Announcement PDF AVA Risk Group Limited (A.C.N. 064 089 318) and controlled entities FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2025 Corporate Information ABN 67 064 089 318 DIRECTORS David Cronin, Chairman and Non-Executive Director Mark Stevens, Non-Executive Director Mike McGeever, Non-Executive Director Malcolm Maginnis, Group Chief Executive Officer and Executive Director. COMPANY SECRETARIES Neville Joyce, Kim Larkin REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS 10 Hartnett Close, Mulgrave, Victoria 3170, Australia Telephone: +61 3 9590 3100 INVESTOR RELATIONS Email: investor@theavagroup.com SHARE REGISTRY Boardroom Pty Limited Grosvenor Place, Level 12, 225 George Street, Sydney, NSW 2000, Australia Telephone (within Australia): 1300 737 760 Telephone (outside Australia): +61 2 9290 9600 Facsimile: +61 2 9279 0664 STOCK EXCHANGE AVA Risk Group Limited shares are quoted on the Australian Securities Exchange (ASX). ASX Code: AVA BANKERS Westpac Banking Corporation 275 Kent Street, Sydney, NSW 2000, Australia AUDITORS BDO Audit Pty Ltd, Level 18, Tower 4/ 727 Collins St. Docklands VIC 3008 WEBSITE www.theavagroup.com Information correct as at 27 August 2025. 2 Annual Report 2025 | AVA Group Chairman's Report DEAR FELLOW SHAREHOLDERS AND ASSOCIATES, FY2025 has been a year of continued progress for Ava Risk Group Limited (“Ava Group” or “the Company”) as we strengthen our position as a global leader in sensing and risk management technology. Technology remains at the core of our growth strategy. Our Detect segment performed strongly, underpinned by further investment in Aura Ai-X — our market-leading fibre optic sensing solution. We expanded Aura Ai-X’s applications to serve the telecommunications sector and developed solutions for shorter perimeter deployments in our traditional detection market. A highlight was the successful deployment of Aura Ai-X to a Telstra subsea cable in Q4 FY25, demonstrating the significant opportunities in telecommunications, a key driver of future growth. Financially, the Company delivered a strong first half, with revenue growth of 20%. The second half was impacted by the deferral of several major Detect segment orders into FY2026. Overall, total revenue grew 5% year-on-year, driven by 15% growth in Detect, which benefited from the fulfilment of a significant backlog order from the prior year. Revenue in the Access segment declined 26%, reflecting a lack of repeat dormakaba stocking orders. Our focus remains on driving volume through this important partner channel in Europe and the U.S., and we remain confident dormakaba is the right partner to return Access to growth. Revenue in Illuminate was consistent with the prior year. EBITDA improved materially to $2.1 million, compared with a $0.9 million loss in FY2024. This reflects our strong gross margins and a lean, stable cost base following completion of major investments in commercial capability and technology. As revenues grow, we expect EBITDA margins to improve further, leveraging our fixed cost and technology base. An impairment charge of $5.6 million was recognised in FY2025, representing the remaining goodwill in the Illuminate segment. While this reflects a more conservative revenue outlook, we remain confident in Illuminate’s complementary role to Detect and its potential in new markets. Looking ahead, FY2026 will be pivotal in accelerating revenue growth. We have built a marketleading technology platform, strengthened our commercial capabilities, developed a robust sales pipeline, and secured strong partners in key markets and industry verticals. With a stable cost base, our priorities are to: · Increase sales order intake, particularly in strategic industry sectors; · Grow sales order backlog, including recurring revenues; · Maintain gross margins of 60–65%; and · Continue targeted investment in technology to extend our market leadership. 3 Annual Report 2025 | AVA Group Chairman's Report On behalf of the Board, I thank our shareholders and associates for your ongoing support and acknowledge the dedication of our management team and staff throughout FY2025. We remain committed to building a world-class technology business and look forward to delivering on our growth ambitions in FY2026. David Cronin Chairman 4 Annual Report 2025 | AVA Group Chief Executive Officer's Report Review of Operations The second half of FY2025 presented challenges as several key Detect segment orders expected for H2 were delayed into H1 FY2026. This impacted sales order intake and revenue; however, we achieved significant strategic progress in building a solid platform for future growth across priority segments and geographies. Sovereign Border Protection We have seen a significant increase in client focus on sovereign borders both in protecting physical barriers such as fences and adding covert buried sensing systems. This has been supported by our success in eastern Europe, and we anticipate further growth in the next financial year. Actions to date include: • Installed additional Aura Ai-X systems on a critical Eastern European border, including replacing competitor technology. • Geopolitical events continue to elevate demand for advanced border security solutions. • Pipeline includes further opportunities in Eastern Europe and new markets in the Middle East and Asia. Airports Airports as part of national critical infrastructure has attracted significant interest due to multiple international breaches of perimeters. Our focus on sensing to trigger other systems Is being well reviewed as part of a holistic approach to Detect and respond. Our action in FY25 included: • Perimeter detection systems deployed at Dubai International Airport and a major North American airport during FY2025. • Secured an additional order for a North African airport in Q1 FY2026. • Following a recent security breach in Australia, we will conduct technology trials with regulators and airports to demonstrate how Aura Ai-X can enhance perimeter security. Transportation Transportation has seen the same increase in activity experienced in Airports. We expect further growth in the new financial year, our key activities during FY25: • Expanded our relationship with UGL Limited through further contract variations and began commissioning Aura Ai-X controllers for the Sydney Metro project. • Achieved key certifications to detect intrusions and objects in rail corridors, positioning us for future wins. • Currently bidding for a major Australian transport infrastructure project, delayed to H1 FY2026 pending prime contractor arrangements. Telecommunications Our relationship with Telstra has continued to develop and has led to introductions internationally with other key Telcos. 5 Annual Report 2025 | AVA Group Chief Executive Officer's Report • Completed Aura Ai-X installation on a Telstra subsea cable in Q4 FY2025, with strong performance results. • Expect further deployments across additional subsea infrastructure. • Collaboration with Telstra has opened new opportunities with international telecom operators. North America • Continued pursuit of the world’s largest security market. • H2 slowdown in sales order intake likely linked to tariff uncertainty, with improvement in Q4 including orders in corrections and energy infrastructure. • Expect more consistent intake from these sectors in FY2026. Access • Dormakaba global framework agreement remains central to Access growth strategy. • Initial U.S. stocking order in FY2024 supported the FY2025 launch of the Cobalt lock series. • Working closely with dormakaba to drive volumes in the U.S. and Europe to return Access to growth in FY2026. FY2025 Sales Order Summary • Total: $29.9m (FY2024: $35.3m) • Detect: $18.3m, including border protection, aviation, and telecom orders • Access: $4.3m, down 25% due to prior-year U.S. stocking order • Illuminate: consistent with FY2024 • Recurring service contracts grew to $2.6m, driven by Aura Ai-X deployments • Sales order backlog: $6.4m (FY2024: $8.5m) including $2.6m in annual recurring revenue Technology Investment • Continued development of Aura Ai-X to expand from security applications to broader fibre sensing markets. • Developed a shorter perimeter coverage variant and tailored telecom-specific applications with Telstra, supporting global opportunities. Financial Review A$m Revenue & Other Income Underlying EBITDA* Profit / (Loss) After Tax FY2024 30.2 (0.9) (5.2) 6 FY2025 31.7 2.1 (6.5) Change +1.5 +3.0 (1.3) Annual Report 2025 | AVA Group Chief Executive Officer's Report • Revenue growth of 5% to $31.7m, driven by Detect (+17%). • Access revenue down 26% due to reduced dormakaba U.S. orders post-launch stocking. • Illuminate revenue flat year-on-year.` • Gross margin improved to 64% (FY2024: 60%) with minimal pricing pressure, reflecting strong technology value. • Operating costs reduced by $0.8m following organisational changes, creating a stable cost base. • EBITDA improvement to $2.1m reflects margin gains and cost efficiencies. • $5.6m impairment of Illuminate goodwill following conservative revenue forecasts; however, segment performance improved in calendar 2025 with stronger OEM demand, particularly in North America. • Year-end cash balance: $5.6m (FY2024: $5.1m). Outlook With a stable cost base and a leading technology platform, Ava Group is focused on accelerating revenue growth in FY2026: • Detect: Increase Aura Ai-X penetration in priority segments; target 20%+ revenue growth; pursue adjacent opportunities via partners. • Access: Drive U.S. and European volumes through dormakaba’s distribution network. • Illuminate: Continue sales momentum from key distributors and explore integration with Detect solutions. Gross margins are expected to remain stable at 60–65%, with targeted investment in sales, project management, and technical support as revenues grow. We anticipate EBITDA margins expanding to double digits in FY2026. I look forward to updating you on our progress and delivering on the growth opportunities ahead. Mal Maginnis, Chief Executive Officer 7 Annual Report 2025 | AVA Group Table of Contents Directors’ Report Auditor’s Independence Declaration Consolidated Statement of Profit or Loss and Other comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity Notes to the Consolidated Financial Statements Directors’ Declaration Independent audit report Shareholder Information 8 9 35 36 37 38 39 40 81 82 87 Annual Report 2025 | AVA Group Directors' Report The 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” or "AVA Group") and the entities it controlled for the financial year ended 30 June 2025 and auditor’s report thereon. Directors The 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 otherwise stated. Information on Company Directors and Company Secretary The qualifications, experience and special responsibilities of each person who has been a director of AVA Group at any time since 1 July 2024 to the date of this report is provided below with details of the company secretaries as at the year end. Name, qualifications, and independence status Experience, special responsibilities and other directorships David Cronin David has over 25 years professional experience and more than 15 years 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 focussed corporate development and investment activities. Chairman of the Board (Appointed 31 August 2018) Non-Executive Director (Appointed 10 April 2018) Previous to his role at Pierce Group Asia, David was an investment manager for the London listed Guinness Peat Group PLC and Director of M&A for its technology focussed division. Working for several large financial and non-financial institutions, David has been involved in various advisory, executive level and board positions with several early to mid-stage technology companies. David has extensive knowledge of AVA 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 Group prior to its IPO. Mike McGeever Non-Executive Director (Appointed 8 August 2018) Mr Cronin is not a director of any other ASX listed entity in the last three years. 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 company 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 focussed companies. Mr McGeever has a Master of Business Administration from the University of Portsmouth (England). He is not a director of any other ASX listed entity in the last three years. Annual Report 2025 | AVA Group Directors' Report Mark Stevens Non-Executive Director (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 positions with Nortel Networks Inc., Aircom International Limited, ECI Telecom Limited, 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 of Engineering degree from Monash University and is a Graduate Member of the Australian Institute of Company Directors. He is not a director of any other ASX listed entity in the last three years. Malcolm Maginnis Mal has more than 35 years of experience in the defence, security, Group Chief Executive Officer safety and technology industries. Most recently, Mal served as President of Rapiscan Systems from July 2017 until September (Appointed 9 January 2023) 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 Technologies, a Sydney-based detection company. He was also President of Smiths Detection from 2011 to 2014. Mal is based in Singapore. He is not a director of any other ASX listed entity in the last three years. Joint Company Secretaries Neville Joyce Appointed 3 November 2021 Neville is a highly experienced financial and commercial executive with proven expertise across multiple sectors including energy, mining, 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 was Group Chief Financial Officer at Redflex Holdings Limited from 2017 to 2021. Neville is a CPA and holds a Bachelor of Business. Kim Larkin Appointed 20 January 2017 Kim is an experienced business professional with 24 years’ experience in the banking and finance industries and 7 years as a Company Secretary (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 Limited’s Queensland office. 10 Annual Report 2025 | AVA Group Directors' Report Directors' Meetings The 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: D Cronin M Stevens M McGeever M Maginnis Board of Directors' Meetings Eligible to attend Attended 12 12 12 12 12 12 12 12 Meetings of Audit & Risk Committee Eligible(ARC) to attend Attended 4 4 4 4 4 4 4 4 Meetings of Remuneration & Nomination Eligible toCommittee attend Attended 3 3 3 3 3 3 3 3 Committee Membership As at the date of this report, the Company had an Audit & Risk Committee, and a Remuneration & Nomination Committee of the Board of Directors. Members acting on the committees of the Board during the year were: Audit Committee M Stevens (Chairman) D Cronin M McGeever Remuneration and Nomination Committee M McGeever (Chairman) D Cronin M Stevens Gender Diversity Policy The 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 been set with the Company assessing annually both the objectives and the entity’s 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 2025, women represented 27% of the business. Whilst AVA Group 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. 11 Annual Report 2025 | AVA Group Directors' Report Directors’ Interests in shares or options As at 30 June 2025, the interests of the directors in the shares and performance rights of AVA Group are as detailed below: Number of Number of ordinary performance shares rights D Cronin M Stevens M Mc Geever M Maginnis 33,750,706 1,721,181 6,005,000 666,666 200,000 200,000 200,000 2,833,333 Principal activities The principal activities of the Consolidated Entity during the financial year 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 external security and intruder detection equipment including ANPR cameras, lighting controllers and infrared and white-light LED Illuminators. Review of Operations The second half of FY2025 presented challenges as several key Detect segment orders expected for H2 were delayed into H1 FY2026. This impacted sales order intake and revenue; however, we achieved significant strategic progress in building a solid platform for future growth across priority segments and geographies. Sovereign Border Protection We have seen a significant increase in client focus on sovereign borders both in protecting physical barriers such as fences and adding covert buried sensing systems. This has been supported by our success in eastern Europe, and we anticipate further growth in the next financial year. Actions to date include: • Installed additional Aura Ai-X systems on a critical Eastern European border, including replacing competitor technology. • Geopolitical events continue to elevate demand for advanced border security solutions. • Pipeline includes further opportunities in Eastern Europe and new markets in the Middle East and Asia. 12 Annual Report 2025 | AVA Group Directors' Report Airports Airports as part of national critical infrastructure has attracted significant interest due to multiple international breaches of perimeters. Our focus on sensing to trigger other systems Is being well reviewed as part of a holistic approach to Detect and respond. Our action in FY25 included: • Perimeter detection systems deployed at Dubai International Airport and a major North American airport during FY2025. • Secured an additional order for a North African airport in Q1 FY2026. • Following a recent security breach in Australia, we will conduct technology trials with regulators and airports to demonstrate how Aura Ai-X can enhance perimeter security. Transportation Transportation has seen the same increase in activity experienced in Airports. We expect further growth in the new financial year, our key activities during FY25: • Expanded our relationship with UGL Limited through further contract variations and began commissioning Aura Ai-X controllers for the Sydney Metro project. • Achieved key certifications to detect intrusions and objects in rail corridors, positioning us for future wins. • Currently bidding for a major Australian transport infrastructure project, delayed to H1 FY2026 pending prime contractor arrangements. Telecommunications Our relationship with Telstra has continued to develop and has led to introductions internationally with other key Telcos. • Completed Aura Ai-X installation on a Telstra subsea cable in Q4 FY2025, with strong performance results. • Expect further deployments across additional subsea infrastructure. • Collaboration with Telstra has opened new opportunities with international telecom operators. North America • Continued pursuit of the world’s largest security market. • H2 slowdown in sales order intake likely linked to tariff uncertainty, with improvement in Q4 including orders in corrections and energy infrastructure. • Expect more consistent intake from these sectors in FY2026. Access • Dormakaba global framework agreement remains central to Access growth strategy. • Initial U.S. stocking order in FY2024 supported the FY2025 launch of the Cobalt lock series. • Working closely with dormakaba to drive volumes in the U.S. and Europe to return Access to growth in FY2026. 13 Annual Report 2025 | AVA Group Directors' Report FY2025 Sales Order Summary • Total: $29.9m (FY2024: $35.3m) • Detect: $18.3m, including border protection, aviation, and telecom orders • Access: $4.3m, down 25% due to prior-year U.S. stocking order • Illuminate: consistent with FY2024 • Recurring service contracts grew to $2.6m, driven by Aura Ai-X deployments • Sales order backlog: $6.4m (FY2024: $8.5m) including $2.6m in annual recurring revenue Technology Investment • Continued development of Aura Ai-X to expand from security applications to broader fibre sensing markets. • Developed a shorter perimeter coverage variant and tailored telecom-specific applications with Telstra, supporting global opportunities. Financial Review A$m Revenue & Other Income Underlying EBITDA* Profit / (Loss) After Tax FY2024 30.2 (0.9) (5.2) FY2025 31.7 2.1 (6.5) Change +1.5 +3.0 (1.3) • Revenue growth of 5% to $31.7m, driven by Detect (+17%). • Access revenue down 26% due to reduced dormakaba U.S. orders post-launch stocking. • Illuminate revenue flat year-on-year. • Gross margin improved to 64% (FY2024: 60%) with minimal pricing pressure, reflecting strong technology value. • Operating costs reduced by $0.8m following organisational changes, creating a stable cost base. • EBITDA improvement to $2.1m reflects margin gains and cost efficiencies. • $5.6m impairment of Illuminate goodwill following conservative revenue forecasts; however, segment performance improved in calendar 2025 with stronger OEM demand, particularly in North America. • Year-end cash balance: $5.6m (FY2024: $5.1m). 14 Annual Report 2025 | AVA Group Directors' Report Significant changes in the state of affairs An impairment charge of $5,624,000 was recorded for the Illuminate CGU. When performing the impairment test for Goodwill management considered the lower than expected revenue for the Illuminate segment during FY2025 and impacts on expected growth in subsequent periods. Refer Note 14 to the financial statements for key assumptions. Following the impairment adjustment there is no longer any Goodwill attributable to the Illuminate CGU. After balance date events No matters of circumstances have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in future years. Risks Specific to the business Intellectual Property Theft and Cyber Security threats The Company has patents and trademarks protecting some of its intellectual property. Know-how contained in confidential documentation and software source code attributable to the intellectual property may be appropriated by a third party to the detriment of the Company. Supply Chain disruption risk AVA Risk Group sources a number of key technology components such as laser and optical devices, and some complete products that make up its total solution provided by third parties. The global supply of these components may experience disruption. To mitigate this risk the Company has identified its critical components and expected lead times. Where possible the Company has identified multiple suppliers of critical components. Coupled with detailed forecasts of expected demand, the Company uses this information to ensure its inventory levels are adequate to fulfil expected demand. Cancellation or delay of infrastructure projects The Company’s growth is dependent in part on specifications by System Integrators as part of a tender for large construction and infrastructure projects. The cancellation or delay of an infrastructure project where AVA Risk Group has been specified as the system provider could have adverse implications on future revenue. To mitigate this risk the Company continues to develop a sales opportunity pipeline which contains both geographic and opportunity diversification. 15 Annual Report 2025 | AVA Group Directors' Report Competition There are some companies that sell security intrusion and access technologies. There are other large organisations that provide complex security solutions that have developed in house technologies that support security applications. AVA Risk Group expects to face competition from such organisations, some of which may have greater financial, technical and marketing resources. Increased competition could result in margin reductions, reduced operating margins and loss of market share. To mitigate this risk AVA Risk Group continues to invest in its core technologies to ensure that it is market leading. Attract and retain skilled staff AVA Risk Group’s success will in part depend on its ability to hire and retain key staff. This risk is mitigated by the Company having appropriate incentive schemes and ensuring that the Company’s remuneration policy remains consistent with market demands. Likely developments Likely development of the operations of the Group are encompassed in the Operating and Financial Review section of this report. Environmental regulation and performance The Consolidated Entity’s operations are not subject to any significant environmental Commonwealth or State regulations or laws. The Group has complied with all environmental regulations to which it is subject. Dividends recommended or declared During the financial year ended 30 June 2025; no dividends were declared. Special dividend at the rate of 0.17cents per share, paid on 15 December 2023 2025 $000 2024 $000 - 436 Share options granted to directors and executives There were no options over unissued ordinary shares granted by AVA Risk Group during or since the financial year end to directors and executives in office. Shares under option There are no unissued ordinary shares of AVA Risk Group under option at the date of this report. 16 Annual Report 2025 | AVA Group Directors' Report Performance Rights Shares (PSRs) During the year ended 30 June 2025, the following performance rights were issued to Executive KMP: Number of PSRs issued Malcolm Maginnis Neville Joyce 2,000,000 1,500,000 Total 3,500,000 The performance rights were granted to Malcolm Maginnis as part of remuneration in three different value tranches, vesting on 31 August 2026 and 31 August 2027 with vesting conditions relating to financial performance, share price hurdle and continuity of employment. The performance rights were granted to Neville Joyce as part of remuneration in three different value tranches, vesting on 31 August 2026 and 31 August 2027 with vesting conditions relating to financial performance, share price hurdle and continuity of employment. 17 Annual Report 2025 | AVA Group Directors' Report During the year ended 30 June 2025, the following performance rights were issued to NonExecutive KMP. Their performance criteria was however not met, and as a result they were not delivered. David Cronin Mark Stevens Mike McGeever Grant date Number of PSRs issues 31 Oct 2024 31 Oct 2024 31 Oct 2024 200,000 200,000 200,000 Unissued ordinary shares of AVA Risk Group under performance rights at 30 June 2025 are as follows: Number of unissued ordinary shares under rights Expiry date of the performance rights 1/07/2022 323,440 31/08/2025 9/01/2023 500,000 9/01/2026 26/10/2023 333,330 9/01/2026 9/09/2024 1,875,000 31/08/2026 9/09/2024 1,875,000 31/08/2027 31/10/2024 600,000 31/07/2025 31/10/2024 31/10/2024 Total 1,000,000 1,000,000 7,506,770 31/08/2026 Date the Performance rights were granted 18 31/08/2027 Annual Report 2025 | AVA Group Directors' Report No 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 Entity No