Tesserent Limited Annual Report 2021

1. SIGNIFICANT ACCOUNTING POLICIES The financial statements were authorised for issue by the Directors on 29 September 2021. The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001 , as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’). The financial statements cover Tesserent Limited (“the Company”) and its controlled entities as a consolidated entity (“the Group”) for the year ended 30 June 2021. The Company is a company limited by shares that are publicly traded on the Australian Stock Exchange, incorporated and domiciled in Australia. Tesserent provides Cyber security consulting, cloud and managed services to a wide range of Australian and international customers, including education providers, corporate enterprises, and government customers. These services are provided on the basis of consulting contracts, software implementation contracts and a subscription fees, either as one off engagements, longer term projects or as monthly or annual fees. Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments. Comparatives Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures. Going Concern For the year ended 30 June 2021 the Group made a net loss of $4.5m (2020: $7.3m) and had cash inflows from operations of $2.9m (vs. 2020: outflows of $3.3m). Current liabilities exceed current assets by $2.0m. The group’s cash reserves amounted to $14.9m and trade and other receivables amounted to $24.8m, whilst current trade and other payables amounted to $29.0m. Management has considered the impacts of continuing Government restrictions in response to the COVID–19 pandemic. The measures taken have impacted how the Group’s employees operate and how the Group operates. Whilst this has proven disruptive, the Group has continued to trade and is able to meet ongoing customer contract obligations, and source and service new sales contracts. The Group’s supply chain has also been disrupted but not to the extent that the Group is unable to deliver products and services. Management has fully considered the impact of the pandemic when considering the Group’s ability to continue as a going concern. The Group budgets and cash flow forecasts take into account expected trading performance and the Directors believe that the Group will continue to meet its obligations as and when they fall due, with positive forecast operational cash flows contributing to cash reserves. The Group does not expect to require any additional debt funding other than that required to fund additional acquisitions and expects that the Group will raise additional funding through a combination of equity placings and debt funding, which has occurred after balance date as disclosed in Note 41. On the basis of this information, the Directors have a reasonable expectation that the business has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing this financial report. Notes to the Consolidated Financial Statements for the year ended 30 June 2021 51