CORPORATE DIRECTORY
4DS MEMORY LIMITED
and Controlled Entities
ACN: 145 590 110
Annual Report
For the year ended 30 June 2021
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 1
CONTENTS
Corporate Directory
Directors' Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditors’ Report
Corporate Governance Statement
ASX Additional Information
2
3
19
20
21
22
23
24
54
55
59
69
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 1
CORPORATE DIRECTORY
Directors
Drs. Willibrordus G.M (Wilbert) van den Hoek
Dr Guido Arnout
Mr David McAuliffe
Mr Howard Digby
Chairman and Non-Executive Director
CEO and Managing Director
Executive Director
Non-Executive Director
Company Secretary
Mr Peter Webse
Registered and Principal Office
Level 2, 50 Kings Park Road,
West Perth WA 6005
PO Box 271
West Perth WA 6872
Phone +61 8 6377 8043
Email david@4dsmemory.com
Website
www.4dsmemory.com
Share Registry
Automic Registry Services
Level 2
267 St Georges Terrace,
Perth WA 6000
Phone +618 9324 2099
+61 8 9321 2337
Fax
info@automic.com.au
Email
Web www.automic.com.au
Auditors
PKF Perth
Level 4, 35 Havelock Street,
West Perth WA 6005
Solicitors
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Securities Exchange Listing
Australian Securities Exchange
Home Exchange: Perth, Western Australia
Code: 4DS
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 2
DIRECTORS’ REPORT
The Directors of 4DS Memory Limited (the Company or 4DS) and controlled entities (the Group) submit the
following report for the year ended 30 June 2021 (Financial Period).
Directors
The names and the particulars of the Directors of the Company during financial period and to the date of this
report are:
Drs. Wilbert van den Hoek
Dr Guido Arnout
Mr David McAuliffe
Mr Howard Digby
Mr James Dorrian
Chairman and Non-Executive Director (appointed 30 November 2020)
CEO and Managing Director
Executive Director
Non-Executive Director
Non-Executive Chairman (resigned 26 April 2021)
Qualifications, Experience and Special Responsibilities of Directors
Drs. Wilbert van den
Hoek
Qualifications
Experience
-
-
-
Directorships held in
other listed entities
Dr Guido Arnout
Qualifications
Experience
-
-
-
-
Chairman and Non-Executive Director
Doctorandus Degree in Chemistry
Drs. van den Hoek was on the Board of Cypress Semiconductor Corporation
(“Cypress”) from 2011 to 2017. Cypress was a leader in advanced embedded
solutions for the world’s most innovative automotive, industrial, smart home
appliances, consumer electronics and medical products. Cypress was acquired
by Infineon Technologies AG at an enterprise value of approximately US$10 billion
in a transaction that was announced in June 2019 and completed in April 2020.
Drs. van den Hoek also spent 17 years of his career at Novellus Systems, Inc.
(“Novellus”). Novellus was a leading provider of advanced process equipment
for the world’s semiconductor industry. From 1999 until 2005, he served as
Novellus’ Chief Technical Officer and Executive Vice President, Integration and
Advanced Development. From 2005 until 2008, he was President and CEO of
Novellus Development Company, LLC, the venture arm of Novellus. Novellus was
acquired by Lam Research Corp in a transaction valued at approximately US$3.3
billion and announced in December 2011.
Drs. van den Hoek currently serves as Chairman of Neocera LLC, as Chairman of
Jiaco Instruments BV, and as a member of the board of directors of Innovent
Technologies, LLC and Neocera Magma, LLC.
Nil
CEO and Managing Director
PhD Electrical Engineering
Dr Arnout has specific expertise with over 30 years in commercialising electronics
technology from concept to product. He was the founding President & CEO of
PowerEscape, which introduced the first tools for the development of low-power
software executing on multicore devices. He was also founding President & CEO
of CoWare, which pioneered system-level design tools for hardware-software co-
design and the time-based licensing business model. Dr Arnout co-founded the
Open SystemC Initiative (OSCI), an industry consortium to standardise a language
for system level design, and as its President submitted the SystemC language to
IEEE. He served as VP of Engineering and later senior VP of marketing of
CrossCheck Technology. He co-founded and later became VP of Engineering of
Silvar-Lisco, the first commercial EDA (electronic design automation).
Directorships held in
other listed entities
-
Nil
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 3
DIRECTORS’ REPORT
Qualifications, Experience and Special Responsibilities of Directors (Continued)
Mr David McAuliffe
Qualifications
Experience
Directorships held in
other listed entities
Mr Howard Digby
Qualifications
Experience
Directorships held in
other listed entities
Mr James Dorrian
Qualifications
Experience
Executive Director
LLB (Hons), BPharm
-
-
- Mr McAuliffe is an experienced company Director and entrepreneur who has had
over 22 years’ experience, mostly in the international biotechnology field. During
that time, he was involved in numerous capital raisings and in licensing of
technologies. He is a founder of several companies in Australia, France and the
United Kingdom, many of which have become public companies. He is President
of the Dyslexia-Speld Foundation WA (Inc).
-
-
-
Non-Executive Director of Invex Therapeutics Limited (ASX: IXC)
Non-Executive Director
BE (Mechanical, Hons)
- Mr Digby started his career at IBM and has spent over 25 years managing
technology related businesses across the Asia Pacific region, of which 12 years
were spent in Hong Kong. More recently, he was with The Economist Group as
Regional Managing Director. Prior to this he held senior management roles at
Adobe and Gartner where his clients included major semiconductor players
inclusive of Samsung, Hynix and TSMC. Upon returning to Perth, Howard served as
Executive Editor of WA Business News and now spends his time as an advisor and
investor, having played key roles in several M&A and reverse takeover
transactions.
Non-Executive Directors of Elsight Limited (ASX: ELS)
-
Non-Executive Director of IMEXHS Limited (ASX: IME)(Formerly known as Omni
Market Tied Limited (ASX: OMT) (Resigned on 30 April 2020)
Non-Executive Director of Cirralto Limited (ASX: CRO)
Non-Executive Chairman of Vortic Limited (ASX: VOR)( Resigned on 19 April 2021)
Non-Executive Chairman of Singular Health Group Ltd (ASX: SHG)
Non-Executive Chairman (resigned 26 April 2021)
BA (Economics and Communications)
-
-
- Mr Dorrian is former partner at Crosspoint Venture Partners, a Silicon Valley based
early-stage venture capital firm. He has served as both CEO and Director of
several Silicon Valley companies and has in depth M&A and IPO experience
gained through founding and managing successful technology exits. Prior to
these roles, Mr Dorrian was the Founder and CEO of Arbor Software and has held
management roles with a number of multinational IT companies. He is a founding
member of the OLAP Council, an industry consortium for On-Line Analytical
Processing.
Directorships held in
other listed entities
-
Nil
Interests in shares and options of the Company
Number of
Ordinary Shares at
30 June 2021
Number of Options
over Ordinary
Shares at 30 June
2021
Number of
Ordinary Shares
as at the date
of this report
Number of Options
over Ordinary
Shares as at the
date of this report
-
20,000,000
-
20,000,000
3,030,053
21,380,000
3,030,053
21,380,000
Chairman and
Non-Executive
Director
CEO and
Managing
Director
Executive Director
6,975,647
7,000,000
6,975,647
7,000,000
Non-Executive
Director
6,211,954
1,250,000
6,211,954
1,250,000
Drs. Wilbert van
den Hoek
Dr Guido
Arnout
Mr David
McAuliffe
Mr Howard
Digby
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 4
DIRECTORS’ REPORT
Company Secretary
Mr Peter Webse
Qualifications
Experience
Principal Activities
- B.Bus, FGIA, FCIS, FCPA, MAICD
- Mr Webse has over 27 years' company secretarial experience and is the Managing
Director of Platinum Corporate Secretarial Pty Ltd, a company specialising in
company secretarial, corporate governance and corporate advisory services.
4DS Memory Limited (ASX: 4DS), with facilities located in Silicon Valley, is a semiconductor company pioneering
the development of a non-volatile memory technology known as Interface Switching ReRAM, for next
generation gigabyte Storage Class Memory. Established in 2007, 4DS owns a patented IP portfolio, comprising
31 USA patents granted and an additional 2 patents pending or being filed, which have been developed in-
house to create high density Storage Class Memory. 4DS has a joint development agreement with Western
Digital subsidiary HGST, a global storage leader, which is now in its eighth year. 4DS also has a development
agreement with Belgium based imec – a world leading research and innovation hub in nanoelectronics and
digital technologies.
Operating Results
The loss of the Group after providing for income tax amounted to $6,657,835 (2020: $5,469,276 loss).
Review of Operations
For the year ending 30 June 2021, 4DS made significant progress in the development of its Interface Switching
ReRAM technology with the consistent achievement of key strategic and technical milestones.
Collaboration agreements
• On 4 March 2021 development partner imec agreed to extend the collaboration agreement for an
additional twelve months, commencing on 1 January 2021.
• On 13 May 2021, the Company reported that Western Digital Corporation subsidiary HGST renewed the
joint development agreement for the 8th consecutive year for another 12 months.
Patent portfolio
•
•
The Company was granted its 24th, 25th, 26th, 27th, 28th, 29th, 30th and 31st US patents.
These patents specifically relate to the operation of the Company’s fully owned and in-house developed
Interface Switching ReRAM technology.
Platform and Non-Platform Lots
• On 10 December 2020, the Company stated that the Second Non-Platform Lot was successfully
manufactured by imec and would be available for testing at its facilities in Fremont in late December 2020.
• On 1 February 2021 the Company stated that 4DS had completed its testing of the Second Non-Platform
•
Lot.
The data from the Second Non-Platform Lot:
−
−
Confirmed that the Company had been able to repeat the results for each of the key memory
characteristics (speed, endurance, and retention) that were achieved with the First Non-Platform
Lot;
Confirmed that significantly, 19 of the 21 device wafers were functional, a first for the Company (the
two non-functional wafers were the result of being manufactured outside the imec process window);
and
Provides 4DS with further valuable insights with respect to how changes in key process parameters
affect these key memory characteristics; i.e. which changes increase which memory characteristic.
• On 1 February 2021, the Company also reported that the production of the Second Platform Lot
commended at imec on 27 January 2021 and on 21 June 2021 that these wafers arrived at 4DS in Fremont
for testing.
−
• On 21 June 2021, the Company also reported that it had taken the opportunity to utilise spare capacity on
imec’s state-of-the-art production equipment to manufacture a Third Non-Platform Lot to ensure that the
Company continues to build an extensive data set around the process parameters for its Interface
Switching ReRAM technology.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 5
DIRECTORS’ REPORT
Review of Operations (Continued)
COVID-19
• COVID-19 related restrictions did not significantly affect the Company’s operations. However, for the safety
of all employees, only a limited number of employees were allowed be at the Fremont facilities at the same
time. Productivity was maintained by scheduling on-site tasks over longer days including weekends and
holidays.
• All COVID-19 restrictions in Silicon Valley officially ended on June 15 and everyone in the team is fully
•
vaccinated.
The US$131,542 (equivalent to AU$191,543) loan that 4DS received on 11 May 2020 under the Paycheck
Protection Program (“PPP”) – established as part of the US Coronavirus Aid, Relief and Economic Security
Act (“CARES Act”) – was fully forgiven by the US Small Business Administration on 6 April 2021.
Events post 30 June 2021 and Short-Term Development Strategies
On 17 August 2021 the Company stated that analysis of the Third Non- Platform Lot wafer results had confirmed
that:
•
•
•
•
•
4DS had been able to repeat the results for each of the key memory characteristics (speed, endurance,
and retention) that were achieved with the Second Non-Platform Lot (1 February 2021 announcement”);
All 23 device wafers in the lot were functional;
4DS had for the first time demonstrated fabrication of fully crystalline Pr1-xCaxMnO3 (“PCMO”) at
temperatures compatible with the advanced processes run in today’s leading-edge high-volume memory
DRAM and NAND factories;
4DS had demonstrated that this fully crystalline PCMO material reduces the cell on-resistance by an order
of magnitude compared to the PCMO material fabricated in the Second Non-Platform Lot. This reduction
in cell on-resistance directly translates into a significant improvement in read speed; and
This significant performance improvement also means that full characterization (speed, endurance,
retention) of memory cells with this fully crystalline PCMO material requires memory cells operating in a
memory array where currents are controlled and limited by access devices.
This important milestone in 4DS’ technology development pathway allows 4DS to focus on doing the same for
integration of its ReRAM technology into imec’s megabit memory platform.
On 17 August 2021 the Company stated that a technical issue during the fabrication of the Second Platform Lot
at imec affected all wafers and most test structures on each wafer. This technical issue had quickly been
identified during detailed analysis and is resolvable going forward with no delays to current timelines.
Significantly, despite this technical issue, the Second Platform Lot still yielded some critically important results:
•
•
The Company had for the first time demonstrated scalability of its memory cell to the smallest cell
geometries supported on imec’s memory platform on 300mm wafers using state-of-the-art process
equipment; and
The Company had also for the first time demonstrated memory cell switching using an access device which
is a critical step for producing a functional megabit memory array.
4DS is finalizing the production date of the Third Platform Lot with imec. This lot is expected to start in late Q3
2021.
The results of the analysis of the Second Platform Lot and the Third Non-Platform Lot bring 4DS and its partners
closer to realizing their strategic objective of commercializing the Company’s technology.
There have been no other matters or circumstances that have arisen since 30 June 2021 that have significantly
affected or may significantly affect:
•
•
•
the Group’s operations in future years or
the results of those operations in future years or
the Group’s state of affairs in future years.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 6
DIRECTORS’ REPORT
Placement, Issue of Securities and Release from Escrow
On 29 June 2020, the Company announced binding commitments to raise $4.5 million via placement of 100
million shares at $0.045 per share of which the proceeds were received subsequently in July 2020.
On 2 July 2020, the Company announced an invitation to eligible Shareholders to participate in a Share
Purchase Plan (SPP).
On 23 July 2020, the Company announced 880,000 unlisted options having an exercise price of $0.045 each
expired.
On 29 July 2020, the Company successfully completed its SPP at $0.045 per share and raised $3.1 million which
will be used to progress the development of 4DS’ Interface Switching ReRam technology with imec and Western
Digital/HGST.
On 11 November 2020, 1,000,000 ordinary shares were issued following the exercise of unlisted options with expiry
of 27 October 2022.
On 30 November 2020, the Company issued the following:
•
652,173 fully paid ordinary shares at $0.046 in satisfaction of the Director’s fees owed to Mr. James Dorrian
from 1 July 2019 until 31 March 2020 (being a total of $30,000) as per shareholders’ approval on 30
November 2020.
434,782 fully paid ordinary shares at $0.046 in satisfaction of the Director’s fees owed to Mr. Howard Digby
from 2019 and 2020 financial years (being a total of $20,000) as per shareholders’ approval on 30 November
2020.
•
On 14 December 2020, 2,000,000 ordinary shares were issued following the exercise of unlisted options with expiry
of 27 October 2022.
On 22 December 2020, 3,000,000 ordinary shares were issued following the exercise of unlisted options with expiry
of 27 October 2022.
On 8 February 2021, 1,760,000 ordinary shares were issued following the exercise of unlisted options with expiry
of 27 October 2022.
On 11 May 2021, 2,408,000 ordinary shares were issued following the exercise of unlisted options with expiry of 27
October 2022.
Incentive Options
On 7 October 2020, the Company announced that the Board had reached a successful outcome with respect
to Dr Arnout’s remuneration. The incentive is in the form of participation in a cash bonus pool (Sale Bonus Pool),
the size of which will be determined by the value received by shareholders upon a liquidity event, such as
takeover of the Company or a sale of the Company’s intellectual property. The members of 4DS’ technical
team, based in Silicon Valley, as well as Drs. Wilbert van den Hoek, are eligible to participate in the Sale Bonus
Pool.
Upon a liquidity event occurring, Dr Guido Arnout, Drs. Wilbert van den Hoek and US based employees (Eligible
Participants) will each be entitled to receive a proportion of the Sale Bonus Pool. Dr Arnout will be entitled to
receive 30%, Drs. Wilbert van den Hoek will be entitled to receive 25%, with the balance to be allocated to
Eligible Participants at the discretion of the Board.
On 30 November 2020, the Company issued Drs. van den Hoek 20,000,000 unlisted options exercisable at $0.064
each, expiring 29 November 2025, with 5,000,000 vesting following the completion of 6 months service to the
Company and the remaining 15,000,000 options vesting quarterly over the following 10 quarters subject to the
holder continuing to remain a Director of the Company.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 7
DIRECTORS’ REPORT
Financial Position and Significant Changes in the State of Affairs
The net assets of the Group totalled $3,944,057 (2020: $1,616,707). Cash on hand at 30 June 2021 totalled
$4,298,794 (2020: $2,509,785).
Dividends Paid or Recommended
No dividend has been declared or paid by the Company. The Directors do not recommend the payment of a
dividend.
Environmental Regulation and Performance
The Company aims to comply with the identified regulatory requirements in each jurisdiction in which it operates.
There have been no known material breaches of the environmental regulations.
Share Options
Unissued shares
At the date of this report, the unissued ordinary shares of 4DS under option are as follows
Grant Date
Expiry Date
Exercise Price
Number under option
30 October 2017
27 October 2022
22 January 2018
27 October 2022
22 January 2019
22 January 2024
6 May 2019
22 January 2024
28 August 2019
28 August 2024
30 November 2020
29 November 2025
$0.042
$0.042
$0.052
$0.052
$0.052
$0.064
18,107,000
14,000,000
8,900,000
16,880,000
2,600,000
20,000,000
80,487,000
On 30 November 2020, the Company issued Drs. Wilbert 20,000,000 unlisted options exercisable at $0.064 each,
expiring 29 November 2025, with 5,000,000 vesting following the completion of 6 months service to the Company
and the remaining 15,000,000 options vesting quarterly over the following 10 quarters subject to the holder
continuing to remain a Director of the Company.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company
or any related body corporate.
Shares issued as a result of the exercise of options
During the financial year ended 30 June 2021, the Group issued 10,168,000 ordinary shares at an issue price of
$0.042 as a result of the exercise of options (there were no amounts unpaid on the shares issued).
Indemnification and Insurance of Directors, Officers and Auditors
Indemnification
The Company indemnifies each of its Directors, Officers and Company Secretary. The Company indemnifies
each Director or Officer to the maximum extent permitted by the Corporations Act 2001 from liability to third
parties, except where the liability arises out of conduct involving lack of good faith, and in defending legal and
administrative proceedings and applications for such proceedings.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 8
DIRECTORS’ REPORT
Indemnification and Insurance of Directors, Officers and Auditors (Continued)
The Company must use its best endeavours to insure a Director or Officer against any liability, which does not
arise out of conduct constituting a wilful breach of duty or a contravention of the Corporations Act 2001. The
Company must also use its best endeavours to insure a Director or Officer against liability for costs and expenses
incurred in defending proceedings whether civil or criminal.
The Company has not entered into any agreement with its current auditors indemnifying them against any
claims by third parties arising from their report on the financial report.
Insurance premiums
During the year the Company paid insurance premiums to insure Directors and Officers against certain liabilities
arising out of their conduct while acting as an Officer of the Group. Under the terms and conditions of the
insurance contract, the nature of the liabilities insured against, and the premium paid cannot be disclosed.
Meetings of Directors
The number of formal meetings of Directors (including committees of Directors) held during the year and the
number of meetings attended by each Director was as follows:
DIRECTORS’
MEETINGS
Number eligible to
attend
8
11
11
11
9
Number attended
8
11
11
11
7
Drs. Wilbert van den Hoek
Dr Guido Arnout
Mr Howard Digby
Mr David McAuliffe
Mr James Dorrian
Proceedings on Behalf of Company
No person has applied for leave of Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party
for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Non Audit Services
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are
satisfied that the services disclosed below did not compromise the external auditors’ independence for the
following reasons:
• All non-audit services are reviewed and approved by the Directors prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the audit; and
• The nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
The following fees to PKF Perth were paid for non-audit services provided during the year ended 30 June 2021.
Taxation compliance and advice services
$5,500
$5,500
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2021 has been received and can be found
on page 19.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 9
DIRECTORS’ REPORT
Remuneration Report (Audited)
This Remuneration Report outlines the Director and Executive remuneration arrangements of the Company and
the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the
purposes of this report Key Management Personnel (KMP) of the Group are defined as those persons having the
authority and responsibility for planning, directing and controlling the major activities of the Company and the
Group, directly or indirectly, including any Director (whether executive or otherwise) of the parent company.
Remuneration Policy
The Company has adopted a remuneration policy designed to align individual and team reward and
encourage Executives to perform to their full capacity.
Remuneration packages may contain any or all of the following:
a) Annual salary base with provision to recognise the value of the individuals’ personal performance and
their ability and experience;
b) Rewards, bonuses, commissions, special payments and other measures available to reward individuals
and teams following a particular outstanding business contribution;
c) Share participation - the Company proposes to put in place an equity incentive plan; and
d) Other benefits, such as holiday leave, sickness benefits, superannuation payments and long service
benefits.
The Board will determine the appropriate level and structure of remuneration of the executive team and such
consideration will occur each year on the recommendation of the CEO and Managing Director.
Remuneration of Executives and Non-Executives will be reviewed annually by the Board.
Remuneration structure
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive
remuneration is separate and distinct.
Non-Executive Director remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract
and retain Directors to the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate Directors' fees payable to Non-Executive
Directors shall be determined from time to time by a general meeting. An amount not exceeding the amount
determined is then divided between the Directors as agreed. Shareholders have approved aggregate
Directors' fees payable of $300,000 per year.
The amount of aggregate Directors’ fees sought to be approved by shareholders and the manner in which it is
apportioned amongst Directors is reviewed annually. The Board may consider advice from external consultants
as well as the fees paid to Non-Executive Directors of comparable companies when undertaking the annual
review process.
Each Non-Executive Director receives a fee for being a Director of the Company. However, if a Director
performs extra or special services beyond their role as a Director, the Board may resolve to provide additional
remuneration for such services.
Fees for Directors are not linked to the performance of the Group however, to align all Directors’ interests with
shareholder interests, Directors are encouraged to hold shares in the Company and may receive options. This
effectively links Directors’ performance to the share price performance and therefore to the interests of
shareholders. For this reason, there are no performance conditions prior to grant, but instead an incentive to
increase the value to all shareholders.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 10
DIRECTORS’ REPORT
Remuneration Report (Audited)
Executive Remuneration
Objective
The Company aims to reward Executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Company and so as to:
• Reward Executives for Company performance;
• Align the interest of Executives with those of shareholders;
•
•
Link reward with the strategic goals and performance of the Company; and
Ensure total remuneration is competitive by market standards.
Structure
Executive remuneration may consist of both fixed and variable elements.
Fixed Remuneration
Objective
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to
the position and is competitive in the market.
Fixed remuneration is reviewed annually or upon renewal of fixed term contracts by the Board and the process
consists of a review of Company and individual performance, relevant comparative remuneration in the market
and internal policies and practices.
Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash and
fringe benefits. It is intended that the manner of payment chosen will be optimal for the recipient without
creating undue cost for the Company.
Variable Remuneration
Objective
Variable remuneration may be provided to reward Executives in a manner which aligns this element of
remuneration with the creation of shareholder wealth.
Employment Contracts
Drs. Wilbert van den Hoek, Chairman and Non-Executive Director
Drs van den Hoek is subject to an employment contract with the following conditions:
•
• Director fee of $50,000 per annum, with an option to convert to 4DS shares. If the option is taken the
shares would be convertible at the 30 June share price and approved at the Annual General Meeting
Entitlement to be reimbursed for all reasonable out-of-pocket expenses necessarily incurred in the
performance of his duties and
Remuneration reviewed annually on each review date or at any other time as the Board may determine
(in its absolute discretion)
•
Incentives
1. On 30 November 2020, the Company issued Drs. van den Hoek 20,000,000 unlisted options exercisable at
$0.064 each, expiring 29 November 2025, with 5,000,000 vesting following the completion of 6 months
service to the Company and the remaining 15,000,000 options vesting quarterly over the following 10
quarters subject to the holder continuing to remain a Director of the Company.
2. Upon a liquidity event occurring, Drs. van den Hoek will be entitled to receive 25% of the Sale Bonus Pool if
Drs. van de Hoek continuously provided the services through the time of the liquidity events.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 11
DIRECTORS’ REPORT
Remuneration Report (Audited)
Employment Contracts (Continued)
The size of the Sale Bonus Pool shall be calculated as follows:
Sale Value of US$120m to US$350m
Sale Value of US$350m to US$550m
Sale Value above US$550m
Sale Bonus Pool
5% of the sale value
US$17.5m plus 6.25% of the excess above US$350m
US$30m plus 7.5% of the excess above US$550m
Termination
Termination condition with immediate effect by written notice to the Company or company’s shareholders may
resolve the removal by member’s resolution.
Dr Guido Arnout, CEO and Managing Director:
Dr Arnout is subject to an employment contract with the following conditions:
•
•
•
Remuneration salary of US$294,000 per annum
Entitlement to be reimbursed for all reasonable out-of-pocket expenses necessarily incurred in the
performance of his duties and
Remuneration reviewed annually on each review date or at any other time as the Board may determine
(in its absolute discretion)
Incentive
Upon a liquidity event occurring, Dr Arnout will be entitled to receive 30% of the Sale Bonus Pool if Dr Arnout
continuously provided the services through the time of the liquidity events.
The size of the Sale Bonus Pool shall be calculated as follows:
Sale Value of US$120m to US$350m
Sale Value of US$350m to US$550m
Sale Value above US$550m
Termination
Termination conditions are as follows:
Sale Bonus Pool
5% of the sale value
US$17.5m plus 6.25% of the excess above US$350m
US$30m plus 7.5% of the excess above US$550m
•
•
six months written notice or pay the Executive six months and
six months termination pay in the event of a Change of Control
Mr David McAuliffe, Executive Director:
Mr McAuliffe is subject to an employment contract with the following conditions:
Remuneration salary of $200,000 per annum plus statutory superannuation
•
• An equity package to be determined by the Board (subject to shareholder approval)
•
Performance bonuses (if any) as may be approved by the Board from time to time
•
Entitlement to be reimbursed for all reasonable out-of-pocket expenses necessarily incurred in the
performance of his duties and
Remuneration reviewed annually on each review date or at any other time as the Board may determine
(in its absolute discretion)
•
Termination
Termination of employment can be provided by the Company with three months written notice or by the
Executive with three months written notice. The notice period can be waived if there is sufficient cause.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 12
DIRECTORS’ REPORT
Remuneration Report (Audited)
Employment Contracts (Continued)
Mr Michael Van Buskirk, Chief Engineering Officer:
Mr Buskirk is subject to an employment contract with the following conditions:
•
•
•
•
•
Remuneration salary of US$264,000 per annum
Provision with both a Health and Dental Plan
Participation in any employee incentive scheme
Entitlement to be reimbursed for all reasonable out-of-pocket expenses necessarily incurred in the
performance of his duties and
Remuneration reviewed annually on each review date or at any other time as the Board may determine
(in its absolute discretion)
Termination
Termination of employment can be provided by the Company with three months written notice or by the
employee with three months written notice. The notice period can be waived if there is sufficient cause.
Mr Seshubabu Desu, Chief Technology Officer:
Mr Desu is subject to an employment contract with the following conditions:
•
•
•
•
Remuneration salary of US$208,000 per annum reduced from effect 1 October 2020 to US$72,000 per
annum and provision with both a Health and Dental Plan
Participation in any employee incentive scheme
Entitlement to be reimbursed for all reasonable out-of-pocket expenses necessarily incurred in the
performance of his duties and
Remuneration reviewed annually on each review date or at any other time as the Board may determine
(in its absolute discretion)
Termination
Termination of employment can be provided by the Company with two weeks written notice or by the
employee with two weeks written notice. The notice period can be waived if there is sufficient cause.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 13
DIRECTORS’ REPORT
Remuneration Report (Audited)
Directors and executive officers’ remuneration
The following table of benefits and payment, details, in respect to the financial year, the components of
remuneration for each member of KMP of the Group and is prepared on the following basis:
Table 1: Remuneration for the year ended to 30 June 2021
Short Term
Salary, Fees &
Commissions
Other
Termination
benefits
Post-Employment
Superannuation
Share Based
Payment
Options
Total
Performance
based
remuneration
Executive Director
Dr Guido Arnouta
394,301
-
Mr David McAuliffe
200,000
75,000b
Non-Executive
Director
Drs. Wilbert van den
Hoekc
Mr James Dorriand
Mr Howard Digby
Other key
management
personnel
Mr Michael Van
Buskirka
Mr Seshubabu Desua
29,167
32,778
30,000
354,066
144,234
-
-
-
-
-
Total
1,184,546
75,000
-
-
-
-
-
-
-
-
-
21,694
40,785
38,685
435,086
335,379
-
22%
-
-
-
-
-
1,056,340
1,085,507
6,908
6,908
39,686
36,908
29,683
14,502
383,749
158,736
21,694
1,193,811
2,475,051
Table 2: Remuneration for the year ended to 30 June 2020
Short Term
Salary, Fees &
Commissions
Other
Termination
benefits
Post-Employment
Superannuation
Share Based
Payment
Options
Total
Performance
based
remuneration
Executive Director
Dr Guido Arnout
Mr David McAuliffe
Non-Executive
Director
Mr James Dorrian
Mr Howard Digby
Other key
management
personnel
Mr Michael Van
Buskirk
Mr Seshubabu Desu
Total
364,889
150,000
30,000
22,500
331,546
260,415
1,159,350
-
-
-
-
-
-
a Conversion to AUD of USD equivalent
b Cash bonus in recognition of performance
c Appointed on 30 November 2020
d Resigned on 25 April 2020
-
-
-
-
-
-
-
14,250
159,507
147,195
524,396
311,445
-
-
-
-
26,285
26,285
56,285
48,785
114,082
445,628
35,929
296,344
14,250
509,283
1,682,883
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 14
-
-
-
-
-
-
-
-
-
-
-
-
DIRECTORS’ REPORT
Remuneration Report (Audited)
Notes in relation to Directors’ and Executive officers’ remuneration table
The fair value of the options is calculated at the date of grant using the Black Scholes option-pricing model and
allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed
is the portion of the fair value of the option recognised as an expense in each reporting period.
Equity Instruments
(A) Options and rights over equity instruments
The movement during the reporting period, by number of rights and options over ordinary shares in 4DS Memory
Limited held, directly, indirectly or beneficially, by each key management person, including their parties, is as
follows:
Table 1: Option holdings of Key Management Personnel for the year ended to 30 June 2021
30 June 2021
Executive Director
Dr Guido Arnout
Mr David McAuliffe
Non-Executive
Director
Drs. Wilbert van den
Hoekc
Mr James Dorriand
Mr Howard Digby
Other key
management
personnel
Mr Michael Van
Buskirk
Mr Seshubabu Desu
Balance at
beginning
of year
Granted as
remuner-
ation
Options
exercised
Net
change
other
Balance at
end of
year
Exercisable
Not
Exercis-
able
Vested at 30 June 2021
21,380,000
7,000,000
-
-
-
20,000,000
1,250,000
1,250,000
14,500,000
9,800,000
-
-
-
-
-
-
-
-
-
(4,168,000)
-
-
21,380,000
7,000,000
20,642,000
6,875,000
738,000
125,000
-
20,000,000
5,000,000
15,000,000
(1,250,000)e
-
-
-
-
1,250,000
1,125,000
125,000
-
-
14,500,000
14,000,000
500,000
5,632,000
5,242,000
390,000
Total
55,180,000
20,000,000
(4,168,000)
(1,250,000)
69,762,000
47,884,000
1,878,000
Table 2: Option holdings of Key Management Personnel for the year ended to 30 June 2020
Balance at
beginning
of year
Granted as
remuner-
ation
Options
exercised
Net change
other
Vested at 30 June 2020
Balance at
end of
year
Exercisable
Not
Exercis-
able
30 June 2020
Executive Director
Dr Guido Arnout
Mr David McAuliffe
Non-Executive
Director
Mr James Dorrian
Mr Howard Digby
Other key
management
personnel
Mr Michael Van
Buskirk
Mr Seshubabu Desu
57,838,333
7,000,000
1,250,000
1,250,000
14,500,000
-
-
-
-
-
8,500,000
1,300,000
Total
90,338,333
1,300,000
e Other changes included cessation as KMP
-
-
-
-
-
-
-
(36,458,333)
-
21,380,000
7,000,000
17,690,000
6,375,000
3,690,000
625,000
-
-
-
-
1,250,000
625,000
625,000
1,250,000
625,000
625,000
14,500,000
12,000,000
2,500,000
9,800,000
8,890,000
910,000
(36,458,333)
55,180,000
46,205,000
8,975,000
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 15
DIRECTORS’ REPORT
Remuneration Report (Audited)
(B)
Share holdings of Key Management Personnel
30 June 2021
Balance 1
July 2020
Granted as
remuneration
On exercise
of options
On
conversion of
performance
share
Net change
otherf
Balance 30
June 2021
Executive Director
Dr Guido Arnout
Mr David McAuliffe
Non-Executive Director
Drs. Wilbert van den
Hoekc
Mr James Dorriand
Mr Howard Digby
Other key management
personnel
Mr Michael Van Buskirk
Mr Seshubabu Desu
3,030,053
13,323,295
-
52,783,831
5,777,172
-
-
-
652,173g
434,782h
1,145,852
658,984
-
-
Total
76,719,187
1,086,955
-
-
-
-
-
-
4,168,000
4,168,000
-
-
-
-
-
-
-
-
-
3,030,053
(6,347,648)
6,975,647
-
(53,436,004)
-
-
-
6,211,954
-
1,145,852
(4,826,984)
-
(64,610,636)
17,363,506
30 June 2020
Balance 1
July 2019
Granted as
remuneration
On exercise
of options
On
conversion of
performance
share
Net change
other
Balance 30
June 2020
Executive Director
Dr Guido Arnout
Mr David McAuliffe
3,030,053
13,077,394
-
245,901
Non-Executive Director
Mr James Dorrian
Mr Howard Digby
52,128,094
5,777,172
Other key management
personnel
Mr Michael Van Buskirk
Mr Seshubabu Desu
1,145,852
658,984
655,737
-
-
-
Total
75,817,549
901,638
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,030,053
13,323,295
52,783,831
5,777,172
1,145,852
658,984
76,719,187
f Net change other included disposals and cessation as KMP.
g 652,173 fully paid ordinary shares at $0.046 in satisfaction of the Director’s fees for 2019 and 2020 financial years (being a total of $30,000) as
per shareholders’ approval on 30 November 2020.
h 434,782 fully paid ordinary shares at $0.046 to David McAuliffe in satisfaction of salary accrued for 2020 financial years (being a total of $20,000)
as per shareholders’ approval on 30 November 2020.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 16
DIRECTORS’ REPORT
Remuneration Report (Audited)
(C)
Rights and options over equity instruments granted as compensation
Details on rights and options over ordinary shares in the Company that were granted as compensation to each
key management person during the reporting period and details on options that vested during the reporting
periods are as follows:
Options
Executive Director
Dr Guido Arnout
Mr David McAuliffe
Non-Executive Director
Drs. Wilbert van den
Hoekc
Mr James Dorriand
Mr Howard Digby
Other key management
personnel
Mr Michael Van Buskirk
Mr Seshubabu Desu
Number of
options
granted
during the
year
Grant date
Fair value
per option
at grant
date
$
Exercise
price per
option
$
Expiry Date
Number of
options
vested
during the
year
-
-
24 Apr 2019
24 Apr 2019
$0.0586
$0.0586
$0.052
22 Apr 2024
2,952,000
$0.052
22 Apr 2024
500,000
20,000,000
30 Nov 2020
$0.0997
$0.064
29 Nov 2025
5,000,000
-
-
-
-
24 Apr 2019
24 Apr 2019
$0.0586
$0.0586
$0.052
22 Apr 2024
500,000
$0.052
22 Apr 2024
500,000
24 Apr 2019
28 Aug 2019
$0.0586
$0.0399
$0.052
22 Apr 2024
2,000,000
$0.052
28 Aug 2024
520,000
All options expire on the earlier of their expiry date or termination of the individual’s employment.
(D)
Exercise of options granted as compensation
For the year ended 30 June 2021, the following shares were issued as a result of exercise of the options previously
granted as compensation:
Mr Seshubabu Desu
4,168,000
$0.042
Number of shares
Amount paid $ / share
There are no amounts unpaid on the shares as a result of the exercise of options in this financial year.
(E)
Performance Share holdings of Key Management Personnel
For the year ended 30 June 2021 and 30 June 2020 the Performance Shareholdings balances of key
management personnel were nil.
(F)
Loans to Key Management Personnel
There are no loans between the entity and Key Management Personnel.
(G)
Employee Share Acquisition Plan
There were no equity issues under the Company’s Employee Share Acquisition Plan during the financial year.
(H)
Principles of Compensation
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and
Executives by the issue of options to the Directors to encourage the alignment of personal and shareholder
interests.
The Company believes this policy will be effective in increasing shareholder wealth.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 17
DIRECTORS’ REPORT
Remuneration Report (Audited)
Voting of shareholders at last year’s annual general meeting
4DS Memory Limited received more than 96.84% of “yes” votes on its remuneration report for the 2020 financial
year. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
Remuneration Report - End
Signed in accordance with a resolution of the Directors.
Dr Guido Arnout
Managing Director
26 August 2021
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 18
PKF Perth
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF 4DS MEMORY LIMITED
In relation to our audit of the financial report of 4DS Memory Limited for the year ended 30 June 2021, to the
best of my knowledge and belief, there have been no contraventions of the auditor independence requirements
of the Corporations Act 2001 or any applicable code of professional conduct.
PKF PERTH
SHANE CROSS
PARTNER
26 AUGUST 2021
WEST PERTH
WESTERN AUSTRALIA
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions
or inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
19
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2021
Other income
Directors’ fees
Employee benefits expense
Travel and accommodation
Rent and utilities
Research and development
Legal and professional fees
Note
2
3
3
3
3
2021
$
2020
$
213,293
33,511
(91,944)
(52,500)
(309,194)
(176,125)
(1,950)
(84,086)
(65,798)
(104,977)
(4,298,973)
(3,786,258)
(189,841)
(201,222)
Share based payments
15
(1,231,464)
(633,350)
Depreciation and amortisation expense
(200,211)
(176,471)
Unrealised / realised foreign exchange
(90,006)
27,096
Other expenses
Operating loss
Interest on lease liabilities
Loss before income tax
Income tax expense
(369,742)
(300,175)
(6,635,830)
(5,454,557)
(22,005)
(14,719)
(6,657,835)
(5,469,276)
4
-
-
Loss for the year after income tax
(6,657,835)
(5,469,276)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation (net of tax)
14(d)
23,465
36,409
Total comprehensive loss for the year
(6,634,370)
(5,432,867)
Basic and diluted loss per share (dollars per share)
5
(0.0051)
(0.0048)
The accompanying notes form part of these financial statements.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Right-of-use asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Lease liabilities
Other current liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
Note
2021
$
2020
$
7
8
9
12
10
11
12
13
12
4,298,794
2,509,785
16,004
46,723
5,478
49,677
4,361,521
2,564,940
377,851
237,502
615,353
216,763
371,069
587,832
4,976,874
3,152,772
735,108
38,611
100,911
-
935,715
26,111
99,506
191,543
874,630
1,252,875
158,187
158,187
283,190
283,190
1,032,817
1,536,065
NET ASSETS
3,944,057
1,616,707
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
14(a)
14(d)
47,925,285
40,086,985
4,326,281
3,200,428
(48,307,509)
(41,670,706)
3,944,057
1,616,707
The accompanying notes form part of these financial statements.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
Issued
Capital
Accumulated
Losses
$
$
Share Based
Payment
Reserve
$
Foreign
Exchange
Reserve
$
Total
$
Balance at 1 July 2019
36,025,887
(37,688,733)
4,139,079
(72,831)
2,403,402
Total Comprehensive Income
Loss attributable to members
Foreign currency translation of
subsidiary
Total comprehensive loss for the
period
-
-
-
(5,469,276)
-
(5,469,276)
Transactions with owners in their
capacity as owners:
Issue of share capital net of costs
Issue of employee options
Issue of shares on exercise of options
Issue of shares in lieu of Director fees
Issue of shares in lieu of Salary
3,726,572
-
279,526
40,000
15,000
-
-
-
-
-
-
-
-
-
633,350
(48,276)
-
-
Options lapsed
-
1,487,303
(1,487,303)
-
(5,469,276)
36,409
36,409
36,409
(5,432,867)
-
-
-
-
-
-
3,726,572
633,350
231,250
40,000
15,000
-
Balance at 30 June 2020
40,086,985
(41,670,706)
3,236,850
(36,422)
1,616,707
Issued
Capital
Accumulated
Losses
$
$
Share
Based
Payment
Reserve
$
Foreign
Exchange
Reserve
Total
$
$
Balance at 1 July 2020
40,086,985
(41,670,706)
3,236,850
(36,422)
1,616,707
Total Comprehensive Income
Loss attributable to members
Foreign currency translation of
subsidiary
Total comprehensive loss for the
period
Transactions with owners in their
capacity as owners:
Issue of share capital net of costs
Issue of employee options
Issue of shares on exercise of
options
Issue of shares in lieu of Director fees
-
-
-
(6,657,835)
-
(6,657,835)
7,253,199
-
535,101
50,000
-
-
-
-
-
-
-
-
1,231,465
(108,045)
-
Options lapsed
-
21,032
(21,032)
-
(6,657,835)
23,465
23,465
23,465
(6,634,370)
-
-
-
-
-
7,253,199
1,231,465
427,056
50,000
-
Balance at 30 June 2021
47,925,285
(48,307,509)
4,339,238
(12,957)
3,944,057
The accompanying notes form part of these financial statements.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 22
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Payments for research and development
Interest received
Interest paid
Government grants
Insurance recovery relating to PPE
Note
2021
$
2020
$
(856,232)
(715,653)
(4,721,001)
(3,069,869)
6,832
11,090
(22,067)
(14,884)
34,260
-
-
22,419
Net cash used in operating activities
7 (b)
(5,558,208)
(3,766,897)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Payment of capital raising costs
Issue of shares on exercise of options
Repayment of borrowings
Proceeds from PPP loan
Principal elements of lease payments
Net cash from financing activities
(40,984)
(10,861)
(40,984)
(10,861)
7,611,969
4,000,000
(358,770)
(273,428)
427,056
231,250
(102,374)
-
-
191,543
(115,888)
(49,651)
7,461,993
4,099,714
Net increase in cash and cash equivalents
1,862,801
321,956
Cash and cash equivalents at the beginning of the financial year
2,509,785
2,167,613
Effect of movements in exchange rates on cash held
(73,792)
20,216
Cash and cash equivalents at the end of the financial year
7 (a)
4,298,794
2,509,785
The accompanying notes form part of these financial statements.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 23
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied to all years presented, unless otherwise stated.
These are the consolidated financial statements and notes of the Company and controlled entities. 4DS is a
company limited by shares, domiciled and incorporated in Australia.
The separate financial statements of 4DS, as the parent entity, have not been presented with this financial report
as permitted by the Corporations Act 2001 (Cth).
The financial statements were authorised for issued on 26 August 2021 in accordance with a resolution by the
Directors of the Company. The Directors have the power to amend and reissue the financial statements.
a. Basis of Preparation
Statement of Compliance
The financial report is a general-purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements as issued
by the Australian Accounting Standards Board and the Corporations Act 2001, as appropriate for “for-profit”
oriented entities. The consolidated financial report of the Group complies with International Financial Reporting
Standards (IFRSs) as issued by the International Accounting Standards Board.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which
they apply.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional
currency.
b. Critical Accounting estimates and judgements
The Directors evaluate estimates and judgements incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the Group.
i.
Impairment – General
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the
period in which the estimate is revised if it affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
ii. Share Based Payments
The grant date fair value of share-based payment is recognised as an expense with a corresponding increase
in equity, over the period that the recipient unconditionally become entitled to the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service
and non-market vesting conditions are expected to be met, such that, the amount ultimately recognised as an
expense is based on the number of awards that do not meet the related service and non-market performance
conditions at the vesting date.
The Company follows the guidelines of AASB 2 ‘Share-based payments’ and takes into account all performance
conditions and estimates the probability and expected timing of achieving these performance conditions.
Accordingly, the expense recognised over the vesting period may vary based upon information available and
estimates made at each reporting period, until the expiry of the vesting period.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 24
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b. Critical Accounting estimates and judgements (Continued)
During the year, the Company engaged an external expert to perform share based payment valuations. See
note 15 for valuation assumptions and inputs.
iii. Research and Development Costs
All research and development costs during the year have been expensed. The research and development costs
have not been recognized as intangible assets as they did not meet the criteria as set out in policy at note 1(k).
iv. Lease term
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an option, or not exercise option a termination option. Extension options (or period after
termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not
terminated).
v. Coronavirus (COVID-19) pandemic
Other than as addressed in specific notes, there does not currently appear to be either any significant impact
upon the financial statements or any significant uncertainties with respect to events or conditions which may
impact the Group unfavorably as at the reporting date or subsequently as a result of the Coronavirus (COVID-
19) pandemic.
c. Principles of Consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at
30 June 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee)
Exposure, or rights, to variable returns from its involvement with the investee and
The ability to use its power over the investee to affect its returns
•
•
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee
•
• Rights arising from other contractual arrangements and
•
The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of
comprehensive income from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of
the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests
having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated
in full on consolidation.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 25
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c. Principles of Consolidation (Continued)
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it:
• De-recognises the assets (including goodwill) and liabilities of the subsidiary
• De-recognises the carrying amount of any non-controlling interests
• De-recognises the cumulative translation differences recorded in equity
• Recognises the fair value of the consideration received
• Recognises the fair value of any investments retained
• Recognises any surplus or deficit in profit and loss
• Reclassifies the parent’s share of components previously recognized in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets
or liabilities
On 9 December 2015, 4DS Memory Limited (formerly Fitzroy Resources Limited), the legal parent, completed
the acquisition of 4D-S Pty Limited (“4D-S”). 4D-S (the legal subsidiary) was deemed to be the acquirer for
accounting purposes as it had obtained control over the operations of the legal acquirer 4DS Memory
(accounting subsidiary). Accordingly, the consolidated financial statements of 4DS Memory were prepared as
a continuation of the financial statements of 4D-S. 4D-S (as the accounting acquirer) accounted for the
acquisition of 4DS Memory from 9 December 2015.
d.
Income Tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled, and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the
same taxable authority on either the same taxable entity or different taxable entity’s which intend to settle
simultaneously.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 26
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Going Concern
The net assets of the Group totalled $3,944,057 (2020: $1,616,707). Cash on hand at 30 June 2021 totalled
$4,298,794 (2020: $2,509,785) and net operating cash outflow of $5,558,208 (2020: $3,766,897) for the year ended
30 June 2021.
The Group’s ability to continue as a going concern and meet its debts and future commitments as and when
they fall due is dependent on the Company’s ability to raise sufficient working capital to ensure the continued
implementation of the Group’s business plan.
The financial report has been prepared on a going concern basis. In arriving at this position, the Directors have
had regard to the fact that the Company has, or in the Directors’ opinion will have access to, sufficient cash to
fund administrative and other committed expenditure for a period of not less than 12 months from the date of
this report.
In the event that the Group does not achieve the above actions, there exists a material uncertainty as to
whether the Group will be able to continue as a going concern and realise its assets and extinguish its liabilities
in the normal course of business.
f.
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian
dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of monetary items are recognized in the profit or loss.
Exchange differences arising on the translation of non-monetary items are recognized directly in other
comprehensive income to the extent that the underlying gain or loss is recognized in other comprehensive
Income; otherwise the exchange difference is recognized in profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
• Assets and liabilities are translated at year-end exchange rates prevailing at that reporting period
•
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction
Income and expenses are translated at average exchange rates for the period and
Exchange differences arising on translation of foreign operations with functional currencies other than Australian
dollars are recognised in other comprehensive income and included in the foreign currency translation reserve
in the statement of financial position. These differences are recognised in the profit or loss in the period in which
the operation is disposed of.
g. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable,
any accumulated depreciation and impairment losses.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of
the asset and the net amount is restated to the revalued amount of the asset.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 27
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g. Property, Plant and Equipment (Continued)
Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed
annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected net cash flows that will be received from the asset’s
employment and subsequent disposal. The expected net cash flows have been discounted to their present
values in determining recoverable amounts.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable overheads.
Plant and equipment
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of
profit or loss and other comprehensive income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over the asset’s useful life
to the Consolidated Entity commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Depreciation Rate
30%
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the statement of comprehensive loss. When revalued assets are sold, amounts
included in the revaluation reserve relating to that asset are transferred to retained earnings.
h. Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognized when the entity
becomes a party to the contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value
through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and
measured as set out below.
Classification and subsequent measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the assets or liability, assuming the market
participants acts in their economic best interests.
i.
Loans and receivables
Loans and receivables are included in current assets, except for those which are not expected to mature
within 12 months after the end of the reporting period. All other loans and receivables are classified as
non-current assets.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 28
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
h.
Financial Instruments (Continued)
ii.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost. Gains or losses are recognized in profit and loss through the amortisation process and when the financial
liability is recognized.
Derivative instruments
The Group does not trade or hold derivatives.
Financial guarantees
The Group has no material financial guarantees.
Impairment
The Group recognized a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss
allowance depends upon the Group’s assessment at the end of each reporting period as to whether the
financial instrument’s credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss
recognized is measured on the basis of the probability weighted present value of anticipated cash shortfalls
over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognized within other comprehensive income. In all other cases, the loss allowance is recognized in profit or
loss.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flow expires, or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the
risks and benefits associated with the asset.
Financial liabilities are derecognised where the related obligations are either discharged, cancelled or
expired. The difference between the carrying value of the financial liability extinguished or transferred to
another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities
assumed, is recognized in profit or loss.
i.
Impairment of Non-Financial Assets
At the end of each reporting date, the Directors assess whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information, including
dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition
profits.
If any such indication exists, an impairment test is carried out on the asset by comparing the asset’s recoverable
amount, being the higher of its fair value less costs to sell and its value in use, to the asset’s carrying amount. Any
excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 29
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
h.
Financial Instruments (Continued)
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash generating unit to which the asset belongs.
i.
Research and development costs
Research costs are expensed as 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
sale
Its intention to complete and its ability 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 development
•
The ability to use the intangible asset generated
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete, and the asset is available for use. It is amortised over the period of expected future
benefit. During the period of development, the asset is tested for impairment annually.
j.
Employee Benefits
i. Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave expected to be settled within one year of the reporting date
are recognised in respect of employees’ services up to the reporting date and are measured at the
amounts expected to be paid when the liabilities are settled.
Superannuation
Contributions are made by the Consolidated Entity to superannuation funds as stipulated by statutory
requirements and are charged as expenses when incurred.
Employee benefit on costs
Employee benefit on costs, including payroll tax, are recognised and included in employee benefits
liabilities and costs when the employee benefits to which they relate are recognised as liabilities.
ii.
iii.
iv. Options
The fair value of options granted is recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant date.
The fair value at grant date is independently determined using the Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the vesting and performance criteria, the
impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the
term of the option.
v.
Equity-settled Compensation
The Group operates equity-settled share-based payment employee share and option schemes. The fair
value of the equity to which employees become entitled is measured at grant date and recognised as an
expense over the vesting period, with a corresponding increase to an equity account. The fair value of
shares is ascertained as the market bid price. The fair value of options is ascertained using a Black–Scholes
pricing model which incorporates all market vesting conditions. The number of shares and options
expected to vest is reviewed and adjusted at each reporting date such that the amount recognised for
services received as consideration for the equity instruments granted shall be based on the number of
equity instruments that eventually vest.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 30
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k. Cash and Cash Equivalents
Cash in the statement of financial position comprises cash at bank.
For the purposes of the statement of cash flow, cash and cash equivalents consist of cash and cash equivalents
as defined above.
Revenue and other Income
l.
i.
Interest
Interest revenue is recognised as it accrues.
ii. Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
m. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the 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.
n.
Trade and other Receivables
Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off. A provision for impairment is raised when some doubt as to collection exists.
o.
Trade and other Payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of consideration to be
paid in the future for goods and services received, whether or not billed to the Company.
Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is
recognised as an expense on an accrual basis.
p.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use
of a specific asset or assets and the arrangement conveys a right to use the asset.
Group as a lessee
Operating lease payments, where substantially all the risk and benefits remain with the lessor, are recognised as
an expense in the statement of profit or loss and other comprehensive income on a straight-line basis over the
lease term. Operating lease incentives are recognised as a liability when received and subsequently reduced
by allocating lease payments between rental expense and reduction of the liability.
From 1 January 2019, leases are recognised as a right-of-use asset and corresponding liability at the date at
which the leased asset is available for use by the Group. Each lease payment is allocated between the liability
and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is
depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 31
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
q.
Leases (Continued)
•
•
•
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
Variable lease payment that are based on an index or a rate
Amount expected to be payable by the lessee under residual value guarantees
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
Payments of penalties for termination the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and
conditions.
Right-of-use of assets are measured at cost comprising the following:
•
•
•
•
The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received
Any initial direct costs
Restoration cost
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short term leases have a lease term of 12 months or less. Low-value assets comprise
IT equipment and office furniture.
r. Operating Segments
Operating segments are identified, and segment information disclosed on the basis of internal reports that are
regularly provided to, or reviewed by, the Group’s chief operating decision maker which, for the Group, is the
Board of Directors. In this regard, such information is provided using similar measures to those used in preparing
the statement of profit or loss and other comprehensive income and statement of financial position.
s.
Earnings Per Share
i.
Basic earnings per share
Basic earnings per share is determined by dividing the net loss after income tax attributable to members of
the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year.
ii. Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after-income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
t. Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable
to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition
as part of the purchase consideration.
Shares issued by the Company to a trust the Group controls are shown as a reduction in equity. Administration
expenses of the trust are expensed to the statement of profit or loss and other comprehensive income.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 32
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
t.
Contributed Equity (Continued)
Where any controlled entity purchases the Company’s equity share capital as treasury shares, the consideration
paid is deducted from equity attributable to the Company’s equity holders until those shares are cancelled,
reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net
of any directly attributable increment transactions costs and the related income tax effects, is included in equity
attributable to the Company’s equity holders.
u.
New Accounting Standard and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended
30 June 2021. The consolidated entity has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 33
NOTES TO THE FINANCIAL STATEMENTS
2. OTHER INCOME
Interest income
ATO Cash Flow Boost
PPP Loan Forgiveness
Insurance recovery on PPE
30 June 2021
30 June 2020
$
$
6,832
11,091
34,260
172,201
-
206,461
-
22,420
22,420
Other Income
213,293
33,511
3.
LOSS FOR THE YEAR
Loss before income tax from continuing operations
includes the following specific expenses:
- Directors’ fees (cash settled)
- Directors’ fees (accrued)
Directors’ fees
- Salary and wages (cash settled)
- Bonus (cash settled)
- Superannuation (cash settled)
Employee benefits expense
- Office rent
- Utilities
Rent and utilities
- Consultants
- Salary and wages
- R&D partner
- Other research expenses
Research and development
30,000
61,944
91,944
212,500
75,000
21,694
309,194
-
65,798
65,798
122,794
2,150,300
1,667,789
358,090
4,298,973
12,500
40,000
52,500
161,875
-
14,250
176,125
50,080
54,897
104,977
319,945
1,660,665
1,470,365
335,283
3,786,258
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 34
NOTES TO THE FINANCIAL STATEMENTS
4.
INCOME TAX
The components of tax expense comprise:
Current tax
Deferred tax
30 June 2021
30 June 2020
$
$
-
-
-
-
-
-
The prima facie income tax expense on pre-tax
accounting loss from operations reconciles to the income
tax expense in the financial statements as follows:
Accounting loss before income tax
(6,657,835)
(5,469,276)
At the Group’s statutory income tax rate of 26% (2020:
27.5%)
Add/(Less): tax effect of non-deductible amounts
(1,731,037)
(1,504,051)
Share based payments
Provisions and accruals
Other permanent differences
Unrealised foreign exchange
Capital raising costs
Other non-deductible amounts
Effect of difference in overseas tax rate
Impact of reduction in future corporate tax rates
Deferred tax balances not recognised
Income tax expense/(benefit)
Change in Corporate tax rate:
320,181
3,415
(64,976)
22,000
(74,293)
49,091
-
280,299
1,195,320
-
174,171
(5,068)
(7,245)
7,463
(66,983)
52,417
(62,442)
-
1,411,738
-
There has been a legislated change in the corporate tax that will apply to future income years. The impact of
this reduction in the corporate tax rate has been reflected in the unrecognised deferred tax positions and the
prima face income tax reconciliation above
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 35
NOTES TO THE FINANCIAL STATEMENTS
4.
INCOME TAX (CONTINUED)
The following deferred tax balances have not been
recognised:
Deferred Tax Assets:
Carry forward revenue losses
Capital raising costs
Other
Total Deferred Tax Assets
30 June 2021
$
30 June 2020
$
3,405,637
2,954,049
163,912
40,302
155,530
23,016
3,609,851
3,132,595
The tax benefits of the above losses will only be obtained if:
(a) The Group derives future assessable income of a nature and of an amount sufficient to enable the
benefits from the deductions for the losses to be utilised.
(b) The Group complies with the conditions for deductibility imposed by law; and
(c) No changes in income tax legislation adversely affect the Group in utilising the benefits.
Deferred Tax Liabilities:
Prepayments
Unrealised forex gain
Total Deferred Tax liabilities
8,683
-
8,683
10,193
7,463
17,656
The above Deferred Tax Liabilities have not been recognised as they have given rise to the carry-forward
revenue losses for which the Deferred Tax Asset has not been recognised.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 36
NOTES TO THE FINANCIAL STATEMENTS
5.
LOSS PER SHARE (EPS)
a) Reconciliation of loss to profit and loss
Loss for the year
b) Weighted average number of ordinary shares
outstanding during the year used in the calculation of
EPS
30 June 2021
30 June 2020
$
$
(6,657,835)
(5,469,276)
No.
No.
1,309,439,593
1,132,865,628
c) Loss per share
($0.0051)
($0.0048)
d) The Group does not report diluted earnings per share with options on annual losses as it is anti-dilutive in
nature.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 37
NOTES TO THE FINANCIAL STATEMENTS
6. PARENT ENTITY – 4DS MEMORY LIMITED
As at 30 June 2021 the legal parent of the Group was
4DS Memory Limited
Statement of financial position
Current assets
Non-current assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
Share Capital
Reserves
Accumulated losses
Total Shareholders’ Equity
30 June 2021
30 June 2020
$
$
4,257,372
2,463,100
333,031
195,857
4,590,403
2,658,957
771,943
945,454
771,943
945,454
3,818,460
1,713,503
54,512,529
46,673,959
4,339,238
3,236,851
(55,033,037)
(48,197,307)
3,818,460
1,713,503
Statement of comprehensive income
Loss for the year
(6,856,762)
(5,132,346)
Other Comprehensive Income
-
-
Total Comprehensive Loss
(6,856,762)
(5,132,346)
Other than contingent liabilities in Note 19, there are no known contingent liabilities.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 38
NOTES TO THE FINANCIAL STATEMENTS
7. CASH AND CASH EQUIVALENTS
30 June 2021
30 June 2020
(a) Total cash and cash equivalents in the Statement of
Cash Flows
Cash at bank
(b) Reconciliation of net loss after income tax to cash flows
used in operations
Net loss after income tax
Non-cash adjustments
Share based payments
Director fee – equity settled
Executive salary – equity settled
Realised/ Unrealised movement in foreign currency
Depreciation
Net finance cost
Changes in assets and liabilities
Decrease in other receivables
(Decrease)/Increase in trade and other payables
Increase in other assets
Net cash used in operations
$
$
4,298,794
2,509,785
4,298,794
2,509,785
(6,657,834)
(5,469,276)
1,231,464
633,350
50,000
-
(97,203)
200,211
4,926
4,372
(282,200)
(11,944)
40,000
15,000
(41,739)
176,471
-
553
881,295
(2,551)
(5,558,208)
(3,766,897)
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 39
NOTES TO THE FINANCIAL STATEMENTS
8.
TRADE AND OTHER RECEIVABLES
GST receivable
Other receivables
Deposits
30 June 2021
30 June 2020
$
$
6,002
5,374
4,628
16,004
4,372
1,106
-
5,478
None of the receivables are past due. Receivables are therefore not impaired and are within initial trade
terms.
9. PLANT AND EQUIPMENT
30 June 2021
30 June 2020
Plant and equipment – at cost
Less: Accumulated depreciation
Less: Provision for impairment
$
$
1,076,618
852,940
(675,435)
(612,845)
(23,332)
(23,332)
377,851
216,763
Reconciliations:
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Balance 30 June 2019
Additions
Foreign exchange movements
Depreciation expense
Balance 30 June 2020
Additions
Foreign exchange movements
Depreciation expense
Balance 30 June 2021
Plant and
equipment
$
318,162
10,861
2,934
(115,194)
216,763
260,384
(1,921)
(97,375)
377,851
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 40
NOTES TO THE FINANCIAL STATEMENTS
10. TRADE AND OTHER PAYABLES
CURRENT
30 June 2021
30 June 2020
$
$
Trade payables and accruals
735,108
935,715
Trade creditors are non-interest bearing and are normally settled on 30-day terms.
11. PROVISIONS
Provision for employee benefits
38,611
26,111
12. LEASES
The right of use asset and lease liabilities have arisen upon adoption of AASB 16 Leases from 1 July 2019.
(i) AASB 16 related amounts recognised in the statement of financial position
Right of use assets
Leased buildings:
Opening balance
Additions
Depreciation expense
Foreign currency exchange
Net carrying amount
Lease liabilities
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
More than five years
Total undiscounted leases liabilities at 30 June 2021
Lease liabilities included in the statement of financial position
as at 30 June 2021
Current
Non-current
Total
30 June 2021
$
371,069
-
(102,545)
(31,022)
237,502
116,456
170,542
-
286,998
100,911
158,187
259,098
30 June
2020
$
-
428,164
(58,837)
1,742
371,069
113,147
324,109
-
437,256
99,506
283,190
382,696
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 41
NOTES TO THE FINANCIAL STATEMENTS
12. LEASES (CONTINUED)
(ii) AASB 16 related amounts recognised in the statement of profit or loss
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities (under finance cost)
Short-term leases expense
2021
$
102,836
22,005
-
2020
$
61,277
14,719
50,080
(iii) AASB 16 related amounts recognised in the statement of cash flows
Annual cash outflows for leases
115,888
49,651
Short-term leases and leases of low-value assets
The Group applies the low-value assets recognition exemption to leases of office equipment that are
considered low value ($10,000 or less). Lease payments on short-term leases and leases of low-value assets are
recognised as expenses on a straight-line basis over the lease term.
Significant judgment in determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered
by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Group applied judgment in evaluating whether it is reasonably certain to exercise the option to renew.
That is, it considered all relevant factors that create an economic incentive to exercise the renewal.
13. BORROWINGS
The United States Small Business Administration (SBA) provided a Paycheck Protection Program (PPP) loan as
a direct incentive for small business to keep their workers on payroll to helps the business keep their workforce
employed during the Coronavirus crisis.
SBA will forgive loans if all employee retention criteria are met and the funds are used for eligible expenses.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent and utilities (due
to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).
Terms and conditions of the loan as per below:
•
PPP loans have an interest rate of 1%
•
Loans issued prior to 5th June 2020 have a maturity of 2 years
•
Loans issued after 5th June 2020 have a maturity of 5 years
•
Loan payments will be deferred for six months
• No collateral or personal guarantees are required
• Neither the government nor lenders will charge small businesses any fees
Loan Forgiveness
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.
Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan
forgiveness form and instructions include several measures to reduce compliance burdens and simplify the
process for borrowers, including:
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 42
NOTES TO THE FINANCIAL STATEMENTS
13. BORROWINGS (CONTINUED)
• Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns
•
•
•
•
with borrowers’ regular payroll cycles
Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the 24-week period
after receiving their PPP loan
Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility
for loan forgiveness
Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring
by June 30
Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-
faith, written offer to rehire workers that was declined
On 11 May 2020, the Company received USD$131,500 equivalent to AUD$191,543 PPP loan from SBA and the
loan was granted forgiveness on 6 April 2021.
14. ISSUED CAPITAL AND RESERVES
(a) Movements in ordinary share capital
2021
2020
2021
2020
Shares
Shares
$
$
Balance at beginning of year
1,140,544,555 1,055,017,917
40,086,985
36,025,887
Placement shares
Share Purchase Plan
100,000,000
65,000,000
4,500,000
3,250,000
69,148,931
15,000,000
3,111,969
750,000
Issued capital – in lieu of Director fees
1,086,955
655,737
50,000
Issued capital – in lieu of Salary
-
245,901
-
40,000
15,000
Exercise of unlisted options
Capital raising costs
10,168,000
4,625,000
535,101
279,526
-
-
(392,880)
(273,428)
Balance at end of year
1,320,948,441 1,140,544,555
47,925,285
40,086,985
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares
have no par value and the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back scheme.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum
capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. The
Group does not have any external debt.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 43
NOTES TO THE FINANCIAL STATEMENTS
14. ISSUED CAPITAL AND RESERVES (CONTINUED)
(b) Movements in options
Balance at beginning of year
Options exercised, advisor options
2021
2020
Options
Options
2021
$
2020
$
71,535,000
132,893,333
3,236,850
4,139,079
-
(4,625,000)
-
(48,277)
Options exercised, employee options
(10,168,000)
-
(108,045)
-
Options expired/forfeited
(880,000)
(59,333,333)
(21,032)
(1,487,302)
Share based payment, employee options
20,000,000
2,600,000
1,231,465
633,350
Balance at end of year
80,487,000
71,535,000
4,339,238
3,236,850
30 June 2021
30 June 2020
$
$
(c) Share based payment reserve
Balance at beginning of year
3,236,850
4,139,079
Options lapsed/forfeited during the year
(21,032)
(1,487,302)
Share-based payment expense
1,231,465
633,350
Exercise of options
Balance at end of year
(108,045)
(48,277)
4,339,238
3,236,850
The option reserve is used to record the value of share-based payments provided to employees, including
Key Management Personnel, as part of their remuneration. Refer to Note 15 for further details.
(d) Foreign exchange translation reserve
Balance at beginning of year
Foreign exchange movement on translation of foreign
operations
Balance at end of year
(36,422)
(72,831)
23,465
36,409
(12,957)
(36,422)
The purpose of the foreign exchange translation reserve is to recognise exchange differences arising from
the translation of foreign operations to Australian dollars.
Share based payment reserve
Foreign exchange translation reserve
Total reserves
4,339,238
3,236,850
(12,957)
(36,422)
4,326,281
3,200,428
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 44
NOTES TO THE FINANCIAL STATEMENTS
14. ISSUED CAPITAL AND RESERVES (CONTINUED)
(e) Options
Summary of options granted
The following table illustrates the number and weighted
average exercise prices of, and movements in, share
options issued during the year:
Outstanding at 1 July 2020
Exercised during the year
Expired during the year
Granted during the year
Outstanding at the 30 June 2021
The following table illustrates the number and weighted
average exercise prices of, and movements in, share
options issued during the year:
Outstanding at 1 July 2019
Exercised during the year
Expired during the year
Granted during the year
Outstanding at the 30 June 2020
WAEP
No.
0.063
71,535,000
(0.042)
(10,168,000)
(0.045)
(880,000)
0.064
0.051
20,000,000
80,487,000
WAEP
0.078
No.
132,893,333
(0.015)
(4,625,000)
(0.052)
(59,333,333)
0.052
0.063
2,600,000
71,535,000
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 45
NOTES TO THE FINANCIAL STATEMENTS
15. SHARE-BASED PAYMENTS
The following share-based payment arrangements were entered into during the year ended 30 June 2021:
On 30 November 2020, the Company issued the following:
•
•
652,173 fully paid ordinary shares at $0.046 in satisfaction of the Director’s fees owed to Mr. Dorrian from
1 July 2019 until 31 March 2020 (being a total of $30,000) as per shareholders’ approval on 30 November
2020.
434,782 fully paid ordinary shares at $0.046 in satisfaction of the Director’s fees owed to Mr. Digby from
2019 and 2020 financial years (being a total of $20,000) as per shareholders’ approval on 30 November
2020.
On 30 November 2020, the Company issued Drs. Wilbert 20,000,000 unlisted options exercisable at $0.064 each,
expiring 29 November 2025, with 5,000,000 vesting following the completion of 6 months service to the Company
and the remaining 15,000,000 options vesting quarterly over the following 10 quarters subject to the holder
continuing to remain a Director of the Company.
Fair value of options
The fair value of share options granted have been valued using a Black Scholes Methodology, taking into
account the terms and conditions upon which the unlisted share options were granted.
A summary of the inputs used in the valuation of the options is as follows:
UNLISTED SHARE OPTIONS
EMPLOYEE INCENTIVE OPTIONS
Exercise price
Share price at date of issue
Grant date
Expected volatility
Expiry date
Risk free interest rate
Value per option
Number of options
Total value of options
$0.064
$0.12
30 Nov 2020
105.43%
29 November 2025
0.2954%
$0.0997
20,000,000
$1,993,892
Set out below is the value of each tranche of options according to vesting schedule.
Tranche
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
Tranche 6
Tranche 7
Tranche 8
Tranche 9
Tranche 10
Tranche 11
Number of options
Vesting date
5,000,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
30 May 2021
30 August 2021
30 November 2021
28 February 2022
30 May 2022
30 August 2022
30 November 2022
28 February 2023
30 May 2023
30 August 2023
30 November 2023
Value
498,472
149,542
149,542
149,542
149,542
149,542
149,542
149,542
149,542
149,542
149,542
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 46
NOTES TO THE FINANCIAL STATEMENTS
15. SHARE-BASED PAYMENTS (CONTINUED)
For the year ended 30 June 2021 a share-based payment expense of $1,231,464 was recognised in line with
option vesting periods. The amount included $175,125 recognised as a vesting expense to employee incentive
options issued in a prior period.
16. RELATED PARTY DISCLOSURE
(a) Controlled Entities
4D-S Pty Limited
4DS Inc.
Fitzroy Copper Pty Limited
Fitzroy Employee Share Plan Pty Limited
(b) Key Management Personnel (“KMP”)
% Interest
Country of Incorporation
2021
2020
Australia
United States of America
Australia
Australia
100
100
100
100
100
100
100
100
Details relating to KMP, including remuneration paid, are included in Note 16 and the audited
remuneration report section of the Directors’ report.
(c) Transactions with Other Related Parties
Other than the above, there were no transactions with other related parties during the financial year.
17. KEY MANAGEMENT PERSONNEL
Compensation for Key Management Personnel
Short term employee benefits
Post-employment benefits
Equity settled
Other payments
Termination benefits
Total compensation
30 June 2021
30 June 2020
1,259,546
21,694
1,193,811
-
-
2,475,051
1,159,350
14,250
509,283
-
-
1,682,883
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 47
NOTES TO THE FINANCIAL STATEMENTS
18. FINANCIAL INSTRUMENTS
Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks equity instruments and accounts
receivable and payable. The main purpose of non-derivative financial instruments is to raise finance for the
Group’s operation. The Group does not speculate in the trading of derivative instruments.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset and financial liability are disclosed in Note 1.
Specific Financial Risk Exposures and Management
The Group’s activities expose it to a variety of financial risks; market risk (including interest rate risk, price risk
and foreign currency risk), credit risk and liquidity risk.
i. Market Risk
The Board meets on a regular basis to analyse currency and interest rate exposure and to evaluate
treasury management strategies in the context of the most recent economic conditions and forecasts.
ii.
Interest rate risk
Exposure to interest rate risk arises on financial assets and liabilities recognised at the end of the reporting
period whereby a future change in interest rates will affect future cash flows or the fair value of fixed
rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.
Interest rate risk is not material to the Group as no interest-bearing debt arrangements have been
entered into.
iii.
Price risk
Price risk relates to the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. The Group is exposed to securities price risk on investments
classified as available for sale. The investment in listed equities has been valued at the market price
prevailing at reporting date. Management of this investment’s price risk is by ongoing monitoring of the
value with respect to any impairment.
iv.
Foreign Exchange Risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument
fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial
instruments which are other than the AUD functional currency of the Group.
With instruments being held by overseas operations, fluctuations in foreign currencies may impact on
the Group’s financial results. The Group’s exposure to foreign exchange risk is monitored by the Board.
The majority of the Group’s funds are held in Australian and United States dollars.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 48
NOTES TO THE FINANCIAL STATEMENTS
18. FINANCIAL INSTRUMENTS (CONTINUED)
At 30 June, the Group has financial assets denominated in the foreign currencies detailed below:
2021
2020
Foreign
Currency
AUD
Equivalent
Foreign
Currency
AUD Equivalent
USD
667,283
889,078
58,392
85,026
EURO
501,000
792,196
-
-
A 5% movement in foreign exchange rates would increase or decrease the loss before tax by $84,064 (2020:
$4,251).
At 30 June, the Group has financial liabilities denominated in the foreign currencies detailed below:
2021
2020
Foreign
Currency
AUD
Equivalent
Foreign
Currency
AUD Equivalent
USD
195,814
260,874
402,599
586,239
A 5% movement in foreign exchange rates would increase or decrease on the loss before tax by $13,044 (2020:
$29,312).
v.
Credit Risk
Credit exposure represents the extent of credit related losses that the Group may be subject to on amounts
to be received from financial assets. Credit risk arises principally from trade and other receivables. The
objective of the Group is to minimise the risk of loss from credit risk. Although revenue from operations is
minimal, the Group trades only with creditworthy third parties. In addition, receivable balances are monitored
on an ongoing basis with the result that the Group’s exposure to bad debts is insignificant. The Group’s
maximum credit risk exposure is limited to the carrying value of its financial assets as indicated on the
Statement of Financial Position and notes to the financial statements.
The credit quality of the financial assets was high during the year. The table below details the credit quality of
the financial assets at the end of the year:
2021
$
2020
$
Cash and cash equivalents held at NAB
4,209,396
2,425,021
Cash and cash equivalents held at HSBC
Other receivables and deposits
89,398
84,764
16,004
5,478
4,314,798
2,515,263
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 49
NOTES TO THE FINANCIAL STATEMENTS
18. FINANCIAL INSTRUMENTS (CONTINUED)
vi.
Cash flow and fair value interest rate risk
From time to time the Group has significant interest-bearing assets, but they are as a result of the timing of equity
raisings and capital expenditure rather than a reliance on interest income. The interest rate risk arises on the rise
and fall of interest rates. The Group’s income and operating cash flows are not expected to be materially exposed
to changes in market interest rates in the future and the exposure to interest rates is cash and cash equivalents
balances and borrowings.
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result
of changes in market interest rates and the effective weighted average interest rates on classes of financial assets
and financial liabilities, is below:
Floating
Interest
Rate
Fixed
Interest
Bearing
Non-
interest
bearing
2021
Total
Floating
Interest
Rate
Fixed
Interest
Bearing
Non-
interest
bearing
2020
Total
$
$
$
$
$
$
$
$
Financial assets
Cash and cash
equivalents
Trade and other
receivables
4,298,794
-
Total financial assets
4,298,794
Weighted average
interest rate
Financial Liabilities
Trade and other
payables
Other liabilities
0.20%
-
-
Lease liabilities
259,098
Total financial liabilities
259,098
Weighted average
interest rate
6%
-
-
-
-
-
-
-
-
4,298,794
2,509,785
16,004
16,004
-
16,004
4,314,798
2,509,785
-
-
-
-
2,509,785
5,478
5,478
5,478
2,515,263
0.47%
-
-
735,108
735,108
-
935,715
935,715
-
-
-
191,543
259,098
382,696
-
-
-
191,543
382,696
735,108
994,206
382,696
191,543
935,715
1,509,954
6%
1%
Net financial assets
4,039,696
-
(719,104)
3,320,592
2,127,089
(191,543)
(930,237)
1,005,309
The Group currently does not have major funding in place. However, the Group continuously monitors forecasts
and actual cash flows and the maturity profiles of financial assets and financial liabilities to manage its liquidity
risk.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 50
NOTES TO THE FINANCIAL STATEMENTS
18. FINANCIAL INSTRUMENTS (CONTINUED)
Net fair value of financial assets and liabilities
The carrying amount of financial assets and financial liabilities recorded in the financial statements represents
their respective net fair values, determined in accordance with accounting policies disclosed in Note 1.
vii. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The Group’s approach to managing liquidity is to ensure, as
far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and
actual cash flows.
The Group has no access to credit standby facilities or arrangements for further funding or borrowings in place.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the Statement of
Financial Position. All trade and other payables are non-interest bearing and due within 12 months of the
reporting date.
2021
Interest
rate
1 year
1-2 years
2-5 years
Over 5
years
Total
contractual
cash flows
$
$
$
$
$
Carrying
amount
assets/
(liabilities)
$
N/A
Financial liabilities at amortised cost
Trade and
other
payables
Lease
liabilities
- Office lease
6%
(735,108)
(100,911)
(836,019)
-
-
(110,458)
(110,458)
(47,729)
(47,729)
-
-
-
(735,108)
(735,108)
(286,998)
(1,022,106)
(259,098)
(994,206)
2020
Interest
rate
1 year
1-2 years
2-5 years
Over 5
years
Total
contractual
cash flows
$
$
$
$
$
Carrying
amount
assets/
(liabilities)
$
N/A
Financial liabilities at amortised cost
Trade and
other
payables
PPP loan
Lease
liabilities
- Office lease
6%
1%
(935,715)
(103,752)
(99,506)
(1,138,973)
-
(87,791)
-
-
(110,598)
(198,389)
(172,592)
(172,592)
-
-
-
-
(953,715)
(191,543)
(935,715)
(191,543)
(497,977)
(1,643,235)
(382,696)
(1,509,954)
19. CONTINGENT LIABILITIES
The Company completed the winding up of Premier Coking Coal, LLC including surrendering the relevant
leases during a previous period and accordingly has no ongoing commitments. However, the Group remains
a party to a claim with a third party in relation to a claim on a small portion of the Emmaus property lease
above the Gilbert Seam. The Company considers the claim to be immaterial.
The Directors are not aware of any other contingent liabilities as at 30 June 2021.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 51
NOTES TO THE FINANCIAL STATEMENTS
20. SEGMENT REPORTING
The Company has identified its operating segments based on internal reports reviewed by the Board and
management. There was only one operating segment being research and development of Interface
Switching ReRAM technology for next generation storage in mobile and cloud.
21. EVENTS AFTER THE REPORTING DATE
On 17 August 2021 the Company stated that analysis of the Third Non- Platform Lot wafer results had confirmed
that:
•
•
•
•
•
4DS had been able to repeat the results for each of the key memory characteristics (speed, endurance,
and retention) that were achieved with the Second Non-Platform Lot (1 February 2021 announcement”);
All 23 device wafers in the lot were functional;
4DS had for the first time demonstrated fabrication of fully crystalline Pr1-xCaxMnO3 (“PCMO”) at
temperatures compatible with the advanced processes run in today’s leading-edge high-volume memory
DRAM and NAND factories;
4DS had demonstrated that this fully crystalline PCMO material reduces the cell on-resistance by an order
of magnitude compared to the PCMO material fabricated in the Second Non-Platform Lot. This reduction
in cell on-resistance directly translates into a significant improvement in read speed; and
This significant performance improvement also means that full characterization (speed, endurance,
retention) of memory cells with this fully crystalline PCMO material requires memory cells operating in a
memory array where currents are controlled and limited by access devices.
This important milestone in 4DS’ technology development pathway allows 4DS to focus on doing the same for
integration of its ReRAM technology into imec’s megabit memory platform.
On 17 August 2021 the Company stated that a technical issue during the fabrication of the Second Platform Lot
at imec affected all wafers and most test structures on each wafer. This technical issue had quickly been
identified during detailed analysis and was resolvable going forward with no delays to current timelines.
Significantly, despite this technical issue, the Second Platform Lot still yielded some critically important results:
•
•
The Company had for the first time demonstrated scalability of its memory cell to the smallest cell
geometries supported on imec’s memory platform on 300mm wafers using state-of-the-art process
equipment; and
The Company had also for the first time demonstrated memory cell switching using an access device which
is a critical step for producing a functional megabit memory array.
4DS is finalizing the production date of the Third Platform Lot with imec. This lot is expected to start in late Q3
2021.
The results of the analysis of the Second Platform Lot and the Third Non-Platform Lot bring 4DS and its partners
closer to realizing their strategic objective of commercializing the Company’s technology.
There have been no other matters or circumstances that have arisen since 30 June 2021 that have significantly
affected or may significantly affect:
•
•
•
the Group’s operations in future years or
the results of those operations in future years or
the Group’s state of affairs in future years.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 52
NOTES TO THE FINANCIAL STATEMENTS
22.
AUDITORS REMUNERATION
The auditor of 4DS Memory Limited for the year ended 30 June
2021 is PKF Perth
Amounts received or due and receivable by PKF Perth for:
- Audit and review of financial statements
- Taxation advice and tax compliance services
30 June 2021
30 June 2020
$
35,050
7,500
42,550
$
34,160
7,300
41,460
23. COMMITMENTS
Material commitments
The Company entered into an agreement with imec on the 31 October 2017 to develop a transferrable
production compatible process flow for its Interface Switching ReRAM technology and to demonstrate this
process on imec’s megabit test chip. On 31 October 2019, an amendment to the collaboration agreement
was signed where both parties agreed to add extra activities to the project and therefore extend the duration
of the agreement and additional payment terms.
From 1 January 2021 the Company shall pay imec a total of 1,000,000 Euro, with payments made quarterly
until 25 December 2021. This ammendment shall become effective from the Ammendment Effective Date (1
January 2021) and shall remain in effect until December 31, 2021, unless terminated earlier in accordance
with the Agreement.
Date of invoice
June 25, 2021
September 25, 2021
December 25, 2021
Invoiced amount
250 000 EUR (paid in July 2021)
250 000 EUR
250 000 EUR
On 7 October 2020, the Company announced that the Board had reached a successful outcome with
respect to Dr Arnout’s remuneration. The incentive is in the form of participation in a cash bonus pool (Sale
Bonus Pool), the size of which will be determined by the value received by shareholders upon a liquidity event,
such as takeover of the Company or a sale of the Company’s intelectual property. The members of 4DS’
technical team, based in Silicon Valley, as well as Drs. Wilbert van den Hoek, will be participating in the Sale
Bonus Pool.
Upon a liquidity event occurring, Dr Guido Arnout, Drs. Wilbert van den Hoek and US based employees
(Eligible Participants) will each be entitled to receive a proportion of the Sale Bonus Pool. Dr Arnout will be
entitled to receive 30%, Drs Wilbert van den Hoek will be entitled to receive 25%, with the balance to be
allocated to Eligible Participants at the discretion of the Board.
There have been no other significant changes in commitments since the last reporting date other than
reported above.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 53
DIRECTORS DECLARATION
The Directors of the Company declare that:
1.
The financial statements, notes and additional disclosures included in the Directors’ Report, designated
as audited, of the Group are in accordance with the Corporations Act 2001, including:
(a)
(b)
Complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
Giving a true and fair view of the Company’s and Group’s financial position as at 30 June 2021
and of their performance for the year ended on that date.
2
3.
4.
The financial report also complies with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1(a) (i) to the financial report.
In the Directors' opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the Directors
in accordance with section 295A of the Corporations Act 2001 for the financial year ended to 30 June
2021.
This declaration is made in accordance with a resolution of the Board of Directors.
Managing Director
Dr Guido Arnout
26 August 2021
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 54
PKF Perth
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF 4DS MEMORY LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of 4DS Memory Limited (the company), which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the company and the
consolidated entity comprising the company and the entities it controlled at the year’s end or from time to
time during the financial year.
In our opinion the financial report of 4DS Memory Limited is in accordance with the Corporations Act 2001,
including:
i)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021
and of its performance for the year ended on that date; and
ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including independence
requirements) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
Material Uncertainty on Going Concern
Without modifying our opinion, we draw attention to Note 1(e) in the financial report, which indicates that the
consolidated entity had cash on hand at 30 June 2021 of $4,298,794 (2020: $2,509,785) and a net
operating cash outflow of $5,558,208 (2020: $3,766,897) for the year ended 30 June 2021. These
conditions, along with other matters as set out in note 1(e), indicate the existence of a material uncertainty
that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and
therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the
normal course of business.
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the
actions or inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
55
The financial report of the consolidated entity does not include any adjustments in relation to the
recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities
that might be necessary should the consolidated entity not continue as going concern.
Key Audit Matter
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current year. This matter was addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
this matter. For the matter below, our description of how our audit addressed each matter is provided in that
context.
1. Value of Share Based Payments
Why significant
For the year ended 30 June 2021 the value of share
based payments expenses totalled $1,231,464, as
disclosed in Note 15. This amount has been expensed.
The consolidated entity’s accounting judgement and
estimates in respect of share based payments is
outlined in Note 1(b). We consider this to be a key audit
matter due to significant judgement required in relation
to:
•
•
The valuation method used in the model; and
The assumptions and inputs used within the
model.
How our audit addressed the key audit matter
Our work included, but was not limited to, the following
procedures:
• Reviewed the independent expert’s valuations of
options issued, including:
o
o
o
o
ensuring the independence of the independent
expert;
assessing the credentials of the independent
expert;
assessing the appropriateness of the valuation
method used; and
assessing
assumptions and
valuation model.
reasonableness
of
inputs used within
the
the
the
• Reviewed Board meeting minutes and ASX
announcements as well as enquired of relevant
personnel to ensure all share based payments had
been recognised;
• Assessed the allocation and recognition to ensure
reasonable; and
• Assessed
the appropriateness of
disclosures in Note 14(b), 14(c), 14(e) and Note 15.
the
related
Other Information
Other Information is financial and non-financial information in the Annual Report of the consolidated entity
which is provided in addition to the Financial Report and Auditor’s Report. The Directors are responsible for
the Other Information in the Annual Report.
The Other Information we obtained prior to the date of this Auditor’s Report is the Director’s Report. The
remaining Other Information, if any, is expected to be made available to us after the date of the Auditor’s
Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express as audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
56
We are required to report if we conclude that there is a material misstatement of this Other Information in
the Financial Report and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of Directors’ for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using a
going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:-
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the consolidated entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the consolidated entity to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
57
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the group financial report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of 4DS Memory Limited for the year ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
PKF PERTH
SHANE CROSS
PARTNER
26 AUGUST 2021
WEST PERTH
WESTERN AUSTRALIA
58
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement (“Statement”) outlines the key aspects of the governance framework
and main governance practices of 4DS Memory Limited (‘4DS Memory’ or ‘the Company’), a Company which
is not included within the S&P/ASX 300 index. The Company’s charters, policies, and procedures are regularly
reviewed and updated to comply with law and best practice. The Company’s Corporate Governance Policies
are available on the Company’s website at www.4dsmemory.com.
This Statement is structured with reference to the Australian Securities Exchange Corporate Governance
Council’s (“the Council’s”) “Corporate Governance Principles and Recommendations 4th Edition” (“the
Recommendations”). The Board of Directors has adopted the Recommendations to the extent that is deemed
appropriate considering the current size and operations of the Company. Therefore, considering the size and
financial position of the Company, where the Board considers that the cost of implementing a recommendation
outweighs any potential benefits, those recommendations have not been adopted.
As at the date of this Statement, the Board of 4DS Memory consists of four Directors. One Director is considered
by the Board to be independent, and three Directors are considered by the Board as non-independent;
Drs Wilbert van den Hoek
Dr Guido Arnout
Mr Howard Digby
Mr David McAuliffe
Chairman and Non-Executive Director
CEO and Managing Director
Independent Non-Executive Director
Executive Director
This Corporate Governance Statement is current as at 26 August 2021 and has been approved by the Board of
the Company.
Principle 1: Lay solid foundations for management and oversight
A listed entity should clearly delineate the respective roles and responsibilities of its Board and management
and regularly review their performance.
Roles of the Board & Management
1.1 A listed entity should have and disclose a Board Charter setting out the respective roles of the Board and
management and those matters expressly reserved to the Board and those delegated to management.
4DS Memory’s Constitution (“Constitution”) provides that the business of 4DS Memory will be managed by or
under the direction of the Board. The Board operates under a Board Charter, a copy of which is located on the
Company’s website at www.4dsmemory.com.
The key roles and responsibilities of the Board along with the key roles and responsibilities of senior management,
including those specifically delegated to the CEO and Managing Director are set out in the Board Charter. The
Board is responsible for evaluating and setting the strategic direction for the Company, establishing goals for
management and monitoring the achievement of these goals. The CEO and Managing Director is responsible
to the Board for the day-to-day management of the Company.
The principal functions and responsibilities of the Board include, but are not limited to, the following:
•
Defining the Company’s purpose and setting its strategic objectives;
• Overseeing the Company, including its control and accountability systems;
•
•
•
•
•
•
Demonstrating leadership;
Approving the Company’s statement of values and code of conduct to underpin the Company’s culture;
Appointing, evaluating, rewarding and if necessary removing the Managing Director, the Company
Secretary and senior management personnel;
Appointing or removing the Chair;
Ensuring the Company’s remuneration policies are aligned with its values, strategic objectives and risk
appetite;
In conjunction with members of the senior management team, develop corporate objectives, strategies
and operations plans and approve and appropriately monitor plans, new investments, major capital and
operating expenditures, use of capital, acquisitions, divestitures and major funding activities;
•
Establishing appropriate levels of delegation to the Executive Directors to allow them to manage the
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 59
CORPORATE GOVERNANCE STATEMENT
business efficiently;
• Monitoring actual performance against planned performance expectations and reviewing operating
information at a requisite level, to understand at all times the financial and operating conditions of the
Company, including the reviewing and approving of annual budgets;
•
•
Holding to account and monitoring the performance of senior management, including the implementation
of strategy, and ensuring appropriate resources are available to them;
Setting the Company's risk appetite, identifying areas of significant business risk and ensure that the
Company is appropriately positioned to manage those risks;
• Overseeing the management of safety, occupational health and environmental matters;
•
•
•
•
Satisfying itself that the financial statements of the Company fairly and accurately set out the financial
position and financial performance of the Company for the period under review;
Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that
relevant information is reported by the management to the Board and that proper operational, financial,
compliance, and internal control processes are in place and functioning appropriately;
Ensuring that appropriate internal and external audit arrangements are in place and operating effectively;
Having a framework in place to help ensure that the Company acts legally and responsibly on all matters
consistent with the code of conduct;
•
Reporting accurately to shareholders, on a timely basis; and
• Monitoring the effectiveness of the Company's governance practices.
Subject to the specific authorities reserved to the Board under the Board Charter, the Board delegates to the
Managing Director responsibility for the management and operation of 4DS Memory. The CEO Managing
Director is responsible for the day-to-day operations, financial performance and administration of 4DS Memory
within the powers authorised to him from time-to-time by the Board. The CEO and Managing Director may make
further delegation within the delegations specified by the Board and will be accountable to the Board for the
exercise of those delegated powers.
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the
formation of separate committees at this time including audit, risk, remuneration or nomination committees,
preferring to manage the Company through the full Board of Directors. The Board assumes the responsibilities
normally delegated to the audit, risk, remuneration and nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate committees will be
reviewed by the Board and implemented if appropriate.
Directors have a right of access to all Company information and executives. Directors are entitled, in fulfilling
their duties and responsibilities, to seek independent external professional advice as considered necessary at
the expense of the Company, subject to prior consultation with the Chairman. A copy of any such advice
received is made available to all members of the Board.
Further details of Board responsibilities, objectives and structure are set out in the Board Charter on the 4DS
Memory website.
1.2 A listed entity should undertake appropriate checks before appointing a Director or senior executive or
putting someone forward for election as a Director and provide security holders with all material information
in its possession relevant to a decision on whether or not to elect or re-elect a Director.
The Constitution of the Company sets out the process of appointment, retirement and rotation of directors.
The Company undertakes comprehensive reference checks prior to appointing a Director or putting that person
forward as a candidate to ensure that the person is competent, experienced, and would not be impaired in
any way from undertaking the duties of a Director. The Company provides all material information that is in its
possession to shareholders for their consideration about the attributes of candidates together with whether the
Board supports the appointment or re-election.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 60
CORPORATE GOVERNANCE STATEMENT
1.3 A listed entity should have a written agreement with each Director and senior executive setting out the
terms of their appointment.
The terms of the appointment of a non-executive Director, executive Director and senior executive are agreed
upon and set out in writing at the time of appointment. All current agreements are made with the Director or
senior executive personally.
1.4 The Company Secretary of a listed entity should be directly accountable to the Board, through the Chair,
on all matters to do with the proper functioning of the Board.
In accordance with the Board Charter, the decision to appoint or remove the Company Secretary must be
made or approved by the Board. The Company Secretary is accountable directly to the Board, through the
Chairperson, on all matters to do with the proper functioning of the Board, including agendas, Board papers
and minutes, advising the Board and its Committees (as applicable) on governance matters, monitoring that
the Board and Committee policies and procedures are followed, communication with regulatory bodies and
the ASX and statutory and other filings.
1.5 A listed entity should have and disclose a Diversity Policy; set measurable objectives for achieving gender
diversity and disclose the measurable objectives set to achieve gender diversity.
The Board has adopted a Diversity Policy which is available on its website and provides a framework for the
Company to establish and achieve measurable diversity objectives, including in respect to gender, age,
ethnicity and cultural diversity. The Diversity Policy allows the Board to set measurable gender diversity
objectives (if considered appropriate) and to assess annually both the objectives (if any have been set) and
the Company’s progress towards achieving them.
The Board has not yet set measurable objectives for achieving gender diversity due to the Company’s current
size and level of operations. The Board is acutely aware of the importance for gender diversity within the
workforce and looks to achieve a culture of inclusion when assessing a suitable candidate for an open position
and through its day-to-day practices.
The participation of women in the Company at the date of this report is as follows:
• Women employees in the Company
• Women in senior management positions
• Women on the Board
0%
0%
0%
The Company is not a “relevant employer” under the Workplace Gender Equality Act.
The Company’s Diversity Policy is available on its website.
1.6 A listed entity should have and disclose a process for periodically evaluating the performance of the Board,
its committees and individual Directors and disclose for each reporting period whether a performance
evaluation has been undertaken in accordance with that process during or in respect of that period.
On an annual basis, the Board conducts a review of its structure, composition and performance.
The annual review includes consideration of the following measures:
• Comparing the performance of the Board against the requirements of its Charter;
• Assessing the performance of the Board over the previous 12 months having regard to the corporate
strategies, operating plans and the annual budget;
• Reviewing the Board’s interaction with management;
• Reviewing the type and timing of information provided to the Board by management;
• Reviewing management’s performance in assisting the Board to meet its objectives; and
•
Identifying any necessary or desirable improvements to the Board Charter.
The method and scope of the performance evaluation will be set by the Board and may include a Board self-
assessment checklist to be completed by each Director. The Board may also use an independent adviser to
assist in the review.
The Chairman has primary responsibility for conducting performance appraisals of Non-Executive Directors, in
conjunction with them, having particular regard to:
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 61
CORPORATE GOVERNANCE STATEMENT
• Contribution to Board discussion and function;
• Degree of independence including relevance of any conflicts of interest;
• Availability for and attendance at Board meetings and other relevant events;
• Contribution to Company strategy;
• Membership of and contribution to any Board committees; and
• Suitability to Board structure and composition.
A Board performance review was conducted during the year in accordance with the above processes.
1.7 A listed entity should have and disclose a process for periodically evaluating the performance of its senior
executives and disclose for each reporting period whether a performance evaluation has been undertaken
in accordance with that process during or in respect of that period.
The Company has an annual performance review process in place for its CEO and Managing Director, Executive
Director and other senior executives. On an annual basis, corporate objectives and individual key performance
indicators (KPIs) are set. The Managing Director reviews the performance of senior executives and their delivery
of corporate and individual objectives.
Performance reviews of senior executives were conducted during the year in accordance with the above
process.
Principle 2: Structure the Board to be effective and add value
The Board of a listed entity should be of an appropriate size and collectively have the skills, commitment and
knowledge of the entity and the industry in which it operates, to enable it to discharge its duties effectively and
to add value.
2.1 The Board of a listed entity should have a nomination committee or, if it does not have a nomination
committee, disclose the fact and the processes it employs to address Board succession issues and to ensure
that the Board has the appropriate balance of skill, knowledge, experience, independence and diversity
to enable it to discharge its duties and responsibilities effectively.
The Board considers that the Company does not currently benefit from the establishment of a separate
Nomination Committee. In accordance with the Company’s Board Charter and operating within the
boundaries of the Remuneration Policy and the Nomination Committee Charter, the Board is responsible for the
nomination and selection of directors.
The Board considers that a diverse range of skills, backgrounds, knowledge and experience is required in order
to effectively govern 4DS Memory. The Board believes that orderly succession and renewal contributes to strong
corporate governance and is achieved by careful planning and continual review.
The Board reviews the size and composition of the Board regularly and at least once a year as part of the Board
evaluation process. When the need for a new Director is identified, the required experience and competencies
of the new director are defined in the context of the skills matrix and any gaps that may exist.
Generally a list of potential candidates is identified based on these skills required and other issues such as
geographic location and diversity criteria. Candidates are assessed against the required skills and on their
qualifications, backgrounds and personal qualities. In addition, candidates are sought who have a proven track
record in creating security holder value and the required time to commit to the position.
2.2 A listed entity should have and disclose a Board skills matrix setting out the mix of skills that the Board
currently has or is looking to achieve.
The Board has a skills matrix covering the competencies and experience of each Director. The results of the skills
matrix assessment in relation to the Board as a whole is displayed on the Company’s website at
www.4dsmemory.com.
2.3 A listed entity should disclose the names of the Directors considered by the Board to be independent
Directors and the length of service of each Director.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 62
CORPORATE GOVERNANCE STATEMENT
Length of Service
Director
Drs. Wilbert van den Hoek Chairman and Non-Executive Director (appointed 30 November 2020);
Dr Guido Arnout
Mr Howard Digby
Mr David McAuliffe
CEO and Managing Director (appointed 7 December 2015);
Independent Non-Executive Director (appointed 7 December 2015).
Executive Director (appointed 7 December 2015); and
2.4 A majority of the Board should be independent Directors.
The Board, at the date of this statement, has only one independent Director, Mr Howard Digby.
The Company’s Non-Executive Chairman, Drs. Wilbert van den Hoek, is not considered to be an independent
Director as he is entitled to receive of proportion of the sales bonus pool upon a liquidity event occurring.
Dr Guido Arnout and Mr David McAuliffe are not considered to be independent as they are executives of the
Company.
Mr Howard Digby is considered to be independent as he is not a member of management and is free of any
business or other relationship that could materially interfere with – or could reasonably be perceived to materially
interfere with – the independent exercise of his judgement.
4DS Memory has adopted a definition of 'independence' for Directors that is consistent with the
Recommendations.
Given the size of the Board and the nature and scale of the Company’s current operations the Board believes
that its current composition, with only one independent Director, is sufficient.
2.5 The chair of the board of a listed entity should be an independent Director and, in particular, should not be
the same person as the CEO of the entity.
Drs. Wilbert van den Hoek is the Chair of the Company, is not considered by the Board to be independent and
is not the same person as the CEO of the Company. Drs. van den Hoek was appointed as a Director and Chair
as his semiconductor knowledge and experience, together with his extensive industry connections, will be
invaluable to the Company as it moves towards the commercialisation of its technology.
2.6 A listed entity should have a program for inducting new Directors and for periodically reviewing whether
there is a need for existing Directors to undertake professional development to maintain the skills and
knowledge needed to perform their role as Directors effectively.
In accordance with the Company’s Procedures for Selection and Appointment of Directors, the Board is
responsible for the approval and review of induction and continuing professional development programs and
procedures for Directors to ensure that they can effectively discharge their responsibilities.
New Directors are issued with a formal Letter of Appointment that sets out the key terms and conditions of their
appointment, including Director's duties, rights and responsibilities, the time commitment envisaged, and the
Board's expectations regarding involvement with any Committee work.
The Company Secretary is responsible for facilitating inductions and professional development that is tailored to
the individual’s needs.
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
A listed entity should instil and continually reinforce a culture across the organisation of acting lawfully, ethically
and responsibly.
3.1 A listed entity should articulate and disclose its values
4DS Memory has adopted a Statement of Values that underpins the commitment that each individual and the
Company as a whole lives by each and every day and includes the following values:
•
Integrity and honesty;
• Pursuit of excellence;
• One team; and
• Responsibility.
A copy of the Statement of Values is available on the Company’s website.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 63
CORPORATE GOVERNANCE STATEMENT
3.2 A listed entity should have and disclose a Code of Conduct for its Directors, senior executives and
employees and ensure that the Board or a committee of the Board is informed of any material breaches of
that Code.
The Company has implemented a Code of Conduct, which provides guidelines aimed at maintaining high
ethical standards, corporate behaviour and accountability within the Company.
All Directors, officers, employee and contractors (collectively called the employees) are expected to:
•
Employees of the Company must act honestly, in good faith and in the best interests of the Company as a
whole;
Employees have a duty to use due care and diligence in fulfilling the functions of their position and
exercising the powers attached to their employment;
Employees must recognise that their primary responsibility is to the Company’s shareholders as a whole;
Employees must protect the assets of the Company to ensure availability for legitimate business purposes
and ensure all corporate opportunities are enjoyed by the Company;
Employees must not take advantage of their position for personal gain, or the gain of their associates;
Directors have an obligation to be independent in their judgements;
Confidential information received by employees in the course of the exercise of their duties remains the
property of the Company. Confidential information can only be released or used with specific permission
from the Company; and
Employees have an obligation to comply with the spirit, as well as the letter, of the law which affects its
operations, wherever it operates, and with the principles of this Code. Where the Company operates
overseas, it shall comply with the relevant local laws as well as any applicable Australian laws.
•
•
•
•
•
•
•
An employee that breaches the Code of Conduct may face disciplinary action including, in the cases of serious
breaches, dismissal. If an employee suspects that a breach of the Code of Conduct has occurred or will occur,
he or she must report that breach to the Company Secretary, or in his absence, the Chairman. No employee
will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be
acted upon and kept confidential.
3.3 A listed entity should have and disclose a Whistleblower Policy and ensure that the Board or a committee
of the Board is informed of any material incidents reported under that Policy.
The Company has adopted a Whistleblower Protection Policy which is available on the Company’s website.
The Policy includes that the Board will be informed of any material incidents reported under that Policy.
3.4 A listed entity should have and disclose an Anti-Bribery and Corruption Policy and ensure that the Board
or a committee of the Board is informed of any material breaches of that Policy.
The Company has adopted an Anti-Bribery and Corruption Policy which is available on the Company’s website.
The Policy includes that the Board will be informed of any material breaches of that Policy.
Principle 4: Safeguard the integrity of corporate reports
A listed entity should have appropriate processes to verify the integrity of its corporate reports.
4.1 A Board of a listed entity should have an audit committee or if it does not have an audit committee, disclose
the fact and the processes it employs that independently verify and safeguard the integrity of its corporate
reporting, including the processes for the appointment and removal of the external auditor and the rotation
of the audit engagement partner.
The Board considers that the Company does not currently benefit from the establishment of a separate Audit
Committee. The Board as a whole fulfils the functions normally delegated to the Audit Committee as detailed
in the Audit Committee Charter.
The Board is responsible for the initial appointment of the external auditor and the appointment of a new
external auditor when any vacancy arises. Candidates for the position of external auditor must demonstrate
complete independence from the Company through the engagement period. The Board may otherwise select
an external auditor based on criteria relevant to the Company’s business and circumstances. The performance
of the external auditor is reviewed on an annual basis by the Board.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 64
CORPORATE GOVERNANCE STATEMENT
The Board receives regular reports from management and from external auditors. It also meets with the external
auditors as and when required.
The external auditors attend 4DS Memory's AGM and are available to answer questions from security holders
relevant to the audit.
Prior approval of the Board must be gained for non-audit work to be performed by the external auditor. There
are qualitative limits on this non-audit work to ensure that the independence of the auditor is maintained.
There is also a requirement that the audit partner responsible for the audit not perform in that role for more than
five years.
4.2 A Board of a listed entity should, before it approves the entity’s financial statements for a financial period,
receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have
been properly maintained and that the financial statements comply with the appropriate accounting
standards and give a true and fair view of the financial position and performance of the entity and that the
opinion has been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
The Board has received certifications from the CEO and CFO Equivalent in connection with the financial
statements for 4DS Memory for the Reporting Period. The certifications state that the declaration provided in
accordance with Section 295A of the Corporations Act as to the integrity of the financial statements is founded
on a sound system of risk management and internal control which is operating effectively.
Principle 5: Make timely and balanced disclosure
A listed entity should make timely and balanced disclosure of all matters concerning it that a reasonable person
would expect to have a material effect on the price or value of its securities.
5.1 A listed entity should have and disclose a written policy for complying with its continuous disclosure
obligations under listing rule 3.1.
The Company has a Continuous Disclosure Policy which outlines the disclosure obligations of the Company as
required under the ASX Listing Rules and Corporations Act. The policy is designed to ensure that procedures are
in place so that the market is properly informed of matters which may have a material impact on the price at
which Company securities are traded.
The Board considers whether there are any matters requiring disclosure in respect of each and every item of
business that it considers in its meetings. Individual Directors are required to make such a consideration when
they become aware of any information in the course of their duties as a Director of the Company.
The Company is committed to ensuring all investors have equal and timely access to material information
concerning the Company.
The Board has designated the Company Secretary as the person responsible for communicating with the ASX.
The Chairman, CEO, Managing Director and the Company Secretary are responsible for ensuring that:
a) Company announcements are made in a timely manner, that announcements are factual and do not
omit any material information required to be disclosed under the ASX Listing Rules and Corporations Act;
and
b) Company announcements are expressed in a clear and objective manner that allows investors to assess
the impact of the information when making investment decisions.
5.2 A listed entity should ensure that its Board receives copies of all material market announcements after they
have been made.
The Board receives copies of all material market announcements after they have been made.
5.3 A listed entity that gives a new and substantive investor or analyst presentation should release a copy of
the presentation materials on the ASX Market Announcements Platform ahead of the presentation.
Any new and substantive investor or analyst presentation will be released on the ASX Market Announcements
Platform ahead of the presentation.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 65
CORPORATE GOVERNANCE STATEMENT
Principle 6: Respect the rights of security holders
A listed entity should provide its security holders with appropriate information and facilities to allow them to
exercise their rights as security holders effectively.
The Company recognises the value of providing current and relevant information to its shareholders.
6.1 A listed entity should provide information about itself and its governance framework to investors via its
website.
The Company has adopted a Shareholder Communications Policy which is available on the Company’s
website. Under this strategy, 4DS Memory’s website will contain information about the Company and its
governance, copies of media releases, ASX announcements, annual reports, financial statements, notices of
meetings of shareholders, copies of documents tabled at shareholder meetings and any materials distributed
at investor or analyst presentations.
6.2 A listed entity should have an investor relations program that facilitates effective two-way communication
with investors.
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the
Company is committed to:
• Communicating effectively with shareholders through releases to the market via ASX, the Company
website, information mailed or emailed to shareholders and the general meetings of the Company;
• Giving shareholders ready access to clear and understandable information about the Company; and
• Making it easy for shareholders to participate in general meetings of the Company.
4DS Memory’s register is maintained by a professional security registry, Automic Group. Shareholders are able to
communicate with the Company and Automic via email and can register to receive communications and
shareholder materials from the Company via its security registry electronically.
The Company also makes available a telephone number and email address for shareholders to make enquiries
of the Company. These contact details are available on the “Contact” page of the Company’s website.
Shareholders may elect to, and are encouraged to, receive communications from 4DS Memory and 4DS
Memory's securities registry electronically. The contact details for the registry are available on the “Investors”
page of the Company’s website.
The Company maintains information in relation to its Constitution, governance documents, Directors and senior
executives, Board and committee charters, annual reports and ASX announcements on the Company’s
website.
6.3 A listed entity should disclose how it facilitates and encourages participation at meetings of security
holders.
The Shareholder Communication Policy provides that security holders are encouraged to attend and
participate at general meetings. To facilitate this, meetings will be held during normal business hours, at a place,
or in a manner, convenient for the greatest possible number of security holders to attend either in person or
electronically. Moreover, 4DS Memory’s Constitution allows, if permitted by law, shareholder meetings to be
held electronically and provides each security holder with the right to appoint a proxy, attorney or
representative to vote on their behalf.
Principle 7: Recognise and manage risk
A listed entity should establish a sound risk management framework and periodically review the effectiveness
of that framework.
7.1 The Board of a listed entity should have a committee or committees that oversee risk and if it does not have
a risk committee or committees, disclose that fact and the processes it employs for overseeing the entity’s
risk management framework
The Board considers that the Company does not currently benefit from the establishment of a separate Risk
Committee. In accordance with the Company’s Board Charter and operating within the boundaries of the Risk
Management and Internal Compliance and Control Policy, the Board carries out the duties that would ordinarily
be carried out by the Risk Committee under the Risk Management and Internal Compliance and Control Policy.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 66
CORPORATE GOVERNANCE STATEMENT
The Board is responsible for the oversight of the Company’s risk management and internal compliance and
control framework. The Company does not have an internal audit function. Responsibility for control and risk
management is delegated to the appropriate level of management within the Company with the Managing
Director having ultimate responsibility to the Board for the risk management and internal compliance and
control framework. 4DS Memory has established policies for the oversight and management of material business
risks.
4DS Memory's Risk Management and Internal Compliance and Control Policy recognises that risk management
is an essential element of good corporate governance and fundamental in achieving its strategic and
operational objectives. Risk management improves decision making, defines opportunities and mitigates
material events that may impact security holder value.
4DS Memory believes that explicit and effective risk management is a source of insight and competitive
advantage. To this end, 4DS Memory is committed to the ongoing development of a strategic and consistent
enterprise wide risk management program, underpinned by a risk conscious culture.
4DS Memory accepts that risk is a part of doing business. Therefore, the Company’s Risk Management and
Internal Compliance and Control Policy is not designed to promote risk avoidance. Rather 4DS Memory's
approach is to create a risk conscious culture that encourages the systematic identification, management and
control of risks whilst ensuring we do not enter into unnecessary risks or enter into risks unknowingly.
4DS Memory assesses its risks on a residual basis; that is it evaluates the level of risk remaining and considering all
the mitigation practices and controls. Depending on the materiality of the risks, 4DS Memory applies varying
levels of management plans.
7.2 The Board or a committee of the Board should review the entity’s risk management framework at least
annually to satisfy itself that it continues to be sound and that the entity is operating with due regard to the
risk appetite set by the Board and disclose, in relation to each reporting period, whether such a review has
taken place.
The Board reviews the Company’s risk management framework each scheduled Board meeting to ensure that
it continues to effectively manage risk.
7.3 A listed entity should disclose if it has an internal audit function or if it does not have an internal audit
function, that fact and the processes it employs for evaluating and continually improving the effectiveness
of its governance, risk management and internal control processes.
The Company does not have an internal audit function.
The Board has required management to design and implement a risk management and internal compliance
and control system to manage 4DS Memory’s material business risks. It receives regular reports on specific
business areas where there may exist significant business risk or exposure. The Company faces risks inherent to
its business, including economic risks, which may materially impact the Company’s ability to create or preserve
value for security holders over the short, medium or long term. The Company has in place policies and
procedures, including a risk management framework (as described in the Company’s Risk Management and
Internal Compliance and Control Policy), which is developed and updated to help manage these risks.
The Company’s process of risk management and internal compliance and control includes:
•
•
Identifying and measuring risks that might impact upon the achievement of the Company’s goals and
objectives, and monitoring the environment for emerging factors and trends that affect those risks;
Formulating risk management strategies to manage identified risks, and designing and implementing
appropriate risk management policies and internal controls; and
• Monitoring the performance of, and improving the effectiveness of, risk management systems and internal
compliance and controls, including regular assessment of the effectiveness of risk management and
internal compliance and control.
The Board reviews the Company’s risk management framework at least annually to ensure that it continues to
effectively manage risk.
Management reports to the Board as to the effectiveness of 4DS Memory’s management of its material business
risks on at each Board meeting.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 67
CORPORATE GOVERNANCE STATEMENT
7.4 A listed entity should disclose whether it has any material exposure to environmental or social risks and, if
it does, how it manages or intends to manage those risks.
The Board does not consider that the Company currently has any material exposure to environmental or social
risks.
Principle 8: Remunerate fairly and responsibly
A listed entity should pay Director remuneration sufficient to attract and retain high quality directors and design
its executive remuneration to attract, retain and motivate high quality senior executives and to align their
interests with the creation of value for security holders and with the entity’s values and risk appetite
8.1 The Board of a listed entity should have a remuneration committee or if it does not have a remuneration
committee, disclose that fact and the processes it employs for setting the level and composition of
remuneration for Directors and senior executives and ensuring that such remuneration is appropriate and
not excessive.
The Company does not have a Remuneration Committee. The Board considers that the Company will not
currently benefit from the establishment of a Remuneration Committee and as a whole fulfills the functions
normally delegated to the Remuneration Committee as detailed in the Remuneration Committee Charter.
In accordance with the Company’s Board Charter, the Board carries out the duties that would ordinarily be
carried out by the Remuneration Committee under the Remuneration Committee Charter, including devoting
time annually to assess the level and composition of remuneration for Directors and senior executives.
8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-
executive Directors and the remuneration of executive Directors and other senior executives.
4DS Memory has implemented a Remuneration Policy which was designed to recognise the competitive
environment within which 4DS Memory operates and also emphasise the requirement to attract and retain high
calibre talent in order to achieve sustained improvement in 4DS Memory’s performance. The overriding
objective of the Remuneration Policy is to ensure that an individual’s remuneration package accurately reflects
their experience, level of responsibility, individual performance and the performance of 4DS Memory.
The key principles are to:
•
•
Link executive reward with strategic goals and sustainable performance of 4DS Memory;
Apply challenging corporate and individual key performance indicators that focus on both short-term
and long-term outcomes;
• Motivate and recognise superior performers with fair, consistent and competitive rewards;
•
•
•
Remunerate fairly and competitively in order to attract and retain top talent;
Recognise capabilities and promote opportunities for career and professional development; and
Through employee ownership of 4DS Memory shares, foster a partnership between employees and other
security holders.
The Board determines the Company’s remuneration policies and practices and assesses the necessary and
desirable competencies of Board members. The Board is responsible for evaluating Board performance,
reviewing Board and management succession plans and determines remuneration packages for the Managing
Director, Non-Executive Directors, Executive Directors and senior management based on an annual review.
4DS Memory’s executive remuneration policies and structures and details of remuneration paid to Directors and
senior managers where appointed) are set out in the Remuneration Report.
Non-Executive Directors receive fees (including statutory superannuation where applicable) for their services,
the reimbursement of reasonable expenses and, in certain circumstances, options.
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors is $300,000 per
annum. The Directors set the individual Non-Executive Directors fees within the limit approved by shareholders.
The total Directors fees paid or payable to Non-Executive Directors during the reporting period were $91,945.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 68
CORPORATE GOVERNANCE STATEMENT
Executive Directors and other senior executives (where appointed) are remunerated using combinations of fixed
and performance based remuneration. Fees and salaries and set at levels reflecting market rates and
performance based remuneration is linked directly to specific performance targets that are aligned to both
short and long term objectives.
Further details in relation to the Company’s remuneration policies are contained in the Remuneration Report,
within the Directors’ report.
8.3 A listed entity which has an equity-based remuneration scheme should have a policy on (whether through
the use of derivatives or otherwise) which limit the economic risk of participating in the scheme and disclose
that policy or a summary of it.
In accordance with the Company’s Securities Trading policy, participants in an equity based incentive scheme
are prohibited from entering into any transaction that would have the effect of hedging or otherwise transferring
the risk of any fluctuation in the value of any unvested entitlement in the Company’s securities to any other
person.
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 69
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 25 August 2021.
As at 25 August 2021 there were 8,064 holders of Ordinary Fully Paid Shares
VOTING RIGHTS
The voting rights of the ordinary shares are as follows:
Subject to any rights or restrictions for the time being attached to any shares or class of shares of the Company,
each member of the Company is entitled to receive notice of, attend and vote at a general meeting.
Resolutions of members will be decided by a show of hands unless a poll is demanded. On a show of hands
each eligible voter present has one vote. However, where a person present at a general meeting represents
personally or by proxy, attorney or representation more than one member, on a show of hands the person is
entitled to one vote only despite the number of members the person represents.
On a poll each eligible member has one vote for each fully paid share held.
There are no voting rights attached to any of the options that the Company currently has on issue. Upon exercise
of these options, the shares issued will have the same voting rights as existing ordinary shares.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of each class of listed securities are listed below:
Ordinary Fully Paid Shares
Name
James Dorrian
Citicorp Nominees Pty Limited
Mr John Clement Cowie Love
BNP Paribas Nominees Pty Ltd
Vicex Holdings Proprietary Limited
Dr Jason Michael Spencer & Dr Carolyn Jean Nelson
Mr Kelland Munro MacCulloch
HSBC Custody Nominees (Australia) Limited
No of Ordinary
Shares Held
45,286,004
36,792,643
30,743,545
18,128,016
17,000,000
14,400,000
13,366,362
11,901,613
Southam Investments 2003 Pty Ltd
10,494,883
Dr Rohan Vanden Driesen
Mr Richard Stanley De Ravin
Aurelius Finance Pty Ltd
Mr Jan Brizee & Mrs Suzanne Brizee
JP Morgan Nominees Australia Pty Limited
8,883,631
8,500,000
8,283,689
7,500,000
7,430,918
Catalyst (NSW) Pty Ltd
7,000,024
National Nominees Limited
Mr John Love
Mr Rodney Alan Brack
Michael Hawran
Dongmin Chen
Total Top 20
Others
Total Ordinary Shares on Issue
6,994,005
6,349,651
6,255,000
6,246,814
5,937,367
277,494,165
1,043,454,276
21.01%
78.99%
1,320,948,441
100.00%
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 70
Percentage of
Issued Shares
3.43%
2.79%
2.33%
1.37%
1.29%
1.09%
1.01%
0.90%
0.79%
0.67%
0.64%
0.63%
0.57%
0.56%
0.53%
0.53%
0.48%
0.47%
0.47%
0.45%
ASX ADDITIONAL INFORMATION
SUBSTANTIAL HOLDERS
The Company has no substantial shareholders as at 25 August 2021.
DISTRIBUTION OF EQUITY SECURITIES
Ordinary Fully Paid Shares
Holding Ranges
Holders
Total Units
% Issued Share Capital
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Totals
UMARKETABLE PARCELS
111
1,129
1,457
3,796
1,571
8,064
24,003
4,032,125
11,811,215
0.00%
0.31%
0.89%
143,048,890
10.83%
1,162,032,208
87.97%
1,320,948,441
100.00%
The number of shareholders holding less than a marketable parcel is 452.
UNQUOTED SECURITIES
As at 25 August 2021, the following unquoted securities are on issue:
32,107,000 Options expiring 27/10/2022 @ $0.042 – 6 Holders
Holders with more than 20%
Holder Name
Guido Arnout
Michael Van Buskirk
25,780,000 Options expiring 22/01/2024 @ $0.052 – 9 Holders
Holders with more than 20%
Holder Name
Guido Arnout
Margaret Elizabeth Livingston
2,600,000 Options expiring 28/08/2024 @ $0.052 – 2 Holders
Holders with more than 20%
Holder Name
Seshubabu Desu
Ting Yen
ON-MARKET BUY BACK
There is currently no on-market buyback program.
Holding
% IC
14,000,000 43.60%
9,500,000
29.59%
Holding
% IC
7,380,000
28.63%
7,000,000
27.15%
Holding
% IC
1,300,000
50.00%
1,300,000
50.00%
4DS Memory Limited ACN 145 590 110 – Annual Report 30 June 2021 | 71