other comprehensive income when the asset is derecognised.k)Trade and other payablesTrade and other payables are carried at amortised cost and due to their short-term nature they are not discounted.They represent liabilities for goods and services provi

316、ded to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.The amounts are unsecured and are usually paid within terms negotiated with suppliers.l)Financial instrument

317、sA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.|452023 ANNUAL REPORT AVA GROUP46|AVA GROUP ANNUAL REPORT 2023Notes to the Financial Statements FINANCIAL ASSETSInitial Recognition and Measurem

318、entFinancial assets are classified,at initial recognition,as measured at amortised cost,fair value through other comprehensive income(OCI),and fair value through profit or loss.The classification of financial assets at initial recognition depends on the financial assets contractual cash flow charact

319、eristics and the Groups business model for managing,the Group initially measures a financial asset at its fair value plus,in the case of a financial asset not at fair value through profit or loss,transaction costs.Trade receivables that do not contain a significant financing component or for which t

320、he Group has applied the practical expedient are measured at the transaction price determined under AASB 15.Refer to significant accounting policies in section 1.4(a)Revenue.In order for a financial asset to be classified and measured at amortised cost or fair value through OCI,it needs to give rise

321、 to cash flows that are solely payments of principal and interest(SPPI)on the principal amount outstanding.This assessment is referred to as the SPPI test and is performed at an instrument level.The Groups business model for managing financial assets refers to how it manages its financial assets in

322、order to generate cash flows.The business model determines whether cash flows will result from collecting contractual cash flows,selling the financial assets,or both.Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in

323、the market place(regular way trades)are recognised on the trade date,i.e.,the date that the Group commits to purchase or sell the asset.Subsequent MeasurementFor purposes of subsequent measurement,financial assets are classified in four categories:Financial assets at amortised cost(debt instruments)

324、Financial assets at fair value through OCI with recycling of cumulative gains and losses(debt instruments)Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition(equity instruments)Financial assets at fair value through profit or loss

325、.The Group only holds financial assets at amortised cost.Financial Assets at Amortised Cost(Debt Instruments)This category is the most relevant to the Group.The Group measures financial assets at amortised cost if both of the following conditions are met:The financial asset is held within a business

326、 model with the objective to hold financial assets in order to collect contractual cash flows;and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.Financial assets at amortis

327、ed cost are subsequently measured using the effective interest rate(EIR)method and are subject to impairment.Gains and losses are recognised in profit or loss when the asset is derecognised,modified or impaired.The Groups financial assets at amortised cost includes cash and cash equivalents,and trad

328、e receivables.DerecognitionA financial asset(or,where applicable,a part of a financial asset or part of a group of similar financial assets)is primarily derecognised(i.e.removed from the Groups consolidated statement of financial position)when:-The rights to receive cash flows from the asset have ex

329、pired;or-The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement and either(a)the Group has transferred substantially all the risks and rewar

330、ds of the asset,or(b)the Group has neither transferred nor retained substantially all the risks and rewards of the asset,but has transferred control of the asset.When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement,it evaluates

331、if,and to what extent,it has retained the risks and rewards of ownership.When it has neither transferred nor retained substantially all of the risks and rewards of the asset,nor transferred control of the asset,the Group continues to recognise the transferred asset to the extent of its continuing in

332、volvement.In that case,the Group also recognises an associated liability.The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.Impairment of financial assetsThe Group recognises an allowance for expected credit

333、 losses(ECLs)for all debt instruments not held at fair value through profit or loss.ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive,discounted at an approximation of the original effective interest rate.The expected cash flows will include cash flows from the sale of collateral held or